CIVPRO Rule 1 3 Case Full Text

CIVIL PROCEDURE: RULES 1-3 CASES FULL TEXT
I. INTRODUCTION
1. CITY OF MANILA vs JUDGE GRECIA-CUERDO, et al.
Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 175723 February 4, 2014
THE CITY OF MANILA, represented by MAYOR JOSE L. ATIENZA, JR., and MS. LIBERTY M. TOLEDO,
in her capacity as the City Treasurer of Manila, Petitioners,
vs.
HON. CARIDAD H. GRECIA-CUERDO, in her capacity as Presiding Judge of the Regional Trial Court,
Branch 112, Pasay City; SM MART, INC.; SM PRIME HOLDINGS, INC.; STAR APPLIANCES CENTER;
SUPERVALUE, INC.; ACE HARDWARE PHILIPPINES, INC.; WATSON PERSONAL CARE STORES, PHILS.,
INC.; JOLLIMART PHILS., CORP.; SURPLUS MARKETING CORPORATION and SIGNATURE
LINES, Respondents.
DECISION
PERALTA, J.:
Before the Court is a special civil action for certiorari under Rule 65 of the Rules of Court seeking to
reverse and set aside the Resolutions1 dated April 6, 2006 and November 29, 2006 of the Court of
Appeals (CA) in CA-G.R. SP No. 87948.
The antecedents of the case, as summarized by the CA, are as follows:
The record shows that petitioner City of Manila, through its treasurer, petitioner Liberty Toledo,
assessed taxes for the taxable period from January to December 2002 against private respondents
SM Mart, Inc., SM Prime Holdings, Inc., Star Appliances Center, Supervalue, Inc., Ace Hardware
Philippines, Inc., Watsons Personal Care Stores Phils., Inc., Jollimart Philippines Corp., Surplus
Marketing Corp. and Signature Lines. In addition to the taxes purportedly due from private
respondents pursuant to Section 14, 15, 16, 17 of the Revised Revenue Code of Manila (RRCM), said
assessment covered the local business taxes petitioners were authorized to collect under Section 21
of the same Code. Because payment of the taxes assessed was a precondition for the issuance of
their business permits, private respondents were constrained to pay the ₱19,316,458.77 assessment
under protest.
On January 24, 2004, private respondents filed [with the Regional Trial Court of Pasay City] the
complaint denominated as one for "Refund or Recovery of Illegally and/or Erroneously-Collected
Local Business Tax, Prohibition with Prayer to Issue TRO and Writ of Preliminary Injunction"
which was docketed as Civil Case No. 04-0019-CFM before public respondent's sala [at Branch 112].
In the amended complaint they filed on February 16, 2004, private respondents alleged that, in
relation to Section 21 thereof, Sections 14, 15, 16, 17, 18, 19 and 20 of the RRCM were violative of
the limitations and guidelines under Section 143 (h) of Republic Act. No. 7160 [Local Government
Code] on double taxation. They further averred that petitioner city's Ordinance No. 8011 which
amended pertinent portions of the RRCM had already been declared to be illegal and
unconstitutional by the Department of Justice.2
In its Order3 dated July 9, 2004, the RTC granted private respondents' application for a writ of
preliminary injunction.
Petitioners filed a Motion for Reconsideration4 but the RTC denied it in its Order5 dated October 15,
2004.
Petitioners then filed a special civil action for certiorari with the CA assailing the July 9, 2004 and
October 15, 2004 Orders of the RTC.6
In its Resolution promulgated on April 6, 2006, the CA dismissed petitioners' petition for certiorari
holding that it has no jurisdiction over the said petition. The CA ruled that since appellate
jurisdiction over private respondents' complaint for tax refund, which was filed with the RTC, is
vested in the Court of Tax Appeals (CTA), pursuant to its expanded jurisdiction under Republic Act
No. 9282 (RA 9282), it follows that a petition for certiorari seeking nullification of an interlocutory
order issued in the said case should, likewise, be filed with the CTA.
Petitioners filed a Motion for Reconsideration,7 but the CA denied it in its Resolution dated
November 29, 2006.
Hence, the present petition raising the following issues:
I- Whether or not the Honorable Court of Appeals gravely erred in dismissing the case for lack of
jurisdiction.
II- Whether or not the Honorable Regional Trial Court gravely abuse[d] its discretion amounting to
lack or excess of jurisdiction in enjoining by issuing a Writ of Injunction the petitioners, their agents
and/or authorized representatives from implementing Section 21 of the Revised Revenue Code of
Manila, as amended, against private respondents.
III- Whether or not the Honorable Regional Trial Court gravely abuse[d] its discretion amounting to
lack or excess of jurisdiction in issuing the Writ of Injunction despite failure of private respondents
to make a written claim for tax credit or refund with the City Treasurer of Manila.
IV- Whether or not the Honorable Regional Trial Court gravely abuse[d] its discretion amounting to
lack or excess of jurisdiction considering that under Section 21 of the Manila Revenue Code, as
amended, they are mere collecting agents of the City Government.
V- Whether or not the Honorable Regional Trial Court gravely abuse[d] its discretion amounting to
lack or excess of jurisdiction in issuing the Writ of Injunction because petitioner City of Manila and
its constituents would result to greater damage and prejudice thereof. (sic)8
Without first resolving the above issues, this Court finds that the instant petition should be denied
for being moot and academic.
Upon perusal of the original records of the instant case, this Court discovered that a Decision9 in the
main case had already been rendered by the RTC on August 13, 2007, the dispositive portion of
which reads as follows:
WHEREFORE, in view of the foregoing, this Court hereby renders JUDGMENT in favor of the plaintiff
and against the defendant to grant a tax refund or credit for taxes paid pursuant to Section 21 of the
Revenue Code of the City of Manila as amended for the year 2002 in the following amounts:
To plaintiff SM Mart, Inc. - P 11,462,525.02
To plaintiff SM Prime Holdings, Inc. - 3,118,104.63
To plaintiff Star Appliances Center - 2,152,316.54
To plaintiff Supervalue, Inc. - 1,362,750.34
To plaintiff Ace Hardware Phils., Inc. - 419,689.04
To plaintiff Watsons Personal Care Health - 231,453.62
Stores Phils., Inc.
To plaintiff Jollimart Phils., Corp. - 140,908.54
To plaintiff Surplus Marketing Corp. - 220,204.70
To plaintiff Signature Mktg. Corp. - 94,906.34
TOTAL: - P 19,316,458.77
Defendants are further enjoined from collecting taxes under Section 21, Revenue Code of Manila
from herein plaintiff.
SO ORDERED.10
The parties did not inform the Court but based on the records, the above Decision had already
become final and executory per the Certificate of Finality11 issued by the same trial court on October
20, 2008. In fact, a Writ of Execution12 was issued by the RTC on November 25, 2009. In view of the
foregoing, it clearly appears that the issues raised in the present petition, which merely involve the
incident on the preliminary injunction issued by the RTC, have already become moot and academic
considering that the trial court, in its decision on the merits in the main case, has already ruled in
favor of respondents and that the same decision is now final and executory. Well entrenched is the
rule that where the issues have become moot and academic, there is no justiciable controversy,
thereby rendering the resolution of the same of no practical use or value.13
In any case, the Court finds it necessary to resolve the issue on jurisdiction raised by petitioners
owing to its significance and for future guidance of both bench and bar. It is a settled principle that
courts will decide a question otherwise moot and academic if it is capable of repetition, yet evading
review.14
However, before proceeding, to resolve the question on jurisdiction, the Court deems it proper to
likewise address a procedural error which petitioners committed.
Petitioners availed of the wrong remedy when they filed the instant special civil action for certiorari
under Rule 65 of the Rules of Court in assailing the Resolutions of the CA which dismissed their
petition filed with the said court and their motion for reconsideration of such dismissal. There is no
dispute that the assailed Resolutions of the CA are in the nature of a final order as they disposed of
the petition completely. It is settled that in cases where an assailed judgment or order is considered
final, the remedy of the aggrieved party is appeal. Hence, in the instant case, petitioner should have
filed a petition for review on certiorari under Rule 45, which is a continuation of the appellate
process over the original case.15
Petitioners should be reminded of the equally-settled rule that a special civil action for certiorari
under Rule 65 is an original or independent action based on grave abuse of discretion amounting to
lack or excess of jurisdiction and it will lie only if there is no appeal or any other plain, speedy, and
adequate remedy in the ordinary course of law.16 As such, it cannot be a substitute for a lost
appeal.17
Nonetheless, in accordance with the liberal spirit pervading the Rules of Court and in the interest of
substantial justice, this Court has, before, treated a petition for certiorari as a petition for review on
certiorari, particularly (1) if the petition for certiorari was filed within the reglementary period
within which to file a petition for review on certiorari; (2) when errors of judgment are averred; and
(3) when there is sufficient reason to justify the relaxation of the rules.18 Considering that the
present petition was filed within the 15-day reglementary period for filing a petition for review on
certiorari under Rule 45, that an error of judgment is averred, and because of the significance of the
issue on jurisdiction, the Court deems it proper and justified to relax the rules and, thus, treat the
instant petition for certiorari as a petition for review on certiorari.
Having disposed of the procedural aspect, we now turn to the central issue in this case. The basic
question posed before this Court is whether or not the CTA has jurisdiction over a special civil action
for certiorari assailing an interlocutory order issued by the RTC in a local tax case.
This Court rules in the affirmative.
On June 16, 1954, Congress enacted Republic Act No. 1125 (RA 1125) creating the CTA and giving to
the said court jurisdiction over the following:
(1) Decisions of the Collector of Internal Revenue in cases involving disputed assessments, refunds
of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other
matters arising under the National Internal Revenue Code or other law or part of law administered
by the Bureau of Internal Revenue;
(2) Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or
other money charges; seizure, detention or release of property affected fines, forfeitures or other
penalties imposed in relation thereto; or other matters arising under the Customs Law or other law
or part of law administered by the Bureau of Customs; and
(3) Decisions of provincial or City Boards of Assessment Appeals in cases involving the assessment
and taxation of real property or other matters arising under the Assessment Law, including rules and
regulations relative thereto.
On March 30, 2004, the Legislature passed into law Republic Act No. 9282 (RA 9282) amending RA
1125 by expanding the jurisdiction of the CTA, enlarging its membership and elevating its rank to the
level of a collegiate court with special jurisdiction. Pertinent portions of the amendatory act
provides thus:
Sec. 7. Jurisdiction. - The CTA shall exercise:
a. Exclusive appellate jurisdiction to review by appeal, as herein provided:
1. Decisions of the Commissioner of Internal Revenue in cases involving disputed

assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation
thereto, or other matters arising under the National Internal Revenue or other laws
administered by the Bureau of Internal Revenue;
2. Inaction by the Commissioner of Internal Revenue in cases involving disputed

assessments, refunds of internal revenue taxes, fees or other charges, penalties in relations
thereto, or other matters arising under the National Internal Revenue Code or other laws
administered by the Bureau of Internal Revenue, where the National Internal Revenue Code
provides a specific period of action, in which case the inaction shall be deemed a denial;
3. Decisions, orders or resolutions of the Regional Trial Courts in local tax cases originally
decided or resolved by them in the exercise of their original or appellate jurisdiction;
4. Decisions of the Commissioner of Customs in cases involving liability for customs duties,
fees or other money charges, seizure, detention or release of property affected, fines,
forfeitures or other penalties in relation thereto, or other matters arising under the Customs
Law or other laws administered by the Bureau of Customs;
5. Decisions of the Central Board of Assessment Appeals in the exercise of its appellate
jurisdiction over cases involving the assessment and taxation of real property originally
decided by the provincial or city board of assessment appeals;
6. Decisions of the Secretary of Finance on customs cases elevated to him automatically for
review from decisions of the Commissioner of Customs which are adverse to the
Government under Section 2315 of the Tariff and Customs Code;
7. Decisions of the Secretary of Trade and Industry, in the case of nonagricultural product,
commodity or article, and the Secretary of Agriculture in the case of agricultural product,
commodity or article, involving dumping and countervailing duties under Section 301 and
302, respectively, of the Tariff and Customs Code, and safeguard measures under Republic
Act No. 8800, where either party may appeal the decision to impose or not to impose said
duties.
b. Jurisdiction over cases involving criminal offenses as herein provided:
1. Exclusive original jurisdiction over all criminal offenses arising from violations of the
National Internal Revenue Code or Tariff and Customs Code and other laws administered by
the Bureau of Internal Revenue or the Bureau of Customs: Provided, however, That offenses
or felonies mentioned in this paragraph where the principal amount of taxes and fees,
exclusive of charges and penalties, claimed is less than One million pesos (₱1,000,000.00) or
where there is no specified amount claimed shall be tried by the regular Courts and the
jurisdiction of the CTA shall be appellate. Any provision of law or the Rules of Court to the
contrary notwithstanding, the criminal action and the corresponding civil action for the
recovery of civil liability for taxes and penalties shall at all times be simultaneously instituted
with, and jointly determined in the same proceeding by the CTA, the filing of the criminal
action being deemed to necessarily carry with it the filing of the civil action, and no right to
reserve the filing of such civil action separately from the criminal action will be recognized.
2. Exclusive appellate jurisdiction in criminal offenses:
a. Over appeals from the judgments, resolutions or orders of the Regional Trial Courts in tax
cases originally decided by them, in their respected territorial jurisdiction.
b. Over petitions for review of the judgments, resolutions or orders of the Regional Trial
Courts in the exercise of their appellate jurisdiction over tax cases originally decided by the
Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in their
respective jurisdiction.
c. Jurisdiction over tax collection cases as herein provided:
1. Exclusive original jurisdiction in tax collection cases involving final and executory
assessments for taxes, fees, charges and penalties: Provides, however, that collection cases
where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is
less than One million pesos (₱1,000,000.00) shall be tried by the proper Municipal Trial
Court, Metropolitan Trial Court and Regional Trial Court.
2. Exclusive appellate jurisdiction in tax collection cases:
a. Over appeals from the judgments, resolutions or orders of the Regional Trial Courts in tax
collection cases originally decided by them, in their respective territorial jurisdiction.
b. Over petitions for review of the judgments, resolutions or orders of the Regional Trial
Courts in the Exercise of their appellate jurisdiction over tax collection cases originally
decided by the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
Courts, in their respective jurisdiction.19
A perusal of the above provisions would show that, while it is clearly stated that the CTA has
exclusive appellate jurisdiction over decisions, orders or resolutions of the RTCs in local tax cases
originally decided or resolved by them in the exercise of their original or appellate jurisdiction, there
is no categorical statement under RA 1125 as well as the amendatory RA 9282, which provides that
th e CTA has jurisdiction over petitions for certiorari assailing interlocutory orders issued by the RTC
in local tax cases filed before it.
The prevailing doctrine is that the authority to issue writs of certiorari involves the exercise of
original jurisdiction which must be expressly conferred by the Constitution or by law and cannot be
implied from the mere existence of appellate jurisdiction.20 Thus, in the cases of Pimentel v.
COMELEC,21 Garcia v. De Jesus,22 Veloria v. COMELEC,23Department of Agrarian Reform Adjudication
Board v. Lubrica,24 and Garcia v. Sandiganbayan,25 this Court has ruled against the jurisdiction of
courts or tribunals over petitions for certiorari on the ground that there is no law which expressly
gives these tribunals such power.26 It must be observed, however, that with the exception of Garcia
v. Sandiganbayan,27 these rulings pertain not to regular courts but to tribunals exercising quasi-
judicial powers. With respect to the Sandiganbayan, Republic Act No. 824928 now provides that the
special criminal court has exclusive original jurisdiction over petitions for the issuance of the writs of
mandamus, prohibition, certiorari, habeas corpus, injunctions, and other ancillary writs and
processes in aid of its appellate jurisdiction.
In the same manner, Section 5 (1), Article VIII of the 1987 Constitution grants power to the Supreme
Court, in the exercise of its original jurisdiction, to issue writs of certiorari, prohibition and
mandamus. With respect to the Court of Appeals, Section 9 (1) of Batas Pambansa Blg. 129 (BP 129)
gives the appellate court, also in the exercise of its original jurisdiction, the power to issue, among
others, a writ of certiorari,whether or not in aid of its appellate jurisdiction. As to Regional Trial
Courts, the power to issue a writ of certiorari, in the exercise of their original jurisdiction, is provided
under Section 21 of BP 129.
The foregoing notwithstanding, while there is no express grant of such power, with respect to the
CTA, Section 1, Article VIII of the 1987 Constitution provides, nonetheless, that judicial power shall
be vested in one Supreme Court and in such lower courts as may be established by law and that
judicial power includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.
On the strength of the above constitutional provisions, it can be fairly interpreted that the power of
the CTA includes that of determining whether or not there has been grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the RTC in issuing an interlocutory order in
cases falling within the exclusive appellate jurisdiction of the tax court. It, thus, follows that the CTA,
by constitutional mandate, is vested with jurisdiction to issue writs of certiorari in these cases.
Indeed, in order for any appellate court to effectively exercise its appellate jurisdiction, it must have
the authority to issue, among others, a writ of certiorari. In transferring exclusive jurisdiction over
appealed tax cases to the CTA, it can reasonably be assumed that the law intended to transfer also
such power as is deemed necessary, if not indispensable, in aid of such appellate jurisdiction. There
is no perceivable reason why the transfer should only be considered as partial, not total.
Consistent with the above pronouncement, this Court has held as early as the case of J.M. Tuason &
Co., Inc. v. Jaramillo, et al.29 that "if a case may be appealed to a particular court or judicial tribunal
or body, then said court or judicial tribunal or body has jurisdiction to issue the extraordinary writ of
certiorari, in aid of its appellate jurisdiction."30 This principle was affirmed in De Jesus v. Court of
Appeals,31 where the Court stated that "a court may issue a writ of certiorari in aid of its appellate
jurisdiction if said court has jurisdiction to review, by appeal or writ of error, the final orders or
decisions of the lower court."32 The rulings in J.M. Tuason and De Jesus were reiterated in the more
recent cases of Galang, Jr. v. Geronimo33 and Bulilis v. Nuez.34
Furthermore, Section 6, Rule 135 of the present Rules of Court provides that when by law,
jurisdiction is conferred on a court or judicial officer, all auxiliary writs, processes and other means
necessary to carry it into effect may be employed by such court or officer.
If this Court were to sustain petitioners' contention that jurisdiction over their certiorari petition lies
with the CA, this Court would be confirming the exercise by two judicial bodies, the CA and the CTA,
of jurisdiction over basically the same subject matter – precisely the split-jurisdiction situation which
is anathema to the orderly administration of justice.35 The Court cannot accept that such was the
legislative motive, especially considering that the law expressly confers on the CTA, the tribunal with
the specialized competence over tax and tariff matters, the role of judicial review over local tax
cases without mention of any other court that may exercise such power. Thus, the Court agrees with
the ruling of the CA that since appellate jurisdiction over private respondents' complaint for tax
refund is vested in the CTA, it follows that a petition for certiorari seeking nullification of an
interlocutory order issued in the said case should, likewise, be filed with the same court. To rule
otherwise would lead to an absurd situation where one court decides an appeal in the main case
while another court rules on an incident in the very same case.
Stated differently, it would be somewhat incongruent with the pronounced judicial abhorrence to
split jurisdiction to conclude that the intention of the law is to divide the authority over a local tax
case filed with the RTC by giving to the CA or this Court jurisdiction to issue a writ of certiorari
against interlocutory orders of the RTC but giving to the CTA the jurisdiction over the appeal from
the decision of the trial court in the same case. It is more in consonance with logic and legal
soundness to conclude that the grant of appellate jurisdiction to the CTA over tax cases filed in and
decided by the RTC carries with it the power to issue a writ of certiorari when necessary in aid of
such appellate jurisdiction. The supervisory power or jurisdiction of the CTA to issue a writ of
certiorari in aid of its appellate jurisdiction should co-exist with, and be a complement to, its
appellate jurisdiction to review, by appeal, the final orders and decisions of the RTC, in order to have
complete supervision over the acts of the latter.36
A grant of appellate jurisdiction implies that there is included in it the power necessary to exercise it
effectively, to make all orders that will preserve the subject of the action, and to give effect to the
final determination of the appeal. It carries with it the power to protect that jurisdiction and to
make the decisions of the court thereunder effective. The court, in aid of its appellate jurisdiction,
has authority to control all auxiliary and incidental matters necessary to the efficient and proper
exercise of that jurisdiction.1âwphi1 For this purpose, it may, when necessary, prohibit or restrain
the performance of any act which might interfere with the proper exercise of its rightful jurisdiction
in cases pending before it.37
Lastly, it would not be amiss to point out that a court which is endowed with a particular jurisdiction
should have powers which are necessary to enable it to act effectively within such jurisdiction.
These should be regarded as powers which are inherent in its jurisdiction and the court must
possess them in order to enforce its rules of practice and to suppress any abuses of its process and
to defeat any attempted thwarting of such process.
In this regard, Section 1 of RA 9282 states that the CTA shall be of the same level as the CA and shall
possess all the inherent powers of a court of justice.
Indeed, courts possess certain inherent powers which may be said to be implied from a general
grant of jurisdiction, in addition to those expressly conferred on them. These inherent powers are
such powers as are necessary for the ordinary and efficient exercise of jurisdiction; or are essential
to the existence, dignity and functions of the courts, as well as to the due administration of justice;
or are directly appropriate, convenient and suitable to the execution of their granted powers; and
include the power to maintain the court's jurisdiction and render it effective in behalf of the
litigants.38
Thus, this Court has held that "while a court may be expressly granted the incidental powers
necessary to effectuate its jurisdiction, a grant of jurisdiction, in the absence of prohibitive
legislation, implies the necessary and usual incidental powers essential to effectuate it, and, subject
to existing laws and constitutional provisions, every regularly constituted court has power to do all
things that are reasonably necessary for the administration of justice within the scope of its
jurisdiction and for the enforcement of its judgments and mandates."39 Hence, demands, matters or
questions ancillary or incidental to, or growing out of, the main action, and coming within the above
principles, may be taken cognizance of by the court and determined, since such jurisdiction is in aid
of its authority over the principal matter, even though the court may thus be called on to consider
and decide matters which, as original causes of action, would not be within its cognizance.40
Based on the foregoing disquisitions, it can be reasonably concluded that the authority of the CTA to
take cognizance of petitions for certiorari questioning interlocutory orders issued by the RTC in a
local tax case is included in the powers granted by the Constitution as well as inherent in the
exercise of its appellate jurisdiction.
Finally, it would bear to point out that this Court is not abandoning the rule that, insofar as quasi-
judicial tribunals are concerned, the authority to issue writs of certiorari must still be expressly
conferred by the Constitution or by law and cannot be implied from the mere existence of their
appellate jurisdiction. This doctrine remains as it applies only to quasi-judicial bodies.
WHEREFORE, the petition is DENIED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
2. MEDICAL PLAZA MAKATI CONDOMINIUM CORP. vs CULLEN

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 181416 November 11, 2013
MEDICAL PLAZA MAKATI CONDOMINIUM CORPORATION, Petitioner,

vs.
ROBERT H. CULLEN, Respondent.
DECISION
PERALTA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the Court of
Appeals (CA) Decision1 dated July 10, 2007 and Resolution2 dated January 25, 2008 in CA-G.R. CV No.
86614. The assailed decision reversed and set aside the September 9, 2005 Order3 of the Regional
Trial Court (RTC) of Makati, Branch 58 in Civil Case No. 03-1018; while the assailed resolution denied
the separate motions for reconsideration filed by petitioner Medical Plaza Makati Condominium
Corporation (MPMCC) and Meridien Land Holding, Inc. (MLHI).
The factual and procedural antecedents are as follows:
Respondent Robert H. Cullen purchased from MLHI condominium Unit No. 1201 of the Medical
Plaza Makati covered by Condominium Certificate of Title No. 45808 of the Register of Deeds of
Makati. Said title was later cancelled and Condominium Certificate of Title No. 64218 was issued in
the name of respondent.
On September 19, 2002, petitioner, through its corporate secretary, Dr. Jose Giovanni E. Dimayuga,
demanded from respondent payment for alleged unpaid association dues and assessments
amounting to ₱145,567.42. Respondent disputed this demand claiming that he had been religiously
paying his dues shown by the fact that he was previously elected president and director of
petitioner.4 Petitioner, on the other hand, claimed that respondent’s obligation was a carry-over of
that of MLHI.5 Consequently, respondent was prevented from exercising his right to vote and be
voted for during the 2002 election of petitioner’s Board of Directors.6 Respondent thus clarified
from MLHI the veracity of petitioner’s claim, but MLHI allegedly claimed that the same had already
been settled.7 This prompted respondent to demand from petitioner an explanation why he was
considered a delinquent payer despite the settlement of the obligation. Petitioner failed to make
such explanation. Hence, the Complaint for Damages8 filed by respondent against petitioner and
MLHI, the pertinent portions of which read:
xxxx
6. Thereafter, plaintiff occupied the said condominium unit no. 1201 and religiously paid all the
corresponding monthly contributions/association dues and other assessments imposed on the
same. For the years 2000 and 2001, plaintiff served as President and Director of the Medical Plaza
Makati Condominium Corporation;
7. Nonetheless, on September 19, 2002, plaintiff was shocked/surprised to receive a letter from the
incumbent Corporate Secretary of the defendant Medical Plaza Makati, demanding payment of
alleged unpaid association dues and assessments arising from plaintiff’s condominium unit no. 1201.
The said letter further stressed that plaintiff is considered a delinquent member of the defendant
Medical Plaza Makati.
x x x;
8. As a consequence, plaintiff was not allowed to file his certificate of candidacy as director. Being
considered a delinquent, plaintiff was also barred from exercising his right to vote in the election of
new members of the Board of Directors x x x;
9. x x x Again, prior to the said election date, x x x counsel for the defendant [MPMCC] sent a
demand letter to plaintiff, anent the said delinquency, explaining that the said unpaid amount is a
carry-over from the obligation of defendant Meridien. x x x;
10. Verification with the defendant [MPMCC] resulted to the issuance of a certification stating that
Condominium Unit 1201 has an outstanding unpaid obligation in the total amount of ₱145,567.42 as
of November 30, 2002, which again, was attributed by defendant [MPMCC] to defendant Meridien.
x x x;
11. Due to the seriousness of the matter, and the feeling that defendant Meridien made false
representations considering that it fully warranted to plaintiff that condominium unit 1201 is free
and clear from all liens and encumbrances, the matter was referred to counsel, who accordingly
sent a letter to defendant Meridien, to demand for the payment of said unpaid association dues and
other assessments imposed on the condominium unit and being claimed by defendant [MPMCC]. x x
x;
12. x x x defendant Meridien claimed however, that the obligation does not exist considering that
the matter was already settled and paid by defendant Meridien to defendant [MPMCC]. x x x;
13. Plaintiff thus caused to be sent a letter to defendant [MPMCC] x x x. The said letter x x x sought
an explanation on the fact that, as per the letter of defendant Meridien, the delinquency of unit
1201 was already fully paid and settled, contrary to the claim of defendant [MPMCC]. x x x;
14. Despite receipt of said letter on April 24, 2003, and to date however, no explanation was given
by defendant [MPMCC], to the damage and prejudice of plaintiff who is again obviously being
barred from voting/participating in the election of members of the board of directors for the year
2003;
15. Clearly, defendant [MPMCC] acted maliciously by insisting that plaintiff is a delinquent member
when in fact, defendant Meridien had already paid the said delinquency, if any. The branding of
plaintiff as delinquent member was willfully and deceitfully employed so as to prevent plaintiff from
exercising his right to vote or be voted as director of the condominium corporation; 16. Defendant
[MPMCC]’s ominous silence when confronted with claim of payment made by defendant Meridien is
tantamount to admission that indeed, plaintiff is not really a delinquent member;
17. Accordingly, as a direct and proximate result of the said acts of defendant [MPMCC], plaintiff
experienced/suffered from mental anguish, moral shock, and serious anxiety. Plaintiff, being a
doctor of medicine and respected in the community further suffered from social humiliation and
besmirched reputation thereby warranting the grant of moral damages in the amount of
₱500,000.00 and for which defendant [MPMCC] should be held liable;
18. By way of example or correction for the public good, and as a stern warning to all similarly
situated, defendant [MPMCC] should be ordered to pay plaintiff exemplary damages in the amount
of ₱200,000.00;
19. As a consequence, and so as to protect his rights and interests, plaintiff was constrained to hire
the services of counsel, for an acceptance fee of ₱100,000.00 plus ₱2,500.00 per every court hearing
attended by counsel;
20. In the event that the claim of defendant [MPMCC] turned out to be true, however, the herein
defendant Meridien should be held liable instead, by ordering the same to pay the said delinquency
of condominium unit 1201 in the amount of ₱145,567.42 as of November 30, 2002 as well as the
above damages, considering that the non-payment thereof would be the proximate cause of the
damages suffered by plaintiff;9
Petitioner and MLHI filed their separate motions to dismiss the complaint on the ground of lack of
jurisdiction.10MLHI claims that it is the Housing and Land Use Regulatory Board (HLURB) which is
vested with the exclusive jurisdiction to hear and decide the case. Petitioner, on the other hand,
raises the following specific grounds for the dismissal of the complaint: (1) estoppel as respondent
himself approved the assessment when he was the president; (2) lack of jurisdiction as the case
involves an intra-corporate controversy; (3) prematurity for failure of respondent to exhaust all
intra-corporate remedies; and (4) the case is already moot and academic, the obligation having been
settled between petitioner and MLHI.11
On September 9, 2005, the RTC rendered a Decision granting petitioner’s and MLHI’s motions to
dismiss and, consequently, dismissing respondent’s complaint.
The trial court agreed with MLHI that the action for specific performance filed by respondent clearly
falls within the exclusive jurisdiction of the HLURB.12 As to petitioner, the court held that the
complaint states no cause of action, considering that respondent’s obligation had already been
settled by MLHI. It, likewise, ruled that the issues raised are intra-corporate between the
corporation and member.13
On appeal, the CA reversed and set aside the trial court’s decision and remanded the case to the
RTC for further proceedings. Contrary to the RTC conclusion, the CA held that the controversy is an
ordinary civil action for damages which falls within the jurisdiction of regular courts.14 It explained
that the case hinged on petitioner’s refusal to confirm MLHI’s claim that the subject obligation had
already been settled as early as 1998 causing damage to respondent.15 Petitioner’s and MLHI’s
motions for reconsideration had also been denied.16
Aggrieved, petitioner comes before the Court based on the following grounds:
I.
THE COURT A QUO HAS DECIDED A QUESTION OF SUBSTANCE, NOT THERETOFORE DETERMINED BY
THE SUPREME COURT, OR HAS DECIDED IT IN A WAY NOT IN ACCORD WITH LAW OR WITH THE
APPLICABLE DECISIONS OF THE SUPREME COURT WHEN IT DECLARED THE INSTANT CASE AN
ORDINARY ACTION FOR DAMAGES INSTEAD OF AN INTRA-CORPORATE CONTROVERSY COGNIZABLE
BY A SPECIAL COMMERCIAL COURT.
II.
THE COURT A QUO HAS DECIDED THE INSTANT CASE IN A WAY NOT IN ACCORD WITH LAW OR WITH
THE APPLICABLE DECISIONS OF THE SUPREME COURT WHEN IT TOOK COGNIZANCE OF THE APPEAL
WHILE RAISING ONLY PURE QUESTIONS OF LAW.17
The petition is meritorious.
It is a settled rule that jurisdiction over the subject matter is determined by the allegations in the
complaint. It is not affected by the pleas or the theories set up by the defendant in an answer or a
motion to dismiss. Otherwise, jurisdiction would become dependent almost entirely upon the
whims of the defendant.18 Also illuminating is the Court’s pronouncement in Go v. Distinction
Properties Development and Construction, Inc.:19
Basic as a hornbook principle is that jurisdiction over the subject matter of a case is conferred by law
and determined by the allegations in the complaint which comprise a concise statement of the
ultimate facts constituting the plaintiff’s cause of action. The nature of an action, as well as which
court or body has jurisdiction over it, is determined based on the allegations contained in the
complaint of the plaintiff, irrespective of whether or not the plaintiff is entitled to recover upon all
or some of the claims asserted therein. The averments in the complaint and the character of the
relief sought are the ones to be consulted. Once vested by the allegations in the complaint,
jurisdiction also remains vested irrespective of whether or not the plaintiff is entitled to recover
upon all or some of the claims asserted therein. x x x20
Based on the allegations made by respondent in his complaint, does the controversy involve intra-
corporate issues as would fall within the jurisdiction of the RTC sitting as a special commercial court
or an ordinary action for damages within the jurisdiction of regular courts?
In determining whether a dispute constitutes an intra-corporate controversy, the Court uses two
tests, namely, the relationship test and the nature of the controversy test.21
An intra-corporate controversy is one which pertains to any of the following relationships: (1)
between the corporation, partnership or association and the public; (2) between the corporation,
partnership or association and the State insofar as its franchise, permit or license to operate is
concerned; (3) between the corporation, partnership or association and its stockholders, partners,
members or officers; and (4) among the stockholders, partners or associates themselves. 22 Thus,
under the relationship test, the existence of any of the above intra-corporate relations makes the
case intra-corporate.23
Under the nature of the controversy test, "the controversy must not only be rooted in the existence
of an intra-corporate relationship, but must as well pertain to the enforcement of the parties’
correlative rights and obligations under the Corporation Code and the internal and intra-corporate
regulatory rules of the corporation."24 In other words, jurisdiction should be determined by
considering both the relationship of the parties as well as the nature of the question involved.25
Applying the two tests, we find and so hold that the case involves intra-corporate controversy. It
obviously arose from the intra-corporate relations between the parties, and the questions involved
pertain to their rights and obligations under the Corporation Code and matters relating to the
regulation of the corporation.26
Admittedly, petitioner is a condominium corporation duly organized and existing under Philippine
laws, charged with the management of the Medical Plaza Makati. Respondent, on the other hand, is
the registered owner of Unit No. 1201 and is thus a stockholder/member of the condominium
corporation. Clearly, there is an intra-corporate relationship between the corporation and a
stockholder/member.
The nature of the action is determined by the body rather than the title of the
complaint.1âwphi1 Though denominated as an action for damages, an examination of the
allegations made by respondent in his complaint shows that the case principally dwells on the
propriety of the assessment made by petitioner against respondent as well as the validity of
petitioner’s act in preventing respondent from participating in the election of the corporation’s
Board of Directors. Respondent contested the alleged unpaid dues and assessments demanded by
petitioner.
The issue is not novel. The nature of an action involving any dispute as to the validity of the
assessment of association dues has been settled by the Court in Chateau de Baie Condominium
Corporation v. Moreno.27 In that case, respondents therein filed a complaint for intra-corporate
dispute against the petitioner therein to question how it calculated the dues assessed against them,
and to ask an accounting of association dues. Petitioner, however, moved for the dismissal of the
case on the ground of lack of jurisdiction alleging that since the complaint was against the
owner/developer of a condominium whose condominium project was registered with and licensed
by the HLURB, the latter has the exclusive jurisdiction. In sustaining the denial of the motion to
dismiss, the Court held that the dispute as to the validity of the assessments is purely an intra-
corporate matter between petitioner and respondent and is thus within the exclusive jurisdiction of
the RTC sitting as a special commercial court. More so in this case as respondent repeatedly
questioned his characterization as a delinquent member and, consequently, petitioner’s decision to
bar him from exercising his rights to vote and be voted for. These issues are clearly corporate and
the demand for damages is just incidental. Being corporate in nature, the issues should be threshed
out before the RTC sitting as a special commercial court. The issues on damages can still be resolved
in the same special commercial court just like a regular RTC which is still competent to tackle civil
law issues incidental to intra-corporate disputes filed before it.28
Moreover, Presidential Decree No. 902-A enumerates the cases over which the Securities and
Exchange Commission (SEC) exercises exclusive jurisdiction:
xxxx
b) Controversies arising out of intra-corporate or partnership relations, between and among

stockholders, members or associates; between any or all of them and the corporation, partnership
or association of which they are stockholders, members, or associates, respectively; and between
such corporation, partnership or association and the State insofar as it concerns their individual
franchise or right to exist as such entity; and
c) Controversies in the election or appointment of directors, trustees, officers, or managers of such

corporations, partnerships, or associations.29
To be sure, this action partakes of the nature of an intra-corporate controversy, the jurisdiction over
which pertains to the SEC. Pursuant to Section 5.2 of Republic Act No. 8799, otherwise known as the
Securities Regulation Code, the jurisdiction of the SEC over all cases enumerated under Section 5 of
Presidential Decree No. 902-A has been transferred to RTCs designated by this Court as Special
Commercial Courts.30 While the CA may be correct that the RTC has jurisdiction, the case should
have been filed not with the regular court but with the branch of the RTC designated as a special
commercial court. Considering that the RTC of Makati City, Branch 58 was not designated as a
special commercial court, it was not vested with jurisdiction over cases previously cognizable by the
SEC.31The CA, therefore, gravely erred in remanding the case to the RTC for further proceedings.
Indeed, Republic Act (RA) No. 9904, or the Magna Carta for Homeowners and Homeowners’
Associations, approved on January 7, 2010 and became effective on July 10, 2010, empowers the
HLURB to hear and decide inter-association and/or intra-association controversies or conflicts
concerning homeowners’ associations. However, we cannot apply the same in the present case as it
involves a controversy between a condominium unit owner and a condominium corporation. While
the term association as defined in the law covers homeowners’ associations of other residential real
property which is broad enough to cover a condominium corporation, it does not seem to be the
legislative intent. A thorough review of the deliberations of the bicameral conference committee
would show that the lawmakers did not intend to extend the coverage of the law to such kind of
association. We quote hereunder the pertinent portion of the Bicameral Conference Committee’s
deliberation, to wit:
THE CHAIRMAN (SEN. ZUBIRI). Let’s go back, Mr. Chair, very quickly on homeowners.
THE ACTING CHAIRMAN (REP. ZIALCITA). Ang sa akin lang, I think our views are similar, Your Honor,
Senator Zubiri, the entry of the condominium units might just complicate the whole matters. So
we’d like to put it on record that we’re very much concerned about the plight of the Condominium
Unit Homeowners’ Association. But this could very well be addressed on a separate bill that I’m
willing to co-sponsor with the distinguished Senator Zubiri, to address in the Condominium Act of
the Philippines, rather than address it here because it might just create a red herring into the entire
thing and it will just complicate matters, hindi ba?
THE CHAIRMAN (SEN. ZUBIRI). I also agree with you although I sympathize with them---although we
sympathize with them and we feel that many times their rights have been also violated by abusive
condominium corporations. However, there are certain things that we have to reconcile. There are
certain issues that we have to reconcile with this version.
In the Condominium Code, for example, they just raised a very peculiar situation under the
Condominium Code --- Condominium Corporation Act. It’s five years the proxy, whereas here, it’s
three years. So there would already be violation or there will be already a problem with their
version and our version. Sino ang matutupad doon? Will it be our version or their version?
So I agree that has to be studied further. And because they have a law pertaining to the
condominium housing units, I personally feel that it would complicate matters if we include them.
Although I agree that they should be looked after and their problems be looked into.
Probably we can ask our staff, Your Honor, to come up already with the bill although we have no
more time. Hopefully we can tackle this again on the 15th Congress. But I agree with the sentiments
and the inputs of the Honorable Chair of the House panel.
May we ask our resource persons to also probably give comments?
Atty. Dayrit.
MR. DAYRIT.
Yes I agree with you. There are many, I think, practices in their provisions in the Condominium Law
that may be conflicting with this version of ours.
For instance, in the case of, let’s say, the condominium, the so-called common areas and/or maybe
so called open spaces that they may have, especially common areas, they are usually owned by the
condominium corporation. Unlike a subdivision where the open spaces and/or the common areas
are not necessarily owned by the association. Because sometimes --- generally these are donated to
the municipality or to the city. And it is only when the city or municipality gives the approval or the
conformity that this is donated to the homeowners’ association. But generally, under PD
[Presidential Decree] 957, it’s donated. In the Condominium Corporation, hindi. Lahat ng mga open
spaces and common areas like corridors, the function rooms and everything, are owned by the
corporation. So that’s one main issue that can be conflicting.
THE CHAIRMAN (SEN. ZUBIRI). I’ll just ask for a one-minute suspension so we can talk.
THE ACTING CHAIRMAN (REP. ZIALCITA). Unless you want to put a catchall phrase like what we did
in the Senior Citizen’s Act. Something like, to the extent --- paano ba iyon? To the extent that it is
practicable and applicable, the rights and benefits of the homeowners, are hereby extended to the -
-- mayroon kaming ginamit na phrase eh...to the extent that it be practicable and applicable to the
unit homeoweners, is hereby extended, something like that. It’s a catchall phrase. But then again, it
might create a...
MR. JALANDONI. It will become complicated. There will be a lot of conflict of laws between the two
laws.
THE ACTING CHAIRMAN (REP. ZIALCITA). Kaya nga eh. At saka, I don’t know. I think the --- mayroon
naman silang protection sa ano eh, di ba? Buyers decree doon sa Condominium Act. I’m sure there
are provisions there eh. Huwag na lang, huwag na lang.
MR. JALANDONI. Mr. Chairman, I think it would be best if your previous comments that you’d be
supporting an amendment.1âwphi1 I think that would be --- Well, that would be the best course of
action with all due respect.
THE ACTING CHAIRMAN (REP. ZIALCITA). Yeah. Okay. Thank you. So iyon na lang final proposal
naming ‘yung catchall phrase, "With respect to the..."32
xxxx
THE CHAIRMAN (SEN. ZUBIRI). xxx And so, what is their final decision on the definition of
homeowners?
THE ACTING CHAIRMAN (REP. ZIALCITA).
We stick to the original, Mr. Chairman. We’ll just open up a whole can of worms and a whole new
ball game will come into play. Besides, I am not authorized, neither are you, by our counterparts to
include the condominium owners.
THE CHAIRMAN (SEN. ZUBIRI).
Basically that is correct. We are not authorized by the Senate nor – because we have discussed this
lengthily on the floor, actually, several months on the floor. And we don’t have the authority as well
for other Bicam members to add a provision to include a separate entity that has already their legal
or their established Republic Act tackling on that particular issue. But we just like to put on record,
we sympathize with the plight of our friends in the condominium associations and we will just
guarantee them that we will work on an amendment to the Condominium Corporation Code. So
with that – we skipped, that is correct, we have to go back to homeowners’ association definition,
Your Honor, because we had skipped it altogether. So just quickly going back to Page 7 because
there are amendments to the definition of homeowners. If it is alright with the House Panel, adopt
the opening phrase of Subsection 7 of the Senate version as opening phrase of Subsection 10 of the
reconciled version.
x x x x33
To be sure, RA 4726 or the Condominium Act was enacted to specifically govern a condominium.
Said law sanctions the creation of the condominium corporation which is especially formed for the
purpose of holding title to the common area, in which the holders of separate interests shall
automatically be members or shareholders, to the exclusion of others, in proportion to the

appurtenant interest of their respective units.34 The rights and obligations of the condominium unit
owners and the condominium corporation are set forth in the above Act.
Clearly, condominium corporations are not covered by the amendment. Thus, the intra-corporate
dispute between petitioner and respondent is still within the jurisdiction of the RTC sitting as a
special commercial court and not the HLURB. The doctrine laid down by the Court in Chateau de
Baie Condominium Corporation v. Moreno35 which in turn cited Wack Wack Condominium
Corporation, et al v. CA36 is still a good law.
WHEREFORE, we hereby GRANT the petition and REVERSE the Court of Appeals Decision dated July
10, 2007 and Resolution dated January 25, 2008 in CA-G.R. CV No. 86614. The Complaint before the
Regional Trial Court of Makati City, Branch 58, which is not a special commercial court, docketed as
Civil Case No. 03-1018 is ordered DISMISSED for lack of jurisdiction. Let the case be REMANDED to
the Executive Judge of the Regional Trial Court of Makati City for re-raffle purposes among the
designated special commercial courts.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
3. SANDOVAL vs CANEBA

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 90503 September 27, 1990
NESTOR SANDOVAL, petitioner,

vs.
HON. DOROTEO CAÑEBA, Presiding Judge, RTC, Manila, Branch 20, DEPUTY SHERIFF OF MANILA
(RTC, Manila, Branch 20), and ESTATE DEVELOPERS & INVESTORS CORPORATION, respondents.
Arnold V. Guerrero & Associates for petitioner.
Lino M. Patajo for private respondent.
GANCAYCO, J.:
The issue in this petition is whether or not the ordinary courts have jurisdiction over the collection
of unpaid installments regarding a subdivision lot.
On August 20, 1987 private respondent filed a complaint in the Regional Trial Court (RTC) of Manila
for the collection of unpaid installments regarding a subdivision lot, pursuant to a promissory note,
plus interest. On January 29, 1988 the trial court rendered a decision.
It appears that petitioner was declared in default so much so that after receiving the evidence of
private respondent, the trial court rendered its decision on January 19,1988, the dispositive portion
of which reads as follows:
WHEREFORE, on the allegations and the prayer of the complaint and the evidence adduced in
support therefor, judgment is hereby rendered, ordering the defendant to pay plaintiff the
following:
1. The sum of P73,867.42 plus interest and other charges commencing from January 1, 1988 until
fully paid;
2. Such sum which shall not be less than P2,000.00 or 25% of the amount of delinquency whichever
is greater, as and for attorney's fees.
3. Costs against the defendant.
4. SO ORDERED. 1
On September 28, 1988 the trial court issued an order directing the issuance of a writ of execution
to enforce its decision that had become final and executory.
On September 30, 1988 petitioner filed a motion to vacate judgment and to dismiss the complaint
on the ground that the lower court has no jurisdiction over the subject matter and that its decision
is null and void. A motion for reconsideration of the writ of execution was also filed by petitioner. An
opposition to both motions was filed by private respondent to which a reply was filed by petitioner.
On February 17, 1989 the trial court denied the motion to vacate the judgment on the ground that it
is now beyond the jurisdiction of the Court to do so. It directed the issuance of a writ of execution
anew.
Hence the herein petition wherein it is alleged that the trial court committed a grave abuse of
discretion as follows:
5.1. The respondent Judge gravely abused his discretion and acted without jurisdiction in taking
cognizance of the complaint before him notwithstanding that exclusive and original jurisdiction over
the subject-matter thereof is vested with the Housing and Land Use Regulatory Board (HLURB)
pursuant to PD 957.
5.2. The respondent Judge gravely abused his discretion and acted without jurisdiction in refusing to
vacate his judgment rendered without jurisdiction and in issuing a writ of execution to implement
his abovesaid void judgment. 2
The petition is impressed with merit.
Under Section 1 of Presidential Decree No. 957 the National Housing Authority (NHA) was given the
exclusive jurisdiction to hear and decide certain cases as follows:
SEC.1. In the exercise of its function to regulate the real estate trade and business and in addition to
its powers provided for in Presidential Decree No. 957, the National Housing Authority shall
have exclusive jurisdiction to hear and decide cases of the following nature:
A. Unsound real estate business practices:
B. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer
against the project owner, developer, dealer, broker or salesman;and
C. Cases involving specific performance of contractual and statutory obligations filed by buyers of
subdivision lot or condominium unit against the owner, developer, dealer, broker or salesman.
(Emphasis supplied.)
The language of this section, particularly, the second portion thereof, leaves no room for doubt that
exclusive jurisdiction over the case between the petitioner and private respondent is vested not on
the RTC but on the NHA. The NHA was re-named Human Settlements Regulatory Commission and
thereafter it was re-named as the Housing and Land Use Regulatory Board (HLURB). 3
Undeniably the sum of money sought to be collected by private respondent from petitioner
represented unpaid installments of a subdivision lot which the petitioner purchased. Petitioner
alleges that he suspended payments thereof because of the failure of the developer to develop the
subdivision pursuant to their agreement.
In Antipolo Realty Corporation vs. National Housing Authority, 4 the suit which was filed with the
NHA, likewise involved non-payment of installments over a subdivision lot, wherein this Court held
that the NHA has exclusive authority to hear and decide the case.
In Solid Homes, Inc. vs. Teresita Payawal, 5 this Court ruled that upon the issuance of Presidential
Decree No. 957, the trial court may no longer assume jurisdiction over the cases enumerated in
Section 1 of Presidential Decree No. 397. We even stated therein that the Housing and Land Use
Regulatory Board has the authority to award damages in the exercise of this exclusive power
conferred upon it by Presidential Decree No. 1344.
In Estate Developers and Investors Corporation vs. Antonio Sarte and Erlinda Sarte, G.R. No. 93646,
which is a case substantially similar to the instant case, in a resolution of August 13, 1990 this Court
upheld the exclusive jurisdiction of the HLURB over the collection suit.
Considering that the trial court has no jurisdiction under the circumstances obtaining in this case,
the decision it rendered is null and void ab initio. It is as if no decision was rendered by the trial
court at all.
When as in this case the attention of the trial court is drawn to its lack of competence and authority
to act on the case, certainly the trial court has a duty to vacate the judgment by declaring the same
to be null and void ab initio.
This is as it should be. Inasmuch as the questioned judgment is null and void, it is, as above
observed, as if no decision had been rendered by the trial court. It cannot become final and
exucutory, much less can it be enforced by a writ of execution.
The trial court, rather than reiterating the issuance of a writ of execution in this case, which it did,
should have recalled and cancelled the writ of execution of the judgment.
WHEREFORE, the petition is GRANTED. The questioned decision of the trial court dated January 29,
1988 is hereby declared null and void for lack of jurisdiction. No pronouncement as to costs.
SO ORDERED.
4. MAGPALE vs CIVIL SERVICE COMMISSION

SUPREME COURT
Manila
EN BANC
G.R. No. 97381 November 5, 1992
BENIGNO V. MAGPALE, JR., petitioner,

vs.
CIVIL SERVICE COMMISSION and ROGELIO A. DAYAN, in his capacity as the General Manager of the
Philippine Ports Authority, respondents.
MELO, J.:
Before Us is a petition for review on certiorari assailing Resolution No. 90-962 dated October 19, 1990 of
respondent Civil Service Commission (CSC). Said CSC resolution set aside and modified the decision
dated February 5, 1990 of the Merit System Protection Board in MSPB Case No. 449, which ordered the
immediate reinstatement in the service of herein petitioner Benigno V. Magpale, Jr., without loss of
seniority rights and with payment of back salaries and other emoluments to which he is entitled under
the law.
The record shows that petitioner started his career in government as an employee in the Presidential
Assistance on Community Development in 1960. Fifteen years later, or in 1975, he transferred to the
Philippine Ports Authority (PPA) as Arrastre Superintendent. He was promoted to the position of Port
Manager in 1977 of the Port Management Unit (PMU), General Santos City. Then he was reassigned, in
the same year to PPA-PMU, Tacloban City where he likewise discharged the functions of Port Manager.
On December 1, 1982, the PPA General Manager designated Atty. William A. Enriquez as officer-in-
charge of PPA-PMU, Tacloban City effective December 6, 1982. On January 6, 1983, petitioner was
ordered to immediately report to the Assistant General Manager (AGM) for Operation, PPA, Manila,
Petitioner reported at PPA Manila on the same date and performed the duties and functions assigned to
him.
In an Internal Control Department Report dated March 5, 1984, the PMU-Tacloban Inventory Committee
and the Commission on Audit (COA) stated that petitioner failed to account for equipment of PPA value
at P65,542.25 and to liquidate cash advances amounting to P130,069.61. He was found also to have
incurred unauthorized absences from May 25, 1984 to July 23, 1984.
On July 23, 1984, or nineteen months after he began reporting in Manila, a formal charge for
Dishonesty, Pursuit of Private Business without permission as required by Civil Service Rules and
Regulations, Frequent and Unauthorized Absences and Neglect of Duty was filed against petitioner.
Based on said charges he was ordered preventively suspended and has been out of service since then.
For almost four years the case remained unacted upon. The formal investigation and hearing resumed
on September 18, 1987.
On January 18, 1989 a Decision was rendered by the Secretary of the Department of Transportation and
Communication (DOTC), through its Administrative Action Board, finding petitioner guilty of Gross
Negligence on two counts: (a) for his failure to account for the forty-four (44) assorted units of
equipment, among them a Sony Betamax and a TV Camera, and (b) for failing to render the required
liquidation of his cash advances amounting to P44,877.00 for a period of four years. Petitioner was also
found guilty of frequent and unauthorized absences. Accordingly, he was meted the penalty of dismissal
from the service with the corresponding accessory penalties.
When petitioner's motion for reconsideration of the aforesaid Decision was denied in the DOTC's Order
of February 20, 1989, he appealed to the Merit System and Protection Board (MSPB) of respondent Civil
Service Commission.
On February 5, 1990, the MSPB rendered a Decision reversing the Decision of the DOTC. The pertinent
portion of the MSPB's Decision reads:
After a careful review of the record of the case, this Board found the appeal meritorious.
Respondent cannot be held liable for Gross Negligence for his alleged failure to account
for several properties and for failure to liquidate the cash advances he received as there
was no showing that he has been specifically required to do so either by law or
regulation. The mere detail of respondent to PPA-Manila, in the absence of an order
requiring him to turn over and account for the funds and property received for his office
at PMU-Tacloban will not necessarily obligate him to make accounting for the same.
Moreover, Section 105, Chapter 5 of Presidential Decree 1445, otherwise known as "The
Government Auditing Code of the Philippines" measured the liability of an officer
accountable for government property only to the money value of said property. Though
respondent is the person primarily liable for these funds and property, he holds this
liability jointly with the person who has the actual possession thereof and who has the
immediate responsibility for the safekeeping.
As to the charge relative to respondent's frequent unauthorized absences had been

sufficiently and convincingly explained, due to which the Board found him not at all
guilty of the offense charged (sic).
IN VIEW THEREOF, the decision appealed from is hereby reversed. Respondent-

Appellant Magpale should immediately by reinstated in the service without loss of
seniority rights and with payment of back salaries and other emoluments to which he is
entitled under the law. (pp. 31-32, Rollo.)
On March 1, 1990, PPA, through its General Manager, herein respondent Rogelio A Dayan, filed an
appeal with the Civil Service Field Office-PPA, and the latter office indorsed the appeal to respondent
CSC in a letter dated March 5, 1990.
On March 5, 1990, petitioner requested the Secretary of the DOTC to direct the PPA to implement the
MSPB decision as it has become final and executory. Said request was reiterated in another letter also
dated March 5, 1990 by petitioner to OIC Wilfredo M. Trinidad of the Office of the Assistant Secretary
for Administration and Legal Affairs, DOTC.
On March 13, 1990, petitioner filed with the MSPB a Motion for Implementation of the MSPB decision.
This was opposed by the PPA through its General Manager.
On April 27, 1990 petitioner filed with respondent CSC his comment to the appeal of the PPA contending
that he is not an accountable officer and is under no obligation to account for the property and
equipment; that said property and equipment were not received by him as custodian and he should not
be held liable for the loss of the same; that the said property and equipment were place in PPA-PMU
Tacloban City which the herein petitioner left on October 8, 1982 and since then had lost control over
them. Moreover, petitioner averred that as to the unliquidated cash advances of P44,877.00, the same
had long been liquidated. Finally, petitioner claimed that his failure to secure the clearance for any
possible property or financial obligation in PMU-Tacloban was due to the urgency of his transfer to PPA-
Manila and the absence of any order or demand to secure the clearance.
On May 29, 1990, the MSPB issued an Order for the immediate implementation of its February 5, 1990
Decision ruling that:
Records further show that a copy of this Board's decision was received by the Office of
the Honorable Secretary, that Department, thru Mr. Frankie Tampus on February 6,
1990. Records finally show that as of March 5, 1990, no motion for reconsideration of
this Board's aforementioned decision has ever been filed as evidenced by the
certification of even date issued and signed by Director Adelaida C. Montero of the
Office for Central Personnel Records, this Commission. Hence, said decision has long
become final and executory. (p. 34, Rollo.)
On June 28, 1990, petitioner filed a Motion to Dismiss the appeal of PPA claiming that:
1. Appeal of PPA was filed out of time and that the CSC has no jurisdiction over it;
2. The PPA has not exhausted administrative remedies before appealing to the higher
body, the CSC;
3. The MSPB decision has become final and therefore cannot be disturbed anymore.
(p. 22, Rollo.)
On October 19, 1990, respondent CSC rendered its now assailed Resolution No. 90-962, the pertinent
portion of which reads as follows:
The Commission thus holds respondent Magpale guilty of Gross Neglect of Duty on two
(2) counts for the forty-four (44) equipments (sic) under his charge and to render an
accounting for cash advances amounting to P44,877.90. Accordingly, considering two
mitigating circumstances of length of service and first offense in favor of respondent,
the commission hereby imposes a penalty of suspension for a period of one (1) year
against him. As he has been out of the service since 1984, the penalty is deemed served
and he should now be reinstated to his former position. This is, however, without
prejudice to any criminal or civil proceedings that the agency concerned or the COA may
institute as proper under the premises.
Finally, the decision of the MSPB exonerating the respondent Magpale for Gross
Negligence is hereby reversed. Corollarily, the order of payment of back salaries is
hereby set aside. MSPB is likewise reminded to be more circumspect on matters of this
nature, especially as the instant case involves accountability of public funds and
property.
WHEREFORE, foregoing premises considered, the Commission finds respondent Benigno

V. Magpale, Jr., guilty of Gross Neglect of Duty on two (2) counts for failure to account
for the forty-four (44) equipments (sic) under his charge and to render an accounting for
cash advance amounting to P44,877.90. In view of the attendant mitigating
circumstances of length of service and first offense in favor of respondents and the
Neglect of Duty to account for cash advance in the amount of P44,877.90 (second
count) be appreciated as an aggravating circumstances, the penalty of suspension for
one (1) year shall be imposed against respondent. This shall be without prejudice to any
criminal or civil proceeding that PPA or COA may institute against respondent.
Accordingly, the Decision and Order of MSBP dated February 5, 1990 and May 29, 1990,
respectively, are hereby set aside. (pp. 27-28, Rollo.)
Hence, the present recourse.
The petition alleges that respondent CSC, in issuing its Resolution No. 90-962, gravely abused its
discretion because:
1. The law did not authorize an appeal by the government from an adverse decision of
the Merit Systems Protection Board (MSBP);
2. Respondent PPA General Manager did not have the right or legal personality to
appeal from the MSPB decision;
3. Assuming that the appeal was available to respondent DAYAN, the same was filed out
time after the MSPB decision had long become final and executory. (pp. 6-7, Petition;
pp. 7-8, Rollo.)
In support of this first contention, petitioner invokes Paragraph 2(a). Section 16, Chapter 3, Subtitle A,
Title I, Book V of Executive Order No. 292, otherwise known as the Administrative Code of 1987 which
provides:
Sec. 16. Offices in the Commission. — The Commission shall have the following offices:
xxx xxx xxx
(2) The Merit Systems Protection Board composed of a Chairman and

two (2) members shall have the following functions:
(a) Hear and decide on appeal administrative cases

involving officials and employees of the Civil Service. Its
decision shall be final except those involving dismissal or
separation from the service which may be appealed to
the Commission. (Emphasis supplied.)
claiming that since the MSBP decision was for dismissal or separation from the service, but
reinstatement without loss of seniority rights and with payment of back salaries, the said MSBP decision
should be deemed final, immediately executory and unappealable.
Petitioner next contends that assuming, for the sake of argument, that the decision of the MSBP was
appealable, respondent Dayan, even in his capacity as General Manager of the PPA, did not have the
legal personality not the right to appeal the decision of the MSBP, citing Paragraph 1, Section 49,
Chapter 7, Subtitle A, Title I, Book V, of Executive Order No. 292 and the case of Paredes vs. CSC, G.R.
No. 88177, December 4, 1990, 192 SCRA 84.
Assuming further that the MSBP decision was appealable and that respondent Dayan had the legal
personality to appeal the MSBP decision, petitioner still contends that the appeal should not have been
given due course by the respondent CSC because the appeal was not filed with the proper disciplining
office in accordance with same Section 49 of Executive Order No. 292, which in this case, should be the
DOTC, not with the CSC Field Office at the PPA.
On the merit of the petition, petitioner claims that assuming even further that an appeal lies from the
MSBP decision, that respondent Dayan had the legal personality or standing to institute the appeal that
it was filed with the proper office, still CSC Resolution 90-962 was rendered with grave abuse of
discretion because petitioner cannot be suspended for alleged failure to account for pieces of
equipment and cash advances since this is not the neglect of duty contemplated by Section 36 of
Presidential Degree No. 807 or Section 46 of chapter in the Civil Service in Executive Order 292. At most,
petitioner can be held liable for the money value of the equipment and advances as mandated by
Section 105 of Presidential Decree No. 1445, the Government Auditing Code of the Philippines.
For its part, respondent CSC maintains —
First, that the finality of the MSPB decision in the disciplinary cases as stated in Section 16, Paragraph
2(a), Book V of Executive Order No. 292, relied upon by petitioner, is modified by section 12, Paragraph
11, Book V, of the same Executive Order No. 292, which reads:
Sec. 12. Powers and Functions. — The Commission shall have the following powers and
functions:
xxx xxx xxx
(11) Hear and decide administrative case instituted by or bought directly or on appeal,
including contested appointments, and review decisions and actions of its offices and of
the agencies attached to it.
Furthermore, relevant provisions of Executive Order No 135 dated February 25, 1987 amending Section
19(b) of Presidential Decree No. 807 and Section 8 of Presidential Decree No. 1409 state, thus:
WHEREAS, in the interest of justice, there is a need to confer upon the Civil Service
Commission jurisdiction over appeal in contested or provisional appointments and to
make its decision thereon, as well as in administrative disciplinary cases final and
reviewable by the Supreme Court.
xxx xxx xxx
Relationship with the Civil Service Commission. –– The Commission shall hear and
decide appeals from other decisions of the Board provided that the decisions of the
Commission shall be subject to review on certiorari upon receipt of the copy thereof by
the aggrieved part.
Thus, respondent CSC argues that it is deemed not to have lost its appellate jurisdiction over the
decisions of the MSPB in administrative disciplinary case.
Second, the case of Paredes vs. CSC is not applicable. Respondent Dayan appealed the MSPB decision
not in his personal capacity nor in pursuit in his private interest, but as head of PPA, being the general
manager thereof.
Third, the appeal was filed with the proper disciplining office because the decision appealed from was
that of the MSPB, one of the offices in respondent CSC. Thus, respondent CSC was justified in giving due
course to PPA's notice of appeal filed with its (CSC) Field Office at the PPA.
Finally, petitioner's claim that he is liable only for the money value of the property and cash advances
and cannot be administratively charged for such infraction is untenable and a mockery of the civil
service law. For his failure to account for the property under his charge and to liquidate his cash
advances, petitioner is guilty of Gross Neglect of Duty and should have been dismissed from the service
if no mitigating circumstances were considered in his favor.
We gave due course to the petition and required the parties to file their respective memoranda. After
considering the same and the pertinent laws and jurisprudence, We find that the petition must be
granted.
After Mendez vs. Civil Service Commission, (204 SCRA 965 [1991]), the extent of the authority of
respondent CSC to review the decisions of the MSPB is now a settled matter.
The Court, in said case held:
It is axiomatic that the right to appeal is merely a statutory privilege and

may be exercised only in the manner and in accordance with the
provisions of law. (Victorias Milling Co., Inc. vs. Office of the Presidential
Assistant for Legal Affairs, 153 SCRA 318).
A cursory reading of P.D. 807, otherwise known as "The Philippines Civil

Service Law" shows that said law does not contemplate a review of
decisions exonerating officers or employees from administrative
charges.
Section 37 paragraph (a) thereof, provides:
The Commission shall decide upon appeal all administrative disciplinary

cases involving the imposition of the penalty of suspension for more
than thirty days, or fine in an amount exceeding thirty day's salary,
demotion in rank or salary or transfer, removal or dismissal from office.
. . . (Emphasis supplied) (p. 7. Rollo)
Said provisions must be read together with Section 39 paragraph (a) of P.D. 805 which
contemplates:
Appeals, where allowable, shall be made by the party adversely affected

by the decision . . . (Emphasis supplied) (p. 104, Rollo)
The phrase "party adversely affective by the decision" refers to the government
employees against whom the administrative case is filed for the purpose of disciplinary
action which may take the form of suspension, demotion in rank or salary, transfer,
removal or dismissal from office. In the instant case, Coloyan who filed the appeal
cannot be considered an aggrieved party because he is not the respondent of the

administrative case below.
Finally, pursuant to Section 37 paragraph (b) of P.D. 807, the city mayor, as head of the
city government, is empowered to enforce judgment with finality on lesser penalties like
suspension from work for one month and forfeiture of salary equivalent to one month
against erring employees.
By inference or implication, the remedy of appeal may be availed of only in a case where
the respondent is found guilty of the charges filed against him. But the respondent is
exonerated of said charges, as in this case, there is no occasion on appeal. (pp. 967-968)
The above ruling is a reiteration of the earlier pronouncement in Paredes vs. Civil Service Commission,
(192 SCRA 84 [1990]) cited by petitioner, where We said:
Based on the above provisions of law, appeal to the Civil Service Commission in an
administrative case is extended to the party adversely affected by the decision, that is,
the person or the respondent employee who has been meted out the penalty of
suspension for more than thirty days; or fine in an amount exceeding thirty days salary
demotion in rank or salary or transfer, removal or dismissal from office. The decision of
the disciplining authority is even final and not appealable to the Civil Service
Commission in cases where the penalty imposed is suspension for not more than thirty
days or fine in an amount not exceeding thirty days salary. Appeal in cases allowed by
law must be filed within fifteen days from receipt of the decision.
Here the MSPB after hearing and the submission of memoranda exonerated private
respondent Amor of all charges except for habitual tardiness. The penalty was only a
reprimand so that even private respondent Amor, the party adversely affected by the
decision, cannot even interpose an appeal to the Civil Service Commission.
As correctly ruled by respondent, petitioner Paredes the complainant is not the part
adversely affected by the decision so that she has no legal personality to interpose an
appeal to the Civil Service Commission. In an administrative case, the complainant is a
mere witness (Gonzalo vs. D. Roda, 64 SCRA 120). Even if she is the Head of the
Administrative Services Department of the HSRC as a complaint she is merely a witness
for the government in an administrative case. No private interest is involved in an
administrative case as the offense is committed against the government. (pp. 98-99)
While it is true, as contended by respondent Civil Service Commission that under Section 12 (par. 11),
Chapter 3, Subtitle A, Book V of Executive Order 292, the CSC does have the power to —
Hear and decide administrative cases instituted by or brought before it directly or on

appeal, including contested appointments, and review decisions and actions of its
offices and of the agencies attached to it. . . .
the exercise of the power is qualified by and should be read together with the other sections of the
same sub-title and book of Executive Order 292, particularly Section 49 which prescribes the following
requisites for the exercise of the power of appeal, to wit:
(a) the decision must be appealable;
(b) the appeal must be made by the party adversely affected by the decision;
(c) the appeal must be made within fifteen days from receipt of the decision, unless a
petition for the reconsideration is seasonably filed; and
(d) the notice of appeal must be filed with the disciplining office, which shall forward the
records of the case, together with the notice of appeal to the appellate authority within
fifteen days from filing of the notice of appeal, with its comments, if any.
Under Section 47 of the same Code, the CSC shall decide on appeal all administrative disciplinary cases
involving the imposition of:
(a) a penalty of suspension for more than thirty days; or
(b) fine in an amount exceeding thirty days salary; or
c) demotion in rank or salary or transfer; or
(d) removal or dismissal from office.
The February 5, 1990 decision of the MSPB did not involve dismissal or separation from office, rather,
the decision exonerated petitioner and ordered him reinstated to his former position. Consequently, in
the light of our pronouncements in the aforecited cases of Mendez v. Civil Service
Commission and Paredes vs. Civil Service Commission, the MSPB decision was not a proper subject of
appeal to the CSC.
Settled is the rule that a tribunal, board, or officer exercising judicial functions acts without jurisdiction if
no authority has been conferred by law to hear and decide the case. (Acena v. Civil Service Commission,
193 SCRA 623 [1991]).
WHEREFORE, the decision of the Civil Service Commission is hereby ANNULLED and SET ASIDE and the
decision of the Merit Systems Protection Board dated February 5, 1990 is hereby REINSTATED.
SO ORDERED
5. DE MURGA vs CHAN

SUPREME COURT
Manila
EN BANC
G.R. No. L-24680 October 7, 1968
JESUSA VDA. DE MURGA, plaintiff-appellee,

vs.
JUANITO CHAN, defendant-appellant.
Jose Go and Fernando P. Blanco for plaintiff-appellee.

Abelardo A. Climaco, T. de los Reyes, Enrique A. Fernandez and Ernani Cruz Paño for defendant-
appellant.
ANGELES, J.:
In this appeal, two issues involving questions of law are posed for resolution: First, whether or not
the allegations in the complaint constitute a cause of action for unlawful detainer, and confer
jurisdiction over the case to the municipal court (now city court) of Zamboanga City, under the
provisions of Rule 70 of the Rules of Court and decisions interpreting the same, when particularly
considered in the light of the contexture of the pertinent letter of demand to vacate the leased
premises (Annex J of the Complaint), couched in the following wise:
Please be advised further that we reiterate our demand made to you in our registered letter dated
February 4, 1959 (to vacate the leased premises) which was received by you on the 10th instant,
unless you pay the amount of Six Hundred pesos (P600.00) or Seven Hundred pesos (P700.00) as
new rental per our letter of January 19, 1959, before the expiration of the 15-day period granted
you for vacating the same.
and, Second, whether or not the lessor and the lessee had agreed upon an automatic renewal of the
lease of the premises, under the stipulation in clause "7" of the corresponding contract of lease,
containing the following agreement:
7. — That upon the termination of the term of Ten (10) years above expressed, the said Jesusa Vda.
de Murga shall have the option to purchase the building or buildings belonging to and constructed
by the said Juanito Chan, and the price of said building or buildings shall be determined by three
commissioners, two of whom shall be appointed by each of the parties, and the remainder
commissioner shall be appointed by both. However, in the event that the said Jesusa Vda. de Murga
shall not exercise the right granted her for any reason or cause, this contract of lease shall be
automatically renewed but the period for said renewal shall, however, be fixed and adjusted again
by the parties. It is agreed further that in case of said renewal, the rental shall also be adjusted by
the parties depending on the business condition which shall then at that time prevail. (Exhibit A.)
Jesusa Vda. de Murga was the owner of two parcels of land in the City of Zamboanga, designated as
lots 36 and 38 of the cadastral plan of the place, and covered by Transfer Certificates of Title Nos.
3237 and 3238, respectively.
On January 31, 1949, a contract of lease over said two lots was entered into by and between Jesusa
Vda. de Murga as lessor, and Juanito Chan as lessee, the basic terms of which pertinent to the
present case are: The period of the lease was ten (10) years from January 31, 1949; the lessee to pay
a monthly rent of P500.00 within the first ten days of every month; with the consent of the lessor,
the lessee may introduce improvements on the land; and Clause "7" quoted hereinabove. (Exhibit
A.)
Upon taking possession of the leased premises, with the consent of the lessor, the lessee introduced
improvements on the land consisting of buildings of the total costs of P70,000.00. It is not disputed
that the lessee paid in full the monthly rent during the ten- year period of the lease.
As early as July 23, 1958, before the expiration of the ten-year period of the lease, there had been
intercourse of communications between the lessor and the lessee for the renewal of the lease, but
the parties failed to arrive at an agreement; hence, this action by the lessor against the lessee.
Thus, on July 23, 1958, the lessor informed the lessee of her willingness to renew the lease for five
years at a monthly rent of P700.00. (Exhibit B.) In his reply the lessee said:
... Much as I am willing to consider the suggested increase of rental, however, I would like to plead
with you that due to very poor business at present, I may not be able to consider your indicated
increase. (Exhibit C.)
On August 1, 1958, the lessor advised the lessee that:
Beginning February 1, 1959, ... the rental of my lots ... will be P700.00. (Exhibit D.)
On January 18, 1959, the lessee advised the lessor that she (lessor) should purchase the buildings
constructed on the land in accordance with the stipulation in the contract of lease, and —
... In case you do not agree with the purchase of the aforesaid buildings, I am willing to continue
occupying the land and execute a new contract of lease, but I am appealing to you to take into
consideration the prevailing business conditions by reducing the monthly rental to P400.00, ...
(Exhibit L.)
On January 19, 1959, the lessor replied that —
... she rejects the option to purchase the buildings, ... and her present last offer is: (a) Six hundred
pesos (P600.00) rentals payable within the first fifteen days of every month, without contract; or (b)
Seven hundred pesos (P700.00) rentals payable within the first fifteen days of every month, one
year advanced rental, with a five-year contract. (Exhibit F.)
On January 20, 1959, the lessor informed the lessee that the conditions stated in the latter's letter
of January 18, 1959, were not acceptable to her. (Exhibit G.)
On January 21, 1959, the lessee advised the lessor that he (lessee) cannot accept the conditions
stated in her (lessor's) letters of January 19 and 20, 1959 —
... y, insists que Vd. compre mis casas enclavadas en los lotes objeto de arrendamiento. Y en caso de
su negative seguire ocupando el solar bajo el pago de un alquiler mensual de Quinientos pesos
(P500.00) debido al negocio reinante en estos dias, tal como esta dispuesto en el contrato de
arrendamiento firmado por Vd. y yo el dia 31 de Enero de 1949." (Exhibit H.)
On February 4, 1959, the lessor made demand on the lessee to vacate the premises —
... for the reason that the lease contract had expired on January 31, 1959, ... and the lessor had
waived the right to exercise the option granted her under paragraph "7" of said contract, ... (Exhibit
I.)
On February 16, 1959, the lessee sent his check for P500.00 to the lessor in payment of the monthly
rental corresponding to the month of February, 1959. (See Exhibit J.)
On February 19, 1959, the lessor returned to the lessee the check which the latter had sent to the
former, stating further in the letter that she was demanding that the leased premises be vacated, if
he (lessor) would not agree to pay the new rental of P600.00 or P700.00 a month beginning
February 1, 1959, as embodied in the letter, Exhibit J, hereinabove quoted.
Disregarding the written demand of the lessor, dated February 19, 1959, Exhibit J, the lessee chose
to remain in the possession of the leased premises and insisted that the contract of lease stipulated
an automatic renewal of the lease, and conformably thereto, he has a right to continue occupying
the premises; and as token of his decision, he sent to the lessor his check for P500.00 in payment of
the monthly rent corresponding to the month of February 1959. The lessor was undoubtedly not
satisfied with the tendered amount of P500.00, because she had demanded P600.00 or P700.00, as
new monthly rent as a condition for the renewal of the lease. And without any
further definite demand on the lessee to vacate the premises filed, on March 10, 1959, a complaint
of unlawful detainer in the municipal court of Zamboanga City against the lessee, Juanito Chan, to
eject the latter from the leased premises. The facts alleged in the complaint as cause of action,
consisted in reproducing and reiterating the substance of the correspondence exchanged between
lessor and lessee, as narrated above, and claiming that the possession of the lessee of the premises
had become illegal by his failure and refusal to pay the increased new rental. For relief, the plaintiff
prayed that the defendant be ordered to vacate the premises, and "TO PAY THE NEW RENTS
DEMANDED OF P600.00 or P700.00 FROM FEBRUARY 1, 1959 MONTHLY AS THE CASE MAY BE."
Attached to the complaint, as annexes thereto, were copies of the letters exchanged between the
lessor and the lessee, Exhibits B to J.
In his answer (as amended), the defendant admitting the genuineness and authenticity of the letters
annexed to the complaint, but traversing some of the allegations therein, raised the defenses of lack
of jurisdiction of the court over the case, and lack of cause of action for unlawful detainer.
After a trial, decision was rendered ordering the defendant to vacate the premises, to pay the
plaintiff the sum of P600.00 as monthly rent from February 1, 1959, and P500.00 as attorney's fees.
The defendant appealed from the decision to the Court of First Instance of Zamboanga City. Before
this Court, the defendant again raised the special defenses of lack of jurisdiction of the municipal
court and lack of cause of action for unlawful detainer. Ruling on the issue of lack of jurisdiction, the
court said:
With reference to the contention of defendant that the municipal court had no jurisdiction to try
this case because the interpretation, application and enforcement of the terms of the Lease
Agreement is within the competence of a court higher than that of the municipal court, deserves
hardly any discussion. Suffice it to say that the jurisdiction of the municipal court is grounded on
Section 88 of the Judiciary Act of 1948.
After a trial, the Court of First Instance rendered judgment ordering the defendant to vacate the
premises, to pay the plaintiff the sum of P1,200.00 from February 1, 1959, as monthly rental of the
land, and P2,000.00 as attorney's fees.
From the foregoing decision, the defendant interposed a direct appeal to this Court. Therefore, only
questions of law may be considered in this appeal.
Among the four errors assigned by the appellant in his brief, the first two pose the issue of lack of
jurisdiction of the municipal Court and of the lack of cause of action for unlawful detainer; the
remaining errors delving on questions of fact which, by reason of the nature of the appeal are,
therefore, deemed admitted and may not be reviewed in this appeal.
In relation to the issue of lack of jurisdiction of the municipal court over the case, it is to be noted
that, after the lessor and the lessee had failed to agree on the renewal of the lease which
terminated on January 31, 1959, the lessor, on February 19, 1959, sent the demand letter
hereinabove quoted, Exhibit J. It was, then, as it is now, the contention of the lessee that such
demand is not that kind of demand contemplated in the Rules of Court as complying with the
jurisdictional requirement — that demand to vacate is indispensable in order to determine whether
the tenant's possession has become illegal. On this matter, the rulings in the following cases are
pertinent and applicable:
The notice giving lessee the alternative either to pay the increased rental or otherwise to vacate the
land is not the demand contemplated by the Rules of Court in unlawful detainer cases. When after
such notice, the lessee elects to stay, he thereby merely assumes the new rental and cannot be
ejected until he defaults in said obligation and necessary demand is first made. (Manotok vs. Guinto,
L-9540, April 30, 1957.)
The lessor may, under Article 1569 of the Civil Code, judicially disposses the lessee for default in the
payment of the price agreed upon. But where such default is based on the fact that the rent sought
to be collected is not that agreed upon, an action for ejectment cannot lie. (Belmonte vs. Martin, 42
Off. Gaz. No. 10, 2146.)
In the case at bar, it clearly appears from the demand letter of February 19, 1959, that the
obligation to vacate the leased premises would be dependent on the failure of the lessee to agree to
the new rent demanded by the lessor. As the lessee, however, was in the physical possession of the
land by virtue of a prior contract of lease, and the demand was in the alternative imposing a new
rental, even without taking into account the efficacy of the stipulation for an automatic renewal of
the lease, which shall be discussed hereafter, in the light of the ruling in Belmonte vs. Martin, supra,
without any subsequent definite demand to vacate the premises, subject to no condition, the lessee
did not incur in default which would give rise to a right on the part of the lessor to bring an action of
unlawful detainer.
Delving on the second special defense to wit, that the allegations in the complaint do not constitute
a cause of action of unlawful detainer, it is the contention of the lessee-appellant that clause "7" of
the contract of lease, quoted hereinabove, meant an express grant to the lessee to renew the lease
at his option, contrary to the claim of the lessor-appellee that there must be a prior mutual
agreement of the parties. As we read clause "7", We find that it envisioned the happening of two
eventualities at the expiration of the lease on January 31, 1959 — either the lessor may purchase
the improvements constructed by the lessee on the land, or in case the lessor fails, for any cause or
reason, to exercise the option to buy, the lease shall be deemed automatically renewed. The
evidence has established that the lessor had refused to buy the buildings on the land. The statement
in said clause "7" that in case of renewal the duration of the lease and the new rental to be paid
shall be adjusted by the parties, is of no moment in the solution of the issue, whether or not the
facts alleged in the complaint constitute a cause of action of unlawful detainer. The pleadings of the
parties, and the annexes thereto, clearly show that the jugular vein of the controversy hinges on the
correct interpretation of clause "7" of the contract of lease, a matter outside the jurisdiction of the
municipal court. The lessor-appellee maintains that the lease had terminated on January 31, 1959,
renewable only upon a new agreement of the parties; on the other hand, the lessee-appellant
contends that, inasmuch as the controversy hinges on the interpretation of clause "7" of the
contract, that is, whether or not said clause contemplated an automatic renewal of the lease, the
action was not for unlawful detainer but one not capable of pecuniary estimation and, therefore,
beyond the competence of the municipal court.
The contention of the lessee-appellant must be sustained.
In Cruz vs. Alberto, 39 Phil. 991, the contract of lease had the following provision:
That the term of this contract of lease shall be six years from the date of the execution, and
extendible for another six years agreed upon by both parties.
It was contended by the lessor that the lease cannot be extended except upon mutual agreement.
Ruling on the contention, the Supreme Court said:
We are of the opinion that the trial judge was entirely correct in his interpretation of the contracts
in question; and though it must be admitted that this interpretation renders the words "agreed
upon by both parties" superfluous yet this does not involve any strain upon the meaning of the
entire passage. If the interpretation which the appellant would have us adopt be true, the entire
clause relative to the extension of the term would be superfluous, for if the extension is only to be
effective upon a new agreement of the parties to be made at the expiration of the original term,
why should anything at all be said about an extension? Parties who are free to make one contract of
lease are certainly free to make a new one when the old has expired without being reminded of
their faculty to do so by the insertion of a clause of this kind in the first lease. This would not only be
superfluous but nonsensical. The clause relative to the extension of the lease should, if possible, be
so interpreted as to give it some force.
As we interpret the contracts before us, the parties meant to express the fact that they had already
agreed that there might be an extension of the lease and had agreed upon its duration, thus giving
the defendant the right of election to take for a second term or to quit upon the expiration of the
original term. The clause in question has the same meaning as if the words "agreed upon by both
parties" had been omitted and the passage had closed with a period after the word "years" in the
first contract and after "extension" in the third contract.
It has been held by this court that the word "extendible" standing without qualification in a contract
of lease, means that the term of the lease may be extended and is equivalent to a promise to
extend, made by the lessor to the lessee, and, as unilateral stipulation, obliges the promisor to fulfill
his promise. (Legarda Koh vs. Ongsiako, 36 Phil. Rep. 185). Such a stipulation is supported by the
consideration which is at the basis of the contract of lease (16 R.C.L. pp. 883, 884) and obviously
involves a mutuality of benefit, or reciprocity, between the parties, notwithstanding the right of
election is conceded solely to the lessee. As a general rule, in construing provisions of this character,
the tenant is favored, where there is any uncertainty, and not the landlord, upon the principle that a
grant should be taken most strongly against the grantor. (15 R.C.L. p. 884, 24 Cyc. 915.)
In the case of Legarda Koh vs. Ongsiaco, 36 Phil. 189-190, the contract of lease had this provision:
The term of the said contract shall be for one year, counting from the 1st of December of the
present year (1963) which term shall be extendible at the will of both parties.
Said the Supreme Court:
According to Article 1091 of the Civil Code, obligations arising from contracts have legal force
between the contracting parties and must be fulfilled in accordance with their stipulation.
Therefore, if the defendant bound himself to lease his properties for the period of one year, which
term should be extendible, it is evident and strictly in accord with justice that the plaintiff-lessee has
a right, at the termination of the first period of one year, to have the said contract of lease renewed
in fulfillment of the stipulated extension of the term of the lease; otherwise, the clause contained in
the document Exhibit 1, that the lease at its termination would be extendible, would be worthless.
The defendant-appellant is wrong in his contention that the renewal or extension of the contract
depended solely upon himself, notwithstanding the stipulations contained in said contract,
inasmuch as the renewal and continuation of the lease could not be left wholly to the plaintiff's free
will, without counting on the defendant's consent — a consent expressly granted in the promise
that the term would be extended, which term, although its duration was not fixed, should be
understood to be for another year, a period equal to and not greater than the term of the lease.
When a contract of lease provides that the term thereof is extendible, the agreement is understood
as being in favor of the lessee, and the latter is authorized to renew the contract and to continue to
occupy the leased property, after notifying the lessor to that effect. The lessor can withdraw from
the said contract only after having fulfilled his promise to grant the extension of time stipulated
therein, unless the lessee has failed to comply with or has violated the conditions of the contract. It
is not necessary that the extension be expressly conceded by the lessor because he consented
thereto in the original contract.
UPON THE FOREGOING CONSIDERATIONS, We declare that the municipal court (now city court) of
Zamboanga City had no jurisdiction over the case; therefore, the appealed decision is set aside and
reversed, with costs against the plaintiff-appellee.
Concepcion, C.J., Reyes, J.B.L., Makalintal, Sanchez, Castro, Fernando and Capistrano, JJ., concur.
Dizon, J., took no part.
Zaldivar, J., is on leave.
6. EDITHA PADLAN vs DINGLASAN

