G.R. No.

149177 November 23, 2007

KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD., Petitioners,

vs.
MINORU KITAMURA, Respondent.

D EC IS I O N

NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the April 18, 2001 Decision 1 of the
Court of Appeals (CA) in CA-G.R. SP No. 60827, and the July 25, 2001 Resolution 2 denying the motion for reconsideration thereof.

On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese consultancy firm providing technical
and management support in the infrastructure projects of foreign governments, 3 entered into an Independent Contractor Agreement
(ICA) with respondent Minoru Kitamura, a Japanese national permanently residing in the Philippines. 4 The agreement provides that
respondent was to extend professional services to Nippon for a year starting on April 1, 1999.5 Nippon then assigned respondent to work
as the project manager of the Southern Tagalog Access Road (STAR) Project in the Philippines, follo wing the company's consultancy
contract with the Philippine Government.6

When the STAR Project was near completion, the Department of Public Works and Highways (DPW H) engaged the consultancy
services of Nippon, on January 28, 2000, this time for the detailed engineering and construction supervision of the Bongabon -Baler
Road Improvement (BBRI) Project.7 Respondent was named as the project manager in the contract's Appendix 3.1. 8

On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for its International Division, informed respondent
that the company had no more intention of automatically renewing his ICA. His services would be engaged by the company only u p to
the substantial completion of the STAR Project on March 31, 2000, just in time for the ICA's expiry.9

Threatened with impending unemployment, respondent, through his lawyer, requested a negotiation conference and demande d that he
be assigned to the BBRI project. Nippon insisted that respondent’s contract was for a fixed term that had already expired, an d refused
to negotiate for the renewal of the ICA.10

As he was not able to generate a positive response from the petitioners, respondent consequently initiated on June 1, 2000 Civil Case
No. 00-0264 for specific performance and damages with the Regional Trial Court of Lipa City. 11

For their part, petitioners, contending that the ICA had been perfected in Japan and executed by and between Japanese nationa ls, moved
to dismiss the complaint for lack of jurisdiction. They asserted that the claim for improper pre-termination of respondent's ICA could
only be heard and ventilated in the proper courts of Japan following the principles of lex loci celebrationis and lex contractus.12

In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the replacement of Kitamura by a certain Y. Kotake as
project manager of the BBRI Project.13

On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank 14 that matters connected with the performance of
contracts are regulated by the law prevailing at the place of performance, 15 denied the motion to dismiss.16 The trial court subsequently
denied petitioners' motion for reconsideration, 17 prompting them to file with the appellate court, on August 14, 2000, their first Petition
for Certiorari under Rule 65 [docketed as CA-G.R. SP No. 60205].18 On August 23, 2000, the CA resolved to dismiss the petition on
procedural grounds—for lack of statement of material dates and for insufficient verification and certification against foru m
shopping.19 An Entry of Judgment was later issued by the appellate court on September 20, 2000. 20

Aggrieved by this development, petitioners filed with the CA, on September 19, 2000, still within the reglementary period,
a second Petition for Certiorari under Rule 65 already stating therein the material dates and attaching thereto the proper verification
and certification. This second petition, which substantially raised the same issues as those in the first, was docketed as CA -G.R. SP
No. 60827.21

Ruling on the merits of the second petition, the appellate cou rt rendered the assailed April 18, 2001 Decision 22 finding no grave abuse
of discretion in the trial court's denial of the motion to dismiss. The CA ruled, among ot hers, that the principle of lex loci
celebrationis was not applicable to the case, because nowhere in the pleadings was the validity of the written agreement put in issue.
The CA thus declared that the trial court was correct in applying instead the principle of lex loci solutionis.23
Petitioners' motion for reconsideration was subsequently denied by the CA in the assailed July 25, 2001 Resolution. 24

Remaining steadfast in their stance despite the series of denials, petitioners instituted the instant Petition for Review
on Certiorari 25 imputing the following errors to the appellate court:

A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE TRIAL COURT VALIDLY
EXERCISED JURISDICTION OVER THE INSTANT CONTROVERSY, DESPITE THE FACT THAT THE CONTRA CT
SUBJECT MATTER OF THE PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN TWO JAPANESE
NATIONALS, WRITTEN WHOLLY IN THE JAPANESE LANGUAGE AND EXECUTED IN TOKYO, JAPAN.

B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN OVERLOOKING THE NEED TO REVIEW OUR
ADHERENCE TO THE PRINCIPLE OF LEX LOCI SOLUTIONIS IN THE LIGHT OF RECENT DEVELOPM ENT[S] IN
PRIVATE INTERNATIONA L LAWS.26

The pivotal question that this Court is called upon to resolve is whether the subject matter jurisdiction of Philippine courts in civil cases
for specific performance and damages involving contracts executed outside the country by foreign nationals may be assailed on the
principles of lex loci celebrationis, lex contractus, the "state of the most significant relationship rule," or forum non conveniens.

However, before ruling on this issue, we must first dispose of the procedural matters raised by the respondent.

Kitamura contends that the finality of the appellate court's decision in CA -G.R. SP No. 60205 has already barred the filing of the second
petition docketed as CA-G.R. SP No. 60827 (fundamentally raising the same issues as those in the first one) and the instant petitio n for
review thereof.

We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the petition's defective certification of non -forum
shopping, it was a dismissal without prejudice.27 The same holds true in the CA's dismissal of the said case due to defects in the formal
requirement of verification 28 and in the other requirement in Rule 46 of the Rules of Court on the statement of the material dates. 29 The
dismissal being without prejudice, petitioners can re-file the petition, or file a second petition attaching thereto the appropriate
verification and certification—as they, in fact did—and stating therein the material dates, within the prescribed period 30 in Section 4,
Rule 65 of the said Rules.31

The dismissal of a case without prejudice signifies the absence of a decision on the merits and leaves the parties free to litigate the matter
in a subsequent action as though the dismissed action had not been commenced. In other words, the termination of a case not o n the
merits does not bar another action involving the same parties, on the same subject matter and theory.32

Necessarily, because the said dismissal is without prejudice and has no res judicata effect, and even if petitioners still indicated in the
verification and certification of the second certiorari petition that the first had already been dismissed on procedural
grounds,33 petitioners are no longer required by the Rules to indicate in their certification of non -forum shopping in the instant petition
for review of the second certiorari petition, the status of the aforesaid first petition before the CA. In any case, an omission in the
certificate of non-forum shopping about any event that will not constitute res judicata and litis pendentia, as in the present case, is not a
fatal defect. It will not warrant the dismissal and nullification of the entire proceedings, considering that the evils sough t to be prevented
by the said certificate are no longer present.34

The Court also finds no merit in respondent's contention that petitioner Hasegawa is only authorized to verify and certify, on behalf of
Nippon, the certiorari petition filed with the CA and not the instant petition. True, the Authorization 35 dated September 4, 2000, which
is attached to the second certiorari petition and which is also attached to the instant petition for review, is limited in scope —its wordings
indicate that Hasegawa is given the authority to sign for and act on behalf of the company only in the petition filed with the appellate
court, and that authority cannot extend to the instant petition for review. 36 In a plethora of cases, however, this Court has liberally applied
the Rules or even suspended its application whenever a satisfactory explanation and a subsequent fulfillment of the requireme nts have
been made.37 Given that petitioners herein sufficiently explained their misgivings on this point and appended to their Reply 38 an updated
Authorization 39 for Hasegawa to act on behalf of the company in the instant petition, the Court finds the same as sufficient compliance
with the Rules.

However, the Court cannot extend the same liberal treatment to the defect in the verification and certification. As respondent pointed
out, and to which we agree, Hasegawa is truly not authorized to act on behalf of Nippon in this case. The aforesaid September 4, 2000
Authorization and even the subsequent August 17, 2001 Authorization were issued only by Nippon's president and chief executive
officer, not by the company's board of directors. In not a few cases, we have ruled that corporate powers are exercised by th e board of
directors; thus, no person, not even its officers, can bind the corporation, in the absence of authority from the board. 40 Considering that
Hasegawa verified and certified the petition only on his behalf and not on behalf of the other petitioner, the petition has to be denied
pursuant to Loquias v. Office of the Ombudsman.41 Substantial compliance will not suffice in a matter that demands strict observance of
the Rules.42 While technical rules of procedure are designed not to frustrate the ends of justice, nonethe less, they are intended to effect
the proper and orderly disposition of cases and effectively prevent the clogging of court dockets. 43

Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition to question the trial court's denial of their motion to
dismiss. It is a well-established rule that an order denying a motion to dismiss is interlocutory, and cannot be the subject of the
extraordinary petition for certiorari or mandamus. The appropriate recourse is to file an answer and to interpose as defenses the
objections raised in the motion, to proceed to trial, and, in case of an adverse decision, to elevate the entire case by appe al in due
course.44 While there are recognized exceptions to this rule,45 petitioners' case does not fall among them.

This brings us to the discussion of the substantive issue of the case.

Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its jurisdiction to hear and resolve the c ivil case for
specific performance and damages filed by the respondent. The ICA subject of the litigation was entered into and perfected in Tokyo,
Japan, by Japanese nationals, and written wholly in the Japanese language. Thus, petitioners posit that local courts have no substantial
relationship to the parties 46 following the [state of the] most significant relationship rule in Private International Law. 47

The Court notes that petitioners adopted an additional but different theory when they elevated the case to the appellate cour t. In the
Motion to Dismiss 48 filed with the trial court, petitioners never contended that the RTC is an inconvenient forum. They merely argued
that the applicable law which will determine the validity or invalidity of respondent's c laim is that of Japan, following the principles
of lex loci celebrationis and lex contractus.49 While not abandoning this stance in their petition before the appellate court, petitioners
on certiorari significantly invoked the defense of forum non conveniens.50 On petition for review before this Court, petitioners dropped
their other arguments, maintained the forum non conveniens defense, and introduced their new argument that the applicable principle is
the [state of the] most significant relationship rule. 51

Be that as it may, this Court is not inclined to deny this petition merely on the basis of the change in theory, as explained in Philippine
Ports Authority v. City of Iloilo.52 We only pointed out petitioners' inconstancy in their arguments to emphasize their incorrect assertion
of conflict of laws principles.

To elucidate, in the judicial resolution of conflicts problems, three consecutiv e phases are involved: jurisdiction, choice of law, and
recognition and enforcement of judgments. Corresponding to these phases are the following questions: (1) Where can or should litigation
be initiated? (2) Which law will the court apply? and (3) Where can the resulting judgment be enforced? 53

Analytically, jurisdiction and choice of law are two distinct concepts. 54 Jurisdiction considers whether it is fair to cause a defendant to
travel to this state; choice of law asks the further question whether the application of a substantive law which will determine the merits
of the case is fair to both parties. The power to exercise jurisdiction does not automatically give a state constitutional authority to apply
forum law. While jurisdiction and the choice of the lex fori will often coincide, the "minimum contacts" for one do not always provide
the necessary "significant contacts" for the other. 55 The question of whether the law of a state can be applied to a transaction is different
from the question of whether the courts of that state have jurisdiction to enter a judgment. 56

In this case, only the first phase is at issue—jurisdiction.1âwphi1 Jurisdiction, however, has various aspects. For a court to validly
exercise its power to adjudicate a controversy, it must have jurisdiction over the plaintiff or the petitioner, over the defe ndant or the
respondent, over the subject matter, over the issues of the case and, in cases involving property, over the res or the thing which is the
subject of the litigation.57 In assailing the trial court's jurisdiction herein, petitioners are actually referring to subject matter jurisdiction.

Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority which establishes and o rganizes the
court. It is given only by law and in the manner prescribed by law.58 It is further determined by the allegations of the complaint
irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein.59 To succeed in its motion for the dismissal
of an action for lack of jurisdiction over the subject matter of the claim, 60 the movant must show that the court or tribunal cannot act on
the matter submitted to it because no law grants it the power to adjudicate the claims. 61

In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not properly vested by law with jurisdiction
to hear the subject controversy for, indeed, Civil Case No. 00-0264 for specific performance and damages is one not capable of pecuniary
estimation and is properly cognizable by the RTC of Lipa City. 62 What they rather raise as grounds to question subject matter jurisdiction
are the principles of lex loci celebrationis and lex contractus, and the "state of the most significant relationship rule."

The Court finds the invocation of these grounds unsound.

Lex loci celebrationis relates to the "law of the place of the ceremony" 63 or the law of the place where a contract is made.64 The doctrine
of lex contractus or lex loci contractus means the "law of the place where a contract is executed or to be performed." 65 It controls the
nature, construction, and validity of the contract 66 and it may pertain to the law voluntarily agreed upon by the parties or the law inte nded
by them either expressly or implicitly.67 Under the "state of the most significant relationship rule," to ascertain what state law to apply
to a dispute, the court should determine which state has the most substantial connection to the occurrence and the parties. In a case
involving a contract, the court should consider where the contract was made, was negotiated, was to be performed, and the domicile,
place of business, or place of incorporation of the parties. 68 This rule takes into account several contacts and evaluates them according
to their relative importance with respect to the particular issue to be resolved.69

Since these three principles in conflict of laws make reference to the law applicable to a dispute, they are rules proper for the second
phase, the choice of law.70 They determine which state's law is to be applied in resolving the substantive issues of a conflicts
problem.71 Necessarily, as the only issue in this case is that of jurisdiction, choice-of-law rules are not only inapplicable but also not yet
called for.

Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they have not yet pointed out any conflict
between the laws of Japan and ours. Before determining which law should apply, first there should exist a conflict of laws situation
requiring the application of the conflict of laws rules. 72 Also, when the law of a foreign country is invoked to provide the proper rules
for the solution of a case, the existence of such law must be pleaded and proved. 73

It should be noted that when a conflicts case, one involving a foreign element, is brought before a court o r administrative agency, there
are three alternatives open to the latter in disposing of it: (1) dismiss the case, either because of lack of jurisdiction or refusal to assume
jurisdiction over the case; (2) assume jurisdiction over the case and apply the internal law of the forum; or (3) assume jurisdiction over
the case and take into account or apply the law of some other State or States. 74 The court’s power to hear cases and controversies is
derived from the Constitution and the laws. While it may choose to recognize laws of foreign nations, the court is not limite d by foreign
sovereign law short of treaties or other formal agreements, even in matters regarding rig hts provided by foreign sovereigns.75

Neither can the other ground raised, forum non conveniens,76 be used to deprive the trial court of its jurisdiction herein. First, it is not a
proper basis for a motion to dismiss because Section 1, Rule 16 of the Rules of Court does not include it as a ground. 77 Second, whether
a suit should be entertained or dismissed on the basis of the said doctrine depends largely upon the facts of the particular case and is
addressed to the sound discretion of the trial court.78 In this case, the RTC decided to assume jurisdiction. Third, the propriety of
dismissing a case based on this principle requires a factual determination; hence, this conflicts principle is more properly considered a
matter of defense.79

Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case filed by respondent and the grounds
raised by petitioners to assail that jurisdiction are inappropriate, the trial and appellate courts correctly denied the petitioners’ motion to
dismiss.

WHEREFORE, premises considered, the petition for review on certiorari is DENIED.

SO ORDERED.
G.R. No. 162416 January 31, 2006

CHESTER DE JOYA, Petitioner,

vs.
JUDGE PLACIDO C. MARQUEZ, in his capacity as Presiding Judge of Branch 40, Manila-RTC, PEOPLE OF THE
PHILIPPINES and THE SECRETARY OF THE DEPARTMENT OF JUSTICE, Respondents.

D EC IS I O N

AZCUNA, J.:

This is a petition for certiorari and prohibition that seeks the Court to nullify and set aside the warrant of arrest issued by respondent
judge against petitioner in Criminal Case No. 03-219952 for violation of Article 315, par. 2(a) of the Revised Penal Code in relation to
Presidential Decree (P.D.) No. 1689. Petitioner asserts that respondent judge erred in finding the existence of probable caus e that justifies
the issuance of a warrant of arrest against him and his co-accused.

Section 6, Rule 112 of the Revised Rules of Criminal Procedure provides:

Sec. 6. When warrant of arrest may issue. – (a) By the Regional Trial Court. – Within ten (10) days from the filing of the complaint
or information, the judge shall personally evaluate the resolution of the prosecutor and its supporting evidence. He may imme diately
dismiss the case if the evidence on record clearly fails to establish probable cause. If he finds probable cause, he shall issue a warrant
of arrest, or a commitment order if the accused has already been arrested pursuant to a warrant issued by the judge who
conducted the preliminary investigation or when the complaint or information was filed pursuant to section 7 of this Rule. In
case of doubt on the existence of probable cause, the judge may order the prosecutor to present additional evidence within five (5) days
from notice and the issuance must be resolved by the court within thirty (30) days from th e filing of the complaint or information.

x x x1

This Court finds from the records of Criminal Case No. 03-219952 the following documents to support the motion of the prosecution
for the issuance of a warrant of arrest:

1. The report of the National Bureau of Investigation to Chief State Prosecutor Jovencito R. Zuño as regards their investigat ion
on the complaint filed by private complainant Manuel Dy Awiten against Mina Tan Hao @ Ma. Gracia Tan Hao and Victo r
Ngo y Tan for syndicated estafa. The report shows that Hao induced Dy to invest more than a hundred million pesos in State
Resources Development Management Corporation, but when the latter’s investments fell due , the checks issued by Hao in
favor of Dy as payment for his investments were dishonored for being drawn against insufficient funds or that the account was
closed.2

2. Affidavit-Complaint of private complainant Manuel Dy Awiten. 3

3. Copies of the checks issued by private complainant in favor of State Resources Corporation. 4

4. Copies of the checks issued to private complainant representing the supposed return of his investments in State Resources. 5

5. Demand letter sent by private complainant to Ma. Gracia Tan Hao. 6

6. Supplemental Affidavit of private complainant to include the incorporators and members of the board of directors of State
Resources Development Management Corporation as participants in the conspiracy to commit the crime of syndicated estafa.
Among those included was petitioner Chester De Joya. 7

7. Counter-Affidavits of Chester De Joya and the other accused, Ma. Gracia Hao and Danny S. Hao.

Also included in the records are the resolution issued by State Prosecutor Benny Nicdao finding probable cause to indict petitioner and
his other co-accused for syndicated estafa,8 and a copy of the Articles of Incorporation of State Resources Development Management
Corporation naming petitioner as incorporator and director of said corporation.

This Court finds that these documents sufficiently establish the existence of probable cause as required under Section 6, Rule 112 of the
Revised Rules of Criminal Procedure. Probable cause to issue a warrant of arrest pertains to facts and circumstances which wo uld lead
a reasonably discreet and prudent person to believe that an offense has been committed by the person sought to be arrested . It bears
remembering that "in determining probable cause, the average man weighs facts and circumstances without resorting to the calibrations
of our technical rules of evidence of which his knowledge is nil. Rather, he relies on the calculus of common s ense of which all reasonable
men have an abundance." 9 Thus, the standard used for the issuance of a warrant of arrest is less stringent than that used for establish ing
the guilt of the accused. As long as the evidence presented shows a prima facie case against the accused, the trial court judge has
sufficient ground to issue a warrant of arrest against him.

The foregoing documents found in the records and examined by respondent judge tend to show that therein private complainant was
enticed to invest a large sum of money in State Resources Development Management Corporation; that he issued several checks
amounting to P114,286,086.14 in favor of the corporation; that the corporation, in turn, issued several checks to private complainant,
purportedly representing the return of his investments; that said checks were later dishonored for insufficient funds and clo sed account;
that petitioner and his co-accused, being incorporators and directors of the corporation, had knowledge of its activities and transactions.
These are all that need to be shown to establish probable cause for the purpose of issuing a warrant of arrest. It need not b e shown that
the accused are indeed guilty of the crime charged. That matter should be left to the trial. It should be emphasized that before issuing
warrants of arrest, judges merely determine personally the probability, not the certainty, of guilt of an accused. Hence, jud ges do not
conduct a de novo hearing to determine the existence of probable cause. They just personally review the initial determination of the
prosecutor finding a probable cause to see if it is supported by substantial evidence. 10 In case of doubt on the existence of probable
cause, the Rules allow the judge to order the prosecutor to present additional evidence. In the present case, it is notable t hat the resolution
issued by State Prosecutor Benny Nicdao thoroughly explains the bases for his findings that there is probable cause to charge all the
accused with violation of Article 315, par. 2(a) of the Revised Penal Code in relation to P.D. No. 1689.

The general rule is that this Court does not review the factual findings of the trial court, which include the determination of probable
cause for the issuance of warrant of arrest. It is only in exceptional cases where this Court sets aside the conclusions of t he prosecutor
and the trial judge on the existence of probable cause, that is, when it is necessary to prevent the misuse of the strong arm of the law or
to protect the orderly administration of justice. The facts obtaining in this case do not warrant the application of the
exception.lavvph!l.ne+

In addition, it may not be amiss to note that petitioner is not entitled to seek relief from this Court nor from the trial co urt as he
continuously refuses to surrender and submit to the court’s jurisdiction. Justice Florenz D. Regalado exp lains the requisites for the
exercise of jurisdiction and how the court acquires such jurisdiction, thus:

x x x Requisites for the exercise of jurisdiction and how the court acquires such jurisdiction:

a. Jurisdiction over the plaintiff or petitioner: This is acquired by the filing of the complaint, petition or initiatory pleading
before the court by the plaintiff or petitioner.

b. Jurisdiction over the defendant or respondent: This is acquired by the voluntary appearance or submission by the
defendant or respondent to the court or by coercive process issued by the court to him, generally by the service of
summons.

c. Jurisdiction over the subject matter: This is conferred by law and, unlike jurisdiction over the parties, cannot be conferred
on the court by the voluntary act or agreement of the parties.

d. Jurisdiction over the issues of the case: This is determined and conferred by the pleadings filed in the case by the parties, or
by their agreement in a pre-trial order or stipulation, or, at times by their implied consent as by the failure of a party to object
to evidence on an issue not covered by the pleadings, as provided in Sec. 5, Rule 10.

e. Jurisdiction over the res (or the property or thing which is the subject of the litigation). This is acquired by the actual or
constructive seizure by the court of the thing in question, thus placing it in custodia legis, as in attachment or garnishment; or
by provision of law which recognizes in the court the power to deal with the property or subject matter within its territorial
jurisdiction, as in land registration proceedings or suits involving civil status or real property in the Philippines of a no n-resident
defendant.

