Civ Pro For Digest

Republic SUPREME Manila THIRD DIVISION
of
the
Philippines COURT
G.R. No. 183926 : March 29, 2010 GENEROSA ALMEDA LATORRE, Petitioner, vs. LUIS ESTEBAN LATORRE, Respondent. RESOLUTION NACHURA, J.: Before this Court is a Petition for Review on Certiorari[1] under Rule 45, in relation to Rule 41, of the Rules of Civil Procedure, assailing the decision[2] of the Regional Trial Court (RTC) of Muntinlupa City, Branch 256, dated April 29, 2008.
The facts of the case are as follows: In October 2000, petitioner Generosa Almeda Latorre filed before the RTC of Muntinlupa City a Complaint for Collection and Declaration of Nullity of Deed of Absolute Sale with application for Injunction against her own son, herein respondent Luis Esteban Latorre (respondent), and one Ifzal Ali (Ifzal). Petitioner averred that, on September 28, 1999, respondent and Ifzal entered into a Contract of Lease[4] over a 1,244-square meter real property, situated at No. 1366 Caballero St., Dasmarias Village, Makati City (subject property). Under the said contract, respondent, as lessor, declared that he was the absolute and registered owner of the subject property. Petitioner alleged that respondent's declaration therein was erroneous because she and respondent were co-owners of the subject property in equal shares Petitioner narrated that, on March 14, 1989, she and respondent executed their respective Deeds of Donation, conveying the subject property in favor of The Porfirio D. Latorre Memorial & Fr. Luis Esteban Latorre Foundation, Inc. (the Foundation). Thus, Transfer Certificate of Title (TCT) No. 161963[5] was issued in the name of the Foundation. Subsequently, on September 2, 1994, petitioner and respondent executed separate Deeds of Revocation of Donation and Reconveyance of the subject property, consented to by the Foundation, through the issuance of appropriate corporate resolutions. However, the Deeds of Revocation were not registered; hence, the subject property remained in the name of the Foundation. Petitioner insisted, however, that respondent was fully aware that the subject property was owned in common by both of them. To protect her rights as co-owner,
petitioner formally demanded from Ifzal the payment of her share of the rentals, which the latter, however, refused to heed. Moreover, petitioner averred that, on or about August 16, 2000, she discovered that respondent caused the annotation of an adverse claim on the TCT of the subject property, claiming full ownership over the same by virtue of a Deed of Absolute Sale[6] dated March 21, 2000, allegedly executed by petitioner in favor of respondent. Petitioner claimed that the deed was a falsified document; that her signature thereon was forged by respondent; and that she never received P21 Million or any other amount as consideration for her share of the subject property. Thus, petitioner prayed that Ifzal be enjoined from paying the rentals to respondent, and the latter from receiving said rentals; that both Ifzal and respondent be ordered to pay petitioner her share of the rentals; and that respondent be enjoined from asserting full ownership over the subject property and from committing any other act in derogation of petitioner's interests therein. Petitioner also prayed for the payment of moral and exemplary damages, litigation expenses, and costs of the suit. Respondent immediately filed a Motion to Dismiss[7] on the sole ground that the venue of the case was improperly laid. He stressed that while the complaint was denominated as one for Collection and Declaration of Nullity of Deed of Absolute Sale with application for Injunction, in truth the case was a real action affecting title to and interest over the subject property. Respondent insisted that all of petitioner's claims were anchored on her claim of ownership over one-half () portion of the subject property. Since the subject property is located in Makati City, respondent argued that petitioner should have filed the case before the RTC of Makati City and not of Muntinlupa City. Ifzal also filed his motion to dismiss on the ground of want of jurisdiction, asserting that he was immune from suit because he was an officer of the Asian Development Bank, an international organization The RTC issued a Temporary Restraining Order dated November 6, 2000, restraining Ifzal from paying his rentals to respondent and enjoining the latter from receiving from the former the aforesaid rentals. The RTC also directed both Ifzal and respondent to pay petitioner her share of the rentals, with the corresponding order against respondent not to commit any act in derogation of petitioner's interest over the subject property. In its Order dated January 2, 2001, the RTC denied respondent's motion to dismiss. The RTC ruled that the nature of an action whether real or personal was determined by the allegations in the complaint, irrespective of whether or not the plaintiff was entitled to recover upon the claims asserted - a matter resolved only after, and as a result of, a trial. Thus, trial on the merits ensued. Undaunted, respondent filed an Answer Ad Cautelam[8] dated March 19, 2001, insisting, among others, that the case was a real action and that the venue was improperly laid.[9]
Respondent narrated that he was a former Opus Dei priest but he left the congregation in 1987 after he was maltreated by his Spanish superiors. Respondent alleged that petitioner lived with him and his family from 1988 to 2000, and that he provided for petitioner's needs. Respondent also alleged that, for almost 20 years, the Opus Dei divested the Latorre family of several real properties. Thus, in order to spare the subject property from the Opus Dei, both petitioner and respondent agreed to donate it to the Foundation. In 1994, when respondent got married and sired a son, both petitioner and respondent decided to revoke the said donation. The Foundation consented to the revocation. However, due to lack of funds, the title was never transferred but remained in the name of the Foundation. Respondent asseverated that he and his wife took good care of petitioner and that they provided for her needs, spending a substantial amount of money for these needs; that because of this, and the fact that the rentals paid for the use of the subject property went to petitioner, both parties agreed that petitioner would convey her share over the subject property to respondent; and that, on March 21, 2000, petitioner executed a Deed of Absolute Sale in favor of respondent. Respondent further alleged that sometime in March to May 2000, the relationship of the parties, as mother and son, deteriorated. Petitioner left respondent's house because he and his wife allegedly ignored, disrespected, and insulted her.[10] Respondent claimed, however, that petitioner left because she detested his act of firing their driver.[11] It was then that this case was filed against him by petitioner In the meantime, in its Order dated May 15, 2003, the RTC dismissed petitioner's claim against Ifzal because the dispute was clearly between petitioner and respondent On April 29, 2008, the RTC ruled in favor of respondent, disposing of the case in this wise: While the case herein filed by the plaintiff involves recovery of possession of a real property situated at 1366 Caballero St., Dasmarias Village, Makati City, the same should have been filed and tried in the Regional Trial Court of Makati City who, undoubtedly, has jurisdiction to hear the matter as aforementioned the same being clearly a real action. WHEREFORE, in view of the foregoing, the above-entitled case is hereby DISMISSED for want of jurisdiction, all in pursuance to the above-cited jurisprudence and Rule 4 of the Rules of Court. SO ORDERED.[12] Aggrieved, petitioner filed her Motion for Reconsideration,[13] which the RTC denied in its Order[14] dated July 24, 2008 for lack of merit.