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 180321 March 20, 2013
EDITHA PADLAN, Petitioner,

vs.
ELENITA DINGLASAN and FELICISIMO DINGLASAN, Respondents.
DECISION
PERALTA, J.:
This is a petition for review on certiorari assailing the Decision1 dated June 29, 2007 of the Court of
Appeals (CA) in CA-G.R. CV No. 86983, and the Resolution2 dated October 23, 2007 denying
petitioner's Motion for Reconsideration.3
The factual and procedural antecedents are as follows:
Elenita Dinglasan (Elenita) was the registered owner of a parcel of land designated as Lot No. 625 of
the Limay Cadastre which is covered by Transfer Certificate of Title (TCT) No. T-105602, with an
aggregate area of 82,972 square meters. While on board a jeepney, Elenita’s mother, Lilia Baluyot
(Lilia), had a conversation with one Maura Passion (Maura) regarding the sale of the said property.
Believing that Maura was a real estate agent, Lilia borrowed the owner’s copy of the TCT from
Elenita and gave it to Maura. Maura then subdivided the property into several lots from Lot No. 625-
A to Lot No. 625-O, under the name of Elenita and her husband Felicisimo Dinglasan (Felicisimo).
Through a falsified deed of sale bearing the forged signature of Elenita and her husband Felicisimo,
Maura was able to sell the lots to different buyers. On April 26, 1990, Maura sold Lot No. 625-K to
one Lorna Ong (Lorna), who later caused the issuance of TCT No. 134932 for the subject property
under her name. A few months later, or sometime in August 1990, Lorna sold the lot to petitioner
Editha Padlan for ₱4,000.00. Thus, TCT No. 134932 was cancelled and TCT No. 137466 was issued in
the name of petitioner.
After learning what had happened, respondents demanded petitioner to surrender possession of
Lot No. 625-K, but the latter refused. Respondents were then forced to file a case before the
Regional Trial Court (RTC) of Balanga, Bataan for the Cancellation of Transfer Certificate of Title No.
137466, docketed as Civil Case No. 438-ML. Summons was, thereafter, served to petitioner through
her mother, Anita Padlan.
On December 13, 1999, respondents moved to declare petitioner in default and prayed that they be
allowed to present evidence ex parte.4
On January 17, 2000, petitioner, through counsel, filed an Opposition to Declare Defendant in
Default with Motion to Dismiss Case for Lack of Jurisdiction Over the Person of
Defendant.5 Petitioner claimed that the court did not acquire jurisdiction over her, because the
summons was not validly served upon her person, but only by means of substituted service through
her mother. Petitioner maintained that she has long been residing in Japan after she married a
Japanese national and only comes to the Philippines for a brief vacation once every two years.
On April 5, 2001, Charlie Padlan, the brother of petitioner, testified that his sister is still in Japan and
submitted a copy of petitioner’s passport and an envelope of a letter that was allegedly sent by his
sister. Nevertheless, on April 5, 2001, the RTC issued an Order6 denying petitioner’s motion to
dismiss and declared her in default. Thereafter, trial ensued.
On July 1, 2005, the RTC rendered a Decision7 finding petitioner to be a buyer in good faith and,
consequently, dismissed the complaint.
Not satisfied, respondents sought recourse before the CA, docketed as CA-G.R. No. CV No. 86983.
On June 29, 2007, the CA rendered a Decision8 in favor of the respondent. Consequently, the CA
reversed and set aside the Decision of the RTC and ordered the cancellation of the TCT issued in the
name of Lorna and the petitioner, and the revival of respondents’ own title, to wit:
WHEREFORE, in view of the foregoing, the Decision dated July
1, 2005 of the Regional Trial Court, Third Judicial Region, Branch 4, Mariveles, Bataan (Stationed in
Balanga, Bataan) in Civil Case No. 438-ML is hereby REVERSED and SET ASIDE.
The Transfer Certificate of Title No. 134932 issued in the name of Lorna Ong and Transfer Certificate
of Title No. 137466 issued in the name of defendant-appellee Editha Padlan are CANCELLED and
Transfer Certificate of Title No. 134785 in the name of the plaintiffs-appellants is REVIVED.
SO ORDERED.9
The CA found that petitioner purchased the property in bad faith from Lorna. The CA opined that
although a purchaser is not expected to go beyond the title, based on the circumstances
surrounding the sale, petitioner should have conducted further inquiry before buying the disputed
property. The fact that Lorna bought a 5,000-square-meter property for only ₱4,000.00 and selling it
after four months for the same amount should have put petitioner on guard. With the submission of
the Judgment in Criminal Case No. 4326 rendered by the RTC, Branch 2, Balanga, Bataan, entitled
People of the Philippines v. Maura Passion10 and the testimonies of respondents, the CA concluded
that respondents sufficiently established that TCT No. 134932 issued in the name of Lorna and TCT
No. 137466 issued in the name of petitioner were fraudulently issued and, therefore, null and void.
Aggrieved, petitioner filed a Motion for Reconsideration. Petitioner argued that not only did the
complaint lacks merit, the lower court failed to acquire jurisdiction over the subject matter of the
case and the person of the petitioner.
On October 23, 2007, the CA issued a Resolution11 denying the motion. The CA concluded that the
rationale for the exception made in the landmark case of Tijam v. Sibonghanoy12 was present in the
case. It reasoned that when the RTC denied petitioner’s motion to dismiss the case for lack of
jurisdiction, petitioner neither moved for a reconsideration of the order nor did she avail of any
remedy provided by the Rules. Instead, she kept silent and only became interested in the case again
when the CA rendered a decision adverse to her claim.
Hence, the petition assigning the following errors:
WHETHER OR NOT THE HONORABLE COURT HAS JURISDICTION OVER THE PERSON OF THE
PETITIONER.
II
WHETHER OR NOT THE HONORABLE COURT HAS JURISDICTION OVER THE SUBJECT MATTER OF THE
CASE.
III
WHETHER OR NOT PETITIONER IS A BUYER IN GOOD FAITH AND FOR VALUE.13
Petitioner maintains that the case of Tijam v. Sibonghanoy finds no application in the case at bar,
since the said case is not on all fours with the present case. Unlike in Tijam, wherein the petitioner
therein actively participated in the proceedings, petitioner herein asserts that she did not
participate in any proceedings before the RTC because she was declared in default.
Petitioner insists that summons was not validly served upon her, considering that at the time
summons was served, she was residing in Japan. Petitioner contends that pursuant to Section 15,
Rule 14 of the Rules of Civil Procedure, when the defendant does not reside in the Philippines and
the subject of the action is property within the Philippines of the defendant, service may be effected
out of the Philippines by personal service or by publication in a newspaper of general circulation. In
this case, summons was served only by substituted service to her mother. Hence, the court did not
acquire jurisdiction over her person.
Also, petitioner posits that the court lacks jurisdiction of the subject matter, considering that from
the complaint, it can be inferred that the value of the property was only ₱4,000.00, which was the
amount alleged by respondents that the property was sold to petitioner by Lorna.
Finally, petitioner stresses that she was a buyer in good faith. It was Maura who defrauded the
respondents by selling the property to Lorna without their authority.
Respondents, on the other hand, argue that the CA was correct in ruling in their favor.
Respondents filed the complaint in 1999, at the time Batas Pambansa Blg. (BP) 129, the Judiciary
Reorganization Act of 1980, was already amended by Republic Act (RA) No. 7691, An Act Expanding
the Jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts, amending for the purpose BP Blg. 129.14
Section 1 of RA 7691, amending BP Blg. 129, provides that the RTC shall exercise exclusive original
jurisdiction on the following actions:
Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization
Act of 1980," is hereby amended to read as follows:
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, where the assessed value of the property involved exceeds Twenty Thousand Pesos
(₱20,000.00) or for civil actions in Metro Manila, where such value exceeds Fifty Thousand Pesos
(₱50,000.00), except actions for forcible entry into and unlawful detainer of lands or buildings,
original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts; x x x
Section 3 of RA 7691 expanded the exclusive original jurisdiction of the first level courts, thus:
Section 3. Section 33 of the same law BP Blg. 129 is hereby amended to read as follows:
Sec. 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, or possession of, real
property, or any interest therein where the assessed value of the property or interest therein does
not exceed Twenty Thousand Pesos (₱20,000.00) or, in civil actions in Metro Manila, where such
assessed value does not exceed Fifty Thousand Pesos (₱50,000.00) exclusive of interest, damages of
whatever kind, attorney's fees, litigation expenses and costs: Provided, That in cases of land not
declared for taxation purposes, the value of such property shall be determined by the assessed
value of the adjacent lots.
Respondents filed their Complaint with the RTC; hence, before proceeding any further with any
other issues raised by the petitioner, it is essential to ascertain whether the RTC has jurisdiction over
the subject matter of this case based on the above-quoted provisions.
However, in order to determine which court has jurisdiction over the action, an examination of the
complaint is essential. Basic as a hornbook principle is that jurisdiction over the subject matter of a
case is conferred by law and determined by the allegations in the complaint which comprise a
concise statement of the ultimate facts constituting the plaintiff's cause of action. The nature of an
action, as well as which court or body has jurisdiction over it, is determined based on the allegations
contained in the complaint of the plaintiff, irrespective of whether or not the plaintiff is entitled to
recover upon all or some of the claims asserted therein. The averments in the complaint and the
character of the relief sought are the ones to be consulted. Once vested by the allegations in the
complaint, jurisdiction also remains vested irrespective of whether or not the plaintiff is entitled to
recover upon all or some of the claims asserted therein.15
What determines the jurisdiction of the court is the nature of the action pleaded as appearing from
the allegations in the complaint. The averments therein and the character of the relief sought are
the ones to be consulted.16
Respondents’ Complaint17 narrates that they are the duly registered owners of Lot No. 625 of the
Limay Cadastre which was covered by TCT No. T-105602. Without their knowledge and consent, the
land was divided into several lots under their names through the fraudulent manipulations of
Maura. One of the lots was Lot 625-K, which was covered by TCT No. 134785. On April 26, 1990,
Maura sold the subject lot to Lorna. By virtue of the fictitious sale, TCT No. 134785 was cancelled
and TCT No. 134932 was issued in the name of Lorna. Sometime in August 1990, Lorna sold the lot
to petitioner for a consideration in the amount of ₱4,000.00. TCT No. 134932 was later cancelled
and TCT No. 137466 was issued in the name of petitioner. Despite demands from the respondents,
petitioner refused to surrender possession of the subject property. Respondents were thus
constrained to engage the services of a lawyer and incur expenses for litigation. Respondents prayed
for the RTC (a) to declare TCT No. 137466 null and to revive TCT No. T-105602 which was originally
issued and registered in the name of the respondents; and (b) to order petitioner to pay attorney’s
fees in the sum of ₱50,000.00 and litigation expenses of ₱20,000.00, plus cost of suit.18
An action "involving title to real property" means that the plaintiff's cause of action is based on a
claim that he owns such property or that he has the legal rights to have exclusive control,
possession, enjoyment, or disposition of the same. Title is the "legal link between (1) a person who
owns property and (2) the property itself." "Title" is different from a "certificate of title" which is the
document of ownership under the Torrens system of registration issued by the government through
the Register of Deeds. While title is the claim, right or interest in real property, a certificate of title is
the evidence of such claim.19
In the present controversy, before the relief prayed for by the respondents in their complaint can be
granted, the issue of who between the two contending parties has the valid title to the subject lot
must first be determined before a determination of who between them is legally entitled to the
certificate of title covering the property in question.1âwphi1
From the Complaint, the case filed by respondent is not simply a case for the cancellation of a
particular certificate of title and the revival of another. The determination of such issue merely
follows after a court of competent jurisdiction shall have first resolved the matter of who between
the conflicting parties is the lawful owner of the subject property and ultimately entitled to its
possession and enjoyment. The action is, therefore, about ascertaining which of these parties is the
lawful owner of the subject lot, jurisdiction over which is determined by the assessed value of such
lot.20
In no uncertain terms, the Court has already held that a complaint must allege the assessed value of
the real property subject of the complaint or the interest thereon to determine which court has
jurisdiction over the action.21In the case at bar, the only basis of valuation of the subject property is
the value alleged in the complaint that the lot was sold by Lorna to petitioner in the amount of
₱4,000.00. No tax declaration was even presented that would show the valuation of the subject
property. In fact, in one of the hearings, respondents’ counsel informed the court that they will
present the tax declaration of the property in the next hearing since they have not yet obtained a
copy from the Provincial Assessor’s Office.22 However, they did not present such copy.
To reiterate, where the ultimate objective of the plaintiffs is to obtain title to real property, it should
be filed in the proper court having jurisdiction over the assessed value of the property subject
thereof.23 Since the amount alleged in the Complaint by respondents for the disputed lot is only
₱4,000.00, the MTC and not the RTC has jurisdiction over the action. Therefore, all proceedings in
the RTC are null and void.24
Consequently, the remaining issues raised by petitioner need not be discussed further.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No.
86983, dated June 29, 2007, and its Resolution dated October 23, 2007, are REVERSED and SET
ASIDE. The Decision of the Regional Trial Court, dated July I, 2005, is declared NULL and VOID. The
complaint in Civil Case No. 438-ML is dismissed without prejudice.
SO ORDERED.
7. QUESADA vs DOJ
G.R. No. 150325 August 31, 2006
EDGARDO V. QUESADA, Petitioner,

vs.
THE DEPARTMENT OF JUSTICE and CLEMENTE TERUEL, Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
For our resolution is the Petition for Certiorari 1 (with prayer for a temporary restraining order
and/or preliminary injunction) assailing the Resolutions dated January 17, 2001 and September 17,
2001 issued by the Secretary of Justice in I.S. No. 00-29780-C, entitled "Clemente M. Teruel,
complainant, versus Ramon P. Camacho, Jr., Edgardo V. Quesada and Rodolfo Corgado,
respondents."
On March 1, 2000, Clemente M. Teruel, herein respondent, filed with the Office of the City
Prosecutor, Mandaluyong City, an affidavit-complaint 2 charging Edgardo V. Quesada (herein
petitioner), Ramon P. Camacho, Jr., and Rodolfo Corgado with the crime of estafa under Article 315,
paragraphs 2 and 3 of the Revised Penal Code, docketed as I.S. No. 00-29780-C. The affidavit-
complaint alleges that on June 13, 1998 at Shangrila Plaza Hotel, EDSA, Mandaluyong City, Quesada,
Camacho, and Corgado represented themselves to Teruel as the president, vice-president/treasurer,
and managing director, respectively, of VSH Group Corporation; that they offered to him a
telecommunication device called Star Consultant Equipment Package which provides the user easy
access to the internet via television; that they assured him that after he pays the purchase price
of P65,000.00, they will immediately deliver to him two units of the internet access device; that
relying on their representations, he paid them P65,000.00 for the two units; and that despite
demands, they, did not deliver to him the units.
It was only petitioner Quesada who filed a counter-affidavit. 3 He alleged that he, Camacho, and
Corgado are Star Consultant Trainers of F.O.M. Philippines, Inc., a corporation engaged in the
business of selling and marketing telecommunication products and technologies; that they formed
the VSH Group as a corporation "for the principal purpose of pooling the commissions they will
receive as Star Consultant Trainers and then dividing said commissions among themselves according
to their agreement"; that while he admitted that the two units of internet access devices purchased
by herein respondent Teruel were not delivered to him, however, this was not due to their alleged
fraudulent representations since they merely acted as sales agents of F.O.M. Phils., Inc.; and that
they found out too late that the said company could not cope with its commitment to them as it ran
short of supplies of telecommunication products.
On April 25, 2000, Assistant City Prosecutor Esteban A. Tacla, Jr. issued a Resolution 4 finding
probable cause against petitioner Quesada, Camacho, and Corgado, and recommending the filing of
the corresponding Information.
Consequently, an Information for estafa against petitioner Quesada, Camacho, and Corgado was
filed with the Regional Trial Court (RTC), Mandaluyong City, docketed as Criminal Case No. MC-00-
2510. This case was later raffled off to Branch 208.
In the meantime, petitioner filed with the Department of Justice a Petition for Review challenging
the April 25, 2000 Resolution of the Investigating Prosecutor. On January 17, 2001, the Secretary of
Justice issued a Resolution 5dismissing the petition. Petitioner’s motion for reconsideration was
denied in a Resolution 6 dated September 17, 2001.
While the RTC was hearing Criminal Case No. MC-00-2510, petitioner filed with this Court the instant
Petition for Certiorari alleging that the Secretary of Justice, in dismissing his Petition for Review in
I.S. No. 00-29780-C, acted with grave abuse of discretion amounting to lack or excess of jurisdiction.
Petitioner contends that the element of fraud or deceit in the crime of estafa is not present 7 and
that there is no evidence which will prove that the accused’s promise to deliver the purchased items
was false or made in bad faith. 8
The Solicitor General, in his Comment, maintains that the Secretary of Justice, in finding a probable
cause against the three accused, did not act with grave abuse of discretion and prayed for the
dismissal of the instant petition for being unmeritorious.
Initially, we observe that the present petition was directly filed with this Court, in utter violation of
the rule on hierarchy of courts.
A petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as amended, must be
filed with the Court of Appeals whose decision may then be appealed to this Court by way of a
petition for review on certiorari under Rule 45 of the same Rules. 9 A direct recourse to this Court is
warranted only where there are special and compelling reasons specifically alleged in the petition to
justify such action. Such ladder of appeals is in accordance with the rule on hierarchy of courts. In
Vergara, Sr. v. Suelto, 10 we stressed that this should be the constant policy that must be observed
strictly by the courts and lawyers, thus:
x x x. The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily perform
the functions assigned to it by the fundamental charter and immemorial tradition. It cannot and
should not be burdened with the task of dealing with causes in the first instance. Its original
jurisdiction to issue the so-called extraordinary writs should be exercised only where absolutely
necessary or where serious and important reasons exist therefor. Hence, that jurisdiction should
generally be exercised relative to actions or proceedings before the Court of Appeals, or before
constitutional or other tribunals, bodies or agencies whose acts for some reason or another are not
controllable by the Court of Appeals. Where the issuance of an extraordinary writ is also within the
competence of the Court of Appeals or a Regional Trial Court, it is in either of these courts that the
specific action for the writ’s procurement must be presented. This is and should continue to be the
policy in this regard, a policy that courts and lawyers must strictly observe. (Underscoring supplied)
We later reaffirmed such policy in People v. Cuaresma 11 after noting that there is "a growing
tendency on the part of litigants and lawyers to have their applications for the so-called
extraordinary writs, and sometimes even their appeals, passed upon and adjudicated directly and
immediately by the highest tribunal of the land." We again emphasized that:
x x x. This Court’s original jurisdiction to issue writs of certiorari (as well as prohibition, mandamus,
quo warranto, habeas corpus and injunction) is not exclusive. x x x. It is also shared by this Court,
and by the Regional Trial Court, with the Court of Appeals x x x. This concurrence of jurisdiction is
not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained
freedom of choice of the court to which application therefor will be directed. There is, after all, a
hierarchy of courts. That hierarchy is determinative of the venue of appeals, and should also serve
as a general determinant of the appropriate forum for petitions for the extraordinary writs. A
becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of
extraordinary writs against first level courts should be filed with the Regional Trial Court, and those
against the latter, with the Court of Appeals. A direct invocation of the Supreme Court’s original
jurisdiction to issue these writs should be allowed only when there are special and important
reasons therefor, clearly and specifically set out in the petition. This is established policy. It is a
policy that is necessary to prevent inordinate demands upon the Court’s time and attention which
are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-
crowding of the Court’s docket. x x x. (Underscoring supplied)
Here, we cannot discern any special and compelling reason to justify the direct filing with this Court
of the present petition. Clearly, it should be dismissed outright.
Even assuming that the petition can be filed directly with this Court, the same must fail. Petitioner
contends that the element of fraud or deceit as an element of the crime of estafa is absent.
Consequently, the affirmance by the Secretary of Justice of the Investigating Prosecutor’s finding
that there exists a probable cause is tainted with grave abuse of discretion.
The issue of whether the element of fraud or deceit is present is both a question of fact and a
matter of defense, the determination of which is better left to the trial court after the parties shall
have adduced their respective evidence. It bears stressing that a preliminary investigation is merely
an inquiry or proceeding to determine whether there is sufficient ground to engender a well-
founded belief that a crime has been committed and that the respondent is probably guilty thereof,
and should be held for trial. 12 It does not call for the application of rules and standards of proof that
a judgment of conviction requires after trial on the merits. 13 As implied by the words "probably
guilty," the inquiry is concerned merely with probability, not absolute or moral certainty. 14 At this
stage, the complainant need not present proof beyond reasonable doubt. A preliminary
investigation does not require a full and exhaustive presentation of the parties’ evidence. 15 A
finding of probable cause needs only to rest on evidence showing that more likely than not, a crime
has been committed and was committed by petitioner and his co-accused. As ruled by the
Investigating Prosecutor and affirmed by the Secretary of Justice, petitioner’s representation and
assurance to respondent Teruel that the telecommunication equipment would be delivered to him
upon payment of its purchase price was the compelling reason why he parted with his money. Such
assurance, the Investigating Prosecutor added, is actually a misrepresentation or deceit.
Thus, we hold that the Secretary of Justice did not gravely abuse his discretion. An act of a court or
tribunal may only be considered as committed in grave abuse of discretion when the same was
performed in a capricious or whimsical exercise of judgment which is equivalent to lack of
jurisdiction. The abuse of discretion must be patent and gross as to amount to an evasion of positive
duty or to a virtual refusal to perform a duty enjoined by law or to act at all in contemplation of law,
as where the power is exercised in an arbitrary and despotic manner by reason of passion or
personal hostility. 16
WHEREFORE, we DISMISS the instant petition. Costs against petitioner.
SO ORDERED.
8. LUMBUAN vs RONQUILO
G.R. No. 155713 May 5, 2006
MILAGROS G. LUMBUAN,* Petitioner,

vs.
ALFREDO A. RONQUILLO, Respondent.
DECISION
QUISUMBING, J.:
This petition for review on certiorari seeks to reverse and set aside the Decision1 dated April 12,
2002, of the Court of Appeals in CA-G.R. SP No. 52436 and its Resolution2 dated October 14, 2002,
denying the petitioner’s motion for reconsideration.
The salient facts, as found by the Court of Appeals,3 are as follows:
Petitioner Milagros G. Lumbuan is the registered owner of Lot 19-A, Block 2844 with Transfer
Certificate of Title No. 193264, located in Gagalangin, Tondo, Manila. On February 20, 1995, she
leased it to respondent Alfredo A. Ronquillo for a period of three years with a monthly rental
of P5,000. The parties also agreed that there will be a 10% annual increase in rent for the succeeding
two years, i.e., 1996 and 1997,4 and the leased premises will be used exclusively for the
respondent’s fastfood business, unless any other use is given, with the petitioner’s prior written
consent.5
While the respondent at the start operated a fastfood business, he later used the premises as
residence without the petitioner’s prior written consent. He also failed to pay the 10% annual
increase in rent of P500/month starting 1996 and P1,000/month in 1997 to the present. Despite
repeated verbal and written demands, the respondent refused to pay the arrears and vacate the
leased premises.
On November 15, 1997, the petitioner referred the matter to the Barangay Chairman’s office but
the parties failed to arrive at a settlement. The Barangay Chairman then issued a Certificate to File
Action.6
On December 8, 1997, the petitioner filed against the respondent an action for Unlawful Detainer,
docketed as Civil Case No. 157922-CV. It was raffled to the Metropolitan Trial Court (MeTC) of
Manila, Branch 6. On December 15, 1997, the respondent received the summons and copy of the
complaint. On December 24, 1997, he filed his Answer by mail. Before the MeTC could receive the
respondent’s Answer, the petitioner filed a Motion for Summary Judgment dated January 7,
1998.7 Acting upon this motion, the MeTC rendered a decision8 on January 15, 1998, ordering the
respondent to vacate and surrender possession of the leased premises; to pay the petitioner the
amount of P46,000 as unpaid rentals with legal interest until fully paid; and to pay the
petitioner P5,000 as attorney’s fees plus cost of the suit.
The respondent then filed a Manifestation calling the attention of the MeTC to the fact that his
Answer was filed on time and praying that the decision be set aside. The MeTC denied the prayer,
ruling that the Manifestation was in the nature of a motion for reconsideration which is a prohibited
pleading under the Rules on Summary Procedure.
Upon appeal, the case was raffled to the Regional Trial Court (RTC) of Manila, Branch 38, and
docketed as Civil Case No. 98-87311. On July 8, 1998, the RTC rendered its decision9 setting aside
the MeTC decision. The RTC directed the parties to go back to the Lupon Chairman or Punong
Barangay for further proceedings and to comply strictly with the condition that should the parties
fail to reach an amicable settlement, the entire records of the case will be remanded to MeTC of
Manila, Branch 6, for it to decide the case anew.
The respondent sought reconsideration but the RTC denied the motion in an Order dated March 15,
1999. Thus, he sought relief from the Court of Appeals through a petition for review.10 On April 12,
2002, the appellate court promulgated a decision, reversing the decision of the RTC and ordering the
dismissal of the ejectment case. The appellate court ruled that when a complaint is prematurely
instituted, as when the mandatory mediation and conciliation in the barangay level had not been
complied with, the court should dismiss the case and not just remand the records to the court of
origin so that the parties may go through the prerequisite proceedings.
The petitioner filed a motion for reconsideration, which was denied by the appellate court. Hence,
this present petition.
In the meantime, while this petition was pending before this Court, the parties went through
barangay conciliation proceedings as directed by the RTC of Manila, Branch 38. Again, they failed to
arrive at an amicable settlement prompting the RTC to issue an Order11 remanding the case to the
MeTC of Manila, Branch 6, where the proceedings took place anew. On April 25, 2000, the MeTC
rendered a second decision, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment on the merits is hereby rendered for the plaintiff as
follows:
1. Ordering defendant and all persons claiming right of possession under him to voluntarily vacate
the property located at Lot 19-A Block 2844, Gagalangin, Tondo, Manila and surrender possession
thereof to the plaintiff;
2. Ordering defendant to pay to plaintiff the amount of P387,512.00 as actual damages in the form
of unpaid rentals and its agreed increase up to January 2000 and to pay the amount of P6,500.00 a
month thereafter until the same is actually vacated;
3. Ordering the defendant to pay to plaintiff the sum of P10,000.00 as and for attorney’s fees plus
cost of the suit.
SO ORDERED.12
The respondent appealed the foregoing decision.1avvphil.net The case was raffled to RTC of Manila,
Branch 22, and docketed as Civil Case No. 00-98173. The RTC ruled in favor of the petitioner and
dismissed the appeal. The respondent elevated the case to the Court of Appeals, where it is now
pending.
The sole issue for our resolution is:
[WHETHER] THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE COMPLAINT FOR THE
ALLEGED FAILURE OF THE PARTIES TO COMPLY WITH THE MANDATORY MEDIATION AND
CONCILIATION PROCEEDINGS IN THE BARANGAY LEVEL.13
With the parties’ subsequent meeting with the Lupon Chairman or Punong Barangay for further
conciliation proceedings, the procedural defect was cured. Nevertheless, if only to clear any
lingering doubt why the Court of Appeals erred in dismissing the complaint, we shall delve on the
issue.
The petitioner alleges that the parties have gone through barangay conciliation proceedings to
settle their dispute as shown by the Certificate to File Action issued by the Lupon/Pangkat Secretary
and attested by the Lupon/Pangkat Chairman. The respondent, on the other hand, contends that
whether there was defective compliance or no compliance at all with the required conciliation, the
case should have been dismissed.
The primordial objective of the Katarungang Pambarangay Rules,14 is to reduce the number of court
litigations and prevent the deterioration of the quality of justice which has been brought about by
the indiscriminate filing of cases in the courts. To attain this objective, Section 412(a) of Republic Act
No. 716015 requires the parties to undergo a conciliation process before the Lupon Chairman or
the Pangkat as a precondition to filing a complaint in court,16thus:
SECTION 412. Conciliation. – (a) Pre-condition to Filing of Complaint in Court. – No complaint,

petition, action, or proceeding involving any matter within the authority of the lupon shall be filed
or instituted directly in court or any other government office for adjudication, unless there has been
a confrontation between the parties before the lupon chairman or the pangkat, and that no
conciliation or settlement has been reached as certified by the lupon secretary or pangkat secretary
as attested to by the lupon or pangkat chairman….
Here, the Lupon/Pangkat Chairman and Lupon/Pangkat Secretary signed the Certificate to File
Action stating that no settlement was reached by the parties. While admittedly no pangkat was
constituted, it was not denied that the parties met at the office of the Barangay Chairman for
possible settlement. The efforts of the Barangay Chairman, however, proved futile as no agreement
was reached. Although no pangkat was formed, in our mind, there was substantial compliance with
the law. It is noteworthy that under the aforequoted provision, the confrontation before
the Lupon Chairman or the pangkat is sufficient compliance with the precondition for filing the case
in court.17 This is true notwithstanding the mandate of Section 410(b) of the same law that the
Barangay Chairman shall constitute a pangkat if he fails in his mediation efforts. Section 410(b)
should be construed together with Section 412, as well as the circumstances obtaining in and
peculiar to the case. On this score, it is significant that the Barangay Chairman or Punong Barangay is
herself the Chairman of the Lupon under the Local Government Code.18
Finally, this Court is aware that the resolution of the substantial issues in this case is pending with
the Court of Appeals. While ordinarily, we would have determined the validity of the parties’
substantial claims since to await the appellate court’s decision will only frustrate speedy justice and,
in any event, would be a futile exercise, as in all probability the case would end up with this Court,
we find that we cannot do so in the instant case.
It must be underscored that supervening events have taken place before the lower courts where the
parties have been adequately heard, and all the issues have been ventilated. Since the records of
those proceedings are with the Court of Appeals, it is in a better position to fully adjudicate the
rights of the parties. To rely on the records before this Court would prevent us from rendering a
sound judgment in this case. Thus, we are left with no alternative but to leave the matter of ruling
on the merits to the appellate court.
WHEREFORE, the petition is GRANTED. The decision and resolution of the Court of Appeals in CA-
G.R. SP No. 52436 are REVERSED and SET ASIDE, and the decision of the Regional Trial Court of
Manila, Branch 38, in Civil Case No. 98-87311 is AFFIRMED.
The Court of Appeals is ordered to proceed with the appeal in CA – G.R. No. 73453 and decide the
case with dispatch.
SO ORDERED.
9. PEOPLE vs CAWALING
FIRST DIVISION
[G.R. No. 117970. July 28, 1998]
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ULYSSES M. CAWALING, ERNESTO

TUMBAGAHAN, RICARDO DE LOS SANTOS, and HILARIO CAJILO, accused-appellants.
DECISION
PANGANIBAN, J.:
It is axiomatic that once an accused-appellant admits killing the victim, he bears the burden of
establishing the presence of any circumstance like self-defense, performance of a lawful duty or, for
that matter, double jeopardy, which may relieve him of responsibility, or which may mitigate his
criminal liability.[1] If he fails to discharge this burden, his conviction becomes inevitable. In this
Decision, we also reiterate the following doctrines: (1) the regional trial court, not the
Sandiganbayan, has jurisdiction over informations for murder committed by public officers,
including a town mayor; (2) the assessment of trial courts on the credibility of witnesses and their
testimonies deserve great respect; (3) the equipoise rule cannot be invoked where the evidence of
the prosecution is overwhelming; (4) alibi cannot be believed in the face of credible testimony
identifying the appellants; and (5) conspiracy may be proven by circumstantial evidence.
The Case
Before us is an appeal from the 34-page Decision[2] dated October 21, 1994, promulgated by the
Regional Trial Court of Romblon in Criminal Case No. OD-269. Convicted of murder were former
Mayor Ulysses M. Cawaling and Policemen Ernesto Tumbagahan,[3] Ricardo De los Santos and Hilario
Cajilo.
Prior to the institution of the criminal case against all the appellants, an administrative case[4] had
been filed before the National Police Commission, in which Policemen Ernesto Tumbagahan, Ricardo
De los Santos, Hilario Cajilo (three of herein appellants) and Andres Fontamillas were charged by
Nelson Ilisan[5] with the killing of his brother Ronie[6] Ilisan. On April 6, 1986, Adjudication Board No.
14[7] rendered its Decision which found Tumbagahan, De los Santos, Cajilo and Fontamillas guilty of
grave misconduct and ordered their dismissal from the service with prejudice.[8] On June 26, 1986,
the Board issued a resolution,[9] dismissing the respondents motion for reconsideration for lack of
merit.
Subsequently, on June 4, 1987, Second Assistant Provincial Fiscal Alexander Mortel filed, before the
Regional Trial Court (RTC) of Odiongan, Romblon,[10] an Information for murder[11]against the
appellants and Andres Fontamillas. The accusatory portion reads:
That on or about the 4th day of December 1982, at around 9:00 oclock in the evening, in the
Poblacion, [M]unicipality of San Jose, [P]rovince of Romblon, Philippines, and within the jurisdiction
of this Honorable Court, the said accused, with intent to kill, conspiring, confederating and mutually
helping one another, did then and there, by means of treachery and with evident premeditation and
taking advantage of their superior strenght [sic] willfully, unlawfully and feloniously attack, assault
and shoot RONIE ILISAN, with the use of firearms, inflicting upon the latter multiple mortal injuries
in different parts of his body which were the direct and immediate cause of his death.
Accused Tumbagahan, De los Santos, Cajilo and Fontamillas, with the assistance of their lawyers
Atty. Abelardo V. Calsado and Juanito Dimaano, pleaded not guilty when arraigned on February 15,
1988;[12] while Accused Cawaling, assisted by Counsel Jovencio Q. Mayor, entered a plea of not guilty
on March 16, 1988.[13]
After due trial,[14] the court a quo[15] rendered its Decision dated October 21, 1994,[16] the decretal
portion of which reads:
WHEREFORE, this Court finds the accused (1) ULYSSES M. CAWALING, (2) ERNESTO TUMBAGAHAN,
(3) RICARDO DELOS SANTOS, (4) HILARIO CAJILO, AND (5) ANDRES FONTAMILLAS GUILTY beyond
reasonable doubt of the crime of MURDER under the Information, dated June 4, 1987, and
sentences each of them to suffer the penalty of reclusion perpetua, with the accessory penalties of
the law.
The accused, jointly and severally, are ORDERED to pay Nelson Elisan the sum of P6,000.00 as actual
damages and the heirs of the deceased Ronie Elisan the sums of P116,666.66 by way of lost earnings
and P50,000.00 as indemnity for death, without subsidiary imprisonment in case of insolvency, and
to pay the costs.
The bail bonds of all the accused are ORDERED CANCELLED and all said accused are ORDERED
immediately confined in jail.
The slug (Exh. A); the .38 caliber revolver (with 3 empty shells and 3 live bullets) (Exh. G); and the
slug of bullet (Exh. H) are confiscated in favor of the government.
After the judgment has become final, the Officer-in-Charge, Office of the Clerk of Court, this Court, is
ordered to deliver and deposit the foregoing Exhibits A, F, G and H, inclusive, to the Provincial
Director, PNP, of the Province of Romblon properly receipted. Thereafter, the receipt must be
attached to the record of the case and shall form part of the record.
The period of preventive imprisonment the accused had undergone shall be credited in their favor
to its full extent pursuant to Article 29 of the Revised Penal Code, as amended.
The case against co-accused ALEX BATUIGAS who is at large is ORDERED ARCHIVED pending his
arrest.[17]
Hence, this appeal.[18]
The Facts
Version of the Prosecution
The trial court gives this summary of the facts as viewed by the prosecution witnesses:
The killing occurred on December 4, 1982 at around 9:00 oclock in the evening at the ricefield of
Poblacion, San Jose, Romblon when the bright moon was already above the sea at an angle of about
45 degrees, or if it was daytime, it was about 9:00 oclock in the morning (Imelda Elisan
Tumbagahon, on direct examination, tsn, Jan. 17, 1989, p. 5, and on cross examination, tsn, April 18,
1989, p. 22).
On December 4, 1982, about 8:00 oclock or 8:30 oclock in the evening, Vicente Elisan and his elder
brother Ronie Elisan, the victim, were drinking tuba at C & J-4 Kitchenette of co-accused Andres
Fontamillas in Poblacion, San Jose, Romblon. When they stood up to go home, Luz Venus, the wife
of Diosdado Venus, told them not to go out because the accused were watching them outside about
three (3) meters from the restaurant. Diosdado Venus accompanied them upon their request and
they went out and walked towards home. About a hundred meters from the restaurant, the six (6)
accused, that is, Mayor Cawaling, the four (4) policemen, namely, Hilario Cajilo, Andres Fontamillas,
Ernesto Tumbagahan and Ricardo delos Santos, and civilian Alex Batuigas, the mayors brother-in-
law, flashlighted them and Diosdado Venus ran going back. The two (2) brothers also ran towards
home to the house of their elder sister Imelda Elisan Tumbagahon. Co-accused Andres Fontamillas
and Hilario Cajilo blocked them on the gate of the fence of their sisters house. Ronie Elisan ran
towards the ricefield. The accused were chasing them. Vicente Elisan saw his brother Ronie f[a]ll
down on the ricefield while he ran towards the bushes and la[y] on the ground. Ronie Elisan rose up
by kneeling and raising his two (2) hands. All the six (6) accused approached him with their
flashlights and shot him. Ronie fell down about twenty (20) meters from the bushes where Vicente
Elisan hid behind the coconut tree. Co-accused Cawaling said []you left him, he is already
dead.[] Mayor Cawaling was armed with .45 caliber, policemen Andres Fontamillas and Hilario Cajilo
were both with armalites, Ernesto Tumbagahan and Ricardo delos Santos were both with .38 caliber
and so with civilian Alex Batuigas. They left towards the house of Mayor Cawaling. After they were
gone, Vicente Elisan ran towards the house of his older brother Nelson Elisan. Upon seeing him,
Vicente told Nelson that Ronie was already dead. Nelson said nothing. While they were there, elder
sister Imelda Elisan Tumbagahon, who was crying came. She said: Manong, patay ron si
Ronie. (Brother, Ronie is already dead). Nelson said []do not be noisy; they might come back and kill
all of us.[] Imelda stopped crying.
After a while, brothers Nelson and Vicente Elisan went to the house of barangay captain Aldolfo
Tumbagahon. The three (3) went to the townhall and called the police but there was none
there. Going to the house of the Chief of Police Oscar Montero, they were told by his wife that
Commander Montero was in the house of Mayor Cawaling. They proceeded to the place where
Ronie Elisan was shot. The cadaver was brought to the house of Nelson Elisan. Vicente Elisan found
an empty shell of a .45 caliber about three (3) arms length from the body of the victim. They
surrendered it to the Napolcom.[19]
Dr. Blandino C. Flores described the gunshot wounds of the victim as follows:
Gunshot Wounds:
1. Shoulder:
Gun shot wound x inch in diameter shoulder right 2 inches from the neck with contussion [sic] collar
s[u]rrounding the wound.
2. Right Axilla:
Gun shot wound x inch in diameter, 2 inches below the right nipple with contussion [sic] collar
s[u]rrounding the wound.
3. Left Axilla:
Exit of the gun shot wound from the right axilla, measuring x inch with edges everted, one inch
below the axilla and one inch below the level of the nipple.
4. Back:
Gun shot wound measuring x inch, along the vertebral column, right at the level of the 10th ribs
with contussion [sic]collar.
5. Leg, Left:
Gun shot wound measuring x anterior aspect upper third leg with contussion [sic] collar, with the
exit x posterior aspect upper third leg, left.[20]
Based on the death certificate (Exhibit E) issued by Dr. Flores, Ronie Ilisan died of severe
hemorrhage and gun shot wo[unds].[21]
Version of the Defense
Appellant Cawaling, in his 47-page Brief,[22] presented his own narration of the incident as follows:
At around 7:00 in the evening of December 4, 1982, Ulysses Cawaling, then the mayor of the
[M]unicipality of San Jose in the [P]rovince of Romblon, arrived aboard a hired motorized boat from
Manila in the seashore of San Jose. From the seashore, he immediately proceeded to his home. At
around 7:30 in the evening, Cawaling went to the municipal hall to check on administrative matters
that piled up in the course of his trip to Manila. He also went inside the police station (located inside
the municipal building) to be apprised of any developments, afterwhich he went out and joined Pfc.
Tumbagahan and Pfc. Cajilo who were standing near the flagpole in front of the municipal
building. The three engaged in a conversation. Cawaling learned that the two police officers were
the ones assigned for patrol/alert for that night. The three of them went inside the INP office and
there Cawaling informed the two policemen that he received information from reliable persons that
certain persons were plotting to kill him and a member of the towns police force. It is to be noted
that this occurred at the height of the communist insurgency and political violence in the
countryside in the early 80s. Hence, such information was taken very seriously, having been relayed
by sources independent of each other.
Cawaling, as town chief then empowered with supervisory authority over the local police,
accompanied Pfc. Tumbagahan and Pfc. Cajilo in conducting patrol and surveillance operations
around the small municipality. He usually did this as routine since Romblon was then plagued with
political assassinations and armed conflict. On their way to the seashore, they passed by C & J-4
Kitchenette, and chanced upon Ronnie Ilisan and his brother Vicente Ilisan drinking liquor and
discussing in very loud voices. They stopped right in the front of the restaurant and there they heard
Ronnie Ilisan state in a every loud voice that he will kill a person that night. Inside the restaurant,
without the knowledge then of Cawaling and the two police officers, witness Gil Palacio, who was
buying cigarettes and Luz Venus, the cook/server of the restaurant, saw Ronnie Ilisan, very drunk,
brandishing in the air a .38 caliber Smith and Wesson revolver with a protruding screw.
Initially dismissing Ronnie Ilisans statement as just another hollow swagger of an intoxicated person
(salitang lasing), Cawaling and the two policemen proceeded on their way. After the patrol, they
returned to the municipal building and stationed themselves in front. At around 8:30 in the evening,
Ronnie Elisan passed by the municipal hall walking towards the direction of the house of Nelson
Ilisan, another brother, and shouted the challenge, gawas ang maisog, meaning THOSE WHO ARE
BRAVE, COME OUT. Cawaling and the two police officers again brushed aside [the] challenge as just
another foolish drunken revelry [o]n the part of Ronnie Ilisan, a well-known troublemaker in the
small municipality.
A few moments later, after Ronie Ilisan had passed by, they distinctly heard a gunshot and hysterical
female voices shouting, pulis, tabang meaning POLICE! HELP! four times. Impelled by the call of
duty, Cawaling and the two policemen immediately ran in the direction of the gunshot and the
desperate female voices until they reached the house of Nelson Ilisan in San Jose Street. At this
point, they saw Ronnie Ilisan holding a .38 caliber revolver. They also saw Vicente Ilisan, Francisco
Tesnado, Fe Ilisan, the wife of Nelson and Delma Ilisan, the wife of Vicente, the latter two being the
same persons who cried pulis, tabang four times. Cawaling then told Ronnie to surrender his gun
but the latter responded by pointing the gun at Cawaling and pulling the trigger.
At the precise moment that the gun fired, Cawaling warned the two policemen to drop to the
ground by shouting dapa. Fortunately, Cawaling was not hit. Ronnie Ilisan then turned around and
ran towards the church. The two policemen gave chase. Cawaling, still shaken and trembling after
the mischance was initially left behind but followed shortly. When Ronnie Ilisan reached the church,
he turned around and again fired at the pursuing Pfc. Cajilo. Fortunately, the gun misfired. When
they finally reached the ricefield, Pfc. Cajilo fired two (2) warning shots in the air for Ronnie to
surrender. Ronnie responded by firing once again at Pfc. Tumbagahan but failed to hit the latter. At
that instance, Pfc. Cajilo counter-fired at Ronnie Ilisan hitting him. Pfc. Tumbagahan also fired his
weapon in the heat of exchange and also hit Ronnie Ilisan. As a result of the gunshot wounds,
Ronnie Ilisan later on succumbed.
Pfc. Tumbagahan picked up the gun still in the hand of the dead Ronnie Ilisan and gave it to Pfc.
Cajilo. The three, Cawaling, who subsequently caught up with them after the incident, and the two
police officers, then proceeded to the police station located in the municipal building to formally
report the incident in their station blotter.[23]
The Brief for All of the Accused-Appellants filed by Atty.

Napoleon U. Galit and the Brief for Appellants Ernesto Tumbagahan and Hilario Cajilo submitted by
Atty. Joselito R. Enriquez merely repeated the facts as narrated by the trial court.
Ruling of the Trial Court
Finding the prosecution witnesses and their testimonies credible, the court a quo convicted the
appellants. The killing was qualified to murder because of the aggravating circumstances of abuse of
superior strength and treachery. The trial court ruled that there was a notorious inequality of forces
between the victim and his assailants, as the latter were greater in number and armed with guns. It
further ruled that abuse of superior strength absorbed treachery, as it ratiocinated:
Certain cases, an authority wrote, involving the killing of helpless victim by assailants superior to
them in arms or numbers, or victims who were overpowered before being killed, were decided on
the theory that the killing was treacherous, when perhaps the correct qualifying circumstance would
be abuse of superiority. In these cases the attack was not sudden nor unexpected and the element
of surprise was lacking. (Id., I Aquino, pp. 423-424). In the instant case, we earlier ruled that the
qualifying treachery should be considered as an exception to the general rule on treachery because
it was not present at the inception of the attack. The killing was not sudden nor unexpected and the
element of surprise was lacking. It is for this reason that we hold that alevosia should be deemed
absorbed or included in abuse of superiority. Even assuming ex-gratia argumenti that it should be
the other way around, the situation will not be of help, penaltywise, to the accused.[24]
The defenses raised by the appellants were dismissed and their witnesses declared unworthy of
belief for the following reasons:
1. It was highly improbable that Defense Witness Tesnado would not tell his wife (Dory) and
Bebelinia Ilisan Sacapao about the incident he had allegedly witnessed; more so when Sacapao was
the victims first cousin.
2. The spot report prepared by Station Commander Oscar M. Montero, the testimonies of Cajilo and
Tumbagahan and the medical findings of Dr. Flores contradicted one another on the following
details: the caliber of the gun used in shooting the victim, the wounds inflicted and the whereabouts
of Cawaling during the shoot-out.
3. Cawaling and his men, armed with guns, could have immediately disarmed the victim at the initial
encounter. The court could not understand why the victim was able to fire his gun, run, then stop
and again fire his gun, without being caught.
4. The positive identification made by the prosecution witnesses prevails over the alibi posed by De
los Santos and Fontamillas, a defense that was not corroborated by any other witness.
5. The .38 caliber revolver, allegedly owned by the victim, was in fact owned and used by Alex
Batuigas.
6. The defense presented a photo and a sketch to prove that Imelda Ilisan Tumabagahan had an
obstructed view of the killing. The trial court ruled that such evidence was misleading, because the
window, from where said witness allegedly saw the incident, was at the eastern side of her house,
and thus afforded a clear view of the incident, while the window referred to by the defense was at
the southern portion.
7. The questioned testimonies of Dr. Flores, Nelson Ilisan and Provincial Prosecutor Pedro
Victoriano, Jr., though not formally offered as evidence, may be admitted because of the failure of
the defense to object thereto at the time they were called to testify.
8. The defense failed to prove that the prosecution witnesses had any ill motive to testify falsely
against the appellant.
9. Appellants had a motive to kill the victim. Nelson Ilisan testified that his brother Ronie (the victim)
had witnessed Bonifacio Buenaventura (a former chief commander of the San Jose Police Force) kill
a certain Ruben Ventura. Cawaling, who was Buenaventuras first cousin, wanted Ronie dead,
because the latter had not followed his instruction to leave town to prevent him from testifying in
said case.
Assignment of Errors
The appellants, through their common counsel, Atty. Napoleon Galit, assign the following errors to
the lower court:
1. The trial court gravely erred in sustaining prosecutors theory of conspiracy and thus renders
nugatory or has totally forgotten that policemen when in actual call of duty normally operate in
group but not necessarily in conspiracy.
2. The trial court gravely erred in believing the theory of the prosecution that accused-appellant
Ulysses Cawaling was one of the alleged co-conspirators in the killing of the deceased Ronnie Elisan.
3. The trial court gravely erred in not believing the defense of accused-appellant Ulysses Cawaling
that he has nothing to do with the shooting incident except to shout to arrest the accused[,] which
prompted his co-accused policemen to chase the accused and sho[o]t him when he resisted, after
he fired at Mayor Cawaling.
4. The trial court gravely erred in not giving weight to accused-appellant policemen[s] testimonies
which carry the presumption of regularity.
5. The trial court gravely erred in not acquitting all the accused-appellants by applying the equipoise
rule thereby resulting [i]n reasonable doubts on the guilt.[25]
In their joint brief,[26] Appellants Tumbagahan and Cajilo cite these other errors:
1. The trial court gravely erred in relying on the theory of the prosecution that accused-appellants
Ernesto Tumbagahan and Hilario Cajilo were alleged co-conspirators in the killing of the victim,
Ronie Ilisan.
2. The trial court gravely erred in not believing the defense that herein accused-appellants merely
did a lawful duty when the shooting incident happened which led to the death of Ronnie Ilisan.
3. The trial court gravely erred in not acquitting herein accused-appellants by applying the equipoise
rule, thereby resulting in reasonable doubt on their guilt.
4. Prescinding from the foregoing, herein accused-appellants do press and hold, that the lower court
committed grave, serious and reversible error in appreciating the qualifying circumstance of
treachery (alevosia).
5. The lower court committed grave, serious and reversible error in convicting both accused-
appellants of murder, instead merely of homicide, defined and penalized under the Revised Penal
Code.
6. The lower court committed grave, serious and reversible error in appreciating the qualifying
circumstance of taking advantage of superior strength.
7. The consummated crime being merely homicide, the mitigating circumstance of voluntary
surrender should be considered to lower the penalty of homicide.
8. The lower court committed error in not considering double jeopardy.
9. The lower court committed error in not dismissing the case for want of jurisdiction.[27]
Appellant Cawaling imputes these additional errors to the court a quo:

1. The trial court gravely erred in not acquitting herein accused-appellant, Ulysses M. Cawaling,
considering that he had no part in the killing and the prosecution failed to prove his guilt beyond
reasonable doubt;
2. The trial court gravely erred in not finding the shooting incident a result of hot pursuit and shoot-
out between the deceased Ronnie Ilisan and the police officers in the performance of their duty and
self-defense, and in sustaining the prosecutions conspiracy theory;
3. The trial court gravely erred in not acquitting Accused-Appellant Ulysses M. Cawaling considering
that there was blatant absence of due process in the proceedings tantamount to mistrial.[28]
This Courts Ruling
We affirm the conviction of the appellants. In so ruling, we will resolve the following issues: (1)
jurisdiction of the trial court, (2) double jeopardy, (3) credibility of prosecution witnesses and their
testimonies, (4) self-defense, (5) performance of lawful duty, (6) alibi, (7) conspiracy, (8) rule on
equipoise, (9) qualifying circumstances, (10) damages and (11) attending circumstances as they
affect the penalty.
We shall address the first two issues as important preliminary questions and discuss the merits of
the remaining ones, which we have culled from the errors cited by the appellants in their
aforementioned briefs.
First Issue:
Jurisdiction of the Trial Court
Appellants Tumbagahan and Cajilo argue that the trial court erred when it assumed jurisdiction over
the criminal case. They insist that the Sandiganbayan, not the regular courts, had jurisdiction to try
and hear the case against the appellants, as they were public officers at the time of the killing which
was allegedly committed by reason of or in relation to their office.
We do not agree.
The jurisdiction of a court to try a criminal case is determined by the law in force at the time of the
institution of the action. Once the court acquires jurisdiction, it may not be ousted from the case by
any subsequent events, such as a new legislation placing such proceedings under the jurisdiction of
another tribunal. The only recognized exceptions to the rule, which find no application in the case at
bar, arise when: (1) there is an express provision in the statute, or (2) the statute is clearly intended
to apply to actions pending before its enactment.[29]
The statutes pertinent to the issue are PD 1606, as amended;[30] and PD 1850, as amended by PD
1952 and BP 129.
Section 4 of PD 1606[31] reads:
Sec. 4. Jurisdiction. -- The Sandiganbayan shall exercise:

(a) Exclusive original jurisdiction in all cases involving:
xxxxxxxxx
(2) Other offenses or felonies committed by public officers and employees in relation to their office,
including those employed in government-owned or controlled corporations, whether simple or
complexed with other crimes, where the penalty prescribed by law is higher than prision
correccional or imprisonment for six (6) years, or a fine of P6,000.00: PROVIDED, HOWEVER, that
offenses or felonies mentioned in this paragraph where the penalty prescribed by law does not
exceed prision correccional or imprisonment for six (6) years or a fine of P6,000.00 shall be tried by
the proper Regional Trial Court, Metropolitan Trial Court, Municipal Trial Court and Municipal Circuit
Trial Court.
xxxxxxxxx
However, former President Ferdinand Marcos issued two presidential decrees placing the members
of the Integrated National Police under the jurisdiction of courts-martial. Section 1 of PD
1952,[32] amending Section 1 of PD 1850, reads:
SECTION 1. Court Martial Jurisdiction over Integrated National Police and Members of the Armed
Forces. Any provision of law to the contrary notwithstanding -- (a) uniformed members of the
Integrated National Police who commit any crime or offense cognizable by the civil courts shall
henceforth be exclusively tried by courts-martial pursuant to and in accordance with
Commonwealth Act No. 408, as amended, otherwise known as the Articles of War; (b) all persons
subjects to military law under Article 2 of the aforecited Articles of War who commit any crime or
offense shall be exclusively tried by courts-martial or their case disposed of under the said Articles of
War; Provided, that, in either of the aforementioned situations, the case shall be disposed of or tried
by the proper civil or judicial authorities when court-martial jurisdiction over the offense has
prescribed under Article 38 of Commonwealth Act Numbered 408, as amended, or court-martial
jurisdiction over the person of the accused military or Integrated National Police personnel can no
longer be exercised by virtue of their separation from the active service without jurisdiction having
duly attached beforehand unless otherwise provided by law:
PROVIDED FURTHER, THAT THE PRESIDENT MAY, IN THE INTEREST OF JUSTICE, ORDER OR DIRECT,
AT ANY TIME BEFORE ARRAIGNMENT, THAT A PARTICULAR CASE BE TRIED BY THE APPROPRIATE
CIVIL COURT.
As used herein, the term uniformed members of the Integrated National Police shall refer to police
officers, policemen, firemen, and jail guards.
On the other hand, the jurisdiction of regular courts over civil and criminal cases was laid down in BP
129, the relevant portion of which is quoted hereunder:
Sec. 20. Jurisdiction in Criminal Cases. -- Trial Courts shall exercise exclusive original jurisdiction in all
criminal cases not within the exclusive jurisdiction of any court, tribunal or body, except those now
falling under the exclusive and concurrent jurisdiction of the Sandiganbayan which shall hereafter be
exclusively taken cognizance of by the latter.[33]
In relation to the above, Section 4-a-2 of PD 1606, as amended by PD 1861, quoted earlier, lists two
requisites that must concur before the Sandiganbayan may exercise exclusive and original
jurisdiction over a case: (a) the offense was committed by the accused public officer in relation to
his office; and (b) the penalty prescribed by law is higher than prision correccionalor imprisonment
for six (6) years, or higher than a fine of six thousand pesos (P6,000).[34] Sanchez vs.
Demetriou[35] clarified that murder or homicide may be committed both by public officers and by
private citizens, and that public office is not a constitutive element of said crime, viz.:
The relation between the crime and the office contemplated by the Constitution is, in our opinion,
direct and not accidental. To fall into the intent of the Constitution, the relation has to be such that,
in the legal sense, the offense cannot exist without the office. In other words, the office must be a
constituent element of the crime as defined in the statute, such as, for instance, the crimes defined
and punished in Chapter Two to Six, Title Seven, of the Revised Penal Code.
Public office is not the essence of murder. The taking of human life is either murder or homicide
whether done by a private citizen or public servant, and the penalty is the same except when the
perpetrator, being a public functionary, took advantage of his office, as alleged in this case, in which
event the penalty is increased.
But the use or abuse of office does not adhere to the crime as an element; and even as an
aggravating circumstance, its materiality arises, not from the allegations but on the proof, not from
the fact that the criminals are public officials but from the manner of the commission of the crime.
Furthermore, the Information filed against the appellants contains no allegation that appellants
were public officers who committed the crime in relation to their office. The charge was for murder,
a felony punishable under Article 248 of the Revised Penal Code. As clarified in Aguinaldo, et al. vs.
Domagas, et al.,[36] [I]n the absence of such essential allegation, and since the present case does not
involve charges of violation of R.A. No. 3019 (the Anti-Graft etc. Act), the Sandiganbayan does not
have jurisdiction over the present case. (Bartolome vs. People, 142 SCRA 459 [1986] Even before
considering the penalty prescribed by law for the offense charged, it is thus essential to determine
whether that offense was committed or alleged to have been committed by the public officers and
employees in relation to their offices.
Jurisdiction is determined by the allegations in the complaint or information.[37] In the absence of
any allegation that the offense was committed in relation to the office of appellants or was
necessarily connected with the discharge of their functions, the regional trial court, not the
Sandiganbayan, has jurisdiction to hear and decide the case.[38]
Second Issue:
Double Jeopardy
In seeking their acquittal, Appellants Tumbagahan and Cajilo also invoke their right against double
jeopardy. They argue that the first jeopardy attached when a criminal case for murder was filed
before the Judge Advocate Generals Office (JAGO), which was allegedly dismissed after several
hearings had been conducted.[39] We are not persuaded.
There is double jeopardy when the following requisites are present: (1) a first jeopardy has attached
prior to the second; (2) the first jeopardy has been validly terminated; and, (3) a second jeopardy is
for the same offense as that in the first. And the first jeopardy attaches only (a) after a valid
indictment; (b) before a competent court; (c) after arraignment; (d) when a valid plea has been
entered; and (e) when the accused was acquitted or convicted, or the case was dismissed or
otherwise terminated without his express consent.[40]
For a better appreciation of appellants argument, we must consider PD 39[41] and its implementing
rules,[42] which prescribe the procedure before a military commission. A summary preliminary
investigation shall be conducted before trial for the purpose of determining whether there is prima
facie evidence to pursue trial before a military commission. The investigation report shall contain a
summary of the evidence, the acts constituting the offense or offenses committed, and the findings
and recommendations of the investigating officer. Thereafter, the report shall be forwarded to the
judge advocate general, who shall determine for either the defense secretary or for the AFP chief of
staff whether the case shall be referred for trial to a military commission.[43] Where a prima
facie case is found against the accused, formal charges shall be signed by a commissioned officer
designated by the judge advocate general.[44] The accused shall then be arraigned, during which the
charge and specification shall be read and the accused shall enter his plea.[45] After hearings, a
record of the trial shall be forwarded to the AFP chief of staff for proper action.[46]
In the present case, the appellants have presented no sufficient and conclusive evidence to show
that they were charged, arraigned and acquitted in a military commission, or that the case was
dismissed therein without their consent. The defense merely offered as evidence certain disposition
forms[47] and a letter,[48] dated March 8, 1983, recommending that the case against Appellants
Tumbagahan, Cajilo and De los Santos be dropped and considered closed.[49] No charge sheet and
record of arraignment and trial were presented to establish the first jeopardy.
As pointed out by the solicitor general, appellants were never arraigned, they never pleaded before
the Judge Advocate Generals Office, there was no trial, and no judgment on the merits had been
rendered.[50]
Third Issue:
Credibility of Witnesses
As a general rule, the factual findings of trial courts deserve respect and are not disturbed on
appeal, unless some facts or circumstances of weight and substance have been overlooked,
misapprehended or misinterpreted, and would otherwise materially affect the disposition of the
case.[51] This rule, however, does not apply when the judge who penned the decision was not the
same one who had heard the prosecution witnesses testify,[52] as in the present case. Nonetheless,
we have carefully perused and considered the voluminous records of this case, and we find no
reason to alter the findings of the court a quo in regard to the credibility of the prosecution
witnesses and their testimonies.
Vicente Ilisan, the victims brother, narrated before the trial court the circumstances relevant to the
crime:
Q. In the evening of December 4, 1982, at about 8:00 or 8:30, where were you?
A. I was inside the restaurant of Andres Fontamillas.
xxxxxxxxx
Q. What were you doing there?
A. I was drinking tuba.
Q. When you were about to finish drinking tuba, what did you do?
A. I stood up preparing to go home.
Q. Were you able to leave that restaurant actually?
A. No, sir.
Q. Why?
A. Luz Venus told us not to go out when [I] stood up to go home.
Q. Do you know why you were advise[d] not to go out?
A. Yes, sir.
Q. Why?
A. Because we were being watched by Mayor Cawaling, Andres Fontamillas, Hilario Cajilo and Alex
Bat[ui]gas.
xxxxxxxxx
Q. When you were informed by Luz Venus that you should not go out because Mayor Cawaling and
the persons you mentioned were outside watching for you, what did you do?
A. We did not go out.
Q. Since you remained inside, what did you do?
A. I also viewed thru the window.
Q. Did you see them?
A. Yes, sir.
Q. How far were they from the restaurant?
A. About three meters.
Q. What were they doing outside the restaurant?
A. They were also viewing us.
Q. For how long did they remain there viewing you?
A. Just a short time.
Q. And later on, do you know where did they go? [sic]
A. No, sir. I went out from the restaurant and when I went out, I did not see them anymore.
Q. Before you went out of the restaurant, what did you do?
A. Diosdado Venus accompanied us.
Q. Why did you ask Diosdado Venus to accompany you?

A. Yes, sir. Because we were aware that we were being watched from outside so we asked to be
accompanied by Diosdado Venus.
Q. From the restaurant accompanied by Diosdado Venus, what did you do?
A. Towards home.
Q. Were you able to reach home?
A. No, sir.
Q. Why, what happened on the way?
A. Diosdado Venus ran going back because we were lighted by a flashlight.
Q. How many flashlight[s] were trimed [sic] to you?
A. Six.
Q. Did you come to know who trimed [sic] the flashlight towards you?
A. Yes, sir.
Q. Who were they?
A. Mayor Cawaling, Andres Fontamillas, Hilario Cajilo, Ernesto Tumbagahan, Ricardo delos Santos
and Alex Batuigas.
Q. How were you able to recognize them when that was night time?
A. Because the flashlight[s] were bright.
Q. When Diosdado Venus ran back to his restaurant, what did your brother Ronie Elisan and you do?
A. We also ran towards home.
Q. To whose house?
A. That of my older sister Imelda [E]lisan.
Q. Were you able to reach that house?
A. No, sir.
Q. Why, what happened when you ran away?
A. Andres Fontamillas and Hilario Cajilo were blocking us on the gate of the fence of my sisters
house.
Q. Since your way was blocked, where did Ronie Elisan go?
A. We ran towards the ricefield.
Q. When you ran, what did Mayor Cawaling do?
A. They were chasing us.
Q. What about Alex Batuigas, what did he do?
A. He also followed helping chasing us. [sic]

Q. What about the four policemen, what did they do?
A. The same. They were also chasing us.
Q. About how far is that restaurant [from] the spot where you were first lighted by the flashlight of
the accused?
A. About one hundred meters.
Q. Now, according to you, you ran towards the ricefield, what happened while you were running
towards the ricefield?
A. I saw my brother fell [sic] down.
Q. Fell down where?
A. On the ricefield.
Q. What about you, where were you when your brother fell down in the ricefield?
A. I ran towards the bushes.
Q. What did you do upon reaching the bushes?
A. I la[y] on the ground with my belly touch[ing] on the ground behind the coconut tree.
Q. When your brother according to you had fallen on the ricefield, what did he do thereafter?
A. He rose up, [raised] his hands and surrender[ed] to them.
Q In rising, what was his position?
A. He was rising like this. (Witness demonstrating by kneeling [and] raising his two hands).
Q. While Ronie Elisan was kneeling and raising both of his hands, what happened?
A. Mayor Cawaling approached him together with the four policemen and his brother-in-law and
they shot him.
Q. Do you know what weapon[s] were used in shooting your brother?
A. Yes, sir.
Q. What weapon were used?
A. The weapon of Mayor Cawaling is .45 caliber and that of Andres Fontamillas and Hilario Cajilo
were both armalite and that of Ernesto Tumbagahan, Alex Batuigas and Ricardo delos Santos were
.38 caliber.
Q. How were you able to identify their weapons?
A. Because the flashlight[s] were bright.
Q. Now, what happened to your brother when he was fired upon by the accused in this case?
A. He fell down.
Q. And how far is that spot where your elder brother had fallen down to the spot where Diosdado
Venus left you when he returned to the restaurant?
A. To my estimate it is about 300 meters.
Q. After your brother had fallen down, what did the accused do?
A. Mayor Cawaling said, []you left him, he is already dead.[]
Q. Where did they go?
A. They went towards the house of Mayor Cawaling.[53]
Imelda Tumbagahan was at home feeding her child when she heard her brother Ronie shouting for
help. After getting a flashlight and looking through the window of her house, she saw Cawaling and
Alex Batuigas chasing Ronie who was running towards her house. Tumbagahan and De los Santos
prevented Ronie from entering the fence of her house, as a result of which, her brother ran towards
a rice field nearby. There, on bended knees and with hands raised, Ronie was shot by Cawaling and
his men.[54]
Nelson Ilisan also heard his younger brother Ronie shouting for help while being chased by the
group of Cawaling. As Cajilo and Fontamillas blocked Ronie from entering the gate of Imeldas house,
the victim ran towards a rice field. Nelson stopped Cawaling and asked, Nong, basi guinalagas ninyo
ang acon hali? (Nong, why do you chase my brother?) But the mayor merely continued chasing
Ronie. Thereafter, Nelson saw his brother, on his knees with both hands raised, shot by
appellants.[55]
The three aforementioned witnesses narrated in detail the assault against their brother Ronie and
positively identified the appellants as the perpetrators. The trial court cannot be faulted for relying
on their testimonies and accepting them as true,[56] especially when the defense failed, to prove any
ill motive on their part.[57] In addition, family members who have witnessed the killing of their loved
one usually strive to remember the faces of the assailants.[58] Thus, the relationship per se of
witnesses with the victim does not necessarily mean that the former are biased. On the contrary, it
is precisely such relationship that would impel them to seek justice and put the real culprit behind
bars, rather than impute the offense to the innocent.[59]
Appellant Cawaling submits that the prosecution witnesses tampered with the evidence by cleaning
the cadaver before an autopsy could be done. Such irregular washing of the cadaver by a
close relative of the deceased, who is educated and who presumably knew perfectly well the need
to preserve it in its original state for the medico-legal examination[,] is highly suspicious. It points to
the fact that the relatives of the deceased wanted to hide, or erase something that would bolster
and assist the defense (that is, state of drunkenness, powder burns or lack thereof, indicating the
firing of a weapon or the proximity of the weapon used on the deceased, etc.).[60]
Such contention is unavailing. First, Bebelinia Sacapao merely cleaned the cadaver and made no
further examination. Second, appellants had an opportunity to have the body examined again to
determine or prove important matters, such as whether Ronie was drunk, if he fired a gun, how
many and what caliber of guns were used in shooting him; they did not, however, avail themselves
of this opportunity. As public officers, appellants knew that it was within their power to request or
secure from the court, or any other competent authority, an order for another autopsy[61] or any
such evidence as may affirm their innocence. Third, their conviction lies in the strong and convincing
testimonial evidence of the prosecution, not in the corroborative testimony of Bebelinia Sacapao.
Relying on the testimonies of Luz Venus and Gil Palacio, Appellant Cawaling also pointed out that
[t]he power of observation of alleged eyewitness Vicente was severely affected by his intoxication. It
may be inferred that an intoxicated persons sense[s] of sight and hearing and of touch are less acute
than those of a sober person and that his observation are inexact as to what actually occurred.[62]
This argument is not persuasive. The evidence presented fails to show that Vicente was so
intoxicated that night as to affect his powers of observation and retrospection. Defense Witness
Palacio merely saw the witness drinking tuba on the night of the killing.[63] Meanwhile the whole
testimony of Luz on the matter mainly reveals that Ronie was the person she was referring to as
drunk, as shown by this portion:[64]
Q When Ronie and Vicente both surnamed Ilisan entered the C & J-4 kitchenette what if any did you
observe?
A I saw them so dr[u]nk (Nakita ko sila lasing na lasing).
Q Who was lasing na lasing or so dr[u]nk?
A Ronie Ilisan sir.
Granting that Vicente was drunk, the conviction of the appellants is still inevitable in view of the
positive declarations of Witnesses Nelson and Imelda, who unequivocally identified appellants as
perpetrators of the senseless killing of their brother Ronie.
Appellant Cawaling also questions the trial courts reliance on the testimonies of Dr. Blandino
Flores,[65] Nelson Ilisan[66] and Prosecutor Pedro Victoriano, Jr.,[67] for failure of the prosecution to
offer them as evidence. In People vs. Java,[68] this Court ruled that the testimony of a witness,
although not formally offered in evidence, may still be admitted by the courts, if the other party
does not object to its presentation. The Court explained: Section 36 of [Rule 132] requires that an
objection in the course of the oral examination of a witness should be made as soon as the grounds
therefor shall become reasonably apparent. Since no objection to the admissibility of evidence was
made in the court below, an objection raised for the first time on appeal will not be considered. In
the present case, a cursory reading of the stenographic notes reveals that the counsel for the
appellants did not raise any objection when said witnesses testified on the matters now being
impugned. Moreover, they repeatedly cross-examined the witnesses, which shows that they had
waived their objections to the said testimonies of such witnesses.
Lastly, Appellant Mayor Cawaling questions the motive of Prosecutor Pedro Victoriano Jr. This
contention is likewise bereft of merit. Unlike judges who are mandated to display cold neutrality in
hearing cases,[69] prosecutors are not required to divest themselves of their personal convictions and
refrain from exhibiting partiality. In this case, there is reasonable ground for Prosecutor Victoriano
to believe that an offense has been committed and that the accused was probably guilty
thereof.[70] Under the circumstance, it is his sworn duty to see that justice is served.[71] Thus, [h]e
may prosecute with earnestness and vigor - - indeed, he should do so. But, while he may strike hard
blows, he is not at liberty to strike foul ones. It is as much his duty to refrain from improper methods
calculated to produce a wrongful conviction as it is to use every legitimate means to bring about a
just one.[72] Further,
Under the prevailing criminal procedure, the fiscals sphere of action is quite extensive, for he has
very direct and active intervention in the trial, assuming as the Governments representative the
defense of society, which has been disturbed by the crime, and taking public action as though he
were the injured party, for the purpose of securing the offenders punishment, whenever the crime
has been proved and the guilt of the accused as the undoubted perpetrator thereof established.[73]
Fourth Issue:
Self-Defense
To escape criminal liability, the appellants also invoke the justifying circumstances of self-defense
and lawful performance of duty.[74] Allegedly, Ronie was firing his gun and shouting Guwa ang
maisog! (Come out who is brave!). Then the mayor and the policemen arrived at the scene to pacify
him. Ronie fired at them, which forced them to chase him and return fire.
We find this scenario bereft of plausibility.
Unlawful aggression on the part of the victim is a condition sine qua non for the successful
invocation of self-defense.[75] As factually found by the trial court, unlawful aggression did not start
with the victim, but rather with the appellants. Cawaling and his men proceeded to the C & J-4
Kitchenette and waited for Ronie to come out. When the victim did, they chased and shot him
without giving him any opportunity to defend himself.
Granting arguendo the veracity of the defenses factual version, it is important to note that
appellants admitted that Ronie was running away from them when they chased and shot him.Thus,
unlawful aggression -- assuming it was initially present had ceased, and the appellants no longer had
any right to pursue the offender. Basic is the rule that when unlawful aggression ceases, the
defender no longer has the right to kill or even wound the former aggressor. Upon the cessation of
the unlawful aggression and the danger or risk to life and limb, there should be a corresponding
cessation of hostilities on the part of the person defending himself.[76]
Furthermore, the means employed to ward off the attack was unreasonably excessive. Being armed,
the appellants could have easily ordered the victim to surrender. Even the first shot at his shoulder
would have been sufficient to immobilize him, yet they fired a succession of shots at him while he
was in no position to put up a defense.
Jurisprudence teaches that when an accused admits having committed the crime but invokes self-
defense to escape criminal liability, the burden of proof is reversed and shifted to him.He must then
prove the elements of self-defense.[77] It necessarily follows that he must now rely on the strength of
his own evidence and not on the weakness of that of the prosecution; for even if the latter evidence
were weak, it could not be disbelieved after the accused has admitted the killing.[78] Thus, appellants
must establish with clear and convincing evidence that the killing was justified, and that they
incurred no criminal liability therefor.[79] They failed to do so, and their conviction thus becomes
inevitable.[80]
Fifth Issue:
Lawful Performance of Duties
Appellants contend that the killing of Ronie resulted from the lawful performance of their duties as
police officers. However, such justifying circumstance may be invoked only after the defense
successfully proves that (1) the accused acted in the performance of a duty, and (2) the injury or
offense committed is the necessary consequence of the due performance or lawful exercise of such
duty.[81] These two requisites are wanting in this case.
The appellants, except Mayor Cawaling, were men in uniform who happened to be on duty when
they killed Ronie. The victim was not committing any offense at the time. Killing the victim under the
circumstances of this case cannot in any wise be considered a valid performance of a lawful duty by
men who had sworn to maintain peace and order and to protect the lives of the people. As aptly
held in People vs. De la Cruz,[82] Performance of duties does not include murder. That Ronie was a
troublemaker in their town is not an excuse; as the Court declared in the same case of People vs. De
la Cruz, Murder is never justified, regardless of the victim.
Sixth Issue:
Alibi
We likewise brush aside the defenses of alibi and denial raised by Appellant De los
Santos. Prosecution witnesses positively identified him and Fontamillas as part of the group which
chased and shot Ronie Ilisan. It is elementary that alibi and denial are outweighed by positive
identification that is categorical, consistent and untainted by any ill motive on the part of the
eyewitness testifying on the matter. Alibi and denial, if not substantiated by clear and convincing
evidence, are negative and self-serving evidence undeserving of weight in law.[83]
In fact, De los Santos failed to establish with clear and convincing evidence that it was physically
impossible for him to have been at the scene of the crime during its commission.[84] The evidence he
had presented demonstrated only that, at the time, he was sleeping in his house, which was near
the locus criminis.
Alibi is always considered with suspicion and received with caution, not only because it is inherently
weak and unreliable, but also because it is easily fabricated and concocted.[85] It is therefore
incumbent upon the appellant to prove that he was at another place when the felony was
committed, and that it was physically impossible for him to have been at the scene of the crime at
the time it was committed.[86] This he failed to prove.
Seventh Issue:
Conspiracy
The trial court correctly appreciated the presence of conspiracy. Conspiracy exists when two or
more persons come to an agreement concerning the commission of a felony and decide to commit
it. Direct proof of conspiracy is rarely found, for criminals do not write down their lawless plans and
plots. The agreement to commit a crime, however, may be deduced from the mode and manner of
the commission of the offense or inferred from acts that point to a joint purpose and design,
concerted action, and community of intent.[87] It does not matter who inflicted the mortal wound, as
the act of one is the act of all, and each incurs the same criminal liability.[88] We concur with the trial
courts elucidation:
All of the accused chased the victim and his brother; four (4) of whom blocked their ways, first, to
their elder brother Nelson Elisans house and, second, to their elder sister Imelda Elisan
Tumbagahons house. Having changed course by proceeding to the ricefield in their desperate
attempt to evade the accused, all the six (6) armed accused continued their pursuit. Their victim,
having fallen on the rice paddy, and rising and kneeling on it with raised hands, all the said accused
with their flashlights beamed on their victim, in a united and concerted manner, shot him. After
Ronie Elisan had fallen down, co-accused Mayor Cawaling was even heard as saying (Y)ou left [sic]
him, he is already dead. x x x.[89]
Eighth Issue:
Equipoise Rule
We reject appellants position that the equipoise rule should apply to this case.[90] In People vs.
Lagnas,[91] the Court through Mr. Justice Florenz D. Regalado described this rule, as follows:
Once again, albeit in effect a supportive and cumulative consideration in view of the preceding
disquisition, the equipoise rule finds application in this case, that is, if the inculpatory facts and
circumstances are capable of two or more explanations, one of which is consistent with the
innocence of the accused and the other consistent with his guilt, then the evidence does not fulfill
the test of moral certainty, and is not sufficient to support a conviction.
In this case, the inculpatory facts point to only one conclusion: appellants are guilty. As amplified in
the discussion above, the Court agrees with the trial court that the guilt of the appellants was
proven beyond reasonable doubt.
Ninth Issue:
Murder or Homicide?
The Information alleges three qualifying circumstances: treachery, evident premeditation and taking
advantage of superior strength. If appreciated, any one of these will qualify the killing to
murder. However, Appellants Tumbagahan and Cajilo posit that there was no treachery, reasoning
that Ronie was not an unsuspecting victim, as he had been forewarned by Diosdado Venus of the
presence of the appellants inside the restaurant and there had been a chase prior to the
killing. Further, they contend that abuse of superior strength is deemed absorbed in treachery, and
that the addition of abuse of superior strength to qualify the case to murder is nothing more than
mere repetition - a legal chicanery, so to say. Similarly, where treachery is not proved, there can be
no abuse of superior strength, vice-versa.[92]
We partly agree.
Treachery exists when the malefactors employ means and methods that tend directly and especially
to insure their execution without risk to themselves arising from the defense which the victims
might make. The essence of treachery is the sudden and unexpected attack without the slightest
provocation on the part of the person attacked.[93] While we do not disregard the fact that the
victim, together with his brother Vicente, was able to run towards a rice field, we still believe that
treachery attended the killing.
In People vs. Landicho,[94] we ruled that treachery might still be appreciated even when the victim
was warned of danger to his person, for what is decisive is that the execution of the attack made it
impossible for the victim to defend himself or to retaliate.
The appellants waited for Ronie to come out of the restaurant. All of them chased the victim and
prevented him from seeking refuge either in the house of his sister Imelda or that of his brother
Nelson. All of them carried firearms and flashlights. They fired their guns at the victim while he was
on his knees with arms raised, manifesting his intention not to fight back.
We cannot appreciate the aggravating circumstance of abuse of superior
strength, however, as we have consistently ruled that it is deemed absorbed in treachery.[95]
We also affirm the finding of the trial court that the prosecution failed to prove the attending
circumstance of evident premeditation. To prove this aggravating circumstance, the prosecution
must show the following: (1) the time when the offender determined to commit the crime; (2) an
act manifestly indicating that the offender clung to his determination; and (3) a lapse of time,
between the determination to commit the crime and the execution thereof, sufficient to allow the
offender to reflect upon the consequences of his act.[96] Nothing in the records shows how and when
the plan to kill was hatched, or how much time had elapsed before it was carried out.
Tenth Issue:
Damages
The trial court awarded the following: (a) P50,000.00, as civil indemnity; (b) P6,000.00, as actual
damages; and (c) P116,666.66, for lost earnings. In computing the latter, the trial court used the
following formula:
Total annual net income = 10% x total annual gross income

= .10 x P25,000.00
= P2,500.00
xxx xxx xxx
Loss of earning capacity of Ronie Elisan = 2/3 (90-20) x P2,500.00 = P116,666.66.[97]
Consistent with jurisprudence, we affirm the ruling of the trial court awarding the amount of
P50,000 as civil indemnity to the heirs of the victim.[98]
We cannot do the same to the award of actual damages and lost earnings, however. The award of
actual damages has no basis, as no receipts were presented to substantiate the expenses allegedly
incurred. An alleged pecuniary loss must be established by credible evidence before actual damages
may be awarded.[99] Similarly erroneous is the award for loss of earning capacity, which should be
computed as follows:[100]
2/3 x [80 - age of victim at the time of death] x [reasonable portion of the annual net income which
would have been received as support by heirs]
As testified to by Nelson Ilisan, the deceased had been earning an average of P100 daily or P3,000
monthly.[101] From this monthly income must be deducted the reasonable amount of P1,000
representing the living and other necessary expenses of the deceased. Hence, the lost earnings of
the deceased should be computed as follows:
= 2/3 x [80 - 22] x [P24,000]