Justice Regalado continues to explain:

In two cases, the court acquires jurisdiction to try the case, even if it has not acquired jurisdiction over the person of a nonresident
defendant, as long as it has jurisdiction over the res, as when the action involves the personal status of the plaintiff or property in the
Philippines in which the defendant claims an interest. In such cases, the service of summons by publication and notice to the defendant
is merely to comply with due process requirements. Under Sec. 133 of the Corporation Code, while a foreign corporation doing business
in the Philippines without a license cannot sue or intervene in any action here, it may be sued or proceeded against before our courts or
administrative tribunals.11

Again, there is no exceptional reason in this case to allow petitioner to obtain relief from the courts without submitting to its jurisdict ion.
On the contrary, his continued refusal to submit to the court’s jurisdiction should give this Court more reason to uphold the action of the
respondent judge. The purpose of a warrant of arrest is to place the accused under the custody of the law to hold him for tri al of the
charges against him. His evasive stance shows an intent to circumvent and frustrate the object of this lega l process. It should be
remembered that he who invokes the court’s jurisdiction must first submit to its jurisdiction.

WHEREFORE, the petition is DISMISSED.

No costs.
G.R. No. 173946 June 19, 2013

BOSTON EQUITY RESOURCES, INC., Petitioner,

vs.
COURT OF APPEALS AND LOLITA G. TOLEDO, Respondents.

D EC IS I O N

PEREZ, J.:

Before the Court is a Petition for Review on Certiorari seeking to reverse and set aside: (1) the Decision, 1 dated 28 February 2006 and
(2) the Resolution,2 dated 1 August 2006 of the Court of Appeals in CA -G.R. SP No. 88586. The challenged decision granted herein
respondent's petition for certiorari upon a finding that the trial court committed grave abuse of discretion in denying respo ndent's motion
to dismiss the complaint against her.3 Based on this finding, the Court of Appeals reversed and set aside the Orders, dated 8 November
20044 and 22 December 2004,5 respectively, of the Regional Trial Court (RTC) of Manila, Branch 24.

The Facts

On 24 December 1997, petitioner filed a complaint for sum of money with a prayer for the issuance of a writ of preliminary attachment
against the spouses Manuel and Lolita Toledo. 6 Herein respondent filed an Answer dated 19 March 1998 but on 7 May 1998, she filed
a Motion for Leave to Admit Amended Answer7 in which she alleged, among others, that her husband and co -defendant, Manuel Toledo
(Manuel), is already dead.8 The death certificate 9 of Manuel states "13 July 1995" as the date of death. As a result, petitioner filed a
motion, dated 5 August 1999, to require respondent to disclose the heirs of Manuel. 10 In compliance with the verbal order of the court
during the 11 October 1999 hearing of the case, respondent submitted the required names and addresses of the heirs. 11 Petitioner then
filed a Motion for Substitution,12 dated 18 January 2000, praying that Manuel be substituted by his children as party -defendants. It
appears that this motion was granted by the trial court in an Order dated 9 October 2000. 13

Pre-trial thereafter ensued and on 18 July 2001, the trial court issued its pre-trial order containing, among others, the dates of hearing of
the case.14

The trial of the case then proceeded. Herein petitioner, as plaintiff, presented its evidence and its exhibits were thereafter admitted.

On 26 May 2004, the reception of evidence for herein respondent was cancelled upon agreement of the parties. On 24 September 2004,
counsel for herein respondent was given a period of fifteen days within which to file a demurrer to evidence. 15 However, on 7 October
2004, respondent instead filed a motion to dismiss the complaint, citin g the following as grounds: (1) that the complaint failed to implead
an indispensable party or a real party in interest; hence, the case must be dismissed for failure to state a cause of action; (2) that the trial
court did not acquire jurisdiction over the person of Manuel pursuant to Section 5, Rule 86 of the Revised Rules of Court; (3) that the
trial court erred in ordering the substitution of the deceased Manuel by his heirs; and (4) that the court must also dismiss the case against
Lolita Toledo in accordance with Section 6, Rule 86 of the Rules of Court. 16

The trial court, in an Order dated 8 November 2004, denied the motion to dismiss for having been filed out of time, citing Section 1,
Rule 16 of the 1997 Rules of Court which states that: "Within the time for but before filing the answer to the complaint or p leading
asserting a claim, a motion to dismiss may be made x x x." 17 Respondent’s motion for reconsideration of the order of denial was likewis e
denied on the ground that "defendants’ attack on the jurisdiction of this Court is now barred by estoppel by lach es" since respondent
failed to raise the issue despite several chances to do so. 18

Aggrieved, respondent filed a petition for certiorari with the Court of Appe als alleging that the trial court seriously erred and gravely
abused its discretion in denying her motion to dismiss despite discovery, during the trial of the case, of evidence that would constitute a
ground for dismissal of the case.19

The Court of Appeals granted the petition based on the following grounds:

It is elementary that courts acquire jurisdiction over the person of the defendant x x x only when the latter voluntarily appeared or
submitted to the court or by coercive process issued by the court to him, x x x. In this case, it is undisputed that when pet itioner Boston
filed the complaint on December 24, 1997, defendant Manuel S. Toledo was already dead , x x x. Such being the case, the court a quo
could not have acquired jurisdiction over the person of defendant Manuel S. Toledo.
x x x the court a quo’s denial of respondent’s motion to dismiss was based on its finding that respondent’s attack on the jur isdiction of
the court was already barred by laches as respondent failed to raise the said ground in its [sic] amended answer and during t he pre-trial,
despite her active participation in the proceedings.

However, x x x it is well-settled that issue on jurisdiction may be raised at any stage of the proceeding, even for the first time on appeal.
By timely raising the issue on jurisdiction in her motion to dismiss x x x respondent is not estopped from raising the question on
jurisdiction.

Moreover, when issue on jurisdiction was raised by respondent, the court a quo had not yet decided the case, hence, there is no basis for
the court a quo to invoke estoppel to justify its denial of the motion for reconsideration;

It should be stressed that when the complaint was filed, defendant Manuel S. Toledo was already dead. The complaint should have
impleaded the estate of Manuel S. Toledo as defendant, not only the wife, considering that the estate of Manuel S. Toledo is an
indispensable party, which stands to be benefited or be injured in the outcome of the case. x x x

xxxx

Respondent’s motion to dismiss the complaint should have been granted by public respondent judge as the same was in order.
Considering that the obligation of Manuel S. Toledo is solidary with anoth er debtor, x x x, the claim x x x should be filed against the
estate of Manuel S. Toledo, in conformity with the provision of Section 6, Rule 86 of the Rules of Court, x x x. 20

The Court of Appeals denied petitioner’s motion for reconsideration. Hence, this petition.

The Issues

Petitioner claims that the Court of Appeals erred in not holding that:

1. Respondent is already estopped from questioning the trial court’s jurisdiction;

2. Petitioner never failed to implead an indispensable party as the estate of Manuel is not an indispensable party;

3. The inclusion of Manuel as party-defendant is a mere misjoinder of party not warranting the dismissal of the case before the
lower court; and

4. Since the estate of Manuel is not an indispensable party, it is not necessary that petitioner file its claim against the e state of
Manuel.

In essence, what is at issue here is the correctness of the trial court’s orders denying re spondent’s motion to dismiss.

The Ruling of the Court

We find merit in the petition.

Motion to dismiss filed out of time

To begin with, the Court of Appeals erred in granting the writ of certiorari in favor of respondent. Well settled is the rule that the special
civil action for certiorari is not the proper remedy to assail the denial by the trial court of a motion to dismiss. The orde r of the trial court
denying a motion to dismiss is merely interlocutory, as it neither terminates nor finally disposes of a case and still leaves something to
be done by the court before a case is finally decided on the merits. 21 Therefore, "the proper remedy in such a case is to appeal after a
decision has been rendered." 22

As the Supreme Court held in Indiana Aerospace University v. Comm. on Higher Education: 23

A writ of certiorari is not intended to correct every controversial interlocutory ruling; it is resorted only to correct a gr ave abuse of
discretion or a whimsical exercise of judgment equivalent to lack of jurisdiction. Its function is limited to keeping an inferior court
within its jurisdiction and to relieve persons from arbitrary acts – acts which courts or judges have no power or authority in law to
perform. It is not designed to correct erroneous findings and conclusions made by the courts. (Emphasis supplied)
Even assuming that certiorari is the proper remedy, the trial court did not commit grave abuse of discretion in denying respo ndent’s
motion to dismiss. It, in fact, acted correctly when it issued the questioned orders as respondent’s motion to dismiss was filed SIX
YEARS AND FIVE MONTHS AFTER SHE FILED HER AMENDED ANSWER. This circumstance alone already warranted the
outright dismissal of the motion for having been filed in clear contravention of the express mandate of Section 1, Rule 16, of the Revised
Rules of Court. Under this provision, a motion to dismiss shall be filed within the time for but before the filing of an answ er to the
complaint or pleading asserting a claim.24

More importantly, respondent’s motion to dismiss was filed after petitioner has completed the presentation of its evidence in the trial
court, giving credence to petitioner’s and the trial court’s conclusion that the filing of the motion to dismiss was a mere ploy on the part
of respondent to delay the prompt resolution of the case against her.

Also worth mentioning is the fact that respondent’s motion to dis miss under consideration herein is not the first motion to dismiss she
filed in the trial court. It appears that she had filed an earlier motion to dismiss 26 on the sole ground of the unenforceability of petitioner’s
claim under the Statute of Frauds, which motion was denied by the trial court. More telling is the following narration of the trial court
in its Order denying respondent’s motion for reconsideration of the denial of her motion to dismiss:

As can be gleaned from the records, with the admission of plaintiff’s exhibits, reception of defendants’ evidence was set on March 31,
and April 23, 2004 x x x . On motion of the defendants, the hearing on March 31, 2004 was cancelled.

On April 14, 2004, defendants sought the issuance of subpoena ad testificandum and duces tecum to one Gina M. Madulid, to app ear
and testify for the defendants on April 23, 2004. Reception of defendants’ evidence was again deferred to May 26, June 2 and June 30,
2004, x x x.

On May 13, 2004, defendants sought again the issuance of a subpoena duces tecum and ad testificandum to the said Gina Madulid . On
May 26, 2004, reception of defendants [sic] evidence was cancelled upon the agreement of the parties. On July 28, 2004, in the absence
of defendants’ witness, hearing was reset to September 24 and October 8, 2004 x x x.

On September 24, 2004, counsel for defendants was given a period of fifteen (15) days to file a demurrer to evidence. On October 7,
2004, defendants filed instead a Motion to Dismiss x x x. 27

Respondent’s act of filing multiple motions, such as the first and earlier motion to dis miss and then the motion to dismiss at issue here,
as well as several motions for postponement, lends credibility to the position taken by petitioner, which is shared by the tr ial court, that
respondent is

deliberately impeding the early disposition of this case. The filing of the second motion to dismiss was, therefore, "not only improper
but also dilatory." 28 Thus, the trial court, "far from deviating or straying off course from established jurisprudence on the matter, x x x
had in fact faithfully observed the law and legal precedents in this case." 29 The Court of Appeals, therefore, erred not only in entertaining
respondent’s petition for certiorari, it likewise erred in ruling that the trial court committed grave abuse of discretion wh en it denied
respondent’s motion to dismiss.

On whether or not respondent is estopped from questioning the jurisdiction of the trial court

At the outset, it must be here stated that, as the succeeding discussions will demonstrate, jurisdiction over the person of M anuel should
not be an issue in this case. A protracted discourse on jurisdiction is, nevertheless, demanded by the fact that jurisdiction has been raised
as an issue from the lower court, to the Court of Appeals and, finally, before this Court. For the sake of clarity, and in or der to finally
settle the controversy and fully dispose of all the issues in this case, it was deemed imperative to resolve the issue of jurisdiction.

1. Aspects of Jurisdiction

Petitioner calls attention to the fact that respondent’s motion to dismiss questioning the trial court’s jurisdiction was filed more than six
years after her amended answer was filed. According to petitioner, respondent had several opportunities, at various stages of the
proceedings, to assail the trial court’s jurisdiction but never did so for six straight years. Citing the doctrine laid down in the case of
Tijam, et al. v. Sibonghanoy, et al.30 petitioner claimed that respondent’s failure to raise the question of jurisdiction at an ea rlier stage
bars her from later questioning it, especially since she actively participated in the proceedings conducted by the trial cour t.

Petitioner’s argument is misplaced, in that, it failed to consider that the concept of jurisdiction has several aspe cts, namely: (1)
jurisdiction over the subject matter; (2) jurisdiction over the parties; (3) jurisdiction over the issues of the case; and (4) in cases involving
property, jurisdiction over the res or the thing which is the subject of the litigation. 31
The aspect of jurisdiction which may be barred from being assailed as a result of estoppel by laches is jurisdiction over the subject
matter. Thus, in Tijam, the case relied upon by petitioner, the issue involved was the authority of the then Court of First Ins tance to hear
a case for the collection of a sum of money in the amount of ₱1,908.00 which amount was, at that time, within the exclusive o riginal
jurisdiction of the municipal courts.

In subsequent cases citing the ruling of the Court in Tijam, what was likewise at issue was the jurisdiction of the trial court over the
subject matter of the case. Accordingly, in Spouses Gonzaga v. Court of Appeals, 32 the issue for consideration was the authority of the
regional trial court to hear and decide an action for reformation of contract and damages involving a subdivision lot, it being argued
therein that jurisdiction is vested in the Housing and Land Use Regulatory Boa rd pursuant to PD 957 (The Subdivision and
Condominium Buyers Protective Decree). In Lee v. Presiding Judge, MTC, Legaspi City, 33 petitioners argued that the respondent
municipal trial court had no jurisdiction over the complaint for ejectment because the issue of ownership was raised in the p leadings.
Finally, in People v. Casuga,34 accused-appellant claimed that the crime of grave slander, of which she was charged, falls within the
concurrent jurisdiction of municipal courts or city courts and the then courts of first instance, and that the judgment of th e court of first
instance, to which she had appealed the municipal court's conviction, should be deemed null and void for want of jurisdiction as her
appeal should have been filed with the Court of Appeals or the Supreme Court.

In all of these cases, the Supreme Court barred the attack on the jurisdiction of the respective courts concerned over the subject matter
of the case based on estoppel by laches, declaring that parties cannot be allowed to belatedly adopt an inconsistent posture by attacking
the jurisdiction of a court to which they submitted their cause voluntarily. 35

Here, what respondent was questioning in her motion to dismiss before the trial court was that court’s jurisdiction over the person of
defendant Manuel. Thus, the principle of estoppel by laches finds no application in this case. Instead, the principles relating to
jurisdiction over the person of the parties are pertinent herein.

The Rules of Court provide:

RULE 9
EFFECT OF FAILURE TO PLEAD

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 re cord 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 barre d by a prior
judgment or by statute of limitations, the court shall dismiss the claim.

RULE 15
MOTIONS

Sec. 8. Omnibus motion. – Subject to the provisions of Section 1 of Rule 9, a motion attacking a pleading, order, judgment, or proceeding
shall include all objections then available, and all objections not so included shall be deemed waived.

Based on the foregoing provisions, the "objection on jurisdictional grounds which is not waived even if not alleged in a motion to dismiss
or the answer is lack of jurisdiction over the subject matter. x x x Lack of jurisdiction over the subject mat ter can always be raised
anytime, even for the first time on appeal, since jurisdictional issues cannot be waived x x x subject, however, to the princ iple of estoppel
by laches." 36

Since the defense of lack of jurisdiction over the person of a party to a case is not one of those defenses which are not dee med waived
under Section 1 of Rule 9, such defense must be invoked when an answer or a motion to dismiss is filed in order to prevent a waiver of
the defense.37 If the objection is not raised either in a motion to dismiss or in the answer, the objection to the jurisdiction over the person
of the plaintiff or the defendant is deemed waived by virtue of the first sentence of the above -quoted Section 1 of Rule 9 of the Rules of
Court.38

The Court of Appeals, therefore, erred when it made a sweeping pronouncement in its questioned decision, stating that "issue on
jurisdiction may be raised at any stage of the proceeding, even for the first time on appeal" and that, therefore, re spondent timely raised
the issue in her motion to dismiss and is, consequently, not estopped from raising the question of jurisdiction. As the quest ion of
jurisdiction involved here is that over the person of the defendant Manuel, the same is deemed waived if not raised in the answer or a
motion to dismiss. In any case, respondent cannot claim the defense since "lack of jurisdiction over the person, being subjec t to waiver,
is a personal defense which can only be asserted by the party who can thereby waive it by silence." 39

2. Jurisdiction over the person of a defendant is acquired through a valid service of summons; trial court did not acquire ju risdiction
over the person of Manuel Toledo
In the first place, jurisdiction over the person of Manuel was never acquired by the trial court. A defendant is informed of a case against
him when he receives summons. "Summons is a writ by which the defendant is notified of t he action brought against him. Service of
such writ is the means by which the court acquires jurisdiction over his person." 40

In the case at bar, the trial court did not acquire jurisdiction over the person of Manuel since there was no valid service of summons
upon him, precisely because he was already dead even before the complaint against him and his wife was filed in the trial cou rt. The
issues presented in this case are similar to those in the case of Sarsaba v. Vda. de Te. 41

In Sarsaba, the NLRC rendered a decision declaring that Patricio Sereno was illegally dis missed from employment and ordering the
payment of his monetary claims. To satisfy the claim, a truck in the possession of Sereno’s employer was levied upon by a she riff of the
NLRC, accompanied by Sereno and his lawyer, Rogelio Sarsaba, the petitioner in that case. A complaint for recovery of motor vehicle
and damages, with prayer for the delivery of the truck pendente lite was eventually filed against Sarsaba, Sereno, the NLRC s heriff and
the NLRC by the registered owner of the truck. After his motion to dismiss was denied by the trial court, petitioner Sarsaba filed his
answer. Later on, however, he filed an omnibus motion to dismiss citing, as one of the grounds, lack of jurisdiction over one of the
principal defendants, in view of the fact that Sereno was already dead when the complaint for recovery of possession was filed.

Although the factual milieu of the present case is not exactly similar to that of Sarsaba, one of the issues submitted for re solution in both
cases is similar: whether or not a case, where one of the named defendants was already dead at the time of its filing, should be dismissed
so that the claim may be pursued instead in the proceedings for the settlement of the estate of the deceased defendant. The p etitioner in
the Sarsaba Case claimed, as did respondent herein, that since one of the defendants died before summons was served on him, the trial
court should have dismissed the complaint against all the defendants and the claim should be filed against the estate of the deceased
defendant. The petitioner in Sarsaba, therefore, prayed that the complaint be dismissed, not only against Sereno, but as to all the
defendants, considering that the RTC did not acquire jurisdiction over the person of Sereno. 42 This is exactly the same prayer made by
respondent herein in her motion to dismiss.

The Court, in the Sarsaba Case, resolved the issue in this wise:

x x x We cannot countenance petitioner’s argument that the complaint against the other defendants should have been dismissed,
considering that the RTC never acquired jurisdiction over the person of Sereno. The court’s failure to acquire jurisdiction o ver one’s
person is a defense which is personal to the person claiming it. Obviously, it is now impossible for Sereno to invoke the same in view
of his death. Neither can petitioner invoke such ground, on behalf of Sereno, so as to reap the benefit of having the case dismissed
against all of the defendants. Failure to serve summons on Sereno’s person will not be a cause for the dismissal of the complaint against
the other defendants, considering that they have been served with copies of the summons and complaints and have long submitte d their
respective responsive pleadings. In fact, the other defendants in the complaint were given the chance to raise all possible defenses and
objections personal to them in their respective motions to dismiss and their subsequent answers. 43 (Emphasis supplied.)

Hence, the Supreme Court affirmed the dismissal by the trial court of the complaint against Sereno only.

Based on the foregoing pronouncements, there is no basis for dismiss ing the complaint against respondent herein. Thus, as already
emphasized above, the trial court correctly denied her motion to dismiss.

On whether or not the estate of Manuel

Toledo is an indispensable party

Rule 3, Section 7 of the 1997 Rules of Court states:

SEC. 7. Compulsory joinder of indispensable parties. – Parties-in-interest without whom no final determination can be had of an action
shall be joined either as plaintiffs or defendants.

An indispensable party is one who has such an interest in the co ntroversy or subject matter of a case that a final adjudication cannot be
made in his or her absence, without injuring or affecting that interest. He or she is a party who has not only an interest in the subject
matter of the controversy, but "an interest of such nature that a final decree cannot be made without affecting that interest or leaving the
controversy in such a condition that its final determination may be wholly inconsistent with equity and good conscience. It h as also been
considered that an indispensable party is a person in whose absence there cannot be a determination between the parties already before
the court which is effective, complete or equitable." Further, an indispensable party is one who must be included in an actio n before it
may properly proceed.44
On the other hand, a "person is not an indispensable party if his interest in the controversy or subject matter is separable from the interest
of the other parties, so that it will not necessarily be directly or injuriously affected by a decree which does complete jus tice between
them. Also, a person is not an indispensable party if his presence would merely permit complete relief between him or her and those
already parties to the action, or if he or she has no interest in the subject matter of the action." It is not a sufficient reason to declare a
person to be an indispensable party simply because his or her presence will avoid multiple litigations.45

Applying the foregoing pronouncements to the case at bar, it is clear that the estate of Manuel is not an indispensable party to the
collection case, for the simple reason that the obligation of Manuel and his wife, respondent herein, is solidary.

The contract between petitioner, on the one hand and respondent and respondent’s husband, on the other, states:

FOR VALUE RECEIVED, I/We jointly and severally 46 (in solemn) promise to pay BOSTON EQUITY RESOURCES, INC. x x x the
sum of PESOS: [ONE MILLION FOUR HUNDRED (₱1,400,000.00)] x x x. 47

The provisions and stipulations of the contract were then followed by the respective signatures of respondent as "MAKER" and her
husband as "CO-MAKER." 48 Thus, pursuant to Article 1216 of the Civil Code, petitioner may collect the entire amount of the obligation
from respondent only. The aforementioned provision states: "The creditor may proceed against any one of the solidary debtors or some
or all of them simultaneously. The demand made against one of them shall not be an obstacle to those which may subsequently b e
directed against the others, so long as the debt has not been fully collected."

In other words, the collection case can proceed and the demands of petitioner can be satisfied by respondent only, even witho ut
impleading the estate of Manuel. Consequently, the estate of Manuel is not an indispensable party to petitioner’s compla int for sum of
money.