Hence, this Petition, claiming that the RTC erred in treating the venue as jurisdiction and in treating petitioner's complaint as a real action While the instant case was pending resolution before this Court, petitioner passed away on November 14, 2009. Thus, petitioner's counsel prayed that, pending the appointment of a representative of petitioner's estate, notices of the proceedings herein be sent to petitioner's other son, Father Roberto A. Latorre.[15] As early as the filing of the complaint, this case had been marred by numerous procedural infractions committed by petitioner, by respondent, and even by the RTC, all of which cannot be disregarded by this Court. First. Petitioner filed her complaint with the RTC of Muntinlupa City instead of the RTC of Makati City, the latter being the proper venue in this case Sections 1 and 2, Rule 4 of the 1997 Rules of Civil Procedure provide an answer to the issue of venue.[16] Actions affecting title to or possession of real property or an interest therein (real actions) shall be commenced and tried in the proper court that has territorial jurisdiction over the area where the real property is situated. On the other hand, all other actions (personal actions) shall be commenced and tried in the proper courts where the plaintiff or any of the principal plaintiffs resides or where the defendant or any of the principal defendants resides.[17] The action in the RTC, other than for Collection, was for the Declaration of Nullity of the Deed of Absolute Sale involving the subject property, which is located at No. 1366 Caballero St., Dasmarias Village, Makati City. The venue for such action is unquestionably the proper court of Makati City, where the real property or part thereof lies, not the RTC of Muntinlupa City.[18] In this jurisdiction, we adhere to the principle that the nature of an action is determined by the allegations in the Complaint itself, rather than by its title or heading.[19] It is also a settled rule that what determines the venue of a case is the primary objective for the filing of the case.[20] In her Complaint, petitioner sought the nullification of the Deed of Absolute Sale on the strength of two basic claims that (1) she did not execute the deed in favor of respondent; and (2) thus, she still owned one half () of the subject property. Indubitably, petitioner's complaint is a real action involving the recovery of the subject property on the basis of her co-ownership thereof
Second. The RTC also committed a procedural blunder when it denied respondent's motion to dismiss on the ground of improper venue. The RTC insisted that trial on the merits be conducted even when it was awfully glaring that the venue was improperly laid, as pointed out by respondent in his motion to dismiss. After trial, the RTC eventually dismissed the case on the ground of lack of jurisdiction, even as it invoked, as justification, the rules and jurisprudence on venue. Despite the conduct of trial, the RTC failed to adjudicate this case on the merits Third. Respondent also did not do very well, procedurally. When the RTC denied his Motion to Dismiss, respondent could have filed a petition for certiorari and/or prohibition inasmuch as the denial of the motion was done without jurisdiction or in excess of jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction.[21] However, despite this lapse, it is clear that respondent did not waive his objections to the fact of improper venue, contrary to petitioner's assertion. Notably, after his motion to dismiss was denied, respondent filed a Motion for Reconsideration to contest such denial. Even in his Answer Ad Cautelam, respondent stood his ground that the case ought to be dismissed on the basis of improper venue Finally, petitioner came directly to this Court on a Petition for Review on Certiorari under Rule 45, in relation to Rule 41, of the Rules of Civil Procedure on alleged pure questions of law. In Murillo v. Consul,[22] we laid down a doctrine that was later adopted by the 1997 Revised Rules of Civil Procedure. In that case, this Court had the occasion to clarify the three (3) modes of appeal from decisions of the RTC, namely: (1) ordinary appeal or appeal by writ of error, where judgment was rendered in a civil or criminal action by the RTC in the exercise of its original jurisdiction; (2) petition for review, where judgment was rendered by the RTC in the exercise of its appellate jurisdiction; and (3) petition for review to the Supreme Court. The first mode of appeal, governed by Rule 41, is brought to the Court of Appeals (CA) on questions of fact or mixed questions of fact and law. The second mode of appeal, covered by Rule 42, is brought to the CA on questions of fact, of law, or mixed questions of fact and law. The third mode of appeal, provided in Rule 45, is filed with the Supreme Court only on questions of law A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts.[23] Our ruling in Velayo-Fong v. Velayo[24] is instructive: A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law, the same must not involve an examination of
the probative value of the evidence presented by the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact. Thus, the test of whether a question is one of law or of fact is not the appellation given to such question by the party raising the same; rather, it is whether the appellate court can determine the issue raised without reviewing or evaluating the evidence, in which case, it is a question of law; otherwise it is a question of fact.[25] In her Reply to respondent's Comment,[26] petitioner prayed that this Court decide the case on the merits. To do so, however, would require the examination by this Court of the probative value of the evidence presented, taking into account the fact that the RTC failed to adjudicate this controversy on the merits. This, unfortunately, we cannot do. It thus becomes exceedingly clear that the filing of the case directly with this Court ran afoul of the doctrine of hierarchy of courts. Pursuant to this doctrine, direct resort from the lower courts to the Supreme Court will not be entertained unless the appropriate remedy sought cannot be obtained in the lower tribunals. This Court is a court of last resort, and must so remain if it is to satisfactorily perform the functions assigned to it by the Constitution and by immemorial tradition.[27] Accordingly, we find no merit in the instant petition. Neither do we find any reversible error in the trial court's dismissal of the case ostensibly for want of jurisdiction, although the trial court obviously meant to dismiss the case on the ground of improper venue. SECOND DIVISION G.R. No188882 : March 30, 2010 PHILIPPINE VETERANS BANK, Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (FOURTH DIVISION) and BENIGNO MARTINEZ, Respondents. RESOLUTION BRION, J. : Submitted for our review in this petition for review on certiorari (with a prayer for temporary restraining order and/or writ of preliminary injunction)[1]
are the decision[2] and the resolution[3] of the Court of Appeals (CA) in CA-G.R. SP No. 00708. The CA decision affirmed the December 8,
2004 decision[4] and March 14, 2005[5] resolution of the National Labor Relations Commission (NLRC), Fourth Division, Cebu City. The NLRC, in turn, reversed the decision of the Labor Arbiter (LA) that dismissed the respondent's complaint for constructive dismissal. On February 20, 2003, respondent Benigno B. Martinez (respondent) filed a complaint for illegal dismissal, with a claim for backwages, reinstatement and damages against petitioner Philippine Veterans Bank (petitioner) In his position paper, the respondent alleged that he was the manager of the petitioner's Dumaguete Branch from September 1, 2001 until January 8, 2003, when his supposed resignation from the petitioner became effective. The respondent claimed that his resignation stemmed from a report published by the Philippine Daily Inquirer regarding the anomalies hounding the petitioner's high-ranking officials. This controversy according to the respondent resulted in huge withdrawals of major depositors. Concerned, the respondent approached Mr. Wilfredo S. Anion (Mr. Anion), the petitioner's Area Head for Visayas and Mindanao to discuss how to resolve the matter. When Mr. Anion just brushed off the issue, the respondent requested the Mayor of Valencia (a known big depositor of the Dumaguete Branch) to talk to Mr. Anion. The latter apparently misinterpreted the respondent's actions and angrily confronted him the next day, saying - "You fool, you went to the mayor of Valencia to seek support. Let them pull out all their deposits, they cannot threaten me! Let them pull out immediately!I will see to it that you will be replaced there!If not, I'd manage the branch myself! Or I'll have Dumaguete Branch made under the Luzon area so that I have nothing to do with your branch." On October 14, 2002, Mr. Anion went to the Dumaguete Branch and brought along with him Mr. Mansueto Quijote as the respondent's replacement and new branch manager. Mr. Anion then instructed the respondent to go to the petitioner's head office in Makati to report to the Vice President and Head of Branch Banking Division, Mr. Jose D. Lloren, Jr (VP Lloren) The respondent flew to Manila and reported to the Makati Office, as ordered. VP Lloren told him that he would undergo training, but no such training took place. Instead, he was made to do clerical jobs. To compound the unjust treatment, the respondent had to travel at least 4 hours daily from his rented house in Cavite to Makati; his travel and living expenses consumed at least half of his salary. On January 8, 2003, the respondent tendered his