= 2/3 x [58] x [P24,000]
= 2[P 1,392,000]
3
= P2,784,000
3
= P928,000.
Eleventh Issue:
Aggravating and Mitigating Circumstances
Prior to the amendment of Section 248 of the Revised Penal Code,[102] the imposable penalty for
murder was reclusion temporal in its maximum period to death. In their Brief, Appellants Cajilo and
Tumbagahan argue for the imposition of the lower penalty of reclusion temporal, contending that
their filing of bail bonds/property bonds, before the order for their arrest was issued, should be
treated as voluntary surrender.[103]
We cannot accept this contention. In the first place, it has no factual basis. The warrant for the
arrest of herein appellants was issued on August 18, 1987,[104] but appellants counsel filed the
Urgent Motion for Bail only thereafter, on September 2, 1987.[105] In the second place, appellants
failed to prove the requisites for voluntary surrender, which are: (1) the offender has not been
actually arrested; (2) the offender surrenders himself to a person in authority or to the latters agent;
and (3) the surrender is voluntary.[106] The records reveal that a warrant of arrest was actually served
on Tumbagahan and Cajilo[107] on September 2, 1987 and that they were in fact detained.[108]
In view of the absence of any other aggravating or mitigating circumstance, the trial court correctly
imposed reclusion perpetua.
WHEREFORE, the appeal is hereby DENIED and the assailed Decision is AFFIRMED with the
following MODIFICATIONS: (1) the award of P6,000 as actual damages is DELETED,and (2) the award
for loss of earning capacity is INCREASED to P928,000. Costs against appellant.
SO ORDERED.
10. ZAMORA vs HEIRS OF CARMEN
THIRD DIVISION
[G.R. No. 146195. November 18, 2004]
AVELINA ZAMORA, EMERITA ZAMORA-NICOL, SONNY NICOL, TERESA ZAMORA-UMALI, CLARENCE
UMALI, ROBERTO ZAMORA, ROLANDO ZAMORA, MARY ANN ZAMORA, MICHELLE ZAMORA and
RODRIGO ZAMORA, petitioners, vs. HEIRS of CARMEN IZQUIERDO, represented by their attorney-
in-fact, ANITA F. PUNZALAN, respondents.
DECISION
Before us is a petition for review on certiorari[1] assailing the Decision[2] of the Court of Appeals
dated September 12, 2000 and its Resolution dated December 1, 2000 in CA-G.R. SP No. 54541,
entitled Avelina Zamora, et al., petitioners, versus Heirs of Carmen Izquierdo, represented by the
executrix, Anita F. Punzalan, respondents.
The records show that sometime in 1973, Carmen Izquierdo and Pablo Zamora entered into a verbal
stipulation whereby the former leased to the latter one of her apartment units located at 117-B
General Luna Street, Caloocan City. They agreed on the following: the rental is P3,000.00 per month;
the leased premises is only for residence; and only a single family is allowed to occupy it.
After the death of Carmen (lessor) in 1996 her attorney-in-fact, Anita Punzalan, representing the
heirs, herein respondents, prepared a new contract of lease wherein the rental was increased
from P3,000.00 to P3,600.00 per month.[3] However, petitioners refused to sign it.
In January 1997, Pablo (lessee) died. His wife, Avelina Zamora, and their children (two of whom have
their own families), herein petitioners, continued to reside in the apartment unit. However, they
refused to pay the increased rental and persisted in operating a photocopying business in the same
apartment.
Meanwhile, petitioner Avelina Zamora applied with the Metropolitan Waterworks & Sewerage
System (MWSS) for a water line installation in the premises. Since a written consent from the owner
is required for such installation, she requested respondents attorney-in-fact to issue it. However, the
latter declined because petitioners refused to pay the new rental rate and violated the restrictions
on the use of the premises by using a portion thereof for photocopying business and allowing three
families to reside therein.
This prompted petitioner Avelina Zamora to file with the Office of the Punong
Barangay of Barangay 16, Sona 2, District I, Lungsod ng Caloocan, a complaint against Anita
Punzalan (respondents attorney-in-fact), docketed as Usaping Bgy. Blg. 1-27-97, Ukol sa: Hindi
Pagbibigay ng Pahintulot sa Pagpapakabit ng Tubig.
On August 24, 1997, during the barangay conciliation proceedings, petitioner Avelina Zamora
declared that she refused to sign the new lease contract because she is not agreeable with the
conditions specified therein.
The following day, Anita Punzalan sent Avelina a letter[4] informing her that the lease is being
terminated and demanding that petitioners vacate the premises within 30 days from notice.
Despite several barangay conciliation sessions, the parties failed to settle their dispute amicably.
Hence, the Barangay Chairman issued a Certification to File Action dated September 14, 1997.[5]
Consequently, on October 2, 1997, respondents, represented by Anita Punzalan, filed with the
Metropolitan Trial Court (MTC), Branch 49, Caloocan City, a complaint for unlawful detainer and
damages against petitioners, docketed as Civil Case No. 23702.[6] Forthwith, petitioners filed a
motion to dismiss[7] the complaint on the ground that the controversy was not referred to
the barangay for conciliation. First, they alleged that the barangay Certification to File Action is
fatally defective because it pertains to another dispute, i.e., the refusal by respondents attorney-in-
fact to give her written consent to petitioners request for installation of water facilities in the
premises. And, second, when the parties failed to reach an amicable settlement before the Lupong
Tagapamayapa, the Punong Barangay (as Lupon Chairman), did not constitute the Pangkat ng
Tagapagkasundo before whom mediation or arbitration proceedings should have been conducted,
in violation of Section 410(b), Chapter 7 (Katarungang Pambarangay), Title One, Book III of Republic
Act No. 7160[8] (otherwise known as the Local Government Code of 1991), which reads:
SECTION 410. Procedure for Amicable Settlement.
(a) x x x
(b) Mediation by lupon chairman Upon receipt of the complaint, the lupon chairman[9] shall, within
the next working day, summon the respondent(s), with notice to the complainant(s) for them and
their witnesses to appear before him for a mediation of their conflicting interests. If he fails in his
mediation effort within fifteen (15) days from the first meeting of the parties before him, he shall
forthwith set a date for the constitution of the pangkat in accordance with the provisions of this
Chapter. (Underscoring supplied)
Respondents opposed the motion to dismiss,[10] the same being prohibited under Section 19 of the
1991 Revised Rule on Summary Procedure. They prayed that judgment be rendered as may be
warranted by the facts alleged in the complaint, pursuant to Section 6[11] of the same Rule.
On July 9, 1998, the MTC issued an Order[12] denying petitioners motion to dismiss and considering
the case submitted for decision in view of their failure to file their answer to the complaint.
Petitioners filed a motion for reconsideration,[13] contending that a motion to dismiss the complaint
on the ground of failure to refer the complaint to the Lupon for conciliation is allowed under Section
19 of the 1991 Revised Rule on Summary Procedure, which partly provides:
SEC. 19. Prohibited pleadings and motions. The following pleadings, motions, or petitions shall not
be allowed in the cases covered by this Rule:
(a) Motion to dismiss the complaint or to quash the complaint or information except on the ground
of lack of jurisdiction over the subject matter, or failure to comply with the preceding
section [referring to Section 18 on referral of the complaint to the Lupon for conciliation];
x x x.
On August 26, 1998, the MTC rendered a Judgment[14] in favor of respondents and against
petitioners, the dispositive portion of which reads:
WHEREFORE, Judgment is hereby rendered in favor of the plaintiff and against the defendants,
ordering defendants and all persons claiming right under them:
1) To vacate the leased premises located at No. 117-B General Luna Street, Caloocan City and to
surrender possession thereof to the plaintiff;
2) To pay the amount of three thousand six hundred (P3,600.00) pesos per month starting
January, 1997 until the premises being occupied by them is finally vacated and possession thereof is
restored to the plaintiff;
3) To pay plaintiff the sum of five thousand (P5,000.00) pesos as and for attorneys fees; and
4) To pay the costs of this suit.
SO ORDERED.
On appeal, the Regional Trial Court (RTC), Branch 125, Caloocan City, rendered its Decision[15] dated
February 15, 1999 affirming the MTC Judgment. Subsequently, it denied petitioners motion for
reconsideration.[16]
Petitioners then filed with the Court of Appeals a petition for review, docketed as CA-G.R. SP No.
54541. On September 12, 2000, it rendered a Decision[17] affirming the RTC Decision.
Thereafter, petitioners filed a motion for reconsideration but was denied by the Appellate Court in
its Resolution dated December 1, 2000.[18]
Hence, the instant petition.
I
The primordial objective of Presidential Decree No. 1508 (the Katarungang Pambarangay Law), now
included under R.A. No. 7160 (the Local Government Code of 1991), is to reduce the number of
court litigations and prevent the deterioration of the quality of justice which has been brought
about by the indiscriminate filing of cases in the courts.[19] To attain this objective, Section 412(a) of
R.A. No. 7160 requires the parties to undergo a conciliation process before the Lupon Chairman or
the Pangkat as a precondition to filing a complaint in court, thus:
SECTION 412. Conciliation. (a) Pre-condition to Filing of Complaint in Court. No complaint, petition,
action, or proceeding involving any matter within the authority of the lupon shall be filed or
instituted directly in court or any other government office for adjudication, unless there has been a
confrontation between the parties before the lupon chairman or the pangkat, and that no
conciliation or settlement has been reached as certified by the lupon or pangkat secretary and
attested to by the lupon or pangkat chairman x x x. (Underscoring supplied)
In the case at bar, the Punong Barangay, as Chairman of the Lupong Tagapamayapa, conducted
conciliation proceedings to resolve the dispute between the parties herein. Contrary to petitioners
contention, the complaint does not only allege, as a cause of action, the refusal of respondents
attorney-in-fact to give her consent to the installation of water facilities in the premises, but also
petitioners violation of the terms of the lease, specifically their use of a portion therein for their
photocopying business and their failure to pay the increased rental. As correctly found by the RTC:
The records show that confrontations before the barangay chairman were held on January 26, 1997,
February 9, 1997, February 23, 1997, February 28, 1997, July 27, 1997, August 3, 1997, August 10,
1997, August 17, 1997 and August 24, 1997 wherein not only the issue of water installation was
discussed but also the terms of the lease and the proposed execution of a written contract relative
thereto. It appears, however, that no settlement was reached despite a total of nine meetings at the
barangay level.
It is of no moment that the complaint was initially made by defendant-appellant Avelina Zamora
because herein plaintiff-appellee was given by the Sangguniang Barangay the authority to bring her
grievance to the Court for resolution. While it is true that the Sertifikasyon dated September 14,
1997 is entitled Ukol Sa Hindi Pagbibigay Ng Pahintulot Sa Pagpapakabit Ng Tubig, this title must not
prevail over the actual issues discussed in the proceedings.
Hence, to require another confrontation at the barangay level as a sine qua non for the filing of the
instant case would not serve any useful purpose anymore since no new issues would be raised
therein and the parties have proven so many times in the past that they cannot get to settle their
differences amicably.[20]
We cannot sustain petitioners contention that the Lupon conciliation alone, without the proceeding
before the Pangkat ng Tagapagkasundo, contravenes the law on Katarungang Pambarangay.
Section 412(a) of R.A. No. 7160, quoted earlier, clearly provides that, as a precondition to filing a
complaint in court, the parties shall go through the conciliation process either before
the Lupon Chairman (as what happened in the present case), or the Pangkat.
Moreover, in Diu vs. Court of Appeals,[21] we held that notwithstanding the mandate in Section
410(b) of R.A. No. 7160 that the Barangay Chairman shall constitute a Pangkat if he fails in his
mediation efforts, the same Section 410(b) should be construed together with Section 412(a) of the
same law (quoted earlier), as well as the circumstances obtaining in and peculiar to the case. Here,
while the Pangkat was not constituted, however, the parties met nine (9) times at the Office of
the Barangay Chairman for conciliation wherein not only the issue of water installation was
discussed but also petitioners violation of the lease contract. It is thus manifest that there was
substantial compliance with the law which does not require strict adherence thereto.[22]
II
We hold that petitioners motion to dismiss the complaint for unlawful detainer is proscribed by
Section 19(a) of the 1991 Revised Rule on Summary Procedure, quoted earlier. Section 19(a) permits
the filing of such pleading only when the ground for dismissal of the complaint is anchored on lack
of jurisdiction over the subject matter, or failure by the complainant to refer the subject matter of
his/her complaint to the Lupon for conciliation prior to its filing with the court. This is clear from
the provisions of Section 18 of the same Rule, which reads:
SEC. 18. Referral to Lupon. Cases requiring referral to the Lupon for conciliation under the
provisions of Presidential Decree No. 1508 where there is no showing of compliance with such
requirement, shall be dismissed without prejudice, and may be revived only after such requirement
shall have been complied with. This provision shall not apply to criminal cases where the accused
was arrested without a warrant. (Underscoring supplied)
As discussed earlier, the case was referred to the Lupon Chairman for conciliation. Obviously,
petitioners motion to dismiss, even if allowed, is bereft of merit.
WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals in
CA-G.R. SP No. 54541 sustaining the Decision of the RTC which upheld the MTC Judgment is
AFFIRMED.
Costs against petitioners.
SO ORDERED
II. GENERAL PROVISIONS [RULE 1, SECTIONS 1-6]
1. TAMANO vs ORTIZ
FIRST DIVISION
[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 contractfalse 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.
(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
andexclusive 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.
2. DOMAGAS vs JENSEN
SECOND DIVISION
[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 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.
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, 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]
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.
3. YU vs PACLEB

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 130316 January 24, 2007
ERNESTO V. YU and ELSIE O. YU, Petitioners,

vs.
BALTAZAR PACLEB,1 Respondent.
DECISION
CORONA, J.:
The present petition filed under Rule 45 of the Rules of Court originated from an action for forcible
entry and damages filed by petitioners Ernesto and Elsie Yu against respondent Baltazar Pacleb.
The antecedent facts follow.
Sometime in September 1992, Ruperto Javier allegedly offered to sell Lot No. 6853-D to petitioners
for P75 per sq.m.lawphil.net The lot was approximately 18,000 square meters and was located in
Barangay Langkaan, Dasmariñas, Cavite. Javier supposedly purchased the lot from one Rebecca del
Rosario who, in turn, acquired it from respondent and his wife. The title of the property (Transfer
Certificate of Title [TCT] No. T-118375), however, remained in the names of respondent and his wife.
The instruments in support of the series of alleged sales were not registered.
On September 11, 1992, petitioners accepted the offer and gave Javier P200,000 as downpayment
for the lot. Javier then delivered his supposed muniments of title to petitioners. After the execution
of a contract to sell, he formally turned over the property to petiti oners.
At the time of the turn-over, a portion of the lot was occupied by Ramon C. Pacleb, respondent’s
son, and his wife as tenants. On September 12, 1992, Ramon and his wife allegedly surrendered
possession of their portion to petitioners. Later on, petitioners appointed Ramon as their trustee
over the subject lot.
Aside from taking possession of the property, petitioners also caused the annotation on TCT No. T-
118375 of a decision rendered in their favor in Civil Case No. 741-93.2 This decision attained finality
on April 19, 1995.
Petitioners alleged that they exercised ownership rights as well as enjoyed open, public and
peaceful possession over the property from September 12, 1992 until the early part of September
1995. During this time, respondent was in the United States.
Upon respondent’s return to the Philippines in May 1995, he allegedly entered the property by
means of force, threat, intimidation, strategy and stealth thereby ousting petitioners and their
trustee, Ramon.
Despite repeated demands, respondent, asserting his rights as registered owner of the property,
refused to vacate the premises and surrender its possession to petitioners.
Petitioners filed an action for forcible entry3 in the Municipal Trial Court (MTC) of Dasmariñas, Cavite
on November 23, 1995. Respondent filed an answer with compulsory counterclaim dated December
8, 1995. After the issues were joined, the MTC required the submission of the parties’ position
papers at a preliminary conference on March 11, 1996. Respondent failed to comply.
On June 17, 1996, the MTC ruled:
WHEREFORE, in view of the foregoing, the [respondent] and other persons claiming right under him
are hereby ordered to surrender physical possession of Lot No. 6853-D in favor of the [petitioners]
and to pay the sum of TWENTY-FIVE THOUSAND (P25,000.00) PESOS as attorney’s fees.
SO ORDERED.4
On appeal,5 the Regional Trial Court (RTC) of Imus, Cavite rendered a decision affirming the MTC
decision in toto.6
Respondent elevated his case to the Court of Appeals (CA)7 which rendered the assailed decision on
March 18, 1997:
WHEREFORE, the Petition is GRANTED; the Decision dated October 25, 1996 of the [RTC] of Imus,
Cavite in Civil Case No. 052-96 and the Decision of the [MTC] of Dasmariñas, Cavite in Civil Case No.
182 are SET ASIDE; and Civil Case No. 182 for Forcible Entry and Damages is hereby ordered
DISMISSED. No pronouncement as to costs.
SO ORDERED.8
In a resolution dated August 20, 1997, the CA denied petitioners’ motion for reconsideration for lack
of merit.
Before us now come petitioners who claim that the appellate court erred in finding that respondent
had prior physical possession of the subject property.lawphil.net
"In an action for forcible entry, the plaintiff must prove that he was in prior possession of the land or
building and that he was deprived thereof by means of force, intimidation, threat, strategy or
stealth."9 The plaintiff, however, cannot prevail where it appears that, as between himself and the
defendant, the latter had possession antedating his own.10 We are generally precluded in a Rule 45
petition from reviewing factual evidence tracing the events prior to the first act of
spoliation.11 However, the conflicting factual findings of the MTC and RTC on one hand, and the CA
on the other, require us to make an exception.
We overrule petitioners’ contentions.
The Civil Code states that possession is the holding of a thing or the enjoyment of a right. 12 In the
grammatical sense, to possess means to have, to actually and physically occupy a thing, with or
without right.13 "Possession always includes the idea of occupation x x x. It is not necessary that the
person in possession should himself be the occupant. The occupancy can be held by another in his
name."14 Without occupancy, there is no possession.15
Two things are paramount in possession.16 First, there must be occupancy, apprehension or taking.
Second, there must be intent to possess (animus possidendi).17
Here, petitioners failed to establish that they had prior physical possession to justify a ruling in their
favor in the complaint for forcible entry against respondent.
In the decision in Civil Case No. 741-93 (a case for specific performance and damages against Javier,
the alleged vendor of the lot in question) upon which petitioners based their right to possess in the
first place, the trial court categorically stated:
The [petitioners were never placed] in possession of the subject property on which [was] planned
to be [site of] a piggery, nor [were they] given a clearance or certification from the Municipal
Agrarian Reform Officer.18(emphasis ours)
The claim that the lot was turned over to petitioners in 1992 was self-serving in the face of this
factual finding. On the other hand, the tax declarations and receipts in the name of respondent in
1994 and 1995 established the possession of respondent.19 The payment of real estate tax is one of
the most persuasive and positive indications showing the will of a person to possess in concepto de
dueño or with claim of ownership.20
"[P]ossession in the eyes of the law does not mean that a man has to have his feet on every square
meter of the ground before he is deemed in possession."21 In this case, Ramon, as respondent’s son,
was named caretaker when respondent left for the United States in 1983.22 Due to the eventual loss
of trust and confidence in Ramon, however, respondent transferred the administration of the land
to his other son, Oscar, in January 1995 until his return in May 1995.23 In other words, the subject
land was in the possession of the respondent’s sons during the contested period.
Petitioners cite an alleged document (Kusangloob na Pagsasauli ng Lupang Sakahan at

Pagpapahayag ng Pagtalikod sa Karapatan) dated March 10, 1995 executed by them and Ramon to
prove a turn over of possession. They also seek to prove their exercise of rights over the land
through alleged frequent visits and the designation of Ramon as their own trustee as declared in a
joint affidavit attached to their position paper filed with the MTC. These instruments, however, fail
to convince us of petitioners’ actual occupancy of the subject land. First, petitioners themselves
acknowledged that Ramon and his wife occupied part of the land as tenants of respondent. Second,
Ramon, a mere tenant, had no authority to sign such document dated March 10, 1995 waiving all
rights to the land. Third, there was no clear proof in the records of the appointment of Ramon as
petitioners’ trustee save their self-serving statements to this effect. Finally, at the time
the Kusangloob na Pagsasauli document was executed, the caretaker of the land was no longer
Ramon but Oscar.24
Most important, the title of the land in question (TCT No. T-118375) remained in the name of
respondent.25 "As the registered owner, petitioner had a right to the possession of the property,
which is one of the attributes of ownership."26 The Civil Code states:
Art. 538. Possession as a fact cannot be recognized at the same time in two different personalities
except in the cases of co-possession. Should a question arise regarding the fact of possession, the
present possessor shall be preferred; if there are two possessors, the one longer in possession; if the
dates of the possession are the same, the one who presents a title; and if all these conditions are
equal, the thing shall be placed in judicial deposit pending determination of its possession or
ownership through proper proceedings.
In view of the evidence establishing respondent’s continuing possession of the subject property,
petitioners’ allegation that respondent deprived them of actual possession by means of force,
intimidation and threat was clearly untenable. In Gaza v. Lim, we held that:
Where a dispute over possession arises between two persons, the person first having actual
possession is the one who is entitled to maintain the action granted by law; otherwise, a mere
usurper without any right whatever, might enter upon the property of another and, by allowing
himself to be ordered off, could acquire the right to maintain the action of forcible entry and
detainer, however momentary his intrusion might have been.27
WHEREFORE, the petition is hereby DENIED. The decision of the Court of Appeals dated March 18,
1997 in CA-G.R. SP No. 42604 is AFFIRMED.
SO ORDERED.
4. CABUTIHAN vs LANDCENTER
THIRD DIVISION
[G.R. No. 146594. June 10, 2002]
REBECCA T. CABUTIHAN, petitioner, vs. LANDCENTER CONSTRUCTION & DEVELOPMENT
CORPORATION, respondent.
DECISION
PANGANIBAN, J.:
Breach of contract gives rise to a cause of action for specific performance or for rescission. A suit for
such breach is not capable of pecuniary estimation; hence, the assessed value of the real estate,
subject of the said action, should not be considered in computing the filing fees. Neither a
misjoinder nor a non-joinder of parties is a ground for dismissal of an action, because parties may be
dropped or added at any stage of the proceedings.
The Case
Before us is a Petition for Review on Certiorari under Rule 45, assailing the Orders dated September
8, 2000 and November 21, 2000, promulgated by of the Regional Trial Court (RTC) of Pasig City,
Branch 263.[1] The first assailed Order disposed as follows:
WHEREFORE, foregoing premises considered, this Court hereby resolves to dismiss the instant
complaint.[2]
Reconsideration was denied in the second challenged Order.[3]
The Facts
Culled from the pleadings, the facts of this case are as follows.
On December 3, 1996, herein respondent Landcenter Construction & Development Corporation,
represented by Wilfredo B.Maghuyop -- entered into an Agreement[4] with Petitioner Rebecca
Cabutihan.The Agreement stipulates:
WHEREAS, [respondent corporation], x x x is the absolute owner, x x x of a parcel of land situated at

Kay-biga, Paranaque, Metro Manila covered under Transfer Certificate of Title No. (S-30409)
(partially cancelled by TCT Nos. 110001 to 110239) and particularly described as follows:
A parcel of land (Plan Psu-80206, Case No. 290, G.L.R.O. Record No. 2291), situated in the Barrio of
Kay-biga, Municipality of Paranaque, Province of Rizal. Bounded on the NE., by properties of Eulogio
Cruz and Isidro Alano; on the E., by property of Justo Bernardo; on the SE., by properties of Marcelo
Nofuente and Lorenzo Molera; on the SW., by properties of Higino and Pedro P. Lopez; on the W.,
by property of Odon Rodriguez; and on the NW., by properties of Evaristo de los Santos and Pastor
Leonardo.....; containing an area of ONE HUNDRED SEVEN THOUSAND AND FORTY SEVEN (107,047)
SQUARE METERS, more or less.
WHEREAS, [respondent corporation] decided to engage the assistance of [petitioner] and x x x

herein called the FACILITATOR for the purpose of facilitating and arranging the recovery of the
property in question, as well as the financing of such undertakings necessary in connection thereto;
WHEREFORE, premises considered and of the mutual covenants of the parties, they have agreed, as
follows:
1. The FACILITATOR undertakes to effect the recovery of the property subject hereof, including the
financing of the undertaking, up to the registration of the same in the name of [respondent
corporation], except any and all taxes due;
2. The FACILITATOR shall be responsible for whatever arrangements necessary in relation to the
squatters presently occupying [a] portion of the property, as well as the legitimate buyers of lots
thereof;
3. As compensation for the undertaking of the FACILITATOR, [she] shall be entitled to Twenty
[Percent] (20%) of the total area of the property thus recovered for and in behalf of [respondent
corporation].
xxx xxx xxx.[5]

Armed with Board Resolution No. 01, Series of 1997,[6] which had authorized her to represent the
corporation, Luz Baylon Ponce entered into a February 11, 1997 Deed of Undertaking with a group
composed of petitioner, Wenifredo P. Forro, Nicanor Radan Sr. and Atty. Prospero A. Anave. The
Deed states the following:
WHEREAS, the UNDERTAKER [respondent corporation] solicited, engaged and hereby voluntarily
acknowledges the assistance of certain persons, in recovering, arranging and financing the
undertaking up to completion/consummation of the same;
WHEREAS, the UNDERTAKER freely, voluntarily, unconditionally and irrevocably agreed, committed
and undertook to compensate x x x said persons, in the manner, specified hereinbelow;
WHEREFORE, considering the foregoing premises, and the mutual covenants of the parties, the
UNDERTAKER hereby unconditionally and irrevocably [c]ommit[s] and [u]ndertake[s], as follows:
1. To pay or compensate the following persons, based on the gross area of the afore-described
parcel of land or gross proceeds of the sale thereof, as the case may be, to wit:
Rebecca T. Cabutihan ------------------------------------ 20%

Wenifredo P. Forro ----------------------------------- 10%
Nicanor Radan, Sr. ------------------------------------ 4%
Atty. Prospero A. Anave ----------------------------------- 2.5%
TOTAL ----------------------------------- 36.5%
2. Execute a Deed of Assignment unto and in favor of each of the persons above-mentioned
corresponding to their respective shares in the subject parcel of land or in the proceeds thereof;
3. This Undertaking as well as the Deed of Assignment above-stated shall be effective and binding
upon the heirs, successors-in-interest, assigns or designates of the parties herein.[7]
An action for specific performance with damages was filed by petitioner on October 14, 1999 before
the RTC of Pasig City, Branch 263. She alleged:
[6.] [Petitioner] accomplished her undertakings under the subject Agreement and the
Undertaking. So in a letter dated 18 April 1997, x x x, [respondent corporation] was informed
accordingly thereof.Simultaneously, [petitioner] demanded upon [respondent corporation] to
execute the corresponding Deed of Assignment of the lots in the subject property, as compensation
for the services rendered in favor of the [respondent corporation]. The subject letter was duly
received and acknowledged receipt, by then Acting Corporate Secretary of the [respondent
corporation].
[7.] [Respondent corporation] failed and refused to act on x x x said demand of [petitioner]. Hence,
[she] sent a letter dated May 8, 1997, to the Register of Deeds for Paranaque, to inform x x x said
Office of x x x [her] claim x x x;
[8.] x x x [T]he subject property was already transferred to and registered in the name of
[respondent corporation] under Transfer Certificate of Title No. -123917-, of the Registry of Deeds
for Paranaque City x x x;
xxx xxx xxx
[10.] With x x x said title of the property now in the possession of the [respondent corporation],
[petitioner] is apprehensive that the more that [she] will not be able to obtain from [respondent
corporation], compliance with the afore-stated Agreement and Undertaking, to the extreme
detriment and prejudice of [petitioner] and her group, x x x;
xxx xxx xxx
[12.] Then in a letter,[8] dated 10 September 1999, [petitioner] through counsel sent to [respondent
corporation] a Formal Demand, to comply with its obligation x x x but x x x [respondent corporation]
did not heed the demand. x x x.[9]
Petitioner prayed, inter alia, that respondent corporation be ordered to execute the appropriate
document assigning, conveying, transferring and delivering the particular lots in her favor. The lots
represented compensation for the undertakings she performed and accomplished, as embodied in
the Agreement.
Respondent then filed a Motion to Dismiss, alleging the following:
5. Because of the troubled situation obtaining at the management level of [respondent corporation],
the sale between [respondent corporation] and PCIB regarding the Fourth Estate Subdivision was
not registered with the Register of Deeds office, although [respondent corporation] continued
holding the deed of sale over the Fourth Estate Subdivision.
6. A group of persons led by one Wilfredo Maghuyop, including herein [petitioner], Wenifredo
Forro, Nicanor Radan, and others, taking advantage of the management mess at [respondent
corporation], tried to grab ownership of the [respondent corporation], and with use of fraud, cheat,
misrepresentation and theft of vital documents from the office of [respondent corporation],
succeeded in filing with the Securities and Exchange Commission false papers and documents
purporting to show that the Articles of Incorporation of [respondent corporation] had been
amended, installing Maghuyop as president of [respondent corporation]. It was on these occasions
that [petitioner] and her companions x x x, with use of fraud, stealth, tricks, deceit and cheat
succeeded in letting Luz Baylon Ponce sign a so-called Deed of Undertaking by virtue of which
[respondent corporation] is duty-bound to give to [petitioner], Forro, Radan and Atty. Prospero
Anave 36.5% of the land area of the Fourth Estate Subdivision as compensation for alleged services
and expenses made by these people in favor of [respondent corporation]. They also caused said x x x
Maghuyop to sign an Agreement with [petitioner] expressing an obligation on the part of
[respondent corporation] to give a big part of the land x x x to [petitioner]. These Agreement and
Deed of Undertaking are being made by herein [petitioner] as her causes of action in the present
case.
Wilfredo Maghuyop was a stranger to [respondent corporation], and he was an impostor used by
[petitioner] and her companions to barge into the management of [respondent corporation] for the
purpose of stealing and creating an obligation against [respondent corporation] in their favor.
7. But Luz Baylon Ponce, whose signature appears on the instrument denominated as Deed of
Undertaking, vehemently denies that she signed said instrument freely and voluntarily. She says that
Wenifredo Forro and Nicanor Radan were once real estate agents of [respondent corporation] who
promised to help sell lots from her project Villaluz II Subdivision located [in] Malibay, Pasay
City. According to Luz Baylon Ponce, the Board of Directors of [respondent corporation] negotiated
with Forro and Radan for the latter to sell units/lots of Villaluz II Subdivision, and to help obtain a
financier who would finance for the expenses for the reconstitution of the lost title of the Fourth
Estate Subdivision situated [in] Sucat, Paranaque City. Shortly thereafter, these two men resigned
from [respondent corporation] as agents, after they manipulated the signing of x x x said Deed of
Undertaking by Luz Baylon Ponce on February 11, 1997. The latter is an old woman 80 years of
age. She is weak, has x x x poor sight, and is feeble in her mental ability. Forro and Radan inserted
the Deed of Undertaking among the papers intended for application for reconstitution of
[respondent corporations] title which these men caused Luz Baylon Ponce to sign, and she
unknowingly signed the Deed of Undertaking. x x x.[10]
In the Motion, respondent sought the dismissal of the Complaint on the grounds of (1) improper
venue, (2) lack of jurisdiction over the subject matter, and (3) nonpayment of the proper docket
fees.Specifically, it contended:
8. That venue is improperly laid
xxx xxx xxx

(b) In other words, the present case filed by [petitioner] is for her recovery (and for her companions)
of 36.5% of [respondent corporations] land (Fourth Estate Subdivision) or her interest therein. x x x
therefore, x x x the present case filed x x x is a real action or an action in rem.
(c) x x x [Following] Section 1, Rule 4 of the Rules of Court, as amended x x x the present case should
have been filed by [petitioner] with the proper court in Paranque City which has jurisdiction over the
x x x Fourth Estate Subdivision because said subdivision is situated in Paranaque City. Since
[petitioner] filed the present case with this x x x [c]ourt in Pasig City, she chose a wrong venue x x x.
xxx xxx xxx
9. That the [c]ourt has no jurisdiction over the subject matter of the claim
xxx xxx xxx
(c) x x x Wenifredo P. Forro, Nicanor Radan, Sr. and Atty. Prospero A. Anave are not named as
plaintiffs in the complaint. [Petitioner] x x x is not named as representative of Forro, Radan and
Anave by virtue of a Special Power of Attorney or other formal written authority. According to the
Rules, where the action is allowed to be prosecuted or defended by a representative or someone
acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be
deemed to be the real party in interest (Sec. 3, Rule 3, Rules of Court, as amended x x x).
xxx xxx xxx
10. That a condition precedent for filing the claim has not been complied with
xxx xxx xxx
(b) Obviously, [petitioner] has not paid the docket or filing fees on the value of her land claim x x
x. Thirty-six percent (36%) x x x is P180,000,000.00, x x x.[11]
Ruling of the Trial Court
The RTC ruled that the allegations in the Complaint show that its primary objective was to recover
real property. Equally important, the prayer was to compel respondent to execute the necessary
deeds of transfer and conveyance of a portion of the property corresponding to 36.5 percent of its
total area or, in the alternative, to hold respondent liable for the value of the said portion, based on
the prevailing market price. The RTC further ruled that, since the suit would affect the title to the
property, it should have been instituted in the trial court where the property was situated.[12]
Furthermore, the action was filed only by petitioner. There was no allegation that she had been
authorized by Forro, Radan and Anave to represent their respective shares in the compensation.
Finally, since this case was an action in rem, it was imperative for petitioner to pay the appropriate
docket or filing fees equivalent to the pecuniary value of her claim, a duty she failed to
discharge.Consequently, following Manchester Development Corp. v. Court of Appeals,[13] the trial
court never acquired jurisdiction over the case.
Hence, this Petition.[14]
Issues
In her Memorandum, petitioner phrases the issue in this wise:
Whether or not the dismissal of the [C]omplaint was in accordance with the pertinent law and
jurisprudence on the matter.[15]
She argues that the RTC erred in dismissing her Complaint on the grounds of (1) improper venue, (2)
non-joinder of necessary parties, and (3) non-payment of proper docket fees.
This Courts Ruling
The Petition is meritorious.
First Issue:
Proper Venue
Maintaining that the action is in personam, not in rem, petitioner alleges that the venue was
properly laid. The fact that she ultimately sought the conveyance of real property not located in the
territorial jurisdiction of the RTC of Pasig is, she claims, an anticipated consequence and beyond the
cause for which the action was instituted.
On the other hand, the RTC ruled that since the primary objective of petitioner was to recover real
property -- even though her Complaint was for specific performance and damages -- her action
should have been instituted in the trial court where the property was situated, in accordance
with Commodities Storage & Ice Plant Corp. v. Court of Appeals.[16]
We agree with petitioner. Sections 1 and 2, Rule 4 of the Rules of Court provide an answer to the
issue of venue.[17] Actions affecting title to or possession of real property or an interest therein (real
actions), shall be commenced and tried in the proper court that has territorial jurisdiction over the
area where the real property is situated. On the other hand, all other actions, (personal actions)
shall be commenced and tried in the proper courts where the plaintiff or any of the principal
plaintiffs resides or where the defendant or any of the principal defendants resides.
In Commodities Storage cited earlier, petitioner spouses obtained a loan secured by a mortgage over
their land and ice plant in Sta. Maria, Bulacan. Because they had failed to pay the loan, the mortgage
was foreclosed and the ice plant auctioned. Before the RTC of Manila, they sued the bank for
damages and for the fixing of the redemption period. Since the spouses ultimately sought
redemption of the mortgaged property, the action affected the mortgage debtors title to the
foreclosed property; hence, it was a real action.[18] Where the action affects title to the property, it
should be instituted in the trial court where the property is situated.[19]
In National Steel Corp. v. Court of Appeals,[20] the Court held that an action in which petitioner seeks
the execution of a deed of sale of a parcel of land in his favor x x x 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.
However, in La Tondea Distillers, Inc. v. Ponferrada,[21] private respondents filed an action for
specific performance with damages before the RTC of Bacolod City. The defendants allegedly
reneged on their contract to sell to them a parcel of land located in Bago City - - a piece of property
which the latter sold to petitioner while the case was pending before the said RTC. Private
respondent did not claim ownership but, by annotating a notice of lis pendens on the title,
recognized defendants ownership thereof. This Court ruled that the venue had properly been laid in
the RTC of Bacolod, even if the property was situated in Bago.
In Siasoco v. Court of Appeals,[22] private respondent filed a case for specific performance with
damages before the RTC of Quezon City. It alleged that after it accepted the offer of petitioners,
they sold to a third person several parcels of land located in Montalban, Rizal. The Supreme Court
sustained the trial courts order allowing an amendment of the original Complaint for specific
performance with damages. Contrary to petitioners position that the RTC of Quezon City had no
jurisdiction over the case, as the subject lots were located in Montalban, Rizal, the said RTC had
jurisdiction over the original Complaint. The Court reiterated the rule that a case for specific
performance with damages is a personal action which may be filed in a court where any of the
parties reside.
A close scrutiny of National Steel and Ruiz reveals that the prayers for the execution of a Deed of
Sale were not in any way connected to a contract, like the Undertaking in this case. Hence, even if
there were prayers for the execution of a deed of sale, the actions filed in the said cases were not
for specific performance.
In the present case, petitioner seeks payment of her services in accordance with the undertaking the
parties signed. Breach of contract gives rise to a cause of action for specific performance or for
rescission.[23] If petitioner had filed an action in rem for the conveyance of real property, the
dismissal of the case would have been proper on the ground of lack of cause of action.
Second Issue:
Non-Joinder of Proper Parties
Petitioner claims that she was duly authorized and empowered to represent the members of her
group and to prosecute their claims on their behalf via a Special Power of Attorney executed by
Forro, Radan and Anave. Besides, she argues that the omission of her companions as plaintiffs did
not prevent the RTC from proceeding with the action, because whatever judgment would be
rendered would be without prejudice to their rights. In the alternative, she avers that the trial court
may add or drop a party or parties at any stage of the action and on such terms as are just.
The RTC ruled that there was no allegation anywhere in the records that petitioner had been
authorized to represent Forro, Radan and Anave, who were real parties-in-interest with respect to
their respective shares of the 36.5 percent claim. Such being the case, the trial court never acquired
jurisdiction over the subject matter of their claims.
Again, we side with petitioner. Neither a misjoinder nor a non-joinder of parties is a ground for the
dismissal of an action. Parties may be dropped or added by order of the court, on motion of any
party or on the courts own initiative at any stage of the action.[24] The RTC should have ordered the
joinder of such party, and noncompliance with the said order would have been ground for dismissal
of the action.
Although the Complaint prayed for the conveyance of the whole 36.5 percent claim without
impleading the companions of petitioner as party-litigants, the RTC could have separately
proceeded with the case as far as her 20 percent share in the claim was concerned, independent of
the other 16.5 percent. This fact means that her companions are not indispensable parties without
whom no final determination can be had.[25] At best, they are mere necessary parties who ought to
be impleaded for a complete determination or settlement of the claim subject of the action.[26] The
non-inclusion of a necessary party does not prevent the court from proceeding with the action, and
the judgment rendered therein shall be without prejudice to the rights of such party.[27]
Third Issue:
Correct Docket Fees
Petitioner insists that the value of the real property, which was the subject of the contract, has
nothing to do with the determination of the correct docket or filing fees.
The RTC ruled that although the amount of damages sought had not been specified in the body of
the Complaint, one can infer from the assessed value of the disputed land that it would amount
to P50 million. Hence, when compared to this figure, the P210 paid as docket fees would appear
paltry.
We hold that the trial court and respondent used technicalities to avoid the resolution of the case
and to trifle with the law. True, Section 5, Rule 141 of the Rules of Court requires that the assessed
value of the real estate, subject of an action, should be considered in computing the filing fees. But
the Court has already clarified that the Rule does not apply to an action for specific
performance,[28] which is classified as an action not capable of pecuniary estimation.[29]
Besides, if during the course of the trial, petitioners 20 percent claim on the Fourth Estate
Subdivision can no longer be satisfied and the payment of its monetary equivalent is the only
solution left, Sunlife Insurance Office, Ltd. v. Asuncion[30] holds as follows: Where 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 or
reglementary period.
WHEREFORE, the Petition is hereby GRANTED, and the assailed Orders REVERSED and SET
ASIDE. The case is REMANDED to the court of origin which is ordered to PROCEED with deliberate
speed in disposing of the case. No costs.
SO ORDERED.
5. CITIZEN SURETY vs MELENCIO-HERRERA
EN BANC
[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.
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.
Concepcion, C.J., Makalintal, Zaldivar, Fernando, Teehankee, Barredo, Villamor and Makasiar, JJ.,
concur.
Dizon and Castro, JJ., reserve their votes

6. GO vs UCPB
SECOND DIVISION
[G.R. No. 156187. November 11, 2004]
JIMMY T. GO, petitioner, vs. UNITED COCONUT PLANTERS BANK, ANGELO V. MANAHAN,
FRANCISCO C. ZARATE, PERLITA A. URBANO and ATTY. EDWARD MARTIN, respondents.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari[1] assailing the Decision[2] dated 31 July 2002 of the
Court of Appeals in CA-G.R. SP No. 62625, the decretal portion of which reads:
WHEREFORE, the petition is GRANTED and the assailed orders dated June 7, 2000, August 9, 2000
and November 8, 2000 are SET ASIDE.
Respondent judge is directed to DISMISS Civil Case No. 67878 on the ground of improper venue.[3]
Petitioner Jimmy T. Go and Alberto T. Looyuko are co-owners of Noahs Ark International, Noahs Ark
Sugar Carriers, Noahs Ark Sugar Truckers, Noahs Ark Sugar Repacker, Noahs Ark Sugar Insurers,
Noahs Ark Sugar Terminal, Noahs Ark Sugar Building, and Noahs Ark Sugar Refinery.[4]
Sometime in August 1996, petitioner Jimmy T. Go and Alberto T. Looyuko applied for an Omnibus
Line accommodation with respondent United Coconut Planters Bank (UCPB) in the amount of Nine
Hundred Million (P900,000,000) Pesos,[5] and was favorably acted upon by the latter.
The transaction was secured by Real Estate Mortgages over parcels of land, covered by Transfer
Certificate of Title (TCT) No. 64070, located at Mandaluyong City with an area of 24,837 square
meters, and registered in the name of Mr. Looyuko; and TCT No. 3325, also located at Mandaluyong
City with an area of 14,271 square meters, registered in the name of Noahs Ark Sugar Refinery.
On 21 July 1997, the approved Omnibus Line accommodation granted to petitioner was
subsequently cancelled[6] by respondent UCPB. As a consequence, petitioner Jimmy T. Go demanded
from UCPB the return of the two (2) TCTs (No. 64070 and No. 3325) covered by Real Estate
Mortgages earlier executed. UCPB refused to return the same and proceeded to have the two (2)
pre-signed Real Estate Mortgages notarized on 22 July 1997 and caused the registration thereof
before the Registry of Deeds of Mandaluyong City on 02 September 1997.
On 15 June 1999, respondent UCPB filed with the Office of the Clerk of Court and Ex-Officio Sheriff
of Mandaluyong City an extrajudicial foreclosure of real estate mortgage[7] covered by TCT No.
64070, for nonpayment of the obligation secured by said mortgage. As a result, the public auction
sale of the mortgaged property was set on 11 April 2000 and 03 May 2000.
To protect his interest, petitioner Jimmy T. Go filed a complaint for Cancellation of Real Estate
Mortgage and damages, with prayer for temporary restraining order and/or writ of preliminary
injunction, against respondent bank and its officers, namely, Angelo V. Manahan, Francisco C.
Zarate, Perlita A. Urbano and Atty. Edward E. Martin, together with Ex-Officio Sheriff Lydia G. San
Juan and Sheriff IV Helder A. Dyangco, with the Regional Trial Court of Pasig City, Branch 266,
docketed as Civil Case No. 67878. The complaint was subsequently amended[8] on 22 May 2000. The
amended complaint alleged, among other things, the following: that petitioner Jimmy T. Go is a co-
owner of the property covered by TCT No. 64070, although the title is registered only in the name of
Looyuko; that respondent bank was aware that he is a co-owner as he was asked to sign two deeds
of real estate mortgage covering the subject property; that the approved omnibus credit line applied
for by him and Looyuko did not materialize and was cancelled by respondent bank on 21 July 1997,
so that the pre-signed real estate mortgages were likewise cancelled; that he demanded from
respondent bank that TCTs No. 64070 and No. 3325 be returned to him, but respondent bank
refused to do so; that despite the cancellation of the omnibus credit line on 21 July 1997,
respondent bank had the two deeds of real estate mortgage dated and notarized on 22 July 1997
and caused the extrajudicial foreclosure of mortgage constituted on TCT No. 64070; that the auction
sale scheduled on 11 April 2000 and 03 May 2000 be enjoined; that the two real estate mortgages
be cancelled and TCTs No. 64070 and No. 3325 be returned to him; and that respondent bank and
its officers be ordered to pay him moral and exemplary damages and attorneys fees.
On 07 June 2000, respondent bank, instead of filing an answer, filed a motion to dismiss[9] based on
the following grounds: 1) that the court has no jurisdiction over the case due to nonpayment of the
proper filing and docket fees; 2) that the complaint was filed in the wrong venue; 3) an
indispensable party/real party in interest was not impleaded and, therefore, the complaint states no
cause of action; 4) that the complaint was improperly verified; and 5) that petitioner is guilty of
forum shopping and submitted an insufficient and false certification of non-forum shopping.
On 07 June 2000, the trial court issued an order[10] granting petitioners application for a writ of
preliminary injunction. Correspondingly, the auction sale, scheduled on 11 April 2000 and 03 May
2000, was enjoined.
On 09 August 2000, the trial court denied[11] respondent banks motion to dismiss Civil Case No.
67878. A motion for reconsideration[12] was filed, but the same was likewise denied in an
Order[13] dated 08 November 2000.
Respondent bank questioned said orders before the Court of Appeals via a petition
for certiorari[14] dated 03 January 2001, alleging that the trial court acted without or in excess of
jurisdiction or with grave abuse of discretion in issuing an order denying the motion to dismiss and
the motion for reconsideration thereof.
On 31 July 2002, the Court of Appeals[15] set aside the Orders dated 07 June 2000, 09 August 2000
and 08 November 2000 issued by the trial court and directed the trial court to dismiss Civil Case No.
67878 on the ground of improper venue.
A motion for reconsideration was filed by petitioner,[16] which was denied in an order dated 14
November 2002.[17]
Hence, this petition for review on certiorari.[18]
On 16 June 2003, the Court gave due course to the petition, and required[19] the parties to file their
respective memoranda. Respondents filed their Joint Memorandum on 27 August 2003, while
petitioner filed his on 25 September 2003 upon prior leave of court for extension. With leave of this
Court, private respondents filed their reply to petitioners memorandum.
In his memorandum, petitioner raised a lone issue:
WHETHER OR NOT THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT FAILED TO
APPLY THE LAW AND ESTABLISHED JURISPRUDENCE ON THE MATTER BY ISSUING THE QUESTIONED
RESOLUTIONS FINDING THAT THE CASE A QUO IS A REAL ACTION.
Simply put, the issue to be resolved in this case is whether petitioners complaint for cancellation of
real estate mortgage is a personal or real action for the purpose of determining venue.
In a real action, the plaintiff seeks the recovery of real property, or as provided for in Section 1, Rule
4,[20] a real action is an action affecting title to or possession of real property, or interest therein.
These include partition or condemnation of, or foreclosure of mortgage on, real property. The venue
for real actions is the same for regional trial courts and municipal trial courts -- the court which has
territorial jurisdiction over the area where the real property or any part thereof lies.[21]
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.[22] The venue for personal actions is likewise the same for the
regional and municipal trial courts -- the court of the place 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, as indicated in Section 2 of Rule 4.[23]
It is quite clear then that the controlling factor in determining venue for cases of the above nature is
the primary objective for which said cases are filed. Thus:
1. In Commodities Storage & Ice Plant Corp. v. Court of Appeals,[24] this Court ruled that an
action to redeem by the mortgage debtor affects his title to the foreclosed property. If the
action is seasonably made, it seeks to erase from the title of the judgment or mortgage debtor
the lien created by registration of the mortgage and sale. If not made seasonably, it may seek
to recover ownership to the land since the purchasers inchoate title to the property becomes
consolidated after [the] expiration of the redemption period. Either way, redemption involves
the title to the foreclosed property. It is a real action.
2. In Fortune Motors, (Phils.), Inc., v. Court of Appeals,[25] this Court quoting the decision of
the Court of Appeals ruled that since an extrajudicial foreclosure of real property results in a
conveyance of the title of the property sold to the highest bidder at the sale, an action to annul
the foreclosure sale is necessarily an action affecting the title of the property sold. It is
therefore a real action which should be commenced and tried in the province where the
property or part thereof lies.
3. In Punsalan, Jr. v. Vda. de Lacsamana,[26] this court ruled that while it is true that
petitioner does not directly seek the recovery . . . of the property in question, his action for
annulment of sale and his claim for damages are closely intertwined with the issue of
ownership of the building which, under the law, is considered immovable property, the
recovery of which is petitioners primary objective. The prevalent doctrine is that an action for
the annulment or rescission of a sale of real property does not operate to efface the
fundamental and prime objective and nature of the case, which is to recover said real property.
It is a real action. Respondent Court, therefore, did not err in dismissing the case on the ground
of improper venue which was timely raised.
4. In Ruiz v. J. M. Tuason Co., Inc., et al.,[27] the court ruled that although [a] complaint is
entitled to be one for specific performance, yet the fact that [complainant] asked that a deed of
sale of a parcel of land . . . be issued in his favor and that a transfer certificate of title covering
said 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 complainant 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 . . . ."
5. In Dr. Antonio A. Lizares, Inc. v. Hon. Hermogenes Caluag,[28] this Court ruled that an action
praying that defendant be ordered `to accept the payment being made by plaintiff for the lot
which the latter contracted to buy on installment basis from the former, to pay plaintiff
compensatory damages and attorneys fees and to enjoin defendant and his agents from
repossessing the lot in question, is one that affects title to the land under Section 3 of Rule 5, of
the Rules of Court, and shall be commenced and tried in the province where the property or
any part thereof lies, because, although the immediate remedy is to compel the defendant to
accept the tender of payment allegedly made, it is obvious that this relief is merely the first
step to establish plaintiffs title to [the] real property.
6. In Land Tenure Administration, et al. v. The Honorable Higinio B. Macadaeg and Alejandro
T. Lim,[29] this Court ruled that where the lessee seeks to establish an interest in an hacienda
that runs with the land and one that must be respected by the purchaser of the land even if the
latter is not a party to the original lease contract, the question of whether or not the standing
crop is immovable property become[s] irrelevant, for venue is determined by the nature of the
principal claim. Since the lessee is primarily interested in establishing his right to recover
possession of the land for the purpose of enabling him to gather his share of the crops, his
action is real and must be brought in the locality where the land is situated.
7. In Espineli & Mojica v. Hon. Santiago and Vda. de Ramirez,[30] the court ruled that although
the main relief sought in the case at bar was the delivery of the certificate of title, said relief, in
turn, entirely depended upon who, between the parties, has a better right to the lot in
question. As it is not possible for the court to decide the main relief, without passing upon the
claim of the parties with respect to the title to and possession of the lot in question, the claim
shall be determined x x x in the province where [the] said property or any part thereof lies.
The case of Carandang v. Court of Appeals,[31] is more particularly instructive. There, we held that an
action for nullification of the mortgage documents and foreclosure of the mortgaged property is a
real action that affects the title to the property. Thus, venue of the real action is before the court
having jurisdiction over the territory in which the property lies, which is the Court of First Instance of
Laguna.
Petitioner in this case contends that a case for cancellation of mortgage is a personal action and
since he resides at Pasig City, venue was properly laid therein. He tries to make a point by alluding to
the case of Francisco S. Hernandez v. Rural Bank of Lucena.[32]
Petitioners reliance in the case of Francisco S. Hernandez v. Rural Bank of Lucena[33] is misplaced.
Firstly, said case was primarily an action to compel the mortgagee bank to accept payment of the
mortgage debt and to release the mortgage. That action, which is not expressly included in the
enumeration found in Section 2(a) of Rule 4 of the Old Civil Procedure and now under Section 1,
Rule 4 of the 1997 Rules of Civil Procedure, does not involve titles to the mortgaged lots. It is a
personal action and not a real action. The mortgagee has not foreclosed the mortgage. The plaintiffs
title is not in question. They are in possession of the mortgaged lots. Hence, the venue of the
plaintiffs personal action is the place 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
case at bar, the action for cancellation of real estate mortgage filed by herein petitioner was
primarily an action to compel private respondent bank to return to him the properties covered by
TCTs No. 64070 and No. 3325 over which the bank had already initiated foreclosure proceedings
because of the cancellation by the said respondent bank of the omnibus credit line on 21 July 1997.
The prime objective is to recover said real properties. Secondly, Carandang distinctly articulated
that the ruling in Hernandez does not apply where the mortgaged property had already been
foreclosed. Here, and as correctly pointed out by the appellate court, respondent bank had already
initiated extrajudicial foreclosure proceedings, and were it not for the timely issuance of a
restraining order secured by petitioner Go in the lower court, the same would have already been
sold at a public auction.
In a relatively recent case, Asset Privatization Trust v. Court of Appeals,[34] it was succinctly stated
that the prayer for the nullification of the mortgage is a prayer affecting real property, hence, is a
real action.
In sum, the cancellation of the real estate mortgage, subject of the instant petition, is a real action,
considering that a real estate mortgage is a real right and a real property by itself.[35]An action for
cancellation of real estate mortgage is necessarily an action affecting the title to the property. It is,
therefore, a real action which should be commenced and tried in Mandaluyong City, the place
where the subject property lies.
WHEREFORE, the instant petition is DENIED for lack of merit. The assailed decision dated 31 July
2002 and the Order dated 14 November 2002 denying the motion for reconsideration are hereby
AFFIRMED. With costs.
SO ORDERED.
7. GOCHAN vs GOCHAN
FIRST DIVISION
[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.
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 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 to forthwith conduct the
preliminary hearing on the affirmative defenses in Civil Case No. CEB-21854.
SO ORDERED.
8. MANCHESTER DEVP. CORP. vs COURT OF APPEALS

SUPREME COURT
Manila
EN BANC
G.R. No. 75919 May 7, 1987
MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners,

vs.
COURT OF APPEALS, CITY LAND DEVELOPMENT CORPORATION, STEPHEN ROXAS, ANDREW
LUISON, GRACE LUISON and JOSE DE MAISIP, respondents.
Tanjuatco, Oreta and Tanjuatco for petitioners.
Pecabar Law Offices for private respondents.
RESOLUTION
GANCAYCO, J.:
Acting on the motion for reconsideration of the resolution of the Second Division of January 28,1987
and another motion to refer the case to and to be heard in oral argument by the Court En Banc filed
by petitioners, the motion to refer the case to the Court en banc is granted but the motion to set the
case for oral argument is denied.
Petitioners in support of their contention that the filing fee must be assessed on the basis of the
amended complaint cite the case of Magaspi vs. Ramolete. 1 They contend that the Court of
Appeals erred in that the filing fee should be levied by considering the amount of damages sought in
the original complaint.
The environmental facts of said case differ from the present in that —
1. The Magaspi case was an action for recovery of ownership and possession of a parcel of land with
damages.2While the present case is an action for torts and damages and specific performance with
prayer for temporary restraining order, etc.3
2. In the Magaspi case, the prayer in the complaint seeks not only the annulment of title of the
defendant to the property, the declaration of ownership and delivery of possession thereof to
plaintiffs but also asks for the payment of actual moral, exemplary damages and attorney's fees
arising therefrom in the amounts specified therein. 4However, in the present case, the prayer is for
the issuance of a writ of preliminary prohibitory injunction during the pendency of the action against
the defendants' announced forfeiture of the sum of P3 Million paid by the plaintiffs for the property
in question, to attach such property of defendants that maybe sufficient to satisfy any judgment
that maybe rendered, and after hearing, to order defendants to execute a contract of purchase and
sale of the subject property and annul defendants' illegal forfeiture of the money of plaintiff,
ordering defendants jointly and severally to pay plaintiff actual, compensatory and exemplary
damages as well as 25% of said amounts as maybe proved during the trial as attorney's fees and
declaring the tender of payment of the purchase price of plaintiff valid and producing the effect of
payment and to make the injunction permanent. The amount of damages sought is not specified in
the prayer although the body of the complaint alleges the total amount of over P78 Million as
damages suffered by plaintiff.5
3. Upon the filing of the complaint there was an honest difference of opinion as to the nature of the
action in the Magaspi case. The complaint was considered as primarily an action for recovery of
ownership and possession of a parcel of land. The damages stated were treated as merely to the
main cause of action. Thus, the docket fee of only P60.00 and P10.00 for the sheriff's fee were
paid. 6
In the present case there can be no such honest difference of opinion. As maybe gleaned from the
allegations of the complaint as well as the designation thereof, it is both an action for damages and
specific performance. The docket fee paid upon filing of complaint in the amount only of P410.00 by
considering the action to be merely one for specific performance where the amount involved is not
capable of pecuniary estimation is obviously erroneous. Although the total amount of damages
sought is not stated in the prayer of the complaint yet it is spelled out in the body of the complaint
totalling in the amount of P78,750,000.00 which should be the basis of assessment of the filing fee.
4. When this under-re assessment of the filing fee in this case was brought to the attention of this
Court together with similar other cases an investigation was immediately ordered by the Court.
Meanwhile plaintiff through another counsel with leave of court filed an amended complaint on
September 12, 1985 for the inclusion of Philips Wire and Cable Corporation as co-plaintiff and by
emanating any mention of the amount of damages in the body of the complaint. The prayer in the
original complaint was maintained. After this Court issued an order on October 15, 1985 ordering
the reassessment of the docket fee in the present case and other cases that were investigated, on
November 12, 1985 the trial court directed plaintiffs to rectify the amended complaint by stating the
amounts which they are asking for. It was only then that plaintiffs specified the amount of damages
in the body of the complaint in the reduced amount of P10,000,000.00. 7 Still no amount of damages
were specified in the prayer. Said amended complaint was admitted.
On the other hand, in the Magaspi case, the trial court ordered the plaintiffs to pay the amount of
P3,104.00 as filing fee covering the damages alleged in the original complaint as it did not consider
the damages to be merely an or incidental to the action for recovery of ownership and possession of
real property. 8 An amended complaint was filed by plaintiff with leave of court to include the
government of the Republic as defendant and reducing the amount of damages, and attorney's fees
prayed for to P100,000.00. Said amended complaint was also admitted. 9
In the Magaspi case, the action was considered not only one for recovery of ownership but also for
damages, so that the filing fee for the damages should be the basis of assessment. Although the
payment of the docketing fee of P60.00 was found to be insufficient, nevertheless, it was held that
since the payment was the result of an "honest difference of opinion as to the correct amount to be
paid as docket fee" the court "had acquired jurisdiction over the case and the proceedings
thereafter had were proper and regular." 10 Hence, as the amended complaint superseded the
original complaint, the allegations of damages in the amended complaint should be the basis of the
computation of the filing fee. 11
In the present case no such honest difference of opinion was possible as the allegations of the
complaint, the designation and the prayer show clearly that it is an action for damages and specific
performance. The docketing fee should be assessed by considering the amount of damages as
alleged in the original complaint.
As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed only upon
payment of the docket fee regardless of the actual date of filing in court . 12 Thus, in the present
case the trial court did not acquire jurisdiction over the case by the payment of only P410.00 as
docket fee. Neither can the amendment of the complaint thereby vest jurisdiction upon the
Court. 13 For an legal purposes there is no such original complaint that was duly filed which could be
amended. Consequently, the order admitting the amended complaint and all subsequent
proceedings and actions taken by the trial court are null and void.
The Court of Appeals therefore, aptly ruled in the present case that the basis of assessment of the
docket fee should be the amount of damages sought in the original complaint and not in the
amended complaint.
The Court cannot close this case without making the observation that it frowns at the practice of
counsel who filed the original complaint in this case of omitting any specification of the amount of
damages in the prayer although the amount of over P78 million is alleged in the body of the
complaint. This is clearly intended for no other purpose than to evade the payment of the correct
filing fees if not to mislead the docket clerk in the assessment of the filing fee. This fraudulent
practice was compounded when, even as this Court had taken cognizance of the anomaly and
ordered an investigation, petitioner through another counsel filed an amended complaint, deleting
all mention of the amount of damages being asked for in the body of the complaint. It was only
when in obedience to the order of this Court of October 18, 1985, the trial court directed that the
amount of damages be specified in the amended complaint, that petitioners' counsel wrote the
damages sought in the much reduced amount of P10,000,000.00 in the body of the complaint but
not in the prayer thereof. The design to avoid payment of the required docket fee is obvious.
The Court serves warning that it will take drastic action upon a repetition of this unethical practice.
To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar
pleadings should specify the amount of damages being prayed for not only in the body of the
pleading but also in the prayer, and said damages shall be considered in the assessment of the filing
fees in any case. Any pleading that fails to comply with this requirement shall not bib accepted nor
admitted, or shall otherwise be expunged from the record.
The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee.
An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court,
much less the payment of the docket fee based on the amounts sought in the amended pleading.
The ruling in the Magaspi case 14 in so far as it is inconsistent with this pronouncement is
overturned and reversed.
WHEREFORE, the motion for reconsideration is denied for lack of merit.
SO ORDERED.
9. SUN INSURANCE LTD. vs ASUNCION

SUPREME COURT
Manila
EN BANC
G.R. Nos. 79937-38 February 13, 1989
SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J. WARBY, petitioners,
vs.
HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional Trial Court, Quezon City
and MANUEL CHUA UY PO TIONG, respondents.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices for petitioners. Tanjuatco,
Oreta, Tanjuatco, Berenguer & Sanvicente Law Offices for private respondent.
GANCAYCO, J.:
Again the Court is asked to resolve the issue of whether or not a court acquires jurisdiction over a
case when the correct and proper docket fee has not been paid.
On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a complaint with
the Regional Trial Court of Makati, Metro Manila for the consignation of a premium refund on a fire
insurance policy with a prayer for the judicial declaration of its nullity against private respondent
Manuel Uy Po Tiong. Private respondent as declared in default for failure to file the required answer
within the reglementary period.
On the other hand, on March 28, 1984, private respondent filed a complaint in the Regional Trial
Court of Quezon City for the refund of premiums and the issuance of a writ of preliminary
attachment which was docketed as Civil Case No. Q-41177, initially against petitioner SIOL, and
thereafter including E.B. Philipps and D.J. Warby as additional defendants. The complaint sought,
among others, the payment of actual, compensatory, moral, exemplary and liquidated damages,
attorney's fees, expenses of litigation and costs of the suit. Although the prayer in the complaint did
not quantify the amount of damages sought said amount may be inferred from the body of the
complaint to be about Fifty Million Pesos (P50,000,000.00).
Only the amount of P210.00 was paid by private respondent as docket fee which prompted
petitioners' counsel to raise his objection. Said objection was disregarded by respondent Judge Jose
P. Castro who was then presiding over said case. Upon the order of this Court, the records of said
case together with twenty-two other cases assigned to different branches of the Regional Trial Court
of Quezon City which were under investigation for under-assessment of docket fees were
transmitted to this Court. The Court thereafter returned the said records to the trial court with the
directive that they be re-raffled to the other judges in Quezon City, to the exclusion of Judge Castro.
Civil Case No. Q-41177 was re-raffled to Branch 104, a sala which was then vacant.
On October 15, 1985, the Court en banc issued a Resolution in Administrative Case No. 85-10-8752-
RTC directing the judges in said cases to reassess the docket fees and that in case of deficiency, to
order its payment. The Resolution also requires all clerks of court to issue certificates of re-
assessment of docket fees. All litigants were likewise required to specify in their pleadings the
amount sought to be recovered in their complaints.
On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177 was
temporarily assigned, issuedan order to the Clerk of Court instructing him to issue a certificate of
assessment of the docket fee paid by private respondent and, in case of deficiency, to include the
same in said certificate.
On January 7, 1984, to forestall a default, a cautionary answer was filed by petitioners. On August
30,1984, an amended complaint was filed by private respondent including the two additional
defendants aforestated.
Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter assigned, after his
assumption into office on January 16, 1986, issued a Supplemental Order requiring the parties in the
case to comment on the Clerk of Court's letter-report signifying her difficulty in complying with the
Resolution of this Court of October 15, 1985 since the pleadings filed by private respondent did not
indicate the exact amount sought to be recovered. On January 23, 1986, private respondent filed a
"Compliance" and a "Re-Amended Complaint" stating therein a claim of "not less than Pl0,000,000.
00 as actual compensatory damages" in the prayer. In the body of the said second amended
complaint however, private respondent alleges actual and compensatory damages and attorney's
fees in the total amount of about P44,601,623.70.
On January 24, 1986, Judge Asuncion issued another Order admitting the second amended
complaint and stating therein that the same constituted proper compliance with the Resolution of
this Court and that a copy thereof should be furnished the Clerk of Court for the reassessment of the
docket fees. The reassessment by the Clerk of Court based on private respondent's claim of "not less
than P10,000,000.00 as actual and compensatory damages" amounted to P39,786.00 as docket fee.
This was subsequently paid by private respondent.
Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of
Judie Asuncion dated January 24, 1986.
On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of
P20,000,000.00 as d.qmages so the total claim amounts to about P64,601,623.70. On October 16,
1986, or some seven months after filing the supplemental complaint, the private respondent paid
the additional docket fee of P80,396.00.1
On August 13, 1987, the Court of Appeals rendered a decision ruling, among others, as follows:
WHEREFORE, judgment is hereby rendered:
1. Denying due course to the petition in CA-G.R. SP No. 1, 09715 insofar as it seeks annulment of the
order
(a) denying petitioners' motion to dismiss the complaint, as amended, and
(b) granting the writ of preliminary attachment, but giving due course to the portion thereof
questioning the reassessment of the docketing fee, and requiring the Honorable respondent Court
to reassess the docketing fee to be paid by private respondent on the basis of the amount of
P25,401,707.00. 2
Hence, the instant petition.
During the pendency of this petition and in conformity with the said judgment of respondent court,
private respondent paid the additional docket fee of P62,432.90 on April 28, 1988. 3
The main thrust of the petition is that the Court of Appeals erred in not finding that the lower court
did not acquire jurisdiction over Civil Case No. Q-41177 on the ground of nonpayment of the correct
and proper docket fee. Petitioners allege that while it may be true that private respondent had paid
the amount of P182,824.90 as docket fee as herein-above related, and considering that the total
amount sought to be recovered in the amended and supplemental complaint is P64,601,623.70 the
docket fee that should be paid by private respondent is P257,810.49, more or less. Not having paid
the same, petitioners contend that the complaint should be dismissed and all incidents arising
therefrom should be annulled. In support of their theory, petitioners cite the latest ruling of the
Court in Manchester Development Corporation vs. CA, 4 as follows:
The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee.
much less the payment of the docket fee based on the amounts sought in the amended pleading.
The ruling in the Magaspi Case in so far as it is inconsistent with this pronouncement is overturned
and reversed.
On the other hand, private respondent claims that the ruling in Manchester cannot apply
retroactively to Civil Case No. Q41177 for at the time said civil case was filed in court there was no
such Manchester ruling as yet. Further, private respondent avers that what is applicable is the ruling
of this Court in Magaspi v. Ramolete, 5 wherein this Court held that the trial court acquired
jurisdiction over the case even if the docket fee paid was insufficient.
The contention that Manchester cannot apply retroactively to this case is untenable. Statutes
regulating the procedure of the courts will be construed as applicable to actions pending and
undetermined at the time of their passage. Procedural laws are retrospective in that sense and to
that extent. 6
In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of the full amount of the
docket fee is an indispensable step for the perfection of an appeal. In a forcible entry and detainer
case before the justice of the peace court of Manaoag, Pangasinan, after notice of a judgment
dismissing the case, the plaintiff filed a notice of appeal with said court but he deposited only P8.00
for the docket fee, instead of P16.00 as required, within the reglementary period of appeal of five
(5) days after receiving notice of judgment. Plaintiff deposited the additional P8.00 to complete the
amount of the docket fee only fourteen (14) days later. On the basis of these facts, this court held
that the Court of First Instance did notacquire jurisdiction to hear and determine the appeal as the
appeal was not thereby perfected.
In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention to become a Filipino
citizen by sending it through registered mail to the Office of the Solicitor General in 1953 but the
required filing fee was paid only in 1956, barely 5V2 months prior to the filing of the petition for
citizenship. This Court ruled that the declaration was not filed in accordance with the legal
requirement that such declaration should be filed at least one year before the filing of the petition
for citizenship. Citing Lazaro, this Court concluded that the filing of petitioner's declaration of
intention on October 23, 1953 produced no legal effect until the required filing fee was paid on May
23, 1956.
In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and Lee were applied. It was an
original petition for quo warranto contesting the right to office of proclaimed candidates which was
mailed, addressed to the clerk of the Court of First Instance, within the one-week period after the
proclamation as provided therefor by law.10However, the required docket fees were paid only after
the expiration of said period. Consequently, this Court held that the date of such payment must be
deemed to be the real date of filing of aforesaid petition and not the date when it was mailed.
Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the docket fee must be paid before
a court will act on a petition or complaint. However, we also held that said rule is not applicable
when petitioner seeks the probate of several wills of the same decedent as he is not required to file
a separate action for each will but instead he may have other wills probated in the same special
proceeding then pending before the same court.
Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that a case is deemed filed
only upon payment of the docket fee regardless of the actual date of its filing in court. Said case
involved a complaint for recovery of ownership and possession of a parcel of land with damages
filed in the Court of First Instance of Cebu. Upon the payment of P60.00 for the docket fee and
P10.00 for the sheriffs fee, the complaint was docketed as Civil Case No. R-11882. The prayer of the
complaint sought that the Transfer Certificate of Title issued in the name of the defendant be
declared as null and void. It was also prayed that plaintiff be declared as owner thereof to whom the
proper title should be issued, and that defendant be made to pay monthly rentals of P3,500.00 from
June 2, 1948 up to the time the property is delivered to plaintiff, P500,000.00 as moral damages,
attorney's fees in the amount of P250,000.00, the costs of the action and exemplary damages in the
amount of P500,000.00.
The defendant then filed a motion to compel the plaintiff to pay the correct amount of the docket
fee to which an opposition was filed by the plaintiff alleging that the action was for the recovery of a
parcel of land so the docket fee must be based on its assessed value and that the amount of P60.00
was the correct docketing fee. The trial court ordered the plaintiff to pay P3,104.00 as filing fee.
The plaintiff then filed a motion to admit the amended complaint to include the Republic as the
defendant. In the prayer of the amended complaint the exemplary damages earlier sought was
eliminated. The amended prayer merely sought moral damages as the court may determine,
attorney's fees of P100,000.00 and the costs of the action. The defendant filed an opposition to the
amended complaint. The opposition notwithstanding, the amended complaint was admitted by the
trial court. The trial court reiterated its order for the payment of the additional docket fee which
plaintiff assailed and then challenged before this Court. Plaintiff alleged that he paid the total docket
fee in the amount of P60.00 and that if he has to pay the additional fee it must be based on the
amended complaint.
The question posed, therefore, was whether or not the plaintiff may be considered to have filed the
case even if the docketing fee paid was not sufficient. In Magaspi, We reiterated the rule that the
case was deemed filed only upon the payment of the correct amount for the docket fee regardless
of the actual date of the filing of the complaint; that there was an honest difference of opinion as to
the correct amount to be paid as docket fee in that as the action appears to be one for the recovery
of property the docket fee of P60.00 was correct; and that as the action is also one, for damages,
We upheld the assessment of the additional docket fee based on the damages alleged in the
amended complaint as against the assessment of the trial court which was based on the damages
alleged in the original complaint.
However, as aforecited, this Court overturned Magaspi in Manchester. Manchester involves an

action for torts and damages and specific performance with a prayer for the issuance of a temporary
restraining order, etc. The prayer in said case is for the issuance of a writ of preliminary prohibitory
injunction during the pendency of the action against the defendants' announced forfeiture of the
sum of P3 Million paid by the plaintiffs for the property in question, the attachment of such property
of defendants that may be sufficient to satisfy any judgment that may be rendered, and, after
hearing, the issuance of an order requiring defendants to execute a contract of purchase and sale of
the subject property and annul defendants' illegal forfeiture of the money of plaintiff. It was also
prayed that the defendants be made to pay the plaintiff jointly and severally, actual, compensatory
and exemplary damages as well as 25% of said amounts as may be proved during the trial for
attorney's fees. The plaintiff also asked the trial court to declare the tender of payment of the
purchase price of plaintiff valid and sufficient for purposes of payment, and to make the injunction
permanent. The amount of damages sought is not specified in the prayer although the body of the
complaint alleges the total amount of over P78 Millon allegedly suffered by plaintiff.
Upon the filing of the complaint, the plaintiff paid the amount of only P410.00 for the docket fee
based on the nature of the action for specific performance where the amount involved is not
capable of pecuniary estimation. However, it was obvious from the allegations of the complaint as
well as its designation that the action was one for damages and specific performance. Thus, this
court held the plaintiff must be assessed the correct docket fee computed against the amount of
damages of about P78 Million, although the same was not spelled out in the prayer of the
complaint.
Meanwhile, plaintiff through another counsel, with leave of court, filed an amended complaint on
September 12, 1985 by the inclusion of another co-plaintiff and eliminating any mention of the
amount of damages in the body of the complaint. The prayer in the original complaint was
maintained.
On October 15, 1985, this Court ordered the re-assessment of the docket fee in the said case and
other cases that were investigated. On November 12, 1985, the trial court directed the plaintiff to
rectify the amended complaint by stating the amounts which they were asking for. This plaintiff did
as instructed. In the body of the complaint the amount of damages alleged was reduced to
P10,000,000.00 but still no amount of damages was specified in the prayer. Said amended complaint
was admitted.
Applying the principle in Magaspi that "the case is deemed filed only upon payment of the docket
fee regardless of the actual date of filing in court," this Court held that the trial court did not acquire
jurisdiction over the case by payment of only P410.00 for the docket fee. Neither can the
amendment of the complaint thereby vest jurisdiction upon the Court. For all legal purposes there
was no such original complaint duly filed which could be amended. Consequently, the order
admitting the amended complaint and all subsequent proceedings and actions taken by the trial
court were declared null and void.13
The present case, as above discussed, is among the several cases of under-assessment of docket fee
which were investigated by this Court together with Manchester. The facts and circumstances of this
case are similar to Manchester. In the body of the original complaint, the total amount of damages
sought amounted to about P50 Million. In the prayer, the amount of damages asked for was not
stated. The action was for the refund of the premium and the issuance of the writ of preliminary
attachment with damages. The amount of only P210.00 was paid for the docket fee. On January 23,
1986, private respondent filed an amended complaint wherein in the prayer it is asked that he be
awarded no less than P10,000,000.00 as actual and exemplary damages but in the body of the
complaint the amount of his pecuniary claim is approximately P44,601,623.70. Said amended
complaint was admitted and the private respondent was reassessed the additional docket fee of
P39,786.00 based on his prayer of not less than P10,000,000.00 in damages, which he paid.
On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of
P20,000,000.00 in damages so that his total claim is approximately P64,601,620.70. On October 16,
1986, private respondent paid an additional docket fee of P80,396.00. After the promulgation of the
decision of the respondent court on August 31, 1987 wherein private respondent was ordered to be
reassessed for additional docket fee, and during the pendency of this petition, and after the
promulgation of Manchester, on April 28, 1988, private respondent paid an additional docket fee of
P62,132.92. Although private respondent appears to have paid a total amount of P182,824.90 for
the docket fee considering the total amount of his claim in the amended and supplemental
complaint amounting to about P64,601,620.70, petitioner insists that private respondent must pay a
docket fee of P257,810.49.
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.
Nevertheless, petitioners contend that the docket fee that was paid is still insufficient considering
the total amount of the claim. This is a matter which the clerk of court of the lower court and/or his
duly authorized docket clerk or clerk in-charge should determine and, thereafter, if any amount is
found due, he must require the private respondent to pay the same.
Thus, the Court rules as follows:
1. 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. Where 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 or reglementary period.
2. The same rule applies to permissive counterclaims, third party claims and similar pleadings, which
shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may
also allow payment of said fee within a reasonable time but also in no case beyond its applicable
prescriptive or reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading
and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not
specified in the pleading, or if specified the same has been left for determination by the court, the
additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of
the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the
additional fee.
WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of Court of the court a quo is
hereby instructed to reassess and determine the additional filing fee that should be paid by private
respondent considering the total amount of the claim sought in the original complaint and the
supplemental complaint as may be gleaned from the allegations and the prayer thereof and to
require private respondent to pay the deficiency, if any, without pronouncement as to costs.
SO ORDERED.
10. TACAY vs RTC OF TAGUM

SUPREME COURT
Manila
EN BANC
G.R. Nos. 88075-77 December 20, 1989
MAXIMO TACAY, PONCIANO PANES and ANTONIA NOEL, petitioners,

vs.
REGIONAL TRIAL COURT OF TAGUM Davao del Norte, Branches 1 and 2, Presided by Hon. Marcial
Fernandez and Hon. Jesus Matas, respectively, PATSITA GAMUTAN, Clerk of Court, and
GODOFREDO PINEDA, respondents.
Eduardo C. De Vera for petitioners.
RESOLUTION
NARVASA, J.:
In the Regional Trial Court at Tagum, Davao del Norte, 1 three
(3) actions for recovery of possession (acciones publicianas 2 ) were separately instituted by
Godofredo Pineda against three (3) defendants, docketed as follows:
1) vs. Antonia Noel Civil Case No. 2209
2) vs. Ponciano Panes Civil Case No. 2210
3) vs. Maximo Tacay Civil Case No. 2211.
Civil Cases Numbered 2209 and 2211 were raffled to Branch I of the Trial Court, presided over by
Judge Marcial Hernandez. Civil No. 2210 was assigned to Branch 2, presided over by Judge Jesus
Matas.
The complaints 3 all alleged the same essential facts (1) Pineda was the owner of a parcel of land
measuring 790 square meters, his ownership being evidenced by TCT No. T-46560; (2) the previous
owner had allowed the defendants to occupy portions of the land by mere tolerance; (3) having
himself need to use the property, Pineda had made demands on the defendants to vacate the
property and pay reasonable rentals therefor, but these demands had been refused; and (4) the last
demand had been made more than a year prior to the commencement of suit. The complaints
prayed for the same reliefs, to wit:
1) that plaintiff be declared owner of the areas occupied by the defendants;

2) that defendants and their "privies and allies" be ordered to vacate and deliver the portions of the
land usurped by them;
3) that each defendant be ordered to pay:
1 ) P 2,000 as monthly rents from February, 1987;
2 ) Actual damages, as proven;
3 ) Moral and nominal damages as the Honorable Court may fix ;
4) P30,000.00, "as attorney's fees, and representation fees of P5,000.00 per day of appearance;" 4
and
4) that he (Pineda) be granted such "further relief and remedies ... just and equitable in the
premises.
The prayer of each complaint contained a handwritten notation (evidently made by plaintiff's
counsel) reading, "P5,000.00 as and for," immediately above the typewritten words, "Actual
damages, as proven," the intention apparently being to make the entire phrase read, " P5,000.00 as
and for actual damages as proven. 5
Motions to dismiss were filed in behalf of each of the defendants by common counsel .6 Every
motion alleged that the Trial Court had not acquired jurisdiction of the case —
. . . for the reason that the ... complaint violates the mandatory and clear provision of Circular No. 7
of the ... Supreme Court dated March 24,1988, by failing to specify all the amounts of damages
which plaintiff is claiming from defendant;" and
. . . for ... failure (of the complaint) to even allege the basic requirement as to the assessed value of
the subject lot in dispute.
Judge Matas denied the motion to dismiss filed in Civil Case No. 2210 but ordered the expunction of
the "allegations in paragraph 11 of the ... complaint regarding moral as well as nominal damages
. 7 On motion of defendant Panes, Judge Matas later ordered the striking out, too, of the
"handwritten amount of 'P5,000. 00 as and for.' including the typewritten words 'actual damages as
proven' ... in sub-paragraph b of paragraph 4 in the conclusion and prayer of the complaint ..." 8
The motions to dismiss submitted in Civil Cases Numbered 2211 and 2209 were also denied in
separate orders promulgated by Judge Marcial Fernandez. 9 His Order in Case No. 2209 dated March
15, 1989 (a) declared that since the "action at bar is for Reivindicatoria, Damages and Attorney's
fees ... (d)efinitely this Court has the exclusive jurisdiction," (b) that the claims for actual, moral and
nominal damages "are only one aspect of the cause of action," and (c) because of absence of
specification of the amounts claimed as moral, nominal and actual damages, they should be
"expunged from the records."
Ascribing grave abuse of discretion to both Judges Matas and Fernandez in the rendition of the
Orders above described, the defendants in all three (3) actions have filed with this Court a "Joint
Petition" for certiorari, prohibition and mandamus, with prayer for temporary restraining order
and/or writ of preliminary prohibitory injunction," praying essentially that said orders be annulled
and respondent judges directed to dismiss all the complaints "without prejudice to private
respondent Pineda's re-filing a similar complaint that complies with Circular No. 7." The joint
petition (a) re-asserted the proposition that because the complaints had failed to state the amounts
being claimed as actual, moral and nominal damages, the Trial Courts a quo had not acquired
jurisdiction over the three (3) actions in question-indeed, the respondent Clerk of Court should not
have accepted the complaints which initiated said suits, and (b) it was not proper merely to expunge
the claims for damages and allow "the so-called cause of action for "reivindicatoria" remain for trial"
by itself. 10
The joint petition should be, as it is hereby, dismissed.
It should be dismissed for failure to comply with this Court's Circular No. 1-88 (effective January 1,
1989). The copies of the challenged Orders thereto attached 11 were not certified by the proper
Clerk of Court or his duly authorized representative. Certification was made by the petitioners'
counsel, which is not allowed.
The petition should be dismissed, too, for another equally important reason. It fails to demonstrate
any grave abuse of discretion on the part of the respondent Judges in rendering the Orders
complained of or, for that matter, the existence of any proper cause for the issuance of the writ of
mandamus. On the contrary, the orders appear to have correctly applied the law to the admitted
facts.
It is true that the complaints do not state the amounts being claimed as actual, moral and nominal
damages. It is also true, however, that the actions are not basically for the recovery of sums of
money. They are principally for recovery of possession of real property, in the nature of an accion
publiciana. Determinative of the court's jurisdiction in this type of actions is the nature thereof, not
the amount of the damages allegedly arising from or connected with the issue of title or possession,
and regardless of the value of the property. Quite obviously, an action for recovery of possession of
real property (such as an accion plenaria de possesion) or the title thereof, 12 or for partition or
condemnation of, or the foreclosure of a mortgage on, said real property 13 - in other words, a real
action-may be commenced and prosecuted without an accompanying claim for actual, moral,
nominal or exemplary damages; and such an action would fall within the exclusive, original
jurisdiction of the Regional Trial Court.
Batas Pambansa Bilang 129 provides that Regional Trial Courts shall exercise exclusive original
jurisdiction inter alia over "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." 14 The rule applies regardless of the value of the real
property involved, whether it be worth more than P20,000.00 or not, infra. The rule also applies
even where the complaint involving realty also prays for an award of damages; the amount of those
damages would be immaterial to the question of the Court's jurisdiction. The rule is unlike that in
other cases e.g., actions simply for recovery of money or of personal property, 15 or actions in
admiralty and maritime jurisdiction 16 in which the amount claimed, 17 or the value of the personal
property, is determinative of jurisdiction; i.e., the value of the personal property or the amount
claimed should exceed twenty thousand pesos (P20,000.00) in order to be cognizable by the
Regional Trial Court.
Circular No. 7 of this Court, dated March 24, 1988, cannot thus be invoked, as the petitioner does, as
authority for the dismissal of the actions at bar. That circular, avowedly inspired by the doctrine laid
down in Manchester Development Corporation v. Court of appeals, 149 SCRA 562 (May 7, 1987), has
but limited application to said actions, as shall presently be discussed. Moreover, the rules therein
laid down have since been clarified and amplified by the Court's subsequent decision in Sun
Insurance Office, Ltd. (SIOL) v. Asuncion, et al., G.R. Nos. 79937-38, February 13, 1989.
Circular No. 7 was aimed at the practice of certain parties who omit from the prayer of their
complaints "any specification of the amount of damages," the omission being "clearly intended for
no other purposes than to evade the payment of the correct filing fees if not to mislead the docket
clerk, in the assessment of the filing fee." The following rules were therefore set down:
1. All complaints, petitions, answers, and similar pleadings should specify the amount of damages
being prayed for not only in the body of the pleading but also in the prayer, and said damages shall
be considered in the assessment of the filing fees in any case.
2. Any pleading that fails to comply with this requirement shall not be accepted nor admitted, or
shall otherwise be expunged from the record.
3. The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee.
much less the payment of the docket fee based on the amount sought in the amended pleading.
The clarificatory and additional rules laid down in Sun Insurance Office, Ltd. v. Asuncion, supra, read
as follows:
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but (also) the
payment of the prescribed docket fee that vests a trial court with jurisdiction over the subject-
matter or nature of the action. Where 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 or reglementary period.
2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which
specified in the pleading, or if specified, the same has been left for determination by the court, the
additional fee.
As will be noted, the requirement in Circular No. 7 that complaints, petitions, answers, and similar
pleadings should specify the amount of damages being prayed for not only in the body of the
pleading but also in the prayer, has not been altered. What has been revised is the rule that
subsequent "amendment of the complaint or similar pleading will not thereby vest jurisdiction in the
Court, much less the payment of the docket fee based on the amount sought in the amended
pleading," the trial court now being authorized to allow payment of the fee within a reasonable time
but in no case beyond the applicable prescriptive or reglementary period. Moreover, a new rule has
been added, governing awards of claims not specified in the pleading - i.e., damages arising after the
filing of the complaint or similar pleading-as to which the additional filing fee therefor shall
constitute a lien on the judgment.
Now, under the Rules of Court, docket or filing fees are assessed on the basis of the "sum claimed,"
on the one hand, or the "value of the property in litigation or the value of the estate," on the
other. 18 There are, in other words, as already above intimated, actions or proceedings involving real
property, in which the value of the property is immaterial to the court's jurisdiction, account thereof
being taken merely for assessment of the legal fees; and there are actions or proceedings, involving
personal property or the recovery of money and/or damages, in which the value of the property or
the amount of the demand is decisive of the trial court's competence (aside from being the basis for
fixing the corresponding docket fees). 19
Where the action is purely for the recovery of money or damages, the docket fees are assessed on
the basis of the aggregate amount claimed, exclusive only of interests and costs. In this case, the
complaint or similar pleading should, according to Circular No. 7 of this Court, "specify the amount
of damages being prayed for not only in the body of the pleading but also in the prayer, and said
damages shall be considered in the assessment of the filing fees in any case."
Two situations may arise. One is where the complaint or similar pleading sets out a claim purely for
money or damages and there is no precise statement of the amounts being claimed. In this event
the rule is that the pleading will "not be accepted nor admitted, or shall otherwise be expunged
from the record." In other words, the complaint or pleading may be dismissed, or the claims as to
which the amounts are unspecified may be expunged, although as aforestated the Court may, on
motion, permit amendment of the complaint and payment of the fees provided the claim has not in
the meantime become time-barred. The other is where the pleading does specify the amount of
every claim, but the fees paid are insufficient; and here again, the rule now is that the court may
allow a reasonable time for the payment of the prescribed fees, or the balance thereof, and upon
such payment, the defect is cured and the court may properly take cognizance of the action, unless
in the meantime prescription has set in and consequently barred the right of action.
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 the meantime. But where-as in the case at
bar-the fees prescribed for an action involving real property have been paid, but the amounts of
certain of the related damages (actual, moral and nominal) being demanded are unspecified, the
action may not be dismissed. The Court undeniably has jurisdiction over the action involving the real
property, acquiring it upon the filing of the complaint or similar pleading and payment of the
prescribed fee. And it is not divested of that authority by the circumstance that it may not have
acquired jurisdiction over the accompanying claims for damages because of lack of specification
thereof. What should be done is simply to expunge those claims for damages as to which no
amounts are stated, which is what the respondent Courts did, or allow, on motion, a reasonable
time for the amendment of the complaints so as to allege the precise amount of each item of
damages and accept payment of the requisite fees therefor within the relevant prescriptive period.
WHEREFORE, the petition is DISMISSED, without pronouncement as to costs.
11. AYALA CORP. vs MADAYAG
FIRST DIVISION
[G.R. No. 88421. January 30, 1990.]
AYALA CORPORATION, LAS PIÑAS VENTURES, INC., AND FILIPINAS LIFE ASSURANCE COMPANY,
INC., Petitioners, v. THE HONORABLE JOB B. MADAYAG, PRESIDING JUDGE, REGIONAL TRIAL
COURT, NATIONAL CAPITAL JUDICIAL REGION, BRANCH 145 and THE SPOUSES CAMILO AND MA.
MARLENE SABIO, Respondents.
Renato L. De la Fuente, for Petitioners.