However, the Court of Appeals, agreeing with the contention of respondent, held that the claim of petitioner should have been filed
against the estate of Manuel in accordance with Sections 5 and 6 of Rule 86 of the Rules of Court. The aforementioned provisions
provide:

SEC. 5. Claims which must be filed under the notice. If not filed, barred; exceptions. All claims for money against the deced ent, arising
from contract, express or implied, whether the same be due, not due, or contingent , all claims for funeral expenses and judgment for
money against the decedent, must be filed within the time limited in the notice; otherwise, they are barred forever, except t hat they may
be set forth as counterclaims in any action that the executor or ad ministrator may bring against the claimants. x x x.

SEC. 6. Solidary obligation of decedent. Where the obligation of the decedent is solidary with another debtor, the claim shall be filed
against the decedent as if he were the only debtor, without prejudice to the right of the estate to recover contribution from the other
debtor. x x x.

The Court of Appeals erred in its interpretation of the above-quoted provisions.

In construing Section 6, Rule 87 of the old Rules of Court, the precursor of Section 6, Rule 86 of the Revised Rules of Court, which
latter provision has been retained in the present Rules of Court without any revisions, the Supreme Court, in the case of Man ila Surety
& Fidelity Co., Inc. v. Villarama, et. al.,49 held:50

Construing Section 698 of the Code of Civil Procedure from whence [Section 6, Rule 87] was taken, this Court held that where two
persons are bound in solidum for the same debt and one of them dies, the whole indebtedness can be proved against the estate of the
latter, the decedent’s liability being absolute and primary; x x x. It is evident from the foregoing that Section 6 of Rule 87 provides the
procedure should the creditor desire to go against the deceased debtor, but there is certainly nothing in the said provision making
compliance with such procedure a condition precedent before an ord inary action against the surviving solidary debtors, should the
creditor choose to demand payment from the latter, could be entertained to the extent that failure to observe the same would deprive the
court jurisdiction to take cognizance of the action against the surviving debtors. Upon the other hand, the Civil Code expressly allows
the creditor to proceed against any one of the solidary debtors or some or all of them simultaneously. There is, therefore, n othing
improper in the creditor’s filing of an action against the surviving solidary debtors alone, instead of instituting a proceeding for the
settlement of the estate of the deceased debtor wherein his claim could be filed.

The foregoing ruling was reiterated and expounded in the later case of Philippin e National Bank v. Asuncion 51 where the Supreme Court
pronounced:

A cursory perusal of Section 6, Rule 86 of the Revised Rules of Court reveals that nothing the rein prevents a creditor from proceeding
against the surviving solidary debtors. Said provision merely sets up the procedure in enforcing collection in case a credito r chooses to
pursue his claim against the estate of the deceased solidary debtor. The rule has been set forth that a creditor (in a solidary obligation)
has the option whether to file or not to file a claim against the estate of the solidary debtor. x x x

xxxx

It is crystal clear that Article 1216 of the New Civil Code is the applicable prov ision in this matter. Said provision gives the creditor the
right to "proceed against anyone of the solidary debtors or some or all of them simultaneously." The choice is undoubtedly le ft to the
solidary creditor to determine against whom he will enforce collection. In case of the death of one of the solidary debtors, he (the
creditor) may, if he so chooses, proceed against the surviving solidary debtors without necessity of filing a claim in the es tate of the
deceased debtors. It is not mandatory for him to have the case dismissed as against the surviving debtors and file its claim against the
estate of the deceased solidary debtor, x x x. For to require the creditor to proceed against the estate, making it a condition precedent for
any collection action against the surviving debtors to prosper, would deprive him of his substantive rightsprovided by Article 1216 of
the New Civil Code. (Emphasis supplied.)

As correctly argued by petitioner, if Section 6, Rule 86 of the Revised Rules of Court were applied lite rally, Article 1216 of the New
Civil Code would, in effect, be repealed since under the Rules of Court, petitioner has no choice but to proceed against the estate of [the
deceased debtor] only. Obviously, this provision diminishes the [creditor’s] right un der the New Civil Code to proceed against any one,
some or all of the solidary debtors. Such a construction is not sanctioned by principle, which is too well settled to require citation, that
a substantive law cannot be amended by a procedural rule. Otherwise stated, Section 6, Rule 86 of the Revised Rules of Court cannot
be made to prevail over Article 1216 of the New Civil Code, the former being merely procedural, while the latter, substantive .

Based on the foregoing, the estate of Manuel is not an indisp ensable party and the case can proceed as against respondent only. That
petitioner opted to collect from respondent and not from the estate of Manuel is evidenced by its opposition to respondent’s motion to
dismiss asserting that the case, as against her, should be dismissed so that petitioner can proceed against the estate of Manuel.

On whether or not the inclusion of Manuel as party defendant is a misjoinder of party

Section 11 of Rule 3 of the Rules of Court states that "neither misjoinder nor non -joinder of parties is ground for dismissal of an action.
Parties may be dropped or added by order of the court on motion of any party or on its own initiative at any stage of the act ion and on
such terms as are just. Any claim against a misjoined party may be severed and proceeded with separately."

Based on the last sentence of the afore-quoted provision of law, a misjoined party must have the capacity to sue or be sued in the event
that the claim by or against the misjoined party is pursued in a separate case. In this case, therefore, the inclusion of Manuel in the
complaint cannot be considered a misjoinder, as in fact, the action would have proceeded against him had he been alive at the time the
collection case was filed by petitioner. This being the case, the remedy provided by Section 11 of Rule 3 does not obtain here. The name
of Manuel as party-defendant cannot simply be dropped from the case. Instead, the procedure taken by the Court in Sarsaba v. Vda. de
Te,52 whose facts, as mentioned earlier, resemble those of this case, should be followed herein. There, the Supreme Court agreed with
the trial court when it resolved the issue of jurisdiction over the person of the deceased Sereno in this wise:

As correctly pointed by defendants, the Honorable Court has not acquired jurisdiction over the person of Patricio Sereno sinc e there was
indeed no valid service of summons insofar as Patricio Sereno is concerned. Patricio Sereno died before the summons, together with a
copy of the complaint and its annexes, could be served upon him.

However, the failure to effect service of summons unto Patricio Sereno, one of the defendants herein, does not render the act ion
DISMISSIBLE, considering that the three (3) other defendants, x x x, were validly served with summons and the case with respect to
the answering defendants may still proceed independently. Be it recalled that the three (3) answering defendants have previou sly filed
a Motion to Dismiss the Complaint which was denied by the Court.

Hence, only the case against Patricio Sereno will be DISMISSED and the same may be filed as a claim against the estate of Pat ricio
Sereno, but the case with respect to the three (3) other accused [sic] will proceed. (Emphasis supplied.)53

As a result, the case, as against Manuel, must be dismissed.

In addition, the dismissal of the case against Manuel is further warranted by Section 1 of Rule 3 of the Rules of Court, which states that:
only natural or juridical persons, or entities authorized by law may be parties in a civil action." Applying this provision o f law, the Court,
in the case of Ventura v. Militante,54 held:
Parties may be either plaintiffs or defendants. x x x. In order to maintain an action in a court of justice, the plaintiff mu st have an actual
legal existence, that is, he, she or it must be a person in law and possessed of a legal entity as either a natural or an art ificial person, and
no suit can be lawfully prosecuted save in the name of such a person.

The rule is no different as regards party defendants. It is incumbent upon a plaintiff, when he institutes a judicial proceeding, to name
the proper party defendant to his cause of action. In a suit or proceeding in personam of an adversary character, the court c an acquire no
jurisdiction for the purpose of trial or judgment until a party defendant who actually or legally exists and is legally capable of being
sued, is brought before it. It has even been held that the question of the legal personality of a party defendant is a question of substance
going to the jurisdiction of the court and not one of procedure.

The original complaint of petitioner named the "estate of Carlos Ngo as represented by surviving spouse Ms. Sulpicia Ventura" as the
defendant.1âwphi1 Petitioner moved to dismiss the same on the ground that the defendant as named in the complaint had no legal
personality. We agree.

x x x. Considering that capacity to be sued is a correlative of the capacity to sue, to the same extent, a decedent does not have the capacity
to be sued and may not be named a party defendant in a court action. (Emphases supplied.)

Indeed, where the defendant is neither a natural nor a juridical person or an entity authorized by law, the complaint may be dismissed
on the ground that the pleading asserting the claim states no cause of action or for failure to state a cause of action pursuant to Section
1(g) of Rule 16 of the Rules of Court, because a complaint cannot possibly state a cause of action against one who cannot be a party to
a civil action.55

Since the proper course of action against the wrongful inclusion of Manuel as party -defendant is the dismissal of the case as against
him, thus did the trial court err when it ordered the substitution of Manuel by his heirs. Substitution is proper only where the party to be
substituted died during the pendency of the case, as expressly provided for by Section 16, Rule 3 of the Rules of Court, whic h states:

Death of 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 an d address of
his legal representative or representatives. x x x

The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the appointment of an executor or
administrator x x x.

The court shall forthwith order said legal representative or representatives to appear and be substituted within a period of thirty (30)
days from notice. (Emphasis supplied.)

Here, since Manuel was already dead at the time of the filing of the complaint, the court never acquired jurisdiction over his person and,
in effect, there was no party to be substituted.

WHEREFORE, the petition is GRANTED. The Decision dated 28 February 2006 and the Resolution dated 1 August 2006 of the Court
of Appeals in CA-G.R. SP No. 88586 are REVERSED and SET ASIDE. The Orders of the Regional Trial Court dated 8 November
2004 and 22 December 2004, respectively, in Civil Case No. 97-86672, are REINSTATED. The Regional Trial Court, Branch 24,
Manila is hereby DIRECTED to proceed with the trial of Civil Case No. 97-86672 against respondent Lolita G. Toledo only, in
accordance with the above pronouncements of the Court, and to decide the case with dispatch.

SO ORDERED.
G.R. No. 181416 November 11, 2013

MEDICAL PLAZA MAKATI CONDOMINIUM CORPORATION, Petitioner,

vs.
ROBERT H. CULLEN, Respondent.

D EC IS I O N

PERALTA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the Court of Appeals (CA) Decision 1 dated July
10, 2007 and Resolution 2 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 recons ideration 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 t he Medical Plaza Makati covered by
Condominium Certificate of Title No. 45808 of the Register of Deeds of Makati. Said title was later cancelled and Condominiu m
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 h e 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 fro m
exercising his right to vote and be voted for during the 2002 election of petit ioner’s Board of Directors.6 Respondent thus clarified fro m
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. P etitioner
failed to make such explanation. Hence, the Complaint for Damages 8 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 alle ged unpaid association dues and assessments
arising from plaintiff’s condominium unit no. 1201. The said letter further stressed that plaintiff is considered a delinquen t
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 defen dant [MPMCC], to
the damage and prejudice of plaintiff who is again obviously being barred from voting/participating in the election of member s
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 v ote or be voted as director of the condominiu m
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 fro m
mental anguish, moral shock, and serious anxiety. Plaintiff, being a doctor of medicine and respected in the community furthe r
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 counse l, 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 proximat e
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. 10 MLHI 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 th e 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 jurisd iction 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 INSTEA D
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 a ffected 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 n ature of an
action, as well as which court or body has jurisdiction over it, is determined based on t he 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 o nes 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 o r
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 o fficers; 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 an d 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 stockholde r/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 due s 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 jurisdictio n 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 Cour t 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 qu estioned his
characterization as a delinquent member and, consequently, petitioner’s decision to bar him from exercising his rights to vot e 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 inc idental 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 o f which they are stockholders, members,
or associates, respectively; and between such corporation, partnership or association and the State insofar as it concerns th eir
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, Branc h 58
was not designated as a special commercial court, it was not vested with jurisdiction over cases previously cognizable by the SEC. 31 The
CA, therefore, gravely erred in remanding the case to the RTC for further proceed ings.

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 inv olves
a controversy between a condominium unit owner and a condominium corporation. While the term association as defined in the la w
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 port ion 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 t hat 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 th at 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 --- Condominiu m
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 persona lly 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 benefit s 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 o n 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 appurtena nt 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. Moreno 35 which in turn cited Wack Wack Condominium Corporation, et
al v. CA 36 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.
G.R. No. 140746 March 16, 2005

PANTRANCO NORTH EXPRESS, INC., and ALEXANDER BUNCAN, Petitioner,

vs.
STANDARD INSURANCE COMPANY, INC., and MARTINA GICALE, Respondents.

D EC IS I O N

SANDOVAL-GUTIERREZ, J.:

Before us is a petition for review on certiorari assailing the Decision 1 dated July 23 1999 and Resolution 2 dated November 4, 1999 of
the Court of Appeals in CA-G.R. CV No. 38453, entitled "Standard Insurance Company, Inc., and Martina Gicale vs. PANTRANCO
North Express, Inc., and Alexander Buncan."

In the afternoon of October 28, 1984, Crispin Gicale was driving the passenger jeepney owned by his mother Martina Gicale, respondent
herein. It was then raining. While driving north bound along the National Highway in Talavera, Nueva Ecija, a passenger bus, owned
by Pantranco North Express, Inc., petitioner, driven by Alexander Buncan, also a petitioner, was trailing behind. When the two vehicles
were negotiating a curve along the highway, the passenger bus overtook the jeepney. In so doing, the passenger bus hit the le ft rear side
of the jeepney and sped away.

Crispin reported the incident to the Talavera Police Station and respondent Standard Insurance Co., Inc. (Standard), insurer of the
jeepney. The total cost of the repair was P21,415.00, but respondent Standard paid only P8,000.00. Martina Gicale shouldered the
balance of P13,415.00.

Thereafter, Standard and Martina, respondents, demanded reimbursement from petitioners Pantranco and its driver Alexander Bun can,
but they refused. This prompted respondents to file with the Regional Trial Court (RTC), Branch 94, Manila, a complaint for sum of
money.

In their answer, both petitioners specifically denied the allegations in the complaint and averred that it is the Metropolita n Trial Court,
not the RTC, which has jurisdiction over the cas e.

On June 5, 1992, the trial court rendered a Decision 3 in favor of respondents Standard and Martina, thus:

"WHEREFORE, and in view of the foregoing considerations , judgment is hereby rendered in favor of the plaintiffs, Standard
Insurance Company and Martina Gicale, and against defendants Pantranco Bus Company and Alexander Buncan, ordering the
latter to pay as follows:

(1) to pay plaintiff Standard Insurance the amount of P8,000.00 with interest due thereon from November 27, 1984 until fully
paid;

(2) to pay plaintiff Martina Gicale the amount of P13,415.00 with interest due thereon from October 22, 1984 until fully paid;

(3) to pay the sum of P10,000.00 for attorney’s fees;

(4) to pay the expenses of litigation and the cost of suit.

SO ORDERED."

On appeal, the Court of Appeals, in a Decision 4 dated July 23, 1999, affirmed the trial court’s ruling, holding that:

"The appellants argue that appellee Gicale’s claim of P13,415.00 and appellee insurance company’s claim of P8,000.00
individually fell under the exclusive original jurisdiction of the municipal trial court. This is not correct because under the
Totality Rule provided for under Sec. 19, Batas Pambansa Bilang 129, it is the sum of the two claims that determines the
jurisdictional amount.

xxx
 In the case at bench, the total of the two claims is definitely more than P20,000.00 which at the time of the incident in question
was the jurisdictional amount of the Regional Trial Court.

Appellants contend that there was a misjoinder of parties. Assuming that there was, under the Rules of Court (Sec. 11, Rule 7)
as well as under the Rules of Civil Procedure (ditto), the same does not affect the jurisdiction of the court nor is it a ground to
dismiss the complaint.

xxx

It does not need perspicacity in logic to see that appellees Gicale’s and insurance company’s individual claims a gainst appellees
(sic) arose from the same vehicular accident on October 28, 1984 involving appellant Pantranco’s bus and appellee Gicale’s
jeepney. That being the case, there was a question of fact common to all the parties: Whose fault or negligence caus ed the
damage to the jeepney?

Appellants submit that they were denied their day in court because the case was deemed submitted for decision "without even
declaring defendants in default or to have waived the presentation of evidence." This is incorrect. Of course, the court did not
declare defendants in default because that is done only when the defendant fails to tender an answer within the reglementary
period. When the lower court ordered that the case is deemed submitted for decision that meant that the defendants were deemed
to have waived their right to present evidence. If they failed to adduce their evidence, they should blame nobody but themselves.
They failed to be present during the scheduled hearing for the reception of their evidence despite notice and without any motion
or explanation. They did not even file any motion for reconsideration of the order considering the case submitted for decisio n.

Finally, contrary to the assertion of the defendant-appellants, the evidence preponderantly established their liability for quasi-
delict under Article 2176 of the Civil Code."

Petitioners filed a motion for reconsideration but was denied by the Appellate Court in a Resolution dated November 4, 1999.

Hence, this petition for review on certiorari raising the following assignments of error:

"I

WHETHER OR NOT THE TRIAL COURT HAS JURISDICTION OVER THE SUBJECT OF THE ACTION
CONSIDERING THAT RESPONDENTS’ RESPECTIVE CAUSE OF ACTION AGAINST PETITIONERS DID NOT
ARISE OUT OF THE SAME TRANSACTION NOR ARE THERE QUESTIONS OF LAW AND FACTS COMMON TO
BOTH PETITIONERS AND RESPONDENTS.

II

WHETHER OR NOT PETITIONERS ARE LIABLE TO RESPONDENTS CONSIDERING THAT BASED ON THE
EVIDENCE ADDUCED AND LAW APPLICABLE IN THE CASE AT BAR, RESPONDENTS HAVE NOT SHOWN ANY
RIGHT TO THE RELIEF PRAYED FOR.

III

WHETHER OR NOT PETITIONERS WERE DEPRIVED OF THEIR RIGHT TO DUE PROCESS."

For their part, respondents contend that their individual claims arose out of the same vehicular accident and involve a commo n question
of fact and law. Hence, the RTC has jurisdiction over the case.

Petitioners insist that the trial court has no jurisdiction over the case since the cause of action of each respondent did no t arise from the
same transaction and that there are no common questions of law and fact common to both parties. Section 6, Rule 3 of the Revised Rules
of Court,5 provides:

"Sec. 6. 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, e xcept as
otherwise provided in these Rules, join as plaintiffs or be joined as defendant s 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."

Permissive joinder of parties requires that: (a) the right to relief arises out of the same transaction or series of transact ions; (b) there is a
question of law or fact common to all the plaintiffs or defendants; and (c) such joinder is not otherwise proscribed by the provisions of
the Rules on jurisdiction and venue.6

In this case, there is a single transaction common to all, that is, Pantranco’s bus hitting the rear side of the jeepney. There is also a
common question of fact, that is, whether petitioners are negligent. There being a single transaction common to both responde nts,
consequently, they have the same cause of action against petitioners.

To determine identity of cause of action, it must be ascertained whether the same evidence which is necessary to sustain the second
cause of action would have been sufficient to authorize a reco very in the first.7 Here, had respondents filed separate suits against
petitioners, the same evidence would have been presented to sustain the same cause of action. Thus, the filing by both respondents of
the complaint with the court below is in order. Such joinder of parties avoids multiplicity of suit and ensures the convenien t, speedy and
orderly administration of justice.

Corollarily, Section 5(d), Rule 2 of the same Rules provides:

"Sec. 5. Joinder of causes of action. – A party may in one pleading assert, in the alternative or otherwise, as many causes of
action as he may have against an opposing party, subject to the following conditions:

xxx

(d) Where the claims in all the causes of action are principally for recovery of money the aggregate amount claimed shall be
the test of jurisdiction."

The above provision presupposes that the different causes of action which are joined accrue in favor of the same plaintiff/s and against
the same defendant/s and that no misjoinder of parties is involved. 8 The issue of whether respondents’ claims shall be lumped together
is determined by paragraph (d) of the above provision. This paragraph embodies the "totality rule" as exemplified by Section 33 (1) of
B.P. Blg. 1299 which states, among others , 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, irr espective of
whether the causes of action arose out of the same or different transactions."

As previously stated, respondents’ cause of action against petitioners arose out of the same transaction. Thus, the amount of the demand
shall be the totality of the claims.

Respondent Standard’s claim is P8,000.00, while that of respondent Martina Gicale is P13,415.00, or a total of P21,415.00. Section 19
of B.P. Blg. 129 provides that the RTC has "exclusive original jurisdiction over all other cases, in which the demand, exclus ive of
interest and cost or the value of the property in controversy, amounts to more than twenty thousand pesos (P20,000.00)." Clearly, it is
the RTC that has jurisdiction over the instant case. It bears emphasis that when the complaint was filed, R.A. 7691 expanding the
jurisdiction of the Metropolitan, Municipal and Municipal Circuit Trial Courts had not yet taken effect. It became effective on April 15,
1994.

II

The finding of the trial court, affirmed by the Appellate Court, that petitioners are negligent and thus liable to respondents, is a factual
finding which is binding upon us, a rule well-established in our jurisprudence. It has been repeatedly held that the trial court's factual
findings, when affirmed by the Appellate Court, are conclusive and binding upon this Cou rt, if they are not tainted with arbitrariness or
oversight of some fact or circumstance of significance and influence. Petitioners have not presented sufficient ground to war rant a
deviation from this rule.10

III

There is no merit in petitioners’ contention that they were denied due process. Records show that during the hearing, petitio ner
Pantranco’s counsel filed two motions for resetting of trial which were gran ted by the trial court. Subsequently, said counsel filed a
notice to withdraw. After respondents had presented their evidence, the trial court, upon petitioners’ motion, reset the hear ing to another
date. On this date, Pantranco failed to appear. Thus, the trial court warned Pantranco that should it fail to appear during the next hearing,
the case will be submitted for resolution on the basis of the evidence presented. Subsequently, Pantranco’s new counsel manif ested that
his client is willing to settle the case amicably and moved for another postponement. The trial court granted the motion. On the date of
the hearing, the new counsel manifested that Pantranco’s employees are on strike and moved for another postponement. On the n ext
hearing, said counsel still failed to appear. Hence, the trial court considered the case submitted for decision.