resignation citing that "it is so expensive for [him] to be staying away from [his] family." The petitioner in its Position Paper claimed that the respondent's transfer was not motivated by bad faith. It argued that Special Order No. 880, which ordered the respondent's transfer to the Branch Banking Division to undergo Branch Head Training effective October 21, 2002, authorized the respondent's transfer. The same Order stated
that the respondent's transfer will not entail any change in rank and compensation and that he is also entitled to per diem and housing allowance amounting to six thousand pesos. The petitioner further claimed that the respondent's transfer was neither unceremonious nor without his consent since he agreed in his contract of employment that he can be given a different assignment at any given time. Finally, the petitioner claimed that the respondent was not placed on "floating status;" after his training on October 29, 2002, he was assigned to the Due
Head Office Task Force to hold the sensitive position of reconciling all book entries of all the petitioner's branches. Thus, to the petitioner, the respondent was not constructively dismissed; he voluntarily resigned from his job
The LA and NLRC Rulings On June 30, 2003, the LA dismissed the respondent's complaint for lack of merit. The LA found that the petitioner was not guilty of constructive dismissal and that the respondent voluntarily resigned from the service On appeal, the NLRC reversed the LA's decision and held that the respondent was constructively dismissed. The NLRC awarded backwages, separation pay in lieu of reinstatement, moral and exemplary damages in the aggregate amount of
P933,350.00. The NLRC found that the "unceremonious replacement" of the
respondent on October 14, 2002 is akin to constructive dismissal. It also found that the events following the respondent's transfer, including the inconvenience that he had to face on a daily basis while working in Makati, left him with no other option but to resign. On December 8, 2004, the petitioner filed a petition for certiorari before the Court of Appeals (CA) contending that the NLRC committed grave abuse of discretion in ruling that the respondent was constructively dismissed. During the pendency of the petition for certiorari, the petitioner filed a supplemental petition raising the theory that the present case involves the termination of an elected corporate officer, which issue is not within the jurisdiction of the LA, but within the exclusive and original jurisdiction of the Regional Trial Courts The CA Ruling On February 27, 2009, the CA affirmed the NLRC's decision with modification on the award of backwages (to be reckoned from January 16, 2003 up to the finality of the decision) and attorney's fees. Procedurally, the CA found the petitioner's petition for certiorari to be defective and, therefore, dismissible since the Head of the Legal Department (who signed the Certification of Non-Forum Shopping) was not duly authorized to file the petition in the petitioner's behalf. The CA held that in the absence of any authority from the board of directors, no person, not even the officers of the corporation, can validly bind the corporation On the merits, the CA held that the petitioner is estopped from raising the issue of lack of jurisdiction for the very first time on appeal. The CA held that the respondent's unceremonious replacement amounted to constructive dismissal; it was clearly an act of clear discrimination, insensibility or disdain on the part of the petitioner
The CA noted that jurisprudence prohibits transfers or reassignments of employees that are unreasonable and that inconvenience or prejudice them. In this case, the CA found that the respondent's transfer from Dumaguete to Makati City was clearly unreasonable, inconvenient and put him in the difficult predicament of choosing whether to live away from his family or to bring them to Manila which will entail additional expenses on his part. The CA also found no compelling reason (i.e. any urgency or genuine business necessity) to justify the petitioner's order of transfer. The petitioner's stated reason about branch head training because of the respondent's gross inefficiency is unconvincing, since the petitioner failed to present any evidence that the latter had a record of gross inefficiency. Finally, the CA opined that the petitioner failed to show any valid reason why it had to require the respondent to go to Makati City to undergo branch head training when it could just as easily require the latter to undergo the same training in the VISMIN area. Based on these considerations, the CA concluded that the respondent's resignation amounted to constructive dismissal The present petition raises the following issues: 1)Whether or not the petitioner is already estopped from raising the issue of lack of jurisdiction; (2) Whether or not the petitioner's act of transferring the respondent to its head office in Makati was a valid exercise of management prerogative; and (3) Whether or not the respondent's severance from employment was voluntary or was he constructively dismissed. We DENY the petition for lack of merit Petitioner is estopped from belatedly raising the issue of lack of jurisdiction As a rule, a party who deliberately adopts a certain theory upon which the case is tried and decided by the lower court will not be permitted to change theoryon appeal.[6]
Points of law, theories, issues and arguments not brought to the attention of the lower court need not be, and ordinarily will not be, considered by a reviewing court, as these cannot be raised for the first time at such late stage. It would be unfair to the adverse party who would have no opportunity to present further evidence material to the new theory,
which it could have done had it been aware of it at the time of the hearing before the trial court.[7] To permit the petitioner in this case to change its theory on appeal would thus be unfair to the respondent, and offend the basic rules of fair play, justice and due process.[8] In addition, the petitioner is already estopped from belatedly raising the issue of lack of jurisdiction since it has actively participated in the proceedings before the LA and NLRC. We
have consistently held that while
jurisdiction may be assailed at any stage, a party's active participation in the proceedings before a court without jurisdiction will estop such party from assailing such lack of it. It is an undesirable practice of a party participating in the proceedings and submitting his case for decision and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse.[9]
The petitioner violated the non-forum shopping provision The certificate of non-forum shopping was filed by the petitioner's Legal Department Head, yet he failed to present proper authority showing that the petitioner authorized him to file the petition for certiorari. Coming from a major bank and from its Legal Department Head, this lapse cannot be condoned and the CA was right in dismissing the petition for this reason, among others
The petitioner was constructively dismissed The settled rule is
that factual findings of labor officials, who are deemed to have acquired