Camilo L. Sabio for Private Respondents.
SYLLABUS
1. CIVIL LAW; SPECIFIC PERFORMANCE WITH DAMAGES; ADDITIONAL FILING FEE CONSTITUTE A
LIEN ON THE JUDGMENT WHEN DAMAGES AROSE AFTER THE FILING OF THE COMPLAINT. — The
trial court misinterpreted paragraph 3 of the above ruling of this Court wherein it is stated that
"where the judgment awards a claim not specified in the pleading, or if specified, the same has been
left for the determination of the court, the additional filing fee therefor shall constitute a lien on the
judgment" by considering it to mean that where in the body and prayer of the complaint there is a
prayer, say for exemplary or corrective damages, the amount of which is left to the discretion of the
Court, there is no need to specify the amount being sought, and that any award thereafter shall
constitute a lien on the judgment.
2. ID.; ID.; RULE IN THE PROPER DETERMINATION OF THE AMOUNT OF DAMAGES. — In the latest
case of Tacay v. Regional Trial Court of Tagum, this Court had occasion to make the clarification that
the phrase "awards of claims not specified in the pleading" refers only to "damages arising after the
filing of the complaint or similar pleading . . . . as to which the additional filing fee therefor shall
constitute a lien on the judgment." The amount of any claim for damages, therefore, arising on or
before the filing of the complaint or any pleading should be specified. While it is true that the
determination of certain damages as exemplary or corrective damages is left to the sound discretion
of the court, it is the duty of the parties claiming such damages to specify the amount sought on the
basis of which the court may make a proper determination, and for the proper assessment of the
appropriate docket fees. The exception contemplated as to claims not specified or to claims
although specified are left for determination of the court is limited only to any damages that may
arise after the filing of the complaint or similar pleading for then it will not be possible for the
claimant to specify nor speculate as to the amount thereof.
3. ID.; ID.; EFFECT OF FAILURE TO STATE THE PRECISE AMOUNT OF EXEMPLARY DAMAGES IN THE
AMENDED AND SUPPLEMENTAL COMPLAINT. — The amended and supplemental complaint in the
present case, therefore, suffers from the material defect in failing to state the amount of exemplary
damages prayed for. As ruled in Tacay the trial court may either order said claim to be expunged
from the record as it did not acquire jurisdiction over the same or on motion, it may allow, within a
reasonable time, the amendment of the amended and supplemental complaint so as to state the
precise amount of the exemplary damages sought and require the payment of the requisite fees
therefor within the relevant prescriptive period.
DECISION
GANCAYCO, J.:
Once more the issue relating to the payment of filing fees in an action for specific performance with
damages is presented by this petition for prohibition.
Private respondents filed against petitioners an action for specific performance with damages in the
Regional Trial Court of Makati. Petitioners filed a motion to dismiss on the ground that the lower
court has not acquired jurisdiction over the case as private respondents failed to pay the prescribed
docket fee and to specify the amount of exemplary damages both in the body and prayer of the
amended and supplemental complaint. The trial court denied the motion in an order dated April 5,
1989. A motion for reconsideration filed by petitioners was likewise denied in an order dated May
18, 1989. Hence this petition.chanrobles.com : virtual law library
The main thrust of the petition is that private respondent paid only the total amount of P1,616.00 as
docket fees instead of the amount of P13,061.35 based on the assessed value of the real properties
involved as evidenced by its tax declaration. Further, petitioners contend that private respondents
failed to specify the amount of exemplary damages sought both in the body and the prayer of the
amended and supplemental complaint.
In Manchester Development Corporation v. Court of Appeals 1 a similar case involving an action for
specific performance with damages, this Court held that the docket fee should be assessed by
considering the amount of damages as alleged in the original complaint.
However, the contention of petitioners is that since the action concerns real estate, the assessed
value thereof should be considered in computing the fees pursuant to Section 5, Rule 141 of the
Rules of Court. Such rule cannot apply to this case which is an action for specific performance with
damages although it is in relation to a transaction involving real estate. Pursuant to Manchester, the
amount of the docket fees to be paid should be computed on the basis of the amount of damages
stated in the complaint.
Petitioners also allege that because of the failure of the private respondents to state the amount of
exemplary damages being sought, the complaint must nevertheless be dismissed in accordance to
Manchester. The trial court denied the motion stating that the determination of the exemplary
damages is within the sound discretion of the court and that it would be unwarrantedly
presumptuous on the part of the private respondents to fix the amount of exemplary damages
being prayed for. The trial court cited the subsequent case of Sun Insurance v. Judge Asuncion 2 in
support of its ruling.
The clarificatory and additional rules laid down in Sun Insurance are as follows:chanrob1es virtual
1aw library
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but (also) the
payment of the prescribed docket fee that vests a trial court with jurisdiction over the subject-
matter or nature of the action. Where 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 or reglementary period.
2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which
specified in the pleading, or if specified, the same has been left for determination by the court, the
additional fee."cralaw virtua1aw library
Apparently, the trial court misinterpreted paragraph 3 of the above ruling of this Court wherein it is
stated that "where the judgment awards a claim not specified in the pleading, or if specified, the
same has been left for the determination of the court, the additional filing fee therefor shall
constitute a lien on the judgment" by considering it to mean that where in the body and prayer of
the complaint there is a prayer, say for exemplary or corrective damages, the amount of which is left
to the discretion of the Court, there is no need to specify the amount being sought, and that any
award thereafter shall constitute a lien on the judgment.chanrobles.com.ph : virtual law library
In the latest case of Tacay v. Regional Trial Court of Tagum, 3 this Court had occasion to make the
clarification that the phrase "awards of claims not specified in the pleading" refers only to "damages
arising after the filing of the complaint or similar pleading . . . . as to which the additional filing fee
therefor shall constitute a lien on the judgment." The amount of any claim for damages, therefore,
arising on or before the filing of the complaint or any pleading should be specified. While it is true
that the determination of certain damages as exemplary or corrective damages is left to the sound
discretion of the court, it is the duty of the parties claiming such damages to specify the amount
sought on the basis of which the court may make a proper determination, and for the proper
assessment of the appropriate docket fees. The exception contemplated as to claims not specified
or to claims although specified are left for determination of the court is limited only to any damages
that may arise after the filing of the complaint or similar pleading for then it will not be possible for
the claimant to specify nor speculate as to the amount thereof.
The amended and supplemental complaint in the present case, therefore, suffers from the material
defect in failing to state the amount of exemplary damages prayed for.
As ruled in Tacay the trial court may either order said claim to be expunged from the record as it did
not acquire jurisdiction over the same or on motion, it may allow, within a reasonable time, the
amendment of the amended and supplemental complaint so as to state the precise amount of the
exemplary damages sought and require the payment of the requisite fees therefor within the
relevant prescriptive period. 4
WHEREFORE, the petition is GRANTED. The trial court is directed either to expunge from the record
the claim for exemplary damages in the amended and supplemental complaint, the amount of
which is not specified, or it may otherwise, upon motion, give reasonable time to private
respondents to amend their pleading by specifying its amount and paying the corresponding
docketing fees within the appropriate reglementary or prescriptive period. No costs.chanrobles
virtual lawlibrary
SO ORDERED
12. NEGROS ORIENTAL PLANTERS vs HON. PRESIDING JUDGE OF NEGROS
THIRD DIVISION
[G.R. NO. 179878 : December 24, 2008]
NEGROS ORIENTAL PLANTERS ASSOCIATION, INC. (NOPA), Petitioner, v. HON. PRESIDING JUDGE
OF RTC-NEGROS OCCIDENTAL, BRANCH 52, BACOLOD CITY, and ANICETO MANOJO
CAMPOS, Respondents.
DECISION
CHICO-NAZARIO, J.:
What's sauce for the goose is sauce for the gander.
This is a Petition for Review on Certiorari seeking the reversal of the Resolutions1 of the Court of
Appeals dated 23 May 2007 and 16 August 2007, respectively, in CA-G.R. SP No. 02651 outrightly
dismissing the Petition for Certiorari filed by petitioner Negros Oriental Planters Association, Inc.
(NOPA) against private respondent Aniceto Manojo Campos (Campos).
On 17 March 1999, Campos filed a Complaint for Breach of Contract with Damages, docketed as Civil
Case No. 99-10773, against NOPA before the Regional Trial Court (RTC) of Negros Occidental,
Bacolod City. According to the Complaint, Campos and NOPA entered into two separate contracts
denominated as Molasses Sales Agreement. Campos allegedly paid the consideration of the
Molasses Sales Agreement in full, but was only able to receive a partial delivery of the molasses
because of a disagreement as to the quality of the products being delivered.
On 17 August 2005, more than six years after NOPA filed its Answer, NOPA filed a Motion to Dismiss
on the ground of an alleged failure of Campos to file the correct filing fee. According to NOPA,
Campos deliberately concealed in his Complaint the exact amount of actual damages by opting to
estimate the value of the unwithdrawn molasses in order to escape the payment of the proper
docket fees.
On 30 June 2006, the RTC issued an Order denying the Motion to Dismiss. NOPA received this Order
on 17 July 2006.
On 1 August 2006, NOPA filed a Motion for Reconsideration of the 30 June 2006 Order. On 5 January
2007, the RTC issued an Order denying NOPA's Motion for Reconsideration.
On 2 April 2007, NOPA filed a Petition for Certiorari before the Court of Appeals assailing the Orders
of the RTC dated 30 June 2006 and 5 January 2007.
On 23 May 2007, the Court of Appeals issued the first assailed Resolution dismissing the Petition
for Certiorari on the following grounds:
1. Failure of the Petitioner to state in its Verification that the allegations in the petition are "based
on authentic records", in violation of Section 4, Rule 7, of the 1997 Rules of Civil Procedure, as
amended by A.M. No. 00-2-10-SC (May 1, 2000), which provides:
" ' x x x - A pleading is verified by an affidavit that the affiant has read the pleading and that the
allegations therein are true and correct of his personal knowledge or based on authentic records.
A pleading required to be verified which contains a verification based on "information and belief," or
lacks a proper verification, shall be treated as an unsigned pleading."
2. Failure of the petitioner to append to the petition relevant pleadings and documents, which
would aid in the resolution of the instant petition, in violation of Section 1, Rule 65 of the Rules of
Court, such as:
A. Ex-parte Motion to Set the Case for Pre-Trial dated July 27, 1999;
b. Notice of Pre-Trial;
c. Motion for Leave to File Third Party Complaint;
d. Orders dated July 31, 2000, March 20 2001, November 17, 2004, and May 17, 2005, respectively;
e. Motion to Suspend the Proceedings dated August 10, 2003;
f. Motion to Dismiss for Failure to Prosecute; andcralawlibrary

g. Motion for Reconsideration to the Order dated May 12, 2005.
Section 1, Rule 65 of the Rules of Court, provides:
"When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without
or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary
course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the
facts with certainty and praying that judgment be rendered annulling or modifying the proceedings
of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.
The petition shall be accompanied by a certified true copy of the judgment, order or resolution
subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn
certification of non-forum shopping as provided in the paragraph of section 3, Rule 46."
3. Failure of petitioner's counsel to indicate in the petition his current IBP Official Receipt Number, in
violation of Bar Matter No. 1132 and/or A.M. No. 287, which reads as follows:
"The Court resolved, upon recommendation of the Office of the Bar Confidant, to GRANT the
request of the Board of Governors of the Integrated Bar of the Philippines and the Sanguniang
Panlalawigan of Ilocos Norte to require all lawyers to indicate their Roll of Attorneys Number in all
papers or pleadings submitted to the various judicial or quasi-judicial bodies in addition to the
requirement of indicating the current Professional Tax Receipt (PTR) and the IBP Official Receipt or
Lifetime Member Number."2
On 22 June 2007, NOPA filed a Motion for Reconsideration of the above Resolution, attaching
thereto an Amended Petition for Certiorari in compliance with the requirements of the Court of
Appeals deemed to have been violated by NOPA. The Court of Appeals denied the said Motion in
the second assailed Resolution dated 16 August 2007.
Hence, this Petition for Review on Certiorari, where NOPA raises the following issue and arguments:
ISSUE
WHETHER OR NOT THE PUBLIC RESPONDENT CA COMMITTED REVERSIBLE ERROR WHEN IT RULED
THAT THERE WAS NO SUBSTANTIAL COMPLIANCE WITH THE PROCEDURAL REQUIREMENTS WHEN
PETITIONER FAILED TO ALLEGE IN ITS VERIFICATION THAT THE ALLEGATIONS THEREIN ARE TRUE
AND CORRECT OF HIS PERSONAL KNOWLEDGE OR BASED ON AUTHENTIC RECORDS AND FAILURE TO
ATTACH THE NECESSARY DOCUMENTS ON ITS PLEADINGS AS REQUIRED BY SECTION 1, RULE 65 OF
THE 1997 RULES OF CIVIL PROCEDURE.3
ARGUMENTS
1. The requirement that a pleading be verified is merely formal and not jurisdictional. The court may
give due course to an unverified pleading where the material facts alleged are a matter of record
and the questions raised are mainly of law such as in a petition for certiorari .4
2. Petitioner had attached to its Petition for Certiorari clearly legible and duplicate original or a
certified true copy of the judgment or final order or resolution of the court a quo and the requisite
number of plain copies thereof and such material portions of the record as would support the
petition.5
3. Substantial compliance of the rules, which was further supplied by the petitioner's subsequent full
compliance demonstrates its good faith to abide by the procedural requirements.6
4. The resolution of the important jurisdictional issue raised by the petitioner before the PUBLIC
RESPONDENT CA would justify a relaxation of the rules.7
The original Verification in the original Petition for Certiorari filed by NOPA states as follows:
1. That I am the President and Chairman of the Board of Directors of Negros Oriental Planters'
Association, Inc. (NOPA), the petitioner in this case, a domestic corporation duly organized under
Philippine Laws, with principal place of business at Central Bais, Bais City, Philippines; that I am duly
authorized by the Board of NOPA (Secretary's Certificate attached as Annex "A") to cause the
preparation of the foregoing petition; and that I hereby affirm and confirm that all the allegations
contained herein are true and correct to my own knowledge and belief;8
NOPA claims that this Court has in several cases allowed pleadings with a Verification that contains
the allegation "to the best of my knowledge" and the allegation "are true and correct," without the
words "of his own knowledge," citing Decano v. Edu,9 and Quimpo v. De la Victoria.10 NOPA claims
that the allegations in these cases constitute substantial compliance with the Rules of Court, and
should likewise apply to the case at bar.
NOPA is mistaken. NOPA cited cases promulgated before 1 May 2000, when Section 4 of Rule 7 was
amended by A.M. No. 00-2-10. Before the amendment, said Section 4 stated:
SEC. 4. Verification.â€“Except when otherwise specifically required by law or rule, pleadings need
not be under oath, verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations
therein are true and correct of his knowledge and belief.
As amended, said Section 4 now states:
SEC. 4. Verification.â€“Except when otherwise specifically required by law or rule, pleadings need
not be under oath, verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations
therein are true and correct of his personal knowledge or based on authentic records.
Clearly, the amendment was introduced in order to make the verification requirement stricter, such
that the party cannot now merely state under oath that he believes the statements made in the
pleading. He cannot even merely state under oath that he has knowledge that such statements are
true and correct. His knowledge must be specifically alleged under oath to be either personal
knowledge or at least based on authentic records.
Unlike, however, the requirement for a Certification against Forum Shopping in Section 5, wherein
failure to comply with the requirements is not curable by amendment of the complaint or other
initiatory pleading,11 Section 4 of Rule 7, as amended, states that the effect of the failure to properly
verify a pleading is that the pleading shall be treated as unsigned:
A pleading required to be verified which contains a verification based on "information and belief,"
or upon "knowledge, information and belief," or lacks a proper verification, shall be treated as an
unsigned pleading.
Unsigned pleadings are discussed in the immediately preceding section of Rule 7:
SEC. 3. Signature and address. - x x x.
xxx
An unsigned pleading produces no legal effect. However, the court may, in its discretion, allow such
deficiency to be remedied if it shall appear that the same was due to mere inadvertence and not
intended for delay. Counsel who deliberately files an unsigned pleading, or signs a pleading in
violation of this Rule, or alleges scandalous or indecent matter therein, or fails to promptly report to
the court a change of his address, shall be subject to appropriate disciplinary action. (5a)
A pleading, therefore, wherein the Verification is merely based on the party's knowledge and
belief produces no legal effect, subject to the discretion of the court to allow the deficiency to be
remedied. In the case at bar, the Court of Appeals, in the exercise of this discretion, refused to allow
the deficiency in the Verification to be remedied, by denying NOPA's Motion for Reconsideration
with attached Amended Petition for Certiorari.
May an appellate court reverse the exercise of discretion by a lower court? The old case of Lino Luna
v. Arcenas12 states that it can, but only in exceptional cases when there is grave abuse of this
discretion or adverse effect on the substantial rights of a litigant:
Discretionary power is generally exercised by trial judges in furtherance of the convenience of the
courts and the litigants, the expedition of business, and in the decision of interlocutory matters on
conflicting facts where one tribunal could not easily prescribe to another the appropriate rule of
procedure.
The general rule, therefore, and indeed one of the fundamental principles of appellate procedure is
that decisions of a trial court which "lie in discretion" will not be reviewed on appeal, whether the
case be civil or criminal at law or in equity.
We have seen that where such rulings have to do with minor matters, not affecting the substantial
rights of the parties, the prohibition of review in appellate proceedings is made absolute by the
express terms of the statute; but it would be a monstrous travesty on justice to declare that where
the exercise of discretionary power by an inferior court affects adversely the substantial legal
rights of a litigant, it is not subject to review on appeal in any case wherein a clear and affirmative
showing is made of an abuse of discretion, or of a total lack of its exercise, or of conduct
amounting to an abuse of discretion, such as its improper exercise under a misapprehension of the
law applicable to the facts upon which the ruling is based.
In its very nature, the discretionary control conferred upon the trial judge over the proceedings had
before him implies the absence of any hard-and-fast rule by which it is to be exercised, and in
accordance with which it may be reviewed. But the discretion conferred upon the courts is not a
willful, arbitrary, capricious and uncontrolled discretion. It is a sound, judicial discretion which
should always be exercised with due regard to the rights of the parties and the demands of equity
and justice. As was said in the case of The Styria v. Morgan (186 U. S., 1, 9): "The establishment of a
clearly defined rule of action would be the end of discretion, and yet discretion should not be a
word for arbitrary will or inconsiderate action." So in the case of Goodwin v. Prime (92 Me., 355), it
was said that "discretion implies that in the absence of positive law or fixed rule the judge is to
decide by his view of expediency or by the demands of equity and justice."
There being no "positive law or fixed rule" to guide the judge in the court below in such cases, there
is no "positive law or fixed rule" to guide a court of appeal in reviewing his action in the premises,
and such courts will not therefore attempt to control the exercise of discretion by the court below
unless it plainly appears that there was "inconsiderate action" or the exercise of mere "arbitrary
will," or in other words that his action in the premises amounted to "an abuse of discretion." But the
right of an appellate court to review judicial acts which lie in the discretion of inferior courts may
properly be invoked upon a showing of a strong and clear case of abuse of power to the prejudice of
the appellant, or that the ruling objected to rested on an erroneous principle of law not vested in
discretion.13
The case at bar demonstrates a situation in which there is no effect on the substantial rights of a
litigant. NOPA's Petition for Certiorari is seeking the reversal of the Orders of the RTC denying
NOPA's Motion to Dismiss on the ground of failure to pay the proper docket fees. The alleged
deficiency in the payment of docket fees by Campos, if there is any, would not inure to the benefit
of NOPA.
There is therefore no substantive right that will be prejudiced by the Court of Appeals' exercise of
discretion in the case at bar. While the payment of docket fees is jurisdictional, it is nevertheless
unmistakably also a technicality. Ironically, in seeking the leniency of this Court on the basis of
substantial justice, NOPA is ultimately praying for a Writ of Certiorari enjoining the action for breach
of contract from being decided on the merits. What's sauce for the goose is sauce for the gander. A
party cannot expect its opponent to comply with the technical rules of procedure while, at the same
time, hoping for the relaxation of the technicalities in its favor.
There was therefore no grave abuse of discretion on the part of the Court of Appeals warranting this
Court's reversal of the exercise of discretion by the former. However, even if we decide to brush
aside the lapses in technicalities on the part of NOPA in its Petition for Certiorari, we nevertheless
find that such Petition would still fail.
NOPA seeks in its Petition for Certiorari for the application of this Court's ruling in Manchester
Development Corporation v. Court of Appeals,14 wherein we ruled that the court acquires jurisdiction
over any case only upon payment of the prescribed docket fee. An amendment of the complaint or
similar pleading will not thereby vest jurisdiction in the court, much less the payment of the docket
fee based on the amount sought in the amended pleading.
In denying15 NOPA's Motion to Dismiss, the RTC cited Sun Insurance Office, Ltd. (SIOL) v.
Asuncion,16wherein we modified our ruling in Manchester and decreed that where the initiatory
pleading is not accompanied by the payment of the docket fee, the court may allow payment of the
fee within a reasonable period of time, but in no case beyond the applicable prescriptive or
reglementary period. The aforesaid ruling was made on the justification that, unlike in Manchester,
the private respondent in Sun Insurance Office, Ltd. (SIOL) demonstrated his willingness to abide by
the rules by paying the additional docket fees required. NOPA claims that Sun is not applicable to
the case at bar, since Campos deliberately concealed his claim for damages in the prayer.
In United Overseas Bank (formerly Westmont Bank) v. Ros,17 we discussed how Manchester was not
applicable to said case in view of the lack of deliberate intent to defraud manifested in the latter:
This Court wonders how the petitioner could possibly arrive at the conclusion that the private
respondent was moved by fraudulent intent in omitting the amount of damages claimed in its
Second Amended Complaint, thus placing itself on the same footing as the complainant
in Manchester, when it is clear that the factual milieu of the instant case is far from that
of Manchester.
First, the complainant in Manchester paid the docket fee only in the amount of P410.00,
notwithstanding its claim for damages in the amount of P78,750,000.00, while in the present case,
the private respondent paid P42,000.00 as docket fees upon filing of the original complaint.
Second, complainant's counsel in Manchester claimed, in the body of the complaint, damages in the
amount of P78,750.00 but omitted the same in its prayer in order to evade the payment of docket
fees. Such fraud-defining circumstance is absent in the instant petition.
Finally, when the court took cognizance of the issue of non-payment of docket fees in Manchester,
the complainant therein filed an amended complaint, this time omitting all mention of the
amount of damages being claimed in the body of the complaint; and when directed by the court
to specify the amount of damages in such amended complaint, it reduced the same
from P78,750,000.00 to P10,000,000.00, obviously to avoid payment of the required docket
fee. Again, this patent fraudulent scheme is wanting in the case at bar.
This Court is not inclined to adopt the petitioner's piecemeal construction of our rulings
in Manchester and Sun Insurance. Its attempt to strip the said landmark cases of one or two lines
and use them to bolster its arguments and clothe its position with jurisprudential blessing must be
struck down by this Court.
All told, the rule is clear and simple. In case where the party does not deliberately intend to
defraud the court in payment of docket fees, and manifests its willingness to abide by the rules by
paying additional docket fees when required by the court, the liberal doctrine enunciated in Sun
Insurance and not the strict regulations set in Manchester will apply.
In the case at bar, Campos filed an amount of P54,898.50 as docket fee, based on the amounts
of P10,000,000.00 representing the value of unwithdrawn molasses, P100,00.00 as storage
fee, P200,00.00 as moral damages, P100,000.00 as exemplary damages and P500,000.00 as
attorney's fees. The total amount considered in computing the docket fee was P10,900,000.00.
NOPA alleges that Campos deliberately omitted a claim for unrealized profit of P100,000.00 and an
excess amount of storage fee in the amount of P502,875.98 in its prayer and, hence, the amount
that should have been considered in the payment of docket fees is P11,502,875.98. The amount
allegedly deliberately omitted was therefore only P602,875.98 out of P11,502,875.98, or merely
5.2% of said alleged total. Campos's pleadings furthermore evince his willingness to abide by the
rules by paying the additional docket fees when required by the Court.
Since the circumstances of this case clearly show that there was no deliberate intent to defraud the
Court in the payment of docket fees, the case of Sun should be applied, and the Motion to Dismiss
by NOPA should be denied.
WHEREFORE, the Resolutions of the Court of Appeals dated 23 May 2007 and 16 August 2007,
respectively, in CA-G.R. SP No. 02651, outrightly dismissing the Petition for Certiorari filed by
petitioner Negros Oriental Planters Association, Inc. against private respondent Aniceto Manojo
Campos, are AFFIRMED. No costs.
SO ORDERED.
13. HEIRS OF BERTULDO HINOG vs MELICOR
SECOND DIVISION
[G.R. No. 140954. April 12, 2005]
HEIRS OF BERTULDO[1] HINOG: Bertuldo Hinog II, Bertuldo Hinog III, Bertuldo Hinog, Jr., Jocelyn
Hinog, Bertoldo Hinog IV, Bertoldo Hinog V, Edgardo Hinog, Milagros H. Pabatao, Lilian H. King,
Victoria H. Engracia, Terisita C. Hinog, Paz H. Besana, Roberto C. Hinog, Vicente C. Hinog, Roel C.
Hinog, Marilyn C. Hinog, Bebot C. Hinog, lordes C. Hinog, Pablo Chiong, Arlene Lanasang (All
respresented by Bertuldo Hinog III), petitioners, vs. HON. ACHILLES MELICOR, in his capacity as
Presiding Judge, RTC, Branch 4, 7th Judicial Region, Tagbiliran City, Bohol, and CUSTODIO BALANE,
RUFO BALANE, HONORIO BALANE, and TOMAS BALANE, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for certiorari and prohibition under Rule 65 of the Rules of Court which assails
the Orders dated March 22, 1999, August 13, 1999 and October 15, 1999 of the Regional Trial Court,
Branch 4, of Tagbilaran City, Bohol in Civil Case No. 4923.
The factual background of the case is as follows:
On May 21, 1991, private respondents Custodio, Rufo, Tomas and Honorio, all surnamed Balane,
filed a complaint for Recovery of Ownership and Possession, Removal of Construction and Damages
against Bertuldo Hinog (Bertuldo for brevity). They alleged that: they own a 1,399- square meter
parcel of land situated in Malayo Norte, Cortes, Bohol, designated as Lot No. 1714; sometime in
March 1980, they allowed Bertuldo to use a portion of the said property for a period of ten years
and construct thereon a small house of light materials at a nominal annual rental of P100.00 only,
considering the close relations of the parties; after the expiration of the ten-year period, they
demanded the return of the occupied portion and removal of the house constructed thereon but
Bertuldo refused and instead claimed ownership of the entire property.
Accordingly, private respondents sought to oust Bertuldo from the premises of the subject property
and restore upon themselves the ownership and possession thereof, as well as the payment of
moral and exemplary damages, attorneys fees and litigation expenses in amounts justified by the
evidence. [2]
On July 2, 1991, Bertuldo filed his Answer. He alleged ownership of the disputed property by virtue
of a Deed of Absolute Sale dated July 2, 1980, executed by one Tomas Pahac with the knowledge
and conformity of private respondents.[3]
After the pre-trial, trial on the merits ensued. On November 18, 1997, private respondents rested
their case. Thereupon, Bertuldo started his direct examination. However, on June 24, 1998, Bertuldo
died without completing his evidence.
On August 4, 1998, Atty. Sulpicio A. Tinampay withdrew as counsel for Bertuldo as his services were
terminated by petitioner Bertuldo Hinog III. Atty. Veronico G. Petalcorin then entered his
appearance as new counsel for Bertuldo.[4]
On September 22, 1998, Atty. Petalcorin filed a motion to expunge the complaint from the record
and nullify all court proceedings on the ground that private respondents failed to specify in the
complaint the amount of damages claimed so as to pay the correct docket fees; and that
under Manchester Development Corporation vs. Court of Appeals,[5] non-payment of the correct
docket fee is jurisdictional.[6]
In an amended motion, filed on October 2, 1998, Atty. Petalcorin further alleged that the private
respondents failed to pay the correct docket fee since the main subject matter of the case cannot be
estimated as it is for recovery of ownership, possession and removal of construction.[7]
Private respondents opposed the motion to expunge on the following grounds: (a) said motion was
filed more than seven years from the institution of the case; (b) Atty. Petalcorin has not complied
with Section 16, Rule 3 of the Rules of Court which provides that the death of the original defendant
requires a substitution of parties before a lawyer can have legal personality to represent a litigant
and the motion to expunge does not mention of any specific party whom he is representing; (c)
collectible fees due the court can be charged as lien on the judgment; and (d) considering the lapse
of time, the motion is merely a dilatory scheme employed by petitioners.[8]
In their Rejoinder, petitioners manifested that the lapse of time does not vest the court with
jurisdiction over the case due to failure to pay the correct docket fees. As to the contention that
deficiency in payment of docket fees can be made as a lien on the judgment, petitioners argued that
the payment of filing fees cannot be made dependent on the result of the action taken.[9]
On January 21, 1999, the trial court, while ordering the complaint to be expunged from the records
and the nullification of all court proceedings taken for failure to pay the correct docket fees,
nonetheless, held:
The Court can acquire jurisdiction over this case only upon the payment of the exact prescribed
docket/filing fees for the main cause of action, plus additional docket fee for the amount of
damages being prayed for in the complaint, which amount should be specified so that the same can
be considered in assessing the amount of the filing fees. Upon the complete payment of such fees,
the Court may take appropriate action in the light of the ruling in the case of Manchester
Development Corporation vs. Court of Appeals, supra.[10]
Accordingly, on January 28, 1999, upon payment of deficiency docket fee, private respondents filed
a manifestation with prayer to reinstate the case.[11] Petitioners opposed the reinstatement[12] but
on March 22, 1999, the trial court issued the first assailed Order reinstating the case.[13]
On May 24, 1999, petitioners, upon prior leave of court,[14] filed their supplemental pleading,
appending therein a Deed of Sale dated November 15, 1982.[15] Following the submission of private
respondents opposition thereto,[16] the trial court, in its Order dated July 7, 1999, denied the
supplemental pleading on the ground that the Deed of Absolute Sale is a new matter which was
never mentioned in the original answer dated July 2, 1991, prepared by Bertuldos original counsel
and which Bertuldo verified; and that such new document is deemed waived in the light of Section
1, Rule 9[17] of the Rules of Court. The trial court also noted that no formal substitution of the parties
was made because of the failure of defendants counsel to give the names and addresses of the legal
representatives of Bertuldo, so much so that the supposed heirs of Bertuldo are not specified in any
pleading in the case. [18]
On July 14, 1999, petitioners manifested that the trial court having expunged the complaint and
nullified all court proceedings, there is no valid case and the complaint should not be admitted for
failure to pay the correct docket fees; that there should be no case to be reinstated and no case to
proceed as there is no complaint filed.[19]
After the submission of private respondents opposition[20] and petitioners rejoinder,[21] the trial
court issued the second assailed Order on August 13, 1999, essentially denying petitioners
manifestation/rejoinder. The trial court held that the issues raised in such manifestation/rejoinder
are practically the same as those raised in the amended motion to expunge which had already been
passed upon in the Order dated January 21, 1999. Moreover, the trial court observed that the Order
dated March 22, 1999 which reinstated the case was not objected to by petitioners within the
reglementary period or even thereafter via a motion for reconsideration despite receipt thereof on
March 26, 1999.[22]
On August 25, 1999, petitioners filed a motion for reconsideration[23] but the same was denied by
the trial court in its third assailed Order dated October 15, 1999. The trial court held that
the Manchester rule was relaxed in Sun Insurance Office, Ltd. vs. Asuncion.[24] Noting that there has
been no substitution of parties following the death of Bertuldo, the trial court directed Atty.
Petalcorin to comply with the provisions of Section 16, Rule 3 of the Rules of Court. The trial court
also reiterated that the Order dated March 22, 1999 reinstating the case was not assailed by
petitioners within the reglementary period, despite receipt thereof on March 26, 1999.[25]
On November 19, 1999, Atty. Petalcorin complied with the directive of the trial court to submit the
names and addresses of the heirs of Bertuldo.[26]
On November 24, 1999, petitioners filed before us the present petition for certiorari and
prohibition.[27] They allege that the public respondent committed grave abuse of discretion in
allowing the case to be reinstated after private respondents paid the docket fee deficiency since the
trial court had earlier expunged the complaint from the record and nullified all proceedings of the
case and such ruling was not contested by the private respondents. Moreover, they argue that the
public respondent committed grave abuse of discretion in allowing the case to be filed and denying
the manifestation with motion to dismiss, despite the defect in the complaint which prayed for
damages without specifying the amounts, in violation of SC Circular No. 7, dated March 24, 1988.
In their Comment, private respondents aver that no grave abuse of discretion was committed by the
trial court in reinstating the complaint upon the payment of deficiency docket fees because
petitioners did not object thereto within the reglementary period. Besides, Atty. Petalcorin
possessed no legal personality to appear as counsel for the heirs of Bertuldo until he complies with
Section 16, Rule 3 of the Rules of Court.[28]
At the outset, we note the procedural error committed by petitioners in directly filing the instant
petition before this Court for it violates the established policy of strict observance of the judicial
hierarchy of courts.
Although the Supreme Court, Court of Appeals and the Regional Trial Courts have concurrent
jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and
injunction, such concurrence does not give the petitioner unrestricted freedom of choice of court
forum.[29] As we stated in People vs. Cuaresma:[30]
This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court
with Regional Trial Courts and with the Court of Appeals. This concurrence of jurisdiction is not,
however, to be taken as according to parties seeking any of the writs an absolute, unrestrained
freedom of choice of the court to which application therefor will be directed. There is after all a
hierarchy of courts. That hierarchy is determinative of the venue of appeals, and also serves as a
general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming
regard for that judicial hierarchy most certainly indicates that petitions for the issuance of
extraordinary writs against first level (inferior) courts should be filed with the Regional Trial Court,
and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Courts
original jurisdiction to issue these writs should be allowed only when there are special and
important reasons therefor, clearly and specifically set out in the petition. This is [an] established
policy. It is a policy necessary to prevent inordinate demands upon the Courts time and attention
which are better devoted to those matters within its exclusive jurisdiction, and to prevent further
over-crowding of the Courts docket.[31]
The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of this
Court; and (b) it would cause an inevitable and resultant delay, intended or otherwise, in the
adjudication of cases, which in some instances had to be remanded or referred to the lower court as
the proper forum under the rules of procedure, or as better equipped to resolve the issues because
this Court is not a trier of facts.[32]
Thus, this Court will not entertain direct resort to it unless the redress desired cannot be obtained in
the appropriate courts, and exceptional and compelling circumstances, such as cases of national
interest and of serious implications, justify the availment of the extraordinary remedy of writ
of certiorari, calling for the exercise of its primary jurisdiction. Exceptional and compelling
circumstances were held present in the following cases: (a) Chavez vs. Romulo[33] on citizens right to
bear arms; (b) Government of the United States of America vs. Purganan[34] on bail in extradition
proceedings; (c) Commission on Elections vs. Quijano-Padilla[35] on government contract involving
modernization and computerization of voters registration list; (d) Buklod ng Kawaning EIIB vs.
Zamora[36] on status and existence of a public office; and (e) Fortich vs. Corona[37] on the so-called
Win-Win Resolution of the Office of the President which modified the approval of the conversion to
agro-industrial area.
In this case, no special and important reason or exceptional and compelling circumstance analogous
to any of the above cases has been adduced by the petitioners so as to justify direct recourse to this
Court. The present petition should have been initially filed in the Court of Appeals in strict
observance of the doctrine on the hierarchy of courts. Failure to do so is sufficient cause for the
dismissal of the petition at bar.
In any event, even if the Court disregards such procedural flaw, the petitioners contentions on the
substantive aspect of the case fail to invite judgment in their favor.
The unavailability of the writ of certiorari and prohibition in this case is borne out of the fact that
petitioners principally assail the Order dated March 22, 1999 which they never sought
reconsideration of, in due time, despite receipt thereof on March 26, 1999. Instead, petitioners
went through the motion of filing a supplemental pleading and only when the latter was denied, or
after more than three months have passed, did they raise the issue that the complaint should not
have been reinstated in the first place because the trial court had no jurisdiction to do so, having
already ruled that the complaint shall be expunged.
After recognizing the jurisdiction of the trial court by seeking affirmative relief in their motion to
serve supplemental pleading upon private respondents, petitioners are effectively barred by
estoppel from challenging the trial courts jurisdiction.[38] If a party invokes the jurisdiction of a court,
he cannot thereafter challenge the courts jurisdiction in the same case.[39] To rule otherwise would
amount to speculating on the fortune of litigation, which is against the policy of the Court.[40]
Nevertheless, there is a need to correct the erroneous impression of the trial court as well as the
private respondents that petitioners are barred from assailing the Order dated March 22, 1999
which reinstated the case because it was not objected to within the reglementary period or even
thereafter via a motion for reconsideration despite receipt thereof on March 26, 1999.
It must be clarified that the said order is but a resolution on an incidental matter which does not
touch on the merits of the case or put an end to the proceedings.[41] It is an interlocutory order since
there leaves something else to be done by the trial court with respect to the merits of the
case.[42] As such, it is not subject to a reglementary period. Reglementary period refers to the period
set by the rules for appeal or further review of a final judgment or order, i.e., one that ends the
litigation in the trial court.
Moreover, the remedy against an interlocutory order is generally not to resort forthwith
to certiorari, but to continue with the case in due course and, when an unfavorable verdict is
handed down, to take an appeal in the manner authorized by law.[43] Only when the court issued
such order without or in excess of jurisdiction or with grave abuse of discretion and when the
assailed interlocutory order is patently erroneous and the remedy of appeal would not afford
adequate and expeditious relief will certiorari be considered an appropriate remedy to assail an
interlocutory order.[44] Such special circumstances are absolutely wanting in the present case.
Time and again, the Court has held that the Manchester rule has been modified in Sun Insurance
Office, Ltd. (SIOL) vs. Asuncion[45] which defined the following guidelines involving the payment of
docket fees:
1. 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. Where the filing of the initiatory pleading is not accompanied by payment
of the docket fee, the court may allow payment of the fees within a reasonable time but in no
case beyond the applicable prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings,
which shall not be considered filed until and unless the filing fee prescribed therefor is paid.
The court may also allow payment of said fee within a reasonable time but also in no case
beyond its applicable prescriptive or reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate
pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a
claim not specified in the pleading, or if specified the same has been left for determination by
the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be
the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and
assess and collect the additional fee.
Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its non-
payment at the time of filing does not automatically cause the dismissal of the case, as long as the
fee is paid within the applicable prescriptive or reglementary period, more so when the party
involved demonstrates a willingness to abide by the rules prescribing such payment.[46] Thus, when
insufficient filing fees were initially paid by the plaintiffs and there was no intention to defraud the
government, the Manchester rule does not apply.[47]
Under the peculiar circumstances of this case, the reinstatement of the complaint was just and
proper considering that the cause of action of private respondents, being a real action, prescribes in
thirty years,[48] and private respondents did not really intend to evade the payment of the prescribed
docket fee but simply contend that they could not be faulted for inadequate assessment because
the clerk of court made no notice of demand or reassessment.[49] They were in good faith and simply
relied on the assessment of the clerk of court.
Furthermore, the fact that private respondents prayed for payment of damages in amounts justified
by the evidence does not call for the dismissal of the complaint for violation of SC Circular No. 7,
dated March 24, 1988 which required that all complaints must specify the amount of damages
sought not only in the body of the pleadings but also in the prayer in order to be accepted and
admitted for filing. Sun Insurance effectively modified SC Circular No. 7 by providing that filing fees
for damages and awards that cannot be estimated constitute liens on the awards finally granted by
the trial court.[50]
Thus, while the docket fees were based only on the real property valuation, the trial court acquired
jurisdiction over the action, and judgment awards which were left for determination by the court or
as may be proven during trial would still be subject to additional filing fees which shall constitute a
lien on the judgment. It would then be the responsibility of the Clerk of Court of the trial court or his
duly authorized deputy to enforce said lien and assess and collect the additional fees.[51]
It is worth noting that when Bertuldo filed his Answer on July 2, 1991, he did not raise the issue of
lack of jurisdiction for non-payment of correct docket fees. Instead, he based his defense on a claim
of ownership and participated in the proceedings before the trial court. It was only in September 22,
1998 or more than seven years after filing the answer, and under the auspices of a new counsel,
that the issue of jurisdiction was raised for the first time in the motion to expunge by Bertuldos
heirs.
After Bertuldo vigorously participated in all stages of the case before the trial court and even
invoked the trial courts authority in order to ask for affirmative relief, petitioners, considering that
they merely stepped into the shoes of their predecessor, are 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.[52]
Moreover, no formal substitution of the parties was effected within thirty days from date of death
of Bertuldo, as required by Section 16, Rule 3[53] of the Rules of Court. Needless to stress, the
purpose behind the rule on substitution is the protection of the right of every party to due process.
It is to ensure that the deceased party would continue to be properly represented in the suit
through the duly appointed legal representative of his estate.[54] Non-compliance with the rule on
substitution would render the proceedings and judgment of the trial court infirm because the court
acquires no jurisdiction over the persons of the legal representatives or of the heirs on whom the
trial and the judgment would be binding.[55] Thus, proper substitution of heirs must be effected for
the trial court to acquire jurisdiction over their persons and to obviate any future claim by any heir
that he was not apprised of the litigation against Bertuldo or that he did not authorize Atty.
Petalcorin to represent him.
The list of names and addresses of the heirs was submitted sixteen months after the death of
Bertuldo and only when the trial court directed Atty. Petalcorin to comply with the provisions of
Section 16, Rule 3 of the Rules of Court. Strictly speaking therefore, before said compliance, Atty.
Petalcorin had no standing in the court a quo when he filed his pleadings. Be that as it may, the
matter has been duly corrected by the Order of the trial court dated October 15, 1999.
To be sure, certiorari under Rule 65[56] is a remedy narrow in scope and inflexible in character. It is
not a general utility tool in the legal workshop.[57] It offers only a limited form of review. Its principal
function is to keep an inferior tribunal within its jurisdiction.[58] It can be invoked only for an error of
jurisdiction, that is, one where the act complained of was issued by the court, officer or a quasi-
judicial body without or in excess of jurisdiction, or with grave abuse of discretion which is
tantamount to lack or in excess of jurisdiction,[59] not to be used for any other purpose,[60] such as to
cure errors in proceedings or to correct erroneous conclusions of law or fact.[61] A contrary rule
would lead to confusion, and seriously hamper the administration of justice.
Petitioners utterly failed to show that the trial court gravely abused its discretion in issuing the
assailed resolutions. On the contrary, it acted prudently, in accordance with law and jurisprudence.
WHEREFORE, the instant petition for certiorari is DISMISSED for lack of merit.
No costs.
SO ORDERED.
III. CAUSE OF ACTION [RULE 2, SECTIONS 1-6]
1. JUANA COMPLEX HOMEOWNERS vs FIL-ESTATE LAND

Supreme Court
Manila
THIRD DIVISION
JUANA COMPLEX I HOMEOWNERS G.R. No. 152272

ASSOCIATION, INC., ANDRES C. BAUTISTA,
BRIGIDO DIMACULANGAN, DOLORES P.
PRADO, IMELDA DE LA CRUZ, EDITHA C. DY,
FLORENCIA M. MERCADO, LEOVINO C.
DATARIO, AIDA
ABAYON, NAPOLEON M. DIMAANO, ROSITA

G. ESTIGOY and NELSON A. LOYOLA,
Petitioners,
versus -
FIL-ESTATE LAND, INC.,
FIL ESTATE ECOCENTRUM CORPORATION, LA

PAZHOUSING AND DEVELOPMENT
CORPORATION, WARBIRD SECURITY
AGENCY,
ENRIQUE RIVILLA,
MICHAEL E. JETHMAL
and MICHAEL ALUNAN,
Respondents.
x-------------------------------------------x
FIL-ESTATE LAND, INC.,
FIL ESTATE ECOCENTRUM CORPORATION, LA

PAZHOUSING AND DEVELOPMENT
CORPORATION, WARBIRD SECURITY

AGENCY, ENRIQUE RIVILLA, MICHAEL E.
JETHMAL and MICHAEL ALUNAN,
Petitioners,
versus -
JUANA COMPLEX I HOMEOWNERS

ASSOCIATION, INC., ANDRES C. BAUTISTA,
BRIGIDO DIMACULANGAN, DOLORES P.
PRADO, IMELDA DE LA CRUZ, EDITHA C. DY,
FLORENCIA M. MERCADO, LEOVINO C.
DATARIO, AIDA
ABAYON, NAPOLEON M. DIMAANO, ROSITA

G. ESTIGOY and NELSON A. LOYOLA,
G. R. No. 152397
Respondents.
Present:
VELASCO, JR., J., Chairperson, PERALTA,

ABAD, MENDOZA, and PERLAS-
BERNABE, JJ.
Promulgated:
March 5, 2012
X -------------------------------------------------------------------------------------- X
DECISION
MENDOZA, J.:
Before the Court are two (2) consolidated petitions assailing the July 31, 2001 Decision[1] and
February 21, 2002 Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 60543, which annulled
and set aside the March 3, 1999 Order[3] of the Regional Trial Court, Branch 25, Bian,
Laguna (RTC), granting the application for the issuance of a writ of preliminary injunction, and
upheld the June 16, 2000 Omnibus Order[4] denying the motion to dismiss.
The Facts:
On January 20, 1999, Juana Complex I Homeowners Association, Inc. (JCHA), together with individual
residents of Juana Complex I and other neighboring subdivisions (collectively referred as JCHA, et.
al.), instituted a complaint[5] for damages, in its own behalf and as a class suit representing the
regular commuters and motorists of Juana Complex I and neighboring subdivisions who were
deprived of the use of La Paz Road, against Fil-Estate Land, Inc. (Fil-Estate), Fil-estate Ecocentrum
Corporation (FEEC), La Paz Housing & Development Corporation (La Paz), and Warbird Security
Agency and their respective officers (collectively referred as Fil-Estate, et al.).
The complaint alleged that JCHA, et al. were regular commuters and motorists who constantly
travelled towards the direction of Manila and Calamba; that they used the entry and exit toll gates
of South Luzon Expressway (SLEX) by passing through right-of-way public road known as La Paz
Road; that they had been using La Paz Road for more than ten (10) years; that in August 1998, Fil-
estate excavated, broke and deliberately ruined La Paz Road that led to SLEX so JCHA, et al. would
not be able to pass through the said road; that La Paz Road was restored by the residents to make it
passable but Fil-estate excavated the road again; that JCHA reported the matter to the Municipal
Government and the Office of the Municipal Engineer but the latter failed to repair the road to
make it passable and safe to motorists and pedestrians; that the act of Fil-estate in excavating La Paz
Road caused damage, prejudice, inconvenience, annoyance, and loss of precious hours to them, to
the commuters and motorists because traffic was re-routed to narrow streets that caused terrible
traffic congestion and hazard; and that its permanent closure would not only prejudice their right to
free and unhampered use of the property but would also cause great damage and irreparable injury.
Accordingly, JCHA, et al. also prayed for the immediate issuance of a Temporary Restraining
Order (TRO) or a writ of preliminary injunction (WPI) to enjoin Fil-Estate, et al. from stopping and
intimidating them in their use of La Paz Road.
On February 10, 1999, a TRO was issued ordering Fil-Estate, et al, for a period of twenty (20) days, to
stop preventing, coercing, intimidating or harassing the commuters and motorists from using the La
Paz Road. [6]
Subsequently, the RTC conducted several hearings to determine the propriety of the issuance of a
WPI.
On February 26, 1999, Fil-Estate, et al. filed a motion to dismiss[7] arguing that the complaint failed
to state a cause of action and that it was improperly filed as a class suit. On March 5, 1999, JCHA, et
al. filed their comment[8] on the motion to dismiss to which respondents filed a reply.[9]
On March 3, 1999, the RTC issued an Order [10] granting the WPI and required JCHA, et al. to post a
bond.
On March 19, 1999, Fil-Estate, et al. filed a motion for reconsideration[11] arguing, among others,
that JCHA, et al. failed to satisfy the requirements for the issuance of a WPI. On March 23, 1999,
JCHA, et al. filed their opposition to the motion.[12]
The RTC then issued its June 16, 2000 Omnibus Order, denying both the motion to dismiss and the
motion for reconsideration filed by Fil-Estate, et al.
Not satisfied, Fil-Estate, et al. filed a petition for certiorari and prohibition before the CA to annul (1)
the Order dated March 3, 1999 and (2) the Omnibus Order dated June 16, 2000. They contended
that the complaint failed to state a cause of action and that it was improperly filed as a class suit.
With regard to the issuance of the WPI, the defendants averred that JCHA, et al. failed to show that
they had a clear and unmistakable right to the use of La Paz Road; and further claimed that La Paz
Road was a torrens registered private road and there was neither a voluntary nor legal easement
constituted over it.[13]
On July 31, 2001, the CA rendered the decision partially granting the petition, the dispositive portion
of which reads:
WHEREFORE, the petition is hereby partially GRANTED. The Order dated March 3,
1999 granting the writ of preliminary injunction is hereby ANNULLED and SET ASIDE but the
portion of the Omnibus Order dated June 16, 2000 denying the motion to dismiss is upheld.
SO ORDERED.[14]
The CA ruled that the complaint sufficiently stated a cause of action when JCHA, et al. alleged in
their complaint that they had been using La Paz Road for more than ten (10) years and that their
right was violated when Fil-Estate closed and excavated the road. It sustained the RTC ruling that the
complaint was properly filed as a class suit as it was shown that the case was of common interest
and that the individuals sought to be represented were so numerous that it was impractical to
include all of them as parties. The CA, however, annulled the WPI for failure of JCHA, et al. to prove
their clear and present right over La Paz Road. The CA ordered the remand of the case to the RTC for
a full-blown trial on the merits.
Hence, these petitions for review.

In G.R. No. 152272, JCHA, et al. come to this Court, raising the following issues:
(A)
THE HONORABLE COURT OF APPEALS, IN HOLDING THAT A FULL-BLOWN TRIAL ON THE

MERITS IS REQUIRED TO DETERMINE THE NATURE OF THE LA PAZ ROAD, HAD DEPARTED
FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO CALL FOR AN
EXERCISE OF THE POWER OF SUPERVISION.
(B)
THE HONORABLE COURT OF APPEALS, IN HOLDING THAT THE PETITIONERS FAILED TO

SATISFY THE REQUIREMENTS FOR THE ISSUANCE OF A WRIT OF PRELIMINARY
INJUNCTION, HAD DECIDED NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE
DECISIONS OF THE SUPREME COURT.[15]
In G.R. No. 152397, on the other hand, Fil-Estate, et al. anchor their petition on the following issues:
I.
The Court of Appeals declaration that respondents Complaint states a cause of action is
contrary to existing law and jurisprudence.
II.
The Court of Appeals pronouncement that respondents complaint was properly filed as a
class suit is contrary to existing law and jurisprudence.
III.
The Court of Appeals conclusion that full blown trial on the merits is required to
determine the nature of the La Paz Road is contrary to existing laws and jurisprudence.[16]
JCHA, et al. concur with the CA that the complaint sufficiently stated a cause of action. They,
however, disagree with the CAs pronouncement that a full-blown trial on the merits was necessary.
They claim that during the hearing on the application of the writ of injunction, they had sufficiently
proven that La Paz Road was a public road and that commuters and motorists of their neighboring
villages had used this road as their means of access to the San Agustin Church, Colegio De San
Agustin and to SLEX in going to Metro Manila and to Southern Tagalog particularly during the rush
hours when traffic at Carmona Entry/Exit and Susana Heights Entry/Exit was at its worst.
JCHA, et al. argue that La Paz Road has attained the status and character of a public road or
burdened by an apparent easement of public right of way. They point out that La Paz Road is the
widest road in the neighborhood used by motorists in going to Halang Road and in entering the
SLEX-Halang toll gate and that there is no other road as wide as La Paz Road existing in the vicinity.
For residents of San Pedro, Laguna, the shortest, convenient and safe route towards SLEX Halang is
along Rosario Avenue joining La Paz Road.
Finally, JCHA, et al. argue that the CA erred when it voided the WPI because the public nature of La
Paz Road had been sufficiently proven and, as residents of San Pedro and Bian, Laguna, their right to
use La Paz Road is undeniable.
In their Memorandum,[17] Fil-Estate, et al. explain that La Paz Road is included in the parcels of land
covered by Transfer Certificates of Title (TCT) Nos. T-120008, T-90321 and T-90607, all registered in
the name of La Paz. The purpose of constructing La Paz Road was to provide a passageway for La
Paz to its intended projects to the south, one of which was the Juana Complex I. When Juana
Complex I was completed, La Paz donated the open spaces, drainage, canal, and lighting facilities
inside the Juana Complex I to the Municipality of Bian. The streets within the subdivisions were then
converted to public roads and were opened for use of the general public. The La Paz Road, not being
part of the Juana Complex I, was excluded from the donation. Subsequently, La Paz became a
shareholder of FEEC, a consortium formed to develop several real properties in Bian, Laguna, known
as Ecocentrum Project. In exchange for shares of stock, La Paz contributed some of its real
properties to the Municipality of Bian, including the properties constituting La Paz Road, to form
part of the Ecocentrum Project.
Fil-Estate, et al. agree with the CA that the annulment of the WPI was proper since JCHA, et al. failed
to prove that they have a clear right over La Paz Road. Fil-Estate, et al. assert that JCHA, et al. failed
to prove the existence of a right of way or a right to pass over La Paz Road and that the closure of
the said road constituted an injury to such right. According to them, La Paz Road is a torrens
registered private road and there is neither a voluntary nor legal easement constituted over it. They
claim that La Paz Road is a private property registered under the name of La Paz and the beneficial
ownership thereof was transferred to FEEC when La Paz joined the consortium for the Ecocentrum
Project.
Fil-Estate, et al., however, insist that the complaint did not sufficiently contain the ultimate facts to
show a cause of action. They aver the bare allegation that one is entitled to something is an
allegation of a conclusion which adds nothing to the pleading.
They likewise argue that the complaint was improperly filed as a class suit for it failed to show
that JCHA, et al. and the commuters and motorists they are representing have a well-defined community of
interest over La Paz Road. They claim that the excavation of La Paz Road would not necessarily give rise to a
common right or cause of action for JCHA, et al. against them since each of them has a separate and distinct
purpose and each may be affected differently than the others.
The Courts Ruling
The issues for the Courts resolution are: (1) whether or not the complaint states a cause of action;
(2) whether the complaint has been properly filed as a class suit; and (2) whether or not a WPI is
warranted.
Section 2, Rule 2 of the Rules of Court defines a cause of action as an act or omission by which a
party violates the right of another. A complaint states a cause of action when it contains three (3)
essential elements of a cause of action, namely:
(1) the legal right of the plaintiff,

(2) the correlative obligation of the defendant, and
(3) the act or omission of the defendant in violation of said legal right.[18]
The question of whether the complaint states a cause of action is determined by its averments
regarding the acts committed by the defendant.[19] Thus, it must contain a concise statement of the
ultimate or essential facts constituting the plaintiffs cause of action.[20] To be taken into account are
only the material allegations in the complaint; extraneous facts and circumstances or other
matters aliunde are not considered.[21]
The test of sufficiency of facts alleged in the complaint as constituting a cause of action is whether
or not admitting the facts alleged, the court could render a valid verdict in accordance with the
prayer of said complaint.[22] Stated differently, if the allegations in the complaint furnish sufficient
basis by which the complaint can be maintained, the same should not be dismissed regardless of the
defense that may be asserted by the defendant.[23]
In the present case, the Court finds the allegations in the complaint sufficient to establish a cause of
action. First, JCHA, et al.s averments in the complaint show a demandable right over La Paz Road.
These are: (1) their right to use the road on the basis of their allegation that they had been using the
road for more than 10 years; and (2) an easement of a right of way has been constituted over the
said roads. There is no other road as wide as La Paz Road existing in the vicinity and it is the shortest,
convenient and safe route towards SLEX Halang that the commuters and motorists may use. Second,
there is an alleged violation of such right committed by Fil-Estate, et al. when they excavated the
road and prevented the commuters and motorists from using the same. Third, JCHA, et al.
consequently suffered injury and that a valid judgment could have been rendered in accordance
with the relief sought therein.
With respect to the issue that the case was improperly instituted as a class suit, the Court finds the
opposition without merit.
Section 12, Rule 3 of the Rules of Court defines a class suit, as follows:
Sec. 12. Class suit. When the subject matter of the controversy is one of common or
general interest to many persons so numerous that it is impracticable to join all as parties, a
number of them which the court finds to be sufficiently numerous and representative as to
fully protect the interests of all concerned may sue or defend for the benefit of all. Any
party in interest shall have the right to intervene to protect his individual interest.
The necessary elements for the maintenance of a class suit are: 1) the subject matter of controversy
is one of common or general interest to many persons; 2) the parties affected are so numerous that
it is impracticable to bring them all to court; and 3) the parties bringing the class suit are sufficiently
numerous or representative of the class and can fully protect the interests of all concerned.[24]
In this case, the suit is clearly one that benefits all commuters and motorists who use La Paz Road.
As succinctly stated by the CA:
The subject matter of the instant case, i.e., the closure and excavation of the La Paz Road, is
initially shown to be of common or general interest to many persons. The records reveal
that numerous individuals have filed manifestations with the lower court, conveying their
intention to join private respondents in the suit and claiming that they are similarly situated
with private respondents for they were also prejudiced by the acts of petitioners in closing
and excavating the La Paz Road. Moreover, the individuals sought to be represented by
private respondents in the suit are so numerous that it is impracticable to join them all as
parties and be named individually as plaintiffs in the complaint. These individuals claim to be
residents of various barangays in Bian, Laguna and other barangays in San Pedro, Laguna.
Anent the issue on the propriety of the WPI, Section 3, Rule 58 of the Rules of Court lays down the
rules for the issuance thereof. Thus:
(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists
in restraining the commission or continuance of the acts complained of, or in the performance of an
act or acts, either for a limited period or perpetually;
(b) That the commission, continuance or non-performance of the act or acts complained of during
the litigation would probably work injustice to the applicant; or
(c) That a party, court, or agency or a person is doing, threatening, or attempting to do, or is procuring
or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting
the subject of the action or proceeding, and tending to render the judgment ineffectual.
A writ of preliminary injunction is available to prevent a threatened or continuous irremediable injury to

parties before their claims can be thoroughly studied and adjudicated.[25] The requisites for its issuance are: (1)
the existence of a clear and unmistakable right that must be protected; and (2) an urgent and paramount
necessity for the writ to prevent serious damage.[26]For the writ to issue, the right sought to be protected must
be a present right, a legal right which must be shown to be clear and positive.[27] This means that the
persons applying for the writ must show that they have an ostensible right to the final relief prayed
for in their complaint.[28]
In the case at bench, JCHA, et al. failed to establish a prima facie proof of violation of their right to justify the
issuance of a WPI. Their right to the use of La Paz Road is disputable since they have no clear legal right
therein. As correctly ruled by the CA:
Here, contrary to the ruling of respondent Judge, private respondents failed to prove as yet that they
have a clear and unmistakable right over the La Paz Road which was sought to be protected by the
injunctive writ. They merely anchor their purported right over the La Paz Road on the bare allegation
that they have been using the same as public road right-of-way for more than ten years. A mere
allegation does not meet the standard of proof that would warrant the issuance of the injunctive
writ. Failure to establish the existence of a clear right which should be judicially protected through the
writ of injunction is a sufficient ground for denying the injunction.
Consequently, the case should be further heard by the RTC so that the parties can fully prove their respective
positions on the issues.
Due process considerations dictate that the assailed injunctive writ is not a judgment on the merits
but merely an order for the grant of a provisional and ancillary remedy to preserve the status quo
until the merits of the case can be heard. The hearing on the application for issuance of a writ of
preliminary injunction is separate and distinct from the trial on the merits of the main case. [29] The
evidence submitted during the hearing of the incident is not conclusive or complete for only a
"sampling" is needed to give the trial court an idea of the justification for the preliminary injunction
pending the decision of the case on the merits.[30] There are vital facts that have yet to be presented
during the trial which may not be obtained or presented during the hearing on the application for
the injunctive writ.[31] Moreover, the quantum of evidence required for one is different from that for
the other.[32]
WHEREFORE, the petitions are DENIED. Accordingly, the July 31, 2001 Decision and February 21,
2002 Resolution of the Court of Appeals in CA-G.R. SP No. 60543 are AFFIRMED.
SO ORDERED.
2. DEL ROSARIO vs FAR EAST BANK AND TRUST COMPANY
SECOND DIVISION
ERNESTO C. DEL ROSARIO andDAVAO G.R. No. 150134

TIMBER CORPORATION,
Petitioners, Present:
QUISUMBING, J., Chairperson,

CARPIO,
versus - CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
FAR EAST BANK & TRUST COMPANY[1] and