We have consistently held that the essence of due process is simply an opportunity to be heard, or an opportunity to explain one’s side
or an opportunity to seek for a reconsideration of the action or ruling complained of. 11

Petitioner Pantranco filed an answer and participated during the trial and presentation of respondents’ ev idence. It was apprised of the
notices of hearing issued by the trial court. Indeed, it was afforded fair and reasonable opportunity to explain its side of the controversy.
Clearly, it was not denied of its right to due process. What is frowned upon is the absolute lack of notice and hearing which is not present
here.

WHEREFORE, the petition is DENIED. The assailed Decision dated July 23 1999 and Resolution dated November 4, 1999 of the
Court of Appeals in CA-G.R. CV No. 38453 are hereby AFFIRMED. Costs against petitioners.

SO ORDERED.
G.R. No. 195033 October 12, 2011

AGG Trucking and/or Alex Ang Gaeid, Petitioners,

vs.
MELANIO B. YUAG, Respondent.

D EC IS I O N

SERENO, J.:

In this Petition for Review on Certiorari under Rule 45 with Prayer for Issuance of Writ of Temporary and/or Permanent Injunction,
assailed is the 23 June 2010 Decision of the Court of Appeals (CA), Cagayan de Oro City, in CA -G.R. SP No. 01854-MIN.1 Reversing
the 30 November 2006 Resolution of the National Labor Relations Commission and reinstating, with modification, the 30 August 2006
Decision of the labor arbiter, the CA disposed as follows:

WHEREFORE, premises considered, the instant Petition is hereby GRANTED, and the Resolution dated November 30, 2006 is hereby
REINSTATED subject to MODIFICATION, thus:

Private respondent Alex Ang Gaeid and/or AAG Trucking is hereby ORDERED to pay petitioner Melanio B. Yuag or his heirs or
assigns the following:

(1) FULL BACKWAGES, inclusive of all allowances, other benefits or their monetary equivalent computed from the time
petitioner's compensation was withheld from him starting December 6, 2004 until the time he was employe d by his new
employer (Bernie Ragandang), instead of the date of his supposed reinstatement which We no longer require as explained
above.

(2) SEPARATION PAY (in lieu of the supposed reinstatement) equivalent to one -half (½) month pay for every year of service.
A fraction of at least six (6) months shall be considered one (1) whole year.

(3) TEMPERATE DAMAGES in the amount of Five Thousand Pesos (Php5,000.00) for the financial loss suffered by the
petitioner when he was abruptly dismissed as a truck driver on December 6, 2004 (during or around the Christmas season),
although the exact amount of such damage is incapable of exact determination); and

(4) EXEMPLARY DAMAGES in the amount of Five Thousand Pesos (Php5,000.00) as a corrective measure in order to set
out an example to serve as a negative incentive or deterrent against socially deleterious actions.

Considering that a person's wage is his/her means of livelihood i.e., equivalent to life itself, this decision is deemed imme diately
executory pending appeal, should the private respondent decide to elevate this case to the Supreme Court.

SO ORDERED.2

The Motion for Reconsideration filed by petitioner was denied by the CA.3 Hence, this Petition.

The facts of the case are simple. Petitioner Alex Ang Gaeid had employed respondent Melanio Yuag as a driver since 28 Februar y 2002.
He alleged that he had a trucking business, for which he had 41 delivery trucks driven by 41 drivers, one of whom was respond ent.4 His
clients were Busco Sugar Milling Co., Inc., operating in Quezon, Bukidnon; and Coca-cola Bottlers Company in Davao City and
Cagayan de Oro City.5 Respondent received his salary on commission basis of 9% of his gross delivery per trip. He was assigned to a
ten-wheeler truck and was tasked to deliver sacks of sugar from the Busco Sugar Mill to the port of Cagayan de Oro. 6 Petitioner noticed
that respondent had started incurring substantial shortages since 30 September 2004, when he allegedly had a shortage of 32 bags,
equivalent to ₱ 48,000; followed by 50 bags, equivalent to ₱ 75,000, on 11 November 2004. 7 It was also reported that he had illegally
sold bags of sugar along the way at a lower price, and that he was banned from entering the premises of the Busco Sugar Mill. 8 Petitioner
asked for an explanation from respondent who remained quiet. 9

Alarmed at the delivery shortages, petitioner took it upon himself to monitor all his drivers, including respondent, by instructing them
to report to him their location from time to time through their mobile phones. 10 He also required them to make their delivery trips in
convoy, in order to avoid illegal sale of cargo along the way. 11

Respondent, along with 20 other drivers, was tasked to deliver bags of sugar from Cagayan de Oro City to Coca-Cola Bottlers Plant in
Davao City on 4 December 2004.12 All drivers, with the exception of Yuag who could not be reached through his cellphone, reported
their location as instructed. Their reported location gave evidence that they were indeed in convoy. 13 Afterwards, everyone, except Yuag,
communicated that the delivery of their respective cargoes had been completed. 14 The Coca-Cola Plant in Davao later reported that the
delivery had a suspiciously enormous shortage. 15

Respondent reported to the office of the petitioner on 6 December 2004. Allegedly in a calm and polite manner, petitioner asked
respondent to explain why the latter had not contacted petitioner for two days, and he had not gone in convoy with the other trucks, as
he was told to do.16 Respondent replied that the battery of his cellphone had broken down. 17 Petitioner then confronted him allegedly
still in a polite and civilized manner, regarding the large shortages, but the latter did not answer. 18 Petitioner afterwards told him to "just
take a rest" or, in their vernacular, "pahulay lang una." 19 This exchange started the dispute since respondent construed it as a dismissal.
He demanded that it be done in writing, but petitioner merely reiterated that respondent should just take a rest in the meanwhile. 20 The
former alleged that respondent had offered to resign and demanded separation pay. At that time, petitioner could not grant the demand,
as it would entail computation which was the duty of the cashier. 21 Petitioner asked him to come back the next day.

Instead of waiting for another day to go back to his employer, Respondent went to the Department of Labor-Regional Arbitration Board
X, that very day of the confrontation or on 6 December 2004. There he filed a Complaint for illegal dismissal, claiming his separation
pay and 13th month pay.22 Subsequently, after the delivered goods to the Coca-Cola Plant were weighed on 9 December 2004, it was
found out that there was a shortage of 111 bags of sugar, equivalent to ₱ 166,000. 23

Respondent argued that he was whimsically dismissed, just because he had not been able to answer his employer's call during the time
of the delivery.24 His reason for not answering was that the battery pack of his cellphone had broken down.25 Allegedly enraged by that
incident, his employer, petitioner herein, supposedly shouted at him and told him, "pahuway naka." 26 When he asked for a clarification ,
petitioner allegedly told him, "wala nay daghan istorya, pahulay na!" This statement was translated by the CA thus: "No more talking!
Take a rest!" 27 He then realized that he was being dismissed. When he asked for his separation pay, petitioner refused. 28 Respondent
thus filed a Complaint for illegal dismissal.

Ruling of the Labor Arbiter

On 30 August 2006, labor arbiter Nicodemus G. Palangan rendered his Decision sustaining respondent's Complaint for illegal
dismissal.29 The labor arbiter made a discourse on the existence of an employer-employee relationship between the parties. In granting
the relief sought by petitioner, the labor arbiter held as follows:

For failure on the part of the respondent to substantially prove the alleged infraction (shortages) committed by complainant and to afford
him the due process mandated by law before he was eventu ally terminated, complainant's dismissal from his employment is hereby
declared illegal and the respondent is liable to reinstate him with backwages for one (1) year but in view of the strained re lationship that
is now prevailing between the parties, this Arbitration Branch finds it more equitable to grant separation pay instead equivalent to one
(1) month per year of service based on the average income for the last year of his employment CY 2004 which is P9,974.51, as hereby
computed: …30

Thus, the labor arbiter awarded respondent separation pay and proportionate 13th month pay for 2004 and 13th month pay differ ential
for 2003.31

Petitioner appealed to the NLRC, alleging that the latter erred in finding that respondent had been illegally dismissed and t hat the
utterance of "pahulay lang una" meant actual dismissal. 32 He also alleged that the pecuniary awards of separation pay, backwages,
proportionate 13th month pay and differential were erroneous. He argued that pahulay lang una was not an act of dismissal; rather, he
merely wanted to give respondent a break, since the company’s clients had lost confidence in respondent. Thus, the latter allegedly had
to wait for clients other than Busco Sugar Mill and Coca-Cola, which had banned respondent from entering their premises.

Ruling of the NLRC

In a Resolution dated 30 November 2006,33 the NLRC reversed the labor arbiter's ruling, holding as follows:

While the general rule in dismissal cases is that the employer has the burden to prove that the dismissal was for just or aut horized causes
and after due process, said burden is necessarily shifted to the employee if the alleged dismissal is denied by the employer, as in this
case, because a dismissal is supposedly a positive and unequivocal act by the employer. Accordingly, it is the employee that bears the
burden of proving that in fact he was dismissed. It was then incumbent upon complain ant to prove that he was in fact dismissed fro m
his job by individual respondent Alex V. Ang Gaeid effective December 6, 2004 when the latter told him: Pahuway naka!" (You t ake a
rest). Sadly, he failed to discharge that burden. Even assuming that Mr. Gaeid had the intention at that time of dismissing complainant
from his job when he uttered the said words to him, there is no proof showing of any overt act subsequently done by Mr. Gaeid that
would suggest he carried out such intention. There is no notice of termination served to complainant. Literally construing the remarks
of Mr. Gaeid as having been dismissed from his job, complainant immediately filed the instant complaint for illegal dismissal on the
same day without first ascertaining the veracity of the same. The how, why and the wherefore of his alleged dismissal should be clearly
demonstrated by substantial evidence. Complainant failed to do so; hence, he cannot claim that he was illegally dismissed fro m
employment." 34

The NLRC further held thus:

At best, complainant should be considered on leave of absence without pay pending his new assignment. Not having been dismiss ed
much less illegally, complainant is not entitled to the awarded benefits of backwages and separation pay for lack of legal and factual
basis." 35

The NLRC likewise held that the complainant was not entitled to 13th month pay, since he was paid on purely commission basis, an
exception under Presidential Decree No. 851 – the law requiring employers to pay 13th month pay to their employees. 36

Respondent moved for reconsideration,37 in effect arguing that petitioner should not be allowed to change the latter’s t heory. Supposedly,
the argument in the position paper of petitioner was that there was no employer-employee relationship between them, and that he was
compelled to dismiss respondent because of the heavy losses the latter was bringing to petitioner. In this Motion for Reconsideration,
respondent admitted that his wife had received the Resolution on 12 January 2007, but that he learned of it much later, on 7 February
2007, justifying the untimely filing of the motion. 38

The NLRC denied the Motion for Reconsideration for being filed out of time. 39 He and his counsel each received notice of the NLRC's
Resolution dated 30 November 2006, reversing the labor arbiter’s Decision on 11 January 2007, 40 but they only filed the motion 25 days
after the period to file had already lapsed.41 Respondent, thus, sought recourse from the CA through a Petition for a Writ of Certiorari
under Rule 65.

The CA Ruling

On 23 June 2010, brushing aside the "technicality" issue, the CA proceeded to resolve the substantive issues which it deemed important,
such as whether there was an employer-employee relationship between petitioner and respondent, and whethe r it was correct for the
NLRC to declare that respondent was not illegally dismissed. 42 It completely reversed the NLRC and came up with the dispositive
portion mentioned at the outset.

The Issues

Petitioner is now before us citing factual errors that the CA allegedly committed, such as not appreciating petitioner's lack of intention
to dismiss respondent. These factual errors, however, are beyond this Court to determine, especially because the records of the
proceedings at the level of the labor arbiter were not attached to the Petition. The Court is more interested in the legal is sues raised by
petitioner and rephrased by the Court as follows:

THE COURT OF APPEALS ERRED IN REVERSING THE NLRC WITHOUT ANY FINDING OF GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION;

II

THE COURT OF APPEALS ERRED IN ENTERTAINING RESPONDENT'S PETITION NOTWITHSTANDING THE

FACT THAT HIS MOTION FOR RECONSIDERATION OF THE NLRC'S DECISION WAS FILED OUT OF TIME;

III

THE COURT OF APPEALS ERRED IN GRANTING AWARDS BEYOND WHAT WAS PRAYED FOR IN THE
COMPLAINT SUCH AS THE AWARD OF TEMPERATE AND EXEMPLARY DAMAGES

The Court's Ruling

We find the Petition impressed with merit.

A writ of certiorari is a remedy to correct errors of jurisdiction, for which reason it must clearly show that the public res pondent has no
jurisdiction to issue an order or to render a decision. Rule 65 of the Rules of Court has instituted the petition fo r certiorari to correct acts
of any tribunal, board or officer exercising judicial or quasi-judicial functions with grave abuse of discretion amounting to lack or excess
of jurisdiction. This remedy serves as a check on acts, either of excess or passivity, that constitute grave abuse of discretion of a judicial
or quasi-judicial function. This Court, in San Fernando Rural Bank, Inc. v. Pampanga Omnibus Development Corporation and Dominic
G. Aquino,43 explained thus:

Certiorari is a remedy narrow in its scope and inflexible in character. It is not a general utility tool in the legal workshop. Certiorari will
issue only to correct errors of jurisdiction and not to correct errors of judgment. An error of judgment is one which the court may commit
in the exercise of its jurisdiction, and which error is reviewable only by an appeal. Error of jurisdiction is one where the act complained
of was issued by the court without or in excess of jurisdiction and which error is correctible only by the extraordinary writ of certiorari.
As long as the court acts within its jurisdiction, any alleged errors committed in the exercise of its discretion will amount to nothing
more than mere errors of judgment, correctible by an appeal if the aggrieved party raised factual and legal issues; or a petition for re view
under Rule 45 of the Rules of Court if only questions of law are involved.

A cert[iorari] writ may be issued if the court or quasi-judicial body issues an order with grave abuse of discretion amounting to excess
or lack of jurisdiction. Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalen t to lack of
jurisdiction or, in other words, where the power is exercised in an arbitrary manner by reason of passion, prejudice, or personal hostility,
and it must be so patent or gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty e njoined or to
act at all in contemplation of law. Mere abuse of discretion is not enough. Moreover, a party is entitled to a writ of certiorari only if
there is no appeal nor any plain, speedy or adequate relief in the ordinary course of law.

The raison d’etre for the rule is that when a court exercises its jurisdiction, an error committed while so engaged does not deprive it of
the jurisdiction being exercised when the error was committed. If it did, every error committed by a court would deprive it o f its
jurisdiction and every erroneous judgment would be a void judgment. In such a situation, the administration of justice would not survive.
Hence, where the issue or question involved affects the wisdom or legal soundness of the decision – not the jurisdiction of the court to
render said decision – the same is beyond the province of a special civil action for certiorari. 44 (citations omitted)

Petitioner is correct in its argument that there must first be a finding on whether the NLRC committed grave abuse of discretion and on
what these acts were. In this case, the CA seemed to have forgotten that its function in resolving a petition for certiorari was to determine
whether there was grave abuse of discretion amounting to lack or excess of jurisdiction on the part of public respondent NLRC. The CA
proceeded to review the records and to rule on issues that were no longer disputed during the appeal to the NLRC, such as the existence
of an employer-employee relationship. The pivotal issue before the NLRC was whether petitioner’s telling respondent to take a rest, or
to have a break, was already a positive act of dismissing him. This issue was not discussed by the CA.

A reading of the assailed Decision will readily reveal the patent errors of the CA. On page 11 of its Decision, it held as follows: " The
NLRC likewise concluded that petitioner was not entitled to separation pay because he was not a regular employee of private r espondent,
he (the petitioner) being paid on purely ‘commission’ or ‘pakyaw’ basis." The CA took off from that point to give a discussion on
regular employment and further held:

To Us, private respondent's "advice to take a rest" theory is nothing but a mere ploy to reinforce his hypothesis that the petitioner is not
a regular employee. What makes this worse is that the NLRC bought private respondent's aforesaid theory hook, line and sinker and
ruled that the petitioner was neither dismissed from work, he (the petitioner) being considered merely on "leave of absence without pay",
nor is he (the petitioner) entitled to separation pay on the ground that he was paid on purely "commission" or "pakyaw" basis which is
in legal parlance, in effect, implies that the petitioner is not a regular employee of the private respondent, but a mere seasonal worker or
independent contractor.

It is most disturbing to see how the CA regarded labor terms "paid on commission," " pakyaw" and "seasonal worker" as one and the
same. In labor law, they are different and have distinct meanings, which we do not need to elaborate on in this Petition as they are not
the issue here. It should also be remembered that a regular status of employment is not based on how the salary is paid to an employee.
An employee may be paid purely on commission and still be considered a regular employee. 45 Moreover, a seasonal employee may also
be considered a regular employee.46

Further, the appreciation by the CA of the NLRC Resolution was erroneous. The fact is that the refusal by the NLRC to grant s eparation
pay was merely consistent with its ruling that there was no dismissal. Since respondent was not dismissed, much less illegally dismissed,
separation pay was unnecessary. The CA looked at the issue differently and erroneously, as it held that the NLRC refused to g rant the
award of separation pay because respondent had not been found to be a regular employee. The NLRC had in fact made no such ruling.
These are flagrant errors that are reversible by this
Court. They should be corrected for the sake not only of the litigants, but also o f the CA, so that it would become more circumspect in
its appreciation of the records before it.

We reviewed the NLRC Resolution that reversed the LA Decision and found nothing in it that was whimsical, unreasonable or pat ently
violative of the law. It was the CA which erred in finding faults that were inexistent in the NLRC Resolution.

On the issue of the propriety of entertaining the Petition for Certiorari despite the prescribed Motion for Reconsideration with the NLRC,
we find another error committed by the CA. The pertinent provisions of the 2005 Rules of Procedure of the NLRC are as follows:

Rule VII, Section 14. Motions for Reconsideration. — Motions for reconsideration of any order, resolution or decision of the
Commission shall not be entertained except when based on palpable or patent errors, provided that the motion is under oath and filed
within ten (10) calendar days from receipt of the order, resolution or decision, with proof of service that a copy of the same has been
furnished, within the reglementary period, the adverse party and provided further, that only one such motion from the same party shall
be entertained.

Rule VIII, Section 2. Finality of decisions of the Commission. — (a) Finality of the decisions, resolutions or orders of the Commission .
Except as provided in Rule XI, Section 10, the decisions, resolutions orders of the Commission/Division shall become executor y after
(10) calendar days from receipt of the same.

When respondent failed to file a Motion for Reconsideration of the NLRC’s 30 November 2006 Resolution within the reglementary
period, the Resolution attained finality and could no longer be modified by the Court of Appeals. The Court has ruled as follows:

[I]t is a fundamental rule that when a final judgment becomes executory , it thereby becomes immutable and unalterable. The judgment
may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous c onclusion
of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest Court of
the land. The only recognized exceptions are the correction of clerical errors or the making of so -called nunc pro tunc entries which
cause no prejudice to any party, and, of cours e, where the judgment is void. Any amendment or alteration which substantially affects a
final and executory judgment is null and void for lack of jurisdiction, including the entire proceedings held for that purpos e.47

It cannot be argued that prescriptive periods are mere procedural rules and technicalities, which may be brushed aside at eve ry cry of
injustice, and may be bent and broken by every appeal to pity . The Court’s ruling in Videogram Regulatory Board v. Court of
Appeals finds application to the present case:

There are certain procedural rules that must remain inviolable, like those setting the periods for perfecting an appeal or filing a petition
for review, for it is doctrinally entrenched that the right to appeal is a statutory right and one who seeks to avail of that righ t must comply
with the statute or rules. The rules, particularly the requirements for perfecting an appeal within the reglementary period specified in the
law, must be strictly followed as they are considered indispensable interdictions against needless delays and for orderly dis charge of
judicial business. Furthermore, the perfection of an appeal in the manner and within the period p ermitted by law is not only mandatory
but also jurisdictional and the failure to perfect the appeal renders the judgment of the court final and executory. Just as a losing party
has the right to file an appeal within the prescribed period, the winning part y also has the correlative right to enjoy the finality of the
resolution of his/her case.1avvphi1

These periods are carefully guarded and lawyers are well-advised to keep track of their applications. After all, a denial of a petition for
being time-barred is a decision on the merits.

Similarly, a motion for reconsideration filed out of time cannot reopen a final and executory judgment of the NLRC. Untimelin ess in
filing motions or petitions is not a mere technical or procedural defect, as leniency regarding this requirement will impinge on the right
of the winning litigant to peace of mind resulting from the laying to rest of the controversy.

As to the third issue, since the CA could no longer modify the NLRC Resolution, it logically follows that the modific ation of the award
cannot be done either. Had the Resolution not yet attained finality, the CA could have granted some other relief, even if not specifically
sought by petitioner, if such ruling is proper under the circumstances. Rule 65 of the Rules of Co urt provides:

Section. 8. Proceedings after comment is filed. After the comment or other pleadings required by the court are filed, or the time for the
filing thereof has expired, the court may hear the case or require the parties to submit memoranda. If a fter such hearing or filing of
memoranda or upon the expiration of the period for filing, the court finds that the allegations of the petition are true, it shall render
judgment for such relief to which the petitioner is entitled.
However, the NLRC Resolution sought to be set aside had become final and executory 25 days before respondent filed his Motion for
Reconsideration. Thus, subsequent proceedings and modifications are not allowed and are deemed null and void.

IN VIEW OF THE FOREGOING, the Petition is GRANTED. The assailed 23 June 2010 Decision of the Court of Appeals and its
20 December 2010 Resolution are hereby SET ASIDE. The 30 November 2006 and 30 March 2010 Resolutions of the NLRC
are AFFIRMED and sustained.

SO ORDERED.
G.R. No. 237428

REPUBLIC of the PHILIPPINES, represented by SOLICITOR GENERAL JOSE C. CALIDA, Petitioner

vs.
MARIA LOURDES P.A. SERENO, Respondent

RES O LUTI ON

TIJAM, J.:

This resolution treats of the following motions:

1. Maria Lourdes P. A. Sereno’s (respondent) Ad Cautelam Motion for Reconsideration of this Court's Decision 1 dated May 11, 2018,
the dispositive portion of which states:

WHEREFORE, the Petition for Quo Warranto is GRANTED. Respondent Maria Lourdes P. A. Sereno is
found DISQUALIFIED from and is here y adjudged GUILTY of UNLAWFULLY HOLDING and EXERCISING the OFFICE OF
THE CHIEF JUSTICE. Accordingly, Respondent Maria Lourdes P.A. Sereno is OUSTED and EXCLUDED therefrom.