expertise in matters within their jurisdiction, are generally accorded not only respect but even finality by the courts when supported by substantial evidence, i.e., the amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.[10]
In the present case, we find that the NLRC's finding, as affirmed by the CA, that respondent's constructive dismissal is supported by substantial evidence
In constructive dismissal cases, the employer has the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. Particularly, for a transfer not to be considered a constructive dismissal, the employer must be able to show that such transfer is not unreasonable, inconvenient, or
prejudicial to the employee. Failure of the employer to overcome this burden of proof taints the employee's transfer as a constructive dismissal.[11] In the present case, the petitioner failed to discharge this burden. The NLRC, as affirmed by the CA, correctly found that the combination of the harsh actions of the petitioner rendered the employment condition of respondent hostile and unbearable for the following reasons: First, the petitioner failed to show any urgency or genuine business necessity to transfer the respondent to the Makati Head Office. In fact, the respondent showed the actual motivation and the bad faith behind his transferThe petitioner's stated reason that the respondent had to undergo branch head training because of his gross inefficiency cannot defeat the respondent's evidence on this point as the petitioner failed to present any evidence that the respondent had a record of gross inefficiency Second, the respondent's transfer from Dumaguete to Makati City is clearly unreasonable, inconvenient and oppressive, since the respondent and his family are residents of Dumaguete City. The CA correctly found that the respondent was placed in the very difficult predicament of having to choose whether to live away from his family or to bring them to Manila, which will entail additional expenses on his part Third, the petitioner failed to present any valid reason why it had to require the respondent to go to Makati Head Office to undergo branch head training when it could have just easily required the latter to undertake the same training in the VISMIN area Finally, there was nothing in the order of transfer as to what position the respondent would occupy after his training; the respondent was effectively placed in a "floating" status. The petitioner's allegation that the respondent was assigned to a sensitive position in the DUHO Task Force is suspect when considered with the fact that he was made to undergo branch head training which is totally different from a position that entails reconciling book entries of all branches of the former. Reconciling book entries is essentially an accounting task. The test of constructive dismissal is whether a reasonable person in the employee's position would have felt compelled to give up his position under the circumstances.[12] Based on the
factual considerations in the present case, we hold that the hostile and unreasonable working conditions of the petitioner justified the finding of the NLRC and the CA that respondent was constructively dismissed WHEREFORE, premises considered, we DENY the present petition and AFFIRM the Court of Appeal's Decision dated February 27, 2009 and Resolution dated July 16, 2009 in CA-G.R. SP No. 00708
Republic SUPREME Manila of the Philippines COURT
FIRST DIVISION G.R. No. 187972 : June 29, 2010
PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR), represented by ATTY. CARLOS R. BAUTISTA, JR., Petitioner, vs. FONTANA DEVELOPMENT CORPORATION, Respondent.
DECISION VELASCO, JR., J.:
In this petition for review under Rule 45, the May 19, 2009 Decision of the Court of Appeals (CA) in CA-G.R. SP No. 107247 is questioned for not nullifying the November 18, 2008 Order of the Regional Trial Court (RTC) in Manila in Civil Case No. 08-120338 that issued a temporary restraining order (TRO) against petitioner Philippine Amusement and Gaming Corporation (PAGCOR), barring PAGCOR from committing acts that allegedly violate the rights of respondent Fontana Development Corporation (FDC) under a December 23, 1999 Memorandum of Agreement (MOA). The antecedents as culled by the CA from the records are:
ch an rob les virt u allaw lib rary
Petitioner Philippine Amusement and Gaming Corporation (PAGCOR) is a government owned and controlled corporation created under Presidential Decree (PD) No. 1869 to enable the Government to regulate and centralize all games of chance authorized by existing franchise or permitted by law. Section 10 thereof conferred on PAGCOR a franchise of twenty-five (25) years or until July 11, 2008, renewable for another twenty-five (25) years. Under
Section 9 thereof, it was given regulatory powers over persons and/or entities with contract or franchise with it, viz:
SECTION 9. Regulatory Power.The Corporation shall maintain a Registry of the affiliated entities, and shall exercise all the powers, authority and the responsibilities vested in the Securities and Exchange Commission over such affiliated entities mentioned under the preceding section, including but not limited to amendments of Articles of Incorporation and By-Laws, changes in corporate term, structure, capitalization and other matters concerning the operation of the affiliating entities, the provisions of the Corporation Code of the Philippines to the contrary notwithstanding, except only with respect to original incorporation. On March 13, 1992, Republic Act No. 7227 was enacted to provide for the conversion and development of existing military reservations, including former United States military bases in the Philippines, into Special Economic Zones (SEZ). The law also provides for the creation of the Subic Bay Metropolitan Authority (SBMA). On April 3, 1993, then President Fidel V. Ramos issued Executive Order (EO) No. 80. Under Section 5 thereof, the Clark Special Economic Zone (CSEZ) was given all the applicable incentives granted to Subic Bay Special Economic Zone (SSEZ), viz:
SECTION 5. Investments Climate in the CSEZ.Pursuant to Section 5(m) and Section 15 of RA 7227, the BCDA shall promulgate all necessary policies, rules and regulations governing the CSEZ, including investment incentives, in consultation with the local government units and pertinent government departments for implementation by the CDC. Among others, the CSEZ shall have all the applicable incentives in the Subic Special Economic and Free Port Zone under RA 7227 and those applicable incentives granted in the Export Processing Zones, the Omnibus Investments Code of 1987, the Foreign Investments Act of 1991 and new investments laws which may hereinafter be enacted. The CSEZ Main Zone covering the Clark Air Base proper shall have all the aforecited investment incentives, while the CSEZ Sub-Zone covering the rest of the CSEZ shall have limited incentives. The full incentives in the Clark SEZ Main Zone and the limited incentives in the Clark SEZ Sub-Zone shall be determined by the BCDA. On December 23, 1999, PAGCOR granted private respondent Fontana Development Corporation (FDC) (formerly RN Development Corporation) the authority to operate and maintain a casino inside the CSEZ under a Memorandum of Agreement (MOA), stating inter alia:
xxxx 1.RNDC Improvements xxxx
4.Non-exclusivity, PAGCOR and RNDC agree that the license granted to RNDC to engage in gaming and amusement operations within CSEZ shall be non-exclusive and co-terminus with the Charter of PAGCOR, or any extension thereof, and shall be for the period hereinabove defined. (Emphasis supplied.) xxxx On April 12, 2000, Clark Development Corporation (CDC) issued Certificate of Registration No. 2000-24. Pursuant to Article VII-11 thereof, the MOA was amended on July 28, 2000, September 6, 2000, December 6, 2001, June 3, 2002, October 13, 2003 and March 31, 2004. Sometime in 2005, the Coconut Oil Refiners Association challenged before the Supreme Court the constitutionality, among others, of EO No. 80 on the ground that the incentives granted to SSEZ under RA No. 7227 was exclusive and cannot be made applicable to CSEZ by a mere executive order. The case was decided in favor of Coconut Oil Refiners Association and Section 5 aforequoted was declared of no legal force and effect. On June 20, 2007, RA No. 9487 was enacted, extending PAGCOR's franchise up to July 10, 2033 renewable for another twenty-five (25) years, viz:
SECTION 1. The Philippine Amusement and Gaming Corporation (PAGCOR) franchise granted under Presidential Decree No. 1869, otherwise known as the PAGCOR Charter, is hereby further amended to read as follows:
(1) Section 10, Nature and Term of Franchise, is hereby amended to read as follows:
SEC. 10. Nature and Term of Franchise.Subject to the terms and conditions established in this Decree, the Corporation is hereby granted from the expiration of its original term on July 11, 2008, another period of twenty-five (25) years, the rights, privileges and authority to operate and license gambling casinos, gaming clubs and other similar recreation or amusement places, gaming pools, i.e., basketball, football, bingo, etc. except jai-alai, whether on land or sea, within the territorial jurisdiction of the Republic of the Philippines: Provided, That the corporation shall obtain the consent of the local government unit that has territorial jurisdiction over the area chosen as the site for any of its operations. xxxx On July 18, 2008, PAGCOR informed FDC that it was extending the MOA on a month-tomonth basis until the finalization of the renewal of the contract. FDC protested, claiming that the extension of PAGCOR's franchise had automatically extended the MOA: that the SC decisions, including RA Nos. 9400 and 9399, had no effect on the authority of CDC to allow the establishment of a casino inside the CSEZ; and that in Coconut Oil Refiners Association, Inc., the SC did not declare void the entire EO No. 80 but only Section 5 thereof. On October 6, 2008, after a series of dialogues and exchange of position papers, PAGCOR notified FDC that its [new] standard Authority to Operate shall now govern and regulate
FDC's casino operations in place of the previous MOA. FDC moved for the reconsideration of the said decision but the same was denied. On November 5, 2008, PAGCOR instructed FDC to remit its franchise fees in accordance with the Authority to Operate. On the same date of November 5, 2008, FDC filed before the RTC of Manila the instant complaint for Injunction against PAGCOR, contending that it could not be covered by a month-to-month extension nor by the standard Authority to Operate since the MOA was automatically renewed and extended up to 2033; that the MOA clearly provided that the same was co-terminus with PAGCOR's franchise including any extension thereof; that it had faithfully complied with the conditions under the MOA; that pursuant to the MOA, it had built a hotel-casino complex and put up other investments equivalent to P1 Billion; that it had adopted a marketing strategy to attract high roller casino players from Asia and had scrupulously met all its obligations to PAGCOR and other government agencies; and that the provisions invalidated in Coconut Oil Refiners Association, Inc., principally pertained to tax and customs duty, privileges or incentives which was thereafter restored by the enactment of RA No. 9400. The complaint was docketed as the herein Civil Case No. 08-120338 and raffled to Branch 7. The RTC summoned PAGCOR and set the hearing on the application for TRO. On November 13, 2008, PAGCOR filed its Special Appearance (for Dismissal of the Petition and the Opposition to the Prayer for a Temporary Restraining Order and/or Writ of Preliminary Injunction), praying that the complaint be dismissed for lack of jurisdiction. PAGCOR contended that its decision to replace the MOA with the Authority to Operate was pursuant to its regulatory powers under Sections 8 and 9 of PD No. 1869; that under the said provisions, it was given all the powers, authority and responsibilities of the Securities and Exchange Commission (SEC) over corporations engaged in gambling; that consequently, being the SEC of said corporations, the appeal or review of its decision should have been made directly to the SC under PD No. 1869 in relation to the last paragraph of Section 6, PD No. 902-A; PAGCOR argued that administrative agencies are co-equal with RTC's; that application or operation of presidential decrees are appealable to the SC under Article VIII, Section 4(2) of the 1987 Constitution; and that there was no basis for the issuance of TRO/Writ of Preliminary Injunction since the franchise or license granted to FDC was not a property right but was merely a privilege and not a contract. On November 18, 2008, the RTC issued the first assailed Order denying PAGCOR's motion to dismiss and granting FDC's application for a TRO. The RTC held that the SC had no exclusive jurisdiction over cases involving PAGCOR; that the cases of Del Mar vs. PAGCOR, Sandoval II vs. PAGCOR, Jaworski vs. PAGCOR were decided by the SC in the exercise of its discretionary power to take cognizance of cases; that it had jurisdiction over the instant complaint under Section 21(1) of Batas Pambansa (BP) No. 129 in relation to Article VIII, Section 5(1) of the 1987 Constitution and the rule on hierarchy of courts; that although PAGCOR was granted regulatory powers, it was not extended quasi-judicial functions; and that PAGCOR is not an administrative agency but a government owned and controlled corporation. Upon the posting by FDC of the required bond of P500,000.00, the RTC issued on November 19, 2008 the second assailed Order, a TRO enjoining the implementation of the Standard Authority to Operate within a period of twenty (20) days. PAGCOR's motion for reconsideration was denied in the third assailed Order. On December 8, 2008, the RTC issued an Order likewise denying FDC's application for the issuance of a Writ of Preliminary Injunction. The RTC ruled that FDC failed to present a clear legal right to justify its issuance; that PAGCOR was granted with legislative right to
franchise to other entities the operation of gambling casinos; and that since what was granted was a license to operate and not a contract, no vested property right was at stake. Both PAGCOR and Fontana moved for the reconsideration of the aforesaid Order. Fontana maintained that it was entitled to a Writ of Preliminary Injunction while PAGCOR wanted deleted the finding that it had the authority to issue casino license to FDC under PD No. 1869.[1] On February 5, 2009, PAGCOR filed a petition for certiorari and prohibition before the CA docketed as CA-G.R. SP No. 107247 entitled PAGCOR represented by Atty. Carlos R. Bautista, Jr. v. Hon. Ma. Theresa Dolores Estoesta and Fontana Development Corporation, questioning the November 18, 2008 Order, the November 19, 2008 Order and the December 4, 2008 Order of respondent judge. Meanwhile, on January 30, 2009, the RTC issued an order, which reconsidered its December 8, 2008 Order and granted the writ of preliminary injunction in favor of FDC. The trial court held that since public interest is not prejudiced, the license issued may not be revoked or rescinded by mere executive action. The fallo reads:
WHEREFORE, having sufficiently established a prima facie proof of violation of its right as a casino licensee under the MOA, FDC's application for the issuance of a writ of preliminary injunction is GRANTED. This reconsiders the Order dated December 8, 2008 insofar as it denied the issuance of a writ of preliminary injunction. Let a writ of preliminary injunction therefore ISSUE to become effective only upon posting of ONE HUNDRED MILLION PESOS (P100,000,000.00). SO ORDERED. The Writ of Preliminary Injunction[2] was issued on February 25, 2009. On February 17, 2009, PAGCOR filed its Motion for Reconsideration and to Dissolve the Preliminary Injunction for Insufficiency of Bond and Irreparable Injury to the Government, which was opposed by FDC. By Order issued on March 31, 2009, the RTC denied PAGCOR's motion for reconsideration of its Order dated January 30, 2009 that granted a writ of preliminary injunction in favor of FDC. On May 19, 2009, the CA rejected the petition in CA-G.R. SP No. 107247 for lack of merit. In dismissing PAGCOR's petition, the CA threw out PAGCOR's postulation that the RTC had no jurisdiction over the case and that the proper remedy is an original action before this Court, as the corporation is a body equal to the Securities and Exchange Commission (SEC). The appellate court reasoned that nowhere in Presidential Decree No. (PD) 1869 and Republic Act No. (RA) 9487 does it state that the instant petition can only be filed with this Court. Moreover, under RA 8799, the quasi-judicial powers earlier granted to the SEC under PD 902-A were transferred to the RTC, while the powers retained by the Commission are now subject to appeal to the CA.