PRIVATE DEVELOPMENTCORPORATION PROMULGATED:
OF THE PHILIPPINES,
Respondents. October 31, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
CARPIO MORALES, J.:
The Regional Trial Court (RTC) of Makati City, Branch 65 (sic)[2] having, by Decision[3] of July 10, 2001,
dismissed petitioners complaint in Civil Case No. 00-540 on the ground of res judicata and splitting
of a cause of action, and by Order of September 24, 2001[4] denied their motion for reconsideration
thereof, petitioners filed the present petition for review on certiorari.
From the rather lengthy history of the present controversy, a recital of the following material facts
culled from the records is in order.
On May 21, 1974, petitioner Davao Timber Corporation (DATICOR) and respondent Private
Development Corporation of the Philippines (PDCP) entered into a loan agreement under which
PDCP extended to DATICOR a foreign currency loan of US $265,000 and a peso loan of P2.5 million
or a total amount of approximately P4.4 million, computed at the then prevailing rate of exchange
of the dollar with the peso.
The loan agreement provided, among other things, that DATICOR shall pay: (1) a service fee of one
percent (1%) per annum (later increased to six percent [6%] per annum) on the outstanding balance
of the peso loan; (2) 12 percent (12%) per annum interest on the peso loan; and (3) penalty charges
of two percent (2%) per month in case of default.
The loans were secured by real estate mortgages over six parcels of land one situated in Manila (the
Otis property) which was registered in the name of petitioner Ernesto C. Del Rosario, and five in
Mati, Davao Oriental and chattel mortgages over pieces of machinery and equipment.
Petitioners paid a total of P3 million to PDCP, which the latter applied to interest, service fees and
penalty charges. This left petitioners, by PDCPs computation, with an outstanding balance on the
principal of more than P10 million as of May 15, 1983.
By March 31, 1982, petitioners had filed a complaint against PDCP before the then Court of First
Instance (CFI) of Manila for violation of the Usury Law, annulment of contract and damages. The
case, docketed as Civil Case No. 82-8088, was dismissed by the CFI.
On appeal, the then Intermediate Appellate Court (IAC) set aside the CFIs dismissal of the complaint
and declared void and of no effect the stipulation of interest in the loan agreement between
DATICOR and PDCP.
PDCP appealed the IACs decision to this Court where it was docketed as G.R. No. 73198.
In the interim, PDCP assigned a portion of its receivables from petitioners (the receivables) to its co-
respondent Far East Bank and Trust Company (FEBTC) under a Deed of Assignment dated April 10,
1987[5] for a consideration of P5,435,000. The Deed of Assignment was later amended by two
Supplements.[6]
FEBTC, as assignee of the receivables, and petitioners later executed a Memorandum of Agreement
(MOA) dated December 8, 1988 whereby petitioners agreed to, as they did pay FEBTC[7] the amount
of P6.4 million as full settlement of the receivables.
On September 2, 1992, this Court promulgated its Decision in G.R. No. 73198[8] affirming in toto the
decision of the IAC. It determined that after deducting the P3 million earlier paid by petitioners to
PDCP, their remaining balance on the principal loan was only P1.4 million.
Petitioners thus filed on April 25, 1994 a Complaint[9] for sum of money against PDCP and
FEBTC before the RTC of Makati, mainly to recover the excess payment which they computed to
be P5.3 million[10] P4.335 million from PDCP, and P965,000 from FEBTC. The case, Civil Case No. 94-
1610, was raffled to Branch 132 of the MakatiRTC.
On May 31, 1995, Branch 132 of the Makati RTC rendered a decision[11] in Civil Case No. 94-1610
ordering PDCP to pay petitioners the sum of P4.035 million,[12] to bear interest at 12% per annum
from April 25, 1994 until fully paid; to execute a release or cancellation of the mortgages on the five
parcels of land in Mati, Davao Oriental and on the pieces of machinery and equipment and to return
the corresponding titles to petitioners; and to pay the costs of the suit.
As for the complaint of petitioners against respondent FEBTC, the trial court dismissed it for lack of
cause of action, ratiocinating that the MOA between petitioners and FEBTC was not subject to this
Courts Decision in G.R. No. 73198, FEBTC not being a party thereto.
From the trial courts decision, petitioners and respondent PDCP appealed to the Court of Appeals
(CA). The appeal was docketed as CA-G.R. CV No. 50591.
On May 22, 1998, the CA rendered a decision[13] in CA-G.R. CV No. 50591, holding that petitioners
outstanding obligation, which this Court had determined in G.R. No. 73198 to be P1.4 million, could
not be increased or decreased by any act of the creditor PDCP.
The CA held that when PDCP assigned its receivables, the amount payable to it by DATICOR was the
same amount payable to assignee FEBTC, irrespective of any stipulation that PDCP and FEBTC
might have
provided in the Deed of Assignment, DATICOR not having been a party thereto, hence, not bound by
its terms.
Citing Articles 2154[14] and 2163[15] of the Civil Code which embody the principle of solutio indebiti,
the CA held that the party bound to refund the excess payment of P5 million[16] was FEBTC as it
received the overpayment; and that FEBTC could recover from PDCP the amount of P4.035 million
representing its overpayment for the assigned receivables based on the terms of the Deed of
Assignment or on the general principle of equity.
Noting, however, that DATICOR claimed in its complaint only the amount of P965,000 from FEBTC,
the CA held that it could not grant a relief different from or in excess of that prayed for.
Finally, the CA held that the claim of PDCP against DATICOR for the payment of P1.4 million had no
basis, DATICORs obligation having already been paid in full, overpaid in fact, when it paid assignee
FEBTC the amount of P6.4 million.
Accordingly, the CA ordered PDCP to execute a release or cancellation of the mortgages it was
holding over the Mati real properties and the machinery and equipment, and to return the
corresponding certificates of title to petitioners. And it ordered FEBTC to pay petitioners the amount
of P965,000 with legal interest from the date of the promulgation of its judgment.
FEBTCs motion for reconsideration of the CA Decision was denied, and so was its subsequent appeal
to this Court.
On April 25, 2000, petitioners filed before the RTC of Makati a Complaint[17] against FEBTC to
recover the balance of the excess payment of P4.335 million.[18] The case was docketed as Civil Case
No. 00-540, the precursor of the present case and raffled to Branch 143 of the RTC.
In its Answer,[19] FEBTC denied responsibility, it submitting that nowhere in the dispositive portion of
the CA Decision in CA-G.R. CV No. 50591 was it held liable to return the whole amount of P5.435
million representing the consideration for the assignment to it of the receivables, and since
petitioners failed to claim the said whole amount in their original complaint in Civil Case No. 94-
1610 as they were merely claiming the amount of P965,000 from it, they were barred from claiming
it.
FEBTC later filed a Third Party Complaint[20] against PDCP praying that the latter be made to pay
the P965,000 and the interests adjudged by the CA in favor of petitioners, as well as the P4.335
million and interests that petitioners were claiming from it. It posited that PDCP should be held
liable because it received a consideration of P5.435 million when it assigned the receivables.
Answering[21] the Third Party Complaint, PDCP contended that since petitioners were not seeking
the recovery of the amount of P965,000, the same cannot be recovered via the third party
complaint.
PDCP went on to contend that since the final and executory decision in CA-G.R. CV No. 50591 had
held that DATICOR has no cause of action
against it for the refund of any part of the excess payment, FEBTC can no longer re-litigate the same
issue.
Moreover, PDCP contended that it was not privy to the MOA which explicitly excluded the
receivables from the effect of the Supreme Court decision, and that the amount of P6.4 million paid
by petitioners to FEBTC was clearly intended as consideration for the release and cancellation of the
lien on the Otis property.
Replying,[22] FEBTC pointed out that PDCP cannot deny that it benefited from the assignment of its
rights over the receivables from petitioners. It added that the third party claim being founded on a
valid and justified cause, PDCPs counterclaims lacked factual and legal basis.
Petitioners thereafter filed a Motion for Summary Judgment[23] to which FEBTC filed its
opposition.[24]
By Order of March 5, 2001, the trial court denied the motion for summary judgment for lack of
merit.[25]
On July 10, 2001, the trial court issued the assailed Decision dismissing petitioners complaint on the
ground of res judicata and splitting of cause of action. It recalled that petitioners had filed Civil Case
No. 94-1610 to recover the alleged overpayment both from PDCP and FEBTC and to secure the
cancellation and release of their mortgages on real properties, machinery and equipment; that
when said case was appealed, the CA, in its Decision, ordered PDCP to release and cancel the
mortgages and FEBTC to pay P965,000 with interest, which Decision became final and executory on
November 23, 1999; and that a Notice of Satisfaction of Judgment between petitioners and FEBTC
was in fact submitted on August 8, 2000, hence, the issue between them was finally settled under
the doctrine of res judicata.
The trial court moreover noted that the MOA between petitioners and FEBTC clearly stated that the
pending litigation before the Supreme Court of the Philippines with respect to the Loan exclusive of
the Receivables assigned to FEBTC shall prevail up to the extent not covered by this Agreement. That
statement in the MOA, the trial court ruled, categorically made only the loan subject to this Courts
Decision in G.R. No. 73198, hence, it was with the parties full knowledge and consent that
petitioners agreed to pay P6.4 million to FEBTC as consideration for the settlement. The parties
cannot thus be allowed to welsh on their contractual obligations, the trial court concluded.
Respecting the third party claim of FEBTC, the trial court held that FEBTCs payment of the amount
of P1,224,906.67 (P965,000 plus interest) to petitioners was in compliance with the final judgment
of the CA, hence, it could not entertain such claim because the Complaint filed by petitioners merely
sought to recover from FEBTC the alleged overpayment of P4.335 million and attorneys fees
of P200,000.
Petitioners motion for reconsideration[26] of the July 10, 2001 decision of the trial court was denied
by Order of September 24, 2001.
Hence, the present petition.
In their Memorandum,[27] petitioners proffer that, aside from the issue of whether their complaint is
dismissible on the ground of res judicata and splitting of cause of action, the issues of 1) whether
FEBTC can be held liable for the balance of the overpayment of P4.335 million plus interest
which petitioners previously claimed against PDCP in Civil Case No. 94-1610, and 2) whether PDCP
can interpose as defense the provision in the Deed of Assignment and the MOA that the assignment
of the receivables shall not be affected by this Courts Decision in G.R. No. 73198, be considered.
Stripped of the verbiage, the only issue for this Courts consideration is the propriety of the dismissal
of Civil Case No. 00-540 upon the grounds stated by the trial court.This should be so because a Rule
45 petition, like the one at bar, can raise only questions of law (and that justifies petitioners
elevation of the case from the trial court directly to this Court) which must be distinctly set forth.[28]
The petition is bereft of merit.
Section 47 of Rule 39 of the Rules of Court, on the doctrine of res judicata, reads:
Sec. 47. Effect of judgments or final orders. The effect of a judgment or final order rendered
by a court of the Philippines, having jurisdiction to pronounce the judgment or final order,
may be as follows:
xxxx
(b) In other cases, the judgment or final order is, with respect to the matter directly
adjudged or as to any other matter that could have been raised in relation thereto,
conclusive between the parties and their successors in interest by title subsequent to the
commencement of the action or special proceeding, litigating for the same thing and under
the same title and in the same capacity; and
(c) In any other litigation between the same parties or their successors in interest, that only
is deemed to have been adjudged in a former judgment or final order which appears upon
its face to have been so adjudged, or which was actually and necessarily included therein or
necessary thereto. (Underscoring supplied)
The above-quoted provision lays down two main rules. Section 49(b) enunciates the first rule of res
judicata known as bar by prior judgment or estoppel by judgment, which states that the judgment
or decree of a court of competent jurisdiction on the merits concludes the parties and their privies
to the litigation and constitutes a bar to a new action or suit involving the same cause of action
either before the same or any other tribunal.[29]
Stated otherwise, bar by former judgment makes the judgment rendered in the first case an
absolute bar to the subsequent action since that judgment is conclusive not only as to the matters
offered and received to sustain it but also as to any other matter which might have been offered for
that purpose and which could have been adjudged therein.[30] It is in this concept that the term res
judicata is more commonly and generally used as a ground for a motion to dismiss in civil cases.[31]
The second rule of res judicata embodied in Section 47(c), Rule 39 is conclusiveness of
judgment. This rule provides that any right, fact, or matter in issue directly adjudicated or
necessarily involved in the determination of an action before a competent court in which a
judgment or decree is rendered on the merits is conclusively settled by the judgment therein and
cannot again be litigated between the parties and their privies whether or not the claim or demand,
purpose, or subject matter of the two suits is the same.[32] It refers to a situation where the
judgment in the prior action operates as an estoppel only as to the matters actually determined or
which were necessarily included therein.[33]
The case at bar satisfies the four essential requisites of bar by prior judgment, viz:
(a) finality of the former judgment;
(b) the court which rendered it had jurisdiction over the subject matter and the parties;
(c) it must be a judgment on the merits; and
(d) there must be, between the first and second actions, identity of parties, subject matter
and causes of action.[34]
There is no doubt that the judgment on appeal relative to Civil Case No. 94-1610 (that rendered in
CA-G.R. CV No. 50591) was a final judgment. Not only did it dispose of the case on the merits; it also
became executory as a consequence of the denial of FEBTCs motion for reconsideration and
appeal.[35]
Neither is there room to doubt that the judgment in Civil Case No. 94-1610 was on the merits for it
determined the rights and liabilities of the parties.[36] To recall, it was ruled that: (1) DATICOR
overpaid by P5.3 million; (2) FEBTC was bound to refund the excess payment but because DATICORs
claim against FEBTC was only P965,000, the court could only grant so much as the relief prayed for;
and (3) PDCP has no further claim against DATICOR because its obligation had already been
paid in full.
Right or wrong, that judgment bars another case based upon the same cause of action.[37]
As to the requisite of identity of parties, subject matter and causes of action, it cannot be gainsaid
that the first case, Civil Case No. 94-1610, was brought by petitioners to recover an alleged
overpayment of P5.3 million P965,000 from FEBTC and P4.335 million from PDCP.
On the other hand, Civil Case No. 00-540, filed by the same petitioners, was for the recovery
of P4.335 million which is admittedly part of the P5.3 million earlier sought to be recovered in Civil
Case No. 94-1610. This time, the action was brought solely against FEBTC which in
turn impleaded PDCP as a third party defendant.
In determining whether causes of action are identical to warrant the application of the rule of res
judicata, the test is to ascertain whether the same evidence which is necessary to sustain the second
action would suffice to authorize a recovery in the first even in cases in which the forms or nature of
the two actions are different.[38] Simply stated, if the same facts or evidence would sustain both, the
two actions are considered the same within the rule that the judgment in the former is a bar to the
subsequent action.
It bears remembering that a cause of action is the delict or the wrongful act or omission committed
by the defendant in violation of the primary rights of the plaintiff.[39]
In the two cases, petitioners imputed to FEBTC the same alleged wrongful act of mistakenly
receiving and refusing to return an amount in excess of what was due it in violation of their right to
a refund. The same facts and evidence presented in the first case, Civil Case No. 94-1610, were the
very same facts and evidence that petitioners presented in Civil Case No. 00-540.
Thus, the same Deed of Assignment between PDCP and FEBTC, the first and second supplements to
the Deed, the MOA between petitioners and FEBTC, and this Courts Decision in G.R. No. 73198 were
submitted in Civil Case No. 00-540.
Notably, the same facts were also pleaded by the parties in support of their allegations for, and
defenses against, the recovery of the P4.335 million. Petitioners, of course, plead the CA Decision as
basis for their subsequent claim for the remainder of their overpayment. It is well established,
however, that a party cannot, by varying the form of action or adopting a different method of
presenting his case, or by pleading justifiable circumstances as herein petitioners are doing, escape
the operation of the principle that one and the same cause of action shall not be twice litigated.[40]
In fact, authorities tend to widen rather than restrict the doctrine of res judicata on the ground that
public as well as private interest demands the ending of suits by requiring the parties to sue once
and for all in the same case all the special proceedings and remedies to which they are entitled.[41]
This Court finds well-taken then the pronouncement of the court a quo that to allow the re-litigation
of an issue that was finally settled as between petitioners and FEBTC in the prior case is to allow the
splitting of a cause of action, a ground for dismissal under Section 4 of Rule 2 of the Rules of Court
reading:
SEC. 4. Splitting of a single cause of action; effect of. If two or more suits are instituted on
the basis of the same cause of action, the filing of one or a judgment upon the merits in any
one is available as a ground for the dismissal of the others. (Emphasis and underscoring
supplied)
This rule proscribes a party from dividing a single or indivisible cause of action into several parts or
claims and instituting two or more actions based on it.[42] Because the plaintiff cannot divide the
grounds for recovery, he is mandated to set forth in his first action every ground for relief which he
claims to exist and upon which he relies; he cannot be permitted to rely upon them by piecemeal in
successive actions to recover for the same wrong or injury.[43]
Clearly then, the judgment in Civil Case No. 94-1610 operated as a bar to Civil Case No. 00-540,
following the above-quoted Section 4, Rule 2 of the Rules of Court.
A final word. Petitioners are sternly reminded that both the rules on res judicata and splitting of
causes of action are based on the salutary public policy against unnecessary multiplicity of
suits interest reipublicae ut sit finis litium.[44] Re-litigation of matters already settled by a courts final
judgment merely burdens the courts and the taxpayers, creates uneasiness and confusion, and
wastes valuable time and energy that could be devoted to worthier cases.[45]
WHEREFORE, the Petition is DENIED. The assailed Decision of the RTC, Branch
143, Makati dismissing petitioners complaint in Civil Case No. 00-540 is AFFIRMED.
SO ORDERED.
3. PROGRESSIVE DEVP. CORP. vs COURT OF APPEALS
SYNOPSIS
Private respondent, Westin Seafood Market, Inc., failed to pay its rentals amounting to
P8,608,284.66. Admittedly, non-payment of rentals constituted breach of their contract; thus,
pursuant to the express authority granted petitioner under the lease agreement, petitioner
repossessed the leased premises. This prompted private respondent to file a complaint against
petitioner for forcible entry with damages before the MTC of Quezon City. This case was still
pending before the MTC when private respondent instituted before the RTC of Quezon City another
action for damages against petitioner, which the latter moved to dismiss on the ground of litis
pendencia and forum shopping to no avail. The same fate awaited petitioner before the Court of
Appeals which dismissed his special civil action for certiorari and prohibition due to the failure of
petitioner to file a motion for reconsideration of the RTC order. Hence, petitioner found its way to
the Supreme Court on petition for review on certiorari.
The Supreme Court found merit to the petition The Court held that while generally a motion for
reconsideration must first be filed before resorting.to certiorari in order to give the lower court an
opportunity to correct the errors imputed to it, this rule admits of exceptions and is not intended to
be applied without considering the circumstances of the case The filing of the motion for
reconsideration before availing of the remedy of certiorari is not sine qua non when the issue raised
is one purely of law, or where the error is patent or the disputed order is void, or the questions
raised on certiorari are those already squarely presented to and passed upon by the lower court. In
its motion for dismissal of the action for damages with the RTC, petitioner raised the ground that
another action for forcible entry was pending at the METC between the same parties involving the
same matter and cause of action. Outrightly rejected by the RTC, the same issue was elevated by
petitioner on certiorari before the Court of Appeals. Clearly, under the prevailing circumstance, any
motion for reconsideration of the trial court would have been a pointless exercise.
The highest Court also directed the RTC of Quezon City to dismiss the complaint for damages filed
before it by private respondent on the ground of forum shopping and for unduly splitting a single
cause of action which run counter to the rule against multiplicity of suits.
SYLLABUS
1. REMEDIAL LAW; SPECIAL CIVIL ACTION; CERTIORARI; MOTION FOR RECONSIDERATION MUST
BE FILED BEFORE RESORTING THERETO; EXCEPTIONS. While generally a motion for reconsideration
must first be filed before resorting to certiorari in order to give the lower court an opportunity to
correct the errors imputed to it this rule admits of exceptions and is not intended to be applied
without considering the circumstances of the case. The filing of the motion for reconsideration
before availing of the remedy of certiorari is not sine qua non when the issue raised is one purely of
law, or where the error is patent or the disputed order is void or the questions raised
on certiorari are the same as those already squarely presented to and passed upon by the lower
court. In its motion for dismissal of the action for damages with the RTC petitioner raised the
ground that another action for forcible entry was pending at the MeTC between the same parties
involving the same matter and cause of action. Outrightly rejected by the RTC, the same issue was
elevated by petitioner on certiorari before the Court of Appeals. Clearly, under the prevailing
circumstance, any motion for reconsideration of the trial court would have been a pointless
exercise.
2. ID.; ID.; FORCIBLE ENTRY OR UNLAWFUL DETAINER; NO CLAIM FOR DAMAGES ARISING
THERETO MAY BE FILED SEPARATELY AND INDEPENDENTLY OF CLAIM FOR RESTORATION OF
POSSESSION.Section 1 of Rule 70 of the Rules of Court provides that any person deprived of the
possession of any land or building by force, intimidation, threat, strategy or stealth, or against whom
the possession of any land or building is unlawfully withheld, may bring an action in the proper
Municipal Trial Court against the person or persons unlawfully withholding or depriving of
possession, together with damages and costs. The mandate under this rule is categorical: that all
cases for forcible entry or unlawful detainer shall be filed before the Municipal Trial Court which
shall include not only the plea for restoration of possession but also all claims for damages and costs
arising therefrom. Otherwise expressed, no claim for damages arising out of forcible entry or
unlawful detainer may be filed separately and independently of the claim for restoration of
possession.
3. ID.; CIVIL PROCEDURE; RES JUDICATA; REQUISITES. Res adjudicata requires that there must be
between the action sought to be dismissed and the other action the following elements: (a) identity
of parties or at least such as representing the same interest in both actions; (b) identity of rights
asserted and relief prayed for, the relief being founded on the same facts; and, (c) the identity in the
two (2) preceding particulars should be such that any judgment which may be rendered on the other
action will, regardless of which party is successful, amount to res adjudicata in the action under
consideration.
4. ID.; ID.; CAUSE OF ACTION; CIRCUMSTANCES OBTAINING IN CASE AT BAR AROSE FROM ONLY
ONE CAUSE OF ACTION. It is likewise basic under Sec. 3 of Rule 2 of the Revised Rules of Court, as
amended, that a party may not institute more than one suit for a single cause of action. Under Sec. 4
of the same Rule, if two or more suits are instituted on the basis of the same cause of action, the
filing of one or a judgment upon the merits in any one is available as a ground for the dismissal of
the other or others. Cause of action is defined by Sec. 2 of Rule 2 as the act of omission by which a
party violates a right of another. These premises obtaining, there is no question at all that private
respondents cause of action in the forcible entry case and in the suit for damages is the alleged
illegal retaking of possession of the leased premises by the lessor, petitioner herein, from which all
legal reliefs arise. Simply stated, the restoration of possession and demand for actual damages in
the case before the MeTC and the demand for damages with the RTC both arise from the same
cause of action, i.e., the forcible entry by petitioner into the leased premises.
5. ID.; ID.; MULTIPLICITY OF SUITS; CASE AT BAR RUNS COUNTER THERETO. A comparative study of
the two (2) complaints filed by private respondent against petitioner before the two (2) trial courts
shows that not only are the elements of res adjudicata present, at least insofar as the claim for
actual and compensatory damages is concerned, but also that the claim for damages moral and
exemplary in addition to actual and compensatory - constitutes splitting a single cause of action.
Since this runs counter to the rule against multiplicity of suits, the dismissal of the second action
becomes imperative.
6. ID.; ID.; SPLITTING A SINGLE CAUSE OF ACTION; PURPOSE IS TO PROTECT DEFENDANT FROM
UNNECESSARY VEXATION. A claim cannot be divided in such a way that a part of the amount of
damages may be recovered in one case and the rest, in another. In Bachrach v. Icarangal we
explained that the rule was aimed at preventing repeated litigations between the same parties in
regard to the same subject of the controversy and to protect the defendant from unnecessary
vexation. Nemo debet bis vexari pro una et eadem causa.
7. ID.; ID.; FORUM SHOPPING COMMITTED IN CASE AT BAR. The records ineluctably show that the
complaint lodged by private respondent with the Regional Trial Court of Quezon City contained no
certification of non-forum shopping. When petitioner filed a motion to dismiss the case raising
among others the ground of forum shopping it pointed out the absence of the required
certification. The amended complaint, as well as the second and third amended complaints,
attempted to rectify the error by invariably stating that there was no other action pending between
the parties involving the same cause of action although there was actually a forcible entry case
pending before the MTC of Quezon City. By its admission of a pending forcible entry case, it is
obvious that private respondent was indulging in forum shopping. While private respondent
conveniently failed to inform the RTC that it had likewise sought damages in the MTC on the basis of
the same forcible entry, the fact remains that it precisely did so, which strategem was being
duplicated in the second case. This is a compelling reason to dismiss the second case.
ECOND DIVISION
[G.R. No. 123555. January 22, 1999]
PROGRESSIVE DEVELOPMENT CORPORATION, INC., petitioner, vs. COURT OF APPEALS and WESTIN
SEAFOOD MARKET, INC., respondents.
DECISION
BELLOSILLO, J.:
May the lessee which instituted before the Metropolitan Trial Court an action for forcible entry
with damages against its lessor file a separate suit with the Regional Trial Court against the same lessor
for moral and exemplary damages plus actual and compensatory damages based on the same forcible
entry?
On grounds of litis pendencia and forum-shopping, petitioner invokes established jurisprudence
that a party cannot by varying the form of action or adopting a different method of presenting his case
evade the principle that the same cause of action shall not be litigated twice between the same
parties or their privies.[1] Petitioner therefore prays for reversal of the decision of the Court of Appeals
dated 27 May 1995, as well as its Resolution dated 17 January 1996 denying reconsideration, which
upheld the denial by the Regional Trial Court of petitioner's motion to dismiss private respondent's
damage suit.
The antecedents: On 27 May 1991 petitioner leased to private respondent Westin Seafood Market,
Inc., a parcel of land with a commercial building thereon located at Araneta Center, Cubao, Quezon City,
for a period of nine (9) years and three (3) months, i.e., from 2 January 1989 to 30 April 1998, with a
monthly rental of approximately P600,000.00. The contract contained, among others, the following
pertinent terms and conditions:
EFFECT OF VIOLATIONS
25. LESSEE hereby agrees that all the provisions contained in this Contract shall be deemed as
conditions, as well as covenants, and that this Contract shall be automatically terminated and cancelled
without resorting to court action should LESSEE violate any or all said conditions, including the payment
of Rent, CUSA and other charges indicated in the FLP when due within the time herein stipulated and in
any such cases, LESSEE hereby irrevocably appoints LESSOR, its authorized agents, employees and/or
representatives as his duly authorized attorney-in-fact, even after the termination, expiration or
cancellationof this Contract, with full power and authority to open, enter, repossess, secure, enclose,
fence and otherwise take full and complete physical possession and control of the leased premises and
its contents without resorting to court action and/or to summarily disconnect electrical and/or water
services thereof, and that LESSEE hereby irrevocably empowers LESSOR, his authorized agents,
employees and/or representatives to take inventory and possession of whatever equipment, furniture,
articles, merchandise, appliances, etc., found therein belonging to LESSEE, consignors and/or to any
other persons and to place the same in LESSORs warehouse or any other place at LESSORs discretion for
safekeeping; charging LESSEE the corresponding storage fees therefor; that in case LESSEE fails to claim
said equipment, furniture, articles, merchandise, appliances, etc. from storage and simultaneously
liquidate any liability with LESSOR within seven (7) days from date of said transfer to LESSORs
warehouse, LESSOR is likewise hereby expressly authorized and empowered by LESSEE to dispose of said
property/properties in a public sale through a Notary Public of LESSORs choice and to apply the
proceeds thereof to whatever liability and/or indebtedness LESSEE may have to LESSOR plus reasonable
expenses for the same, including storage fees, and the balance, if any, shall be turned over to LESSEE;
that LESSEE hereby expressly agrees that any or all acts performed by LESSOR, his authorized agents,
employees and/or representatives under the provisions of this Section may not be the subject of any
petition for a Writ of Preliminary Injunction or Mandatory Injunction in court, and that LESSOR and/or
his authorized agents, employees, and/or representatives shall be free from any civil and/or criminal
liability or responsibility whatsoever therefor.
TERMINATION OF LEASE
26. Upon the automatic termination of this lease contract, as the case may be, LESSEE shall immediately
vacate and redeliver physical possession of the leased premises, including the keys appertaining thereto,
to LESSOR in good, clean and sanitary condition, reasonable wear and tear excepted, devoid of all
occupants, equipment, furniture, articles, merchandise, etc., belonging to LESSEE or to any other person
except those belonging to LESSOR; that should LESSEE fail to comply with this provision, LESSOR is
hereby given the same rights and power to proceed against LESSEE as expressly granted in the
immediately preceding section.
Private respondent failed to pay rentals despite several demands by petitioner. As of 19 October
1992 the arrearages amounted to P8,608,284.66. Admittedly, non-payment of rentals constituted
breach of their contract; thus, pursuant to the express authority granted petitioner under the above-
quoted Secs. 25 and 26 of the lease agreement, petitioner on 31 October 1992 repossessed the leased
premises, inventoried the movable properties found within and owned by private respondent and
scheduled public auction for the sale of the movables on 19 August 1993 with notice to private
respondent.
On 26 November 1992 private respondent filed with the Metropolitan Trial Court of Quezon City a
complaint against petitioner for forcible entry with damages and a prayer for a temporary restraining
order and/or writ of preliminary injunction.[2] The case was raffled to Branch 40 presided over by Judge
Guillermo L. Loja Jr. who issued a temporary restraining order enjoining petitioner from selling private
respondents properties at a public auction.
On 9 December 1992 Judge Loja inhibited himself from trying the case and directed its transfer to
Branch 34 presided over by Judge Joselito SD Generoso. Soon after, petitioner filed an urgent motion for
the inhibition of Judge Generoso and the immediate reraffle of the case arguing that the summary
transfer of the case to Judge Generoso was irregular as it was not done by raffle.
The motion was granted and the case went to Branch 36 presided over by Judge Francisco D.
Villanueva. Thereafter, on 22 December 1992, at the continuation of the hearing on the issuance of a
writ preliminary mandatory injunction, the parties agreed, among others, on the following: (a) private
respondent would deposit with the Philippine Commercial and Industrial Bank in the name of
theMetropolitan Trial Court, Branch 36, the amount of P8,000,000.00 to guarantee the payment of its
back rentals; (b) petitioner would defer the sale of the personal properties of the Westin Seafood
Market, Inc., until a final settlement of the case had been arrived at; (c) petitioner shall allow private
respondent to retrieve all the perishable goods from inside the leased premises like frozen meat,
vegetables and fish, all properly receipted for; (d) petitioner shall allow three (3) maintenance personnel
of private respondent to enter the premises at reasonable working hours to maintain the restaurant
equipment; and (e) the parties shall negotiate for the restoration of the premises to private respondent,
and if no settlement be arrived at on or before January 8, 1993, the hearing on the merits of the case
shall proceed and the disposition of the amount deposited representing the rental arrearages shall be
left to the discretion of the court.
This agreement was incorporated in the order of the court dated 22 December 1992[3] which in
effect terminated for all intents and purposes the incident on the issuance of a preliminary writ of
injunction.
Private respondent did not comply with its undertaking to deposit with the designated bank the
amount representing its back rentals. Instead, with the forcible entry case still pending with the MeTC,
private respondent instituted on 9 June 1993 another action for damages against petitioner with the
Regional Trial Court of Quezon City. The case was raffled to Branch 101 presided over by Judge Pedro T.
Santiago.[4]
Petitioner filed a motion to dismiss the damage suit on the ground of litis pendencia and forum
shopping. On 2 July 1993, instead of ruling on the motion, Judge Santiago issued an order archiving the
case pending the outcome of the forcible entry case being heard at the MeTC for the reason that "the
damages is (sic) principally anchored on whether or not the defendants (petitioner herein) have
committed forcible entry."[5] On 2 August 1993 petitioner moved for reconsideration of the order and
reiterated its motion to dismiss the suit for damages.
Before petitioner's motion to dismiss could be resolved,
private respondent filed with the RTC on 18 August 1993 an amended complaint for damages. On 14
September 1993 it also filed an Urgent Ex-Parte Motion for the Issuance of a Temporary Restraining
Order and Motion for the Grant of a Preliminary Prohibitory and Preliminary Mandatory Injunction. On
the very same day, Judge Santiago issued an order (a) denying petitioner's motion to dismiss, (b)
admitting private respondent's amended complaint, and (c) granting private respondent's application
for a temporary restraining order against petitioner.
Thus, petitioner filed with the Court of Appeals a special civil action for certiorari and prohibition on
the ground that Judge Santiago acted in excess of his jurisdiction and/or committed grave abuse of
discretion amounting to lack of jurisdiction in admitting the amended complaint of private respondent
and issuing a restraining order against petitioner; in allowing private respondent to engage in forum
shopping; and, taking cognizance of the action for damages despite lack of jurisdiction.[6]
But the Court of Appeals dismissed the petition due to the failure of petitioner to file a motion for
reconsideration of Judge Santiago's order of 14 September 1993 which, it explained, was a prerequisite
to the institution of a petition for certiorari and prohibition. It also found that the elements of litis
pendencia were lacking to justify the dismissal of the action for damages with the RTC because despite
the pendency of the forcible entry case with the MeTC the only damages recoverable thereat were
those caused by the loss of the use and occupation of the property and not the kind of damages being
claimed before the RTC which had no direct relation to loss of material possession. It clarified that since
the damages prayed for in the amended complaint with the RTC were those caused by the alleged high-
handed manner with which petitioner reacquired possession of the leased premises and the sale of
private respondents movables found therein, the RTC and not the MeTC had jurisdiction over the action
of damages.[7]
Petitioner, aggrieved by the decision of the appellate court, filed the instant petition for review
on certiorari under Rule 45 of the Rules of Court alleging that it erred in (a) finding that petitioner failed
to avail of its plain, speedy and adequate remedy of a prior motion for reconsideration with the
RTC; (b) ruling that the trial judge did not act with grave abuse of discretion in taking cognizance of the
action for damages and injunction despite the pendency of the forcible entry case with the MeTC; and,
(c) ruling that private respondent did not commit forum shopping since the causes of action before the
RTC and MeTC were not identical with each other.
There is merit in the petition. While generally a motion for reconsideration must first be filed
before resorting to certiorari in order to give the lower court an opportunity to correct the errors
imputed to it[8] this rule admits of exceptions and is not intended to be applied without considering the
circumstances of the case.[9] The filing of the motion for reconsideration before availing of the remedy
of certiorariis not sine qua non when the issue raised is one purely of law,[10] or where the error is patent
or the disputed order is void,[11] or the questions raised on certiorari are the same as those already
squarely presented to and passed upon by the lower court.
In its motion for dismissal of the action for damages with the RTC petitioner raised the ground that
another action for forcible entry was pending at the MeTC between the same parties involving the same
matter and cause of action. Outrightly rejected by the RTC, the same issue was elevated by petitioner
on certiorari before the Court of Appeals. Clearly, under the prevailing circumstance, any motion for
reconsideration of the trial court would have been a pointless exercise.[12]
We now turn to the issue of whether an action for damages filed with the Regional Trial Court by
the lessee against the lessor should be dismissed on the ground of pendency of another action for
forcible entry and damages earlier filed by the same lessee against the same lessor before the
Metropolitan Trial Court.
Section 1 of Rule 70 of the Rules of Court provides that any person deprived of the possession of
any land or building by force, indimidation, threat, strategy or stealth, or against whom the possession
of any land or building is unlawfully withheld, may bring an action in the proper Municipal Trial Court
against the person or persons unlawfully withholding or depriving of possession, together with damages
and costs. The mandate under this rule is categorical: that all cases for forcible entry or
unlawful detainer shall be filed before the Municipal Trial Court which shall include not only the plea for
restoration of possession but also all claims for damages and costs arising therefrom. Otherwise
expressed, no claim for damages arising out of forcible entry or unlawful detainer may be filed
separately and independently of the claim for restoration of possession.
This is consistent with the principle laid down in Sec. 1, par. (e), of Rule 16 of the Rules of Court
which states that the pendency of another action between the same parties for the same cause is a
ground for dismissal of an action. Res adjudicata requires that there must be between the action sought
to be dismissed and the other action the following elements: (a) identity of parties or at least such as
representing the same interest in both actions; (b) identity of rights asserted and relief prayed for, the
relief being founded on the same facts; and, (c) the identity in the two (2) preceding particulars should
be such that any judgment which may be rendered on the other action will, regardless of which party is
successful, amount to res adjudicata in the action under consideration.[13]
It is likewise basic under Sec. 3 of Rule 2 of the Revised Rules of Court, as amended, that a party
may not institute more than one suit for a single cause of action. Under Sec. 4 of the same Rule, if two
or more suits are instituted on the basis of the same cause of action, the filing of one or a judgment
upon the merits in any one is available as a ground for the dismissal of the other or others. "Cause of
action" is defined by Sec. 2 of Rule 2 as the act of omission by which a party violates a right of
another.[14] These premises obtaining, there is no question at all that private respondent's cause of
action in the forcible entry case and in the suit for damages is the alleged illegal retaking of possession
of the leased premises by the lessor, petitioner herein, from which all legal reliefs arise. Simply stated,
the restoration of possession and demand for actual damages in the case before the MeTC and the
demand for damages with the RTC both arise from the same cause of action, i.e., the forcible entry by
petitioner into the leased premises.
A comparative study of the two (2) complaints filed by private respondent against petitioner before
the two (2) trial courts shows that not only are the elements of res adjudicata present, at least insofar as
the claim for actual and compensatory damages is concerned, but also that the claim for damages -
moral and exemplary in addition to actual and compensatory - constitutes splitting a single cause of
action.Since this runs counter to the rule against multiplicity of suits, the dismissal of the second action
becomes imperative.
The complaint for forcible entry contains the following pertinent allegations -
2.01 On 02 January 1989, plaintiff entered into a contract of lease with defendant PDC over a property
designated as Ground Floor, Seafood Market (hereinafter Subject Premises) situated at the corner of
EDSA corner MacArthur Street, Araneta Center, Cubao, Quezon City, for a period of ten (10) years from
02 January 1989 to 30 April 1998.
2.02 Immediately after having acquired actual physical possession of the Subject Premises, plaintiff
established and now operates thereon the now famous Seafood Market Restaurant. Since then, plaintiff
had been in actual, continuous, and peaceful physical possession of the Subject Premises until 31
October 1992.
xxxx
3.02 Plaintiff, being the lessee of the Subject Premises, is entitled to the peaceful occupation and
enjoyment of the Subject Premises to the exclusion of all others, including defendants herein.
3.03 Defendants resort to strong arms tactics to forcibly wrest possession of the Subject Premises from
plaintiff and maintain possession thereof through the use of force, threat, strategy and intimidation by
the use of superior number of men and arms amounts to the taking of the law into their own hands.
3.04 Thus, defendants act of unlawfully evicting out plaintiff from the Subject Premises it is leasing from
defendant PDC and depriving it of possession thereof through the use of force, threat, strategy and
intimidation should be condemned and declared illegal for being contrary to public order and policy.
3.05 Consequently, defendants should be enjoined from continuing with their illegal acts and be ordered
to vacate the Subject Premises and restore possession thereof, together with its contents, to plaintiff.
xxxx
4.07 Considering that defendants act of forcibly grabbing possession of the Subject Premises from
plaintiff is illegal and null and void, defendant should be adjudged liable to plaintiff for all the
aforedescribed damages which plaintiff incurred as a result thereof.
The amended complaint for damages filed by private respondent alleges basically the same factual
circumstances and issues as bases for the relief prayed for, to wit:
4. On May 28, 1991, plaintiff and defendant PDC entered into a Contract of Lease for a period of ten
years or from January 2, 1989 up to April 30, 1998 over a property designated as Ground Floor, Seafood
Market (hereinafter referred to as Subject Premises) situated at the corner of EDSA corner McArthur
Street, Araneta Center, Cubao, Quezon City. A copy of the lease contract is attached hereto as Annex A.
5. Immediately thereafter, plaintiff took over actual physical possession of Subject Premises, and
established thereon the now famous Seafood Market Restaurant.
xxxx
7. On October 31, 1992 at around 8:30 p.m., defendant PDC, without the benefit of any writ of
possession or any lawful court order and with the aid of approximately forty (40) armed security guards
and policemen under the supervision of defendant Tejam, forcibly entered the subject premises through
force, intimidation, threats and stealth and relying on brute force and in a thunderboltish manner and
against plaintiffs will, unceremoniously drew away all of plaintiffs men out of the
subject premises, thereby depriving herein plaintiff of its actual, physical and natural possession of the
subject premises. The illegal, high-handed manner and gestapo like take-over by defendants of subject
premises is more particularly described as follows: x x x
8. To date, defendants continue to illegally possess and hold the Subject Premises, including all the
multi-million improvements, fixtures and equipment therein owned by plaintiff, all to the damage and
prejudice of plaintiff. The actuations of defendants constitute an unlawful appropriation, seizure and
taking of property against the will and consent of plaintiff. Worse, defendants are threatening to sell at
public auction and without the consent of plaintiff and without lawful authority, the multi-million
fixtures and equipment of plaintiff and at prices way below the market value thereof. Plaintiff hereby
attaches as Annex B the letter from defendants dated August 6, 1993 addressed to plaintiff, informing
the latter that the former intends to sell at an auction on August 19, 1993 at 2:00 p.m. properties of the
plaintiff presently in defendants possession.
xxxx
12. Defendants unlawful takeover of the premises constitutes a violation of its obligation under Art.
1654 of the New Civil Code requiring the lessor to maintain the lessee in peaceful and adequate
enjoyment of the lease for the entire duration of the contract. Hence, plaintiff has filed the present suit
for the recovery of damages under Art. 1659 of the New Civil Code x x x x
Restated in its bare essentials, the forcible entry case has one cause of action, namely, the alleged
unlawful entry by petitioner into the leased premises out of which three (3) reliefs (denominated by
private respondent as its causes of action) arose: (a) the restoration by the lessor (petitioner herein) of
the possession of the leased premises to the lessee; (b) the claim for actual damages due to the losses
suffered by private respondent such as the deterioration of perishable foodstuffs stored inside the
premises and the deprivation of the use of the premises causing loss of expected profits; and, (c) the
claim for attorney's fees and costs of suit.
On the other hand, the complaint for damages prays for a monetary award consisting of (a) moral
damages of P500,000.00 and exemplary damages of another P500,000.00; (b) actual damages
of P20,000,000.00 and compensatory damages of P1,000,000.00 representing unrealized profits; and,
(c) P200,000.00 for attorney's fees and costs, all based on the alleged forcible takeover of the leased
premises by petitioner. Since actual and compensatory damages were already prayed for in the forcible
entry case before the MeTC, it is obvious that this cannot be relitigated in the damage suit before the
RTC by reason of res adjudicata.
The other claims for moral and exemplary damages cannot also succeed considering that these
sprung from the main incident being heard before the MeTC. Jurisprudence is unequivocal that when a
single delict or wrong is committed - like the unlawful taking or detention of the property of another -
there is but one single cause of action regardless of the number of rights that may have been violated,
and all such rights should be alleged in a single complaint as constituting one single cause of action.[15] In
a forcible entry case, the real issue is the physical possession of the real property. The question of
damages is merely secondary or incidental, so much so that the amount thereof does not affect
the jurisdiction of the court. In other words, the unlawful act of a deforciant in taking possession of a
piece of land by means of force and intimidation against the rights of the party actually in possession
thereof is a delict or wrong, or a cause of action that gives rise to two (2) remedies, namely, the recovery
of possession and recovery of damages arising from the loss of possession, but only to one action. For
obvious reasons, both remedies cannot be the subject of two (2) separate and independent actions, one
for recovery of possession only, and the other, for the recovery of damages. That would inevitably lead
to what is termed in law as splitting up a cause of action.[16] In David v. de la Cruz[17] we observed -
Herein tenants have but one cause of action against their landlord, their illegal ejectment or removal
from their landholdings, which cause of action however entitles them to two (2) claims or remedies - for
reinstatement and damages. As both claims arise from the same cause of action, they should be alleged
in a single complaint.
A claim cannot be divided in such a way that a part of the amount of damages may be recovered in
one case and the rest, in another.[18] In Bachrach v. Icarangal[19] we explained that the rule was aimed at
preventing repeated litigations between the same parties in regard to the same subject of the
controversy and to protect the defendant from unnecessary vexation. Nemo debet bis vexari pro una et
eadem causa.
What then is the effect of the dismissal of the other action? Since the rule is that all such rights
should be alleged in a single complaint, it goes without saying that those not therein included cannot be
the subject of subsequent complaints for they are barred forever.[20] If a suit is brought for a part of a
claim, a judgment obtained in that action precludes the plaintiff from bringing a second action for the
residue of the claim, notwithstanding that the second form of action is not identical with the first or
different grounds for relief are set for the second suit. This principle not only embraces what was
actually determined, but also extends to every matter which the parties might have litigated in the
case.[21] This is why the legal basis upon which private respondent anchored its second claim for
damages, i.e., Art. 1659 in relation to Art. 1654 of the Civil Code,[22] not otherwise raised and cited by
private respondent in the forcible entry case, cannot be used as justification for the second suit for
damages. We note, not without some degree of displeasure, that by filing a second suit for damages,
private respondent was not only able to press a claim for moral and exemplary damages which by its
failure to allege the same in its suit before the MeTC foreclosed its right to sue on it, but it was also able
to obtain from the RTC, by way of another temporary restraining order, a second reprieve from an
impending public auction sale of its movables which it could not anymore secure from the MeTC before
which the matter of the issuance of a preliminary writ of injunction was already closed.
The foregoing discussions provide sufficient basis to petitioner's charge that private respondent
and its counsel in the trial courts committed forum shopping. In Crisostomo v. Securities and Exchange
Commission[23] we ruled -
There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party seeks a
favorable opinion (other than by appeal or certiorari) in another. The principle applies x x x with respect
to suits filed in the courts x x x in connection with litigations commenced in the court x x x in anticipation
of an unfavorable x x x ruling and a favorable case where the court in which the second suit was
brought, has no jurisdiction.
This Court likewise elucidated in New Pangasinan Review, Inc. v. National Labor Relations
Commission[24] that there is forum shopping when the actions involve the same transactions, the same
essential facts and circumstances. The reason behind the proscription of forum shopping is obvious. This
unnecessarily burdens our courts with heavy caseloads, unduly taxes the manpower and
financial resources of the judiciary and trifles with and mocks our judicial processes, thereby adversely
affecting the efficient administration of justice. This condemnable conduct has prompted the Court to
issue circulars[25]ordering among others that a violation thereof shall be cause for the dismissal of the
case or cases without prejudice to the taking of appropriate action against the counsel or party
concerned.
The records ineluctably show that the complaint lodged by private respondent with the Regional
Trial Court of Quezon City contained no certification of non-forum shopping. When petitioner filed a
motion to dismiss the case raising among others the ground of forum shopping it pointed out the
absence of the required certification. The amended complaint, as well as the second and third amended
complaints, attempted to rectify the error by invariably stating that there was no other action pending
between the parties involving the same causes of action although there was actually a forcible entry
case pending before the MTC of Quezon City. By its admission of a pending forcible entry case, it is
obvious that private respondent was indulging in forum shopping. While private respondent
conveniently failed to inform the RTC that it had likewise sought damages in the MTC on the basis of the
same forcible entry, the fact remains that it precisely did so, which stratagem was being duplicated in
the second case.This is a compelling reason to dismiss the second case.
WHEREFORE, the Petition is GRANTED. The questioned Decision of the Court of Appeals dated 27
September 1995 and the Order of the Regional Trial Court of Quezon City dated 24 September 1993
are REVERSED and SET ASIDE. The Regional Trial Court of Quezon City is directed to dismiss Civil Case
No. Q-93-16409, "Westin Seafood Market, Inc. v. Progressive Development Corporation, et al.," and the
Metropolitan Trial Court of Quezon City to proceed with the proper disposition of Civil Case No. 6589,
"Westin Seafood Market, Inc. v. Progressive Development Corporation, et al.," with dispatch considering
the summary nature of the case. Treble costs against private respondent.
SO ORDERED.
4. JOSEPH vs BAUTISTA

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-41423 February 23, 1989
LUIS JOSEPH, petitioner

vs.
HON. CRISPIN V. BAUTISTA, PATROCINIO PEREZ, ANTONIO SIOSON, JACINTO PAGARIGAN,

ALBERTO CARDENO and LAZARO VILLANUEVA, respondents.
Jose M. Castillo for petitioner.
Arturo Z. Sioson for private respondent, Patrocinio Perez.
Cipriano B. Farrales for private respondents except P. Perez.
REGALAD0, J.:
Petitioner prays in this appeal by certiorari for the annulment and setting aside of the order, dated
July 8, 1975, dismissing petitioner's complaint, as well as the order, dated August 22, 1975, denying
his motion for reconsideration of said dismissal, both issued by respondent Judge Crispin V. Bautista
of the former Court of First Instance of Bulacan, Branch III.
Petitioner herein is the plaintiff in Civil Case No. 50-V-73 entitled "Luis Joseph vs. Patrocinio Perez,
Domingo Villa y de Jesus, Rosario Vargas, Antonio Sioson, Lazaro Villanueva and Jacinto Pagarigan",
filed before the Court of First Instance of Bulacan, Branch III, and presided over by respondent Judge
Crispin V. Bautista; while private respondents Patrocinio Perez, Antonio Sioson, Jacinto Pagarigan
and Lazaro Villanueva are four of the defendants in said case. Defendant Domingo Villa y de Jesus
did not answer either the original or the amended complaint, while defendant Rosario Vargas could
not be served with summons; and respondent Alberto Cardeno is included herein as he was
impleaded by defendant Patrocinio Perez, one of respondents herein, in her cross-claim.
The generative facts of this case, as culled from the written submission of the parties, are as follows:
Respondent Patrocinio Perez is the owner of a cargo truck with Plate No. 25-2 YT Phil. '73 for
conveying cargoes and passengers for a consideration from Dagupan City to Manila. On January 12,
1973, said cargo truck driven by defendant Domingo Villa was on its way to Valenzuela, Bulacan
from Pangasinan. Petitioner, with a cargo of livestock, boarded the cargo truck at Dagupan City after
paying the sum of P 9.00 as one way fare to Valenzuela, Bulacan. While said cargo truck was
negotiating the National Highway proceeding towards Manila, defendant Domingo Villa tried to
overtake a tricycle likewise proceeding in the same direction. At about the same time, a pick-up
truck with Plate No. 45-95 B, supposedly owned by respondents Antonio Sioson and Jacinto
Pagarigan, then driven by respondent Lazaro Villanueva, tried to overtake the cargo truck which was
then in the process of overtaking the tricycle, thereby forcing the cargo truck to veer towards the
shoulder of the road and to ram a mango tree. As a result, petitioner sustained a bone fracture in
one of his legs. 1
The following proceedings thereafter took place: 2
Petitioner filed a complaint for damages against respondent Patrocinio Perez, as owner of the cargo
truck, based on a breach of contract of carriage and against respondents Antonio Sioson and Lazaro
Villanueva, as owner and driver, respectively, of the pick-up truck, based on quasi-delict.
Respondent Sioson filed his answer alleging that he is not and never was an owner of the pick-up
truck and neither would he acquire ownership thereof in the future.
On September 24, 1973, petitioner, with prior leave of court, filed his amended complaint
impleading respondents Jacinto Pagarigan and a certain Rosario Vargas as additional alternative
defendants. Petitioner apparently could not ascertain who the real owner of said cargo truck was,
whether respondents Patrocinio Perez or Rosario Vargas, and who was the real owner of said pick-
up truck, whether respondents Antonio Sioson or Jacinto Pagarigan.
Respondent Perez filed her amended answer with crossclaim against her co-defendants for
indemnity and subrogation in the event she is ordered to pay petitioner's claim, and therein
impleaded cross-defendant Alberto Cardeno as additional alternative defendant.
On September 27, 1974, respondents Lazaro Villanueva, Alberto Cardeno, Antonio Sioson and
Jacinto Pagarigan, thru their insurer, Insurance Corporation of the Philippines, paid petitioner's claim
for injuries sustained in the amount of P 1,300.00. By reason thereof, petitioner executed a release
of claim releasing from liability the following parties, viz: Insurance Corporation of the Philippines,
Alberto Cardeno, Lazaro Villanueva, Antonio Sioson and Jacinto Pagarigan.
On December 2, 1974, respondents Lazaro Villanueva, Alberto Cardeno and their insurer, the
Insurance Corporation of the Philippines, paid respondent Patrocinio Perez' claim for damages to
her cargo truck in the amount of P 7,420.61.
Consequently, respondents Sioson, Pagarigan, Cardeno and Villanueva filed a "Motion to Exonerate
and Exclude Defs/ Cross defs. Alberto Cardeno, Lazaro Villanueva, Antonio Sioson and Jacinto
Pagarigan on the Instant Case", alleging that respondents Cardeno and Villanueva already paid P
7,420.61 by way of damages to respondent Perez, and alleging further that respondents Cardeno,
Villanueva, Sioson and Pagarigan paid P 1,300.00 to petitioner by way of amicable settlement.
Thereafter, respondent Perez filed her "Opposition to Cross-defs.' motion dated Dec. 2, 1974 and
Counter Motion" to dismiss. The so-called counter motion to dismiss was premised on the fact that
the release of claim executed by petitioner in favor of the other respondents inured to the benefit of
respondent Perez, considering that all the respondents are solidarity liable to herein petitioner.
On July 8, 1975, respondent judge issued the questioned order dismissing the case, and a motion for
the reconsideration thereof was denied. Hence, this appeal, petitioner contending that respondent
judge erred in declaring that the release of claim executed by petitioner in favor of respondents
Sioson, Villanueva and Pagarigan inured to the benefit of respondent Perez; ergo, it likewise erred in
dismissing the case.
We find the present recourse devoid of merit.
The argument that there are two causes of action embodied in petitioner's complaint, hence the
judgment on the compromise agreement under the cause of action based on quasi-delict is not a
bar to the cause of action for breach of contract of carriage, is untenable.
A cause of action is understood to be the delict or wrongful act or omission committed by the
defendant in violation of the primary rights of the plaintiff. 3 It is true that a single act or omission
can be violative of various rights at the same time, as when the act constitutes juridically a violation
of several separate and distinct legal obligations. However where there is only one delict or wrong,
there is but a single cause of action regardless of the number of rights that may have been violated
belonging to one person. 4
The singleness of a cause of action lies in the singleness of the- delict or wrong violating the rights of
one person. Nevertheless, if only one injury resulted from several wrongful acts, only one cause of
action arises. 5 In the case at bar, there is no question that the petitioner sustained a single injury on
his person. That vested in him a single cause of action, albeit with the correlative rights of action
against the different respondents through the appropriate remedies allowed by law.
The trial court was, therefore, correct in holding that there was only one cause of action involved
although the bases of recovery invoked by petitioner against the defendants therein were not
necessarily Identical since the respondents were not identically circumstanced. However, a recovery
by the petitioner under one remedy necessarily bars recovery under the other. This, in essence, is
the rationale for the proscription in our law against double recovery for the same act or omission
which, obviously, stems from the fundamental rule against unjust enrichment.
There is no question that the respondents herein are solidarily liable to petitioner. On the evidence
presented in the court below, the trial court found them to be so liable. It is undisputed that
petitioner, in his amended complaint, prayed that the trial court hold respondents jointly and
severally liable. Furthermore, the allegations in the amended complaint clearly impleaded
respondents as solidary debtors. We cannot accept the vacuous contention of petitioner that said
allegations are intended to apply only in the event that execution be issued in his favor. There is
nothing in law or jurisprudence which would countenance such a procedure.
The respondents having been found to be solidarity liable to petitioner, the full payment made by
some of the solidary debtors and their subsequent release from any and all liability to petitioner
inevitably resulted in the extinguishment and release from liability of the other solidary debtors,
including herein respondent Patrocinio Perez.
The claim that there was an agreement entered into between the parties during the pre-trial
conference that, after such payment made by the other respondents, the case shall proceed as
against respondent Perez is both incredible and unsubstantiated. There is nothing in the records to
show, either by way of a pre-trial order, minutes or a transcript of the notes of the alleged pre-trial
hearing, that there was indeed such as agreement.
WHEREFORE, the challenged orders of the respondent judge are hereby AFFIRMED.
SO ORDERED.
5. FLORES vs MALLARE-PHILLIPS

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-66620 September 24, 1986
REMEDIO V. FLORES, petitioner,

vs.
HON. JUDGE HEILIA S. MALLARE-PHILLIPPS, IGNACIO BINONGCAL & FERNANDO
CALION, respondents.
Lucio A. Dixon for respondent F. Calion.
FERIA, J.:
The Court rules that the application of the totality rule under Section 33(l) of Batas Pambansa Blg.
129 and Section 11 of the Interim Rules is subject to the requirements for the permissive joinder of
parties under Section 6 of Rule 3 which provides as follows:
Permissive joinder of parties.-All persons in whom or against whom any right to relief in respect to
or arising out of the same transaction or series of transactions is alleged to exist, whether jointly,
severally, or in the alternative, may, except as otherwise provided in these rules, join as plaintiffs or
be joined as defendants in one complaint, where any question of law or fact common to all such
plaintiffs or to all such defendants may arise in the action; but the court may make such orders as
may be just to prevent any plaintiff or defendant from being embarrassed or put to expense in
connection with any proceedings in which he may have no interest.
Petitioner has appealed by certiorari from the order of Judge Heilia S. Mallare-Phillipps of the
Regional Trial Court of Baguio City and Benguet Province which dismissed his complaint for lack of
jurisdiction. Petitioner did not attach to his petition a copy of his complaint in the erroneous belief
that the entire original record of the case shall be transmitted to this Court pursuant to the second
paragraph of Section 39 of BP129. This provision applies only to ordinary appeals from the regional
trial court to the Court of Appeals (Section 20 of the Interim Rules). Appeals to this Court by petition
for review on certiorari are governed by Rule 45 of the Rules of Court (Section 25 of the Interim
Rules).
However, the order appealed from states that the first cause of action alleged in the complaint was
against respondent Ignacio Binongcal for refusing to pay the amount of P11,643.00 representing
cost of truck tires which he purchased on credit from petitioner on various occasions from August to
October, 1981; and the second cause of action was against respondent Fernando Calion for allegedly
refusing to pay the amount of P10,212.00 representing cost of truck tires which he purchased on
credit from petitioner on several occasions from March, 1981 to January, 1982.
On December 15, 1983, counsel for respondent Binongcal filed a Motion to Dismiss on the ground of
lack of jurisdiction since the amount of the demand against said respondent was only P11,643.00,
and under Section 19(8) of BP129 the regional trial court shall exercise exclusive original jurisdiction
if the amount of the demand is more than twenty thousand pesos (P20,000.00). It was further
averred in said motion that although another person, Fernando Calion, was allegedly indebted to
petitioner in the amount of P10,212.00, his obligation was separate and distinct from that of the
other respondent. At the hearing of said Motion to Dismiss, counsel for respondent Calion joined in
moving for the dismissal of the complaint on the ground of lack of jurisdiction. Counsel for
petitioner opposed the Motion to Dismiss. As above stated, the trial court dismissed the complaint
for lack of jurisdiction.
Petitioner maintains that the lower court has jurisdiction over the case following the "novel" totality
rule introduced in Section 33(l) of BP129 and Section 11 of the Interim Rules.
The pertinent portion of Section 33(l) of BP129 reads as follows:
... Provided,That where there are several claims or causes of action between the same or different
parties, embodied in the same complaint, the amount of the demand shall be the totality of the
claims in all the causes of action, irrespective of whether the causes of action arose out of the same
or different transactions. ...
Section 11 of the Interim Rules provides thus:
Application of the totality rule.-In actions where the jurisdiction of the court is dependent on the
amount involved, the test of jurisdiction shall be the aggregate sum of all the money demands,
exclusive only of interest and costs, irrespective of whether or not the separate claims are owned by
or due to different parties. If any demand is for damages in a civil action, the amount thereof must
be specifically alleged.
Petitioner compares the above-quoted provisions with the pertinent portion of the former rule
under Section 88 of the Judiciary Act of 1948 as amended which reads as follows:
... Where there are several claims or causes of action between the same parties embodied in the
same complaint, the amount of the demand shall be the totality of the demand in all the causes of
action, irrespective of whether the causes of action arose out of the same or different transactions;
but where the claims or causes of action joined in a single complaint are separately owned by or due
to different parties, each separate claim shall furnish the jurisdictional test. ...
and argues that with the deletion of the proviso in the former rule, the totality rule was reduced to
clarity and brevity and the jurisdictional test is the totality of the claims in all, not in each, of the
causes of action, irrespective of whether the causes of action arose out of the same or different
transactions.
This argument is partly correct. There is no difference between the former and present rules in
cases where a plaintiff sues a defendant on two or more separate causes of action. In such cases,
the amount of the demand shall be the totality of the claims in all the causes of action irrespective
of whether the causes of action arose out of the same or different transactions. If the total demand
exceeds twenty thousand pesos, then the regional trial court has jurisdiction. Needless to state, if
the causes of action are separate and independent, their joinder in one complaint is permissive and
not mandatory, and any cause of action where the amount of the demand is twenty thousand pesos
or less may be the subject of a separate complaint filed with a metropolitan or municipal trial court.
On the other hand, there is a difference between the former and present rules in cases where two
or more plaintiffs having separate causes of action against a defendant join in a single complaint.
Under the former rule, "where the claims or causes of action joined in a single complaint are
separately owned by or due to different parties, each separate claim shall furnish the jurisdictional
test" (Section 88 of the Judiciary Act of 1948 as amended, supra). This was based on the ruling in the
case of Vda. de Rosario vs. Justice of the Peace, 99 Phil. 693. As worded, the former rule applied
only to cases of permissive joinder of parties plaintiff. However, it was also applicable to cases of
permissive joinder of parties defendant, as may be deduced from the ruling in the case of Brillo vs.
Buklatan, thus:
Furthermore, the first cause of action is composed of separate claims against several defendants of
different amounts each of which is not more than P2,000 and falls under the jurisdiction of the
justice of the peace court under section 88 of Republic Act No, 296. The several claims do not seem
to arise from the same transaction or series of transactions and there seem to be no questions of
law or of fact common to all the defendants as may warrant their joinder under Rule 3, section 6.
Therefore, if new complaints are to be filed in the name of the real party in interest they should be
filed in the justice of the peace court. (87 Phil. 519, 520, reiterated in Gacula vs. Martinez, 88 Phil.
142, 146)
Under the present law, the totality rule is applied also to cases where two or more plaintiffs having
separate causes of action against a defendant join in a single complaint, as well as to cases where a
plaintiff has separate causes of action against two or more defendants joined in a single complaint.
However, the causes of action in favor of the two or more plaintiffs or against the two or more
defendants should arise out of the same transaction or series of transactions and there should be a
common question of law or fact, as provided in Section 6 of Rule 3.
The difference between the former and present rules in cases of permissive joinder of parties may
be illustrated by the two cases which were cited in the case of Vda. de Rosario vs. Justice of the
Peace (supra) as exceptions to the totality rule. In the case of Soriano y Cia vs. Jose (86 Phil. 523),
where twenty-nine dismissed employees joined in a complaint against the defendant to collect their
respective claims, each of which was within the jurisdiction of the municipal court although the total
exceeded the jurisdictional amount, this Court held that under the law then the municipal court had
jurisdiction. In said case, although the plaintiffs' demands were separate, distinct and independent
of one another, their joint suit was authorized under Section 6 of Rule 3 and each separate claim
furnished the jurisdictional test. In the case of International Colleges, Inc. vs. Argonza (90 Phil. 470),
where twenty-five dismissed teachers jointly sued the defendant for unpaid salaries, this Court also
held that the municipal court had jurisdiction because the amount of each claim was within,
although the total exceeded, its jurisdiction and it was a case of permissive joinder of parties
plaintiff under Section 6 of Rule 3.
Under the present law, the two cases above cited (assuming they do not fall under the Labor Code)
would be under the jurisdiction of the regional trial court. Similarly, in the abovecited cases of Brillo
vs. Buklatan and Gacula vs. Martinez (supra), if the separate claims against the several defendants
arose out of the same transaction or series of transactions and there is a common question of law or
fact, they would now be under the jurisdiction of the regional trial court.
In other words, in cases of permissive joinder of parties, whether as plaintiffs or as defendants,

under Section 6 of Rule 3, the total of all the claims shall now furnish the jurisdictional test. Needless
to state also, if instead of joining or being joined in one complaint separate actions are filed by or
against the parties, the amount demanded in each complaint shall furnish the jurisdictional test.
In the case at bar, the lower court correctly held that the jurisdictional test is subject to the rules on
joinder of parties pursuant to Section 5 of Rule 2 and Section 6 of Rule 3 of the Rules of Court and
that, after a careful scrutiny of the complaint, it appears that there is a misjoinder of parties for the
reason that the claims against respondents Binongcal and Calion are separate and distinct and
neither of which falls within its jurisdiction.
WHEREFORE, the order appealed from is affirmed, without pronouncement as to costs.
SO ORDERED.
IV. PARTIES TO A CVIL ACTION [RULE 3, SECTIONS 1-22

1. RAYO vs METROBANK
SECOND DIVISION
EDUARDO L. RAYO, G.R. No. 165142

Petitioner,
Present:
QUISUMBING, J., Chairperson,

versus - CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
METROPOLITAN BANK AND TRUST Promulgated:

COMPANY AND BRANCH 223 OF THE
REGIONAL TRIAL COURT OF QUEZON CITY, December 10, 2007
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
QUISUMBING, J.:
Before us is a petition for review assailing the Resolutions dated June 15, 2004[1] and August 23,
2004[2] of the Court of Appeals in CA-G.R. SP No. 83895 for annulment of judgment.
The pertinent facts are undisputed.
Midas Diversified Export Corp. (Midas), thru its president, Mr. Samuel U. Lee, obtained six (6) loans
from private respondent Metropolitan Bank and Trust Company (Metrobank), amounting
to P588,870,000 as evidenced by promissory notes. To secure the payment of an P8,000,000 loan,
Louisville Realty & Development Corporation (Louisville), thru its president, Mr. Samuel U. Lee,
executed in favor of Metrobank, a real estate mortgage over three parcels of land situated at No. 40
Timog Ave., Brgy. Laging Handa, Quezon City, with all the buildings and improvements thereon. The
properties are covered by Transfer Certificates of Title (TCT) Nos. N-163455, N-166349 and N-
166350 issued by the Registry of Deeds of Quezon City.
When the debtor-mortgagor failed to pay, Metrobank extra-judicially foreclosed the real estate
mortgage in accordance with Act No. 3135,[3] as amended. Thereafter, in a public auction,
Metrobank was the highest bidder. A Certificate of Sale[4] dated December 11, 2000 was duly
registered with the Registry of Deeds of Quezon City on December 13, 2000. When Louisville refused
to turn over the real properties, on March 17, 2001, Metrobank filed before the Regional Trial Court
(RTC), Branch 223, Quezon City, an ex partepetition[5] for the issuance of a writ of possession
docketed as LRC Case No. Q-13915(01). After presentation of evidence ex parte, the RTC granted the
petition in an Order[6]dated July 5, 2001, the dispositive portion of which reads as follows:
WHEREFORE, in consideration of the foregoing premises, the instant petition is hereby

GRANTED. Upon the filing of a bond in the amount of ONE HUNDRED THOUSAND PESOS
([P]100,000.00), let a Writ of Possession over the properties covered by Transfer Certificates
of Title Nos. N-163455, N-166349 & N-166350 issue in favor of the petitioner
METROPOLITAN BANK & TRUST COMPANY to be implemented by the Deputy Sheriff of
Branch 223, Regional Trial Court of Quezon City by placing the petitioner in possession over
the parcels of land with all its improvements.
SO ORDERED.[7]
On September 24, 2001, Metrobank posted the required bond. Consequently, a writ of possession
was issued on October 9, 2001. This was partially implemented as to TCT No. N-163455, as
evidenced by the Turn-Over Receipt[8] dated December 13, 2002. The writ over the two remaining
properties, under TCT Nos. N-166349 and N-166350, were subsequently implemented as evidenced
by the Turn-Over Receipt[9] dated December 3, 2003.
Meanwhile, on April 3, 2002, petitioner Eduardo L. Rayo filed a complaint[10] docketed as Civil Case
No. Q02-46514 against Metrobank for Nullification of Real Estate Mortgage Contract(s) and
Extrajudicial Foreclosure Sale, in the RTC, Branch 99, Quezon City.
On May 13, 2004, petitioner Rayo filed with the Court of Appeals a Petition[11] for Annulment of
Judgment on the ground of absolute lack of due process. Petitioner alleged that his
predecessor, Louisville, was not notified of the proceedings and that Section 7[12] (ex parte motion or
petition for the issuance of a writ of possession) of Act No. 3135 is unconstitutional.
On June 15, 2004, the Court of Appeals denied the petition for lack of merit. The Court of Appeals
ruled that petitioner is neither the registered owner nor the successor-in-interest of the registered
owner; hence, not a real party-in-interest. It also ruled that there is no basis to challenge the
constitutionality of Section 7 of Act No. 3135, as amended as it constitutes a collateral attack against
said provision. Further, petitioner availed of the wrong remedy in filing Civil Case No. Q02-
46514. Petitioner sought reconsideration, but was likewise denied.
Petitioner now comes before us raising the following as primary issue:
WHETHER OR NOT SECTION 7 OF ACT NO. 3135 IS CONTRARY TO THE DUE PROCESS
PROVISION OF THE PHILIPPINE CONSTITUTION CONSIDERING THAT SUCH SECTION 7 OF
THE LAW PROVIDES OR ALLOWS, ACCORDING TO THIS HONORABLE COURT, FOR AN EX-
PARTE PROCEEDING WHICH IS A JUDICIAL PROCEEDING BROUGHT FOR THE BENEFIT OF
ONE PARTY ONLY, AND WITHOUT NOTICE TO, OR CONSENT BY ANY PERSON ADVERSELY
INTERESTED OR A PROCEEDING WHEREIN RELIEF IS GRANTED WITHOUT AN
OPPORTUNITY FOR THE PERSON AGAINST WHOM THE RELIEF IS SOUGHT TO BE HEARD, AS
HELD IN THE CASE OF GOVERNMENT SERVICE INSURANCE SYSTEM VS. COURT OF APPEALS,
169 SCRA 244 @ 255, JANUARY 20, 1989.[13]
He also raises the following as secondary issues:

I.
WHETHER OR NOT THE PETITIONER HAS THE LEGAL PERSONALITY TO SEEK THE
ANNULMENT OF JUDGMENT IN [THE] SUBJECT LRC CASE NO. Q-13915(01).
II.
WHETHER OR NOT PRIVATE RESPONDENT VIOLATED THE RULE AGAINST FORUM-SHOPPING
WHEN IT DID NOT INFORM THE HONORABLE BRANCH 223 OF THE REGIONAL TRIAL COURT
OF QUEZON CITY REGARDING THE FILING OF CIVIL CASE NO. Q-02-46514 FOR
NULLIFICATION OF REAL ESTATE MORTGAGE CONTRACT AND THE EXTRA-JUDICIAL
FORECLOSURE SALE OF THE SAME SUBJECT REAL PROPERTIES AND THE PENDENCY OF THE
SAME BEFORE THE HONORABLE BRANCH 99 OF THE SAME REGIONAL TRIAL COURT.[14]
Stated simply, the issues raised are: (1) Does petitioner have the legal personality in the annulment
of judgment proceedings? (2) Is Section 7 of Act No. 3135, as amended, unconstitutional? (3) Is
respondent guilty of forum-shopping?
Petitioner insists that contrary to the ruling of the Court of Appeals, he has the legal personality to
institute the annulment of judgment case against Metrobank, considering that the March 25,
2002 deed of assignment he entered into with Louisville and Winston Linwy L. Chua makes him a co-
assignee over the subject real properties.
For its part, Metrobank claims that it was not a party to the deed of assignment among Louisville,
Chua and petitioner, hence, it has no privity of contract with petitioner Rayo. Moreover, Metrobank
points out that the real properties had already been extrajudicially foreclosed when petitioner and
his assignors executed the deed of assignment.
Under Section 2,[15] Rule 3 of the Rules of Court, every action must be prosecuted or defended in the
name of the real party-in-interest, or one who stands to be benefited or injured by the judgment in
the suit.[16] A real party-in-interest is one with a present substantial interest which means such
interest of a party in the subject matter of the action as will entitle him, under the substantive law,
to recover if the evidence is sufficient, or that he has the legal title to demand.[17]
Now, is petitioner Rayo a real party-in-interest? Initially, we recognized herein petitioner as the co-
assignee of the subject real properties as shown in the March 25, 2002deed of
assignment. However, while petitioner would be injured by the judgment in this suit, we find that
petitioner has no present substantial interest to institute the annulment of judgment proceedings
and nullify the order granting the writ of possession.
First, there was no violation of petitioners right to constitutional due process. In a long line of
cases,[18] we have consistently ruled that the issuance of a writ of possession in favor of the
purchaser in a foreclosure sale of a mortgaged property under Section 7 of Act No. 3135, as
amended is a ministerial duty of the court. The purchaser of the foreclosed property,
upon ex parte application and the posting of the required bond, has the right to acquire possession
of the foreclosed property during the 12-month redemption period and with more reason, after the
expiration of the redemption period.
An ex parte petition for the issuance of a writ of possession under Section 7 of Act No. 3135 is not,
strictly speaking, a judicial process as contemplated in Article 433[19]of the Civil Code. It is a judicial
proceeding for the enforcement of ones right of possession as purchaser in a foreclosure sale. It is
not an ordinary suit filed in court, by which one party sues another for the enforcement of a wrong
or protection of a right, or the prevention or redress of a wrong. It is a non-litigious proceeding
authorized in an extrajudicial foreclosure of mortgage pursuant to Act No. 3135, as amended, and is
brought for the benefit of one party only, and without notice to, or consent by any person adversely
interested. It is a proceeding where the relief is granted without requiring an opportunity for the
person against whom the relief is sought to be heard. No notice is needed to be served upon
persons interested in the subject property.[20]
Second, in the deed of assignment, petitioner also acknowledged that the subject real properties
were already sold at various extrajudicial foreclosure sales and bought by Metrobank. Clearly,
petitioner recognized the prior existing right of Metrobank as the mortgagee-purchaser over the
subject real properties.[21] Actual knowledge of a prior mortgage with Metrobank is equivalent to
notice of registration[22] in accordance with Article 2125[23] of the Civil Code. Conformably with
Articles 1312[24] and 2126[25] of the Civil Code, a real right or lien in favor of Metrobank had
already been established, subsisting over the properties until the discharge of the principal
obligation, whoever the possessor(s) of the land might be. [26] As petitioner is not a party whose
interest is adverse to that of Louisville, there was no bar to the issuance of a writ of possession to
Metrobank. It does not matter that petitioner was not specifically named in the writ of possession
nor notified of such proceedings.
Third, we also note that petitioner availed of the wrong remedy in filing Civil Case No. Q02-46514,
for nullification of real estate mortgage and extrajudicial foreclosure sale, more than six (6) months
after the issuance of the writ of possession considering the mandate of Section 8[27] of Act No. 3135,
as amended. Hence, even petitioners action for annulment of judgment cannot prosper as it cannot
be a substitute for a lost remedy.
Now, petitioner is challenging the constitutionality of Section 7 of Act No. 3135, as amended. He
avers that Section 7 violates the due process clause because, by the mere filing of
an ex parte motion in the proper cadastral court, the purchaser in a foreclosure sale is allowed to
obtain possession of the foreclosed property during the redemption period.
The Court of Appeals ruled that petitioners attempt to challenge the constitutionality of Section 7 of
Act No. 3135, as amended, constitutes a collateral attack that is not allowed. We fully agree with the
appellate courts ruling. For reasons of public policy, the constitutionality of a law cannot be attacked
collaterally.[28]
With regard to forum-shopping; forum-shopping is the filing of multiple suits involving the same
parties for the same cause of action, either simultaneously or successively, for the purpose of
obtaining a favorable judgment. It exists where the elements of litis pendentia are present or
where a final judgment in one case will amount to res judicata in another.[29] The issuance of the
writ of possession being a ministerial function, and summary in nature, it cannot be said to be a
judgment on the merits. It is only an incident in the transfer of title. Hence, a separate case for
annulment of mortgage and foreclosure sale cannot be barred by litis pendentia or res
judicata.[30] Clearly, insofar as LRC Case No. Q-13915(01) and Civil Case No. Q02-46514 are
concerned, Metrobank is not guilty of forum-shopping.
WHEREFORE, the petition is DENIED for lack of merit. The assailed Resolutions dated June 15,
2004 and August 23, 2004 of the Court of Appeals in CA-G.R. SP No. 83895 are
hereby AFFIRMED. Costs against the petitioner.
SO ORDERED.
2. COMM. DOMINGO vs SCHEER
SECOND DIVISION
[G.R. No. 154745. January 29, 2004]
COMMISSIONER ANDREA D. DOMINGO, BUREAU OF IMMIGRATION, petitioner, vs. HERBERT
MARKUS EMIL SCHEER, respondent.
DECISION
CALLEJO, SR., J.:
This is a petition for review under Rule 45 of the Rules of Court, as amended, of the Decision[1] of the
Court of Appeals in CA-G.R. SP No. 71094 granting the respondents petition for certiorari and
prohibition annulling the order of arrest issued by the petitioner, and permanently enjoining her
from deporting the respondent from the Philippines. Through its decision, the CA virtually reversed
the Summary Deportation Order[2] of the Board of Commissioners (BOC) and its Omnibus
Resolution[3] denying the respondents Urgent Motion for Reconsideration of said Order, and
enjoining the petitioner from deporting the respondent.
The facts as culled from the records are as follows:
Respondent Herbert Markus Emil Scheer, a native of Ochsenfurt, Germany, was a frequent visitor of
the Philippines. On July 18, 1986, his application for permanent resident status was granted.[4] The
Bureau of Immigration and Deportation (BID) issued in favor of the respondent Alien Certificate of
Registration No. B-396907 dated September 16, 1987[5] and Immigration Certificate of Residence
No. 256789 dated February 24, 1988.[6] The Commissioner stated that the granting of the petition
would redound to the benefit of the Filipino people.[7] During his sojourn in the Philippines, the
respondent married widowed Edith delos Reyes[8] with whom he had two daughters. They had a
son, Herbert Scheer, Jr., but he passed away on November 13, 1995.[9] They resided in Puerto
Princesa City, Palawan, where the respondent established and managed the Bavaria Restaurant. On
May 21, 1991, he was appointed Confidential Agent by then NBI Director Alfredo S. Lim.[10]
In a Letter dated June 29, 1995, Vice Consul Jutta Hippelein informed the Philippine Ambassador to
Bonn, Germany, that the respondent had police records and financial liabilities in Germany.[11]
The Department of Foreign Affairs received from the German Embassy in Manila Note Verbale No.
369/95 dated July 26, 1995, informing it that the respondent was wanted by the German Federal
Police; that a warrant of arrest had been issued against him; and that the respondent will be served
with an official document requesting him to turn over his German passport to the Embassy which
was invalidated on July 2, 1995.[12] The Embassy requested the Department of Foreign Affairs to
inform the competent Philippine authorities of the matter.The BOC thereafter issued a Summary
Deportation Order dated September 27, 1997. The penultimate paragraph of the Order reads:
WHEREFORE, the foregoing considered, the Board of Commissioners hereby orders the following:
1. Cancellation of respondents permanent residence visa;

2. Respondents summary deportation and permanent exclusion from the Philippines; and
3. Inclusion of his name on the Bureaus Blacklist.
PROVIDED, however that said summary deportation should be held in abeyance in case said alien
has a pending final and executory criminal conviction where the imposed penalty is imprisonment,
in which case, he has to serve first such imposed penalty, and/or has a pending criminal, civil or
administrative action and a Hold Departure Order has been issued or that his presence in said action
is indispensable. In such instances, the alien should remain in the custody of the Bureau until his
turnover to the proper authorities in case he has to serve imprisonment or in case of pendency of
civil or criminal administrative action, he shall remain in the custody of the Bureau until such time
that his pending cases shall have been decided, terminated or settled, as the case may be, unless
circumstances demand the immediate implementation of this summary deportation.
...
SO ORDERED.[13]
In issuing the said order, the BOC relied on the correspondence from the German Vice Consul on its
speculation that it was unlikely that the German Embassy will issue a new passport to the
respondent; on the warrant of arrest issued by the District Court of Germany against the respondent
for insurance fraud; and on the alleged illegal activities of the respondent in Palawan.[14] The BOC
concluded that the respondent was not only an undocumented but an undesirable alien as well.
When the respondent was apprised of the deportation order, he forthwith aired his side to then BID
Commissioner Leandro T. Verceles. The Commissioner allowed the respondent to remain in the
Philippines, giving the latter time to secure a clearance and a new passport from the German
Embassy.[15] Then Presidential Assistant Teodorico K. Imperial wrote a Testimonial dated November
24, 1995, in behalf of the respondent addressed to Commissioner Verceles. Nonetheless, the
respondent, through counsel, filed on December 5, 1995 an Urgent Motion for Reconsideration of
the Summary Deportation Order of the BOC.[16] In his motion, the respondent alleged, inter alia,
that:
1. The elementary rules of due process require notice and opportunity to be heard before a person
can be lawfully deprived of his right (Ute Paterok vs. Bureau of Customs, 193 SCRA 132). In the
instant case, although it is acknowledged that the Honorable Office may conduct summary
deportation proceedings, respondent was not given notice and opportunity to be heard before said
Summary Deportation Order was issued. Respondents right to procedural due process was therefore
violated. Consequently, the Summary Deportation Order is invalid.
2. In issuing, the Summary Deportation Order, this Honorable Office relied on Note Verbal No.
369/95 issued by the Embassy of the Federal Republic of Germany, Manila, notifying the
Department of Foreign Affairs and this Honorable Office about the warrant of arrest against
respondent for alleged illegal insurance fraud and illegal activities. However, a close scrutiny of said
note verbal shows that nowhere therein does it state that respondent was involved in insurance
fraud or in any kind of illegal activities in Germany or anywhere else in the world, such as in
Palawan. Therefore, the main basis of the Summary Deportation Order is incompetent as evidence
against respondent who is, like every Filipino, presumed to be innocent until his guilt is proven
beyond reasonable doubt.
3. The power to deport alien is a police power measure necessary against undesirable alien whose
presence in the country is injurious to the public good and domestic tranquility of the country
(Board of Commissioner Commission on Immigration vs. De la Rosa, 197 SCRA 853). It is respectfully
submitted that respondent is not an undesirable alien. He has stayed in the Philippines for more or
less than (10) years. He has married a Filipina and has three (3) minor children. He has established
his business in Palawan and he has no police record whatsoever. Respondent has considered the
Philippines his second home and he has nowhere else to go back to in Germany. Under the
circumstances and for humanitarian considerations, respondent is not an undesirable alien whose
deportation is warranted. Likewise, the mere fact that his passport was not renewed by the German
Embassy does not also automatically justify the deportation of respondent.[17]
However, the BOC did not resolve the respondents motion. The respondent was neither arrested
nor deported.
Meanwhile, on February 15, 1996, the District Court of Straubing rendered a Decision dismissing the
criminal case against the respondent for physical injuries.[18] The German Embassy in Manila,
thereafter, issued a temporary passport to the respondent.
In a Letter dated March 1, 1996, the respondent informed Commissioner Verceles that his passport
had been renewed following the dismissal of the said criminal case. He reiterated his request for the
cancellation of the Summary Deportation Order dated September 27, 1995 and the restoration of
his permanent resident status.[19] Subsequently, on March 12, 1996, the German Embassy issued to
the respondent a regular passport, to expire on March 11, 2006.
The BOC still failed to resolve the respondents Urgent Motion for Reconsideration. Commissioner
Verceles did not respond to the respondents March 1, 1996 Letter. The respondent remained in the
Philippines and maintained his business in Palawan. On March 20, 1997, the Department of Labor
and Employment approved his application for Alien Employment Registration Certificate as manager
of the Bavaria Restaurant in Puerto Princesa City.
In the meantime, petitioner Immigration Commissioner Andrea T. Domingo assumed office. She
wrote the German Embassy and inquired if the respondent was wanted by the German police. On
April 12, 2002, the German Embassy replied that the respondent was not so wanted.[20] At about
midnight on June 6, 2002, Marine operatives and BID agents apprehended the respondent in his
residence on orders of the petitioner. He was whisked to the BID Manila Office and there held in
custody while awaiting his deportation. Despite entreaties from the respondents wife[21] and his
employees, the petitioner refused to release the respondent.[22]
Shocked at the sudden turn of events, the respondent promptly communicated with his lawyer. The
latter filed with the BID a motion for bail to secure the respondents temporary liberty.On June 11,
2002, the respondents counsel filed with the Court of Appeals a petition for certiorari, prohibition
and mandamus with a prayer for temporary restraining order and writ of preliminary injunction, to
enjoin the petitioner from proceeding with the respondents deportation.[23] The respondent
(petitioner therein) alleged, inter alia, that his arrest and detention were premature, unjust,
wrongful, illegal and unconstitutional, effected without sufficient cause and without jurisdiction or
with grave abuse of discretion. He asserted that there was no speedy remedy open to him in the
ordinary course of law[24] and that his Urgent Motion for Reconsideration of the Summary
Deportation Order of the BOC had not yet been resolved despite the lapse of more than six years.
The respondent averred that he was a fully documented alien, a permanent resident and a law-
abiding citizen. He, thus, prayed as follows:
PRAYER
WHEREFORE, it is most respectfully prayed of this Honorable Court that:
1. Upon the filing of this Petition, this Honorable Court issue a Temporary Restraining Order to
enjoin respondent Commissioner from enforcing any order to deport petitioner;
2. After due hearing, a writ of preliminary and mandatory injunction be correspondingly issued to
maintain the status quo pending resolution of the Petition on the merits.
3. After hearing, judgment be rendered:
a) Directing and mandating respondent Commissioner and the body she heads to resolve the
Motion for Reconsideration filed in 1995, in his favor, and nullifying or suspending the
implementation of any order, oral or written, she may have issued or issue to deport petitioner; and
b) Making the injunction in petitioners favor permanent.
Petitioner likewise prays for such other and further relief as may be deemed just and equitable in
the premises, such as directing respondent, if Herbert Scheer is deported before the matter is heard
on notice, to authorize his return.[25]
The BOC ruled that its September 27, 1995 Order had become final and executory after the lapse of
one year, citing our rulings in Sy vs. Vivo,[26] and Lou vs. Vivo.[27] The BOC also held that it was not
competent to reverse the September 27, 1995 Order, citing our ruling in Immigration Commissioner
vs. Fernandez.[28] It declared that the respondent may seek the waiver of his exclusion via
deportation proceedings through the exceptions provided by Commonwealth Act No.
613,[29] Section 29 (a)(15), but that his application for the waiver presupposes his prior removal from
the Philippines.
In a parallel development, the respondent procured a letter from the National Bureau of
Investigation (NBI) in Puerto Princesa City certifying that he had no pending criminal record.[30]The
Puerto Princesa City Philippine National Police (PNP) also issued a certification that the respondent
had no pending criminal or derogatory records in the said office.[31]
Meanwhile, on June 26, 2002, the Court of Appeals issued a status quo order restraining the
petitioner from deporting the respondent on a bond of P100,000.00.[32] On July 18, 2002, the BOC
issued an Omnibus Resolution dated June 14, 2002, pendente lite denying the respondents Urgent
Motion for Reconsideration, Motion for Bail/Recognizance, and the Letter dated June 11, 2002. The
decretal portion of the resolution reads:
Wherefore, in view of the foregoing circumstances, we deny the prayers of the Urgent Motion for
Reconsideration of 5 December 1995, the Motion for Bail/Recognizance dated 7 June 2002 and the
Letter of 11 June 2002. Further, we hereby order the following:
1. Subject to the submission of appropriate clearances, the summary deportation order the
respondent Herbert Scheer, German, under BI Office Memorandum Order No. 34 (series of 1989)
and the BOC Summary Deportation Order of 27 September 1995;
2. Permanent exclusion of Herbert Scheer from the Philippines under C.A. No. 613, Section 40
(a)(15).
3. Inclusion of the name of Herbert Scheer in the Immigration Black List; and
4. Forfeiture of the bail bond, if any, of Herbert Scheer under C.A. No. 613, Section 40 (a)(15).
...
IT IS SO ORDERED.[33]
During the hearing of the respondents plea for a writ of preliminary mandatory injunction before
the CA on July 22, 2002, the Office of the Solicitor General (OSG) manifested that the State had no
opposition to the respondents re-entry and stay in the Philippines, provided that he leave the
country first and re-apply for admission and residency status with the assurance that he would be
re-admitted.[34] The respondents counsel manifested to the appellate court that he had just been
informed by the OSG of the Omnibus Resolution of the BOC dated June 14, 2002.
In her Comment on the Petition, the petitioner (the respondent therein) alleged, inter alia, the
following:
1) that the BOC was an indispensable party to the petition;
2) the petitioners failure to implead the BOC warranted the denial of the petition;
3) the allowance by then Immigration Commissioner Leandro Verceles for the petitioner therein to
renew his passport and secure clearances, even if proved, was not binding on the BOC;
4) the September 27, 1995 Order of the BOC was already executory when the respondent filed her
petition in the CA;
5) the German Embassys issuance of a new passport did not legalize the respondents stay in this
country, which became illegal on July 2, 1995 when his passport expired;
6) the respondent therein did not act with abuse of discretion in causing the arrest and detention of
the respondent based on the BOCs Summary Deportation Order; and
7) the BOC did not act with grave abuse of discretion in issuing its Summary Deportation Order and
Omnibus Resolution and such order and resolution were not mooted by the German Embassys
issuance of a new passport in favor of the respondent.
In view of the Omnibus Resolution of the BOC, the respondent (petitioner therein) in his
Memorandum prayed for the nullification of the BOCs Order, as well as its Omnibus Resolution
denying his Urgent Motion for Reconsideration considering that with the issuance of a new
passport, there was no more basis for his deportation, thus:
RELIEF
WHEREFORE, it is most respectfully prayed of this Honorable Court that:
1. Upon the filing of this Memorandum, this Honorable Court forthwith direct and authorize the
immediate release of petitioner, even on undersigneds recognizance, until further orders from this
Honorable Court;
2. The Summary Deportation Order of September 27, 19[9]5, affirmed by respondent allegedly on
June 14, 2002 and made known only yesterday, be nullified to the extent that it directs the
deportation of petitioner, who has removed the very basis of said Order of not having a valid
passport, and that the Resolution of June 14, 2002 be nullified in toto; and,
3. The Temporary Restraining Order of June 26, 2002 be converted into a permanent injunction or
writ of prohibition.
Petitioner likewise prays for such other and further relief as may be deemed just and equitable in
the premises.[35]
Surprisingly, the respondents counsel received on July 24, 2003 a Letter from the petitioner dated
July 16, 2002 stating that, the BOC was in the course of reviewing the deportation case against Mr.
Scheer, and that its findings would be given in due time.[36]
On August 20, 2002, the Court of Appeals rendered a Decision in favor of the respondent granting
his petition for certiorari and prohibition and permanently enjoining the petitioner from deporting
the respondent. The decretal portion of the Decision reads:
WHEREFORE, premises considered, the petitions for certiorari and prohibition are hereby GRANTED.
Accordingly, any order, oral or written, issued by respondent Commissioner Domingo against
petitioner, in relation to his deportation, is hereby ANNULLED, and respondent Commissioner
Domingo is hereby permanently enjoined/prohibited from deporting petitioner, in so far as this case
is concerned.
It is likewise ordered that petitioner be released from his confinement/detention in the Bureau of
Immigration UNLESS there is/are fresh new grounds/cases that will warrant his continued detention.
SO ORDERED.[37]
The Court of Appeals ruled that the German Embassys subsequent issuance of passport to the
respondent before the BOCs issuance of its Omnibus Resolution had mooted the September 27,
1995 Summary Deportation Order, as well as the arrest and detention of the respondent. According
to the court, it made no sense to require the respondent to leave the country and thereafter re-
apply for admission with the BOC. Furthermore, since the grounds cited by the BOC in its Summary
Deportation Order no longer existed, there was no factual and legal basis to disqualify the
respondent from staying in the country.
On the issue of whether the members of the BOC were indispensable parties, the CA ruled as
follows:
a) There are quite a number of cases in relevant jurisprudence wherein only the Immigration
Commissioner was impleaded to decide whether an alien may stay or be deported, such as in the
case of Vivo vs. Arca (19 SCRA 878) and Vivo vs. Cloribel (22 SCRA 159).
b) In the case of Caruncho III vs. COMELEC (315 SCRA 693), it was pronounced that: Ordinarily, the
nonjoinder of an indispensable party or the real party interest is not by itself a ground for the
dismissal of the petition. The court before which the petition is filed must first require the joinder of
such party. It is the noncompliance with said order that would be a ground for the dismissal of the
petition.
thus, c) respondent may be estopped for not raising such issue earlier.[38]
Aggrieved, the respondent therein, now the petitioner, through the Office of the Solicitor General,
appealed to us for relief. The petitioner contends that the Court of Appeals erred on a question of
law in granting the respondents petition in CA-G.R. SP No. 71094.[39]
In support of his contention, the Solicitor General has submitted the following arguments:
I. THE WRIT OF MANDAMUS DOES NOT LIE AGAINST THE COMMISSIONER OF THE BUREAU OF
IMMIGRATION TO RESOLVE RESPONDENTS URGENT MOTION FOR RECONSIDERATION OF THE
SUMMARY DEPORTATION ORDER, CONSIDERING THAT IT IS THE BOARD OF COMMISSIONERS, AND
NOT THE COMMISSIONER ALONE, WHICH HAS AUTHORITY TO MAKE SAID RESOLUTION.
II. THE WRIT OF CERTIORARI DOES NOT LIE AGAINST THE COMMISSIONER OF THE BUREAU OF
IMMIGRATION, CONSIDERING THAT IT IS THE BOARD OF COMMISSIONERS, AND NOT THE
COMMISSIONER ALONE, WHICH ISSUED THE SUMMARY DEPORTATION ORDER AND THE OMNIBUS
RESOLUTION.
III. THE WRIT OF PROHIBITION DOES NOT LIE AGAINST THE COMMISSIONER OF THE BUREAU OF
IMMIGRATION, PROHIBITING THE IMPLEMENTATION OF THE SUMMARY DEPORTATION ORDER AND
THE OMNIBUS RESOLUTION, CONSIDERING THAT THE BOARD OF COMMISSIONERS WAS NOT
IMPLEADED AS PARTY-RESPONDENT IN THE PETITION IN CA-G.R. SP NO. 71094.
IV. ASSUMING BUT WITHOUT ADMITTING THAT THE BOARD OF COMMISSIONERS WAS PROPERLY
IMPLEADED AS PARTY-RESPONDENT IN THE PETITION IN CA-G.R. SP NO. 71094, NEVERTHELESS, THE
SUMMARY DEPORTATION ORDER AND THE OMNIBUS RESOLUTION WERE NOT ISSUED WITHOUT OR
IN EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF (SIC)
EXCESS OF JURISDICTION.
V. FURTHER ASSUMING BUT WITHOUT ADMITTING THAT THE BOARD OF COMMISSIONERS WAS
PROPERLY IMPLEADED AS PARTY-RESPONDENT IN THE PETITION IN CA-G.R. SP NO. 71094, THE
COMMISSIONER OF THE BUREAU OF IMMIGRATION DID NOT ACT WITHOUT OR IN EXCESS OF
JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN IMPLEMENTING THE SUMMARY DEPORTATION ORDER AND THE OMNIBUS
RESOLUTION.[40]
Elucidating on his first three arguments, the petitioner maintains that the respondents petition
for certiorari, prohibition and mandamus before the Court of Appeals should have been dismissed
because he failed to implead the real party-in-interest as mandated by Rule 3, Section 7 of the Rules
of Court, as amended; in this case, the BOC. According to the Solicitor General, this was a fatal
procedural error. The inclusion of the BOC as respondent in the case was necessary in order that its
actions could be directly attacked and for the court to acquire jurisdiction over it. The fact that
Immigration Commissioner Andrea T. Domingo was impleaded as the sole respondent was not
enough, as she is only one of the four Commissioners.Furthermore, the assailed Orders were issued
by the Board, and not by the Immigration Commissioner alone.
The respondent counters that the petitioner is already estopped from raising this issue. He argues
that -
In quite a number of jurisprudence, only the Immigration Commissioner is impleaded to decide

whether an alien may stay here or not. The bottom line is petitioner, head of the Bureau of
Immigration, was more than fully heard on its institutional position, a Bureau which speaks with a
single voice in this case. She is in estoppel for not raising the issue earlier, either in a timely
Comment or during the oral argument[41]
In Caruncho III v. Comelec, it was held that-
[O]rdinarily, the nonjoinder of an indispensable party or real party in interest is not by itself a
ground for the dismissal of the petition. The court before which the petition is filed must first
require the joinder of such party. It is the noncompliance with said order that would be a ground for
the dismissal of the petition.
But even as the Court of Appeals did not require respondent of such joinder of parties, the
respondent, in fact, begged leave, ad cautelam, in its Reply Memorandum dated July 31, 2002 to
implead the Board which speaks with a single voice anyway in this case, and therefore, no claim can
be made that a valid point of view has not been heard[42]
Moreover, according to the respondent, the petitioner is clearly the BIDs chosen instrumentality for
the relevant purpose. What the respondent ultimately questioned are the acts or orders of the
petitioner for the arrest and immediate deportation of the respondent by way of implementing the
BOCs Summary Deportation Order.
By way of reply, the Office of the Solicitor General asserted that the Summary Deportation Order
and Omnibus Resolution were collegial actions of the BOC and not of the petitioner alone. Although
its Chairperson, the petitioner, is merely a member thereof, her decisions and actions are still
subject to the collective will of the majority.[43]
The Ruling of the Court
The BOC is an
Indispensable
Party
We agree with the petitioners contention that the BOC was an indispensable party to the
respondents petition for certiorari, prohibition and mandamus in the Court of Appeals. The
respondent was arrested and detained on the basis of the Summary Deportation Order of the BOC.
The petitioner caused the arrest of the respondent in obedience to the said Deportation Order. The
respondent, in his Memorandum, prayed that the CA annul not only the Summary Deportation
Order of the BOC but also the latters Omnibus Resolution, and, thus, order the respondents
immediate release. The respondent also prayed that the CA issue a writ of mandamus for the
immediate resolution of his Urgent Motion for Reconsideration. The said motion had to be resolved
by the BOC as the order sought to be resolved and reconsidered was issued by it and not by the
petitioner alone. The powers and duties of the BOC may not be exercised by the individual members
of the Commission.[44]
Section 7, Rule 3 of the Rules of Court, as amended, requires indispensable parties to be joined as
plaintiffs or defendants. The joinder of indispensable parties is mandatory. Without the presence of
indispensable parties to the suit, the judgment of the court cannot attain real finality.[45] Strangers to
a case are not bound by the judgment rendered by the court.[46] The absence of an indispensable
party renders all subsequent actions of the court null and void. Lack of authority to act not only of
the absent party but also as to those present.[47] The responsibility of impleading all the
indispensable parties rests on the petitioner/plaintiff.[48]
However, the non-joinder of indispensable parties is not a ground for the dismissal of an
action. Parties may be added by order of the court on motion of the party or on its own initiative at
any stage of the action and/or such times as are just.[49] If the petitioner/plaintiff refuses to implead
an indispensable party despite the order of the court, the latter may dismiss the complaint/petition
for the petitioner/plaintiffs failure to comply therefor.[50] The remedy is to implead the non-party
claimed to be indispensable.[51] In this case, the CA did not require the respondent (petitioner
therein) to implead the BOC as respondent, but merely relied on the rulings of the Court in Vivo v.
Arca,[52] and Vivo v. Cloribel.[53] The CAs reliance on the said rulings is, however, misplaced. The acts
subject of the petition in the two cases were those of the Immigration Commissioner and not those
of the BOC; hence, the BOC was not a necessary nor even an indispensable party in the aforecited
cases.
The Non-joinder of an
Indispensable Party is not
a Ground for the Dismissal
of the Petition
The Court may be curing the defect in this case by adding the BOC as party-petitioner. The petition
should not be dismissed because the second action would only be a repetition of the first.[54] In
Salvador, et al., v. Court of Appeals, et al.,[55] we held that this Court has full powers, apart from that
power and authority which is inherent, to amend the processes, pleadings, proceedings and
decisions by substituting as party-plaintiff the real party-in-interest. The Court has the power to
avoid delay in the disposition of this case, to order its amendment as to implead the BOC as party-
respondent. Indeed, it may no longer be necessary to do so taking into account the unique backdrop
in this case, involving as it does an issue of public interest.[56] After all, the Office of the Solicitor
General has represented the petitioner in the instant proceedings, as well as in the appellate court,
and maintained the validity of the deportation order and of the BOCs Omnibus Resolution. It cannot,
thus, be claimed by the State that the BOC was not afforded its day in court, simply because only the
petitioner, the Chairperson of the BOC,[57] was the respondent in the CA, and the petitioner in the
instant recourse. In Alonso v. Villamor,[58] we had the occasion to state:
There is nothing sacred about processes or pleadings, their forms or contents. Their sole purpose is
to facilitate the application of justice to the rival claims of contending parties. They were created,
not to hinder and delay, but to facilitate and promote, the administration of justice. They do not
constitute the thing itself, which courts are always striving to secure to litigants. They are designed
as the means best adapted to obtain that thing. In other words, they are a means to an end. When
they lose the character of the one and become the other, the administration of justice is at fault and
courts are correspondingly remiss in the performance of their obvious duty.
The CA had Jurisdiction