The position of the Chief Justice of the Supreme Court is declared vacant and the Judicial and Bar Council is directed to commence the
application and nomination process.

This Decision is immediately executory without need of further action from the Court.

Respondent Maria Lourdes P.A. Sereno is ordered to SHOW CAUSE within ten (10) days from receipt hereof why she should not be
sanctioned for violating the Code of Professional Responsibility and the Code of Judicial Conduct for tran sgressing the subjudice rule
and for casting aspersions and ill motives to the Members of the Supreme Court.

SO ORDERED.2

2. Respondent’s Ad Cautelam Motion for Extension of Time to File Reply (to the Show Cause Order dated 11 May 2018).

We first dispose of respondent's Motion for Reconsideration.

Respondent claims denial of due process because her case was allegedly not heard by an impartial tribunal. She reiter ates that the six
(6) Justices ought to have inhibited themselves on the grounds of actual bias, of having personal knowledge of disputed evide ntiary
facts, and of having acted as a material witness in the matter in controversy. Respondent also argues denial of due process when the
Court supposedly took notice of extraneous matters as corroborative evidence and when the Court based its main Decision on fa cts
without observing the mandatory procedure for reception of evidence.

She reiterates her arguments that the Court is without jurisdiction to oust an impeachable officer through quo warranto; that the official
acts of the Judicial and Bar Council (JBC) and the President involves political questions that cannot be annulled absent any allegation
of grave abuse of discretion; that the petition for quo warranto is time-barred; and that respondent was and is a person of proven integrity.

By way of Comment, the Republic of the Philippines (Republic), through the Office of the Solicitor General (OSG), seeks a den ial of
respondent's motion for reconsideration for being proforma. In any case, the OSG argues that respondent's motion lacks merit as there
was no denial of due process and that quo warranto is the appropriate remedy to oust an ineligible impeachable officer. The OSG adds
that the issue of whether respondent is a person of proven integrity is justiciable considering that the decision -making powers of the
JBC are limited by judicially discoverable standards. Undeviating from its position, the OSG maintains t hat the petition is not time -
barred as Section 11, Rule 66 of the Rules of Court does not apply to the State and that the peculiar circumstances of the in stant case
preclude the strict application of the prescriptive period.

Disputing respondent's claims, the OSG reiterates that respondent's repeated failure to file her Statement of Assets, Liabilities and Net
Worth (SALN) and her non-submission thereof to the JBC which the latter required to prove the integrity of an applicant affect
respondent's integrity. The OSG concludes that respondent, not having possessed of proven integrity, failed to meet the constitutional
requirement for appointment to the Judiciary.

Carefully weighing the arguments advanced by both parties, this Court finds no reason to reverse its earlier Decision.
I

Respondent is seriously in error for claiming denial of due process. Respondent refuses to recognize the Court's jurisdiction over the
subject matter and over her person on the ground that respondent, as a purported impeachable official, can only be removed exclusively
by impeachment. Reiterating this argument, respondent filed her Comment to the Petition, moved that her case be heard on Oral
Argument, filed her Memorandum, filed her Reply/Supplement to the OSG's Memorandum and now, presently moves for
reconsideration. All these representations were made ad cautelam which, stripped of its legal parlance, simply means that she asks to be
heard by the Court which jurisdiction she does not acknowledge. She asked relief from the Court and was in fact heard by the Court,
and yet she claims to have been denied of due process. She repeatedly discussed the supposed merits of her opposition to the present quo
warranto petition in various social and traditional media, and yet she claims denial o f due process. The preposterousness of her claim
deserves scant consideration.

Respondent also harps on the alleged bias on the part of the six (6) Justices and that supposedly, their failure to inhibit t hemselves from
deciding the instant petition amounts to a denial of due process.

Respondent's contentions were merely a rehash of the issues already taken into consideration and properly resolved by the Cou rt. To
reiterate, mere imputation of bias or partiality is not enough ground for inhibition, especially when the charge is without basis. Acts or
conduct clearly indicative of arbitrariness or prejudice has to be shown. 3 Verily, for bias and prejudice to be cons idered sufficient
justification for the inhibition of a Member of this Court, mere suspicion is not enough.

Moreover, as discussed in the main Decision, respondent's allegations on the grounds for inhibition were merely based on spec ulations,
or on distortions of the language, context and meaning of the answers given by the concerned Justices as resource persons in the
proceedings of the Committee on Justice of the House of Representatives. These matters were squarely resolved by the Court in its main
Decision, as well as in the respective separate opinions of the Justices involved.

Indeed, the Members of the Court's right to inhibit are weighed against their duty to adjudicate the case without fear of rep ression.
Respondent's motion to require the inhibition of Justices Teresita J. Leonardo-De Castro, Lucas P. Bersamin, Diosdado M. Peralta,
Francis H. Jardeleza, Samuel R. Martires, and Noel Gimenez Tijam, who all concurred to the main Decision, would open the floo dgates
to the worst kind of forum shopping, and on its face, would allow respondent to shop for a Member of the Court who she perceives to
be more compassionate and friendly to her cause, and is clearly antithetical to the fair administration of justice.

Bordering on the absurd, respondent alleges prejudice based on the footnotes of the main Decision which show that the draft thereof
was being prepared as early as March 15, 2018 when respondent has yet to file her Comment. Respondent forgets to mention that the
Petition itself was filed on March 5, 2018 where the propriety of the remedy of quo warranto was specifically raised. Certainly, there is
nothing irregular nor suspicious for the Member-in-Charge, nor for any of the Justices for that matter, to have made a requisite initial
determination on the matter of jurisdiction. In professing such argument, respondent imputes fault on the part of the Justices for having
been diligent in the performance of their work.

Respondent also considers as irregular the query made by the Member-in-Charge with the JBC Office of the Executive Officer (OEO)
headed by Atty. Annaliza S. Ty-Capacite (Atty. Capacite ). Respondent points out that the same is not allowed and shows prejudice on
the part of the Court.

For respondent's information, the data were gathered pursuant to the Court En Bane’s Resolution dated March 20, 2018 wherein the
Clerk of Court En Banc and the JBC, as custodian and repositories of the documents submitted by respondent, were directed to provide
the Court with documents pertinent to respondent's application and appointment as an Associate Justice in 2010 and as Chief Justice of
the Court in 2012 for the purpose of arriving at a judicious, complete, and efficient resolution of the instant case. In the same manner,
the "corroborative evidence" referred to by respondent simply refers to respondent's acts and representations ascertainable through an
examination of the documentary evidence appended by both parties to their respective pleadings as well as their representatio ns during
the Oral Argument. Reference to respondent's subsequent acts committed during her incumbency as Chief Justice, on the other hand,
are plainly matters of public record and already determined by the House of Representatives as constituting probable cause fo r
impeachment.

II

The Court reaffirms its authority to decide the instant quo warranto action. This authority is expressly conferred on the Supreme Court
by the Constitution under Section 5, Article VIII which states that:

Sec. 5. The Supreme Court shall have the following powers:

1. Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and over petitions
for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.

x x x x (Emphasis ours)

Section 5 of Article VIII does not limit the Court's quo warranto jurisdiction only to certain public officials or that excludes impeachable
officials therefrom. In Sarmiento v. Mison, 4 the Court ruled:

The task of the Court is rendered lighter by the existence of relatively clear provisions in the Constitution. In cases like this, we follo w
what the Court, speaking through Mr. Justice (later, Chief Justice) Jose Abad Santos stated in Gold Creek Mining
Corp. v. Rodriguez, that:

The fundamental principle of constitutional construction is to give effect to the intent of the framers of the organic law an d of the people
adopting it. The intention to which force is to be given is that which is embodied and expressed in the constitutional provisions
themselves.5 (Emphasis ours)

The Constitution defines judicial power as a "duty" to be performed by the courts of justice.6 Thus, for the Court to repudiate its own
jurisdiction over this case would be to abdicate a constitutionally imposed responsibility.

As the Court pointed out in its Decision, this is not the first time the Court took cognizance of a quo warranto petition against an
impeachable officer. In the consolidated cases of Estrada v. Macapagal-Arroyo 7 and Estrada v. Desierto,8 the Court assumed
jurisdiction over a quo warranto petition that challenged Gloria Macapagal-Arroyo's title to the presidency.

Arguing that the aforesaid cases cannot serve as precedent for the Court to take cognizance of this case, respondent makes it appear that
they involved a totally different issue, one that concerned Joseph E. Estrada's immunity from suit, specifically: "Whether conviction in
the impeachment proceedings is a condition precedent for the criminal prosecution of petitioner Estrada. In the negative and on the
assumption that petitioner is still President, whether he is immune from criminal prosecution." 9

Respondent's allegation is utterly false and misleading. A cursory reading of the cases will reveal that Estrada's immunity f rom suit was
just one of the issues raised therein. Estrada in fact sought a quo warranto inquiry into Macapagal-Arroyo's right to assume the
presidency, claiming he was simply a President on leave.

Respondent also asserts that Estrada cannot serve as precedent for the Court to decide this case because it was dismissed, and unlike
the instant petition, it was filed within the prescribed one (1)-year period under Section 11, Rule 66 of the Rules of Court. 10

The argument fails to persuade. Estrada was dismissed not because the Court had no jurisdiction over the quo warranto petition but
because Estrada's challenge to Macapagal-Arroyo's presidency had no merit. In ruling upon the merits of Estrada's quo
warranto petition, the Court has undeniably exercised its jurisdiction under Section 5(1) of Article VIII. Thus, Estrada clearly
demonstrates that the Court's quo warranto jurisdiction extends to impeachable officers.

Furthermore, as will be discussed elsewhere in this Resolution, the filing of the instant petition was not time -barred. The issue of
prescription must be addressed in light of the public interest that quo warranto is meant to protect.

Accordingly, the Court could, as it did in Estrada, assume jurisdiction over the instant quo warranto petition against an impeachable
officer.

Quo warranto and impeachment are two distinct proceedings, although both may result in the ouster of a public officer. Strictly
speaking, quo warranto grants the relief of "ouster", while impeachment affords "removal."

A quo warranto proceeding is the proper legal remedy to determine a person's right or title to a public office and to oust the holder from
its enjoyment. 11 It is the proper action to inquire into a public officer's eligibility 12 or the validity of his appointment. 13 Under Rule 66
of the Rules of Court, a quo warranto proceeding involves a judicial determination of the right to the use or exercise of the office.

Impeachment, on the other hand, is a political process undertaken by the legislature to determine whether the public officer committed
any of the impeachable offenses, namely, culpable violation of the Constitution, treason, bribery, graft and corruption, other high crimes ,
or betrayal of public trust. 14 It does not ascertain the officer's eligibility for appointment or election, or challenge the le gality of his
assumption of office. Conviction for any of the impeachable offenses shall result in the removal of the impeachable official fro m
office. 15
The OSG 's quo warranto petition challenged respondent's right and title to the position of Chief Justice. He averred that in failing to
regularly disclose her assets, liabilities and net worth as a member of the career service prior to her appointment as an A ssociate Justice
of the Court, respondent could not be said to possess the requirement of proven integrity demanded of every aspiring member o f the
Judiciary. The OSG thus prayed that respondent's appointment as Chief Justice be declared void.

Clearly, the OSG questioned the respondent's eligibility for appointment as Chief Justice and sought to invalidate such appointment.
The OSG's petition, therefore, is one for quo warranto over which the Court exercises original jurisdiction.

As the Court previously held, "where the dispute is on the eligibility to perform the duties by the person sought to be ousted or
disqualified a quo warranto is the proper action." 16

Respondent harps on the supposed intent of the framers of the Constitution for impeachable officers to be removed only through
impeachment. 17 However, a circumspect examination of the deliberations of the 1986 Constitutional Commission will reveal that the
framers presumed that the impeachable officers had duly qualified for the position. Indeed, the deliberations which responden t herself
cited 18 showed that the framers did not contemplate a situation where the impeachable officer was unqualified for appointment or
election.

Accordingly, respondent's continued reliance on the Court's pronouncement in Mayor Lecaroz v. Sandiganbayan, 19 Cuenca v. Hon.
Fernan,20 Jn Re Gonzales,21 Jarque v. Desierto 22 and Marcoleta v. Borra 23 (Lecaroz etc.) is misplaced. Not one of these cases concerned
the validity of an impeachable officer's appointment. To repeat , Lecaroz involved a criminal charge against a mayor before the
Sandiganbayan, while the rest were disbarment cases filed against impeachable officers principally for acts done during their tenure in
public office. The officers' eligibility or the validity of their appointment was not raised before the Court. The principle laid down in
said cases is to the effect that during their incumbency, impeachable officers cannot be criminally prosecuted for an offense that carries
with it the penalty of removal, and if they are required to be members of the Philippine Bar to qualify for their positions, they cannot be
charged with disbarment. The proscription does not extend to actions assailing the public officer's title or right to the off ice he or she
occupies. The ruling therefore cannot serve as authority to hold that a quo warranto action can never be filed against an impeachable
officer.

The Court's quo warranto jurisdiction over impeachable officers also finds basis in paragraph 7, Section 4, Article VII of th e Constitution
which designates it as the sole judge of the qualifications of the President and Vice -President, both of whom are impeachable officers.
With this authority, the remedy of quo warranto was provided in the rules of the Court sitting as the Presidential Electoral Tribunal
(PET).

Respondent, however, argues that quo warranto petitions may be filed against the President and Vice-President under the PET Rules
"only because the Constitution specifically permits" them under Section 4, Article VII. Ac cording to respondent, no counterpart
provision exists in the Constitution giving the same authority to the Court over the Chief Justice, the members of the Consti tutional
Commissions and the Ombudsman. Respondent, thus, asserts that the Constitution made a distinction between elected and appointive
impeachable officials, and limited quo warranto to elected impeachable officials. For these reasons, respondent concludes that by
constitutional design, the Court is denied power to remove any of its members. 24

The Court is not convinced. The argument, to begin with, acknowledges that the Constitution in fact allows quo warranto actions against
impeachable officers, albeit respondent limits them to the President and Vice-President. This admission refutes the very position taken
by respondent that all impeachable officials cannot be sued through quo warranto because they belong to a "privileged class" of officers
who can be removed only through impeachment. 25 To be sure, Lecaroz, etc. did not distinguish between elected and appointed
impeachable officers.

Furthermore, that the Constitution does not show a counterpart provision to paragraph 7 of Section 4, Article VII for members of this
Court or the Constitutional Commissions does not mean that quo warranto cannot extend to non-elected impeachable officers. The
authority to hear quo warranto petitions against appointive impeachable officers emanates from Section 5(1) of Article VIII which
grants quo warranto jurisdiction to this Court without qualification as to the class of public officers over whom the same may be
exercised.

Respondent argues that Section 5(1) of Article VIII is not a blanket authority, otherwise paragraph 7 of Section 4, Article VII would be
"superfluous." Superfluity, however, is not the same as inconsistency. Section 4, Article VII is not repugnant to, and clearly confirms,
the Court's quo warranto jurisdiction under Section 5(1) of Article VIII. Respondent herself has not alleged any irreconcilability in these
provisions.

Indeed, contrary to respondent's claim, Section 4 of Article VII is not meant to limit the Court's quo warrantojurisdiction under Article
VIII of the Constitution. In fact, We held that "[t]he power wielded by PET is "a derivative of the plenary judicial power allocated to
the courts of law, expressly provided in the Constitution." 26 Thus, the authority under Section 4 of Article VII to hear quo
warranto petitions assailing the qualifications of the President and Vice-President is simply a component of the Court's quo
warranto jurisdiction under Article VIII. This finds support in the nature of quo warranto as a remedy to determine a person's right or
title to a public office, 27 which is not confined to claims of ineligibility but extends to other instances or claims of usurpation or unlawful
holding of public office as in the cases of Lota v. CA and Sangalang,28 Moro v. Del Castillo, Jr.,29 Mendoza v. Allas,30 Sen. Defensor
Santiago v. Sen. Guingona, Jr. 31 and Estrada. It will be recalled that in Estrada, the Court took cognizance of, and ruled upon, a quo
warranto challenge to a vice-president's assumption of the presidency; the challenge was based, not on ineligibility, but on therein
petitioner's claim that he had not resigned and was simply a president on leave. To sus tain respondent's argument, therefore, is to unduly
curtail the Court's judicial power and to dilute the efficacy of quo warranto as a remedy against the "unauthorized arbitrary assumption
and exercise of power by one without color of title or who is not entitled by law thereto." 32 It bears to reiterate that:

While an appointment is an essentially discretionary executive power, it is subject to the limitation th at the appointee should possess
none of the disqualifications but all the qualifications required by law. Where the law prescribes certain qualifications for a given
office or position, courts may determine whether the appointee has the requisite qualifications, absent which, his right or title
thereto may be declared void. 33 (Citations omitted and emphasis ours)

This Court has the constitutional mandate to exercise jurisdiction over quo warranto petitions. And as Estrada and the PET Rules show,
impeachable officers are not immune to quo warranto actions. Thus, a refusal by the Court to take cognizance of this case would not
only be a breach of its duty under the Constitution, it would also accord respondent an exemption not given to other impeachable officers.
Such privilege finds no justification either in law, as impeachable officers are treated without distinction under the impeac hmen t
provisions 34 of the Constitution, or in reason, as the qualifications of the Chief Justice are no less important than the President's or t he
Vice-President's.

Respondent's insistence that she could not be removed from office except through impeachment is predicated on Section 2, Article XI
of the Constitution. It reads:

Sec. 2. The President, the Vice-President, the Members of the Supreme Court, the Members of the Constitutional Commissions, and the
Ombudsman may be removed from office on impeachment for, and conviction of, culpable violation of the Constitution, treason,
bribery, graft and corruption, other high crimes, or betrayal of public trust. All other public officers and employees may be
removed from office as provided by law, but not by impeachment. (Emphasis ours)

By its plain language, however, Section 2 of Article XI does not preclude a quo warranto action questioning an impeachable
officer's qualifications to assume office. These qualifications include age, citizenship and professional experience - matters which are
manifestly outside the purview of impeachment under the above-cited provision.

Furthermore, Section 2 of Article XI cannot be read in isolation from Section 5(1) of Article VIII of the Constitution which gives this
Court its quo warranto jurisdiction, or from Section 4, paragraph 7 of Article VII of the Constitution which designates the Court as the
sole judge of the qualifications of the President and Vice-President.

In Civil Liberties Union v. The Executive Secretary, 35 the Court held:

It is a well-established rule in constitutional construction that no one provision of the Constitution is to be separated from all the others,
to be considered alone, but that all the provisions bearing upon a particular subject are to be brought into view and to be s o interpreted
as to effectuate the great purposes of the instrument. Sections bearing on a particular subject should be considered and interpreted
together as to effectuate the whole purpose of the Constitution and one section is not to be allowed to defeat another, if by any reasonable
construction, the two can be made to s tand together.

In other words, the court must harmonize them, if practicable, and must lean in favor of a construction which will render eve ry word
operative, rather than one which may make the words idle and nugatory. 36 (Citations omitted)

Section 2 of Article XI provides that the impeachable officers may be removed from office on impeachment for and conviction o f
culpable violation of the Constitution, treason, bribery, graft and corruption, other high crimes, or betrayal of public trust. Lack of
qualifications for appointment or election is evidently not among the stated grounds for impeachment. It is, however, a groun d for a quo
warranto action over which this Court was given original jurisdiction under Section 5(1) of Article VIII. The grant of jurisdiction was
not confined to unimpeachable officers. In fact, under Section 4, paragraph 7 of Article VII, this Court was expressly authorized to pass
upon the qualifications of the President and Vice-President. Thus, the proscription against the removal of public officers other than by
impeachment does not apply to quo warranto actions assailing the impeachable officer's eligibility for appointment or election.

This construction allows all three provisions to stand together and to give effect to the clear intent of the Constitution to a ddress not only
the impeachable offenses but also the issue of qualifications of public officers, including impeachable officers.
As this Court intoned in its Decision, to take appointments of impeachable officers beyond the reach of judicial review is to cleanse
them of any possible defect pertaining to the constitutionally prescribed qualifications which cannot otherwise be raised i n an
impeachment proceeding.

To illustrate this, the Court cited the requirement that the impeachable officer must be a natural-born citizen of the Philippines. We
explained that if it turns out that the impeachable officer is in fact of foreign nationalit y, respondent's argument will prevent this Court
from inquiring into this important qualification that directly affects the officer's ability to protect the interests of the State. Unless
convicted of an impeachable offense, the officer will continue in office despite being clearly disqualified from holding it. We stressed
that this could not have been the intent of the framers of the Constitution.

Respondent, however, contends that the above-cited defect will actually constitute a ground for impeachment because the appointee's
continued exercise of public functions despite knowledge of his foreign nationality amounts to a culpable violation of the Co nstitution.

The argument is untenable. Citizenship is a qualification issue which this Court has the authorit y to resolve. Thus, in Kilosbayan
Foundation v. Exec. Sec. Ermita,37 where the appointment of Sandiganbayan Justice Gregory S. Ong (Ong) to this Court was soug ht to
be annulled for the latter's supposed failure to comply with the citizenship requirement under the Constitution, We stated th at:

Third, as to the proper forum for litigating the issue of respondent Ong's qualification for membership of this Court. This case is a
matter of primordial importance involving compliance with a Constitutional mandate. As the body tasked with the
determination of the merits of conflicting claims under the Constitution, the Court is the proper forum for resolving the iss ue,
even as the JBC has the initial competence to do so.38 (Citation omitted and emphasis ours)

In the subsequent case of Topacio v. Assoc. Justice Gregory Santos Ong, et al.,39 Ong's citizenship was raised anew, this time to prevent
him from further exercising the office of a Sandiganbayan Associate Justice. The Court held that the challenge was one against Ong's
title to the office which must be raised in a quo warranto proceeding, thus:

While denominated as a petition for certiorari and prohibition, the petition partakes of the nature of a quo warranto proceedi ng
with respect to Ong, for it effectively seeks to declare null and void his appointment as an Associate Justice of the Sandiganbay an
for being unconstitutional. While the petition professes to be one for certiorari and prohibition, petitioner even adverts to a quo
warranto aspect of the petition.

Being a collateral attack on a public officer's title, the present petition for certiorari and prohibition must be dismissed.