An examination of the allegations of the complaint further revealed that it was an original action for injunction, and under Batas Pampansa Blg. (BP) 129, the RTC shall exercise original jurisdiction over writs of injunction. Lastly, the CA stressed that the case has been rendered moot and academic, as the TRO issued by Judge Estoesta lapsed on December 9, 2008 and its issuance has ceased to be a justiciable controversy. On the other hand, PAGCOR did not assail the writ of preliminary injunction issued by Judge Estoesta on February 25, 2009 after the CA petition was filed. In the instant petition, PAGCOR puts forward the following issues for the consideration of the Court, to wit:
The Court a quo and the trial court decided the question of substance (i.e. What is the proper remedy available to a party claiming to be aggrieved by PAGCOR in the exercise of its authority to operate games of chance/gambling and to license and regulate others to operate games of chance/gambling?) not theretofore determined by the Supreme Court. The trial court's TRO and later a Writ of Preliminary Injunction in favor of the private respondent prevented herein Petitioner from implementing the standard Authority to Operate. In issuing such processes the trial court has so far departed from the accepted and usual course of judicial proceedings, as to call for an exercise of the power of supervision. The trial court's TRO and later a Writ of Preliminary Injunction in favor of private respondent prevented herein Petitioner from collecting Government revenues in the form of the new license fee from private respondent under the standard Authority to Operate. In issuing such processes the trial court has so far departed from the accepted and usual course of judicial proceedings, as to call for an exercise of the power of supervision. The Court a quo in declaring moot and academic the question of the TRO issued by the trial court had sanctioned the trial court's departure from the accepted and usual course of judicial proceedings, as to call for an exercise of the power of supervision. The trial court in declaring that herein Petitioner issued the license (MOA) to herein private respondent under the authority of PD 1869 and not under E.O. 80, Section 5 decided such question of substance in a way not in accord with law or with the applicable decisions of the Supreme Court. We synthesize petitioner's issues to two core issues:
(1)Whether the Manila RTC or this Court has jurisdiction over FDC's complaint for injunction and specific performance; and (2)Did PAGCOR issue the license (MOA) under PD 1869 or under Executive Order No. (EO) 80, Section 5? On the threshold issue of jurisdiction, PAGCOR insists lack of jurisdiction of the trial court over the complaint of FDC and, hence, all the processes and writs issued by said court are null and void. It posits that the proper legal remedy of FDC is not through an injunction complaint before the trial court, but a petition for review on purely questions of law before this Court or an appeal to the Office of the President. It heavily relies on Sec. 9 of PD 1869,
which states that PAGCOR 'shall exercise all the powers, authority and responsibilities vested in the Securities and Exchange Commission,' and Sec. 6 of PD 902-A which provides for a petition for review to this Court from SEC's decisions. We are not convinced. Jurisdiction of a court over the subject matter of the action is a matter of law and is conferred only by the Constitution or by statute.[3] It is settled that jurisdiction is determined by the allegations of the complaint or the petition irrespective of whether plaintiff is entitled to all or some of the claims or reliefs asserted.[4]
A perusal of FDC's complaint in Civil Case No. 08-120338 easily reveals that it is an action for injunction based on an alleged violation of contractthe MOA between the parties which granted FDC the right to operate a casino inside the Clark Special Economic Zone (CSEZ). As such, the Manila RTC has jurisdiction over FDC's complaint anchored on Sec. 19, Chapter II of BP 129, which grants the RTCs original exclusive jurisdiction over 'all civil actions in which the subject of the litigation is incapable of pecuniary estimation.' Evidently, a complaint for injunction or breach of contract is incapable of pecuniary estimation. Moreover, the RTCs shall exercise original jurisdiction 'in the issuance of writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction which may be enforced in any part of their respective regions' under Sec. 21 of BP 129.
PAGCOR's claim of jurisdiction of this Court over the complaint in question heavily leans on Sec. 9 of PD 1869, PAGCOR's Charter, which provides:
Section 9. Regulatory Power.The Corporation shall maintain a Registry of the affiliated entities and shall exercise all the powers, authority and responsibilities vested in the Securities and Exchange Commission over such affiliated entities x x x. In view of the vestment to PAGCOR by PD 1869 of the powers, authority, and responsibilities of the SEC, PAGCOR concludes that any decision or ruling it renders has to be brought to this Court via a petition for review based on Sec. 6 of SEC's Charter, PD 902A, which reads:
The aggrieved party may appeal the order, decision or ruling of the Commission sitting en banc to the Supreme Court by petition for review in accordance with the pertinent provisions of the Rules of Court. This reasoning is flawed. A scrutiny of PD 1869 demonstrates that it has no procedure for the appeal or review of PAGCOR's decisions or orders. Neither does it make any express reference to an exclusive remedy that can be brought before this Court. Even a review of PD 1869's predecessor lawsPD 1067-A, 1067-B, 1067-C, 1399, and 1632, as well as its amendatory law, RA 9487do not confer original jurisdiction to this Court to review PAGCOR's actions and decisions.
PAGCOR, however, insists that this Court has jurisdiction over an action contesting its exercise of licensing and regulatory powers, i.e., the revocation of FDC's license to operate a casino in CSEZ and that FDC's complaint is a case of first impression.