Over the Petition for
Certiorari, Prohibition
and Mandamus
We do not agree with the petitioners contention that the issue before the CA, as to the power of the
President to determine whether an alien may remain or be deported from the Philippines, is beyond
the appellate courts competence to delve into and resolve. The contention of the petitioner is based
on a wrong premise.
The settled rule is that the authority to exclude or expel aliens by a power affecting international
relation is vested in the political department of the government, and is to be regulated by treaty or
by an act of Congress, and to be executed by the executive authority according to the regulations so
established, except in so far as the judicial department has been authorized by treaty or by statute,
or is required by the Constitution to intervene.[59] The judicial department cannot properly express
an opinion upon the wisdom or the justice of the measures executed by Congress in the exercise of
the power conferred on it,[60] by statute or as required by the Constitution. Congress may, by
statute, allow the decision or order of the Immigration Commissioner or the BOC to be reviewed by
the President of the Philippines or by the courts, on the grounds and in the manner prescribed by
law.
Article VIII, Section 1 of the Constitution has vested judicial power in the Supreme Court and the
lower courts such as the Court of Appeals, as established by law. Although the courts are without
power to directly decide matters over which full discretionary authority has been delegated to the
legislative or executive branch of the government and are not empowered to execute absolutely
their own judgment from that of Congress or of the President,[61] the Court may look into and
resolve questions of whether or not such judgment has been made with grave abuse of discretion,
when the act of the legislative or executive department violates the law or the
Constitution. In Harvy Bridges v. I.F. Wixon,[62] the United States Federal Supreme Court reversed an
Order of Deportation made by the Attorney General for insufficiency of evidence and for improper
admission of evidence. In Nging v. Nagh,[63] the United States Court of Appeals (9th Circuit Court)
held that conclusions of administrative offices on the issues of facts are invulnerable in courts unless
when they are not rendered by fair-minded men; hence, are arbitrary. In Toon v. Stump,[64] the Court
ruled that courts may supervise the actions of the administrative offices authorized to deport aliens
and reverse their rulings when there is no evidence to sustain them. When acts or omissions of a
quasi-judicial agency are involved, a petition for certiorari or prohibition may be filed in the Court of
Appeals as provided by law or by the Rules of Court, as amended.[65]
In this case, the respondent alleges that the petitioner acted arbitrarily, contrary to law and with
grave abuse of discretion in causing his arrest and detention at a time when his Urgent Motion for
Reconsideration of the BOCs Summary Deportation Order had yet to be resolved. There was no
factual or legal basis for his deportation considering that he was a documented alien and a law-
abiding citizen; the respondent, thus, prayed for a writ of mandamus to compel the petitioner, the
Chairperson of the BOC, to resolve the said motion. The petition before the CA did not involve the
act or power of the President of the Philippines to deport or exclude an alien from the country. This
being so, the petition necessarily did not call for a substitution of the Presidents discretion on the
matter of the deportation of the respondent with that of the judgment of the CA.
Irrefragably, the CA had jurisdiction over the petition of the respondent.
The BOC Committed a Grave
Abuse of Discretion Amounting
To Lack or Excess of Jurisdiction
In Issuing its Summary Deportation
Order and Omnibus Resolution; The
Petitioner Committed a Grave Abuse
Of Her Discretion Amounting to
Lack or Excess of Jurisdiction in
Causing the Arrest and Detention
Of The Private Respondent
On the Solicitor Generals fourth and fifth arguments, we are convinced that the BOC committed a
grave abuse of discretion amounting to excess or lack of jurisdiction in issuing its Summary
Deportation Order and Omnibus Resolution, and that the petitioner committed grave abuse of
discretion amounting to excess or lack of jurisdiction in causing the arrest and detention of the
private respondent.
The settled rule is that the entry or stay of aliens in the Philippines is merely a privilege and a matter
of grace; such privilege is not absolute nor permanent and may be revoked. However, aliens may be
expelled or deported from the Philippines only on grounds and in the manner provided for by the
Constitution, the Immigration Act of 1940, as amended, and administrative issuances pursuant
thereto. In Mejoff v. Director of Prisons,[66] we held, thus:
Moreover, by its Constitution (Art. II, Sec. 3) the Philippines adopts the generally accepted principles
of international law a part of the law of Nation. And in a resolution entitled Universal Declaration of
Human Rights and approved by the General Assembly of the United Nations of which the Philippines
is a member, at its plenary meeting on December 10, 1948, the right to life and liberty and all other
fundamental rights as applied to all human beings were proclaimed. It was there resolved that All
human beings are born free and equal in degree and rights (Art. 1); that Everyone is entitled to all
the rights and freedom set forth in this Declaration, without distinction of any kind, such as race,
color, sex, language, religion, political or other opinion, nationality or social origin, property, birth,
or other status (Art. 2); that Every one has the right to an effective remedy by the competent
national tribunals for acts violating the fundamental rights granted him by the Constitution or by law
(Art. 8); that No one shall be subjected to arbitrary arrest, detention or exile (Art. 9); etc.
In this case, the BOC ordered the private respondents deportation on September 27, 1995 without
even conducting summary deportation proceedings. The BOC merely relied on the June 29, 1995
Letter of the German Vice Consul and of the German Embassys Note Verbale No. 369/95 dated July
26, 1995. It issued the Summary Deportation Order on September 27, 1995 allegedly under
paragraph 3 of Office Memorandum Order No. 34 dated August 21, 1989 which reads:
3. If a foreign embassy cancels the passport of the alien or does not reissue a valid passport to him,
the alien loses the privilege to remain in the country, under the Immigration Act, Sections 10 and 15
(Schonemann vs. Santiago, et al., G.R. No. 81461, 30 May 1989). The automatic loss of the privilege
obviates deportation proceedings. In such instance, the Board of Commissioners may issue summary
judgment of deportation which shall be immediately executory.
However, as gleaned from the Summary Deportation Order, the respondent was ordered deported
not only because his passport had already expired; the BOC speculated that the respondent
committed insurance fraud and illegal activities in the Philippines and would not, thus, be issued a
new passport. This, in turn, caused the BOC to conclude that the respondent was an undesirable
alien. Section 37(c) of Commonwealth Act No. 613, as amended, provides that:
No alien shall be deported without being informed of the specific grounds for deportation or
without being given a hearing under rules of procedure to be prescribed by the Commissioner of
Immigration.
Under paragraphs 4 and 5 of Office Memorandum Order No. 34, an alien cannot be deported unless
he is given a chance to be heard in a full deportation hearing, with the right to adduce evidence in
his behalf, thus:
4. All other cases shall be tried in full deportation hearing, with due observance of the pertinent
provisions of Law Instruction No. 39.
5. In all cases, the right of the alien to be informed of the charges against him, to be notified of the
time and place of hearing, when necessary, to examine the evidence against him, and to present
evidence in his own behalf, where appropriate, shall be observed.
The respondent was not afforded any hearing at all. The BOC simply concluded that the respondent
committed insurance fraud and illegal activities in Palawan without any evidence. The respondent
was not afforded a chance to refute the charges. He cannot, thus, be arrested and deported without
due process of law as required by the Bill of Rights of the Constitution.In Lao Gi v. Court of
Appeals,[67] we held that:
Although a deportation proceeding does not partake of the nature of a criminal action, however,
considering that it is a harsh and extraordinary administrative proceeding affecting the freedom and
liberty of a person, the constitutional right of such person to due process should not be denied.
Thus, the provisions of the Rules of Court of the Philippines particularly on criminal procedure are
applicable to deportation proceedings.
It must be noted that the respondent was a permanent resident before his passport expired on July
2, 1995. In Chew v. Colding,[68] the United States Federal Supreme Court ruled:
It is well established that if an alien is a lawful permanent resident of the United States and remains
physically present there, he is a person within the protection of the Fifth Amendment. He may not
be deprived of his life, liberty or property without due process of law. Although it later may be
established, as respondents contend, that petitioner can be expelled and deported, yet before his
expulsion, he is entitled to notice of the nature of the charge and a hearing at least before an
executive or administrative tribunal. Although Congress may prescribe conditions for his expulsion
and deportation, not even Congress may expel him without allowing him a fair opportunity to be
heard.
As Mr. Justice Murphy said in his concurring opinion in Bridges v. Wixon:[69]
The Bill of Rights belongs to them as well as to all citizens. It protects them as long as they reside
within the boundaries of our land. It protects them in the exercise of the great individual rights
necessary to a sound political and economic democracy.
According to Vattal,[70] an alien who is a permanent resident in a country is a member of the new
society, at least as a permanent inhabitant, and is a kind of citizen of inferior order from the native
citizens; but is, nevertheless, limited and subject to the society, without participating in all its
advantages. Sir Robert Philconse called them de facto, though not de jure citizens of the country of
their domicile.[71]
Such permanent resident[72] may be classified as a denizen, a kind of middle state between alien and
a natural-born subject and partakes of both. Paraphrasing Justice Brewer in his dissenting opinion
in Fong Yue Ting v. United States,[73] when the right to liberty and residence is involved, some other
protection than the mere discretion of the petitioner or the BOC is required. We recall the warning
of the United States Supreme Court in Boyd v. United States:[74]
Illegitimate and unconstitutional practices get their first footing in that way, namely, by silent
approaches and slight deviations from legal modes of procedure. This can only be obviated by
adhering to the rule that constitutional provisions for the security of person and property should be
liberally construed. A close and literal construction deprives them of half their efficacy, and leads to
a gradual depreciation of the right, as if it consisted more in sound than in substance. It is the duty
of the courts to be watchful for the constitutional rights of the citizen, and against any stealthy
encroachments thereon. Their motto should be obsta principiis.
In sum, the arrest and detention of the respondent and his deportation under the Summary
Deportation Order of the BOC for insurance fraud and illegal activities in Palawan violated his
constitutional and statutory rights to due process.
The Respondents Arrest and
Detention was Premature,
Unwarranted and Arbitrary
We agree that the Immigration Commissioner is mandated to implement a legal and valid Summary
Deportation Order within a reasonable time. But in this case, the arrest of the respondent in his
house, at near midnight, and his subsequent detention was premature, unwarranted and arbitrary.
Like a thunderbolt in the sky, the BID agents and marines arrested the respondent on June 6, 2002,
on orders of the petitioner based on the September 27, 1995 Summary Deportation Order. Under
the basic rudiments of fair play and due process, the petitioner was required to first resolve the
respondents Urgent Motion for Reconsideration of the said Order, which was filed more than six
years before or on December 5, 1995.
It may be argued that respondents filing of an Urgent Motion for Reconsideration did not ipso
facto suspend the efficacy of the BOCs deportation order. However, such an argument cannot be
sustained in this case because of the extant and peculiar factual milieu. It bears stressing that more
than six years had elapsed, from the time the Summary Deportation Order was issued, until the
respondent was finally arrested. Supervening facts and circumstances rendered the respondents
arrest and detention unjust, unreasonable, barren of factual and legal basis. The BOC should have
set the respondents motion for hearing to afford him a chance to be heard and adduce evidence in
support thereon. It was bad enough that the BOC issued its Summary Deportation Order without a
hearing; the BOC dealt the respondent a more severe blow when it refused to resolve his motion for
reconsideration before causing his arrest on June 6, 2002.
As aforestated, the BOC ordered the deportation of the respondent after a summary proceeding
without prior notice on the following grounds: (a) the respondents German passport had expired;
(b) there was a pending criminal case for physical injuries against him in Germany; (c) the
respondent indulged in illegal activities in Palawan; (d) that in all likelihood, the respondents
passport will not be renewed by the German Embassy as he was wanted for insurance fraud in
Germany; and, (e) he was an undesirable alien. But then, in response to the written query of no less
than the petitioner herself, the German Embassy declared that the respondent was not wanted by
the German police for any crime, including insurance fraud. This could only mean that the warrant
of arrest issued by the German Federal police mentioned in Note Verbale No. 369/95 had been
lifted, and that the respondent was not involved in any illegal activities in Germany. The criminal
case against the respondent for physical injuries, which does not involve moral turpitude, was
dismissed by the German District Court.Furthermore, there was no evidence of insurance fraud
against the respondent.
The BOC issued its Summary Deportation Order without affording the respondent the right to be
heard on his motion and adduce evidence thereon. It merely concluded that the respondent was
involved in illegal activities in Palawan. What made matters worse was that the BOC indulged in
sheer speculation, that the German Embassy is unlikely to issue a new passport to the respondent.
The deportation of aliens should not be based on mere speculation or a mere product of
procrastinations as in this case. As it turned out, the German Embassy re-issued the respondents
passport; he was issued a temporary passport, and, thereafter, a regular passport, yet to expire on
March 12, 2006. The petitioner cannot feign ignorance of this matter because the respondent
himself, six years before he was arrested, informed then Immigration Commissioner Verceles in a
Letter dated March 1, 1996. The respondents letter forms part of the records of the BOC. There is no
evidence on record that the respondent committed any illegal activities in Palawan. He was even
designated as special agent of the NBI, and was, in fact, issued clearances by the PNP and the NBI no
less. Despite all the foregoing, the petitioner ordered and caused the arrest and detention of the
respondent.
What is most nettlesome is the apparent antedating of the BOC Omnibus Resolution. The records
show that the petitioner sought to assuage the respondents concern on the belated resolution of his
pending urgent motion for reconsideration in a Letter to the latters counsel dated July 18, 2002 in
which the petitioner assured the respondent that the BOC will provide him of its action on the said
motion:
Dear Atty. Sagisag,
We respond to your letter of 17 June 2002 by informing you that the case of Mr. Herbert Scheer is
being evaluated by the Board of Commissioners (BOC). The BOC will provide you of the results of its
collegial action in due time.
Very truly yours,

(Sgd.) ANDREA D. DOMINGO
Commissioner[75]
However, the Omnibus Resolution of the BOC was dated June 14, 2002, although on its face it was
filed with the Records Division of the BID only on July 18, 2002.
The foregoing gave reason for the CA to suspect that the Omnibus Resolution of the BOC was
antedated.[76] The petition of the respondent in the CA must have jolted the petitioner and the BOC
from its stupor because it came out with its Omnibus Resolution on July 18, 2002, which was,
however, dated as early as June 14, 2002. The respondent had to wait in anxiety for the BOC to
quench his quest for justice. The BOCs wanton acts amounted to an abdication of its duty to act
and/or resolve cases/incidents with reasonable dispatch. To recall our ruling in Board of
Commissioners v. De la Rosa,[77] citing Sheor v. Bengson,[78] thus:
This inaction or oversight on the part of the immigration officials has created an anomalous situation
which, for reasons of equity, should be resolved in favor of the minor herein involved.
The petitioner and the BOC should have taken to heart the following pronouncement
in Commissioner of Immigration v. Fernandez:[79]
In the face of the disclosure that Teban Caoili had been all along working in the Avenue Electrical
Supply Co. (Avesco), located at No. 653 Rizal Avenue, Manila, until his arrest, and the documentary
evidence showing that he had been issued a Philippine Passport; had regularly paid his Residence
Tax Certificates (A & B), and filed Income Tax Returns, a finding of fact is necessary whether the
Commissioner really had intended to notify Teban Caoili of the exclusion proceedings the Board had
conducted in his absence. While it may be true that the proceedings is purely administrative in
nature, such a circumstance did not excuse the serving of notice. There are cardinal primary rights
which must be respected even in proceedings of administrative character, the first of which is the
right of the party interested or affected to present his own case and submit evidence in support
thereof.[80]
...
Since the proceedings affected Caoilis status and liberty, notice should have been given. And in the
light of the actuations of the new Board of Commissioners, there is a necessity of determining
whether the findings of the Board of Special Inquiry and the old Board of Commissioners are correct
or not. This calls for an examination of the evidence, and, the law on the matter.[81]
Apparently, the BOC did not bother to review its own records in resolving the respondents Urgent
Motion for Reconsideration. It anchored its Omnibus Resolution only on the following: the
membership of the BOC had changed when it issued its September 27, 1995 Summary Deportation
Order and under Commonwealth Act No. 613, Section 27(b); the BOC is precluded from reversing a
previous order issued by it;[82]and, the September 27, 1995 Order of the BOC had become final and
could no longer be reviewed and reversed by it after the lapse of one year.[83] However, the rulings
cited by the petitioner are not applicable in the instant case, as the said cases cited involve appeals
to the BOC from the decisions of the Board of Special Inquiry (BSI). In Sy v. Vivo[84] and Lou v.
Vivo,[85] we ruled that under Section 27(b) of Commonwealth Act No. 613, as amended, the Decision
of the BOC on appeal from the decision of the BSI becomes final and executory after one year:
(b) A board of special inquiry shall have authority (1) to determine whether an alien seeking to enter
or land in the Philippines shall be allowed to enter or land or shall be excluded, and (2) to make its
findings and recommendations in all the cases provided for in section twenty-nine of this Act
wherein the Commissioner of Immigration may admit an alien who is otherwise inadmissible. For
this purpose, the board or any member thereof, may administer oaths and take evidence and in case
of necessity may issue subpoena and/or subpoena duces tecum. The hearing of all cases brought
before a board of special inquiry shall be conducted under rules of procedure to be prescribed by
the Commissioner of Immigration. The decision of any two members of the board shall prevail and
shall be final unless reversed on appeal by the Board of Commissioners as hereafter stated, or in the
absence of an appeal, unless reversed by the Board of Commissioners after a review by it, motu
propio, of the entire proceedings within one year from the promulgation of the decision.
In Commissioner of Immigration v. Fernandez,[86] we held that the BOC composed of new members
is precluded from reversing, motu proprio, the decision of the BOC on appeal from a BSI
decision. But not to be ignored was our ruling that at any rate, the issue of authority should be made
in accordance with the procedure established by law, with a view to protecting the rights of
individuals.[87]
In this case, the Summary Deportation Order was issued by the BOC in the exercise of its authority
under Office Memorandum Order No. 34, and not in the exercise of its appellate jurisdiction of BSI
decisions. There is no law nor rule which provides that a Summary Deportation Order issued by the
BOC in the exercise of its authority becomes final after one year from its issuance,[88] or that the
aggrieved party is barred from filing a motion for a reconsideration of any order or decision of the
BOC. The Rules of Court may be applied in a suppletory manner to deportation proceedings[89] and
under Rule 37, a motion for reconsideration of a decision or final order may be filed by the
aggrieved party.
Neither is there any law nor rule providing that the BOC, composed of new members, cannot revise
a Summary Deportation Order previously issued by a different body of Commissioners. The BOC that
issued the Summary Deportation Order and the BOC which resolved the respondents Urgent Motion
for Reconsideration are one and the same government entity, with the same powers and duties
regardless of its membership. Similarly, an RTC judge who replaces another judge who presided over
a case may review the judgment or order of his predecessor as long as the said judgment or order
has not as yet become final or executory. The act subject of review is not the act of the judge but
the act of the court.
The petitioners contention that it failed to resolve the respondents motion for reconsideration
because of the change of administration in the BOC was branded by the CA as flimsy, if not
bordering on the absurd:
Firstly, it was issued three days (June 14, 2002) after petitioner filed this instant petition on June 11,
2002 or almost seven years from the time the motion for reconsideration was filed;
Secondly, respondents counsels excuse that it took such time to resolve it because it was only later
that the motion for reconsideration was discovered because of change of administration, is flimsy, if
not bordering on the absurd;[90]
The Issuance of a New and Regular

Passport to the Respondent
Rendered the Summary
Deportation Order Moot and
Academic, and the Omnibus
Resolution of the BOC Lacking
in Legal Basis
We agree with the petitioner that a foreign embassys cancellation of the passport it had issued to its
citizens, or its refusal to issue a new one in lieu of a passport that has expired, will result in the loss
of the aliens privilege to stay in this country and his subsequent deportation therefrom. But even
the BOC asserted in its Summary Deportation Order that an embassys issuance of a new passport to
any of its citizens may bar the latters deportation, citing the resolution of this Court in Schonemann
v. Commissioner Santiago.[91]
Irrefragably, Commissioner Verceles was mandated to cause the arrest of the respondent
preparatory to his deportation from the Philippines. However, there was no fixed period in the
Order within which to comply with the same. The Commissioner is not mandated to deport an alien
immediately upon receipt of the BOCs deportation order. It is enough that the Commissioner
complies with the Order within a reasonable time, which, in Mejoff v. Director of Prisons,[92] we held
to connote as follows:
The meaning of reasonable time depends upon the circumstances, specially the difficulties of
obtaining a passport, the availability of transportation, the diplomatic arrangements with the
governments concerned and the efforts displayed to send the deportee away; but the Court warned
that under established precedents, too long a detention may justify the issuance of a writ of habeas
corpus.
In this case, the BOC had yet to act on the respondents Urgent Motion for Reconsideration. The
respondent was also given a chance to secure a clearance and a new passport with the German
Embassy. After all, the possibility that the German Embassy would renew the respondents passport
could not be ruled out. This was exactly what happened: the German Embassy issued a new
passport to the respondent on March 12, 1996 after the German District Court dismissed the case
for physical injuries. Thus, the respondent was no longer an undocumented alien; nor was he an
undesirable one for that matter.
The petitioner even admits that there is no longer a legal or factual basis to disqualify the
respondent from remaining in the country as a permanent resident. Yet, the OSG insists that he has
to be deported first so that the BOCs Summary Deportation Order could be implemented. This
contention was rejected by the CA, thus:
During the hearing of petitioners prayer for issuance of a writ of preliminary injunction before Us,
respondents counsel from the Office of the Solicitor General had the occasion to manifest in open
court that the State has no opposition to petitioners stay in the country provided he first leave and
re-enter and re-apply for residency if only to comply with the Summary Deportation Order of 1995.
That, to Our mind, seems preposterous, if not ridiculous. An individuals human rights and rights to
freedom, liberty and self-determination recognize no boundaries in the democratic, free and
civilized world. Such rights follow him wherever he may be. If presently, there is no factual or legal
impediment to disqualify petitioner in his stay in the country, other than allegedly those relied upon
in the Summary Deportation Order of 1995 (as hereinbefore discussed, had ceased to exist),
requiring petitioner to leave the country and re-enter and re-apply for residency makes little sense
or no sense at all, more so, in the case of petitioner who, for many years past, had lived herein and
nurtured a family that is Filipino.
Thus, opined, We, therefore, believe and hereby rule, that there is presently every reason to
enjoin/prohibit the Bureau of Immigration, respondent Commissioner Domingo in particular, from
presently deporting petitioner.[93]
We agree with the Court of Appeals. The Summary Deportation Order had been rendered moot and
academic upon the German Embassys issuance of a new passport to the respondent. The
respondent had been in the Philippines as a permanent resident since July 18, 1986, and had
married a Filipino citizen, with whom he has two children. He is not a burden to the country nor to
the people of Palawan. He put up, and has been managing, the Bavaria Restaurant with about 30
employees. He has no pending criminal case; nor does he have any derogatory record. The
respondent was allowed by then Immigration Commissioner Verceles to renew his passport and was
given time to secure a clearance from the German Embassy.The respondent was able to do so. The
case against him for physical injuries was dismissed by the German District Court. Thus, the
inceptual basis for the respondents deportation had ceased to exist.
The power to deport is a police matter against undesirable aliens, whose presence in the country is
found to be injurious to the public good. We believe that the deportation of the respondent late in
the day did not achieve the said purpose. The petitioner admitted that there is no longer a factual
and legal basis to disqualify the respondent from staying in the country.He is not an undesirable
alien; nor is his presence in the country injurious to public good. He is even an entrepreneur and a
productive member of society.
Arrest, detention and deportation orders of aliens should not be enforced blindly and
indiscriminately, without regard to facts and circumstances that will render the same unjust, unfair
or illegal.[94] To direct the respondent to leave the country first before allowing him re-entry is
downright iniquitous.[95] If the respondent does leave the country, he would thereby be accepting
the force and effect of the BOCs Summary Deportation Order with its attendant infirmities. He will
thereby lose his permanent resident status and admit the efficacy of the cancellation of his
permanent resident visa. Moreover, his entry into the country will be subject to such conditions as
the petitioner may impose.
The deportation of an alien is not intended as a punishment or penalty. But in a real sense, it
is. In Bridges v. Wixon,[96] Mr. Justice Murphy declared that the impact of deportation upon the life
of an alien is often as great if not greater than the imposition of a criminal sentence. In dealing with
deportation, there is no justifiable reason for disregarding the democratic and human tenets of our
legal system and descending to the practices of despotism. As Justice Brewer opined in Fong
Yue Ting v. United States,[97] deportation is a punishment because it requires first, an arrest, a
deprivation of liberty and second, a removal from home, from family, from business, from
property. To be forcibly taken away from home, family, business and property and sent across the
ocean to a distant land is punishment; and that oftentimes is most severe and cruel. It would be
putting salt on the respondents woes occasioned by the BOCs ineptitude. Considering the peculiar
backdrop and the equities in this case, the respondents deportation and the cancellation of his
permanent resident visa as a precondition to his re-entry into this country is severe and cruel; it is a
form of punishment.
Our ruling in Vivo v. Cloribel,[98] has no application in this case, precisely because the factual milieu
here is entirely different. In that case, the Commissioner of Immigration required the respondents to
leave the country on or before September 12, 1962, because their stay in the country as approved
by the Secretary of Justice had been cancelled. Our ruling in Bing v. Commission on
Immigration,[99] even buttresses the case for the respondent since we ruled therein that an alien
entitled to a permanent stay cannot be deported without being accorded due notice and hearing.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The Decision of the Court of Appeals is
AFFIRMED.
SO ORDERED.
3. DOMINGO vs CARAGUE
EN BANC
[G.R. No. 161065. April 15, 2005]
EUFEMIO C. DOMINGO, CELSO D. GANGAN, PACASIO S. BANARIA, SOFRONIO B. URSAL, ALBERTO
P. CRUZ, MARIA L. MATIB, RACHEL U. PACPACO, ANGELO G. SANCHEZ, and SHERWIN A. SIP-
AN, petitioners, vs. HON. GUILLERMO N. CARAGUE, in his capacity as Chairman, Commission on
Audit, HON. EMMANUEL M. DALMAN and HON. RAUL C. FLORES, in their capacities as
Commissioners, Commission on Audit, respondents.
DECISION
Judicial power is the power to hear and decide cases pending between parties who have the right to
sue in courts of law and equity.[1] Corollary to this dictum is the principle of locus standi of a litigant.
He who is directly affected and whose interest is immediate and substantial has the standing to sue.
Thus, a party must show a personal stake in the outcome of the case or an injury to himself that can
be redressed by a favorable decision in order to warrant an invocation of the courts jurisdiction and
justify the exercise of judicial power on his behalf.
Assailed in this petition for certiorari is the legality of Resolution No. 2002-05 of the Commission on
Audit (COA) providing for Organizational Restructuring Plan. The above-named petitioners basically
alleged therein that this Plan is intrinsically void for want of an enabling law authorizing COA to
undertake the same and providing for the necessary standards, conditions, restrictions, limitations,
guidelines, and parameters. Petitioners further alleged that in initiating such Organizational
Restructuring Plan without legal authority, COA committed grave abuse of discretion amounting to
lack or excess of jurisdiction.
At this point, it is pertinent to state that the COA is a quasi-judicial body and that its decision, order
or ruling may be brought to the Supreme Court on certiorari by the aggrieved party.[2]
Petitioners Eufemio C. Domingo, Celso C. Gangan, Pascasio S. Banaria are retired Chairmen, while
Sofronio B. Ursal, and Alberto P. Cruz are retired Commissioners of COA. All claim to maintain a
deep-seated abiding interest in the affairs of COA,[3] especially in its Organizational Restructuring
Plan, as concerned taxpayers.
The other petitioners are incumbent officers or employees of COA. Maria L. Matib and Angelo G.
Sanchez are State Auditor III and State Auditor II, respectively, assigned to the Cordillera
Administrative Region (CAR). Prior to the implementation of the questioned COA Organizational
Restructuring Plan, they were Resident Auditors and later Audit Team Leaders. Petitioner Rachel U.
Pacpaco is a State Auditor III assigned to CAR and a Team Supervisor, while petitioner Sherwin A.
Sipi-an is a State Auditor I also assigned at the CAR. These petitioners claim that they were
unceremoniously divested of their designations/ranks as Unit Head, Team Supervisor, and Team
Leader upon implementation of the COA Organizational Restructuring Plan without just cause and
without due process, in violation of Civil Service Law. Moreover, they were deprived of their
respective Representation and Transportation Allowances (RATA), thus causing them undue
financial prejudice.
Petitioners now invoke this Courts judicial power to strike down the COA Organizational
Restructuring Plan for being unconstitutional or illegal.
Initially, for our resolution is the issue of whether petitioners have the legal standing to institute the
instant petition.
Petitioners invoke our ruling in Chavez v. Public Estates Authority,[4] Agan, Jr. v. Philippine
International Air Terminals Co., Inc.,[5] and Information Technology Foundation of the Philippines v.
Commission on Elections[6] that where the subject matter of a case is a matter of public concern and
imbued with public interest, then this fact alone gives them legal standing to institute the instant
petition. Petitioners contend that the COA Organizational Restructuring Plan is not just a mere
reorganization but a revamp or overhaul of the COA, with a spillover effect upon its audit
performance. This will have an impact upon the rest of the government bodies subject to its audit
supervision, thus, should be treated as a matter of transcendental importance. Consequently,
petitioners legal standing should be recognized and upheld.
Respondents, through the Office of the Solicitor General (OSG), counter that petitioners have no
legal standing to file the present petition since following our ruling in Kilusang Mayo Uno Labor
Center v. Garcia, Jr.,[7] they have not shown a personal stake in the outcome of the case or an actual
or potential injury that can be redressed by our favorable decision. Petitioners themselves admitted
that they do not seek any affirmative relief nor impute any improper or improvident act against the
said respondents and are not motivated by any desire to seek affirmative relief from COA or from
respondents that would redound to their personal benefit or gain. It is clear then that petitioners
failed to show any present substantial interest in the outcome of this case, citing Kilosbayan v.
Morato.[8] Nor may petitioners claim that as taxpayers, they have legal standing since nowhere in
their petition do they claim that public funds are being spent in violation of law or that there is a
misapplication of the taxpayers money, as we ruled in Dumlao v. Comelec.[9]
Petitioners reliance upon our rulings in Chavez,[10] Agan, Jr.,[11] and Information Technology
Foundation[12] is flawed.
In Chavez, we ruled that the petitioner has legal standing since he is a taxpayer and his purpose in
filing the petition is to compel the Public Estate Authority (PEA) to perform its constitutional duties
with respect to: (a) the right of the citizens to information on matters of public concern; and (b) the
application of a constitutional provision intended to insure the equitable distribution of alienable
lands of the public domain among Filipino citizens. The thrust of the first is to compel PEA to disclose
publicly information on the sale of Government lands worth billions of pesos, as mandated by the
Constitution and statutory law. The thrust of the second is to prevent PEA from alienating hundreds
of hectares of alienable lands of the public domain, thereby compelling it to comply with a
constitutional duty to the nation. We held that these matters are of transcendental public
importance.[13]
In Agan, Jr., we held that petitioners have legal standing as they have a direct and substantial
interest to protect. By the implementation of the PIATCO contracts, they stand to lose their source
of livelihood, a property right zealously protected by the Constitution. Such financial prejudice on
their part is sufficient to confer upon them the requisite locus standi.[14]
In Information Technology Foundation, there were two reasons why petitioners standing was
recognized. First, the nations political and economic future virtually hangs in the balance, pending
the outcome of the 2004 elections. Accordingly, the award for the automation of the electoral
process was a matter of public concern, imbued with public interest. Second, the individual
petitioners, as taxpayers, asserted a material interest in seeing to it that public funds are properly
used.
Here, petitioners have not shown any direct and personal interest in the COA Organizational
Restructuring Plan. There is no indication that they have sustained or are in imminent danger of
sustaining some direct injury as a result of its implementation. In fact, they admitted that they do
not seek any affirmative relief nor impute any improper or improvident act against the respondents
and are not motivated by any desire to seek affirmative relief from COA or from respondents that
would redound to their personal benefit or gain. Clearly, they do not have any legal standing to file
the instant suit.
We are well aware of the averments of petitioners Matib, Pacpaco, Sanchez, and Sipi-An that they
were demoted and unceremoniously divested of their previous designations as Unit Head, Team
Supervisor, or Team Leader; that they were deprived of their RATA; that they were relegated to
being mere Team Members, entitled to only a reimbursable transportation allowance; and that they
were denied due process.
Such averments lack merit. Actually, they were not demoted. Under Section 11, Rule VII of the
Omnibus Rules Implementing Book V of the Administrative Code of 1987, a demotion is the
movement from one position to another involving the issuance of an appointment with diminution
in duties, responsibilities, status, or rank which may or may not involve reduction in salary. [15] A
demotion by assigning an employee to a lower position in the same service which has a lower rate
of compensation is tantamount to removal, if no cause is shown for it.[16]
Here, there have been no new appointments issued to Matib, Pacpaco, Sanchez, and Sipi-An under
the COA Organizational Restructuring Plan. Thus, their contention that they have been demoted is
baseless.
Moreover, the change in their status from COA auditors (receiving monthly RATA) to COA auditors
(receiving only reimbursable RATA) cannot be attributed to the COA Organizational Restructuring
Plan but to the implementation of the Audit Team Approach (ATAP), pursuant to COA Resolution
No. 96-305 dated April 16, 1996.
Under the ATAP, an audit team, not a resident auditor, is deployed to conduct an audit. An audit
team may be composed of two (2) or more members under an Audit Team Leader. Whenever
practicable, an Audit Team Supervisor supervises at least three (3) audit teams. The composition of
an audit team is not permanent. Hence, an Audit Team Member may be designated or assigned as
an Audit Team Leader for one assignment and subsequently as a Team Member in another
engagement. The designation depends upon the position or rank of the one who is designated as an
Audit Team Leader. Thus, a State Auditor III who may have been assigned as an Audit Team Leader
in one engagement may find himself relegated to being an Audit Team Member in another
engagement, if a State Auditor IV or State Auditor V is designated as the Audit Team Leader.
Pursuant to the COA Organizational Restructuring Plan, the COA issued Memorandum No. 2002-
034[17] providing for the guidelines regarding the payment of RATA, thus:
1. All holders of State Auditor IV position shall be entitled to fixed commutable RATA wherever
they are assigned.
2. Henceforth, only State Auditors IV shall be assigned as new Unit Heads or Team Leaders.
3. State Auditors below State Auditor IV assigned as Unit Heads or Team Leaders who have
been receiving fixed RATA shall continue to be designated as such and to receive the RATA until
relieved of the designation for incompetence, inefficiency, or misconduct.
All others who collect RATA on reimbursable basis, including those paid on a daily basis under COA
Resolution No. 99-007 dated June 7, 1999, are likewise entitled thereto.
Matib, Pacpaco, Sanchez, and Sipi-An are not qualified to be Audit Team Leaders or to receive fixed
monthly RATA since none of them holds the rank or position of State Auditor IV. But this does not
mean that they are not entitled to receive reimbursable RATA if they are designated as Audit Team
Leaders. It is clear from the text of the said COA Memorandum that the principle of non-diminution
of benefits has been upheld.
Thus, in the implementation of the COA Organizational Restructuring Plan, we fail to see how
petitioners could have sustained personal injury as they have not shown to have a personal stake
therein. Accordingly, they are wanting in legal standing to institute the instant petition. Corollarily,
we find no reason to delve into the constitutionality or legality of the COA Organizational
Restructuring Plan.
WHEREFORE, the petition is DISMISSED. No pronouncement as to costs.
SO ORDERED.
4. PACANA-CONTRERAS vs ROVILA WATER SUPPLY

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 168979 December 2, 2013

REBECCA PACAÑA-CONTRERAS and ROSALIE PACAÑA, Petitioners,

vs.
ROVILA WATER SUPPLY, INC., EARL U KOKSENG, LILIA TORRES, DALLA P. ROMANILLOS and
MARISSA GABUYA, Respondents.
DECISION
BRION, J.:
Before the Court is a petition for review on certiorari1 under Rule 4 of the Rules of Court seeking the
reversal of the decision2 dated January 27, 2005 and the resolution3 dated June 6, 2005 of the
Courts of Appeals (CA) in CA-G.R. SP No. 71551. The CA set aside the orders dated February 28,
20024 and April 1, 20025 of the Regional Trial Court (RTC), Branch 8, Cebu City, which denied the
motion to dismiss for reconsideration respectively, of respondents Rovila Water Supply, Inc. (Rovilla,
Inc.), Earl U. Kokseng, Lialia Torres, Dalla P. Romanillos and Marissa Gabuya.
THE FACTUAL ANTECEDENTS
Petitioners Rebecca Pacaña-Contreras and Rosalie Pacaña, children of Lourdes Teves Pacaña and
Luciano Pacaña, filed the present case against Rovila Inc., Earl, Lilia, Dalla and Marisa for accounting
and damages.6
The petitioners claimed that their family has long been known in the community to be engaged in
the water supply business; they operated the "Rovila Water Supply" from their family residence and
were engaged in the distribution of water to customers in Cebu City. The petitioners alleged that
Lilia was a former trusted employee in the family business who hid business records and burned and
ransacked the family files. Lilia also allegedly posted security guards and barred the members of the
Pacaña family from operating their business. She then claimed ownership over the family business
through a corporation named "Rovila Water Supply, Inc." (Rovila Inc.) Upon inquiry with the
Securities and Exchange Commission (SEC), the petitioners claimed that Rovila Inc. was
surreptitiously formed with the respondents as the majority stockholders. The respondents did so
by conspiring with one another and forming the respondent corporation to takeover and illegally
usurp the family business’ registered name.7
In forming the respondent corporation, the respondents allegedly used the name of Lourdes as one
of the incorporators and made it appear in the SEC documents that the family business was
operated in a place other than the Pacaña residence. Thereafter, the respondents used the Pacaña
family’s receipts and the deliveries and sales were made to appear as those of the respondent Rovila
Inc. Using this scheme, the respondents fraudulently appropriated the collections and payments.8
The petitioners filed the complaint in their own names although Rosalie was authorized by Lourdes
through a sworn declaration and special power of attorney (SPA). The respondents filed a first
motion to dismiss on the ground that the RTC had no jurisdiction over an intra-corporate
controversy.9
The RTC denied the motion. On September 26, 2000, Lourdes died10 and the petitioners amended
their complaint, with leave of court, on October 2, 2000 to reflect this development.11
They still attached to their amended complaint the sworn declaration with SPA, but the caption of
the amended complaint remained the same.12
On October 10, 2000, Luciano also died.13
The respondents filed their Answer on November 16, 2000.14
The petitioners’ sister, Lagrimas Pacaña-Gonzales, filed a motion for leave to intervene and her
answer-in-intervention was granted by the trial court. At the subsequent pre-trial, the respondents
manifested to the RTC that a substitution of the parties was necessary in light of the deaths of
Lourdes and Luciano. They further stated that they would seek the dismissal of the complaint
because the petitioners are not the real parties in interest to prosecute the case. The pre-trial
pushed through as scheduled and the RTC directed the respondents to put into writing their earlier
manifestation. The RTC issued a pre-trial order where one of the issues submitted was whether the
complaint should be dismissed for failure to comply with Section 2, Rule 3 of the Rules of Court
which requires that every action must be prosecuted in the name of the real party in interest.15
On January 23, 2002,16 the respondents again filed a motion to dismiss on the grounds, among
others, that the petitioners are not the real parties in interest to institute and prosecute the case
and that they have no valid cause of action against the respondents.
THE RTC RULING
The RTC denied the respondents’ motion to dismiss. It ruled that, save for the grounds for dismissal
which may be raised at any stage of the proceedings, a motion to dismiss based on the grounds
invoked by the respondents may only be filed within the time for, but before, the filing of their
answer to the amended complaint. Thus, even granting that the defenses invoked by the
respondents are meritorious, their motion was filed out of time as it was filed only after the
conclusion of the pre-trial conference. Furthermore, the rule on substitution of parties only applies
when the parties to the case die, which is not what happened in the present case.17
The RTC likewise denied the respondents’ motion for reconsideration.18
The respondents filed a petition for certiorari under Rule 65 of the Rules of Court with the CA,
invoking grave abuse of discretion in the denial of their motion to dismiss. They argued that the
deceased spouses Luciano and Lourdes, not the petitioners, were the real parties in interest. Thus,
the petitioners violated Section 16, Rule 3 of the Rules of Court on the substitution of parties.19
Furthermore, they seasonably moved for the dismissal of the case20 and the RTC never acquired
jurisdiction over the persons of the petitioners as heirs of Lourdes and Luciano.21
THE CA RULING
The CA granted the petition and ruled that the RTC committed grave abuse of discretion as the
petitioners filed the complaint and the amended complaint as attorneys-in-fact of their parents. As
such, they are not the real parties in interest and cannot bring an action in their own names; thus,
the complaint should be dismissed22 pursuant to the Court’s ruling in Casimiro v. Roque and
Gonzales.23
Neither are the petitioners suing as heirs of their deceased parents.1awp++i1 Pursuant to
jurisprudence,24 the petitioners should first be declared as heirs before they can be considered as
the real parties in interest. This cannot be done in the present ordinary civil case but in a special
proceeding for that purpose. The CA agreed with the respondents that they alleged the following
issues as affirmative defenses in their answer: 1) the petitioners are not the real parties in interest;
and 2) that they had no legal right to institute the action in behalf of their parents.25
That the motion to dismiss was filed after the period to file an answer has lapsed is of no moment.
The RTC judge entertained it and passed upon its merit. He was correct in doing so because in the
pre-trial order, one of the submitted issues was whether the case must be dismissed for failure to
comply with the requirements of the Rules of Court. Furthermore, in Dabuco v. Court of
Appeals,26 the Court held that the ground of lack of cause of action may be raised in a motion to
dismiss at anytime.27
The CA further ruled that, in denying the motion to dismiss, the RTC judge acted contrary to
established rules and jurisprudence which may be questioned via a petition for certiorari. The
phrase "grave abuse of discretion" which was traditionally confined to "capricious and whimsical
exercise of judgment" has been expanded to include any action done "contrary to the Constitution,
the law or jurisprudence[.]"28
THE PARTIES’ ARGUMENTS
The petitioners filed the present petition and argued that, first, in annulling the interlocutory orders,
the CA unjustly allowed the motion to dismiss which did not conform to the rules.29
Specifically, the motion was not filed within the time for, but before the filing of, the answer to the
amended complaint, nor were the grounds raised in the answer. Citing Section 1, Rule 9 of the Rules
of Court, the respondents are deemed to have waived these grounds, as correctly held by the RTC.30
Second, even if there is non-joinder and misjoinder of parties or that the suit is not brought in the
name of the real party in interest, the remedy is not outright dismissal of the complaint, but its
amendment to include the real parties in interest.31
Third, the petitioners sued in their own right because they have actual and substantial interest in
the subject matter of the action as heirs or co-owners, pursuant to Section 2, Rule 3 of the Rules of
Court.32
Their declaration as heirs in a special proceeding is not necessary, pursuant to the Court’s ruling in
Marabilles, et al. v. Quito.33
Finally, the sworn declaration is evidentiary in nature which remains to be appreciated after the trial
is completed.34
The respondents reiterated in their comment that the petitioners are not the real parties in
interest.35
They likewise argued that they moved for the dismissal of the case during the pre-trial conference
due to the petitioners’ procedural lapse in refusing to comply with a condition precedent, which is,
to substitute the heirs as plaintiffs. Besides, an administrator of the estates of Luciano and Lourdes
has already been appointed.36
The respondents also argued that the grounds invoked in their motion to dismiss were timely raised,
pursuant to Section 2, paragraphs g and i, Rule 18 of the Rules of Court. Specifically, the nature and
purposes of the pre-trial include, among others, the dismissal of the action, should a valid ground
therefor be found to exist; and such other matters as may aid in the prompt disposition of the
action. Finally, the special civil action of certiorari was the proper remedy in assailing the order of
the RTC.37
THE COURT’S RULING
We find the petition meritorious.
Petition for certiorari under Rule 65 is a proper remedy for a denial of a motion to dismiss attended
by grave abuse of discretion
In Barrazona v. RTC, Branch 61, Baguio City,38 the Court held that while an order denying a motion to
dismiss is interlocutory and non-appealable, certiorari and prohibition are proper remedies to
address an order of denial made without or in excess of jurisdiction. The writ of certiorari is granted
to keep an inferior court within the bounds of its jurisdiction or to prevent it from committing grave
abuse of discretion amounting to lack or excess of jurisdiction.
The history and development of the ground "fails to state a cause of action" in the 1940, 1964 and
the present 1997 Rules of Court Preliminarily, a suit that is not brought in the name of the real party
in interest is dismissible on the ground that the complaint "fails to state a cause of action."39
Pursuant to jurisprudence,40 this is also the ground invoked when the respondents alleged that the
petitioners are not the real parties in interest because: 1) the petitioners should not have filed the
case in their own names, being merely attorneys-in-fact of their mother; and 2) the petitioners
should first be declared as heirs. A review of the 1940, 1964 and the present 1997 Rules of Court
shows that the fundamentals of the ground for dismissal based on "failure to state a cause of
action" have drastically changed over time. A historical background of this particular ground is in
order to preclude any confusion or misapplication of jurisprudence decided prior to the effectivity of
the present Rules of Court. The 1940 Rules of Court provides under Section 10, Rule 9 that:
Section 10. Waiver of defenses- Defenses and objections not pleaded either in a motion to dismiss
or in the answer are deemed waived; except the defense of failure to state a cause of action, which
may be alleged in a later pleading, if one is permitted, or by motion for judgment on the pleadings,
or at the trial on the merits; but in the last instance, the motion shall be disposed of as provided in
section 5 of Rule 17 in the light of any evidence which may have been received. Whenever it appears
that the court has no jurisdiction over the subject-matter, it shall dismiss the action. [underscoring
supplied]
This provision was essentially reproduced in Section 2, Rule 9 of the 1964 Rules of Court, and we
quote:
Section 2. Defenses and objections not pleaded deemed waived. — Defenses and objections not
pleaded either in a motion to dismiss or in the answer are deemed waived; except the failure to
state a cause of action which may be alleged in a later pleading, if one is permitted, or by motion for
judgment on the pleadings, or at the trial on the merits; but in the last instance, the motion shall be
disposed of as provided in section 5 of Rule 10 in the light of any evidence which may have been
received. Whenever it appears that the court has no jurisdiction over the subject-matter, it shall
dismiss the action. [underscoring supplied]
Under the present Rules of Court, this provision was reflected in Section 1, Rule 9, and we quote:
Section 1. Defenses and objections not pleaded. — Defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed waived. However, when it appears from the
pleadings or the evidence on record that the court has no jurisdiction over the subject matter, that
there is another action pending between the same parties for the same cause, or that the action is
barred by a prior judgment or by statute of limitations, the court shall dismiss the claim.
[underscoring supplied]
Notably, in the present rules, there was a deletion of the ground of "failure to state a cause of
action" from the list of those which may be waived if not invoked either in a motion to dismiss or in
the answer. Another novelty introduced by the present Rules, which was totally absent in its two
precedents, is the addition of the period of time within which a motion to dismiss should be filed as
provided under Section 1, Rule 16 and we quote:
Section 1. Grounds. — Within the time for but before filing the answer to the complaint or pleading
asserting a claim, a motion to dismiss may be made on any of the following grounds: xxx
[underscoring supplied]
All these considerations point to the legal reality that the new Rules effectively restricted the
dismissal of complaints in general, especially when what is being invoked is the ground of "failure to
state a cause of action." Thus, jurisprudence governed by the 1940 and 1964 Rules of Court to the
effect that the ground for dismissal based on failure to state a cause of action may be raised anytime
during the proceedings, is already inapplicable to cases already governed by the present Rules of
Court which took effect on July 1, 1997. As the rule now stands, the failure to invoke this ground in a
motion to dismiss or in the answer would result in its waiver. According to Oscar M. Herrera, 41 the
reason for the deletion is that failure to state a cause of action may be cured under Section 5, Rule
10 and we quote:
Section 5. Amendment to conform to or authorize presentation of evidence. — When 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. Such amendment of the pleadings
as may be necessary to cause them to conform to the evidence and to raise these issues may be
made upon motion of any party at any time, even after judgment; but failure to amend does not
effect the result of the trial of these issues. If evidence is objected to at the trial on the ground that
it is not within the issues made by the pleadings, the court may allow the pleadings to be amended
and shall do so with liberality if the presentation of the merits of the action and the ends of
substantial justice will be subserved thereby. The court may grant a continuance to enable the
amendment to be made.
With this clarification, we now proceed to the substantial issues of the petition.1âwphi1
The motion to dismiss in the present case based on failure to state a cause of action was not timely
filed and was thus waived
Applying Rule 16 of the Rules of Court which provides for the grounds for the dismissal of a civil
case, the respondents’ grounds for dismissal fall under Section 1(g) and (j), Rule 16 of the Rules of
Court, particularly, failure to state a cause of action and failure to comply with a condition
precedent (substitution of parties), respectively. The first paragraph of Section 1,42
Rule 16 of the Rules of Court provides for the period within which to file a motion to dismiss under
the grounds enumerated. Specifically, the motion should be filed within the time for, but before the
filing of, the answer to the complaint or pleading asserting a claim. Equally important to this
provision is Section 1,43
Rule 9 of the Rules of Court which states that defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed waived, except for the following grounds: 1) the
court has no jurisdiction over the subject matter; 2) litis pendencia; 3) res judicata; and 4)
prescription. Therefore, the grounds not falling under these four exceptions may be considered as
waived in the event that they are not timely invoked. As the respondents’ motion to dismiss was
based on the grounds which should be timely invoked, material to the resolution of this case is the
period within which they were raised. Both the RTC and the CA found that the motion to dismiss
was only filed after the filing of the answer and after the pre-trial had been concluded. Because
there was no motion to dismiss before the filing of the answer, the respondents should then have at
least raised these grounds as affirmative defenses in their answer. The RTC’s assailed orders did not
touch on this particular issue but the CA ruled that the respondents did, while the petitioners insist
that the respondents did not. In the present petition, the petitioners reiterate that there was a
blatant non-observance of the rules when the respondents did not amend their answer to invoke
the grounds for dismissal which were raised only during the pre-trial and, subsequently, in the
subject motion to dismiss.44
The divergent findings of the CA and the petitioners’ arguments are essentially factual issues. Time
and again, we have held that the jurisdiction of the Court in a petition for review on certiorari under
Rule 45, such as the present case, is limited only to questions of law, save for certain exceptions.
One of these is attendant herein, which is, when the findings are conclusions without citation of
specific evidence on which they are based.45
In the petition filed with the CA, the respondents made a passing allegation that, as affirmative
defenses in their answer, they raised the issue that the petitioners are not the real parties in
interest.46
On the other hand, the petitioners consistently argued otherwise in their opposition47 to the motion
to dismiss, and in their comment48 and in their memorandum49 on the respondents’ petition before
the CA. Our examination of the records shows that the CA had no basis in its finding that the
respondents alleged the grounds as affirmative defenses in their answer. The respondents merely
stated in their petition for certiorari that they alleged the subject grounds in their answer. However,
nowhere in the petition did they support this allegation; they did not even attach a copy of their
answer to the petition. It is basic that the respondents had the duty to prove by substantial evidence
their positive assertions. Considering that the petition for certiorari is an original and not an
appellate action, the CA had no records of the RTC’s proceedings upon which the CA could refer to
in order to validate the respondents’ claim. Clearly, other than the respondents’ bare allegations,
the CA had no basis to rule, without proof, that the respondents alleged the grounds for dismissal as
affirmative defenses in the answer. The respondents, as the parties with the burden of proving that
they timely raised their grounds for dismissal, could have at least attached a copy of their answer to
the petition. This simple task they failed to do. That the respondents did not allege in their answer
the subject grounds is made more apparent through their argument, both in their motion to
dismiss50 and in their comment,51 that it was only during the pre-trial stage that they verbally
manifested and invited the attention of the lower court on their grounds for dismissal. In order to
justify such late invocation, they heavily relied on Section 2(g) and (i), Rule 1852 of the Rules of Court
that the nature and purpose of the pre-trial include, among others, the propriety of dismissing the
action should there be a valid ground therefor and matters which may aid in the prompt disposition
of the action. The respondents are not correct. The rules are clear and require no interpretation.
Pursuant to Section 1, Rule 9 of the Rules of Court, a motion to dismiss based on the grounds
invoked by the respondents may be waived if not raised in a motion to dismiss or alleged in their
answer. On the other hand, "the pre-trial is primarily intended to make certain that all issues
necessary to the disposition of a case are properly raised. The purpose is to obviate the element of
surprise, hence, the parties are expected to disclose at the pre-trial conference all issues of law and
fact which they intend to raise at the trial, except such as may involve privileged or impeaching
matter."53
The issues submitted during the pre-trial are thus the issues that would govern the trial proper. The
dismissal of the case based on the grounds invoked by the respondents are specifically covered by
Rule 16 and Rule 9 of the Rules of Court which set a period when they should be raised; otherwise,
they are deemed waived.
The Dabuco ruling is inapplicable in the present case; the ground for dismissal "failure to state a
cause of action" distinguished from "lack of cause of action"
To justify the belated filing of the motion to dismiss, the CA reasoned out that the ground for
dismissal of "lack of cause of action" may be raised at any time during the proceedings, pursuant to
Dabuco v. Court of Appeals.54
This is an erroneous interpretation and application of Dabuco as will be explained below.
First, in Dabuco, the grounds for dismissal were raised as affirmative defenses in the answer which is
in stark contrast to the present case.
Second, in Dabuco, the Court distinguished between the dismissal of the complaint for "failure to
state a cause of action" and "lack of cause of action." The Court emphasized that in a dismissal of
action for lack of cause of action, "questions of fact are involved, [therefore,] courts hesitate to
declare a plaintiff as lacking in cause of action. Such declaration is postponed until the insufficiency
of cause is apparent from a preponderance of evidence.
Usually, this is done only after the parties have been given the opportunity to present all relevant
evidence on such questions of fact."55
In fact, in Dabuco, the Court held that even the preliminary hearing on the propriety of lifting the
restraining order was declared insufficient for purposes of dismissing the complaint for lack of cause
of action. This is so because the issues of fact had not yet been adequately ventilated at that
preliminary stage. For these reasons, the Court declared in Dabuco that the dismissal by the trial
court of the complaint was premature. In the case of Macaslang v. Zamora,56 the Court noted that
the incorrect appreciation by both the RTC and the CA of the distinction between the dismissal of an
action, based on "failure to state a cause of action" and "lack of cause of action," prevented it from
properly deciding the case, and we quote:
Failure to state a cause of action and lack of cause of action are really different from each other. On
the one hand, failure to state a cause of action refers to the insufficiency of the pleading, and is a
ground for dismissal under Rule 16 of the Rules of Court. On the other hand, lack of cause [of] action
refers to a situation where the evidence does not prove the cause of action alleged in the pleading.
Justice Regalado, a recognized commentator on remedial law, has explained the distinction: xxx
What is contemplated, therefore, is a failure to state a cause of action which is provided in Sec. 1(g)
of Rule 16. This is a matter of insufficiency of the pleading. Sec. 5 of Rule 10, which was also included
as the last mode for raising the issue to the court, refers to the situation where the evidence does
not prove a cause of action. This is, therefore, a matter of insufficiency of evidence. Failure to state a
cause of action is different from failure to prove a cause of action. The remedy in the first is to move
for dismissal of the pleading, while the remedy in the second is to demur to the evidence, hence
reference to Sec. 5 of Rule 10 has been eliminated in this section. The procedure would
consequently be to require the pleading to state a cause of action, by timely objection to its
deficiency; or, at the trial, to file a demurrer to evidence, if such motion is warranted. [italics
supplied]
Based on this discussion, the Court cannot uphold the dismissal of the present case based on the
grounds invoked by the respondents which they have waived for failure to invoke them within the
period prescribed by the Rules. The Court cannot also dismiss the case based on "lack of cause of
action" as this would require at least a preponderance of evidence which is yet to be appreciated by
the trial court. Therefore, the RTC did not commit grave abuse of discretion in issuing the assailed
orders denying the respondents’ motion to dismiss and motion for reconsideration. The Court shall
not resolve the merits of the respondents’ grounds for dismissal which are considered as waived.
Other heirs of the spouses Pacaña to be impleaded in the case.
It should be emphasized that insofar as the petitioners are concerned, the respondents have waived
the dismissal of the complaint based on the ground of failure to state a cause of action because the
petitioners are not the real parties in interest. At this juncture, a distinction between a real party in
interest and an indispensable party is in order. In Carandang v. Heirs of de Guzman, et al.,57 the
Court clarified these two concepts and held that "[a] real party in interest is the party who stands to
be benefited or injured by the judgment of the suit, or the party entitled to the avails of the suit. On
the other hand, an indispensable party is a party in interest without whom no final determination
can be had of an action, in contrast to a necessary party, which is one who is not indispensable but
who ought to be joined as a party if complete relief is to be accorded as to those already parties, or
for a complete determination or settlement of the claim subject of the action. xxx If a 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. However, the dismissal on this ground entails
an examination of whether the parties presently pleaded are interested in the outcome of the
litigation, and not whether all persons interested in such outcome are actually pleaded. The latter
query is relevant in discussions concerning indispensable and necessary parties, but not in
discussions concerning real parties in interest. Both indispensable and necessary parties are
considered as real parties in interest, since both classes of parties stand to be benefited or injured
by the judgment of the suit."
At the inception of the present case, both the spouses Pacaña were not impleaded as parties-
plaintiffs. The Court notes, however, that they are indispensable parties to the case as the alleged
owners of Rovila Water Supply. Without their inclusion as parties, there can be no final
determination of the present case. They possess such an interest in the controversy that a final
decree would necessarily affect their rights, so that the courts cannot proceed without their
presence. Their interest in the subject matter of the suit and in the relief sought is inextricably
intertwined with that of the other parties.58
Jurisprudence on the procedural consequence of the inclusion or non-inclusion of an indispensable

party is divided in our jurisdiction. Due to the non-inclusion of indispensable parties, the Court
dismissed the case in Lucman v. Malawi, et al.59 and Go v. Distinction Properties Development
Construction, Inc.,60 while in Casals, et al. v. Tayud Golf and Country Club et al.,61 the Court annulled
the judgment which was rendered without the inclusion of the indispensable parties. In Arcelona et
al. v. Court of Appeals62 and Bulawan v. Aquende,63 and Metropolitan Bank & Trust Company v. Alejo
et al.64 the Court ruled that the burden to implead or order the impleading of an indispensable party
rests on the plaintiff and on the trial court, respectively. Thus, the non-inclusion of the indispensable
parties, despite notice of this infirmity, resulted in the annulment of these cases. In Plasabas, et al. v.
Court of Appeals, et al.,65 the Court held that the trial court and the CA committed reversible error
when they summarily dismissed the case, after both parties had rested their cases following a
protracted trial, on the sole ground of failure to implead indispensable parties. Non-joinder of
indispensable parties is not a ground for the dismissal of an action. The remedy is to implead the
non-party claimed to be indispensable. However, in the cases of Quilatan, et al. v. Heirs of Quilatan,
et al.66 and Lagunilla, et al. v. Monis, et al.,67 the Court remanded the case to the RTC for the
impleading of indispensable parties. On the other hand, in Lotte Phil. Co., Inc. v. Dela Cruz,68PepsiCo,
Inc. v. Emerald Pizza, 69 and Valdez Tallorin, v. Heirs of Tarona, et al.,70 the Court directly ordered
that the indispensable parties be impleaded. Mindful of the differing views of the Court as regards
the legal effects of the non-inclusion of indispensable parties, the Court clarified in Republic of the
Philippines v. Sandiganbayan, et al.,71that the failure to implead indispensable parties is a curable
error and the foreign origin of our present rules on indispensable parties permitted this corrective
measure. This cited case held:
Even in those cases where it might reasonably be argued that the failure of the Government to
implead the sequestered corporations as defendants is indeed a procedural aberration xxx, slight
reflection would nevertheless lead to the conclusion that the defect is not fatal, but one correctible
under applicable adjective rules – e.g., Section 10, Rule 5 of the Rules of Court [specifying the
remedy of amendment during trial to authorize or to conform to the evidence]; Section 1, Rule 20
[governing amendments before trial], in relation to the rule respecting omission of so-called
necessary or indispensable parties, set out in Section 11, Rule 3 of the Rules of Court. It is relevant in
this context to advert to the old familiar doctrines that the omission to implead such parties "is a
mere technical defect which can be cured at any stage of the proceedings even after judgment"; and
that, particularly in the case of indispensable parties, since their presence and participation is
essential to the very life of the action, for without them no judgment may be rendered,
amendments of the complaint in order to implead them should be freely allowed, even on appeal, in
fact even after rendition of judgment by this Court, where it appears that the complaint otherwise
indicates their identity and character as such indispensable parties." Although there are decided
cases wherein the non-joinder of indispensable parties in fact led to the dismissal of the suit or the
annulment of judgment, such cases do not jibe with the matter at hand. The better view is that non-
joinder is not a ground to dismiss the suit or annul the judgment. The rule on joinder of
indispensable parties is founded on equity. And the spirit of the law is reflected in Section 11, Rule 3
of the 1997 Rules of Civil Procedure. It prohibits the dismissal of a suit on the ground of non-joinder
or misjoinder of parties and allows the amendment of the complaint at any stage of the
proceedings, through motion or on order of the court on its own initiative. Likewise, jurisprudence
on the Federal Rules of Procedure, from which our Section 7, Rule 3 on indispensable parties was
copied, allows the joinder of indispensable parties even after judgment has been entered if such is
needed to afford the moving party full relief. Mere delay in filing the joinder motion does not
necessarily result in the waiver of the right as long as the delay is excusable.
In Galicia, et al. v. Vda. De Mindo, et al.,72 the Court ruled that in line with its policy of promoting a
just and inexpensive disposition of a case, it allowed the intervention of the indispensable parties
instead of dismissing the complaint. Furthermore, in Commissioner Domingo v. Scheer, 73 the Court
cited Salvador, et al. v. Court of Appeals, et al.74 and held that the Court has full powers, apart from
that power and authority which are inherent, to amend the processes, pleadings, proceedings and
decisions by substituting as party-plaintiff the real party in interest. The Court has the power to
avoid delay in the disposition of this case, and to order its amendment in order to implead an
indispensable party. With these discussions as premises, the Court is of the view that the proper
remedy in the present case is to implead the indispensable parties especially when their non-
inclusion is merely a technical defect. To do so would serve proper administration of justice and
prevent further delay and multiplicity of suits. Pursuant to Section 9, Rule 3 of the Rules of Court,
parties may be added by order of the court on motion of the party or on its own initiative at any
stage of the action. If the plaintiff refuses to implead an indispensable party despite the order of the
court, then the court may dismiss the complaint for the plaintiff’s failure to comply with a lawful
court order.75
The operative act that would lead to the dismissal of the case would be the refusal to comply with
the directive of the court for the joinder of an indispensable party to the case.76
Obviously, in the present case, the deceased Pacañas can no longer be included in the complaint as
indispensable parties because of their death during the pendency of the case. Upon their death,
however, their ownership and rights over their properties were transmitted to their heirs, including
herein petitioners, pursuant to Article 77477 in relation with Article 77778 of the Civil Code.
In Orbeta, et al. v. Sendiong,79 the Court acknowledged that the heirs, whose hereditary rights are to
be affected by the case, are deemed indispensable parties who should have been impleaded by the
trial court. Therefore, to obviate further delay in the proceedings of the present case and given the
Court’s authority to order the inclusion of an indispensable party at any stage of the proceedings,
the heirs of the spouses Pacaña, except the petirioners who are already parties to the case are
Lagrimas Pacaña-Gonzalez who intervened in the case, are hereby ordered impleaded as parties-
plaintiffs.
WHEREFORE, the petition is GRANTED. The decision dated January 27, 2005 and the resolution date
June 6, 2005 of the Court of Appeals in CA-G.R. SP No. 71551 are REVERSED and SET ASIDE. The heirs
of the spouses Luciano and Lourdes Pacaña, except herein petitioner and Lagrimas Pacaña-Gonzalez,
are ORDERED IMPLEADED as parties plaintiffs and the RTC is directed tp proceed with the trial of the
case with DISPATCH.
SO ORDERED.
5. JUANA COMPLEX HOMEOWNERS vs FIL-ESTATE LAND
DECISION
MENDOZA, J.:
Before the Court are two (2) consolidated petitions assailing the July 31, 2001 Decision[1] and
February 21, 2002 Resolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 60543, which annulled
and set aside the March 3, 1999 Order[3] of the Regional Trial Court, Branch 25, Bian,
Laguna (RTC), granting the application for the issuance of a writ of preliminary injunction, and
upheld the June 16, 2000 Omnibus Order[4] denying the motion to dismiss.
The Facts:
On January 20, 1999, Juana Complex I Homeowners Association, Inc. (JCHA), together with individual
residents of Juana Complex I and other neighboring subdivisions (collectively referred as JCHA, et.
al.), instituted a complaint[5] for damages, in its own behalf and as a class suit representing the
regular commuters and motorists of Juana Complex I and neighboring subdivisions who were
deprived of the use of La Paz Road, against Fil-Estate Land, Inc. (Fil-Estate), Fil-estate Ecocentrum
Corporation (FEEC), La Paz Housing & Development Corporation (La Paz), and Warbird Security
Agency and their respective officers (collectively referred as Fil-Estate, et al.).
The complaint alleged that JCHA, et al. were regular commuters and motorists who constantly
travelled towards the direction of Manila and Calamba; that they used the entry and exit toll gates
of South Luzon Expressway (SLEX) by passing through right-of-way public road known as La Paz
Road; that they had been using La Paz Road for more than ten (10) years; that in August 1998, Fil-
estate excavated, broke and deliberately ruined La Paz Road that led to SLEX so JCHA, et al. would
not be able to pass through the said road; that La Paz Road was restored by the residents to make it
passable but Fil-estate excavated the road again; that JCHA reported the matter to the Municipal
Government and the Office of the Municipal Engineer but the latter failed to repair the road to
make it passable and safe to motorists and pedestrians; that the act of Fil-estate in excavating La Paz
Road caused damage, prejudice, inconvenience, annoyance, and loss of precious hours to them, to
the commuters and motorists because traffic was re-routed to narrow streets that caused terrible
traffic congestion and hazard; and that its permanent closure would not only prejudice their right to
free and unhampered use of the property but would also cause great damage and irreparable injury.
Accordingly, JCHA, et al. also prayed for the immediate issuance of a Temporary Restraining
Order (TRO) or a writ of preliminary injunction (WPI) to enjoin Fil-Estate, et al. from stopping and
intimidating them in their use of La Paz Road.
On February 10, 1999, a TRO was issued ordering Fil-Estate, et al, for a period of twenty (20) days, to
stop preventing, coercing, intimidating or harassing the commuters and motorists from using the La
Paz Road. [6]
Subsequently, the RTC conducted several hearings to determine the propriety of the issuance of a
WPI.
On February 26, 1999, Fil-Estate, et al. filed a motion to dismiss[7] arguing that the complaint failed
to state a cause of action and that it was improperly filed as a class suit. On March 5, 1999, JCHA, et
al. filed their comment[8] on the motion to dismiss to which respondents filed a reply.[9]
On March 3, 1999, the RTC issued an Order [10] granting the WPI and required JCHA, et al. to post a
bond.
On March 19, 1999, Fil-Estate, et al. filed a motion for reconsideration[11] arguing, among others,
that JCHA, et al. failed to satisfy the requirements for the issuance of a WPI. On March 23, 1999,
JCHA, et al. filed their opposition to the motion.[12]
The RTC then issued its June 16, 2000 Omnibus Order, denying both the motion to dismiss and the
motion for reconsideration filed by Fil-Estate, et al.
Not satisfied, Fil-Estate, et al. filed a petition for certiorari and prohibition before the CA to annul (1)
the Order dated March 3, 1999 and (2) the Omnibus Order dated June 16, 2000. They contended
that the complaint failed to state a cause of action and that it was improperly filed as a class suit.
With regard to the issuance of the WPI, the defendants averred that JCHA, et al. failed to show that
they had a clear and unmistakable right to the use of La Paz Road; and further claimed that La Paz
Road was a torrens registered private road and there was neither a voluntary nor legal easement
constituted over it.[13]
On July 31, 2001, the CA rendered the decision partially granting the petition, the dispositive portion
of which reads:
WHEREFORE, the petition is hereby partially GRANTED. The Order dated March 3,
1999 granting the writ of preliminary injunction is hereby ANNULLED and SET ASIDE but the
portion of the Omnibus Order dated June 16, 2000 denying the motion to dismiss is upheld.
SO ORDERED.[14]
The CA ruled that the complaint sufficiently stated a cause of action when JCHA, et al. alleged in
their complaint that they had been using La Paz Road for more than ten (10) years and that their
right was violated when Fil-Estate closed and excavated the road. It sustained the RTC ruling that the
complaint was properly filed as a class suit as it was shown that the case was of common interest
and that the individuals sought to be represented were so numerous that it was impractical to
include all of them as parties. The CA, however, annulled the WPI for failure of JCHA, et al. to prove
their clear and present right over La Paz Road. The CA ordered the remand of the case to the RTC for
a full-blown trial on the merits.
Hence, these petitions for review.
In G.R. No. 152272, JCHA, et al. come to this Court, raising the following issues:
(A)
THE HONORABLE COURT OF APPEALS, IN HOLDING THAT A FULL-BLOWN TRIAL ON THE

MERITS IS REQUIRED TO DETERMINE THE NATURE OF THE LA PAZ ROAD, HAD DEPARTED
FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO CALL FOR AN
EXERCISE OF THE POWER OF SUPERVISION.
(B)
THE HONORABLE COURT OF APPEALS, IN HOLDING THAT THE PETITIONERS FAILED TO

SATISFY THE REQUIREMENTS FOR THE ISSUANCE OF A WRIT OF PRELIMINARY
INJUNCTION, HAD DECIDED NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE
DECISIONS OF THE SUPREME COURT.[15]
In G.R. No. 152397, on the other hand, Fil-Estate, et al. anchor their petition on the following issues:
I.
The Court of Appeals declaration that respondents Complaint states a cause of action is
contrary to existing law and jurisprudence.
II.
The Court of Appeals pronouncement that respondents complaint was properly filed as a
class suit is contrary to existing law and jurisprudence.
III.
The Court of Appeals conclusion that full blown trial on the merits is required to
determine the nature of the La Paz Road is contrary to existing laws and jurisprudence.[16]
JCHA, et al. concur with the CA that the complaint sufficiently stated a cause of action. They,
however, disagree with the CAs pronouncement that a full-blown trial on the merits was necessary.
They claim that during the hearing on the application of the writ of injunction, they had sufficiently
proven that La Paz Road was a public road and that commuters and motorists of their neighboring
villages had used this road as their means of access to the San Agustin Church, Colegio De San
Agustin and to SLEX in going to Metro Manila and to Southern Tagalog particularly during the rush
hours when traffic at Carmona Entry/Exit and Susana Heights Entry/Exit was at its worst.
JCHA, et al. argue that La Paz Road has attained the status and character of a public road or
burdened by an apparent easement of public right of way. They point out that La Paz Road is the
widest road in the neighborhood used by motorists in going to Halang Road and in entering the
SLEX-Halang toll gate and that there is no other road as wide as La Paz Road existing in the vicinity.
For residents of San Pedro, Laguna, the shortest, convenient and safe route towards SLEX Halang is
along Rosario Avenue joining La Paz Road.
Finally, JCHA, et al. argue that the CA erred when it voided the WPI because the public nature of La
Paz Road had been sufficiently proven and, as residents of San Pedro and Bian, Laguna, their right to
use La Paz Road is undeniable.
In their Memorandum,[17] Fil-Estate, et al. explain that La Paz Road is included in the parcels of land
covered by Transfer Certificates of Title (TCT) Nos. T-120008, T-90321 and T-90607, all registered in
the name of La Paz. The purpose of constructing La Paz Road was to provide a passageway for La
Paz to its intended projects to the south, one of which was the Juana Complex I. When Juana
Complex I was completed, La Paz donated the open spaces, drainage, canal, and lighting facilities
inside the Juana Complex I to the Municipality of Bian. The streets within the subdivisions were then
converted to public roads and were opened for use of the general public. The La Paz Road, not being
part of the Juana Complex I, was excluded from the donation. Subsequently, La Paz became a
shareholder of FEEC, a consortium formed to develop several real properties in Bian, Laguna, known
as Ecocentrum Project. In exchange for shares of stock, La Paz contributed some of its real
properties to the Municipality of Bian, including the properties constituting La Paz Road, to form
part of the Ecocentrum Project.
Fil-Estate, et al. agree with the CA that the annulment of the WPI was proper since JCHA, et al. failed
to prove that they have a clear right over La Paz Road. Fil-Estate, et al. assert that JCHA, et al. failed
to prove the existence of a right of way or a right to pass over La Paz Road and that the closure of
the said road constituted an injury to such right. According to them, La Paz Road is a torrens
registered private road and there is neither a voluntary nor legal easement constituted over it. They
claim that La Paz Road is a private property registered under the name of La Paz and the beneficial
ownership thereof was transferred to FEEC when La Paz joined the consortium for the Ecocentrum
Project.
Fil-Estate, et al., however, insist that the complaint did not sufficiently contain the ultimate facts to
show a cause of action. They aver the bare allegation that one is entitled to something is an
allegation of a conclusion which adds nothing to the pleading.
They likewise argue that the complaint was improperly filed as a class suit for it failed to show
that JCHA, et al. and the commuters and motorists they are representing have a well-defined community of
interest over La Paz Road. They claim that the excavation of La Paz Road would not necessarily give rise to a
common right or cause of action for JCHA, et al. against them since each of them has a separate and distinct
purpose and each may be affected differently than the others.
The Courts Ruling
The issues for the Courts resolution are: (1) whether or not the complaint states a cause of action;
(2) whether the complaint has been properly filed as a class suit; and (2) whether or not a WPI is
warranted.
Section 2, Rule 2 of the Rules of Court defines a cause of action as an act or omission by which a
party violates the right of another. A complaint states a cause of action when it contains three (3)
essential elements of a cause of action, namely:
(1) the legal right of the plaintiff,

(2) the correlative obligation of the defendant, and
(3) the act or omission of the defendant in violation of said legal right.[18]
The question of whether the complaint states a cause of action is determined by its averments
regarding the acts committed by the defendant.[19] Thus, it must contain a concise statement of the
ultimate or essential facts constituting the plaintiffs cause of action.[20] To be taken into account are
only the material allegations in the complaint; extraneous facts and circumstances or other
matters aliunde are not considered.[21]
The test of sufficiency of facts alleged in the complaint as constituting a cause of action is whether
or not admitting the facts alleged, the court could render a valid verdict in accordance with the
prayer of said complaint.[22] Stated differently, if the allegations in the complaint furnish sufficient
basis by which the complaint can be maintained, the same should not be dismissed regardless of the
defense that may be asserted by the defendant.[23]
In the present case, the Court finds the allegations in the complaint sufficient to establish a cause of
action. First, JCHA, et al.s averments in the complaint show a demandable right over La Paz Road.
These are: (1) their right to use the road on the basis of their allegation that they had been using the
road for more than 10 years; and (2) an easement of a right of way has been constituted over the
said roads. There is no other road as wide as La Paz Road existing in the vicinity and it is the shortest,
convenient and safe route towards SLEX Halang that the commuters and motorists may use. Second,
there is an alleged violation of such right committed by Fil-Estate, et al. when they excavated the
road and prevented the commuters and motorists from using the same. Third, JCHA, et al.
consequently suffered injury and that a valid judgment could have been rendered in accordance
with the relief sought therein.
With respect to the issue that the case was improperly instituted as a class suit, the Court finds the
opposition without merit.
Section 12, Rule 3 of the Rules of Court defines a class suit, as follows:
Sec. 12. Class suit. When the subject matter of the controversy is one of common or
general interest to many persons so numerous that it is impracticable to join all as parties, a
number of them which the court finds to be sufficiently numerous and representative as to
fully protect the interests of all concerned may sue or defend for the benefit of all. Any
party in interest shall have the right to intervene to protect his individual interest.
The necessary elements for the maintenance of a class suit are: 1) the subject matter of controversy
is one of common or general interest to many persons; 2) the parties affected are so numerous that
it is impracticable to bring them all to court; and 3) the parties bringing the class suit are sufficiently
numerous or representative of the class and can fully protect the interests of all concerned.[24]
In this case, the suit is clearly one that benefits all commuters and motorists who use La Paz Road.
As succinctly stated by the CA:
The subject matter of the instant case, i.e., the closure and excavation of the La Paz Road, is
initially shown to be of common or general interest to many persons. The records reveal
that numerous individuals have filed manifestations with the lower court, conveying their
intention to join private respondents in the suit and claiming that they are similarly situated
with private respondents for they were also prejudiced by the acts of petitioners in closing
and excavating the La Paz Road. Moreover, the individuals sought to be represented by
private respondents in the suit are so numerous that it is impracticable to join them all as
parties and be named individually as plaintiffs in the complaint. These individuals claim to be
residents of various barangays in Bian, Laguna and other barangays in San Pedro, Laguna.
Anent the issue on the propriety of the WPI, Section 3, Rule 58 of the Rules of Court lays down the
rules for the issuance thereof. Thus:
(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists
in restraining the commission or continuance of the acts complained of, or in the performance of an
act or acts, either for a limited period or perpetually;
(b) That the commission, continuance or non-performance of the act or acts complained of during
the litigation would probably work injustice to the applicant; or
(c) That a party, court, or agency or a person is doing, threatening, or attempting to do, or is procuring
or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting
the subject of the action or proceeding, and tending to render the judgment ineffectual.
A writ of preliminary injunction is available to prevent a threatened or continuous irremediable injury to

parties before their claims can be thoroughly studied and adjudicated.[25] The requisites for its issuance are: (1)
the existence of a clear and unmistakable right that must be protected; and (2) an urgent and paramount
necessity for the writ to prevent serious damage.[26]For the writ to issue, the right sought to be protected must
be a present right, a legal right which must be shown to be clear and positive.[27] This means that the
persons applying for the writ must show that they have an ostensible right to the final relief prayed
for in their complaint.[28]
In the case at bench, JCHA, et al. failed to establish a prima facie proof of violation of their right to justify the
issuance of a WPI. Their right to the use of La Paz Road is disputable since they have no clear legal right
therein. As correctly ruled by the CA:
Here, contrary to the ruling of respondent Judge, private respondents failed to prove as yet that they
have a clear and unmistakable right over the La Paz Road which was sought to be protected by the
injunctive writ. They merely anchor their purported right over the La Paz Road on the bare allegation
that they have been using the same as public road right-of-way for more than ten years. A mere
allegation does not meet the standard of proof that would warrant the issuance of the injunctive
writ. Failure to establish the existence of a clear right which should be judicially protected through the
writ of injunction is a sufficient ground for denying the injunction.
Consequently, the case should be further heard by the RTC so that the parties can fully prove their respective
positions on the issues.
Due process considerations dictate that the assailed injunctive writ is not a judgment on the merits
but merely an order for the grant of a provisional and ancillary remedy to preserve the status quo
until the merits of the case can be heard. The hearing on the application for issuance of a writ of
preliminary injunction is separate and distinct from the trial on the merits of the main case. [29] The
evidence submitted during the hearing of the incident is not conclusive or complete for only a
"sampling" is needed to give the trial court an idea of the justification for the preliminary injunction
pending the decision of the case on the merits.[30] There are vital facts that have yet to be presented
during the trial which may not be obtained or presented during the hearing on the application for
the injunctive writ.[31] Moreover, the quantum of evidence required for one is different from that for
the other.[32]
WHEREFORE, the petitions are DENIED. Accordingly, the July 31, 2001 Decision and February 21,
2002 Resolution of the Court of Appeals in CA-G.R. SP No. 60543 are AFFIRMED.
SO ORDERED.
6. MATHAY vs CONSOLIDATED BANK