The title to a public office may not be contested except directly, by quo warranto proceedings; and it cannot be assailed
collaterally, even through mandamus or a motion to annul or set aside order. In Nacionalista Party v. De Vera, the Court ruled that
prohibition does not lie to inquire into the validity of the appointment of a public officer.

x x x [T]he writ of prohibition, even when directed against persons acting as judges or other judicial officers, cannot be treated as a
substitute for quo warranto or be rightfully called upon to perform any of the functions of the writ. If there is a court, judge or
officer de facto, the title to the office and the right to act cannot be questioned by prohibition. If an intruder takes possession of a judicial
office, the person dispossessed cannot obtain relief through a writ of prohibition commanding the alle ged intruder to cease fro m
performing judicial acts, since in its very nature prohibition is an improper remedy by which to determine the title to an
office.40 (Citations omitted and emphasis ours)

Determining title to the office on the basis of a public officer's qualifications is the function of quo warranto. For this reason,
impeachment cannot be treated as a substitute for quo warranto.

Furthermore, impeachment was designed as a mechanism "to check abuse of power." 41 The grounds for impeachment, including
culpable violation of the Constitution, have been described as referring to "serious crimes or misconduct" 42 of the "vicious and
malevolent" kind.43 Citizenship issues are hardly within the ambit of this constitutional standard.

The Constitution must be construed in light of the object sought to be accomplished and the evils sought to be prevented or
remedied.44 An interpretation that would cause absurdity is not favored. 45

It thus bears to reiterate that even the PET Rules expressly provide for the remedy of election protest. Following respondent's theory
that an impeachable officer can be removed only through impeachment means that a President or Vice -President against whom an
election protest has been filed can demand for the dismissal of the protest on the ground that it can potentially cause his/her remo val
from office through a mode other than by impeachment. To sustain respondent's position is to render election protests under t he PET
Rules nugatory. The Constitution could not have intended such absurdity since fraud and irregularities in elections cannot be
countenanced, and the will of the people as reflected in their votes must be determined and respected.

The preposterousness of allowing unqualified public officials to continue occupying their positions by making impeachment the sole
mode of removing them was likewise aptly discussed by Our esteemed colleague Justice Estela M. Perlas -Bernabe when she stated that
qualification should precede authority, viz:

Owing to both the "political" and "offense-based" nature of these grounds, I am thus inclined to believe that impeachment is not the sole
mode of "removing" impeachable officials as it be clearly absurd for any of them to remain in office despite their failure to meet the
minimum eligibility requirements, which failure does not constitute a ground for impeachment. Sensibly, there should be a remedy to
oust all our public officials, no matter how high-ranking they are or criticial their functions may be, upon a determination that they have
not actually qualified for election or appointment. While I do recognize the wisdom of insulating impeachable officials from suits that
may impede the performance of vital public functions, ultimately, this concern cannot override the basic qualification requirements of
public office. There is no doubt that qualification should precede authority. Every public office is created and conferred by law.xx
x. 46 (Emphasis in the original)

Underlying all constitutional provisions on government service is the principle that public office is a public trust. 47 The people, therefore,
have the right to have only qualified individuals appointed to public office. To construe Section 2, Article XI of the Constitution as
proscribing a quo warranto petition is to deprive the State of a remedy to correct a public wrong arising from defective or void
appointments. Equity, however, will not suffer a wrong to be without remedy. 48 It stands to reason, therefore, that quo warranto should
be available to question the validity of appointments especially of impeachable officers since they occupy the upper echelons of
government and are capable of wielding vast power and influence on matters of law and policy.

III

Much noise and hysteria have been made that a sitting Chief Justice can only be removed by impeachment and that quo warranto is an
improper remedy not sanctioned by the Constitution. The wind of disinformation was further fanned by respondent who claimed that
her ouster was orchestrated by the President. This campaign of misinformation attempted to conceal and obfuscate the fact tha t the main
issue in the petition which the Court is tasked to resolve is the qualification of responde nt.

In the instant motion, respondent made mention of Senate Resolution No. 738, 49 which urges this Court to review Our May 11, 2018
Decision as it sets a "dangerous precedent that transgresses the exclusive powers of the legislative branch to initiate, try and decide all
cases of impeachment." This Resolution was supposedly aimed to express "the sense of the Senate to uphold the Constitution on the
matter of removing a Chief Justice from office." We have to remind the respondent, however, that while a majority of the Senators - 14
out of the 23 members - signed the said Resolution, the same has not yet been adopted by the Senate to date. In fact, the Court takes
judicial notice that on May 31, 2018, the Senate adjourned its interpellation without any conclusion as to whether the Resolu tion is
adopted. 50 Without such approval, the Senate Resolution amounts to nothing but a mere scrap of paper at present.

The Senate Resolution also appears to have been drafted, signed by some Senators, and interpellated on while respondent's mot ion for
reconsideration is still pending consideration by the Court. While the concerned Members of the Senate insist on non -encroachment of
powers, the Senate Resolution itself tends to influence, if not exert undue pressure on, the Court on how it should resolve t he pending
motion for reconsideration. The importance and high regard for the institution that is the Senate is undisputed. But the Court, in the
discharge of its Constitutional duty, is also entitled to the same degree of respect and deference.

At any rate, and with due regard to the Members of the Senate, We emphasize that the judicial determination of actual controversies
presented before the courts is within the exclusive domain of the Judiciary. "The separation of powers doctrine is the backbo ne of our
tripartite system of government. It is implicit in the manner that our Constitution lays out in separate and distinct Articles the powers
and prerogatives of each co-equal branch of government." 51 Thus, the act of some of the Senators questioning the Court's judicial action
is clearly an unwarranted intrusion to the Court's powers and mandate.

To disabuse wandering minds, there is nothing violative or intrusive of the Senate's power to remove impeachable officials in the main
Decision. In fact, in the said assailed Decision, We recognized that the Senate has the sole power to try and decide all case s of
impeachment. We have extensively discussed therein that the Court merely exercised its Cons titutional duty to resolve a legal question
referring to respondent's qualification as a Chief Justice of the Supreme Court. We also emphasized that this Court's action never intends
to deprive the Congress of its mandate to make a determination on impeach able officials' culpability for acts committed while in office.
We even explained that impeachment and quo warranto may proceed independently and simultaneously, albeit a ruling of removal or
ouster of the respondent in one case will preclude the same ruling in the other due to legal impossibility and mootness.

Quo warranto is not a figment of imagination or invention of this Court. It is a mandate boldly enshrined in the Constitution 52 where
the judiciary is conferred original jurisdiction to the exclusion of the other branches of the government. Quo warranto, not impeachment ,
is the constitutional remedy prescribed to adjudicate and resolve questions relating t o qualifications, eligibility and entitlement to public
office. Those who chose to ignore this fact are Constitutionally blind. US Supreme Court Justice Scalia once said: "If it is in the
Constitution, it is there. If it is not in the Constitution, it is n ot there." 53 There is nothing in Our Constitution that says that impeachable
officers are immuned, exempted, or excluded from quo warranto proceedings when the very issue to be determined therein is the status
of an officer as such. No amount of public indignation can rewrite or deface the Constitution.

IV

The plain issue in the instant case is whether respondent is eligible to occupy the position of Chief Just ice. To determine whether or not
respondent is eligible, the primordial consideration is whether respondent met the requisite Constitutional requirements for the position.
Questions on eligibility therefore present a justiciable issue, which can be resolve d by juxtaposing the facts with the Constitution, as
well as pertinent laws and jurisprudence. In Kilosbayan Foundation,54 the Court affirmed its jurisdiction to resolve the issue on the
qualification for membership of this Court as the body tasked with the determination of the merits of conflicting claims unde r the
Constitution, even when the JBC has the initial competence to do so. 55

True enough, constitutionally committed to the JBC is the principal function of recommending appointees to the Judiciary. The function
to recommend appointees carries with it the concomitant duty to screen applicants therefor. The JBC's exercise of its recommendatory
function must nevertheless conform with the basic premise that the appointee possesses the non -negotiable qualifications prescribed by
the Constitution. While the JBC enjoys a certain leeway in screening aspiring magistrates, such remains to be tightly circumscribed by
the Constitutional qualifications for aspiring members of the Judiciary. 56 These Constitutional prerequisites are therefore deemed
written into the rules and standards which the JBC may prescribe in the discharge of its primary function. The JBC cannot go beyond
or less than what the Constitution prescribes.

The surrender to the JBC of the details as to how these qualifications are to be determined is rendered necessary and in keeping with its
recommendatory function which is nevertheless made expressly subject to the Court's exercise of supervision.

As an incident of its power of supervision over the JBC, the Court has the authority to insure that the JBC performs its duties under the
Constitution and complies with its own rules and standards. Indeed, supervision is an active power and implies the authority to inquire
into facts and conditions that renders the power of supervision real and effective. 57 Under its power of supervision, the Court has ample
authority to look into the processes leading to respondent's nomination for the position of Chief Justice on the face of the Republic's
contention that respondent was ineligible to be a candidate to the position to begin with.

Arguments were raised against the Court's assumption over the quo warranto petition on the premise that the determination of the
integrity requirement lies solely on the JBC's discretion and thus, a prior nullification of the JBC's act on the ground of g rave abuse of
discretion through a certiorari petition is the proper legal route.

The question of whether or not a nominee possesses the reqms1te qualifications is determined based on facts and as such, gene rates no
exercise of discretion on the part of the nominating body. Thus, whether a nominee is of the requisite age, is a natural-born citizen, has
met the years of law practice, and is of proven competence, integrity, probity, and independence are to be determined based o n facts and
cannot be made dependent on inference or discretion, much less concessions, which the recommending authority may make or extend.
To say that the determination of whether a nominee is of "proven integrity" is a task absolutely contingent upon the discretion of the
JBC is to place the integrity requirement on a plateau different from the rest of the Constitutional requirements, when no such distinction
is assigned by the Constitution. As well, to treat as discretionary on the part of the JBC the question of whether a nominee is of "proven
integrity" is to render the Court impotent to nullify an otherwise unconstitutional nomination unless the Court's jurisdiction is invoked
on the ground of grave abuse of discretion. Such severely limiting course of action would effectively diminish the Court's co llegial
power of supervision over the JBC.

To re-align the issue in this petition, the Republic charges respondent of unlawfully holding or exercising the position of Chief J ustice
of the Supreme Court. The contents of the petition pose an attack to respondent's authority to hold or exercise the position. Unmoving
is the rule that title to a public office may not be contested except directly, by quo warranto proceedings. 58 As it cannot be assailed
collaterally, certiorari is an infirm remedy for this purpose. It is for this reason that the Court previously denied a certiorari and
prohibition petition which sought to annul appointment to the Judiciary of an alleged naturalized citizen. 59

Aguinaldo, et al. v. Aquino, et al., 60 settles that when it is the qualification for the position that is in issue, the proper remedy is quo
warranto pursuant to Topacio. 61 But when it is the act of the appointing power that is placed under scrutiny and not any disqualification
on the part of the appointee, a petition for certiorari challenging the appointment for being unconstitutional or for having been done in
grave abuse of discretion is the apt legal course. In Aguinaldo,the Court elucidated:
The Court recognized in Jardeleza v. Sereno that a petition for certiorari is a proper remedy to question the act of any branch or
instrumentality of the government on the ground of grave abuse of discretion amounting to lack or excess of jurisdiction by any branch
or instrumentality of the government, even if the latter does not exercise judicial, quasi-judicial or ministerial functions.

In opposing the instant Petition for Certiorari and Prohibition, the OSG cites Topacio in which the Court declares that title to a public
office may not be contested except directly, by quo warranto proceedings; and it cannot be assailed collaterally, such as
by certiorari and prohibition.

However, Topacio is not on all fours with the instant case. In Topacio, the writs of certiorari and prohibition were sought against
Sandiganbayan Associate Justice Gregory S. Ong on the ground that he lacked the qualification of Filipino citizenship for said position.
In contrast, the present Petition for Certiorari and Prohibition puts under scrutiny, not any disqualification on the part of respondents
Musngi and Econg, but the act of President Aquino in appointing respondents Musngi and Econg as Sandiganbayan Associate Justices
without regard for the clustering of nominees into six separate shortlists by the JBC, which allegedly violated the Constitution and
constituted grave abuse of discretion amounting to lack or excess of jurisdiction. This would not be the first time that the Court, in the
exercise of its expanded power of judicial review, takes cognizance of a petition for certiorari that challenges a presidential appointment
for being unconstitutional or for having been done in grave abuse of discretion.xx x. 62 (Italics and citations omitted.)

A certiorari petition also lacks the safeguards installed in a quo warranto action specifically designed to promote stability in public
office and remove perpetual uncertainty in the title of the person holding the office. For one, a certiorari petition thrives on allegation
and proof of grave abuse of discretion. In a quo warranto action, it is imperative to demonstrate that the respondent have usurped,
intruded into or unlawfully held or exercised a public office, position or franchise.

For another, certiorari may be filed by any person alleging to have been aggrieved by an act done with grave abuse of discretion. In
a quo warranto action, it is the Solicitor General or a public prosecutor, when directed by the President or when upon complaint or when
he has good reason to believe that the grounds for quo warranto can be established by proof, who must commence the action. The only
instance when an individual is allowed to commence such action is when he or she claims to be entitled to a public office or position
usurped or unlawfully held or exercised by another. In such case, it is incumbent upon the private person to present proof of a clear and
indubitable right to the office. If certiorari is accepted as the proper legal vehicle to assail eligibility to public office then any person,
although unable to demonstrate clear and indubitable right to the office, and merely upon claim of grave abuse of discretion, can place
title to public office in uncertainty.

Tellingly also, the rules on quo warranto do not require that the recommending or appointing authority be impleaded as a necessary
party, much less makes the nullification of the act of the recommending authority a condition precedent before the remedy of quo
warranto can be availed of. The JBC itself did not bother to intervene in the instant petition.

Under Section 6, Rule 66 of the Rules of Court, when the action is against a person for usurping a public office, position o r franchise, it
is only required that, if there be a person who claims to be entitled thereto, his or her name should be set forth in the pet ition with an
averment of his or her right to the office, position or franchise and that the respondent is unlawfully in possession thereof. All persons
claiming to be entitled to the public office, position or franchise may be made parties and their respective rights may be de termined in
the same quo warranto action. The appointing authority, or in this case the recommending authority which is the JBC, is therefore not
a necessary party in a quo warranto action.

Peculiar also to the instant petition is the surrounding circumstance that an administrative matter directly pertaining to th e nomination
of respondent is pending before the Court. While the administrative matter aims to determine whether there is culpability or lapses on
the part of the JBC members, the factual narrative offered by the latter are all extant on record which the Court can take ju dicial notice
of. Thus, considerations regarding the lack of due process on the part of the JBC present only a superficial resistance to the Co urt's
assumption of jurisdiction over the instant quo warranto petition.

In any case, the rules on quo warranto vests upon the Court ancillary jurisdiction to render such further judgment as "justice
requires." 63 Indeed, the doctrine of ancillary jurisdiction implies the grant of necessary and usual incidental powers essential to effectuate
its jurisdiction and subject to existing laws and constitutional provisions, every regularly constituted court has power to d o 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. 64 Accordingly, "demands, matters or questions ancillary or inciden tal 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." 65
V

This Court had likewise amply laid down the legal and factual bases for its ruling against the dismissal of the instant petition on the
ground of prescription. Our ruling on this matter is anchored upon the very purpose of such prescriptive period as consistent ly held by
this Court for decades and also upon consideration of the unique underlying circumstances in this case which cannot be ignored.

In addition to the catena of cases cited in the assailed Decision, the Court, in Madrigal v. Prov. Gov. Lecaroz, 66 exhaustively explained

the rationale behind the prescriptive period:

The unbending jurisprudence in this jurisdiction is to the effect that a petition for quo warranto and mandamus affecting titles to public
office must be filed within one (1) year from the date the petitioner is ousted from his position. xx x The reason behind this being was
expounded in the case of Unabia v. City Mayor, etc., x x x where We said:

"x x x[W]e note that in actions of quo warranto involving right to an office, the action must be instituted within the period of one year.
This has been the law in the island since 1901, the period having been originally fixed in Section 216 of the Code of Civil P rocedure
(Act No. 190). We find this provision to be an expression of policy on the part of the State that persons claiming a right to an
office of which they are illegally dispossessed should immediately take steps to recover said office and that if they do not do so
within a period of one year, they shall be considered as having lost their right thereto by abandonment. There are weighty reasons
of public policy and convenience that demand the adoption of a similar period for persons claiming rights to positions in the civil
service. There must be stability in the service so that public business may [not] be unduly retarded; delays in the statement of
the right to positions in the service must be discouraged. The following considerations as to public officers, by Mr. Justice Bengzon,
may well be applicable to employees in the civil service:

'Furthermore, constitutional rights may certainly be waived, and the inaction of the officer for one year could be validly considered
as waiver, i.e., a renunciation which no principle of justice may prevent, he being at liberty to resign his position anytime he pleases.

And there is good justification for the limitation period; it is not proper that the title to public office should be subject ed to continued
uncertain[t]y, and the peoples' interest require that such right should be determined as speedily as practicable.'

"Further, the Government must be immediately informed or advised if any person claims to be entitled to an office or a position
in the civil service as against another actually holding it, so that the Government may not be faced with the predicament of
having to pay the salaries, one, for the person actually holding the office, although illegally, and another, for one not actuall y
rendering service although entitled to do so.xx x." 67 (Citations omitted and emphasis ours)

The long line of cases decided by this Court since the l 900's, which specifically explained the spirit behind the rule pr oviding a
prescriptive period for the filing of an action for quo warranto, reveals that such limitation can be applied only against private individuals
claiming rights to a public office, not against the State.

Indeed, there is no proprietary right over a public office. Hence, a claimed right over a public office may be waived. In fact, even
Constitutionally-protected rights may be waived. Thus, We have consistently held that the inaction of a person claiming right over a
public office to assert the same within the prescriptive period provided by the rules, may be considered a waiver of such right. This is
where the difference between a quo warranto filed by a private individual as opposed to one filed by the State through the Solicito r
General lies. There is no claim of right over a public office where it is the State itself, through the Solicitor General, which files a petition
for quo warranto to question the eligibility of the person holding the public office. As We have emphasized in the assailed Decision,
unlike Constitutionally-protected rights, Constitutionally-required qualifications for a public office can never be waived either
deliberately or by mere passage of time. While a private individual may, in proper instances, be deemed to have waived his or her right
over title to public office and/or to have acquiesced or consented to the loss of such right, no organized society would allo w, much more
a prudent court would consider, the State to have waived by mere lapse of time, its right to uphold and ensure compliance with the
requirements for such office, fixed by no less than the Constitution, the fundamental law upon which the foundations of a Sta te stand,
especially so when the government cannot be faulted for such lapse.

On another point, the one-year prescriptive period was necessary for the government to be immediately informed if any person claims
title to an office so that the government may not be faced with the predicament of having to pay two salaries, one for the pe rson actually
holding it albeit illegally, and another to the person not rendering service although entitled to do so. It would thus be absurd to requ ire
the filing of a petition for quo warranto within the one-year period for such purpose when it is the State itself which files the same not
for the purpose of determining who among two private individuals are entitled to the office. Stated in a different manner, th e purpose of
the instant petition is not to inform the government that it is facing a predicament of having to pay two salaries; rather, the government,
having learned of the predicament that it might be paying an unqualified person, is acting upon it head -on.
Most importantly, urgency to resolve the controversy on the title to a public office to prevent a hiatus or disrup tion in the delivery of
public service is the ultimate consideration in prescribing a limitation on when an action for quo warranto may be instituted. However,
it is this very same concern that precludes the application of the prescriptive period when it is the State which questions the eligibilit y
of the person holding a public office and not merely the personal interest of a private individual claiming title thereto. Ag ain, as We
have stated in the assailed Decision, when the government is the real party in interest and asserts its rights, there can be no defense on
the ground of laches or limitation, 68 otherwise, it would be injurious to public interest if this Court will not act upon the case presented
before it by the Republic and merely allow the uncertainty and controversy surrounding the Chief Justice position to continue .

Worthy to mention is the fact that this is not the first time that this Court precluded the application of the prescriptive period in filing a
petition for quo warranto. In Cristobal v. Melchor,69 the Court considered certain exceptional circumstances attending the case, which
took it out of the rule on the one-year prescriptive period. Also, in Agcaoiliv. Suguitan, 70 the Court considered, among others, therein
petitioner's good faith and the injustice that he suffered due to his forcible ouster from office in ruling that he is not bo und by the
provision on the prescriptive period in filing his action for quo warranto to assert his right to the public office. When the Court in several
cases exercised liberality in the application of the statute of limitations in favor of private individuals so as not to defe at their personal
interests on a public position, is it not but proper, just, reasonable, and more in accord with the spirit of the rule for this Court to decide
against the application of the prescriptive period considering the public interest involved? Certainly, it is every citizen's interest to have
qualified individuals to hold public office, especially which of the highest position in the Judiciary.

From the foregoing disquisition, it is clear that this Court's ruling on the issue of prescription is not grounded upon provisions of the
Civil Code, specifically Article 1108(4)71 thereof. Instead, the mention thereof was intended merely to convey that if the principle that
"prescription does not lie against the State" can be applied with regard to pro perty disputes, what more if the underlying consideration
is public interest.

To be clear, this Court is not abolishing the limitation set by the rules in instituting a petition for quo warranto. The one-year prescriptive
period under Section 11, Rule 66 of the Rules of Court still stands. However, for reasons explained above and in the main Decision, this
Court made distinctions as to when such prescriptive period applies, to wit: (1) when filed by the State at its own instance, through the
Solicitor General, 72 prescription shall not apply. This, of course, does not equate to a blanket authority given to the Solicitor General to
indiscriminately file baseless quo warranto actions in disregard of the constitutionally-protected rights of individuals; (2) when filed by
the Solicitor General or public prosecutor at the request and upon relation of another person, with leave of court, 73 prescription shall
apply except when established jurisprudential exceptions 74 are present; and (3) when filed by an individual in his or her own
name, 75 prescription shall apply, except when established jurisprudential exceptions are present. In fine, Our pronouncement in the
assailed Decision as to this matter explained that certain circumstances preclude the absolute and strict application of the prescriptive
period provided under the rules in filing a petition for quo warranto.

Thus, this Court finds no reason to reverse its ruling that an action for quo warranto is imprescriptible if brought by the State at its own
instance, as in the instant case.