PAGCOR's argument is bereft of merit. A similar factual setting was presented by PAGCOR in PAGCOR v. Viola,[5] which involves the controversy between PAGCOR and the Mimosa Regency Casino that operated inside the CSEZ. Mimosa filed a case for injunction and prayed for the issuance of a TRO before the Pampanga RTC when PAGCOR decided to close down the casino. In this case, PAGCOR likewise assailed the jurisdiction of the trial court by claiming that an original action before the CA is the proper remedy. In PAGCOR v. Viola, we ruled that PAGCOR, in the exercise of its licensing and regulatory powers, has no quasi-judicial functions, as Secs. 8 and 9 of PD 1869 do not grant quasijudicial powers to PAGCOR. As such, direct resort to this Court is not allowed. While we allowed said recourse in Del Mar v. PAGCOR[6] and Jaworski v. PAGCOR,[7] that is an exception to the principle of hierarchy of courts on the grounds of expediency and the importance of the issues involved. More importantly, we categorically ruled in PAGCOR v. Viola that cases involving revocation of a license falls within the original jurisdiction of the RTC, thus:
Having settled that PAGCOR's revocation of MONDRAGON's authority to operate a casino was not an exercise of quasi-judicial powers then it follows that the case was properly filed before the Regional Trial Court. Hence, as the Regional Trial Court had jurisdiction to take cognizance of the case, petitioner's contention that the temporary restraining order and the preliminary injunction by the trial court are void must fail.[8] Moreover, it is settled that the normal rule is to strictly follow the hierarchy of courts, thus:
The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily perform the functions assigned to it by the fundamental charter and immemorial tradition. A direct invocation of this Court's original jurisdiction to issue said writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is established policya policy that is necessary to prevent inordinate demands upon the Court's time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Court's docket.[9] While it is the trial court that has original jurisdiction over FDC's complaint, PAGCOR nevertheless prays that this Court 'suspend the Rules and directly decide the entire controversy in this proceeding instead of remanding the same to the trial court.'[10] In the exercise of its broad discretionary power, we will resolve FDC's complaint on the merits, instead of remanding it to the trial court for further proceedings. Moreover, the dispute between the parties involves a purely question of lawwhether the license or MOA was issued pursuant to PD 1869 or Sec. 5, EO 80, in relation to RA 7227, which does not
necessitate a full blown trial. Demands of substantial justice and equity require the relaxation of procedural rules.[11] In Lianga Bay v. Court of Appeals,[12] the Court held:
Remand of case to the lower court for further reception of evidence is not necessary where the court is in a position to resolve the dispute based on the records before it. On many occasions, the Court, in the public interest and the expeditious administration of justice, has resolved actions on the merits instead of remanding them to the trial court for further proceedings, such as where the ends of justice would not be subserved by the remand of the case or when public interest demands an early disposition of the case or where the trial court had already received all the evidence of the parties. The core issue to be resolved is whether the trial court erred in declaring that PAGCOR issued the license (MOA) to FDC under the authority of PD 1869 and not under EO 80, Sec. 5. PAGCOR maintains that the license it issued to the FDC was based on Sec. 5 of EO 80 and that its charter PD 1869 should be read together with said EO. When Sec. 5 was nullified in Coconut Oil Refiners Association, Inc. v. Torres,[13] the MOA it entered into with FDC was consequently voided. Such postulation must fail. Sec. 5 of EO 80 provides:
SECTION 5. Investments Climate in the CSEZ.Pursuant to Section 5(m) and Section 15 of RA 7227, the BCDA shall promulgate all necessary policies, rules and regulations governing the CSEZ, including investment incentives, in consultation with the local government units and pertinent government departments for implementation by the CDC. Among others, the CSEZ shall have all the applicable incentives in the Subic Special Economic and Free Port Zone under RA 7227 and those applicable incentives granted in the Export Processing Zones, the Omnibus Investments Code of 1987, the Foreign Investments Act of 1991 and new investments laws which may hereinafter be enacted. On the other hand, we quote Sec. 13 of RA 7227 in relation to Sec. 5 of EO 80:
Sec. 13. The Subic Bay Metropolitan Authority. (a)Creation of the Subic Bay Metropolitan Authority. - A body corporate to be known as the Subic Bay Metropolitan Authority is hereby created as an operating and implementing arm of the Conversion Authority. (b)Powers and functions of the Subic Bay Metropolitan Authority. - The Subic Bay Metropolitan Authority, otherwise known as the Subic Authority, shall have the following powers and function:
xxxx
7)To operate directly or indirectly or license tourism related activities subject to priorities and standards set by the Subic Authority including games and amusements, except horse racing, dog racing and casino gambling which shall continue to be licensed by the Philippine Amusement and Gaming Corporation (PAGCOR) upon recommendation of the Conversion Authority; to maintain and preserve the forested areas as a national park. A reading of the aforequoted provisions does not point to any authority granted to PAGCOR to license casinos within Subic, Clark, or any other economic zone. As a matter of fact, Sec. 13 of RA 7227 simply shows that SBMA has no power to license or operate casinos. Rather, said casinos shall continue to be licensed by PAGCOR. Hence, the source of PAGCOR's authority lies in its basic charter, PD 1869, as amended, and neither in RA 7227 nor its extension, EO 80, for the latter merely recognizes PAGCOR's power to license casinos. Indeed, PD 1869 empowers PAGCOR to regulate and control all games of chance within the Philippines, and clearly, RA 7227 or EO 80 cannot be the source of its powers, but its basic charter, PD 1869.
Basco v. PAGCOR[14] points to PD 1869 as the source of authority for PAGCOR to regulate and centralize all games of chance authorized by existing franchise or law, thus:
P.D. 1869 was enacted pursuant to the policy of the government to 'regulate and centralize thru an appropriate institution all games of chance authorized by existing franchise or permitted by law' (1st Whereas Clause, PD 1869). As was subsequently proved, regulating and centralizing gambling operations in one corporate entity the PAGCOR, was beneficial not just to the Government but to society in general. It is a reliable source of much needed revenue for the cash strapped Government. It provided funds for social impact projects and subjected gambling to 'close scrutiny, regulation, supervision and control of the Government' (4th Whereas Clause, PD 1869).
Lastly, only PD 1869, particularly Secs. 8 and 9 and not any other law, requires registration and affiliation of all persons primarily engaged in gambling with PAGCOR. We quote Secs. 8 and 9:
TITLE III - AFFILIATION PROVISIONS Section 8. Registration. - All persons primarily engaged in gambling, together with their allied business, with contract or franchise from the Corporation, shall register and affiliate their businesses with the Corporation. The Corporation shall issue the corresponding certificates of affiliation upon compliance by the registering entity with the promulgated rules and regulations.
Section 9. Regulatory Power. - The Corporation shall maintain a Registry of the affiliated entities, and shall exercise all the powers, authority and the responsibilities vested in the Securities and Exchange Commission over such affiliated entities mentioned under the preceding section, including but not limited to amendments of Articles of Incorporation and By-Laws, changes in corporate term, structure, capitalization and other matters concerning the operation of the affiliating entities, the provisions of the Corporation Code of the Philippines to the contrary notwithstanding, except only with respect to original incorporation. In the light of the foregoing provisions, it is unequivocal that PAGCOR draws its authority and power to operate and regulate casinos from PD 1869, and neither from Sec. 5 of EO 80 nor from RA 7227. Hence, since PD 1869 remains unaffected by the unconstitutionality of Sec. 5 of EO 80, then PAGCOR has no legal basis for nullifying or recalling the MOA with FDC and replacing it with its new Standard Authority to Operate (SAO). There is no infirmity in the MOA, as it was validly entered by PAGCOR under PD 1869 and remains valid until legally terminated in accordance with the MOA.