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-23136 August 26, 1974
ISMAEL MATHAY, JOSEFINA MATHAY, DIOGRACIAS T. REYES and S. ADOR DIONISIO, plaintiffs-
appellants,
vs.
THE CONSOLIDATED BANK AND TRUST COMPANY, JOSE MARINO OLONDRIZ, WILFRIDO C.
TECSON, SIMON R. PATERNO, FERMIN Z. CARAM, JR., ANTONIO P. MADRIGAL, JOSE P. MADRIGAL,
CLAUDIO TEEHANKEE, and ALFONSO JUAN OLONDRIZ, defendants-appellees. CIPRIANO AZADA,
MARIA CRISTINA OLONDRIZ PERTIERRA jointly with her husband ARTURO PERTIERRA, and MARIA
DEL PUY OLONDRIZ DE STEVENS, movants-intervenors-appellants.
Deogracias T. Reyes & Associates for appellants.
Tañada, Teehankee & Carreon for appellees.
Paterno Pedrena for appellee Fermin Z. Caram, Jr.
ZALDIVAR, J.:p
In this appeal, appellants-plaintiffs and movants-intervenors seek the reversal of the order dated
March 21, 1964 of the Court of First Instance of Manila dismissing the complaint together with all
other pending incidents in Civil Case No. 55810.
The complaint in this case, filed on December 24, 1963 as a class suit, under Section 12, Rule 3, of
the Rules of Court, contained six causes of action. Under the first cause of action, plaintiffs-
appellants alleged that they were, on or before March 28, 1962, stockholders in the Consolidated
Mines, Inc. (hereinafter referred to as CMI), a corporation duly organized and existing under
Philippine laws; that the stockholders of the CMI, including the plaintiffs-appellants, passed, at a
regular stockholders' meeting, a Resolution providing: (a) that the Consolidated Bank & Trust Co.
(hereinafter referred to as Bank) be organized with an authorized capital of P20,000,000.00; (b) that
the organization be undertaken by a Board of Organizers composed of the President and Members
of the Board of Directors of the CMI; (c) that all stockholders of the CMI, who were legally qualified
to become stockholders, would be entitled to subscribe to the capital stock of the proposed Bank
"at par value to the same extent and in the same amount as said stockholders' respective share
holdings in the CMI," as shown in its stock books on a date to be fixed by the Board of Directors
[which date was subsequently fixed as January 15, 1963], provided that the right to subscribe should
be exercised within thirty days from the date so fixed, and "that if such right to subscription be not
so exercised then the stockholders concerned shall be deemed to have thereby waived and
released ipso factotheir right to such subscription in favor of the Interim Board of Organizers of the
Defendant Bank or their assignees;" and (d) that the Board of Directors of the CMI be authorized to
declare a "special dividend" in an amount it would fix, which the subscribing stockholders might
authorize to be paid directly to the treasurer of the proposed Bank in payment of the subscriptions;
that the President and members of the Board of Directors of the CMI, who are the individuals-
defendants-appellees in the instant case, constituted themselves as the Interim Board of Organizers;
that said Board sent out, on or about November 20, 1962, to the CMI stockholders, including the
plaintiffs-appellants, circular letters with "Pre-Incorporation Agreement to Subscribe" forms that
provided that the payment of the subscription should be made in cash from time to time or by the
application of the special dividend declared by the CMI, and that the subscription must be made
within the period from December 4, 1962 to January 15, 1963, "otherwise such subscription right
shall be deemed to have been thereby ipso facto waived and released in favor of the Board of
Organizers of the Defendant Bank and their assignees"; that the plaintiffs-appellants accomplished
and filed their respective "Pre-Incorporation Agreement to Subscribe" and paid in full their
subscriptions; that plaintiffs-appellants and the other CMI subscribing stockholders in whose behalf
the action was brought also subscribed to a very substantial amount of shares; that on June 25,
1963, the Board of Organizers caused the execution of the Articles or Incorporation of the proposed
Bank indicating an original subscription of 50,000 shares worth P5,000,000 subscribed and paid only
by six of the individuals-defendants-appellees, namely, Antonio P. Madrigal, Jose P. Madrigal Simon
R. Paterno, Fermin Z. Caram, Jr., Claudio Teehankee, and Wilfredo C. Tecson, thereby excluding the
plaintiffs-appellants and the other CMI subscribing stockholders who had already subscribed; that
the execution of said Articles of Incorporation was "in violation of law and in breach of trust and
contractual agreement as a means to gain control of Defendant Bank by Defendant Individuals and
persons or entities chosen by them and for their personal profit or gain in disregard of the rights of
Plaintiffs and other CMI Subscribing Stockholders;" that the paid-in capital stock was raised, as
required by the Monetary Board, to P8,000,000.00, and individuals-defendants-appellees caused to
be issued from the unissued shares 30,000 shares amounting to P3,000,000.00, all of which were
again subscribed and paid for entirely by individuals-defendants-appellees or entities chosen by
them "to the exclusion of Plaintiffs and other CMI subscribing stockholders" "in violation of law and
breach of trust and of the contractual agreement embodied in the contractual agreement of March
28, 1962"; that the Articles were filed with the Securities and Exchange Commission which issued
the Certificate of Incorporation on June 25, 1963; that as of the date of the Complaint, the plaintiffs-
appellants and other CMI subscribing stockholders had been denied, through the unlawful acts and
manipulation of the defendant Bank and Individuals-defendants-appellees, the right to subscribe at
par value, in proportion to their equities established under their respective "Pre-Incorporation
Agreements to Subscribe" to the capital stock, i.e., (a) to the original issue of 50,000 shares and/or
(b) to the additional issue of 30,000 shares, and/or (c) in that portion of said original or additional
issue which was unsubscribed; that the individuals-defendants-appellees and the persons chosen by
them had unlawfully acquired stockholdings in the defendant-appellee Bank in excess of what they
were lawfully entitled and held such shares "in trust" for the plaintiffs-appellants and the other CMI
stockholders; that it would have been vain and futile to resort to intra corporate remedies under the
facts and circumstances alleged above. As relief on the first cause of action, plaintiffs-appellants
prayed that the subscriptions and share holdings acquired by the individuals-defendants- appellees
and the persons chosen by them, to the extent that plaintiffs-appellants and the other CMI
stockholders had been deprived of their right to subscribe, be annulled and transferred to plaintiffs-
appellants and other CMI subscribing stockholders.
Besides reproducing all the above allegations in the other causes of action, plaintiffs-appellants
further alleged under the second cause of action that on or about August 28, 1963, defendants-
appellees Antonio P. Madrigal, Jose P. Madrigal: Fermin Z. Caram, Jr., and Wilfredo C. Tecson "falsely
certified to the calling of a special stockholders' meeting allegedly pursuant to due notice and call of
Defendant Bank" although plaintiffs-appellants and other CMI stockholders were not notified
thereof, and amended the Articles of Incorporation increasing the number of Directors from 6 to 7,
and had the illegally created Position of Director filled up by defendant-appellee Alfonso Juan
Olondriz, who was not competent or qualified to hold such position. In the third cause of action,
plaintiffs-appellants claimed actual damages in an amount equivalent to the difference between the
par value of the shares they were entitled, but failed, to acquire and the higher market value of the
same shares. In the fourth cause of action, Plaintiffs-appellants claimed moral damages; in the fifth,
exemplary damages; and in the sixth, attorney's fees.
In his manifestation to the court on January 4, 1964, Francisco Sevilla, who was one of the original
plaintiffs, withdrew. On January 15, 1964 Cipriano Azada, Maria Cristina Olondriz Pertierra, Maria
del Puy Olondriz de Stevens (who later withdrew as intervenors-appellants) and Carmen Sievert de
Amoyo, filed a motion to intervene, and to join the plaintiffs-appellants on record, to which motion
defendants-appellees, except Fermin Z. Caram, Jr., filed, on January 17, 1964 their opposition.
On February 7, 1964 defendants-appellees, except Fermin Z. Caram, Jr., filed a motion to dismiss on
the grounds that (a) plaintiffs-appellants had no legal standing or capacity to institute the alleged
class suit; (b) that the complaint did not state a sufficient and valid cause of action; and (c) that
plaintiffs-appellants' complaint against the increase of the number of directors did not likewise state
a cause of action. Plaintiffs-appellants filed their opposition thereto on February 21, 1964.
On March 4, 1964 appellants, plaintiffs and intervenors, filed a verified petition for a writ of
preliminary injunction to enjoin defendants-appellees from considering or ratifying by resolution, at
the meeting of the stockholders of defendant-appellee Bank to be held the following day, the
unlawful apportionment of the shares of the defendant-appellee Bank and the illegal amendment to
its Articles of Incorporation increasing the number of Directors, The Court, after hearing, granted
the writ, but subsequently set it aside upon the appellees' filing a counter bond.
Some subscribers to the capital stock of the Bank like Concepcion Zuluaga, et al., and Carlos Moran
Sison, et al., filed separate manifestations that they were opposing and disauthorizing the suit of
plaintiffs-appellants.
On March 7, 1964 defendants-appellees, except Fermin Z. Caram, Jr., filed a supplemental ground
for their motion to dismiss, to wit, that the stockholders, except Fermin Z. Caram, Jr., who
abstained, had unanimously, at their regular annual meeting held on March 5, 1964, ratified and
confirmed all the actuations of the organizers-directors in the incorporation, organization and
establishment of the Bank.
In its order, dated March 21, 1964, the trial court granted the motion to dismiss, holding, among
other things, that the class suit could not be maintained because of the absence of a showing in the
complaint that the plaintiffs-appellants were sufficiently numerous and representative, and that the
complaint failed to state a cause of action. From said order, appellants, plaintiffs and intervenors,
interposed this appeal to this Court on questions of law and fact, contending that the lower court
erred as follows:
1. In holding that plaintiffs-appellants could not maintain the present class suit because of the
absence of a showing in the complaint that they were sufficiently numerous and representative;
II. In holding that the instant action could not be maintained as a class suit because plaintiffs-
appellants did not have a common legal interest in the subject matter of the suit;
III. In dismissing the present class suit on the ground that it did not meet the requirements of Rule 3,
section 12 of the Rules of Court;
IV. In holding that the complaint was fatally defective in that it failed to state with particularity that
plaintiffs-appellants had resorted to, and exhausted, intra-corporate remedies;
V. In resolving defendants-appellees' motion on the basis of facts not alleged in the complaint;
VI. In holding that plaintiffs-appellants' complaint stated no valid cause of action against defendants-
appellees;
VII. In not holding that a trust relationship existed between the Interim Board of Organizers of
defendant-appellee Bank and the CMI subscribing stockholders and in not holding that the waiver
was in favor of the Board of Trustees for the CMI subscribing stockholders;
VIII. In holding that the failure of plaintiffs-appellants to allege that they had paid or had offered to
pay for the shares allegedly pertaining to them constituted another ground for dismissal;
XI. In holding that the allegations under the second cause of action stated no valid cause of action
due to a fatal omission to allege that plaintiffs-appellants were stockholders of record at the time of
the holding of the special stockholders' meeting;
X. In holding that plaintiffs-appellants' complaint stated no cause of action against defendant-

appellee Bank; and
XI. In considering the resolution of ratification and confirmation and in holding that the resolution
rendered the issues in this case moot.
The assigned error revolve around two questions namely: (1) whether the instant action could be
maintained as a class suit, and (2) whether the complaint stated a cause of action. These issues
alone will be discussed.
1. Appellants contended in the first three assigned errors that the trial court erred in holding that
the present suit could not be maintained as a class suit, and in support thereof argued that the
propriety of a class suit should be determined by the common interest in the subject matter of the
controversy; that in the instant case there existed such common interest which consisted not only in
the recovery of the shares of which the appellants were unlawfully deprived, but also in divesting
the individuals-defendants-appellees and the person or entities chosen by them of control of the
appellee Bank.1 ; that the complaint showed that besides the four plaintiff-appellants of record, and
the four movant-intervenors-appellants there were in the appellee Bank many other stockholders
who, tough similarly situated as the appellants, did not formally include themselves as parties on
record in view of the representative character of the suit; that the test, in order to determine the
legal standing of a party to institute a class suit, was not one, of number, but whether or not the
interest of said party was representative of the persons in whose behalf the class suit was instituted;
that granting arguendo, that the plaintiffs-appellants were not sufficiently numerous and
representative, the court should not have dismissed the action, for insufficiency of number in a class
suit was not a ground for a motion to dismiss, and the court should have treated the suit as an
action under Rule 3, section 6, of the Rules of Court which permits a joinder of parties.
Defendants-appellees, on the contrary, stressed that the instant suit was instituted as a class suit
and the plaintiffs-appellants did not sue in their individual capacities for the protection of their
individual interests; that the plaintiffs appellants of record could not be considered numerous and
representative, as said plaintiffs-appellants were only four out of 1,500 stockholders, and owned
only 8 shares out of the 80,000 shares of stock of the appellee Bank; that even if to the four
plaintiffs-appellants were added the four movants-intervenors-appellants the situation would be the
same as two of the intervenors, to wit, Ma. Cristina Olondriz Pertierra and Ma. del Puy Olondriz de
Stevens, could not sue as they did not have their husbands' consent; that it was necessary that in a
class suit the complaint itself should allege facts showing that the plaintiffs were sufficiently
numerous and representative, and this did not obtain in the instant case, as the complaint did not.
even allege how many other CMI stockholders were "similarly situated"; that the withdrawal of one
plaintiff, Francisco Sevilla, the subsequent disclaimers of any interest in the suit made in two
separate pleadings by other CMI stockholders and the disauthorization of their being represented by
plaintiffs-appellants by the 986 (out of 1,663) stockholders who attended the annual meeting of
bank stockholders on March 5, 1964, completely negated plaintiffs-appellants' pretension that they
were sufficiently numerous and representative or that there were many other stockholders similarly
situated whom the plaintiffs-appellants allegedly represented; that plaintiffs-appellants did not have
that common or general interest required by the Rules of Court in the subject matter of the suit.2
In their Reply Brief, appellants insisted that non-compliance with Section 12, Rule 3, not being one
enumerated in Rules 16 and 17, was not a ground for dismissal; that the requirements for a class
had been complied with; that the required common interest existed even if the interests were
several for there was a common question of law or fact and a common relief was sought; that the
common or general interest could be in the object of the action, in the result of the proceedings, or
in the question involved in the action, as long as there was a common right based on the same
essential facts; that plaintiffs-appellants adequately represented the aggrieved group of bank
stockholders, inasmuch as appellants' interests were not antagonistic to those of the latter, and
appellants were in the same position as the group in whose behalf the complaint was filed.
The governing statutory provision for the maintenance of a class suit is Section 12 of Rule 3 of the
Rules of Court, which reads as follows:
Sec. 12. Class suit — When the subject matter of the controversy is one of common or general
interest to many persons, and the parties are so numerous that it is impracticable to bring them all
before the court, one or more may sue or defend for the benefit of -ill. But in such case the court
shall make sure that the parties actually before it are sufficiently numerous and representative so
that all interests concerned are fully protected. Any party in interest shall have a right to intervene
in protection of his individual interest.
The necessary elements for the maintenance of a class suit are accordingly: (1) that the subject
matter of the controversy be one of common or general interest to many persons, and (2) that such
persons be so numerous as to make it impracticable to bring them all to the court. An action does
not become a class suit merely because it is designated as such in the pleadings. Whether the suit is
or is not a class quit depends upon the attending facts, and the complaint, or other pleading
initiating the class action should allege the existence of the necessary facts, to wit, the existence of a
subject matter of common interest, and the existence of a class and the number of persons in the
alleged class,3 in order that the court might be enabled to determine whether the members of the
class are so numerous as to make it impracticable to bring them all before the court, to contrast the
number appearing on the record with the number in the class and to determine whether claimants
on record adequately represent the class and the subject matter of general or common interest.4
The complaint in the instant case explicitly declared that the plaintiffs- appellants instituted the
"present class suit under Section 12, Rule 3, of the Rules of Court in. behalf of CMI subscribing
stockholders"5 but did not state the number of said CMI subscribing stockholders so that the trial
court could not infer, much less make sure as explicitly required by the sufficiently numerous and
representative in order that all statutory provision, that the parties actually before it were interests
concerned might be fully protected, and that it was impracticable to bring such a large number of
parties before the court.
The statute also requires, as a prerequisite to a class suit, that the subject-matter of the controversy
be of common or general interest to numerous persons. Although it has been remarked that the
"innocent 'common or general interest' requirement is not very helpful in determining whether or
not the suit is proper",6 the decided cases in our jurisdiction have more incisively certified the
matter when there is such common or general interest in the subject matter of the controversy. By
the phrase "subject matter of the action" is meant "the physical facts, the things real or personal,
the money, lands, chattels, and the like, in relation to which the suit is prosecuted, and not the
delict or wrong committed by the defendant."7
This Court has ruled that a class suit did not lie in an action for recovery of real property where
separate portions of the same parcel were occupied and claimed individually by different parties to
the exclusion of each other, such that the different parties had determinable, though undivided
interests, in the property in question.8 It his likewise held that a class suit would not lie against 319
defendants individually occupying different portions of a big parcel of land, where each defendant
had an interest only in the particular portion he was occupying, which portion was completely
different from the other portions individually occupied by other defendants, for the applicable
section 118 of the Code of Civil Procedure relates to a common and general interest in single specific
things and not to distinct ones.9In an action for the recovery of amounts that represented
surcharges allegedly collected by the city from some 30,000 customers of four movie houses, it was
held that a class suit did not lie, as no one plaintiff had any right to, or any share in the amounts
individually claimed by the others, as each of them was entitled, if at all, only to the return of what
he had personally paid. 10
The interest, subject matter of the class suits in the above cited cases, is analogous to the interest
claimed by appellants in the instant case. The interest that appellants, plaintiffs and intervenors, and
the CMI stockholders had in the subject matter of this suit — the portion of stocks offering of the
Bank left unsubscribed by CMI stockholders who failed to exercise their right to subscribe on or
before January 15, 1963 — was several, not common or general in the sense required by the
statute. Each one of the appellants and the CMI stockholders had determinable interest; each one
had a right, if any, only to his respective portion of the stocks. No one of them had any right to, or
any interest in, the stock to which another was entitled. Anent this point, the trial court correctly
remarked:
It appears to be the theory of the plaintiffs borne out by the prayer, that each subscribing CMI
stockholder is entitled to further subscribe to a certain Proportion depending upon his stockholding
in the CMI, of the P8 million capital stock of the defendant bank open to subscription (out of the 20
million authorized capital stock) as well as the unsubscribed portion of the P8 million stock offering
which were left unsubscribed by those CMI stockholders who for one reason or another had failed
to exercise their subscription rights on or before January 15, 1963. Under the plaintiffs' theory
therefore, each subscribing CMI stockholder was entitled to subscribe to a definite number of shares
both in the original offering of P8 million and in that part thereof not subscribed on or before the
deadline mentioned, so that one subscribing CMI stockholder may be entitled to subscribe to one
share, another to 3 shares and a third to 11 shares, and so on, depending upon the amount and
extent of CMI stockholding. But except for the fact that a question of law — the proper
interpretation of the waiver provisions of the CMI stockholders' resolution of March 28, 1962 — is
common to all, each CMI subscribing stock holder has a legal interest in, and a claim to, only his
respective proportion of shares in the defendant bank, and none with regard to any of the shares to
which another stockholder is entitled. Thus plaintiff Ismael Mathay has no legal interest in, or claim
to, any share claimed by any or all of his co-plaintiffs from the defendant individuals. Hence, no CMI
subscribing stockholder or, for that matter, not any number of CMI stockholders can maintain a
class suit in behalf of others,... 11
Even if it be assumed, for the sake of argument, that the appellants and the CMI stockholders
suffered wrongs that had been committed by similar means and even pursuant to a single plan of
the Interim Board of Organizers of the Bank, the wrong suffered by each of them would constitute a
wrong separate from those suffered by the other stockholders, and those wrongs alone would not
create that common or general interest in the subject matter of the controversy as would entitle
any one of them to bring a class suit on behalf of the others. Anent this point it has been said that:
Separate wrongs to separate persons, although committed by similar means and even pursuant to a
single plan, do not alone create a 'common' or 'general' interest in those who are wronged so as to
entitle them to maintain a representative action. 12
Appellants, however, insisted, citing American authorities, 13 that a class suit might be brought even
if the interests of plaintiffs-appellants might be several as long as there was a common question of
law or fact affecting them and a common relief was sought. We have no conflict with the authorities
cited; those were rulings under the Federal Rules of Civil Procedure, pursuant to Rule 23 of which,
there were three types of class suits, namely: the true, the hybrid, and the spurious, and these three
had only one feature in common, that is, in each the persons constituting the class must be so
numerous as to make it impracticable to bring them all before the court. The authorities cited by
plaintiffs-appellants refer to the spurious class action (Rule 23 (a) (3) which involves a right sought to
be enforced, which is several, and there is a common question of law or fact affecting the several
rights and a common relief is sought. 14 The spurious class action is merely a permissive joinder
device; between the members of the class there is no jural relationship, and the right or liability of
each is distinct, the class being formed solely by the presence of a common question of law or
fact. 15 This permissive joinder is provided in Section 6 of Rule 3, of our Rules of Court. Such joinder
is not and cannot be regarded as a class suit, which this action purported and was intended to be as
per averment of the complaint.
It may be granted that the claims of all the appellants involved the same question of law. But this
alone, as said above, did not constitute the common interest over the subject matter indispensable
in a class suit. The right to purchase or subscribe to the shares of the proposed Bank, claimed by
appellants herein, is analogous to the right of preemption that stockholders have when their
corporation increases its capital. The right to preemption, it has been said, is personal to each
stockholder, 16 and while a stockholder may maintain a suit to compel the issuance of his
proportionate share of stock, it has been ruled, nevertheless, that he may not maintain a
representative action on behalf of other stockholders who are similarly situated. 17 By analogy, the
right of each of the appellants to subscribe to the waived stocks was personal, and no one of them
could maintain on behalf of others similarly situated a representative suit.
Straining to make it appear that appellants and the CMI subscribing stockholders had a common or
general interest in the subject matter of the suit, appellants stressed in their brief that one of the
reliefs sought in the instant action was "to divest defendant individuality and the persons or entities
chosen by them of control of the defendant bank." 18 This relief allegedly sought by appellants did
not, however, appear either in the text or in the prayer of the complaint.
Appellants, furthermore, insisted that insufficiency of number in a class suit was not a ground for
dismissal of one action. This Court has, however, said that where it appeared that no sufficient
representative parties had been joined, the dismissal by the trial court of the action, despite the
contention by plaintiffs that it was a class suit, was correct. 19 Moreover, insofar as the instant case
is concerned, even if it be granted for the sake of argument, that the suit could not be dismissed on
that ground, it could have been dismissed, nevertheless, on the ground of lack of cause of action
which will be presently discussed. .
2. Appellants supported their assigned error that the court erred in holding that the complaint
stated no valid cause of action, by claiming that paragraph 15 together with the other allegations of
the complaint to the effect that defendants-appellees had unlawfully acquired stockholdings in the
capital stock of defendant-appellee Bank in excess of what they were lawfully entitled to, in
violation of law and in breach of trust and the contractual agreement, constituted a valid and
sufficient cause of action; 20 and that only the allegations in the complaint should have been
considered by the trial court in determining whether the complaint stated a cause of action or not.
Defendants-appellees, on the contrary, maintained that the allegations of the complaint should not
be the only ones to be considered in determining whether there is a cause of action; that even if the
ultimate facts alleged in the first cause of action of the complaint be the only ones considered the
complaint would still fail to state a valid cause of action on the following grounds: first, there was no
allegation regarding appellants' qualification to subscribe to the capital stock of the appellee Bank,
for under the CMI stockholders' resolution of March 28, 1962, only those qualified under the law
were entitled to subscribe, and under the regulations of the Monetary Board, only natural-born
Filipino citizens could be stockholders of a banking corporation organized under the laws of the
Philippines, and nowhere did the complaint alleged that plaintiffs-appellants were natural born
Filipino citizens. 21 Second, appellants' averment in paragraph 8 that they "subscribed," and their
averment in paragraph 15 that they were "denied the right to subscribe ... to the capital stock of the
defendant Bank", were inconsistent, and hence neutralized each other, thereby leaving in shambles
the first cause of action. Third, there was no allegation that appellants had not yet received or had
not been issued the corresponding certificates of stock covering the shares they had subscribed and
paid for. Fourth, the allegations failed to show the existence of the supposed trust; and fifth, the
complaint failed to allege that plaintiffs-appellants had paid or offered to pay for the shares
allegedly pertaining to them. 22
Let us premise the legal principles governing the motion to dismiss on the ground of lack of cause of
action.
Section 1, Rule 16 of the Rules of Court providing in part that: .

Within the time for pleading a motion to dismiss may be made on any of the following grounds: ....
(g) That the complaint states no cause of action. ..1.
explicitly requires that the sufficiency of the complaint must be tested exclusively on the basis of the
complaint itself and no other should be considered when the ground for motion to dismiss is that
the complaint states no cause of action. Pursuant thereto this Court has ruled that:
As a rule the sufficiency of the complaint, when Challenged in a motion to dismiss, must be
determined exclusively on the basis of the facts alleged therein. 23
It has been likewise held that a motion to dismiss based on lack of cause of action hypothetically
admits the truth of the allegations of fact made in the complaint. 24 It is to be noted that only the
facts well pleaded in the complaint, and likewise, any inferences fairly deducible therefrom, are
deemed admitted by a motion to dismiss. Neither allegations of conclusions 25 nor allegations of
facts the falsity of which the court may take judicial notice are deemed admitted. 26 The question,
therefore, submitted to the Court in a motion to dismiss based on lack of cause of action is not
whether the facts alleged in the complaint are true, for these are hypothetically admitted, but
whether the facts alleged are sufficient to constitute a cause of action such that the court may
render a valid judgment upon the facts alleged therein.
A cause of action is an act or omission of one party in violation of the legal right of the other. Its
essential elements are, namely: (1) the existence of a legal right in the plaintiff, (2) a correlative legal
duty in the defendant, and (3) an act or omission of the defendant in violation of plaintiff's right with
consequential injury or damage to the plaintiff for which he may maintain an action for the recovery
of damages or other appropriate relief. 27 On the other hand, Section 3 of Rule 6 of the Rules of
Court provides that the complaint must state the ultimate facts constituting the plaintiff's cause of
action. Hence, where the complaint states ultimate facts that constitute the three essential
elements of a cause of action, the complaint states a cause of action; 28 otherwise, the complaint
must succumb to a motion to dismiss on that ground.
The legal principles having been premised, let us now analyze and discuss appellant's various causes
of action.
Appellants' first cause of action, pursuant to what has been premised above, should have consisted
of: (1) the right of appellants as well as of the other CMI stockholders to subscribe, in proportion to
their equities established under their respective "Pre-Incorporation Agreements to Subscribe", to
that portion of the capital stock which was unsubscribed because of failure of the CMI stockholders
to exercise their right to subscribe thereto; (2) the legal duty of the appellant to have said portion of
the capital stock to be subscribed by appellants and other CMI stockholders; and (3) the violation or
breach of said right of appellants and other CMI stockholders by the appellees.
Did the complaint state the important and substantial facts directly forming the basis of the primary
right claimed by plaintiffs? Before proceeding to elucidate this question, it should be noted that a
bare allegation that one is entitled to something is an allegation of a conclusion. Such allegations
adds nothing to the pleading, it being necessary to plead specifically the facts upon which such
conclusion is founded. 29 The complaint alleged that appellants were stockholders of the CMI; that
as such stockholders, they were entitled; by virtue of the resolution of March 28, 1962, to subscribe
to the capital stock of the proposed Consolidated Bank and Trust Co., at par value to the same
extent and in the same amount as said stockholders' respective share holdings in the CMI as shown
in the latter's stock book as of January 15, 1963, the right to subscribe to be exercised until January
15, 1963, provided said stockholders of the CMI were qualified under the law to become
stockholders of the proposed Bank; 30 that appellants accomplished and filed their respective "Pre-
Incorporation Agreements to Subscribe" and fully paid the subscription. 31
These alleged specific facts did not even show that appellants were entitled to subscribe to the
capital stock of the proposed Bank, for said right depended on a condition precedent, which was,
that they were qualified under the law to become stockholders of the Bank, and there was no direct
averment in the complaint of the facts that qualified them to become stockholders of the Bank. The
allegation of the fact that they subscribed to the stock did not, by necessary implication, show that
they were possessed of the necessary qualifications to become stockholders of the proposed Bank.
Assuming arguendo that appellants were qualified to become stockholders of the Bank, they could
subscribe, pursuant to the explicit terms of the resolution of March 28, 1962, "to the same extent
and in the same amount as said stockholders' respective stockholdings in the CMI" as of January 15,
1963. 32 This was the measure of the right they could claim to subscribe to waived stocks. Appellants
did not even aver that the stocks waived to the subscription of which they claimed the right to
subscribe, were comprised in "the extent and amount" of their respective share holdings in the CMI.
It is not surprising that they did not make such an averment for they did not even allege the amount
of shares of stock to which they claimed they were entitled to subscribe. The failure of the
complaint to plead specifically the above facts rendered it impossible for the court to conclude by
natural reasoning that the appellants and other CMI stockholders had a right to subscribe to the
waived shares of stock, and made any allegation to that effect a conclusion of the pleader, not an
ultimate fact, in accordance with the test suggested by the California Supreme Court, to wit:
If from the facts in evidence, the result can be reached by that process of natural reasoning adopted
in the investigation of truth, it becomes an ultimate fact, to be found as such. If, on the other hand,
resort must be had to the artificial processes of the law, in order to reach a final determination, the
result is a conclusion of law. 33
Let us now pass to the second and third elements that would have constituted the first cause of
action. Did the complaint allege as ultimate facts the legal duty of defendants-appellees to have a
portion of the capital stock subscribed to by appellants? Did the complaint allege as ultimate facts
that defendants appellees had violated appellants' right?
Even if it be assumed arguendo that defendants-appellees had the duty to have the waived stocks
subscribed to by the CMI stockholders, this duty was not owed to all the CMI stockholders, but only
to such CMI stockholders as were qualified to become stockholders of the proposed Bank. Inasmuch
as it has been shown that the complaint did not contain ultimate facts to show that plaintiffs-
appellants were qualified to become stockholders of the Bank, it follows that the complaint did not
show that defendants-appellees were under duty to have plaintiffs-appellants subscribe to the
stocks of the proposed Bank. It inevitably follows also that the complaint did not contain ultimate
facts to show that the right of the plaintiffs-appellants to subscribe to the shares of the proposed
Bank had been violated by defendants-appellees. How could a non-existent right be violated?
Let us continue the discussion further. The complaint alleged that by virtue of the resolution of
March 28, 1962, the President and Members of the Board of Directors of the CMI would be
constituted as a Board of Organizers to undertake and carry out the organization of the Bank; 34 that
the Board of Organizers was constituted and proceeded with the establishment of the Bank, 35 that
the persons composing the Board of Organizers were the individuals-defendants-appellees; 36 that
the Board of Organizers sent our circular letters with "Pre-Incorporation Agreement to Subscribe"
forms 37 which specified, among others, "such subscription right shall be deemed ipso facto waived
and released in favor of the Board of Organizers of the defendant Bank and their assignees"; 38 that
in the Articles of Incorporation prepared by the Board of Organizers, the individuals-defendants-
appellees alone appeared to have subscribe to the 50, shares; 39 and that individuals-defendants-
appellees again subscribe to all the additional 30,000 shares. 40 From these facts, appellants
concluded that they were denied their right to subscribe in proportion to their equities; 41 that the
individuals-defendants-appellees unlawfully acquired stockholdings far in excess of what they were
lawfully entitled in violation of law and in breach of trust and of contractual agreement; 42and that,
because of matters already alleged, the individuals-defendants-appellees "hold their shares in the
defendant bank in trust for plaintiffs." 43
The allegation in the complaint that the individuals-defendants-appellees held their shares "in trust"
for plaintiffs-appellants without averment of the facts from which the court could conclude the
existence of the alleged trust, was not deemed admitted by the motion to dismiss for that was a
conclusion of law. Express averments "that a party was the beneficial owner of certain property; ...
that property or money was received or held in trust, or for the use of another; that particular funds
were trust funds; that a particular transaction created an irrevocable trust; that a person held
Property as constructive trustee; that on the transfer of certain property a trust resulted" have been
considered as mere conclusions of law. 44 The facts alleged in the complaint did not, by logical
reasoning, necessarily lead to the conclusion that defendants-appellees were trustees in favor of
appellants of the shares of stock waived by the CMI stockholders who failed to exercise their right to
subscribe. In this connection, it has been likewise said that:
"The general rule is that an allegation of duty in terms unaccompanied by a statement of the facts
showing the existence of the duty, is a mere conclusion of law, unless there is a relation set forth
from which the law raises the duty." 45
In like manner, the allegation that individuals-defendants-appellees held said shares in trust was no
more than an interpretation by appellants of the effect of the waiver clause of the Resolution and as
such it was again a mere conclusion of law. It has been said that:
The following are also conclusions of law: ... an allegation characterizing an instrument or purporting
to interpret it and state its effects, ... 46
Allegations in petition in the nature of conclusions about the meaning of contract, inconsistent with
stated terms of the contract, cannot be considered. 47
The allegation that the defendants-appellee acquired stockholdings far in excess of what they were
lawfully entitled, in violation of law and in breach of trust and of contractual agreement, is also
mere conclusion of law.
Of course, the allegation that there was a violation of trust duty was plainly a conclusion of law, for
"a mere allegation that it was the duty of a party to do this or that, or that he was guilty of a breach
of duty, is a statement of a conclusion not of fact." 48
An averment ... that an act was 'unlawful' or 'wrongful' is a mere legal conclusion or opinion of the
pleader. 49
Moreover, plaintiffs-appellants did not state in the complaint the amount of subscription the
individual defendant-appellee were entitled to; hence there was no basis for the court to determine
what amount subscribed to by them was excessive.
From what has been said, it is clear that the ultimate facts stated under the first cause of action are
not sufficient to constitute a cause of action.
The further allegations in the second cause of action that the calling of a special meeting was
"falsely certified", that the seventh position of Director was "illegally created" and that defendant
Alfonso Juan Olondriz was "not competent or qualified" to be a director are mere conclusions of
law, the same not being necessarily inferable from the ultimate facts stated in the first and second
causes of action. It has been held in this connection that:
An averment that ... an act was 'unlawful' or 'wrongful' is a mere legal conclusion or opinion of the
pleader. The same is true of allegations that an instrument was 'illegally' certified or ... that an act
was arbitrarily done ..." 50
A pleader states a mere conclusion when he makes any of the following allegations: that a party was
incapacitated to enter into a contract or convey
property ... 51
The third, fourth, fifth and sixth causes of action depended on the first cause of action, which, as has
been shown, did not state ultimate facts sufficient to constitute a cause of action. It stands to
reason, therefore, that said causes of action would also be fatally defective.
It having been shown that the complaint failed to state ultimate facts to constitute a cause of action,
it becomes unnecessary to discuss the other assignments of errors.
WHEREFORE, the instant appeal is dismissed, and the order dated March 21, 1964 of the Court of
First Instance of Manila dismissing the complaint in Civil Case No. 55810 is affirmed, with costs in
this instance against appellants. It is so ordered.
7. NEWSWEEK vs IAC

SUPREME COURT
Manila
EN BANC
G.R. No. L-63559 May 30, 1986
NEWSWEEK, INC., petitioner,

vs.
THE INTERMEDIATE APPELLATE COURT, and NATIONAL FEDERATION OF SUGARCANE PLANTERS
INC., BINALBAGAN-ISABELA PLANTERS ASSOCIATION, INC., ASOCIACION DE AGRICULTORES DE LA
CARLOTA, LA CASTELLANA y PONTEVEDRA, INC., DONEDCO PLANTERS ASSOCIATION INC.,
ARMANDO GUSTILO, ENRIQUE ROJAS, ALFREDO MONTELIBANO, JR., PABLO SOLA, JOSE
MONTALVO, VICENTE GUSTILO, JOSEPH MARANON, ROBERTO CUENCA, JOSE SICANGCO,
FLORENCIO ALONSO, MIGUEL GATUSLAO, PEDRO YULO, MARINO RUBIN and BENJAMIN
BAUTISTA, respondents.
San Juan, Africa, Gonzales & San Agustin Law Offices for private respondents.
FERIA, J.:
Petitioner, Newsweek, Inc., a foreign corporation licensed to do business in the Philippines, in this
special action for certiorari, prohibition with preliminary injunction, seeks to annul the decision of
the Intermediate Appellate Court dated December 17, 1982 sustaining the Order of the then Court
of First Instance of Bacolod City which denied petitioner's Motion to Dismiss the complaint for libel
filed by private respondents (Civil Case No. 15812), and the Resolution dated March 10, 1983 which
denied its Motion for Reconsideration.
It appears that on March 5, 1981, private respondents, incorporated associations of sugarcane

planters in Negros Occidental claiming to have 8,500 members and several individual sugar planters,
filed Civil Case No. 15812 in their own behalf and/or as a class suit in behalf of all sugarcane planters
in the province of Negros Occidental, against petitioner and two of petitioners' non-resident
correspondents/reporters Fred Bruning and Barry Came. The complaint alleged that petitioner and
the other defendants committed libel against them by the publication of the article "An Island of
Fear" in the February 23, 1981 issue of petitioner's weekly news magazine Newsweek. The article
supposedly portrayed the island province of Negros Occidental as a place dominated by big
landowners or sugarcane planters who not only exploited the impoverished and underpaid
sugarcane workers/laborers, but also brutalized and killed them with imprunity. Complainants
therein alleged that said article, taken as a whole, showed a deliberate and malicious use of
falsehood, slanted presentation and/or misrepresentation of facts intended to put them (sugarcane
planters) in bad light, expose them to public ridicule, discredit and humiliation here in the
Philippines and abroad, and make them objects of hatred, contempt and hostility of their
agricultural workers and of the public in general. They prayed that defendants be ordered to pay
them PlM as actual and compensatory damages, and such amounts for moral, exemplary and
corrective damages as the court may determine, plus expenses of litigation, attorney's fees and
costs of suit. A photo copy of the article was attached to the complaint.
On November 5, 1981, petitioner filed a motion to dismiss on the grounds that (1) the printed article
sued upon is not actionable in fact and in law; and (2) the complaint is bereft of allegations that
state, much less support a cause of action. It pointed out the non-libelous nature of the article and,
consequently, the failure of the complaint to state a cause of action. Private respondents filed an
Opposition to the motion to dismiss and petitioner filed a reply.
On March 17, 1982, the trial court denied the motion to dismiss, stating that the grounds on which
the motion to dismiss are predicated are not indubitable as the complaint on its face states a valid
cause of action; and the question as to whether the printed article sued upon its actionable or not is
a matter of evidence. Petitioner's motion for reconsideration was denied on May 28, 1982.
On June 18, 1982, petitioner filed a petition for certiorari with respondent Court (CA-G. R. No.
14406) seeking the annulment of the aforecited trial court's Orders for having been issued with such
a grave abuse of discretion as amounting to lack of jurisdiction and praying for the dismissal of the
complaint for failure to state a cause of action.
As earlier stated, respondent Court affirmed the trial court's Orders in a Decision dated December
17, 1982 and ordered the case to be tried on the merits on the grounds that -(1) the complaint
contains allegations of fact which called for the presentation of evidence; and (2) certiorari under
Rule 65 cannot be made to substitute for an appeal where an appeal would lie at a proper time.
Subsequently, on March 10, 1983, the respondent Court denied petitioner's Motion for
Reconsideration of the aforesaid decision, hence this petition.
The proper remedy which petitioner should have taken from the decision of respondent Court is an
appeal by certiorari under Rule 45 of the Rules of Court and not the special civil action of certiorari
and prohibition under Rule 65 of said Rules. However, since the petition was filed on time within
fifteen days from notice of the Resolution denying the motion for reconsideration, we shall treat the
same as a petition for review on certiorari. The two (2) issues raised in the petition are: (1) whether
or not the private respondents' complaint failed to state a cause of action; and (2) whether or not
the petition for certiorari and prohibition is proper to question the denial of a motion to dismiss for
failure to state a cause of action.
First, petitioner argues that private respondents' complaint failed to state a cause of action because
the complaint made no allegation that anything contained in the article complained of regarding
sugarcane planters referred specifically to any one of the private respondents; that libel can be
committed only against individual reputation; and that in cases where libel is claimed to have been
directed at a group, there is actionable defamation only if the libel can be said to reach beyond the
mere collectivity to do damage to a specific, individual group member's reputation.
We agree with petitioner.
In the case of Corpus vs. Cuaderno, Sr. (16 SCRA 807) this Court ruled that "in order to maintain a
libel suit, it is essential that the victim be identifiable (People vs. Monton, L-16772, November 30,
1962), although it is not necessary that he be named (19 A.L.R. 116)." In an earlier case, this Court
declared that" ... defamatory matter which does not reveal the Identity of the person upon whom
the imputation is cast, affords no ground of action unless it be shown that the readers of the libel
could have Identified the personality of the individual defamed." (Kunkle vs. Cablenews-American
and Lyons 42 Phil. 760).
This principle has been recognized to be of vital importance, especially where a group or class of
persons, as in the case at bar, claim to have been defamed, for it is evident that the larger the
collectivity, the more difficult it is for the individual member to prove that the defamatory remarks
apply to him. (Cf. 70 ALR 2d. 1384).
In the case of Uy Tioco vs. Yang Shu Wen , 32 Phil. 624, this Court held as follows:
Defamatory remarks directed at a class or group of persons in general language only, are not
actionable by individuals composing the class or group unless the statements are sweeping; and it is
very probable that even then no action would lie where the body is composed of so large a number
of persons that common sense would tell those to whom the publication was made that there was
room for persons connected with the body to pursue an upright and law abiding course and that it
would be unreasonable and absurd to condemn all because of the actions of a part. (supra p. 628).
It is evident from the above ruling that where the defamation is alleged to have been directed at a
group or class, it is essential that the statement must be so sweeping or all-embracing as to apply to
every individual in that group or class, or sufficiently specific so that each individual in the class or
group can prove that the defamatory statement specifically pointed to him, so that he can bring the
action separately, if need be.
We note that private respondents filed a "class suit" in representation of all the 8,500 sugarcane
planters of Negros Occidental. Petitioner disagrees and argues that the absence of any actionable
basis in the complaint cannot be cured by the filing of a class suit on behalf of the aforesaid sugar
planters.
We find petitioner's contention meritorious.
The case at bar is not a class suit. It is not a case where one or more may sue for the benefit of all
(Mathay vs. Consolidated Bank and Trust Company, 58 SCRA 559) or where the representation of
class interest affected by the judgment or decree is indispensable to make each member of the class
an actual party (Borlaza vs. Polistico, 47 Phil. 348). We have here a case where each of the plaintiffs
has a separate and distinct reputation in the community. They do not have a common or general
interest in the subject matter of the controversy.
The disputed portion of the article which refers to plaintiff Sola and which was claimed to be
libelous never singled out plaintiff Sola as a sugar planter. The news report merely stated that the
victim had been arrested by members of a special police unit brought into the area by Pablo Sola,
the mayor of Kabankalan. Hence, the report, referring as it does to an official act performed by an
elective public official, is within the realm of privilege and protected by the constitutional
guarantees of free speech and press.
The article further stated that Sola and the commander of the special police unit were arrested. The
Court takes judicial notice of this fact. (People vs. Sola, 103 SCRA 393.)
The second issue to be resolved here is whether or not the special civil action of certiorari or
prohibition is available to petitioner whose motion to dismiss the complaint and subsequent motion
for reconsideration were denied.
As a general rule, an order denying a motion to dismiss is merely interlocutory and cannot be
subject of appeal until final judgment or order is rendered. (Sec. 2 of Rule 4 1). The ordinary
procedure to be followed in such a case is to file an answer, go to trial and if the decision is adverse,
reiterate the issue on appeal from the final judgment. The same rule applies to an order denying a
motion to quash, except that instead of filing an answer a plea is entered and no appeal lies from a
judgment of acquittal.
This general rule is subject to certain exceptions. If the court, in denying the motion to dismiss or
motion to quash, acts without or in excess of jurisdiction or with grave abuse of discretion, then
certiorari or prohibition lies. The reason is that it would be unfair to require the defendant or
accused to undergo the ordeal and expense of a trial if the court has no jurisdiction over the subject
matter or offense, or is not the court of proper venue, or if the denial of the motion to dismiss or
motion to quash is made with grave abuse of discretion or a whimsical and capricious exercise of
judgment. In such cases, the ordinary remedy of appeal cannot be plain and adequate. The following
are a few examples of the exceptions to the general rule.
In De Jesus vs. Garcia (19 SCRA 554), upon the denial of a motion to dismiss based on lack of
jurisdiction over the subject matter, this Court granted the petition for certiorari and prohibition
against the City Court of Manila and directed the respondent court to dismiss the case.
In Lopez vs. City Judge (18 SCRA 616), upon the denial of a motion to quash based on lack of
jurisdiction over the offense, this Court granted the petition for prohibition and enjoined the
respondent court from further proceeding in the case.
In Enriquez vs. Macadaeg (84 Phil. 674), upon the denial of a motion to dismiss based on improper
venue, this Court granted the petition for prohibition and enjoined the respondent judge from
taking cognizance of the case except to dismiss the same.
In Manalo vs. Mariano (69 SCRA 80), upon the denial of a motion to dismiss based on bar by prior
judgment, this Court granted the petition for certiorari and directed the respondent judge to dismiss
the case.
In Yuviengco vs. Dacuycuy (105 SCRA 668), upon the denial of a motion to dismiss based on the
Statute of Frauds, this Court granted the petition for certiorari and dismissed the amended
complaint.
In Tacas vs. Cariaso (72 SCRA 527), this Court granted the petition for certiorari after the motion to
quash based on double jeopardy was denied by respondent judge and ordered him to desist from
further action in the criminal case except to dismiss the same.
In People vs. Ramos (83 SCRA 11), the order denying the motion to quash based on prescription was
set aside on certiorari and the criminal case was dismissed by this Court.
Respondent Court correctly stated the general rule and its exceptions. However, it ruled that none
of the exceptions is present in the case at bar and that the case appears complex and complicated,
necessitating a full-blown trial to get to the bottom of the controversy.
Petitioner's motion to dismiss is based on the ground that the complaint states no cause of action
against it by pointing out the non-libelous nature of the article sued upon. There is no need of a trial
in view of the conclusion of this Court that the article in question is not libelous. The specific
allegation in the complaint, to the effect that the article attributed to the sugarcane planters the
deaths and brutalization of sugarcane workers, is not borne out by a perusal of the actual text.
The complaint contains a recital of the favorable working conditions of the agricultural workers in
the sugar industry and the various foundations and programs supported by planters' associations for
the benefit of their workers. Undoubtedly, the statements in the article in question are sweeping
and exaggerated; but, paraphrasing the ruling in the Uy Tioco case above quoted, it would be
unreasonable and absurd to condemn the majority of the sugarcane planters, who have at heart the
welfare of their workers, because of the actions of a part. Nonetheless, articles such as the one in
question may also serve to prick the consciences of those who have but are not doing anything or
enough for those who do not have.
On the other hand, petitioner would do well to heed the admonition of the President to media that
they should check the sources of their information to ensure the publication of the truth. Freedom
of the press, like all freedoms, should be exercised with responsibility.
WHEREFORE, the decision of the Intermediate Appellate Court is reversed and the complaint in Civil
Case No. 15812 of the Court of First Instance of Negros Occidental is dismissed, without
pronouncement as to costs.
SO ORDERED.
8. OPOSA vs FACTORAN

SUPREME COURT
Manila
EN BANC
G.R. No. 101083 July 30, 1993
JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed OPOSA, minors, and
represented by their parents ANTONIO and RIZALINA OPOSA, ROBERTA NICOLE SADIUA, minor,
represented by her parents CALVIN and ROBERTA SADIUA, CARLO, AMANDA SALUD and
PATRISHA, all surnamed FLORES, minors and represented by their parents ENRICO and NIDA
FLORES, GIANINA DITA R. FORTUN, minor, represented by her parents SIGRID and DOLORES
FORTUN, GEORGE II and MA. CONCEPCION, all surnamed MISA, minors and represented by their
parents GEORGE and MYRA MISA, BENJAMIN ALAN V. PESIGAN, minor, represented by his
parents ANTONIO and ALICE PESIGAN, JOVIE MARIE ALFARO, minor, represented by her parents
JOSE and MARIA VIOLETA ALFARO, MARIA CONCEPCION T. CASTRO, minor, represented by her
parents FREDENIL and JANE CASTRO, JOHANNA DESAMPARADO,
minor, represented by her parents JOSE and ANGELA DESAMPRADO, CARLO JOAQUIN T.
NARVASA, minor, represented by his parents GREGORIO II and CRISTINE CHARITY NARVASA, MA.
MARGARITA, JESUS IGNACIO, MA. ANGELA and MARIE GABRIELLE, all surnamed SAENZ, minors,
represented by their parents ROBERTO and AURORA SAENZ, KRISTINE, MARY ELLEN, MAY, GOLDA
MARTHE and DAVID IAN, all surnamed KING, minors, represented by their parents MARIO and
HAYDEE KING, DAVID, FRANCISCO and THERESE VICTORIA, all surnamed ENDRIGA, minors,
represented by their parents BALTAZAR and TERESITA ENDRIGA, JOSE MA. and REGINA MA., all
surnamed ABAYA, minors, represented by their parents ANTONIO and MARICA ABAYA, MARILIN,
MARIO, JR. and MARIETTE, all surnamed CARDAMA, minors, represented by their parents MARIO
and LINA CARDAMA, CLARISSA, ANN MARIE, NAGEL, and IMEE LYN, all surnamed OPOSA, minors
and represented by their parents RICARDO and MARISSA OPOSA, PHILIP JOSEPH, STEPHEN JOHN
and ISAIAH JAMES, all surnamed QUIPIT, minors, represented by their parents JOSE MAX and
VILMI QUIPIT, BUGHAW CIELO, CRISANTO, ANNA, DANIEL and FRANCISCO, all surnamed BIBAL,
minors, represented by their parents FRANCISCO, JR. and MILAGROS BIBAL, and THE PHILIPPINE
ECOLOGICAL NETWORK, INC., petitioners,
vs.
THE HONORABLE FULGENCIO S. FACTORAN, JR., in his capacity as the Secretary of the Department
of Environment and Natural Resources, and THE HONORABLE ERIBERTO U. ROSARIO, Presiding
Judge of the RTC, Makati, Branch 66, respondents.
Oposa Law Office for petitioners.
The Solicitor General for respondents.
DAVIDE, JR., J.:
In a broader sense, this petition bears upon the right of Filipinos to a balanced and healthful ecology
which the petitioners dramatically associate with the twin concepts of "inter-generational
responsibility" and "inter-generational justice." Specifically, it touches on the issue of whether the
said petitioners have a cause of action to "prevent the misappropriation or impairment" of
Philippine rainforests and "arrest the unabated hemorrhage of the country's vital life support
systems and continued rape of Mother Earth."
The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch 66 (Makati,
Metro Manila) of the Regional Trial Court (RTC), National Capital Judicial Region. The principal
plaintiffs therein, now the principal petitioners, are all minors duly represented and joined by their
respective parents. Impleaded as an additional plaintiff is the Philippine Ecological Network, Inc.
(PENI), a domestic, non-stock and non-profit corporation organized for the purpose of, inter alia,
engaging in concerted action geared for the protection of our environment and natural resources.
The original defendant was the Honorable Fulgencio S. Factoran, Jr., then Secretary of the
Department of Environment and Natural Resources (DENR). His substitution in this petition by the
new Secretary, the Honorable Angel C. Alcala, was subsequently ordered upon proper motion by the
petitioners.1 The complaint2 was instituted as a taxpayers' class suit3 and alleges that the plaintiffs
"are all citizens of the Republic of the Philippines, taxpayers, and entitled to the full benefit, use and
enjoyment of the natural resource treasure that is the country's virgin tropical forests." The same
was filed for themselves and others who are equally concerned about the preservation of said
resource but are "so numerous that it is impracticable to bring them all before the Court." The
minors further asseverate that they "represent their generation as well as generations yet
unborn."4 Consequently, it is prayed for that judgment be rendered:
. . . ordering defendant, his agents, representatives and other persons acting in his behalf to —
(1) Cancel all existing timber license agreements in the country;
(2) Cease and desist from receiving, accepting, processing, renewing or approving new timber
license agreements.
and granting the plaintiffs ". . . such other reliefs just and equitable under the premises."5
The complaint starts off with the general averments that the Philippine archipelago of 7,100 islands
has a land area of thirty million (30,000,000) hectares and is endowed with rich, lush and verdant
rainforests in which varied, rare and unique species of flora and fauna may be found; these
rainforests contain a genetic, biological and chemical pool which is irreplaceable; they are also the
habitat of indigenous Philippine cultures which have existed, endured and flourished since time
immemorial; scientific evidence reveals that in order to maintain a balanced and healthful ecology,
the country's land area should be utilized on the basis of a ratio of fifty-four per cent (54%) for forest
cover and forty-six per cent (46%) for agricultural, residential, industrial, commercial and other uses;
the distortion and disturbance of this balance as a consequence of deforestation have resulted in a
host of environmental tragedies, such as (a) water shortages resulting from drying up of the water
table, otherwise known as the "aquifer," as well as of rivers, brooks and streams, (b) salinization of
the water table as a result of the intrusion therein of salt water, incontrovertible examples of which
may be found in the island of Cebu and the Municipality of Bacoor, Cavite, (c) massive erosion and
the consequential loss of soil fertility and agricultural productivity, with the volume of soil eroded
estimated at one billion (1,000,000,000) cubic meters per annum — approximately the size of the
entire island of Catanduanes, (d) the endangering and extinction of the country's unique, rare and
varied flora and fauna, (e) the disturbance and dislocation of cultural communities, including the
disappearance of the Filipino's indigenous cultures, (f) the siltation of rivers and seabeds and
consequential destruction of corals and other aquatic life leading to a critical reduction in marine
resource productivity, (g) recurrent spells of drought as is presently experienced by the entire
country, (h) increasing velocity of typhoon winds which result from the absence of windbreakers, (i)
the floodings of lowlands and agricultural plains arising from the absence of the absorbent
mechanism of forests, (j) the siltation and shortening of the lifespan of multi-billion peso dams
constructed and operated for the purpose of supplying water for domestic uses, irrigation and the
generation of electric power, and (k) the reduction of the earth's capacity to process carbon dioxide
gases which has led to perplexing and catastrophic climatic changes such as the phenomenon of
global warming, otherwise known as the "greenhouse effect."
Plaintiffs further assert that the adverse and detrimental consequences of continued and
deforestation are so capable of unquestionable demonstration that the same may be submitted as a
matter of judicial notice. This notwithstanding, they expressed their intention to present expert
witnesses as well as documentary, photographic and film evidence in the course of the trial.
As their cause of action, they specifically allege that:

CAUSE OF ACTION
7. Plaintiffs replead by reference the foregoing allegations.
8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million hectares of rainforests
constituting roughly 53% of the country's land mass.
9. Satellite images taken in 1987 reveal that there remained no more than 1.2 million hectares of
said rainforests or four per cent (4.0%) of the country's land area.
10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth rainforests are
left, barely 2.8% of the entire land mass of the Philippine archipelago and about 3.0 million hectares
of immature and uneconomical secondary growth forests.
11. Public records reveal that the defendant's, predecessors have granted timber license
agreements ('TLA's') to various corporations to cut the aggregate area of 3.89 million hectares for
commercial logging purposes.
A copy of the TLA holders and the corresponding areas covered is hereto attached as Annex "A".
12. At the present rate of deforestation, i.e. about 200,000 hectares per annum or 25 hectares per
hour — nighttime, Saturdays, Sundays and holidays included — the Philippines will be bereft of
forest resources after the end of this ensuing decade, if not earlier.
13. The adverse effects, disastrous consequences, serious injury and irreparable damage of this
continued trend of deforestation to the plaintiff minor's generation and to generations yet unborn
are evident and incontrovertible. As a matter of fact, the environmental damages enumerated in
paragraph 6 hereof are already being felt, experienced and suffered by the generation of plaintiff
adults.
14. The continued allowance by defendant of TLA holders to cut and deforest the remaining forest
stands will work great damage and irreparable injury to plaintiffs — especially plaintiff minors and
their successors — who may never see, use, benefit from and enjoy this rare and unique natural
resource treasure.
This act of defendant constitutes a misappropriation and/or impairment of the natural resource
property he holds in trust for the benefit of plaintiff minors and succeeding generations.
15. Plaintiffs have a clear and constitutional right to a balanced and healthful ecology and are
entitled to protection by the State in its capacity as the parens patriae.
16. Plaintiff have exhausted all administrative remedies with the defendant's office. On March 2,
1990, plaintiffs served upon defendant a final demand to cancel all logging permits in the country.
A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as Annex "B".
17. Defendant, however, fails and refuses to cancel the existing TLA's to the continuing serious
damage and extreme prejudice of plaintiffs.
18. The continued failure and refusal by defendant to cancel the TLA's is an act violative of the rights
of plaintiffs, especially plaintiff minors who may be left with a country that is desertified (sic), bare,
barren and devoid of the wonderful flora, fauna and indigenous cultures which the Philippines had
been abundantly blessed with.
19. Defendant's refusal to cancel the aforementioned TLA's is manifestly contrary to the public
policy enunciated in the Philippine Environmental Policy which, in pertinent part, states that it is the
policy of the State —
(a) to create, develop, maintain and improve conditions under which man and nature can thrive in
productive and enjoyable harmony with each other;
(b) to fulfill the social, economic and other requirements of present and future generations of
Filipinos and;
(c) to ensure the attainment of an environmental quality that is conductive to a life of dignity and
well-being. (P.D. 1151, 6 June 1977)
20. Furthermore, defendant's continued refusal to cancel the aforementioned TLA's is contradictory
to the Constitutional policy of the State to —
a. effect "a more equitable distribution of opportunities, income and wealth" and "make full and
efficient use of natural resources (sic)." (Section 1, Article XII of the Constitution);
b. "protect the nation's marine wealth." (Section 2, ibid);
c. "conserve and promote the nation's cultural heritage and resources (sic)" (Section 14, Article
XIV, id.);
d. "protect and advance the right of the people to a balanced and healthful ecology in accord with
the rhythm and harmony of nature." (Section 16, Article II, id.)
21. Finally, defendant's act is contrary to the highest law of humankind — the natural law — and
violative of plaintiffs' right to self-preservation and perpetuation.
22. There is no other plain, speedy and adequate remedy in law other than the instant action to
arrest the unabated hemorrhage of the country's vital life support systems and continued rape of
Mother Earth. 6
On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the
complaint based on two (2) grounds, namely: (1) the plaintiffs have no cause of action against him
and (2) the issue raised by the plaintiffs is a political question which properly pertains to the
legislative or executive branches of Government. In their 12 July 1990 Opposition to the Motion, the
petitioners maintain that (1) the complaint shows a clear and unmistakable cause of action, (2) the
motion is dilatory and (3) the action presents a justiciable question as it involves the defendant's
abuse of discretion.
On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to
dismiss.7 In the said order, not only was the defendant's claim — that the complaint states no cause
of action against him and that it raises a political question — sustained, the respondent Judge
further ruled that the granting of the relief prayed for would result in the impairment of contracts
which is prohibited by the fundamental law of the land.
Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised Rules of
Court and ask this Court to rescind and set aside the dismissal order on the ground that the
respondent Judge gravely abused his discretion in dismissing the action. Again, the parents of the
plaintiffs-minors not only represent their children, but have also joined the latter in this case.8
On 14 May 1992, We resolved to give due course to the petition and required the parties to submit
their respective Memoranda after the Office of the Solicitor General (OSG) filed a Comment in
behalf of the respondents and the petitioners filed a reply thereto.
Petitioners contend that the complaint clearly and unmistakably states a cause of action as it
contains sufficient allegations concerning their right to a sound environment based on Articles 19,
20 and 21 of the Civil Code (Human Relations), Section 4 of Executive Order (E.O.) No. 192 creating
the DENR, Section 3 of Presidential Decree (P.D.) No. 1151 (Philippine Environmental Policy), Section
16, Article II of the 1987 Constitution recognizing the right of the people to a balanced and healthful
ecology, the concept of generational genocide in Criminal Law and the concept of man's inalienable
right to self-preservation and self-perpetuation embodied in natural law. Petitioners likewise rely on
the respondent's correlative obligation per Section 4 of E.O. No. 192, to safeguard the people's right
to a healthful environment.
It is further claimed that the issue of the respondent Secretary's alleged grave abuse of discretion in
granting Timber License Agreements (TLAs) to cover more areas for logging than what is available
involves a judicial question.
Anent the invocation by the respondent Judge of the Constitution's non-impairment clause,
petitioners maintain that the same does not apply in this case because TLAs are not contracts. They
likewise submit that even if TLAs may be considered protected by the said clause, it is well settled
that they may still be revoked by the State when the public interest so requires.
On the other hand, the respondents aver that the petitioners failed to allege in their complaint a
specific legal right violated by the respondent Secretary for which any relief is provided by law. They
see nothing in the complaint but vague and nebulous allegations concerning an "environmental
right" which supposedly entitles the petitioners to the "protection by the state in its capacity
as parens patriae." Such allegations, according to them, do not reveal a valid cause of action. They
then reiterate the theory that the question of whether logging should be permitted in the country is
a political question which should be properly addressed to the executive or legislative branches of
Government. They therefore assert that the petitioners' resources is not to file an action to court,
but to lobby before Congress for the passage of a bill that would ban logging totally.
As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be done
by the State without due process of law. Once issued, a TLA remains effective for a certain period of
time — usually for twenty-five (25) years. During its effectivity, the same can neither be revised nor
cancelled unless the holder has been found, after due notice and hearing, to have violated the terms
of the agreement or other forestry laws and regulations. Petitioners' proposition to have all the TLAs
indiscriminately cancelled without the requisite hearing would be violative of the requirements of
due process.
Before going any further, We must first focus on some procedural matters. Petitioners instituted
Civil Case No. 90-777 as a class suit. The original defendant and the present respondents did not
take issue with this matter. Nevertheless, We hereby rule that the said civil case is indeed a class
suit. The subject matter of the complaint is of common and general interest not just to several, but
to all citizens of the Philippines. Consequently, since the parties are so numerous, it, becomes
impracticable, if not totally impossible, to bring all of them before the court. We likewise declare
that the plaintiffs therein are numerous and representative enough to ensure the full protection of
all concerned interests. Hence, all the requisites for the filing of a valid class suit under Section 12,
Rule 3 of the Revised Rules of Court are present both in the said civil case and in the instant petition,
the latter being but an incident to the former.
This case, however, has a special and novel element. Petitioners minors assert that they represent
their generation as well as generations yet unborn. We find no difficulty in ruling that they can, for
themselves, for others of their generation and for the succeeding generations, file a class suit. Their
personality to sue in behalf of the succeeding generations can only be based on the concept of
intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned.
Such a right, as hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the created world in its entirety.9 Such rhythm
and harmony indispensably include, inter alia, the judicious disposition, utilization, management,
renewal and conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore
areas and other natural resources to the end that their exploration, development and utilization be
equitably accessible to the present as well as future generations. 10Needless to say, every generation
has a responsibility to the next to preserve that rhythm and harmony for the full enjoyment of a
balanced and healthful ecology. Put a little differently, the minors' assertion of their right to a sound
environment constitutes, at the same time, the performance of their obligation to ensure the
protection of that right for the generations to come.
The locus standi of the petitioners having thus been addressed, We shall now proceed to the merits
of the petition.
After a careful perusal of the complaint in question and a meticulous consideration and evaluation
of the issues raised and arguments adduced by the parties, We do not hesitate to find for the
petitioners and rule against the respondent Judge's challenged order for having been issued with
grave abuse of discretion amounting to lack of jurisdiction. The pertinent portions of the said order
reads as follows:
xxx xxx xxx