In any case, and as aptly discussed in the main Decision, the peculiarities of the instant case pre clude strict application of the one-year
prescriptive period against the State. As observed by Justice Perlas -Bernabe in her Separate Opinion, "x x x if there is one thing that is
glaringly apparent from these proceedings, it is actually the lack of respon dent's candor and forthrightness in the submission of her
SALNs." 76 Respondent's actions prevented the State from discovering her disqualification within the p rescriptive period. Most certainly,
thus the instant case is one of those proper cases where the one-year prescriptive period set under Section 11, Rule 66 of the Rules of
Court should not apply.

VI

Respondent reiterates her argument that her case should b e treated similarly as in Concerned Taxpayer v. Doblada Jr. 77

As extensively discussed in the main Decision, respondent, unlike Doblada, did not present contrary proof to rebut the Certifications
from U.P. HRDO that respondent's SALNs for 1986, 1987, 1988, 1992, 1999, 2000, 2001, 2003, 2004, 2005 and 2006 are not in its
possession and from the Ombudsman that based on its records, there is no SALN filed by respo ndent except that for 1998. Being
uncontroverted, these documents suffice to support this Court's conclusion that respondent failed to file her SALNs in accord ance with
law.

In Doblada, the contrary proof was in the form of the letter of the head of the personnel of Branch 155 that the SALN for 2000 exists and
was duly transmitted and received by the Office of the Court Administrator as the repository agency. In respondent's case, other than
her bare allegations attacking the credibility of the aforesaid certifications from U.P. HR.DO and the Ombudsman, no supporting proof
was presented. It bears to note that these certifications from the aforesaid public agencies enjoy a presumption that officia l duty has been
regularly performed. These certifications suffice as proof of respondent's failure to file her SALN until contradicted or overcome by
sufficient evidence. Consequently, absent a countervailing evidence, such disputable presumption becomes conclusive. 78
As what this Court has stated in its May 11, 2018 Decision, while government employees cannot be required to keep their SALNs for
more than 10 years based from the provisions of Section 8, paragraph C(4) of Republic Act No. 6713,79 the same cannot substitute for
respondent's manifest ineligibility at the time of her application. Verily, even her more recent SALNs, such as those in the years of 2002
to 2006, which in the ordinary course of things would have been easier to retrieve, were not presented nor accounted for by r espondent.

Respondent attempts to strike a parallelism with Doblada by claiming that she, too, religiously filed her SALNs. The similarity however,
ends there. Unlike in Doblada, respondent failed to present contrary proof to rebut the evidence of non -filing. If, indeed, she never
missed filing her SALNs and the same were merely lost, or missing in the records of the repository agency, this Court sees nothing that
would prevent respondent from securing a Certification which would provide a valid or legal reason for the copies' non -production.

VII

Respondent insists that the filing of SALNs bears no relation to the Constitutional qualification of integrity.1âwphi1 For her, the measure
of integrity should be as what the JBC sets it to be and that in any case, the SALN laws, being malum prohibitum, do not concern
adherence to moral and ethical principles.

Respondent's argument, however, dangerously disregards that the filing of SALN is not only a requirement under the law, but a positive
duty required from every public officer or employee, first and foremost by the Constitution. 80 The SALN laws were passed in aid of the
enforcement of the Constitutional duty to submit a declaration under oath of one's assets, liabilities, and net worth. This p ositive
Constitutional duty of filing one's SALN is so sensitive and important that it even shares the same category as the Constitutional duty
imposed upon public officers and employees to owe allegiance to the State and the Constitution. 81 As such, offenses against the SALN
laws are not ordinary offenses but violations of a duty which every public officer and employee owes to the State and the Con stitution.
In other words, the violation of SALN laws, by itself, defeats any claim of integrity as it is inherently immoral to violate the will of the
legislature and to violate the Constitution.

Integrity, as what this Court has defined in the assailed Decision, in relation to a judge 's qualifications, should not be viewed separately
from the institution he or she represents. Integrity contemplates both adherence to the highest moral standards and obedience to laws
and legislations. Integrity, at its minimum, entails compliance with th e law.

In sum, respondent has not presented any convincing ground that would merit a modification or reversal of Our May 11, 2018 De cision.
Respondent, at the time of her application, lacked proven integrity on account of her failure to file a substantial number of SALNs and
also, her failure to submit the required SALNs to the JBC during her application for the position. Although deviating from th e majorit y
opinion as to the proper remedy, Justice Antonio T. Carpio shares the same finding:

Since respondent took her oath and assumed her posit10n as Associate Justice of the Supreme Court on 16 August 2010, she was required
to file under oath her SALN within thirty (30) days after assumption of office, or until 15 September 2010, and the statement s must be
reckoned as of her first day of service, pursuant to the relevant provisions on SALN filing.

However, respondent failed to file a SALN containing sworn statements reckoned as of her first day of service within thirty (30)
days after assuming office. While she allegedly submitted an "entry SALN" on 16 September 2010, it was unsubscribed and the
statements of her assets, liabilities and net worth were reckoned as of 31 December 2009, and not as of her first day of serv ice, or as of
16 August 2010. x x x

xxxx

The Constitution, law, and rules clearly require that the sworn entry SALN "must be reckoned as of his/her first day of service" and
must be filed "within thirty (30) days after assumption of office." Evidently, respondent failed to file under oath a SALN reckoned as of
her first day of service, or as of 16 August 2010, within the prescribed period of thirty (30) days after her assumption of o ffice. In other
words, respondent failed to file the required SALN upon her assumption of office, which is a clear violation of Section 17, Article
XI of the Constitution. In light of her previous failure to file her SALNs for several years while she was a UP College of La w Professor,
her failure to file her SALN upon assuming office in 2010 as Associate Justice of this Court constitutes culpable violation of the
Constitution, a violation committed while she was already serving as an impeachable office. 82 (Citation omitted and emphasis ours)

Having settled respondent's ineligibility and ouster from the position, the Court reiterates its directive to the JBC to imme diately
commence the application, nomination and recommendation process for the position of Chief Justice of the S upreme Court.

WHEREFORE, respondent Maria Lourdes P. A. Sereno's Ad Cautelam Motion for Reconsideration is DENIED with FINALITY for
lack of merit. No further pleadings shall be entertained. Let entry of judgment be made immediately.
The Court REITERATES its order to the Judicial and Bar Council to commence the application and nomination process for the position
of the Chief Justice without delay. The ninety-day (90) period 83 for filling the vacancy shall be reckoned from the date of the
promulgation of this Resolution.

SO ORDERED.
G.R. Nos. 197592 & 20262 November 27, 2013

THE PROVINCE OF AKLAN, Petitioner,

vs.
JODY KING CONSTRUCTION AND DEVELOPMENT CORP., Respondent.

D EC IS I O N

VILLARAMA, JR., J.:

These consolidated petitions for review on certiorari seek to reverse and set aside the following: (1) Decision 1 dated October 18, 2010
and Resolution 2 dated July 5, 2011 of the Court of Appeals (CA) in CA -G.R. SP No. 111754; and (2) Decision 3 dated August 31, 2011
and Resolution 4 dated June 27, 2012 in CA-G.R. SP No. 114073.

The Facts

On January 12, 1998, the Province of Aklan (petitioner) and Jody King Construction and Development Corp. (respondent) entered into
a contract for the design and -construction of the Caticlan Jetty Port and Terminal (Phase I) in Malay, Aklan. The total project cost is
₱38,900,000: P 18,700,000 for the design and construction of passenger terminal, and ₱20,200,000 for the design and construct ion of
the jetty port facility.5 In the course of construction, petitioner issued variation/change orders for additional works. The scope of work
under these change orders were agreed upon by petitioner and respondent. 6

On January 5, 2001, petitioner entered into a negotiated contract with respondent for the construction of Passenger Terminal Building
(Phase II) also at Caticlan Jetty Port in Malay, Aklan. The contract price for Phase II is ₱2,475,345.54.7

On October 22, 2001, respondent made a demand for the total amount of ₱22,419,112.96 covering the following items which
petitioner allegedly failed to settle:

1. Unpaid accomplishments on additional works

undertaken - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Php 12,396,143.09

2. Refund of taxes levied despite it not being

covered by original contract- - - - - - - - - - - - - - - - - - - - - - Php 884,098.59

3. Price escalation (Consistent with Section 7.5,

Original Contract- - - - - - - - - - - - - - - - - - - - - - - - - - - - Php 1,291,714.98

4. Additional Labor Cost resulting [from]

numerous change orders issued sporadically - - - - - - - - Php 3,303,486.60

5. Additional Overhead Cost resulting [from]

numerous Orders issued sporadically - - - - - - - - - - - - - Php 1,101,162.60

6. Interest resulting [from] payment delays

consistent with Section 7.3.b of the Original
Contract - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Php 3,442,507.50.8

On July 13, 2006, respondent sued petitioner in the Regional Trial Court (RTC) of Marikina City (Civil Case No. 06-1122-MK) to
collect the aforesaid amounts.9 On August 17, 2006, the trial court issued a writ of preliminary attachment. 10

Petitioner denied any unpaid balance and interest due to respondent. It asserted that the sums being claimed by respondent we re not
indicated in Change Order No. 3 as approved by the Office of Provincial Governor. Also cited was respondent’s June 10, 2003 letter
absolving petitioner from liability for any cost in connection with the Caticlan Passenger Terminal Project. 11

After trial, the trial court rendered its Decision 12 on August 14, 2009, the dispositive portion of which reads:

WHEREFORE, foregoing premises considered, judgment is hereby rendered in favor of plaintiff Jody King Construction And
Development Corporation and against defendant Province of Aklan, as follows:
 1. ordering the defendant to pay to the plaintiff the amount of Php7,396,143.09 representing the unpaid accomplishment on
additional works undertaken by the plaintiff;

2. ordering the defendant to refund to the plaintiff the amount of Php884,098.59 representing additional 2% tax levied upon
against the plaintiff;

3. ordering the defendant to pay to the plaintiff price escalation in the amount of Php1,291,714.98 pursuant to Section 7.5 of
the original contract;

4. ordering the defendant to pay to the plaintiff the amount of Php3,303,486.60 representing additional labo r cost resulting from
change orders issued by the defendant;

5. ordering the defendant to pay to the plaintiff the sum of Php1,101,162.00 overhead cost resulting from change orders issued
by the defendant;

6. ordering the defendant to pay the sum of Php3,442,507.50 representing interest resulting from payment delays up to October
15, 2001 pursuant to Section 7.3.b of the original contract;

7. ordering the defendant to pay interest of 3% per month from unpaid claims as of October 16, 2001 to date of actual p ayment
pursuant to Section 7.3.b[;]

8. ordering the [defendant] to pay to the plaintiff the sum of Php500,000.00 as moral damages;

9. ordering the defendant to pay to the plaintiff the sum of Php300,000.00 as exemplary damages;

10. ordering the defendant to pay the plaintiff the sum of Php200,000.00, as and for attorney’s fees; and

11. ordering the defendant to pay the cost of suit.

SO ORDERED.13

Petitioner filed its motion for reconsideration 14 on October 9, 2009 stating that it received a copy of the decision on September 25, 2009.
In its Order15 dated October 27, 2009, the trial court denied the motion for reconsideration upon verification from the records that as
shown by the return card, copy of the decision was actually received by both Assistant Provincial Prosecutor Ronaldo B. Ingente and
Atty. Lee T. Manares on September 23, 2009. Since petitioner only had until October 8, 2009 within which to file a motion for
reconsideration, its motion filed on October 9, 2009 was filed one day after the finality of the decision. The trial court further noted that
there was a deliberate attempt on both Atty. Manares and Prosecutor Ingente to mislead the court and make it appear that their motion
for reconsideration was filed on time. Petitioner filed a Manifestation 16 reiterating the explanation set forth in its Rejoinder to
respondent’s comment/opposition and motion to dismiss that the wrong date of receipt of the decision stated in the motion for
reconsideration was due to pure inadvertence attributable to the staff of petitioner’s counsel. It stressed that there was no intention to
mislead the trial court nor cause undue prejudice to the case, as in fact its counsel immediately corrected the error upon discovery by
explaining the attendant circumstances in the Rejoinder dated October 29, 2009.

On November 24, 2009, the trial court issued a writ of execution ordering Sheriff IV Antonio E. Gamboa, Jr. t o demand from petitioner
the immediate payment of ₱67,027,378.34 and tender the same to the respondent. Consequently, Sheriff Gamboa served notices of
garnishment on Land Bank of the Philippines, Philippine National Bank and Development Bank of the Philippines at their branch es in
Kalibo, Aklan for the satisfaction of the judgment debt from the funds deposited under the account of petitioner. Said banks, however,
refused to give due course to the court order, citing the relevant provisions of statutes, circulars and jurisprudence on the determination
of government monetary liabilities, their enforcement and satisfaction. 17

Petitioner filed in the CA a petition for certiorari with application for temporary restraining order (TRO) and preliminary injunction
assailing the Writ of Execution dated November 24, 2009, docketed as CA -G.R. SP No. 111754.

On December 7, 2009, the trial court denied petitioner’s notice of appeal filed on December 1, 2009. Petition er’s motion for
reconsideration of the December 7, 2009 Order was likewise denied. 18 On May 20, 2010, petitioner filed another petition for certiorari
in the CA questioning the aforesaid orders denying due course to its notice of appeal, docketed as CA -G.R. SP No. 114073.

By Decision dated October 18, 2010, the CA’s First Division dismissed the petition in CA -G.R. SP No. 111754 as it found no grave
abuse of discretion in the lower court’s issuance of the writ of execution. Petitioner filed a motion for reconsideration which was likewis e
denied by the CA. The CA stressed that even assuming as true the alleged errors committed by the trial court, these were insu fficient
for a ruling that grave abuse of discretion had been committed. On the matter of execution of the trial court’s decision, the appellate
court said that it was rendered moot by respondent’s filing of a petition before the Commission on Audit (COA).

On August 31, 2011, the CA’s Sixteenth Division rendered its Decision dismissing the petition in CA -G.R. SP No. 114073. The CA
said that petitioner failed to provide valid justification for its failure to file a timely motion for reconsideration; couns el’s explanation
that he believed in good faith that the August 14, 2009 Decision of the trial court was received on September 25, 2009 becaus e it was
handed to him by his personnel only on that day is not a justifiable excuse that would warrant the relaxation of th e rule on reglementary
period of appeal. The CA also held that petitioner is estopped from invoking the doctrine of primary jurisdiction as it only raised the
issue of COA’s primary jurisdiction after its notice of appeal was denied and a writ of execution was issued against it.

The Cases

In G.R. No. 197592, petitioner submits the following issues:

I.

WHETHER OR NOT THE DECISION DATED 14 AUGUST 2009 RENDERED BY THE REGIONA L TRIAL COURT,
BRANCH 273, MARIKINA CITY AND THE WRIT OF EXECUTION DATED 24 NOVEMBER 2009 SHOULD BE
RENDERED VOID FOR LACK OF JURISDICTION OVER THE SUBJECT MATTER OF THE CASE.

II.

WHETHER OR NOT THE REGIONA L TRIAL COURT, BRANCH 273, MARIKINA CITY GRAVELY ABUSED ITS
DISCRETION AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN RENDERING THE DECISION DATED
14 AUGUST 2009 AND ISSUING THE WRIT OF EXECUTION DATED 24 NOVEMBER 2009 EVEN IT FAILED TO
DISPOSE ALL THE ISSUES OF THE CASE BY NOT RESOLVING PETITIONER’S "URGENT MOTION TO
DISCHARGE EX-PARTE WRIT OF PRELIMINA RY ATTACHMENT" DATED 31 AUGUST 2006.

III.

WHETHER OR NOT THE WRIT OF EXECUTION DATED 24 NOVEMBER 2009 WHICH WAS HASTILY ISSUED IN
VIOLATION OF SUPREME COURT ADMINISTRATIVE CIRCULAR NO. 10-2000 SHOULD BE RENDERED VOID.19

The petition in G.R. No. 202623 sets forth the following arguments:

Petitioner is not estopped in questioning the jurisdiction of the Regional Trial Court, Branch 273, Marikina City over the su bject matter
of the case.20

The petition for certiorari filed before the CA due to the RTC’s denial of petitioner’s Notice of Appeal was in accord with
jurisprudence.21

The Issues

The controversy boils down to the following issues: (1) the applicability of the doctrine of primary jurisdiction to this cas e; and (2) the
propriety of the issuance of the writ of execution.

Our Ruling

The petitions are meritorious.

COA has primary jurisdiction over private respondent’s money claims Petitioner is not estopped from raising the issue of jurisdiction

The doctrine of primary jurisdiction holds that if a case is such that it s determination requires the expertise, specialized training and
knowledge of the proper administrative bodies, relief must first be obtained in an administrative proceeding before a remedy is supplied
by the courts even if the matter may well be within their proper jurisdiction.22 It applies where a claim is originally cognizable in the
courts, and comes into play whenever enforcement of the claim requires the reso lution of issues which, under a regulatory scheme, have
been placed within the special competence of an administrative agency. In such a case, the court in which the claim is sought to be
enforced may suspend the judicial process pending referral of such issues to the administrative body for its view or, if the parties would
not be unfairly disadvantaged, dismiss the case without prejudice. 23

The objective of the doctrine of primary jurisdiction is to guide the court in determining whether it should refrain from exercising its
jurisdiction until after an administrative agency has determined some question or some aspect of some question arising in the proceeding
before the court.24

As can be gleaned, respondent seeks to enforce a claim for sums of money allegedly owed by petitioner, a local government unit.

Under Commonwealth Act No. 327,25 as amended by Section 26 of Presidential Decree No. 1445, 26 it is the COA which has primary
jurisdiction over money claims against government agencies and instrumentalities.

Section 26. General jurisdiction. The authority and powers of the Commission shall extend to and comprehend all matters relat ing to
auditing procedures, systems and controls, the keeping of the general accounts of the Government, the preservation of vouchers
pertaining thereto for a period of ten years, the examination and inspection of the books, records, and papers relating to th ose accounts;
and the audit and settlement of the accounts of all persons respecting funds or property received or held by them in an accou ntable
capacity, as well as the examination, audit, and settlement of all debts and claims of any sort due from or owing to the Government or
any of its subdivisions, agencies and instrumentalities. The said jurisdiction extends to all government -owned or controlled corporations,
including their subsidiaries, and other self-governing boards, commissions, or agencies of the Government, and as herein prescribed,
including non-governmental entities subsidized by the government, those funded by donations through the government, those required
to pay levies or government share, and those for which the government has put up a counterpart fund or those partly funded by the
government. (Emphasis supplied.)

Pursuant to its rule-making authority conferred by the 1987 Constitution 27 and existing laws, the COA promulgated the 2009 Revised
Rules of Procedure of the Commission on Audit. Rule II, Section 1 specifically enumerated those matters falling under COA’s e xclusive
jurisdiction, which include "money claims due from or owing to any government agency." Rule VIII, Section 1 further provides:

Section 1. Original Jurisdiction - The Commission Proper shall have original jurisdiction over:

a) money claim against the Government; b) request for concurrence in the hiring of legal retainers by government agency ; c) write off
of unliquidated cash advances and dormant accounts receivable in amounts exceeding one million pesos (₱1,000,000.00); d) requ est for
relief from accountability for loses due to acts of man, i.e. theft, robbery, arson, etc, in amounts in exce ss of Five Million pesos
(₱5,000,000.00).

In Euro-Med Laboratories Phil., Inc. v. Province of Batangas, 28 we ruled that it is the COA and not the RTC which has primary
jurisdiction to pass upon petitioner’s money claim against respondent local government unit. Such jurisdiction may not be waived by
the parties’ failure to argue the issue nor active participation in the proceedings. Thus:

This case is one over which the doctrine of primary jurisdiction clearly held sway for although petitioner’s collection suit for ₱487,662.8 0
was within the jurisdiction of the RTC, the circumstances surrounding petitioner’s claim brought it clearly within the ambit of the COA’s
jurisdiction.

First, petitioner was seeking the enforcement of a claim for a certain amount of money against a local government unit. This brought
the case within the COA’s domain to pass upon money claims against the government or any subdivision thereof under Section 26 of
the Government Auditing Code of the Philippines:

The authority and powers of the Commission [on Audit] shall extend to and comprehend all matters relating to x x x the examin atio n ,
audit, and settlement of all debts and claims of any sort due from or owing to the Government or any of its subdivisions, agencies, and
instrumentalities. x x x.

The scope of the COA’s authority to take cognizance of claims is circumscribed, however, by an unbroken line of cases holding statutes
of similar import to mean only liquidated claims, or those determined or readily determinable from vouchers, invoices, and such other
papers within reach of accounting officers. Petitioner’s claim was for a fixed amount and although respondent took issue with the
accuracy of petitioner’s summation of its accountabilities, the amount thereof was readily determinable from the receipts, invoices and
other documents. Thus, the claim was well within the COA’s jurisdiction under the Government Auditing Code of the Philippines .

Second, petitioner’s money claim was founded on a series of purchases for the medical supplies of respondent’s public hospitals. Both
parties agreed that these transactions were governed by the Local Government Code provisions on supply and property managemen t
and their implementing rules and regulations promulgated by the COA pursuant to Section 383 of said Code. Petitioner’s claim therefore
involved compliance with applicable auditing laws and rules on procurement. Such matters are not within the usual area o f knowledge,
experience and expertise of most judges but within the special competence of COA auditors and accountants. Thus, it was but p roper,
out of fidelity to the doctrine of primary jurisdiction, for the RTC to dismiss petitioner’s complaint.

Petitioner argues, however, that respondent could no longer question the RTC’s jurisdiction over the matter after it had filed its a nswer
and participated in the subsequent proceedings. To this, we need only state that the court may raise the issue of primary jur isdiction sua
sponte and its invocation cannot be waived by the failure of the parties to argue it as the doctrine exists for the proper distribution of
power between judicial and administrative bodies and not for the convenience of the parties. 29 (Emphasis supplied.)

Respondent’s collection suit being directed against a local government unit, such money claim should have been first brought to the
COA.30 Hence, the RTC should have suspended the proceedings and refer the filing of the claim before the COA. Moreover, petitioner
is not estopped from raising the issue of jurisdiction even after the denial of its notice of appeal and before the CA.

There are established exceptions to the doctrine of primary jurisdiction, such as: (a) where there is estoppel on the part of the party
invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there
is unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount involved is relatively
small so as to make the rule impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to be
decided by the courts of justice; (f) where judicial intervention is urgent; (g) when its application may cause great and irr eparable
damage; (h) where the controverted acts violate due process; (i) when the issue of non -exhaustion of administrative remedies has been
rendered moot; (j) when there is no other plain, speedy and adequate remedy; (k) when strong public interest is involved; and , (l) in quo
warranto proceedings.31 However, none of the foregoing circumstances is applicable in the present case.

The doctrine of primary jurisdiction does not warrant a co urt to arrogate unto itself authority to resolve a controversy the jurisdiction
over which is initially lodged with an administrative body of special competence. 32 All the proceedings of the court in violation of the
doctrine and all orders and decisions rendered thereby are null and void. 33

Writ of Execution issued in violation of COA’s primary jurisdiction is void

Since a judgment rendered by a body or tribunal that has no jurisdiction over the subject matter of the case is no judgment a t all, it
cannot be the source of any right or the creator of any obligation. 34 All acts pursuant to it and all claims emanating from it have no legal
effect and the void judgment can never be final and any writ of execution based on it is likewise vo id.35

Clearly, the CA erred in ruling that the RTC committed no grave abuse of discretion when it ordered the execution of its judg ment
against petitioner and garnishment of the latter’s funds.

In its Supplement to the Motion for Reconsideration, petitioner argued that it is the COA and not the RTC which has original jurisdiction
over money claim against government agencies and subdivisions.1âwphi1 The CA, in denying petitioner's motion for reconsideration,
simply stated that the issue had become moot by respondent's filing of the proper petition with the COA. However, respondent' s belated
compliance with the formal requirements of presenting its money claim before t he COA did not cure the serious errors committed by
the RTC in implementing its void decision. The RTC's orders implementing its judgment rendered without jurisdiction must be s et aside
because a void judgment can never be validly executed.

Finally, the RTC should have exercised utmost caution, prudence and judiciousness in issuing the writ of execution and notices of
garnishment against petitioner. The RTC had no authority to direct the immediate withdrawal of any portion of the garnished f unds from
petitioner's depositary banks.36 Such act violated the express directives of this Court under Administrative Circular No. 10-2000,37 which
was issued "precisely in order to prevent the circumvention of Presidential Decree No. 1445, as well as of the rules and proc edures of
the COA." 38 WHEREFORE, both petitions in G.R. Nos. 197592 and 202623 are GRANTED. The Decision dated October 18, 2010 and
Resolution dated July 5 2011 of the Court of Appeals in CA -G.R. SP No. 111754, and Decision dated August 31, 2011 and Resolution
dated June 27, 2012 in CA- G.R. SP No. 114073 are hereby REVERSED and SET ASIDE. The Decision dated August 14 2009, Writ
of Execution and subsequent issuances implementing the said decision of the Regional Trial Court of Marikina City in Civil Case No.
06-1122-MK are all SET ASIDE. No pronouncement as to costs.

SO ORDERED.
G.R. No. 176260 November 24, 2010

LUCIA BARRAMEDA VDA. DE BALLESTEROS, Petitioner,

vs.
RURAL BANK OF CANAMAN INC., represented by its Liquidator, the philippine deposit insurance
corporation, Respondent.

D EC IS I O N

MENDOZA, J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Civil Procedure assailing the August 15, 20 06
Decision 1 of the Court of Appeals (CA) in CA-G.R. No. 82711, modifying the decision of the Regional Trial Court of Iriga City, Branch
36 (RTC-Iriga), in Civil Case No. IR-3128, by ordering the consolidation of the said civil case with Special Proceeding Case No. M -
5290 (liquidation case) before the Regional Trial Court of Makati City, Branch 59 (RTC-Makati).

It appears from the records that on March 17, 2000, petitioner Lucia Barrameda Vda. De Ballesteros (Lucia) filed a complaint
for Annulment of Deed of Extrajudicial Partition, Deed of Mortgage and Damages with prayer for Preliminary Injunction against her
children, Roy, Rito, Amy, Arabel, Rico, Abe, Ponce Rex and Adden, all surnamed Ballesteros, and the Rural Bank of Canaman, Inc.,
Baao Branch (RBCI) before the RTC-Iriga. The case was docketed as Civil Case No. IR-3128.

In her complaint, Lucia alleged that her deceased husband, Eugenio, left two (2) parcels of land located in San Nicolas, Baao , Camarines
Sur, each with an area of 357 square meters; that on March 6, 1995, without her knowledge and consent, her children executed a deed
of extrajudicial partition and waiver of the estate of her husband wherein all the heirs, including Lucia, agreed t o allot the two parcels
to Rico Ballesteros (Rico); that, still, without her knowledge and consent, Rico mortgaged Parcel B of the estate in favor of RBCI which
mortgage was being foreclosed for failure to settle the loan secured by the lot; and that Lucia was occupying Parcel B and had no other
place to live. She prayed that the deed of extrajudicial partition and waiver, and the subsequent mortgage in favor of RBCI b e declared
null and void having been executed without her knowledge and consent. She also prayed for damages.

In its Answer, RBCI claimed that in 1979, Lucia sold one of the two parcels to Rico which represented her share in the estate of her
husband. The extrajudicial partition, waiver and mortgage were all executed with the knowledge and cons ent of Lucia although she was
not able to sign the document. RBCI further claimed that Parcel B had already been foreclosed way back in 1999 which fact was known
to Lucia through the auctioning notary public. Attorney’s fees were pleaded as counterclaim.

The case was then set for pre-trial conference. During the pre-trial, RBCI’s counsel filed a motion to withdraw after being informed that
Philippine Deposit Insurance Corporation (PDIC) would handle the case as RBCI had already been closed and placed under the
receivership of the PDIC. Consequently, on February 4, 2002, the lawyers of PDIC took over the case of RBCI.

On May 9, 2003, RBCI, through PDIC, filed a motion to dismiss on the ground that the RTC-Iriga has no jurisdiction over the subject
matter of the action. RBCI stated that pursuant to Section 30, Republic Act No. 7653 (RA No. 7653), otherwise known as the "New
Central Bank Act," the RTC-Makati, already constituted itself, per its Order dated August 10, 2001, as the liquidation court to assist
PDIC in undertaking the liquidation of RBCI. Thus, the subject matter of Civil Case No. IR-3128 fell within the exclusive jurisdiction
of such liquidation court. Lucia opposed the motion.

On July 29, 2003, the RTC-Iriga issued an order2 granting the Motion to Dismiss, to wit:

This resolves the Motion to Dismiss filed by the defendant Rural Bank of Canaman, Inc., premised on the ground that this cour t has no
jurisdiction over the subject matter of the action. This issue of jurisdiction was raised in view of the pronouncement of the Supreme
Court in Ong v. C.A. 253 SCRA 105 and in the case of Hernandez v. Rural Bank of Lucena, Inc., G.R. No. L-29791 dated January 10,
1978, wherein it was held that "the liquidation court shall have jurisdiction to adjudicate all claims against the bank whether the y be
against assets of the insolvent bank, for Specific Performance, Breach of Contract, Damages or whatever."

It is in view of this jurisprudential pronouncement made by no less than the Supreme Court, that this case is, as far as defendant Rural
Bank of Canaman Inc., is concerned, hereby ordered DISMISSED without prejudice on the part of the plaintiff to ventilate their claim
before the Liquidation Court now, RTC Branch 59, Makati City.

SO ORDERED.
Not in conformity, Lucia appealed the RTC ruling to the CA on the ground that the RTC-Iriga erred in dismissing the case because it
had jurisdiction over Civil Case No. IR-3128 under the rule on adherence of jurisdiction.

On August 15, 2006, the CA rendered the questioned decision ordering the consolidation of Civil Case No. IR-3128 and the liquidation
case pending before RTC-Makati. The appellate court ratiocinated thus:

…The consolidation is desirable in order to prevent confusion, to avoid multiplicity of suits and to save unnecessary cost and expense.
Needless to add, this procedure is well in accord with the principle that the rules of procedure shall be liberally construed in order to
promote their object and to assist the parties in obtaining just, speedy and inexpensive determination of every action and pr oceeding
(Vallacar Transit, Inc. v. Yap, 126 SCRA 500 [1983]; Suntay v. Aguiluz, 209 SCRA 500 [1992] citing Ramos v. Ebarle, 182 SCRA
245 [1990]). It would be more in keeping with the demands of equity if the cases are simply ordered consolidated. Pursuant to Section
2, Rule 1, Revised Rules of Court, the rules on consolidation should be liberally construed to achieve the object of th e parties in obtaining
just, speedy and inexpensive determination of their cases (Allied Banking Corporation v. Court of Appeals, 259 SCRA 371 [1996]). …

The dispositive portion of the decision reads:

IN VIEW OF ALL THE FOREGOING, the appealed decision is hereby MODIFIED, in such a way that the dismissal of this case (Civ il
Case No. IR-3128) is set aside and in lieu thereof another one is entered ordering the consolidation of said case with the liquidation ca se
docketed as Special Proceeding No. M-5290 before Branch 59 of the Regional Trial Court of Makati City, entitled " In Re: Assistance
in the Judicial Liquidation of Rural Bank of Canaman, Camarines Sur, Inc., Philippine Deposit Corporation, Petitioner. " No
pronouncement as to cost.

SO ORDERED.3

Lucia filed a motion for reconsideration 4 but it was denied by the CA in its Resolution dated December 14, 2006.5

Hence, the present petition for review on certiorari anchored on the following

GROUNDS

(I)

THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE REGIONAL TRIAL COURT OF IRIGA CITY,
BRANCH 36 IS VESTED WITH JURISDICTION TO CONTINUE TRYING AND ULTIMATELY DECIDE CIVIL CASE
NO. IR-3128.

(II)

THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION IN ORDERING THE
CONSOLIDATION OF CIVIL CASE NO. IR-3128 WITH THE LIQUIDATION CASE DOCKETED AS SPECIA L
PROCEEDINGS NO. M-5290 BEFORE BRANCH 59 OF THE REGIONAL TRIAL COURT OF MAKATI CITY. 6

Given the foregoing arguments, the Court finds that the core issue to be resolved in this petition involves a determination of whether a
liquidation court can take cognizance of a case wherein the main cause of action is not a simple money claim against a bank o rdered
closed, placed under receivership of the PDIC, and undergoing a liquidation proceeding.

Lucia contends that the RTC-Iriga is vested with jurisdiction over Civil Case No. 3128, the constitution of the liquidation court
notwithstanding. According to her, the cas e was filed before the RTC-Iriga on March 17, 2000 at the time RBCI was still doing business
or before the defendant bank was placed under receivership of PDIC in January 2001.

She further argues that the consolidation of the two cases is improper. Her cas e, which is for annulment of deed of partition and waiver,
deed of mortgage and damages, cannot be legally brought before the RTC-Makati with the liquidation case considering that her cause
of action against RBCI is not a simple claim arising out of a cred itor-debtor relationship, but one which involves her rights and interest
over a certain property irregularly acquired by RBCI. Neither is she a creditor of the bank, as only the creditors of the ins olvent bank
are allowed to file and ventilate claims before the liquidator, pursuant to the August 10, 2001 Order of the RTC-Makati which granted
the petition for assistance in the liquidation of RBCI.
In its Comment,7 PDIC, as liquidator of RBCI, counters that the consolidation of Civil Case No. 3128 with the liquidation proceeding
is proper. It posits that the liquidation court of RBCI, having been established, shall have exclusive jurisdiction over all claims against
the said bank.

After due consideration, the Court finds the petition devoid of merit.

Lucia’s argument, that the RTC-Iriga is vested with jurisdiction to continue trying Civil Case No. IR-3128 until its final disposition,
evidently falls out from a strained interpretation of the law and jurisprudence. She contends that:

Since the RTC-Iriga has already obtained jurisdiction over the case it should continue exercising such jurisdiction until the final
termination of the case. The jurisdiction of a court once attached cannot be ousted by subsequent happenings or events, although of a
character which would have prevented jurisdiction from attaching in the first instance, and the Court retains jurisdiction un til it finally
disposes of the case (Aruego Jr. v. Court of Appeals, 254 SCRA 711).

When a court has already obtained and is exercising jurisdiction over a controversy, its jurisdiction to proceed to final det ermination of
the case is not affected by a new legislation transferring jurisdiction over such proceedin gs to another tribunal. (Alindao v. Joson, 264
SCRA 211). Once jurisdiction is vested, the same is retained up to the end of the litigation (Bernate v. Court of Appeals, 263 SCRA
323).8

The afore-quoted cases, cited by Lucia to bolster the plea for the continuance of her case, find no application in the case at bench.

Indeed, the Court recognizes the doctrine on adherence of jurisdiction. Lucia, however, must be reminded that such principle is not
without exceptions. It is well to quote the ruling of the CA on this matter, thus:

This Court is not unmindful nor unaware of the doctrine on the adherence of jurisdiction. However, the rule on adherence of jurisdiction
is not absolute and has exceptions. One of the exceptions is that when the change in jurisdiction is curative in character (Garcia v.
Martinez, 90 SCRA 331 [1979]; Calderon, Sr. v. Court of Appeals, 100 SCRA 459 [1980]; Atlas Fertilizer Corporation v. Navarro, 149
SCRA 432 [1987]; Abad v. RTC of Manila, Br. Lll, 154 SCRA 664 [1987]).

For sure, Section 30, R.A. 7653 is curative in character when it declared that the liquidation court shall have jurisdiction in the same
proceedings to assist in the adjudication of the disputed claims against the Bank. The interpretation of this Section (formerly Section 29,
R.A. 265) becomes more obvious in the light of its intent. In Manalo v. Court of Appeals (366 SCRA 752, [2001]), the Supreme Court
says:

xxx The requirement that all claims against the bank be pursued in the liquidation proceedings filed by the Central Bank is intended to
prevent multiplicity of actions against the insolvent bank and designed to establish due process and orderliness in the liquidation of the
bank, to obviate the proliferation of litigations and to avoid injustice and arbitrariness (citing Ong v. CA, 253 SCRA 105 [1996]). The
lawmaking body contemplated that for convenience, only one court, if possible, should pass upon the claims against the inso lvent bank
and that the liquidation court should assist the Superintendents of Banks and regulate his operations (citing Central Bank of the
Philippines, et al. v. CA, et al., 163 SCRA 482 [1988]).9

As regards Lucia’s contention that jurisdiction already attached when Civil Case No. IR-3128 was filed with, and jurisdiction obtained
by, the RTC-Iriga prior to the filing of the liquidation case before the RTC-Makati, her stance fails to persuade this Court. In refuting
this assertion, respondent PDIC cited the case of Lipana v. Development Bank of Rizal 10 where it was held that the time of the filing of
the complaint is immaterial, viz:

It is the contention of petitioners, however, that the placing under receivership of Respondent Bank long after the filing of the complaint
removed it from the doctrine in the said Morfe Case.

This contention is untenable. The time of the filing of the complaint is immaterial. It is the execution that will obviously pre judice the
other depositors and creditors. Moreover, as stated in the said Morfe case, the effect of the judgment is only to fix th e amount of the
debt, and not to give priority over other depositors and creditors.

The cited Morfe case11 held that "after the Monetary Board has declared that a bank is insolvent and has ordered it to cease operations,
the Board becomes the trustee of its assets for the equal benefit of all the creditors, including depositors. The assets of t he insolvent
banking institution are held in trust for the equal benefit of all creditors, and after its insolvency, one cannot obtain an advantage or a
preference over another by an attachment, execution or otherwise."
Thus, to allow Lucia’s case to proceed independently of the liquidation case, a possibility of favorable judg ment and execution thereof
against the assets of RBCI would not only prejudice the other creditors and depositors but would defeat the very purpose for which a
liquidation court was constituted as well.

Anent the second issue, Lucia faults the CA in directing the consolidation of Civil Case No. IR-3128 with Special Proceedings No. M-
5290. The CA committed no error. Lucia’s complaint involving annulment of deed of mortgage and damages falls within the purview
of a disputed claim in contemplation of Section 30 of R.A. 7653 (The New Central Bank Act). The jurisdiction should be lodged with
the liquidation court. Section 30 provides:

Sec. 30. Proceedings in Receivership and Liquidation. - Whenever, upon report of the head of the supervising or examining department,
the Monetary Board finds that a bank or quasi-bank:

(a) is unable to pay its liabilities as they become due in the ordinary course of business: Provided, That this shall not inc lude
inability to pay caused by extraordinary demands induced by financial panic in the banking community;

(b) has insufficient realizable assets, as determined by the Bangko Sentral, to meet its liabilities; or

(c) cannot continue in business without involving probable losses to its depositors or creditors; or

(d) has wilfully violated a cease and desist order under Section 37 that has become final, involving acts or transactions which
amount to fraud or a dissipation of the assets of the institution; in which cases, the Monetary Board may summarily and witho ut
need for prior hearing forbid the institution from doing business in the Philippines and designate the Philippine Deposit
Insurance Corporation as receiver of the banking institution.

For a quasi-bank, any person of recognized competence in banking or finance may be designa ted as receiver.

The receiver shall immediately gather and take charge of all the assets and liabilities of the institution, administer the sa me for the benefit
of its creditors, and exercise the general powers of a receiver under the Revised Rules of Court but shall not, with the exception of
administrative expenditures, pay or commit any act that will involve the transfer or disposition of any asset of the institut ion: Provided,
That the receiver may deposit or place the funds of the institution in non -speculative investments. The receiver shall determine as soon
as possible, but not later than ninety (90) days from take over, whether the institution may be rehabilitated or otherwise placed in such
a condition that it may be permitted to resume business with safety to its depositors and creditors and the general public: Provided, That
any determination for the resumption of business of the institution shall be subject to prior approval of the Monetary Board.

If the receiver determines that the institution cannot be rehabilitated or permitted to resume business in accordance with the next
preceding paragraph, the Monetary Board shall notify in writing the board of directors of its findings and direct the receive r to proceed
with the liquidation of the institution. The receiver shall:

(1) file ex parte with the proper regional trial court, and without requirement of prior notice or any other action, a petition for
assistance in the liquidation of the institution pursuant to a liquidation plan adopted by the Philippine Deposit Insurance
Corporation for general application to all closed banks. In case of quasi-banks, the liquidation plan shall be adopted by the
Monetary Board. Upon acquiring jurisdiction, the court shall, upon motion by the receiver after due notice, adjudicate disputed
claims against the institution, assist the enforcement of individual liabilities of the stockholders, directors and officers, and
decide on other issues as may be material to implement the liquidation plan adopted. The receiver shall pay the cost of the
proceedings from the assets of the institution.

(2) convert the assets of the institution to money, dispose of the same to creditors and other parties, for the purpose of pa ying
the debts of such institution in accordance with the rules on concurrence and preference of credit under the Civ il Code of the
Philippines and he may, in the name of the institution, and with the assistance of counsel as he may retain, institute such a ctions
as may be necessary to collect and recover accounts and assets of, or defend any action against, the institut ion. The assets of
an institution under receivership or liquidation shall be deemed in custodia legis in the hands of the receiver and shall, fr om the
moment the institution was placed under such receivership or liquidation, be exempt from any order of gar nishment, levy,
attachment, or execution. [Emphasis supplied]

xxx

"Disputed claims" refers to all claims, whether they be against the assets of the insolvent bank, for specific performance, b reach of
contract, damages, or whatever.12 Lucia’s action being a claim against RBCI can properly be consolidated with the liquidation
proceedings before the RTC-Makati. A liquidation proceeding has been explained in the case of In Re: Petition For Assistance in the
Liquidation of the Rural Bank of BOKOD (Benguet), Inc. v. Bureau of Internal Revenue 13 as follows:

A liquidation proceeding is a single proceeding which consists of a number of cases properly classified as "claims." It is basically a two -
phased proceeding. The first phase is concerned with the approval and disapproval of claims. Upon the approval of the petitio n seeking
the assistance of the proper court in the liquidation of a closed entity, all money claims against the bank are required to be filed with the
liquidation court. This phase may end with the declaration by the liquidation court that the claim is not proper or wit hout basis. On the
other hand, it may also end with the liquidation court allowing the claim. In the latter case, the claim shall be classified whether it is
ordinary or preferred, and thereafter included Liquidator. In either case, the order allowing or d isallowing a particular claim is final
order, and may be appealed by the party aggrieved thereby.

The second phase involves the approval by the Court of the distribution plan prepared by the duly appointed liquidator. The d istribution
plan specifies in detail the total amount available for distribution to creditors whose claim were earlier allowed. The Order finally
disposes of the issue of how much property is available for disposal. Moreover, it ushers in the final phase of the liquidation proceeding
- payment of all allowed claims in accordance with the order of legal priority and the approved distribution plan.

xxx

A liquidation proceeding is commenced by the filing of a single petition by the Solicitor General with a court of competent jurisdiction
entitled, "Petition for Assistance in the Liquidation of e.g., Pacific Banking Corporation." All claims against the insolvent are required
to be filed with the liquidation court. Although the claims are litigated in the same proceeding, the treatment is individual. Each claim
is heard separately. And the Order issued relative to a particular claim applies only to said claim, leaving the other claims unaffected, as
each claim is considered separate and distinct from the others. x x x [Emphasis supplied.]

It is clear, therefore, that the liquidation court has jurisdiction over all claims, including that of Lucia against the insolvent bank. As
declared in Miranda v. Philippine Deposit Insurance Corporation ,14 regular courts do not have jurisdiction over actions filed by
claimants against an insolvent bank, unless there is a clear showing that the action taken by the BSP, through the Monetary Board, in
the closure of financial institutions was in excess of jurisdiction, or with grave abuse of discretion. The same is not obtaining in this
present case.1avvphi1

The power and authority of the Monetary Board to close banks and liquidate them thereafter when public interest so re quires is an
exercise of the police power of the State. Police power, however, is subject to judicial inquiry. It may not be exercised arb itrarily or
unreasonably and could be set aside if it is either capricious, discriminatory, whimsical, arbitrary, unju st, or is tantamount to a denial of
due process and equal protection clauses of the Constitution. 15

In sum, this Court holds that the consolidation is proper considering that the liquidation court has jurisdiction over Lucia’s action. It
would be more in keeping with law and equity if Lucia’s case is consolidated with the liquidation case in order to expeditiou sly determine
whether she is entitled to recover the property subject of mortgage from RBCI and, if so, how much she is entitled to receive from the
remaining assets of the bank.

WHEREFORE, the petition is DENIED.

SO ORDERED.