After a careful and circumspect evaluation of the Complaint, the Court cannot help but agree with
the defendant. For although we believe that plaintiffs have but the noblest of all intentions, it (sic)
fell short of alleging, with sufficient definiteness, a specific legal right they are seeking to enforce
and protect, or a specific legal wrong they are seeking to prevent and redress (Sec. 1, Rule 2, RRC).
Furthermore, the Court notes that the Complaint is replete with vague assumptions and vague
conclusions based on unverified data. In fine, plaintiffs fail to state a cause of action in its Complaint
against the herein defendant.
Furthermore, the Court firmly believes that the matter before it, being impressed with political color
and involving a matter of public policy, may not be taken cognizance of by this Court without doing
violence to the sacred principle of "Separation of Powers" of the three (3) co-equal branches of the
Government.
The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction,
grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in
the country and to cease and desist from receiving, accepting, processing, renewing or approving
new timber license agreements. For to do otherwise would amount to "impairment of contracts"
abhored (sic) by the fundamental law. 11
We do not agree with the trial court's conclusions that the plaintiffs failed to allege with sufficient
definiteness a specific legal right involved or a specific legal wrong committed, and that the
complaint is replete with vague assumptions and conclusions based on unverified data. A reading of
the complaint itself belies these conclusions.
The complaint focuses on one specific fundamental legal right — the right to a balanced and
healthful ecology which, for the first time in our nation's constitutional history, is solemnly
incorporated in the fundamental law. Section 16, Article II of the 1987 Constitution explicitly
provides:
Sec. 16. The State shall protect and advance the right of the people to a balanced and healthful
ecology in accord with the rhythm and harmony of nature.
This right unites with the right to health which is provided for in the preceding section of the same
article:
Sec. 15. The State shall protect and promote the right to health of the people and instill health
consciousness among them.
While the right to a balanced and healthful ecology is to be found under the Declaration of
Principles and State Policies and not under the Bill of Rights, it does not follow that it is less
important than any of the civil and political rights enumerated in the latter. Such a right belongs to a
different category of rights altogether for it concerns nothing less than self-preservation and self-
perpetuation — aptly and fittingly stressed by the petitioners — the advancement of which may
even be said to predate all governments and constitutions. As a matter of fact, these basic rights
need not even be written in the Constitution for they are assumed to exist from the inception of
humankind. If they are now explicitly mentioned in the fundamental charter, it is because of the
well-founded fear of its framers that unless the rights to a balanced and healthful ecology and to
health are mandated as state policies by the Constitution itself, thereby highlighting their continuing
importance and imposing upon the state a solemn obligation to preserve the first and protect and
advance the second, the day would not be too far when all else would be lost not only for the
present generation, but also for those to come — generations which stand to inherit nothing but
parched earth incapable of sustaining life.
The right to a balanced and healthful ecology carries with it the correlative duty to refrain from
impairing the environment. During the debates on this right in one of the plenary sessions of the
1986 Constitutional Commission, the following exchange transpired between Commissioner Wilfrido
Villacorta and Commissioner Adolfo Azcuna who sponsored the section in question:
MR. VILLACORTA:
Does this section mandate the State to provide sanctions against all forms of pollution — air, water
and noise pollution?
MR. AZCUNA:
Yes, Madam President. The right to healthful (sic) environment necessarily carries with it the
correlative duty of not impairing the same and, therefore, sanctions may be provided for
impairment of environmental balance. 12
The said right implies, among many other things, the judicious management and conservation of the
country's forests.
Without such forests, the ecological or environmental balance would be irreversiby disrupted.
Conformably with the enunciated right to a balanced and healthful ecology and the right to health,
as well as the other related provisions of the Constitution concerning the conservation,
development and utilization of the country's natural resources, 13 then President Corazon C. Aquino
promulgated on 10 June 1987 E.O. No. 192, 14 Section 4 of which expressly mandates that the
Department of Environment and Natural Resources "shall be the primary government agency
responsible for the conservation, management, development and proper use of the country's
environment and natural resources, specifically forest and grazing lands, mineral, resources,
including those in reservation and watershed areas, and lands of the public domain, as well as the
licensing and regulation of all natural resources as may be provided for by law in order to ensure
equitable sharing of the benefits derived therefrom for the welfare of the present and future
generations of Filipinos." Section 3 thereof makes the following statement of policy:
Sec. 3. Declaration of Policy. — It is hereby declared the policy of the State to ensure the sustainable
use, development, management, renewal, and conservation of the country's forest, mineral, land,
off-shore areas and other natural resources, including the protection and enhancement of the
quality of the environment, and equitable access of the different segments of the population to the
development and the use of the country's natural resources, not only for the present generation but
for future generations as well. It is also the policy of the state to recognize and apply a true value
system including social and environmental cost implications relative to their utilization,
development and conservation of our natural resources.
This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative Code of
1987,15 specifically in Section 1 thereof which reads:
Sec. 1. Declaration of Policy. — (1) The State shall ensure, for the benefit of the Filipino people, the
full exploration and development as well as the judicious disposition, utilization, management,
renewal and conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore
areas and other natural resources, consistent with the necessity of maintaining a sound ecological
balance and protecting and enhancing the quality of the environment and the objective of making
the exploration, development and utilization of such natural resources equitably accessible to the
different segments of the present as well as future generations.
(2) The State shall likewise recognize and apply a true value system that takes into account social
and environmental cost implications relative to the utilization, development and conservation of our
natural resources.
The above provision stresses "the necessity of maintaining a sound ecological balance and
protecting and enhancing the quality of the environment." Section 2 of the same Title, on the other
hand, specifically speaks of the mandate of the DENR; however, it makes particular reference to the
fact of the agency's being subject to law and higher authority. Said section provides:
Sec. 2. Mandate. — (1) The Department of Environment and Natural Resources shall be primarily
responsible for the implementation of the foregoing policy.
(2) It shall, subject to law and higher authority, be in charge of carrying out the State's constitutional
mandate to control and supervise the exploration, development, utilization, and conservation of the
country's natural resources.
Both E.O. NO. 192 and the Administrative Code of 1987 have set the objectives which will serve as
the bases for policy formulation, and have defined the powers and functions of the DENR.
It may, however, be recalled that even before the ratification of the 1987 Constitution, specific
statutes already paid special attention to the "environmental right" of the present and future
generations. On 6 June 1977, P.D. No. 1151 (Philippine Environmental Policy) and P.D. No. 1152
(Philippine Environment Code) were issued. The former "declared a continuing policy of the State (a)
to create, develop, maintain and improve conditions under which man and nature can thrive in
productive and enjoyable harmony with each other, (b) to fulfill the social, economic and other
requirements of present and future generations of Filipinos, and (c) to insure the attainment of an
environmental quality that is conducive to a life of dignity and well-being." 16 As its goal, it speaks of
the "responsibilities of each generation as trustee and guardian of the environment for succeeding
generations." 17 The latter statute, on the other hand, gave flesh to the said policy.
Thus, the right of the petitioners (and all those they represent) to a balanced and healthful ecology
is as clear as the DENR's duty — under its mandate and by virtue of its powers and functions under
E.O. No. 192 and the Administrative Code of 1987 — to protect and advance the said right.
A denial or violation of that right by the other who has the corelative duty or obligation to respect or
protect the same gives rise to a cause of action. Petitioners maintain that the granting of the TLAs,
which they claim was done with grave abuse of discretion, violated their right to a balanced and
healthful ecology; hence, the full protection thereof requires that no further TLAs should be
renewed or granted.
A cause of action is defined as:
. . . an act or omission of one party in violation of the legal right or rights of the other; and its
essential elements are legal right of the plaintiff, correlative obligation of the defendant, and act or
omission of the defendant in violation of said legal right. 18
It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint
fails to state a cause of action, 19 the question submitted to the court for resolution involves the
sufficiency of the facts alleged in the complaint itself. No other matter should be considered;
furthermore, the truth of falsity of the said allegations is beside the point for the truth thereof is
deemed hypothetically admitted. The only issue to be resolved in such a case is: admitting such
alleged facts to be true, may the court render a valid judgment in accordance with the prayer in the
complaint? 20 In Militante vs. Edrosolano, 21 this Court laid down the rule that the judiciary should
"exercise the utmost care and circumspection in passing upon a motion to dismiss on the ground of
the absence thereof [cause of action] lest, by its failure to manifest a correct appreciation of the
facts alleged and deemed hypothetically admitted, what the law grants or recognizes is effectively
nullified. If that happens, there is a blot on the legal order. The law itself stands in disrepute."
After careful examination of the petitioners' complaint, We find the statements under the
introductory affirmative allegations, as well as the specific averments under the sub-heading CAUSE
OF ACTION, to be adequate enough to show, prima facie, the claimed violation of their rights. On
the basis thereof, they may thus be granted, wholly or partly, the reliefs prayed for. It bears
stressing, however, that insofar as the cancellation of the TLAs is concerned, there is the need to
implead, as party defendants, the grantees thereof for they are indispensable parties.
The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy
formulation or determination by the executive or legislative branches of Government is not squarely
put in issue. What is principally involved is the enforcement of a right vis-a-vis policies already
formulated and expressed in legislation. It must, nonetheless, be emphasized that the political
question doctrine is no longer, the insurmountable obstacle to the exercise of judicial power or the
impenetrable shield that protects executive and legislative actions from judicial inquiry or review.
The second paragraph of section 1, Article VIII of the Constitution states that:
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.
Commenting on this provision in his book, Philippine Political Law, 22 Mr. Justice Isagani A. Cruz, a
distinguished member of this Court, says:
The first part of the authority represents the traditional concept of judicial power, involving the
settlement of conflicting rights as conferred as law. The second part of the authority represents a
broadening of judicial power to enable the courts of justice to review what was before forbidden
territory, to wit, the discretion of the political departments of the government.
As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power
to rule upon even the wisdom of the decisions of the executive and the legislature and to declare
their acts invalid for lack or excess of jurisdiction because tainted with grave abuse of discretion. The
catch, of course, is the meaning of "grave abuse of discretion," which is a very elastic phrase that
can expand or contract according to the disposition of the judiciary.
In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking for this Court, noted:
In the case now before us, the jurisdictional objection becomes even less tenable and decisive. The
reason is that, even if we were to assume that the issue presented before us was political in nature,
we would still not be precluded from revolving it under the expanded jurisdiction conferred upon us
that now covers, in proper cases, even the political question. Article VII, Section 1, of the
Constitution clearly provides: . . .
The last ground invoked by the trial court in dismissing the complaint is the non-impairment of
contracts clause found in the Constitution. The court a quo declared that:
The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction,
grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in
the country and to cease and desist from receiving, accepting, processing, renewing or approving
new timber license agreements. For to do otherwise would amount to "impairment of contracts"
abhored (sic) by the fundamental law. 24
We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a sweeping
pronouncement. In the first place, the respondent Secretary did not, for obvious reasons, even
invoke in his motion to dismiss the non-impairment clause. If he had done so, he would have acted
with utmost infidelity to the Government by providing undue and unwarranted benefits and
advantages to the timber license holders because he would have forever bound the Government to
strictly respect the said licenses according to their terms and conditions regardless of changes in
policy and the demands of public interest and welfare. He was aware that as correctly pointed out
by the petitioners, into every timber license must be read Section 20 of the Forestry Reform Code
(P.D. No. 705) which provides:
. . . Provided, That when the national interest so requires, the President may amend, modify, replace
or rescind any contract, concession, permit, licenses or any other form of privilege granted herein . .
.
Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a
contract, property or a property right protested by the due process clause of the Constitution.
In Tan vs. Director of Forestry, 25 this Court held:
. . . A timber license is an instrument by which the State regulates the utilization and disposition of
forest resources to the end that public welfare is promoted. A timber license is not a contract within
the purview of the due process clause; it is only a license or privilege, which can be validly
withdrawn whenever dictated by public interest or public welfare as in this case.
A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a
contract between the authority, federal, state, or municipal, granting it and the person to whom it is
granted; neither is it property or a property right, nor does it create a vested right; nor is it taxation
(37 C.J. 168). Thus, this Court held that the granting of license does not create irrevocable rights,
neither is it property or property rights (People vs. Ong Tin, 54 O.G. 7576).
We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary: 26
. . . Timber licenses, permits and license agreements are the principal instruments by which the
State regulates the utilization and disposition of forest resources to the end that public welfare is
promoted. And it can hardly be gainsaid that they merely evidence a privilege granted by the State
to qualified entities, and do not vest in the latter a permanent or irrevocable right to the particular
concession area and the forest products therein. They may be validly amended, modified, replaced
or rescinded by the Chief Executive when national interests so require. Thus, they are not deemed
contracts within the purview of the due process of law clause [See Sections 3(ee) and 20 of Pres.
Decree No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No. L-24548, October 27, 1983,
125 SCRA 302].
Since timber licenses are not contracts, the non-impairment clause, which reads:
Sec. 10. No law impairing, the obligation of contracts shall be passed. 27
cannot be invoked.
In the second place, even if it is to be assumed that the same are contracts, the instant case does
not involve a law or even an executive issuance declaring the cancellation or modification of existing
timber licenses. Hence, the non-impairment clause cannot as yet be invoked. Nevertheless, granting
further that a law has actually been passed mandating cancellations or modifications, the same
cannot still be stigmatized as a violation of the non-impairment clause. This is because by its very
nature and purpose, such as law could have only been passed in the exercise of the police power of
the state for the purpose of advancing the right of the people to a balanced and healthful ecology,
promoting their health and enhancing the general welfare. In Abe vs. Foster Wheeler
Corp. 28 this Court stated:
The freedom of contract, under our system of government, is not meant to be absolute. The same is
understood to be subject to reasonable legislative regulation aimed at the promotion of public
health, moral, safety and welfare. In other words, the constitutional guaranty of non-impairment of
obligations of contract is limited by the exercise of the police power of the State, in the interest of
public health, safety, moral and general welfare.
The reason for this is emphatically set forth in Nebia vs. New York, 29 quoted in Philippine American
Life Insurance Co. vs. Auditor General,30 to wit:
Under our form of government the use of property and the making of contracts are normally
matters of private and not of public concern. The general rule is that both shall be free of
governmental interference. But neither property rights nor contract rights are absolute; for
government cannot exist if the citizen may at will use his property to the detriment of his fellows, or
exercise his freedom of contract to work them harm. Equally fundamental with the private right is
that of the public to regulate it in the common interest.
In short, the non-impairment clause must yield to the police power of the state. 31
Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply
with respect to the prayer to enjoin the respondent Secretary from receiving, accepting, processing,
renewing or approving new timber licenses for, save in cases of renewal, no contract would have as
of yet existed in the other instances. Moreover, with respect to renewal, the holder is not entitled to
it as a matter of right.
WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the
challenged Order of respondent Judge of 18 July 1991 dismissing Civil Case No. 90-777 is hereby set
aside. The petitioners may therefore amend their complaint to implead as defendants the holders or
grantees of the questioned timber license agreements.
No pronouncement as to costs.
SO ORDERED.
9. HEIRS OF BERTULDO HINOG vs MELICOR
SECOND DIVISION
[G.R. No. 140954. April 12, 2005]
HEIRS OF BERTULDO[1] HINOG: Bertuldo Hinog II, Bertuldo Hinog III, Bertuldo Hinog, Jr., Jocelyn
Hinog, Bertoldo Hinog IV, Bertoldo Hinog V, Edgardo Hinog, Milagros H. Pabatao, Lilian H. King,
Victoria H. Engracia, Terisita C. Hinog, Paz H. Besana, Roberto C. Hinog, Vicente C. Hinog, Roel C.
Hinog, Marilyn C. Hinog, Bebot C. Hinog, lordes C. Hinog, Pablo Chiong, Arlene Lanasang (All
respresented by Bertuldo Hinog III), petitioners, vs. HON. ACHILLES MELICOR, in his capacity as
Presiding Judge, RTC, Branch 4, 7th Judicial Region, Tagbiliran City, Bohol, and CUSTODIO BALANE,
RUFO BALANE, HONORIO BALANE, and TOMAS BALANE, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for certiorari and prohibition under Rule 65 of the Rules of Court which assails
the Orders dated March 22, 1999, August 13, 1999 and October 15, 1999 of the Regional Trial Court,
Branch 4, of Tagbilaran City, Bohol in Civil Case No. 4923.
The factual background of the case is as follows:
On May 21, 1991, private respondents Custodio, Rufo, Tomas and Honorio, all surnamed Balane,
filed a complaint for Recovery of Ownership and Possession, Removal of Construction and Damages
against Bertuldo Hinog (Bertuldo for brevity). They alleged that: they own a 1,399- square meter
parcel of land situated in Malayo Norte, Cortes, Bohol, designated as Lot No. 1714; sometime in
March 1980, they allowed Bertuldo to use a portion of the said property for a period of ten years
and construct thereon a small house of light materials at a nominal annual rental of P100.00 only,
considering the close relations of the parties; after the expiration of the ten-year period, they
demanded the return of the occupied portion and removal of the house constructed thereon but
Bertuldo refused and instead claimed ownership of the entire property.
Accordingly, private respondents sought to oust Bertuldo from the premises of the subject property
and restore upon themselves the ownership and possession thereof, as well as the payment of
moral and exemplary damages, attorneys fees and litigation expenses in amounts justified by the
evidence. [2]
On July 2, 1991, Bertuldo filed his Answer. He alleged ownership of the disputed property by virtue
of a Deed of Absolute Sale dated July 2, 1980, executed by one Tomas Pahac with the knowledge
and conformity of private respondents.[3]
After the pre-trial, trial on the merits ensued. On November 18, 1997, private respondents rested
their case. Thereupon, Bertuldo started his direct examination. However, on June 24, 1998, Bertuldo
died without completing his evidence.
On August 4, 1998, Atty. Sulpicio A. Tinampay withdrew as counsel for Bertuldo as his services were
terminated by petitioner Bertuldo Hinog III. Atty. Veronico G. Petalcorin then entered his
appearance as new counsel for Bertuldo.[4]
On September 22, 1998, Atty. Petalcorin filed a motion to expunge the complaint from the record
and nullify all court proceedings on the ground that private respondents failed to specify in the
complaint the amount of damages claimed so as to pay the correct docket fees; and that
under Manchester Development Corporation vs. Court of Appeals,[5] non-payment of the correct
docket fee is jurisdictional.[6]
In an amended motion, filed on October 2, 1998, Atty. Petalcorin further alleged that the private
respondents failed to pay the correct docket fee since the main subject matter of the case cannot be
estimated as it is for recovery of ownership, possession and removal of construction.[7]
Private respondents opposed the motion to expunge on the following grounds: (a) said motion was
filed more than seven years from the institution of the case; (b) Atty. Petalcorin has not complied
with Section 16, Rule 3 of the Rules of Court which provides that the death of the original defendant
requires a substitution of parties before a lawyer can have legal personality to represent a litigant
and the motion to expunge does not mention of any specific party whom he is representing; (c)
collectible fees due the court can be charged as lien on the judgment; and (d) considering the lapse
of time, the motion is merely a dilatory scheme employed by petitioners.[8]
In their Rejoinder, petitioners manifested that the lapse of time does not vest the court with
jurisdiction over the case due to failure to pay the correct docket fees. As to the contention that
deficiency in payment of docket fees can be made as a lien on the judgment, petitioners argued that
the payment of filing fees cannot be made dependent on the result of the action taken.[9]
On January 21, 1999, the trial court, while ordering the complaint to be expunged from the records
and the nullification of all court proceedings taken for failure to pay the correct docket fees,
nonetheless, held:
The Court can acquire jurisdiction over this case only upon the payment of the exact prescribed
docket/filing fees for the main cause of action, plus additional docket fee for the amount of
damages being prayed for in the complaint, which amount should be specified so that the same can
be considered in assessing the amount of the filing fees. Upon the complete payment of such fees,
the Court may take appropriate action in the light of the ruling in the case of Manchester
Development Corporation vs. Court of Appeals, supra.[10]
Accordingly, on January 28, 1999, upon payment of deficiency docket fee, private respondents filed
a manifestation with prayer to reinstate the case.[11] Petitioners opposed the reinstatement[12] but
on March 22, 1999, the trial court issued the first assailed Order reinstating the case.[13]
On May 24, 1999, petitioners, upon prior leave of court,[14] filed their supplemental pleading,
appending therein a Deed of Sale dated November 15, 1982.[15] Following the submission of private
respondents opposition thereto,[16] the trial court, in its Order dated July 7, 1999, denied the
supplemental pleading on the ground that the Deed of Absolute Sale is a new matter which was
never mentioned in the original answer dated July 2, 1991, prepared by Bertuldos original counsel
and which Bertuldo verified; and that such new document is deemed waived in the light of Section
1, Rule 9[17] of the Rules of Court. The trial court also noted that no formal substitution of the parties
was made because of the failure of defendants counsel to give the names and addresses of the legal
representatives of Bertuldo, so much so that the supposed heirs of Bertuldo are not specified in any
pleading in the case. [18]
On July 14, 1999, petitioners manifested that the trial court having expunged the complaint and
nullified all court proceedings, there is no valid case and the complaint should not be admitted for
failure to pay the correct docket fees; that there should be no case to be reinstated and no case to
proceed as there is no complaint filed.[19]
After the submission of private respondents opposition[20] and petitioners rejoinder,[21] the trial
court issued the second assailed Order on August 13, 1999, essentially denying petitioners
manifestation/rejoinder. The trial court held that the issues raised in such manifestation/rejoinder
are practically the same as those raised in the amended motion to expunge which had already been
passed upon in the Order dated January 21, 1999. Moreover, the trial court observed that the Order
dated March 22, 1999 which reinstated the case was not objected to by petitioners within the
reglementary period or even thereafter via a motion for reconsideration despite receipt thereof on
March 26, 1999.[22]
On August 25, 1999, petitioners filed a motion for reconsideration[23] but the same was denied by
the trial court in its third assailed Order dated October 15, 1999. The trial court held that
the Manchester rule was relaxed in Sun Insurance Office, Ltd. vs. Asuncion.[24] Noting that there has
been no substitution of parties following the death of Bertuldo, the trial court directed Atty.
Petalcorin to comply with the provisions of Section 16, Rule 3 of the Rules of Court. The trial court
also reiterated that the Order dated March 22, 1999 reinstating the case was not assailed by
petitioners within the reglementary period, despite receipt thereof on March 26, 1999.[25]
On November 19, 1999, Atty. Petalcorin complied with the directive of the trial court to submit the
names and addresses of the heirs of Bertuldo.[26]
On November 24, 1999, petitioners filed before us the present petition for certiorari and
prohibition.[27] They allege that the public respondent committed grave abuse of discretion in
allowing the case to be reinstated after private respondents paid the docket fee deficiency since the
trial court had earlier expunged the complaint from the record and nullified all proceedings of the
case and such ruling was not contested by the private respondents. Moreover, they argue that the
public respondent committed grave abuse of discretion in allowing the case to be filed and denying
the manifestation with motion to dismiss, despite the defect in the complaint which prayed for
damages without specifying the amounts, in violation of SC Circular No. 7, dated March 24, 1988.
In their Comment, private respondents aver that no grave abuse of discretion was committed by the
trial court in reinstating the complaint upon the payment of deficiency docket fees because
petitioners did not object thereto within the reglementary period. Besides, Atty. Petalcorin
possessed no legal personality to appear as counsel for the heirs of Bertuldo until he complies with
Section 16, Rule 3 of the Rules of Court.[28]
At the outset, we note the procedural error committed by petitioners in directly filing the instant
petition before this Court for it violates the established policy of strict observance of the judicial
hierarchy of courts.
Although the Supreme Court, Court of Appeals and the Regional Trial Courts have concurrent
jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and
injunction, such concurrence does not give the petitioner unrestricted freedom of choice of court
forum.[29] As we stated in People vs. Cuaresma:[30]
This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court
with Regional Trial Courts and with the Court of Appeals. This concurrence of jurisdiction is not,
however, to be taken as according to parties seeking any of the writs an absolute, unrestrained
freedom of choice of the court to which application therefor will be directed. There is after all a
hierarchy of courts. That hierarchy is determinative of the venue of appeals, and also serves as a
general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming
regard for that judicial hierarchy most certainly indicates that petitions for the issuance of
extraordinary writs against first level (inferior) courts should be filed with the Regional Trial Court,
and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Courts
original jurisdiction to issue these writs should be allowed only when there are special and
important reasons therefor, clearly and specifically set out in the petition. This is [an] established
policy. It is a policy necessary to prevent inordinate demands upon the Courts time and attention
which are better devoted to those matters within its exclusive jurisdiction, and to prevent further
over-crowding of the Courts docket.[31]
The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of this
Court; and (b) it would cause an inevitable and resultant delay, intended or otherwise, in the
adjudication of cases, which in some instances had to be remanded or referred to the lower court as
the proper forum under the rules of procedure, or as better equipped to resolve the issues because
this Court is not a trier of facts.[32]
Thus, this Court will not entertain direct resort to it unless the redress desired cannot be obtained in
the appropriate courts, and exceptional and compelling circumstances, such as cases of national
interest and of serious implications, justify the availment of the extraordinary remedy of writ
of certiorari, calling for the exercise of its primary jurisdiction. Exceptional and compelling
circumstances were held present in the following cases: (a) Chavez vs. Romulo[33] on citizens right to
bear arms; (b) Government of the United States of America vs. Purganan[34] on bail in extradition
proceedings; (c) Commission on Elections vs. Quijano-Padilla[35] on government contract involving
modernization and computerization of voters registration list; (d) Buklod ng Kawaning EIIB vs.
Zamora[36] on status and existence of a public office; and (e) Fortich vs. Corona[37] on the so-called
Win-Win Resolution of the Office of the President which modified the approval of the conversion to
agro-industrial area.
In this case, no special and important reason or exceptional and compelling circumstance analogous
to any of the above cases has been adduced by the petitioners so as to justify direct recourse to this
Court. The present petition should have been initially filed in the Court of Appeals in strict
observance of the doctrine on the hierarchy of courts. Failure to do so is sufficient cause for the
dismissal of the petition at bar.
In any event, even if the Court disregards such procedural flaw, the petitioners contentions on the
substantive aspect of the case fail to invite judgment in their favor.
The unavailability of the writ of certiorari and prohibition in this case is borne out of the fact that
petitioners principally assail the Order dated March 22, 1999 which they never sought
reconsideration of, in due time, despite receipt thereof on March 26, 1999. Instead, petitioners
went through the motion of filing a supplemental pleading and only when the latter was denied, or
after more than three months have passed, did they raise the issue that the complaint should not
have been reinstated in the first place because the trial court had no jurisdiction to do so, having
already ruled that the complaint shall be expunged.
After recognizing the jurisdiction of the trial court by seeking affirmative relief in their motion to
serve supplemental pleading upon private respondents, petitioners are effectively barred by
estoppel from challenging the trial courts jurisdiction.[38] If a party invokes the jurisdiction of a court,
he cannot thereafter challenge the courts jurisdiction in the same case.[39] To rule otherwise would
amount to speculating on the fortune of litigation, which is against the policy of the Court.[40]
Nevertheless, there is a need to correct the erroneous impression of the trial court as well as the
private respondents that petitioners are barred from assailing the Order dated March 22, 1999
which reinstated the case because it was not objected to within the reglementary period or even
thereafter via a motion for reconsideration despite receipt thereof on March 26, 1999.
It must be clarified that the said order is but a resolution on an incidental matter which does not
touch on the merits of the case or put an end to the proceedings.[41] It is an interlocutory order since
there leaves something else to be done by the trial court with respect to the merits of the
case.[42] As such, it is not subject to a reglementary period. Reglementary period refers to the period
set by the rules for appeal or further review of a final judgment or order, i.e., one that ends the
litigation in the trial court.
Moreover, the remedy against an interlocutory order is generally not to resort forthwith
to certiorari, but to continue with the case in due course and, when an unfavorable verdict is
handed down, to take an appeal in the manner authorized by law.[43] Only when the court issued
such order without or in excess of jurisdiction or with grave abuse of discretion and when the
assailed interlocutory order is patently erroneous and the remedy of appeal would not afford
adequate and expeditious relief will certiorari be considered an appropriate remedy to assail an
interlocutory order.[44] Such special circumstances are absolutely wanting in the present case.
Time and again, the Court has held that the Manchester rule has been modified in Sun Insurance
Office, Ltd. (SIOL) vs. Asuncion[45] which defined the following guidelines involving the payment of
docket fees:
1. 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. Where the filing of the initiatory pleading is not accompanied by payment
of the docket fee, the court may allow payment of the fees within a reasonable time but in no
case beyond the applicable prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings,
which shall not be considered filed until and unless the filing fee prescribed therefor is paid.
The court may also allow payment of said fee within a reasonable time but also in no case
beyond its applicable prescriptive or reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate
pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a
claim not specified in the pleading, or if specified the same has been left for determination by
the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be
the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and
assess and collect the additional fee.
Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its non-
payment at the time of filing does not automatically cause the dismissal of the case, as long as the
fee is paid within the applicable prescriptive or reglementary period, more so when the party
involved demonstrates a willingness to abide by the rules prescribing such payment.[46] Thus, when
insufficient filing fees were initially paid by the plaintiffs and there was no intention to defraud the
government, the Manchester rule does not apply.[47]
Under the peculiar circumstances of this case, the reinstatement of the complaint was just and
proper considering that the cause of action of private respondents, being a real action, prescribes in
thirty years,[48] and private respondents did not really intend to evade the payment of the prescribed
docket fee but simply contend that they could not be faulted for inadequate assessment because
the clerk of court made no notice of demand or reassessment.[49] They were in good faith and simply
relied on the assessment of the clerk of court.
Furthermore, the fact that private respondents prayed for payment of damages in amounts justified
by the evidence does not call for the dismissal of the complaint for violation of SC Circular No. 7,
dated March 24, 1988 which required that all complaints must specify the amount of damages
sought not only in the body of the pleadings but also in the prayer in order to be accepted and
admitted for filing. Sun Insurance effectively modified SC Circular No. 7 by providing that filing fees
for damages and awards that cannot be estimated constitute liens on the awards finally granted by
the trial court.[50]
Thus, while the docket fees were based only on the real property valuation, the trial court acquired
jurisdiction over the action, and judgment awards which were left for determination by the court or
as may be proven during trial would still be subject to additional filing fees which shall constitute a
lien on the judgment. It would then be the responsibility of the Clerk of Court of the trial court or his
duly authorized deputy to enforce said lien and assess and collect the additional fees.[51]
It is worth noting that when Bertuldo filed his Answer on July 2, 1991, he did not raise the issue of
lack of jurisdiction for non-payment of correct docket fees. Instead, he based his defense on a claim
of ownership and participated in the proceedings before the trial court. It was only in September 22,
1998 or more than seven years after filing the answer, and under the auspices of a new counsel,
that the issue of jurisdiction was raised for the first time in the motion to expunge by Bertuldos
heirs.
After Bertuldo vigorously participated in all stages of the case before the trial court and even
invoked the trial courts authority in order to ask for affirmative relief, petitioners, considering that
they merely stepped into the shoes of their predecessor, are 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.[52]
Moreover, no formal substitution of the parties was effected within thirty days from date of death
of Bertuldo, as required by Section 16, Rule 3[53] of the Rules of Court. Needless to stress, the
purpose behind the rule on substitution is the protection of the right of every party to due process.
It is to ensure that the deceased party would continue to be properly represented in the suit
through the duly appointed legal representative of his estate.[54] Non-compliance with the rule on
substitution would render the proceedings and judgment of the trial court infirm because the court
acquires no jurisdiction over the persons of the legal representatives or of the heirs on whom the
trial and the judgment would be binding.[55] Thus, proper substitution of heirs must be effected for
the trial court to acquire jurisdiction over their persons and to obviate any future claim by any heir
that he was not apprised of the litigation against Bertuldo or that he did not authorize Atty.
Petalcorin to represent him.
The list of names and addresses of the heirs was submitted sixteen months after the death of
Bertuldo and only when the trial court directed Atty. Petalcorin to comply with the provisions of
Section 16, Rule 3 of the Rules of Court. Strictly speaking therefore, before said compliance, Atty.
Petalcorin had no standing in the court a quo when he filed his pleadings. Be that as it may, the
matter has been duly corrected by the Order of the trial court dated October 15, 1999.
To be sure, certiorari under Rule 65[56] is a remedy narrow in scope and inflexible in character. It is
not a general utility tool in the legal workshop.[57] It offers only a limited form of review. Its principal
function is to keep an inferior tribunal within its jurisdiction.[58] It can be invoked only for an error of
jurisdiction, that is, one where the act complained of was issued by the court, officer or a quasi-
judicial body without or in excess of jurisdiction, or with grave abuse of discretion which is
tantamount to lack or in excess of jurisdiction,[59] not to be used for any other purpose,[60] such as to
cure errors in proceedings or to correct erroneous conclusions of law or fact.[61] A contrary rule
would lead to confusion, and seriously hamper the administration of justice.
Petitioners utterly failed to show that the trial court gravely abused its discretion in issuing the
assailed resolutions. On the contrary, it acted prudently, in accordance with law and jurisprudence.
WHEREFORE, the instant petition for certiorari is DISMISSED for lack of merit.
No costs.
SO ORDERED.
10. DELA CRUZ vs JOAQUIN
THIRD DIVISION
[G.R. No. 162788. July 28, 2005]
Spouses JULITA DE LA CRUZ and FELIPE DE LA CRUZ, petitioners, vs. PEDRO JOAQUIN, respondent.
DECISION
PANGANIBAN, J.:
The Rules require the legal representatives of a dead litigant to be substituted as parties to a
litigation. This requirement is necessitated by due process. Thus, when the rights of the legal
representatives of a decedent are actually recognized and protected, noncompliance or belated
formal compliance with the Rules cannot affect the validity of the promulgated decision. After all,
due process had thereby been satisfied.
The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, assailing the August 26,
2003 Decision[2] and the March 9, 2004 Resolution[3] of the Court of Appeals (CA) in CA-GR CV No.
34702. The challenged Decision disposed as follows:
WHEREFORE, the foregoing considered, the appeal is DISMISSED and the assailed decision
accordingly AFFIRMED in toto. No costs.[4]
On the other hand, the trial courts affirmed Decision disposed as follows:
WHEREFORE, judgment is hereby rendered:
a) declaring the Deed of Absolute Sale (Exh. D) and Kasunduan (Exhibit B), to be a sale with right of
repurchase;
b) ordering the plaintiff to pay the defendants the sum of P9,000.00 by way of repurchasing the land
in question;
c) ordering the defendants to execute a deed of reconveyance of said land in favor of the plaintiff
after the latter has paid them the amount of P9,000.00 to repurchase the land in question;
d) ordering the defendants to yield possession of the subject land to the plaintiff after the latter has
paid them the amount of P9,000.00 to repurchase the property from them; and
e) ordering the defendants to pay the plaintiff the amount of P10,000.00 as actual and
compensatory damages; the amount of P5,000[.00] as exemplary damages; the amount
of P5,000.00 as expenses of litigation and the amount of P5,000.00 by way of attorneys fees.[5]
The Facts
The case originated from a Complaint for the recovery of possession and ownership, the
cancellation of title, and damages, filed by Pedro Joaquin against petitioners in the Regional Trial
Court of Baloc, Sto. Domingo, Nueva Ecija.[6] Respondent alleged that he had obtained a loan from
them in the amount of P9,000 on June 29, 1974, payable after five (5) years; that is, on June 29,
1979. To secure the payment of the obligation, he supposedly executed a Deed of Sale in favor of
petitioners. The Deed was for a parcel of land in Pinagpanaan, Talavera, Nueva Ecija, covered by TCT
No. T-111802. The parties also executed another document entitled Kasunduan. [7]
Respondent claimed that the Kasunduan showed the Deed of Sale to be actually an equitable
mortgage.[8] Spouses De la Cruz contended that this document was merely an accommodation to
allow the repurchase of the property until June 29, 1979, a right that he failed to exercise.[9]
On April 23, 1990, the RTC issued a Decision in his favor. The trial court declared that the parties had
entered into a sale with a right of repurchase.[10] It further held that respondent had made a valid
tender of payment on two separate occasions to exercise his right of repurchase.[11] Accordingly,
petitioners were required to reconvey the property upon his payment.[12]
Ruling of the Court of Appeals
Sustaining the trial court, the CA noted that petitioners had given respondent the right to
repurchase the property within five (5) years from the date of the sale or until June 29, 1979.
Accordingly, the parties executed the Kasunduan to express the terms and conditions of their actual
agreement.[13] The appellate court also found no reason to overturn the finding that respondent had
validly exercised his right to repurchase the land.[14]
In the March 9, 2004 Resolution, the CA denied reconsideration and ordered a substitution by legal
representatives, in view of respondents death on December 24, 1988.[15]
Hence, this Petition.[16]
The Issues
Petitioners assign the following errors for our consideration:
I. Public Respondent Twelfth Division of the Honorable Court of Appeals seriously erred in dismissing
the appeal and affirming in toto the Decision of the trial court in Civil Case No. SD-838;
II. Public Respondent Twelfth Division of the Honorable Court of Appeals likewise erred in denying
[petitioners] Motion for Reconsideration given the facts and the law therein presented.[17]
Succinctly, the issues are whether the trial court lost jurisdiction over the case upon the death of
Pedro Joaquin, and whether respondent was guilty of forum shopping.[18]
The Courts Ruling
The Petition has no merit.
First Issue:
Jurisdiction
Petitioners assert that the RTCs Decision was invalid for lack of jurisdiction.[19] They claim that
respondent died during the pendency of the case. There being no substitution by the heirs, the trial
court allegedly lacked jurisdiction over the litigation.[20]
Rule on Substitution
When a party to a pending action dies and the claim is not extinguished,[21] the Rules of Court
require a substitution of the deceased. The procedure is specifically governed by Section 16 of Rule
3, which reads thus:
Section 16. Death of a party; duty of counsel. Whenever a party to a pending action dies, and the
claim is not thereby extinguished, it shall be the duty of his counsel to inform the court within thirty
(30) days after such death of the fact thereof, and to give the name and address of his legal
representative or representatives. Failure of counsel to comply with this duty shall be a ground for
disciplinary action.
The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the
appointment of an executor or administrator and the court may appoint a guardian ad litem for the
minor heirs.
The court shall forthwith order said legal representative or representatives to appear and be
substituted within a period of thirty (30) days from notice.
If no legal representative is named by the counsel for the deceased party, or if the one so named
shall fail to appear within the specified period, the court may order the opposing party, within a
specified time, to procure the appointment of an executor or administrator for the estate of the
deceased, and the latter shall immediately appear for and on behalf of the deceased. The court
charges in procuring such appointment, if defrayed by the opposing party, may be recovered as
costs.
The rule on the substitution of parties was crafted to protect every partys right to due
process.[22] The estate of the deceased party will continue to be properly represented in the suit
through the duly appointed legal representative.[23] Moreover, no adjudication can be made against
the successor of the deceased if the fundamental right to a day in court is denied.[24]
The Court has nullified not only trial proceedings conducted without the appearance of the legal
representatives of the deceased, but also the resulting judgments.[25] In those instances, the courts
acquired no jurisdiction over the persons of the legal representatives or the heirs upon whom no
judgment was binding.[26]
This general rule notwithstanding, a formal substitution by heirs is not necessary when they
themselves voluntarily appear, participate in the case, and present evidence in defense of the
deceased.[27] These actions negate any claim that the right to due process was violated.
The Court is not unaware of Chittick v. Court of Appeals,[28] in which the failure of the heirs to
substitute for the original plaintiff upon her death led to the nullification of the trial courts Decision.
The latter had sought to recover support in arrears and her share in the conjugal partnership. The
children who allegedly substituted for her refused to continue the case against their father and
vehemently objected to their inclusion as parties.[29] Moreover, because he died during the
pendency of the case, they were bound to substitute for the defendant also. The substitution
effectively merged the persons of the plaintiff and the defendant and thus extinguished the
obligation being sued upon.[30]
Clearly, the present case is not similar, much less identical, to the factual milieu of Chittick.
Strictly speaking, the rule on the substitution by heirs is not a matter of jurisdiction, but a
requirement of due process. Thus, when due process is not violated, as when the right of the
representative or heir is recognized and protected, noncompliance or belated formal compliance
with the Rules cannot affect the validity of a promulgated decision.[31] Mere failure to substitute for
a deceased plaintiff is not a sufficient ground to nullify a trial courts decision. The alleging party
must prove that there was an undeniable violation of due process.
Substitution in
the Instant Case
The records of the present case contain a Motion for Substitution of Party Plaintiff dated February
15, 2002, filed before the CA. The prayer states as follows:
WHEREFORE, it is respectfully prayed that the Heirs of the deceased plaintiff-appellee as

represented by his daughter Lourdes dela Cruz be substituted as party-plaintiff for the said Pedro
Joaquin.
It is further prayed that henceforth the undersigned counsel[32] for the heirs of Pedro Joaquin be
furnished with copies of notices, orders, resolutions and other pleadings at its address below.
Evidently, the heirs of Pedro Joaquin voluntary appeared and participated in the case. We stress that
the appellate court had ordered[33] his legal representatives to appear and substitute for him. The
substitution even on appeal had been ordered correctly. In all proceedings, the legal representatives
must appear to protect the interests of the deceased.[34] After the rendition of judgment, further
proceedings may be held, such as a motion for reconsideration or a new trial, an appeal, or an
execution.[35]
Considering the foregoing circumstances, the Motion for Substitution may be deemed to have been
granted; and the heirs, to have substituted for the deceased, Pedro Joaquin. There being no
violation of due process, the issue of substitution cannot be upheld as a ground to nullify the trial
courts Decision.
Second Issue:
Forum Shopping
Petitioners also claim that respondents were guilty of forum shopping, a fact that should have
compelled the trial court to dismiss the Complaint.[36] They claim that prior to the commencement of
the present suit on July 7, 1981, respondent had filed a civil case against petitioners on June 25,
1979. Docketed as Civil Case No. SD-742 for the recovery of possession and for damages, it was
allegedly dismissed by the Court of First Instance of Nueva Ecija for lack of interest to prosecute.
Forum Shopping Defined
Forum shopping is the institution of two or more actions or proceedings involving the same parties
for the same cause of action, either simultaneously or successively, on the supposition that one or
the other court would make a favorable disposition.[37] Forum shopping may be resorted to by a
party against whom an adverse judgment or order has been issued in one forum, in an attempt to
seek a favorable opinion in another, other than by an appeal or a special civil action for certiorari.[38]
Forum shopping trifles with the courts, abuses their processes, degrades the administration of
justice, and congests court dockets.[39] Willful and deliberate violation of the rule against it is a
ground for the summary dismissal of the case; it may also constitute direct contempt of court.[40]
The test for determining the existence of forum shopping is whether the elements of litis
pendentia are present, or whether a final judgment in one case amounts to res judicata in
another.[41] We note, however, petitioners claim that the subject matter of the present case has
already been litigated and decided. Therefore, the applicable doctrine is res judicata.[42]
Applicability of Res Judicata
Under res judicata, a final judgment or decree on the merits by a court of competent jurisdiction is
conclusive of the rights of the parties or their privies, in all later suits and on all points and matters
determined in the previous suit.[43] The term literally means a matter adjudged, judicially acted
upon, or settled by judgment.[44] The principle bars a subsequent suit involving the same parties,
subject matter, and cause of action. Public policy requires that controversies must be settled with
finality at a given point in time.
The elements of res judicata are as follows: (1) the former judgment or order must be final; (2) it
must have been rendered on the merits of the controversy; (3) the court that rendered it must have
had jurisdiction over the subject matter and the parties; and (4) there must have been -- between
the first and the second actions -- an identity of parties, subject matter and cause of action.[45]
Failure to Support Allegation
The onus of proving allegations rests upon the party raising them.[46] As to the matter of forum
shopping and res judicata, petitioners have failed to provide this Court with relevant and clear
specifications that would show the presence of an identity of parties, subject matter, and cause of
action between the present and the earlier suits. They have also failed to show whether the other
case was decided on the merits. Instead, they have made only bare assertions involving its existence
without reference to its facts. In other words, they have alleged conclusions of law without stating
any factual or legal basis. Mere mention of other civil cases without showing the identity of rights
asserted and reliefs sought is not enough basis to claim that respondent is guilty of forum shopping,
or that res judicata exists.[47]
WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution are AFFIRMED. Costs
against petitioners.
SO ORDERED.
11. SPOUSE ALGURA vs CITY OF NAGA
THIRD DIVISION
G.R. No. 150135 October 30, 2006
SPOUSES ANTONIO F. ALGURA and LORENCITA S.J. ALGURA, petitioners,

vs.
THE LOCAL GOVERNMENT UNIT OF THE CITY OF NAGA, ATTY. MANUEL TEOXON, ENGR. LEON
PALMIANO, NATHAN SERGIO and BENJAMIN NAVARRO, SR., respondents.
DECISION
VELASCO, JR., J.:
Anyone who has ever struggled with poverty

knows how extremely expensive it is to be poor.
–– James Baldwin
The Constitution affords litigants—moneyed or poor—equal access to the courts; moreover, it

specifically provides that poverty shall not bar any person from having access to the
courts.1 Accordingly, laws and rules must be formulated, interpreted, and implemented pursuant to
the intent and spirit of this constitutional provision. As such, filing fees, though one of the essential
elements in court procedures, should not be an obstacle to poor litigants' opportunity to seek
redress for their grievances before the courts.
The Case
This Petition for Review on Certiorari seeks the annulment of the September 11, 2001 Order of the
Regional Trial Court (RTC) of Naga City, Branch 27, in Civil Case No. 99-4403 entitled Spouses Antonio
F. Algura and Lorencita S.J. Algura v. The Local Government Unit of the City of Naga, et al.,
dismissing the case for failure of petitioners Algura spouses to pay the required filing fees.2 Since the
instant petition involves only a question of law based on facts established from the pleadings and
documents submitted by the parties,3 the Court gives due course to the instant petition sanctioned
under Section 2(c) of Rule 41 on Appeal from the RTCs, and governed by Rule 45 of the 1997 Rules
of Civil Procedure.
The Facts
On September 1, 1999, spouses Antonio F. Algura and Lorencita S.J. Algura filed a Verified Complaint
dated August 30, 19994 for damages against the Naga City Government and its officers, arising from
the alleged illegal demolition of their residence and boarding house and for payment of lost income
derived from fees paid by their boarders amounting to PhP 7,000.00 monthly.
Simultaneously, petitioners filed an Ex-Parte Motion to Litigate as Indigent Litigants,5 to which

petitioner Antonio Algura's Pay Slip No. 2457360 (Annex "A" of motion) was appended, showing a
gross monthly income of Ten Thousand Four Hundred Seventy Four Pesos (PhP 10,474.00) and a net
pay of Three Thousand Six Hundred Sixteen Pesos and Ninety Nine Centavos (PhP 3,616.99) for [the
month of] July 1999.6 Also attached as Annex "B" to the motion was a July 14, 1999
Certification7 issued by the Office of the City Assessor of Naga City, which stated that petitioners had
no property declared in their name for taxation purposes.
Finding that petitioners' motion to litigate as indigent litigants was meritorious, Executive Judge Jose
T. Atienza of the Naga City RTC, in the September 1, 1999 Order,8 granted petitioners' plea for
exemption from filing fees.
Meanwhile, as a result of respondent Naga City Government's demolition of a portion of petitioners'

house, the Alguras allegedly lost a monthly income of PhP 7,000.00 from their boarders' rentals.
With the loss of the rentals, the meager income from Lorencita Algura's sari-sari store and Antonio
Algura's small take home pay became insufficient for the expenses of the Algura spouses and their
six (6) children for their basic needs including food, bills, clothes, and schooling, among others.
On October 13, 1999, respondents filed an Answer with Counterclaim dated October 10,
1999,9 arguing that the defenses of the petitioners in the complaint had no cause of action, the
spouses' boarding house blocked the road right of way, and said structure was a nuisance per se.
Praying that the counterclaim of defendants (respondents) be dismissed, petitioners then filed their
Reply with Ex-Parte Request for a Pre-Trial Setting10 before the Naga City RTC on October 19, 1999.
On February 3, 2000, a pre-trial was held wherein respondents asked for five (5) days within which
to file a Motion to Disqualify Petitioners as Indigent Litigants.
On March 13, 2000, respondents filed a Motion to Disqualify the Plaintiffs for Non-Payment of Filing
Fees dated March 10, 2000.11 They asserted that in addition to the more than PhP 3,000.00 net
income of petitioner Antonio Algura, who is a member of the Philippine National Police, spouse
Lorencita Algura also had a mini-store and a computer shop on the ground floor of their residence
along Bayawas St., Sta. Cruz, Naga City. Also, respondents claimed that petitioners' second floor was
used as their residence and as a boarding house, from which they earned more than PhP 3,000.00 a
month. In addition, it was claimed that petitioners derived additional income from their computer
shop patronized by students and from several boarders who paid rentals to them. Hence,
respondents concluded that petitioners were not indigent litigants.
On March 28, 2000, petitioners subsequently interposed their Opposition to the Motion12 to
respondents' motion to disqualify them for non-payment of filing fees.
On April 14, 2000, the Naga City RTC issued an Order disqualifying petitioners as indigent litigants on
the ground that they failed to substantiate their claim for exemption from payment of legal fees and
to comply with the third paragraph of Rule 141, Section 18 of the Revised Rules of Court—directing
them to pay the requisite filing fees.13
On April 28, 2000, petitioners filed a Motion for Reconsideration of the April 14, 2000 Order. On
May 8, 2000, respondents then filed their Comment/Objections to petitioner's Motion for
Reconsideration.
On May 5, 2000, the trial court issued an Order14 giving petitioners the opportunity to comply with
the requisites laid down in Section 18, Rule 141, for them to qualify as indigent litigants.
On May 13, 2000, petitioners submitted their Compliance15 attaching the affidavits of petitioner
Lorencita Algura16and Erlinda Bangate,17 to comply with the requirements of then Rule 141, Section
18 of the Rules of Court and in support of their claim to be declared as indigent litigants.
In her May 13, 2000 Affidavit, petitioner Lorencita Algura claimed that the demolition of their small
dwelling deprived her of a monthly income amounting to PhP 7,000.00. She, her husband, and their
six (6) minor children had to rely mainly on her husband's salary as a policeman which provided
them a monthly amount of PhP 3,500.00, more or less. Also, they did not own any real property as
certified by the assessor's office of Naga City. More so, according to her, the meager net income
from her small sari-sari store and the rentals of some boarders, plus the salary of her husband, were
not enough to pay the family's basic necessities.
To buttress their position as qualified indigent litigants, petitioners also submitted the affidavit of
Erlinda Bangate, who attested under oath, that she personally knew spouses Antonio Algura and
Lorencita Algura, who were her neighbors; that they derived substantial income from their
boarders; that they lost said income from their boarders' rentals when the Local Government Unit of
the City of Naga, through its officers, demolished part of their house because from that time, only a
few boarders could be accommodated; that the income from the small store, the boarders, and the
meager salary of Antonio Algura were insufficient for their basic necessities like food and clothing,
considering that the Algura spouses had six (6) children; and that she knew that petitioners did not
own any real property.
Thereafter, Naga City RTC Acting Presiding Judge Andres B. Barsaga, Jr. issued his July 17,
200018 Order denying the petitioners' Motion for Reconsideration.
Judge Barsaga ratiocinated that the pay slip of Antonio F. Algura showed that the "GROSS INCOME
or TOTAL EARNINGS of plaintiff Algura [was] ₧10,474.00 which amount [was] over and above the
amount mentioned in the first paragraph of Rule 141, Section 18 for pauper litigants residing
outside Metro Manila."19 Said rule provides that the gross income of the litigant should not exceed
PhP 3,000.00 a month and shall not own real estate with an assessed value of PhP 50,000.00. The
trial court found that, in Lorencita S.J. Algura's May 13, 2000 Affidavit, nowhere was it stated that
she and her immediate family did not earn a gross income of PhP 3,000.00.
The Issue
Unconvinced of the said ruling, the Alguras instituted the instant petition raising a solitary issue for
the consideration of the Court: whether petitioners should be considered as indigent litigants who
qualify for exemption from paying filing fees.
The Ruling of the Court
A review of the history of the Rules of Court on suits in forma pauperis (pauper litigant) is necessary
before the Court rules on the issue of the Algura spouses' claim to exemption from paying filing fees.
When the Rules of Court took effect on January 1, 1964, the rule on pauper litigants was found in
Rule 3, Section 22 which provided that:
Section 22. Pauper litigant.—Any court may authorize a litigant to prosecute his action or defense as
a pauper upon a proper showing that he has no means to that effect by affidavits, certificate of the
corresponding provincial, city or municipal treasurer, or otherwise. Such authority[,] once given[,]
shall include an exemption from payment of legal fees and from filing appeal bond, printed record
and printed brief. The legal fees shall be a lien to any judgment rendered in the case [favorable] to
the pauper, unless the court otherwise provides.
From the same Rules of Court, Rule 141 on Legal Fees, on the other hand, did not contain any
provision on pauper litigants.
On July 19, 1984, the Court, in Administrative Matter No. 83-6-389-0 (formerly G.R. No. 64274),
approved the recommendation of the Committee on the Revision of Rates and Charges of Court
Fees, through its Chairman, then Justice Felix V. Makasiar, to revise the fees in Rule 141 of the Rules
of Court to generate funds to effectively cover administrative costs for services rendered by the
courts.20 A provision on pauper litigants was inserted which reads:
Section 16. Pauper-litigants exempt from payment of court fees.—Pauper-litigants include wage
earners whose gross income do not exceed P2,000.00 a month or P24,000.00 a year for those
residing in Metro Manila, and P1,500.00 a month or P18,000.00 a year for those residing outside
Metro Manila, or those who do not own real property with an assessed value of not more than
P24,000.00, or not more than P18,000.00 as the case may be.
Such exemption shall include exemption from payment of fees for filing appeal bond, printed record
and printed brief.
The legal fees shall be a lien on the monetary or property judgment rendered in favor of the pauper-
litigant.
To be entitled to the exemption herein provided, the pauper-litigant shall execute an affidavit that
he does not earn the gross income abovementioned, nor own any real property with the assessed
value afore-mentioned [sic], supported by a certification to that effect by the provincial, city or town
assessor or treasurer.
When the Rules of Court on Civil Procedure were amended by the 1997 Rules of Civil Procedure
(inclusive of Rules 1 to 71) in Supreme Court Resolution in Bar Matter No. 803 dated April 8, 1997,
which became effective on July 1, 1997, Rule 3, Section 22 of the Revised Rules of Court was
superseded by Rule 3, Section 21 of said 1997 Rules of Civil Procedure, as follows:
Section 21. Indigent party.—A party may be authorized to litigate his action, claim or defense as an
indigent if the court, upon an ex parte application and hearing, is satisfied that the party is one who
has no money or property sufficient and available for food, shelter and basic necessities for himself
and his family.
Such authority shall include an exemption from payment of docket and other lawful fees, and of
transcripts of stenographic notes which the court may order to be furnished him. The amount of the
docket and other lawful fees which the indigent was exempted from paying shall be a lien on any
judgment rendered in the case favorable to the indigent, unless the court otherwise provides.
Any adverse party may contest the grant of such authority at any time before judgment is rendered
by the trial court. If the court should determine after hearing that the party declared as an indigent
is in fact a person with sufficient income or property, the proper docket and other lawful fees shall
be assessed and collected by the clerk of court. If payment is not made within the time fixed by the
court, execution shall issue for the payment thereof, without prejudice to such other sanctions as
the court may impose.
At the time the Rules on Civil Procedure were amended by the Court in Bar Matter No. 803,
however, there was no amendment made on Rule 141, Section 16 on pauper litigants.
On March 1, 2000, Rule 141 on Legal Fees was amended by the Court in A.M. No. 00-2-01-SC,
whereby certain fees were increased or adjusted. In this Resolution, the Court amended Section 16
of Rule 141, making it Section 18, which now reads:
Section 18. Pauper-litigants exempt from payment of legal fees.—Pauper litigants (a) whose gross
income and that of their immediate family do not exceed four thousand (P4,000.00) pesos a month
if residing in Metro Manila, and three thousand (P3,000.00) pesos a month if residing outside Metro
Manila, and (b) who do not own real property with an assessed value of more than fifty thousand
(P50,000.00) pesos shall be exempt from the payment of legal fees.
The legal fees shall be a lien on any judgment rendered in the case favorably to the pauper litigant,
unless the court otherwise provides.
To be entitled to the exemption herein provided, the litigant shall execute an affidavit that he and
his immediate family do not earn the gross income abovementioned, nor do they own any real
property with the assessed value aforementioned, supported by an affidavit of a disinterested
person attesting to the truth of the litigant's affidavit.
Any falsity in the affidavit of a litigant or disinterested person shall be sufficient cause to strike out
the pleading of that party, without prejudice to whatever criminal liability may have been incurred.
It can be readily seen that the rule on pauper litigants was inserted in Rule 141 without revoking or
amendingSection 21 of Rule 3, which provides for the exemption of pauper litigants from payment
of filing fees. Thus, on March 1, 2000, there were two existing rules on pauper litigants;
namely, Rule 3, Section 21 and Rule 141, Section 18.
On August 16, 2004, Section 18 of Rule 141 was further amended in Administrative Matter No. 04-2-
04-SC, which became effective on the same date. It then became Section 19 of Rule 141, to wit:
Sec. 19. Indigent litigants exempt from payment of legal fees.– INDIGENT LITIGANTS (A) WHOSE
GROSS INCOME AND THAT OF THEIR IMMEDIATE FAMILY DO NOT EXCEED AN AMOUNT DOUBLE
THE MONTHLY MINIMUM WAGE OF AN EMPLOYEE AND (B) WHO DO NOT OWN REAL PROPERTY
WITH A FAIR MARKET VALUE AS STATED IN THE CURRENT TAX DECLARATION OF MORE THAN THREE
HUNDRED THOUSAND (P300,000.00) PESOS SHALL BE EXEMPT FROM PAYMENT OF LEGAL FEES.
The legal fees shall be a lien on any judgment rendered in the case favorable to the indigent litigant
unless the court otherwise provides.
To be entitled to the exemption herein provided, the litigant shall execute an affidavit that he and
his immediate family do not earn a gross income abovementioned, and they do not own any real
property with the fair value aforementioned, supported by an affidavit of a disinterested person
attesting to the truth of the litigant's affidavit. The current tax declaration, if any, shall be attached
to the litigant's affidavit.
Any falsity in the affidavit of litigant or disinterested person shall be sufficient cause to dismiss the
complaint or action or to strike out the pleading of that party, without prejudice to whatever
criminal liability may have been incurred. (Emphasis supplied.)
Amendments to Rule 141 (including the amendment to Rule 141, Section 18) were made to
implement RA 9227 which brought about new increases in filing fees. Specifically, in the August 16,
2004 amendment, the ceiling for the gross income of litigants applying for exemption and that of
their immediate family was increased from PhP 4,000.00 a month in Metro Manila and PhP 3,000.00
a month outside Metro Manila, to double the monthly minimum wage of an employee; and the
maximum value of the property owned by the applicant was increased from an assessed value of
PhP 50,000.00 to a maximum market value of PhP 300,000.00, to be able to accommodate more
indigent litigants and promote easier access to justice by the poor and the marginalized in the wake
of these new increases in filing fees.
Even if there was an amendment to Rule 141 on August 16, 2004, there was still no amendment or
recall of Rule 3, Section 21 on indigent litigants.
With this historical backdrop, let us now move on to the sole issue—whether petitioners are exempt
from the payment of filing fees.
It is undisputed that the Complaint (Civil Case No. 99-4403) was filed on September 1, 1999.
However, the Naga City RTC, in its April 14, 2000 and July 17, 2000 Orders, incorrectly applied Rule
141, Section 18 on Legal Feeswhen the applicable rules at that time were Rule 3, Section 21 on
Indigent Party which took effect on July 1, 1997 and Rule 141, Section 16 on Pauper Litigants which
became effective on July 19, 1984 up to February 28, 2000.
The old Section 16, Rule 141 requires applicants to file an ex-parte motion to litigate as a pauper
litigant by submitting an affidavit that they do not have a gross income of PhP 2,000.00 a month or
PhP 24,000.00 a year for those residing in Metro Manila and PhP 1,500.00 a month or PhP 18,000.00
a year for those residing outside Metro Manila or those who do not own real property with an
assessed value of not more than PhP 24,000.00 or not more than PhP 18,000.00 as the case may be.
Thus, there are two requirements: a) income requirement—the applicants should not have a gross
monthly income of more than PhP 1,500.00, and b) property requirement––they should not own
property with an assessed value of not more than PhP 18,000.00.
In the case at bar, petitioners Alguras submitted the Affidavits of petitioner Lorencita Algura and
neighbor Erlinda Bangate, the pay slip of petitioner Antonio F. Algura showing a gross monthly
income of PhP 10,474.00,21 and a Certification of the Naga City assessor stating that petitioners do
not have property declared in their names for taxation.22 Undoubtedly, petitioners do not own real
property as shown by the Certification of the Naga City assessor and so the property requirement is
met. However with respect to the income requirement, it is clear that the gross monthly income of
PhP 10,474.00 of petitioner Antonio F. Algura and the PhP 3,000.00 income of Lorencita Algura
when combined, were above the PhP 1,500.00 monthly income threshold prescribed by then Rule
141, Section 16 and therefore, the income requirement was not satisfied. The trial court was
therefore correct in disqualifying petitioners Alguras as indigent litigants although the court should
have applied Rule 141, Section 16 which was in effect at the time of the filing of the application on
September 1, 1999. Even if Rule 141, Section 18 (which superseded Rule 141, Section 16 on March 1,
2000) were applied, still the application could not have been granted as the combined PhP
13,474.00 income of petitioners was beyond the PhP 3,000.00 monthly income threshold.
Unrelenting, petitioners however argue in their Motion for Reconsideration of the April 14, 2000
Order disqualifying them as indigent litigants23 that the rules have been relaxed by relying on Rule 3,
Section 21 of the 1997 Rules of Civil procedure which authorizes parties to litigate their action as
indigents if the court is satisfied that the party is "one who has no money or property sufficient and
available for food, shelter and basic necessities for himself and his family." The trial court did not
give credence to this view of petitioners and simply applied Rule 141 but ignored Rule 3, Section 21
on Indigent Party.
The position of petitioners on the need to use Rule 3, Section 21 on their application to litigate as
indigent litigants brings to the fore the issue on whether a trial court has to apply both Rule 141,
Section 16 and Rule 3, Section 21 on such applications or should the court apply only Rule 141,
Section 16 and discard Rule 3, Section 21 as having been superseded by Rule 141, Section 16 on
Legal Fees.
The Court rules that Rule 3, Section 21 and Rule 141, Section 16 (later amended as Rule 141, Section
18 on March 1, 2000 and subsequently amended by Rule 141, Section 19 on August 16, 2003, which
is now the present rule) are still valid and enforceable rules on indigent litigants.
For one, the history of the two seemingly conflicting rules readily reveals that it was not the intent
of the Court to consider the old Section 22 of Rule 3, which took effect on January 1, 1994 to have
been amended and superseded by Rule 141, Section 16, which took effect on July 19, 1984 through
A.M. No. 83-6-389-0. If that is the case, then the Supreme Court, upon the recommendation of the
Committee on the Revision on Rules, could have already deleted Section 22 from Rule 3 when it
amended Rules 1 to 71 and approved the 1997 Rules of Civil Procedure, which took effect on July 1,
1997. The fact that Section 22 which became Rule 3, Section 21 on indigent litigant was retained in
the rules of procedure, even elaborating on the meaning of an indigent party, and was also
strengthened by the addition of a third paragraph on the right to contest the grant of authority to
litigate only goes to show that there was no intent at all to consider said rule as expunged from the
1997 Rules of Civil Procedure.
Furthermore, Rule 141 on indigent litigants was amended twice: first on March 1, 2000 and the
second on August 16, 2004; and yet, despite these two amendments, there was no attempt to
delete Section 21 from said Rule 3. This clearly evinces the desire of the Court to maintain the two
(2) rules on indigent litigants to cover applications to litigate as an indigent litigant.
It may be argued that Rule 3, Section 21 has been impliedly repealed by the recent 2000 and 2004
amendments to Rule 141 on legal fees. This position is bereft of merit. Implied repeals are frowned
upon unless the intent of the framers of the rules is unequivocal. It has been consistently ruled that:
(r)epeals by implication are not favored, and will not be decreed, unless it is manifest that the
legislature so intended. As laws are presumed to be passed with deliberation and with full
knowledge of all existing ones on the subject, it is but reasonable to conclude that in passing a
statute[,] it was not intended to interfere with or abrogate any former law relating to same
matter, unless the repugnancy between the two is not only irreconcilable, but also clear and
convincing, and flowing necessarily from the language used, unless the later act fully embraces the
subject matter of the earlier, or unless the reason for the earlier act is beyond peradventure
removed. Hence, every effort must be used to make all acts stand and if, by any
reasonable construction they can be reconciled, the later act will not operate as a repeal of the
earlier.24 (Emphasis supplied).
Instead of declaring that Rule 3, Section 21 has been superseded and impliedly amended by Section
18 and later Section 19 of Rule 141, the Court finds that the two rules can and should be
harmonized.
The Court opts to reconcile Rule 3, Section 21 and Rule 141, Section 19 because it is a settled
principle that when conflicts are seen between two provisions, all efforts must be made to
harmonize them. Hence, "every statute [or rule] must be so construed and harmonized with other
statutes [or rules] as to form a uniform system of jurisprudence."25
In Manila Jockey Club, Inc. v. Court of Appeals, this Court enunciated that in the interpretation of
seemingly conflicting laws, efforts must be made to first harmonize them. This Court thus ruled:
Consequently, every statute should be construed in such a way that will harmonize it with existing
laws. This principle is expressed in the legal maxim 'interpretare et concordare leges legibus est
optimus interpretandi,' that is, to interpret and to do it in such a way as to harmonize laws with laws
is the best method of interpretation.26
In the light of the foregoing considerations, therefore, the two (2) rules can stand together and are
compatible with each other. When an application to litigate as an indigent litigant is filed, the court
shall scrutinize the affidavits and supporting documents submitted by the applicant to determine if
the applicant complies with the income and property standards prescribed in the present Section 19
of Rule 141—that is, the applicant's gross income and that of the applicant's immediate family do
not exceed an amount double the monthly minimum wage of an employee; and the applicant does
not own real property with a fair market value of more than Three Hundred Thousand Pesos (PhP
300,000.00). If the trial court finds that the applicant meets the income and property requirements,
the authority to litigate as indigent litigant is automatically granted and the grant is a matter of
right.
However, if the trial court finds that one or both requirements have not been met, then it would set
a hearing to enable the applicant to prove that the applicant has "no money or property sufficient
and available for food, shelter and basic necessities for himself and his family." In that hearing, the
adverse party may adduce countervailing evidence to disprove the evidence presented by the
applicant; after which the trial court will rule on the application depending on the evidence
adduced. In addition, Section 21 of Rule 3 also provides that the adverse party may later still contest
the grant of such authority at any time before judgment is rendered by the trial court, possibly
based on newly discovered evidence not obtained at the time the application was heard. If the court
determines after hearing, that the party declared as an indigent is in fact a person with sufficient
income or property, the proper docket and other lawful fees shall be assessed and collected by the
clerk of court. If payment is not made within the time fixed by the court, execution shall issue or the
payment of prescribed fees shall be made, without prejudice to such other sanctions as the court
may impose.
The Court concedes that Rule 141, Section 19 provides specific standards while Rule 3, Section 21
does not clearly draw the limits of the entitlement to the exemption. Knowing that the litigants may
abuse the grant of authority, the trial court must use sound discretion and scrutinize evidence
strictly in granting exemptions, aware that the applicant has not hurdled the precise standards
under Rule 141. The trial court must also guard against abuse and misuse of the privilege to litigate
as an indigent litigant to prevent the filing of exorbitant claims which would otherwise be regulated
by a legal fee requirement.
Thus, the trial court should have applied Rule 3, Section 21 to the application of the Alguras after
their affidavits and supporting documents showed that petitioners did not satisfy the twin
requirements on gross monthly income and ownership of real property under Rule 141. Instead of
disqualifying the Alguras as indigent litigants, the trial court should have called a hearing as required
by Rule 3, Section 21 to enable the petitioners to adduce evidence to show that they didn't have
property and money sufficient and available for food, shelter, and basic necessities for them and
their family.27 In that hearing, the respondents would have had the right to also present evidence to
refute the allegations and evidence in support of the application of the petitioners to litigate as
indigent litigants. Since this Court is not a trier of facts, it will have to remand the case to the trial
court to determine whether petitioners can be considered as indigent litigants using the standards
set in Rule 3, Section 21.
Recapitulating the rules on indigent litigants, therefore, if the applicant for exemption meets the
salary and property requirements under Section 19 of Rule 141, then the grant of the application is
mandatory. On the other hand, when the application does not satisfy one or both requirements,
then the application should not be denied outright; instead, the court should apply the "indigency
test" under Section 21 of Rule 3 and use its sound discretion in determining the merits of the prayer
for exemption.
Access to justice by the impoverished is held sacrosanct under Article III, Section 11 of the 1987
Constitution. The Action Program for Judicial Reforms (APJR) itself, initiated by former Chief Justice
Hilario G. Davide, Jr., placed prime importance on 'easy access to justice by the poor' as one of its six
major components. Likewise, the judicial philosophy of Liberty and Prosperity of Chief Justice
Artemio V. Panganiban makes it imperative that the courts shall not only safeguard but also
enhance the rights of individuals—which are considered sacred under the 1987 Constitution.
Without doubt, one of the most precious rights which must be shielded and secured is the
unhampered access to the justice system by the poor, the underprivileged, and the marginalized.
WHEREFORE, the petition is GRANTED and the April 14, 2000 Order granting the disqualification of
petitioners, the July 17, 2000 Order denying petitioners' Motion for Reconsideration, and the
September 11, 2001 Order dismissing the case in Civil Case No. RTC-99-4403 before the Naga City
RTC, Branch 27 are ANNULLED and SET ASIDE. Furthermore, the Naga City RTC is ordered to set the
"Ex-Parte Motion to Litigate as Indigent Litigants" for hearing and apply Rule 3, Section 21 of the
1997 Rules of Civil Procedure to determine whether petitioners can qualify as indigent litigants.
No costs.
SO ORDERED.
12. WHITE vs CITY OF MANILA


SUPREME COURT
Manila
EN BANC
G.R. No. 122846 January 20, 2009
WHITE LIGHT CORPORATION, TITANIUM CORPORATION and STA. MESA TOURIST & DEVELOPMENT
CORPORATION, Petitioners,
vs.
CITY OF MANILA, represented by DE CASTRO, MAYOR ALFREDO S. LIM, Respondent.
DECISION
Tinga, J.:
With another city ordinance of Manila also principally involving the tourist district as subject, the Court
is confronted anew with the incessant clash between government power and individual liberty in
tandem with the archetypal tension between law and morality.
In City of Manila v. Laguio, Jr.,1 the Court affirmed the nullification of a city ordinance barring the
operation of motels and inns, among other establishments, within the Ermita-Malate area. The petition
at bar assails a similarly-motivated city ordinance that prohibits those same establishments from
offering short-time admission, as well as pro-rated or "wash up" rates for such abbreviated stays. Our
earlier decision tested the city ordinance against our sacred constitutional rights to liberty, due process
and equal protection of law. The same parameters apply to the present petition.
This Petition2 under Rule 45 of the Revised Rules on Civil Procedure, which seeks the reversal of the
Decision3 in C.A.-G.R. S.P. No. 33316 of the Court of Appeals, challenges the validity of Manila City
Ordinance No. 7774 entitled, "An Ordinance Prohibiting Short-Time Admission, Short-Time Admission
Rates, and Wash-Up Rate Schemes in Hotels, Motels, Inns, Lodging Houses, Pension Houses, and Similar
Establishments in the City of Manila" (the Ordinance).
I.
The facts are as follows:
On December 3, 1992, City Mayor Alfredo S. Lim (Mayor Lim) signed into law the Ordinance. 4 The
Ordinance is reproduced in full, hereunder:
SECTION 1. Declaration of Policy. It is hereby the declared policy of the City Government to protect the
best interest, health and welfare, and the morality of its constituents in general and the youth in
particular.
SEC. 2. Title. This ordinance shall be known as "An Ordinance" prohibiting short time admission in hotels,
motels, lodging houses, pension houses and similar establishments in the City of Manila.
SEC. 3. Pursuant to the above policy, short-time admission and rate [sic], wash-up rate or other similarly
concocted terms, are hereby prohibited in hotels, motels, inns, lodging houses, pension houses and
similar establishments in the City of Manila.
SEC. 4. Definition of Term[s]. Short-time admission shall mean admittance and charging of room rate for
less than twelve (12) hours at any given time or the renting out of rooms more than twice a day or any
other term that may be concocted by owners or managers of said establishments but would mean the
same or would bear the same meaning.
SEC. 5. Penalty Clause. Any person or corporation who shall violate any provision of this ordinance shall
upon conviction thereof be punished by a fine of Five Thousand (₱5,000.00) Pesos or imprisonment for a
period of not exceeding one (1) year or both such fine and imprisonment at the discretion of the court;
Provided, That in case of [a] juridical person, the president, the manager, or the persons in charge of the
operation thereof shall be liable: Provided, further, That in case of subsequent conviction for the same
offense, the business license of the guilty party shall automatically be cancelled.
SEC. 6. Repealing Clause. Any or all provisions of City ordinances not consistent with or contrary to this
measure or any portion hereof are hereby deemed repealed.
SEC. 7. Effectivity. This ordinance shall take effect immediately upon approval.
Enacted by the city Council of Manila at its regular session today, November 10, 1992.
Approved by His Honor, the Mayor on December 3, 1992.
On December 15, 1992, the Malate Tourist and Development Corporation (MTDC) filed a complaint for
declaratory relief with prayer for a writ of preliminary injunction and/or temporary restraining order (
TRO)5 with the Regional Trial Court (RTC) of Manila, Branch 9 impleading as defendant, herein
respondent City of Manila (the City) represented by Mayor Lim.6 MTDC prayed that the Ordinance,
insofar as it includes motels and inns as among its prohibited establishments, be declared invalid and
unconstitutional. MTDC claimed that as owner and operator of the Victoria Court in Malate, Manila it
was authorized by Presidential Decree (P.D.) No. 259 to admit customers on a short time basis as well as
to charge customers wash up rates for stays of only three hours.
On December 21, 1992, petitioners White Light Corporation (WLC), Titanium Corporation (TC) and Sta.
Mesa Tourist and Development Corporation (STDC) filed a motion to intervene and to admit attached
complaint-in-intervention7 on the ground that the Ordinance directly affects their business interests as
operators of drive-in-hotels and motels in Manila.8 The three companies are components of the Anito
Group of Companies which owns and operates several hotels and motels in Metro Manila.9
On December 23, 1992, the RTC granted the motion to intervene.10 The RTC also notified the Solicitor
General of the proceedings pursuant to then Rule 64, Section 4 of the Rules of Court. On the same date,
MTDC moved to withdraw as plaintiff.11
On December 28, 1992, the RTC granted MTDC's motion to withdraw.12 The RTC issued a TRO on January
14, 1993, directing the City to cease and desist from enforcing the Ordinance.13 The City filed an Answer
dated January 22, 1993 alleging that the Ordinance is a legitimate exercise of police power.14
On February 8, 1993, the RTC issued a writ of preliminary injunction ordering the city to desist from the
enforcement of the Ordinance.15 A month later, on March 8, 1993, the Solicitor General filed his
Comment arguing that the Ordinance is constitutional.
During the pre-trial conference, the WLC, TC and STDC agreed to submit the case for decision without
trial as the case involved a purely legal question.16 On October 20, 1993, the RTC rendered a decision
declaring the Ordinance null and void. The dispositive portion of the decision reads:
WHEREFORE, in view of all the foregoing, [O]rdinance No. 7774 of the City of Manila is hereby declared
null and void.
Accordingly, the preliminary injunction heretofor issued is hereby made permanent.
SO ORDERED.17
The RTC noted that the ordinance "strikes at the personal liberty of the individual guaranteed and
jealously guarded by the Constitution."18 Reference was made to the provisions of the Constitution
encouraging private enterprises and the incentive to needed investment, as well as the right to operate
economic enterprises. Finally, from the observation that the illicit relationships the Ordinance sought to
dissuade could nonetheless be consummated by simply paying for a 12-hour stay, the RTC likened the
law to the ordinance annulled in Ynot v. Intermediate Appellate Court,19 where the legitimate purpose of
preventing indiscriminate slaughter of carabaos was sought to be effected through an inter-province
ban on the transport of carabaos and carabeef.
The City later filed a petition for review on certiorari with the Supreme Court.20 The petition was
docketed as G.R. No. 112471. However in a resolution dated January 26, 1994, the Court treated the
petition as a petition for certiorari and referred the petition to the Court of Appeals.21
Before the Court of Appeals, the City asserted that the Ordinance is a valid exercise of police power
pursuant to Section 458 (4)(iv) of the Local Government Code which confers on cities, among other local
government units, the power:
[To] regulate the establishment, operation and maintenance of cafes, restaurants, beerhouses, hotels,
motels, inns, pension houses, lodging houses and other similar establishments, including tourist guides
and transports.22
The Ordinance, it is argued, is also a valid exercise of the power of the City under Article III, Section
18(kk) of the Revised Manila Charter, thus:
"to enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance
of the prosperity and the promotion of the morality, peace, good order, comfort, convenience and
general welfare of the city and its inhabitants, and such others as be necessary to carry into effect and
discharge the powers and duties conferred by this Chapter; and to fix penalties for the violation of
ordinances which shall not exceed two hundred pesos fine or six months imprisonment, or both such
fine and imprisonment for a single offense.23
Petitioners argued that the Ordinance is unconstitutional and void since it violates the right to privacy
and the freedom of movement; it is an invalid exercise of police power; and it is an unreasonable and
oppressive interference in their business.
The Court of Appeals reversed the decision of the RTC and affirmed the constitutionality of the
Ordinance.24 First, it held that the Ordinance did not violate the right to privacy or the freedom of
movement, as it only penalizes the owners or operators of establishments that admit individuals for
short time stays. Second, the virtually limitless reach of police power is only constrained by having a
lawful object obtained through a lawful method. The lawful objective of the Ordinance is satisfied since
it aims to curb immoral activities. There is a lawful method since the establishments are still allowed to
operate. Third, the adverse effect on the establishments is justified by the well-being of its constituents
in general. Finally, as held in Ermita-Malate Motel Operators Association v. City Mayor of Manila, liberty
is regulated by law.
TC, WLC and STDC come to this Court via petition for review on certiorari.25 In their petition and
Memorandum, petitioners in essence repeat the assertions they made before the Court of Appeals.
They contend that the assailed Ordinance is an invalid exercise of police power.
II.
We must address the threshold issue of petitioners’ standing. Petitioners allege that as owners of
establishments offering "wash-up" rates, their business is being unlawfully interfered with by the
Ordinance. However, petitioners also allege that the equal protection rights of their clients are also
being interfered with. Thus, the crux of the matter is whether or not these establishments have the
requisite standing to plead for protection of their patrons' equal protection rights.
Standing or locus standi is the ability of a party to demonstrate to the court sufficient connection to and
harm from the law or action challenged to support that party's participation in the case. More
importantly, the doctrine of standing is built on the principle of separation of powers,26 sparing as it
does unnecessary interference or invalidation by the judicial branch of the actions rendered by its co-
equal branches of government.
The requirement of standing is a core component of the judicial system derived directly from the
Constitution.27 The constitutional component of standing doctrine incorporates concepts which
concededly are not susceptible of precise definition.28 In this jurisdiction, the extancy of "a direct and
personal interest" presents the most obvious cause, as well as the standard test for a petitioner's
standing.29 In a similar vein, the United States Supreme Court reviewed and elaborated on the meaning
of the three constitutional standing requirements of injury, causation, and redressability in Allen v.
Wright.30
Nonetheless, the general rules on standing admit of several exceptions such as the overbreadth
doctrine, taxpayer suits, third party standing and, especially in the Philippines, the doctrine of
transcendental importance.31
For this particular set of facts, the concept of third party standing as an exception and the overbreadth
doctrine are appropriate. In Powers v. Ohio,32 the United States Supreme Court wrote that: "We have
recognized the right of litigants to bring actions on behalf of third parties, provided three important
criteria are satisfied: the litigant must have suffered an ‘injury-in-fact,’ thus giving him or her a
"sufficiently concrete interest" in the outcome of the issue in dispute; the litigant must have a close
relation to the third party; and there must exist some hindrance to the third party's ability to protect his
or her own interests."33 Herein, it is clear that the business interests of the petitioners are likewise
injured by the Ordinance. They rely on the patronage of their customers for their continued viability
which appears to be threatened by the enforcement of the Ordinance. The relative silence in
constitutional litigation of such special interest groups in our nation such as the American Civil Liberties
Union in the United States may also be construed as a hindrance for customers to bring suit.34
American jurisprudence is replete with examples where parties-in-interest were allowed standing to
advocate or invoke the fundamental due process or equal protection claims of other persons or classes
of persons injured by state action. In Griswold v. Connecticut,35 the United States Supreme Court held
that physicians had standing to challenge a reproductive health statute that would penalize them as
accessories as well as to plead the constitutional protections available to their patients. The Court held
that:
"The rights of husband and wife, pressed here, are likely to be diluted or adversely affected unless those
rights are considered in a suit involving those who have this kind of confidential relation to them."36
An even more analogous example may be found in Craig v. Boren,37 wherein the United States Supreme
Court held that a licensed beverage vendor has standing to raise the equal protection claim of a male
customer challenging a statutory scheme prohibiting the sale of beer to males under the age of 21 and
to females under the age of 18. The United States High Court explained that the vendors had standing
"by acting as advocates of the rights of third parties who seek access to their market or function."38
Assuming arguendo that petitioners do not have a relationship with their patrons for the former to
assert the rights of the latter, the overbreadth doctrine comes into play. In overbreadth analysis,
challengers to government action are in effect permitted to raise the rights of third parties. Generally
applied to statutes infringing on the freedom of speech, the overbreadth doctrine applies when a
statute needlessly restrains even constitutionally guaranteed rights.39 In this case, the petitioners claim
that the Ordinance makes a sweeping intrusion into the right to liberty of their clients. We can see that
based on the allegations in the petition, the Ordinance suffers from overbreadth.
We thus recognize that the petitioners have a right to assert the constitutional rights of their clients to
patronize their establishments for a "wash-rate" time frame.
III.
To students of jurisprudence, the facts of this case will recall to mind not only the recent City of
Manila ruling, but our 1967 decision in Ermita-Malate Hotel and Motel Operations Association, Inc., v.
Hon. City Mayor of Manila.40Ermita-Malate concerned the City ordinance requiring patrons to fill up a
prescribed form stating personal information such as name, gender, nationality, age, address and
occupation before they could be admitted to a motel, hotel or lodging house. This earlier ordinance was
precisely enacted to minimize certain practices deemed harmful to public morals. A purpose similar to
the annulled ordinance in City of Manila which sought a blanket ban on motels, inns and similar
establishments in the Ermita-Malate area. However, the constitutionality of the ordinance in Ermita-
Malate was sustained by the Court.
The common thread that runs through those decisions and the case at bar goes beyond the singularity
of the localities covered under the respective ordinances. All three ordinances were enacted with a view
of regulating public morals including particular illicit activity in transient lodging establishments. This
could be described as the middle case, wherein there is no wholesale ban on motels and hotels but the
services offered by these establishments have been severely restricted. At its core, this is another case
about the extent to which the State can intrude into and regulate the lives of its citizens.
The test of a valid ordinance is well established. A long line of decisions including City of Manila has held
that for an ordinance to be valid, it must not only be within the corporate powers of the local
government unit to enact and pass according to the procedure prescribed by law, it must also conform
to the following substantive requirements: (1) must not contravene the Constitution or any statute; (2)
must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but
may regulate trade; (5) must be general and consistent with public policy; and (6) must not be
unreasonable.41
The Ordinance prohibits two specific and distinct business practices, namely wash rate admissions and
renting out a room more than twice a day. The ban is evidently sought to be rooted in the police power
as conferred on local government units by the Local Government Code through such implements as the
general welfare clause.
A.
Police power, while incapable of an exact definition, has been purposely veiled in general terms to
underscore its comprehensiveness to meet all exigencies and provide enough room for an efficient and
flexible response as the conditions warrant.42 Police power is based upon the concept of necessity of the
State and its corresponding right to protect itself and its people.43 Police power has been used as
justification for numerous and varied actions by the State. These range from the regulation of dance
halls,44 movie theaters,45 gas stations46 and cockpits.47 The awesome scope of police power is best
demonstrated by the fact that in its hundred or so years of presence in our nation’s legal system, its use
has rarely been denied.
The apparent goal of the Ordinance is to minimize if not eliminate the use of the covered establishments
for illicit sex, prostitution, drug use and alike. These goals, by themselves, are unimpeachable and
certainly fall within the ambit of the police power of the State. Yet the desirability of these ends do not
sanctify any and all means for their achievement. Those means must align with the Constitution, and our
emerging sophisticated analysis of its guarantees to the people. The Bill of Rights stands as a rebuke to
the seductive theory of Macchiavelli, and, sometimes even, the political majorities animated by his
cynicism.
Even as we design the precedents that establish the framework for analysis of due process or equal
protection questions, the courts are naturally inhibited by a due deference to the co-equal branches of
government as they exercise their political functions. But when we are compelled to nullify executive or
legislative actions, yet another form of caution emerges. If the Court were animated by the same
passing fancies or turbulent emotions that motivate many political decisions, judicial integrity is
compromised by any perception that the judiciary is merely the third political branch of government.
We derive our respect and good standing in the annals of history by acting as judicious and neutral
arbiters of the rule of law, and there is no surer way to that end than through the development of
rigorous and sophisticated legal standards through which the courts analyze the most fundamental and
far-reaching constitutional questions of the day.
B.
The primary constitutional question that confronts us is one of due process, as guaranteed under
Section 1, Article III of the Constitution. Due process evades a precise definition.48 The purpose of the
guaranty is to prevent arbitrary governmental encroachment against the life, liberty and property of
individuals. The due process guaranty serves as a protection against arbitrary regulation or seizure. Even
corporations and partnerships are protected by the guaranty insofar as their property is concerned.
The due process guaranty has traditionally been interpreted as imposing two related but distinct
restrictions on government, "procedural due process" and "substantive due process." Procedural due
process refers to the procedures that the government must follow before it deprives a person of life,
liberty, or property.49 Procedural due process concerns itself with government action adhering to the
established process when it makes an intrusion into the private sphere. Examples range from the form
of notice given to the level of formality of a hearing.
If due process were confined solely to its procedural aspects, there would arise absurd situation of
arbitrary government action, provided the proper formalities are followed. Substantive due process
completes the protection envisioned by the due process clause. It inquires whether the government has
sufficient justification for depriving a person of life, liberty, or property.50
The question of substantive due process, moreso than most other fields of law, has reflected dynamism
in progressive legal thought tied with the expanded acceptance of fundamental freedoms. Police power,
traditionally awesome as it may be, is now confronted with a more rigorous level of analysis before it
can be upheld. The vitality though of constitutional due process has not been predicated on the
frequency with which it has been utilized to achieve a liberal result for, after all, the libertarian ends
should sometimes yield to the prerogatives of the State. Instead, the due process clause has acquired
potency because of the sophisticated methodology that has emerged to determine the proper metes
and bounds for its application.
C.
The general test of the validity of an ordinance on substantive due process grounds is best tested when
assessed with the evolved footnote 4 test laid down by the U.S. Supreme Court in U.S. v. Carolene
Products.51 Footnote 4 of the Carolene Products case acknowledged that the judiciary would defer to
the legislature unless there is a discrimination against a "discrete and insular" minority or infringement
of a "fundamental right."52 Consequently, two standards of judicial review were established: strict
scrutiny for laws dealing with freedom of the mind or restricting the political process, and the rational
basis standard of review for economic legislation.
A third standard, denominated as heightened or immediate scrutiny, was later adopted by the U.S.
Supreme Court for evaluating classifications based on gender53 and legitimacy.54 Immediate scrutiny was
adopted by the U.S. Supreme Court in Craig,55 after the Court declined to do so in Reed v. Reed.56 While
the test may have first been articulated in equal protection analysis, it has in the United States since
been applied in all substantive due process cases as well.
We ourselves have often applied the rational basis test mainly in analysis of equal protection
challenges.57 Using the rational basis examination, laws or ordinances are upheld if they rationally
further a legitimate governmental interest.58 Under intermediate review, governmental interest is
extensively examined and the availability of less restrictive measures is considered.59 Applying strict
scrutiny, the focus is on the presence of compelling, rather than substantial, governmental interest and
on the absence of less restrictive means for achieving that interest.
In terms of judicial review of statutes or ordinances, strict scrutiny refers to the standard for
determining the quality and the amount of governmental interest brought to justify the regulation of
fundamental freedoms.60 Strict scrutiny is used today to test the validity of laws dealing with the
regulation of speech, gender, or race as well as other fundamental rights as expansion from its earlier
applications to equal protection.61 The United States Supreme Court has expanded the scope of strict
scrutiny to protect fundamental rights such as suffrage,62 judicial access63and interstate travel.64
If we were to take the myopic view that an Ordinance should be analyzed strictly as to its effect only on
the petitioners at bar, then it would seem that the only restraint imposed by the law which we are
capacitated to act upon is the injury to property sustained by the petitioners, an injury that would
warrant the application of the most deferential standard – the rational basis test. Yet as earlier stated,
we recognize the capacity of the petitioners to invoke as well the constitutional rights of their patrons –
those persons who would be deprived of availing short time access or wash-up rates to the lodging
establishments in question.
Viewed cynically, one might say that the infringed rights of these customers were are trivial since they
seem shorn of political consequence. Concededly, these are not the sort of cherished rights that, when
proscribed, would impel the people to tear up their cedulas. Still, the Bill of Rights does not shelter
gravitas alone. Indeed, it is those "trivial" yet fundamental freedoms – which the people reflexively
exercise any day without the impairing awareness of their constitutional consequence – that accurately
reflect the degree of liberty enjoyed by the people. Liberty, as integrally incorporated as a fundamental
right in the Constitution, is not a Ten Commandments-style enumeration of what may or what may not
be done; but rather an atmosphere of freedom where the people do not feel labored under a Big
Brother presence as they interact with each other, their society and nature, in a manner innately
understood by them as inherent, without doing harm or injury to others.
D.
The rights at stake herein fall within the same fundamental rights to liberty which we upheld in City of
Manila v. Hon. Laguio, Jr. We expounded on that most primordial of rights, thus:
Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include "the right to exist
and the right to be free from arbitrary restraint or servitude. The term cannot be dwarfed into mere
freedom from physical restraint of the person of the citizen, but is deemed to embrace the right of man
to enjoy the facilities with which he has been endowed by his Creator, subject only to such restraint as
are necessary for the common welfare."[65] In accordance with this case, the rights of the citizen to be
free to use his faculties in all lawful ways; to live and work where he will; to earn his livelihood by any
lawful calling; and to pursue any avocation are all deemed embraced in the concept of liberty.[66]
The U.S. Supreme Court in the case of Roth v. Board of Regents, sought to clarify the meaning of
"liberty." It said:
While the Court has not attempted to define with exactness the liberty . . . guaranteed [by the Fifth and
Fourteenth Amendments], the term denotes not merely freedom from bodily restraint but also the right
of the individual to contract, to engage in any of the common occupations of life, to acquire useful
knowledge, to marry, establish a home and bring up children, to worship God according to the dictates
of his own conscience, and generally to enjoy those privileges long recognized . . . as essential to the
orderly pursuit of happiness by free men. In a Constitution for a free people, there can be no doubt that
the meaning of "liberty" must be broad indeed.67 [Citations omitted]
It cannot be denied that the primary animus behind the ordinance is the curtailment of sexual behavior.
The City asserts before this Court that the subject establishments "have gained notoriety as venue of
‘prostitution, adultery and fornications’ in Manila since they ‘provide the necessary atmosphere for
clandestine entry, presence and exit and thus became the ‘ideal haven for prostitutes and thrill-
seekers.’"68 Whether or not this depiction of a mise-en-scene of vice is accurate, it cannot be denied that
legitimate sexual behavior among willing married or consenting single adults which is constitutionally
protected69 will be curtailed as well, as it was in the City of Manila case. Our holding therein retains
significance for our purposes:
The concept of liberty compels respect for the individual whose claim to privacy and interference
demands respect. As the case of Morfe v. Mutuc, borrowing the words of Laski, so very aptly stated:
Man is one among many, obstinately refusing reduction to unity. His separateness, his isolation, are
indefeasible; indeed, they are so fundamental that they are the basis on which his civic obligations are
built. He cannot abandon the consequences of his isolation, which are, broadly speaking, that his
experience is private, and the will built out of that experience personal to himself. If he surrenders his
will to others, he surrenders himself. If his will is set by the will of others, he ceases to be a master of
himself. I cannot believe that a man no longer a master of himself is in any real sense free.
Indeed, the right to privacy as a constitutional right was recognized in Morfe, the invasion of which
should be justified by a compelling state interest. Morfe accorded recognition to the right to privacy
independently of its identification with liberty; in itself it is fully deserving of constitutional protection.
Governmental powers should stop short of certain intrusions into the personal life of the citizen.70
We cannot discount other legitimate activities which the Ordinance would proscribe or impair. There are
very legitimate uses for a wash rate or renting the room out for more than twice a day. Entire families
are known to choose pass the time in a motel or hotel whilst the power is momentarily out in their
homes. In transit passengers who wish to wash up and rest between trips have a legitimate purpose for
abbreviated stays in motels or hotels. Indeed any person or groups of persons in need of comfortable
private spaces for a span of a few hours with purposes other than having sex or using illegal drugs can
legitimately look to staying in a motel or hotel as a convenient alternative.
E.
That the Ordinance prevents the lawful uses of a wash rate depriving patrons of a product and the
petitioners of lucrative business ties in with another constitutional requisite for the legitimacy of the
Ordinance as a police power measure. It must appear that the interests of the public generally, as
distinguished from those of a particular class, require an interference with private rights and the means
must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive of
private rights.71 It must also be evident that no other alternative for the accomplishment of the purpose
less intrusive of private rights can work. More importantly, a reasonable relation must exist between the
purposes of the measure and the means employed for its accomplishment, for even under the guise of
protecting the public interest, personal rights and those pertaining to private property will not be
permitted to be arbitrarily invaded.72
Lacking a concurrence of these requisites, the police measure shall be struck down as an arbitrary
intrusion into private rights. As held in Morfe v. Mutuc, the exercise of police power is subject to judicial
review when life, liberty or property is affected.73 However, this is not in any way meant to take it away
from the vastness of State police power whose exercise enjoys the presumption of validity.74
Similar to the Comelec resolution requiring newspapers to donate advertising space to candidates, this
Ordinance is a blunt and heavy instrument.75 The Ordinance makes no distinction between places
frequented by patrons engaged in illicit activities and patrons engaged in legitimate actions. Thus it
prevents legitimate use of places where illicit activities are rare or even unheard of. A plain reading of
section 3 of the Ordinance shows it makes no classification of places of lodging, thus deems them all
susceptible to illicit patronage and subject them without exception to the unjustified prohibition.
The Court has professed its deep sentiment and tenderness of the Ermita-Malate area, its longtime
home,76 and it is skeptical of those who wish to depict our capital city – the Pearl of the Orient – as a
modern-day Sodom or Gomorrah for the Third World set. Those still steeped in Nick Joaquin-dreams of
the grandeur of Old Manila will have to accept that Manila like all evolving big cities, will have its
problems. Urban decay is a fact of mega cities such as Manila, and vice is a common problem confronted
by the modern metropolis wherever in the world. The solution to such perceived decay is not to prevent
legitimate businesses from offering a legitimate product. Rather, cities revive themselves by offering
incentives for new businesses to sprout up thus attracting the dynamism of individuals that would bring
a new grandeur to Manila.
The behavior which the Ordinance seeks to curtail is in fact already prohibited and could in fact be
diminished simply by applying existing laws. Less intrusive measures such as curbing the proliferation of
prostitutes and drug dealers through active police work would be more effective in easing the situation.
So would the strict enforcement of existing laws and regulations penalizing prostitution and drug use.
These measures would have minimal intrusion on the businesses of the petitioners and other legitimate
merchants. Further, it is apparent that the Ordinance can easily be circumvented by merely paying the
whole day rate without any hindrance to those engaged in illicit activities. Moreover, drug dealers and
prostitutes can in fact collect "wash rates" from their clientele by charging their customers a portion of
the rent for motel rooms and even apartments.
IV.
We reiterate that individual rights may be adversely affected only to the extent that may fairly be
required by the legitimate demands of public interest or public welfare. The State is a leviathan that
must be restrained from needlessly intruding into the lives of its citizens. However well-intentioned the
Ordinance may be, it is in effect an arbitrary and whimsical intrusion into the rights of the
establishments as well as their patrons. The Ordinance needlessly restrains the operation of the
businesses of the petitioners as well as restricting the rights of their patrons without sufficient
justification. The Ordinance rashly equates wash rates and renting out a room more than twice a day
with immorality without accommodating innocuous intentions.
The promotion of public welfare and a sense of morality among citizens deserves the full endorsement
of the judiciary provided that such measures do not trample rights this Court is sworn to protect.77 The
notion that the promotion of public morality is a function of the State is as old as Aristotle.78 The
advancement of moral relativism as a school of philosophy does not de-legitimize the role of morality in
law, even if it may foster wider debate on which particular behavior to penalize. It is conceivable that a
society with relatively little shared morality among its citizens could be functional so long as the pursuit
of sharply variant moral perspectives yields an adequate accommodation of different interests.79
To be candid about it, the oft-quoted American maxim that "you cannot legislate morality" is ultimately
illegitimate as a matter of law, since as explained by Calabresi, that phrase is more accurately
interpreted as meaning that efforts to legislate morality will fail if they are widely at variance with public
attitudes about right and wrong.80 Our penal laws, for one, are founded on age-old moral traditions, and
as long as there are widely accepted distinctions between right and wrong, they will remain so oriented.
Yet the continuing progression of the human story has seen not only the acceptance of the right-wrong
distinction, but also the advent of fundamental liberties as the key to the enjoyment of life to the fullest.
Our democracy is distinguished from non-free societies not with any more extensive elaboration on our
part of what is moral and immoral, but from our recognition that the individual liberty to make the
choices in our lives is innate, and protected by the State. Independent and fair-minded judges
themselves are under a moral duty to uphold the Constitution as the embodiment of the rule of law, by
reason of their expression of consent to do so when they take the oath of office, and because they are
entrusted by the people to uphold the law.81
Even as the implementation of moral norms remains an indispensable complement to governance, that
prerogative is hardly absolute, especially in the face of the norms of due process of liberty. And while
the tension may often be left to the courts to relieve, it is possible for the government to avoid the
constitutional conflict by employing more judicious, less drastic means to promote morality.
WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals is REVERSED, and the
Decision of the Regional Trial Court of Manila, Branch 9, is REINSTATED. Ordinance No. 7774 is hereby
declared UNCONSTITUTIONAL. No pronouncement as to costs.
SO ORDERED.

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CIVIL PROCEDURE: RULES 1-3 CASES FULL TEXT

1. CITY OF MANILA vs JUDGE GRECIA-CUERDO, et al.

Republic of the Philippines

G.R. No. 175723 February 4, 2014

The antecedents of the case, as summarized by the CA, are as follows:

Hence, the present petition raising the following issues:

To plaintiff SM Mart, Inc. - P 11,462,525.02

To plaintiff SM Prime Holdings, Inc. - 3,118,104.63

To plaintiff Star Appliances Center - 2,152,316.54

To plaintiff Supervalue, Inc. - 1,362,750.34

To plaintiff Ace Hardware Phils., Inc. - 419,689.04

To plaintiff Watsons Personal Care Health - 231,453.62

Stores Phils., Inc.

To plaintiff Jollimart Phils., Corp. - 140,908.54

To plaintiff Surplus Marketing Corp. - 220,204.70

To plaintiff Signature Mktg. Corp. - 94,906.34

This Court rules in the affirmative.

Sec. 7. Jurisdiction. - The CTA shall exercise:

a. Exclusive appellate jurisdiction to review by appeal, as herein provided:

1. Decisions of the Commissioner of Internal Revenue in cases involving disputed

2. Inaction by the Commissioner of Internal Revenue in cases involving disputed

b. Jurisdiction over cases involving criminal offenses as herein provided:

2. Exclusive appellate jurisdiction in criminal offenses:

c. Jurisdiction over tax collection cases as herein provided:

2. Exclusive appellate jurisdiction in tax collection cases:

WHEREFORE, the petition is DENIED.

2. MEDICAL PLAZA MAKATI CONDOMINIUM CORP. vs CULLEN

Republic of the Philippines

G.R. No. 181416 November 11, 2013

MEDICAL PLAZA MAKATI CONDOMINIUM CORPORATION, Petitioner,

The factual and procedural antecedents are as follows:

The petition is meritorious.

b) Controversies arising out of intra-corporate or partnership relations, between and among

c) Controversies in the election or appointment of directors, trustees, officers, or managers of such

May we ask our resource persons to also probably give comments?

THE ACTING CHAIRMAN (REP. ZIALCITA).

THE CHAIRMAN (SEN. ZUBIRI).

automatically be members or shareholders, to the exclusion of others, in proportion to the

Republic of the Philippines

G.R. No. 90503 September 27, 1990

NESTOR SANDOVAL, petitioner,

Arnold V. Guerrero & Associates for petitioner.

Lino M. Patajo for private respondent.

3. Costs against the defendant.

The petition is impressed with merit.

A. Unsound real estate business practices:

4. MAGPALE vs CIVIL SERVICE COMMISSION

Republic of the Philippines

G.R. No. 97381 November 5, 1992

BENIGNO V. MAGPALE, JR., petitioner,

As to the charge relative to respondent's frequent unauthorized absences had been

IN VIEW THEREOF, the decision appealed from is hereby reversed. Respondent-

(p. 22, Rollo.)

WHEREFORE, foregoing premises considered, the Commission finds respondent Benigno

Hence, the present recourse.

xxx xxx xxx

(2) The Merit Systems Protection Board composed of a Chairman and

(a) Hear and decide on appeal administrative cases

For its part, respondent CSC maintains —

xxx xxx xxx

xxx xxx xxx

The Court, in said case held:

It is axiomatic that the right to appeal is merely a statutory privilege and

A cursory reading of P.D. 807, otherwise known as "The Philippines Civil