The reliance of PAGCOR on Coconut Oil Refiners Association, Inc.[15] to buttress its position that the MOA with FDC can be validly supplanted with the 10-year SAO is clearly misplaced. That case cannot be a precedent to the instant case, as it dealt solely with the void grant of tax and duty-free incentives inside CSEZ. The Court ruled in Coconut Oil Refiners Association, Inc. that the tax incentives within the CSEZ were an invalid exercise of quasilegislative powers, thus:
In the present case, while Section 12 of Republic Act No. 7227 expressly provides for the grant of incentives to the SSEZ, it fails to make any similar grant in favor of other economic zones, including the CSEZ. Tax and duty-free incentives being in the nature of tax exemptions, the basis thereof should be categorically and unmistakably expressed from the language of the statute. Consequently, in the absence of any express grant of tax and duty-free privileges to the CSEZ in Republic Act No. 7227, there would be no legal basis to uphold the questioned portions of two issuances: Section 5 of Executive Order No. 80 and Section 4 of BCDA Board Resolution No. 93-05-034, which both pertain to the CSEZ. (Emphasis supplied.) Lastly, the Court has to point out that the issuance of the 10-year SAO by PAGCOR in lieu of the MOA with FDC is a breach of the MOA. The MOA in question was validly entered into by PAGCOR and FDC on December 23, 1999. It embodied the license and authority to operate a casino, the nature and extent of PAGCOR's regulatory powers over the casino, and the rights and obligations of FDC. Thus, the MOA is a valid contract with all the essential elements required under the Civil Code. The parties are then bound by the stipulations of the MOA subject to the regulatory powers of PAGCOR. Well-settled is the rule that a contract voluntarily entered into by the parties is the law between them and all issues or controversies shall be resolved mainly by the provisions thereof.[16]
On the revocation, termination, or suspension of the license or grant of authority to operate a casino, PAGCOR agreed to the following stipulations on the revocation or termination of the MOA, viz:
VI. REVOCATION/TERMINATION 1.This grant of authority may be revoked or suspended at any time at the sole option of PAGCOR by giving written notice to RNDC [FDC] of such revocation or suspension stating therein the reason(s) for such revocation or suspension, on any of the following grounds:
a.RNDC makes any default which PAGCOR considers material in the due and punctual performance or observance of any of the obligations or undertakings contained in the Agreement, and RNDC shall fail to remedy such default, within fifteen (15) working days after notice specifying the default. Should the default consist in the non-remittance of the consideration as hereinabove specified, PAGCOR shall, in addition have the right to proceed against the Surety Bond, unless RNDC was able to cure the default so specified by PAGCOR within seventy-two (72) hours after notice specifying the default. RNDC shall be liable for interest at the prevailing commercial rates on all or portion of the amounts due.
b.There shall be any failure on the part of RNDC which PAGCOR considers material to comply with any provision of the Agreement and RNDC fails to remedy the same within fifteen (15) working days after notice specifying the default;
c.RNDC has become bankrupt;
d.After the RNDC casino shall have formally commenced gaming and amusement operations within the CSEZ, RNDC's continuous cumulative non-operation of the casino for a period of one (1) month except upon lawful order of the Court or force majeure, provided that upon the cessation of such cause or causes, RNDC shall immediately continue its casino operations, otherwise, such continuous non-operation for the period provided above shall be sufficient ground for revocation or suspension;
e.Failure of RNDC to comply with and observe any pertinent law, rule, regulation and/or ordinance promulgated by a competent authority, including PAGCOR, relative to the operation of the casino;
f.Such other situations analogous to the above.[17] Central to the present controversy is the term or period of effectivity of the MOA, as provided under the definition of terms in Title I and Title II, No. 4, which, for clarity, we reiterate in full:
'Period' refers to the period of time co-terminus with that of the franchise granted to PAGCOR in accordance with Section 10 of Presidential Decree No. 1869 including any extension thereof;[18]
xxxx 4.Non-exclusivity. PAGCOR and RNDC agree that the license granted to RNDC to engage in gaming and amusement operations within the CSEZ shall be non-exclusive and coterminus with the Charter of PAGCOR, or any extension thereof, and shall be for the period hereinabove defined.[19] (Emphasis supplied.) As parties to the MOA, FDC and PAGCOR bound themselves to all its provisions. After all, the terms of a contract have the force of law between the parties, and courts have no choice but to enforce such contract so long as they are not contrary to law, morals, good customs, or public policy.[20] A stipulation for the term or period for the effectivity of the MOA to be co-terminus with term of the franchise of PAGCOR including any extension is not contrary to law, morals, good customs, or public policy. It is beyond doubt that PAGCOR did not revoke or terminate the MOA based on any of the grounds enumerated in No. 1 of Title VI, nor did it terminate it based on the period of effectivity of the MOA specified in Title I and Title II, No. 4 of the MOA. Without explicitly terminating the MOA, PAGCOR simply informed FDC on July 18, 2008 that it is giving the latter an extension of the MOA on a month-to-month basis in gross contravention of the MOA. Worse, PAGCOR informed FDC only on October 6, 2008 that the MOA is deemed expired on July 11, 2008 without an automatic renewal and is replaced with a 10-year SAO. Clearly it is in breach of the MOA's stipulated effectivity period which is co-terminus with that of the franchise granted to PAGCOR in accordance with Sec. 10 of PD 1869 including any extension. Hence, PAGCOR's disregard of the MOA is without legal basis and must be nullified. PAGCOR has to respect the December 23, 1999 MOA it entered into with FDC, especially considering the huge investment poured into the project by the latter in reliance and pursuant to the MOA in question.
WHEREFORE, the petition is hereby DENIED for lack of merit. The Decision dated May 19, 2009 of the CA in CA-G.R. SP No. 107247 affirming the Orders dated November 18, 2008 and December 4, 2008 of the RTC, Branch 7 in Manila is hereby AFFIRMED. The writ of injunction issued on February 25, 2009 by the trial court pursuant to the January 30, 2009 Order in Civil Case No. 08-120338 is hereby made PERMANENT. PAGCOR is ordered to honor and comply with the stipulations of the MOA dated December 23, 1999, as amended, that it executed with FDC.
SECOND DIVISION G.R. No. 182779 : August 23, 2010 VICTORINA (VICTORIA) ALICE LIM LAZARO, Petitioner, v. BREWMASTER INTERNATIONAL, INC., Respondent. RESOLUTION NACHURA, J.: Before the Court is a petition for review on certiorari of the Court of Appeals (CA) Decision1 dated September 4, 2007 and Resolution dated January 31, 2008, which awarded the amount sought by respondent in its Complaint. As held by the CA, to grant the relief prayed for by respondent is, in the words of Section 6 of the Revised Rule on Summary Procedure, the judgment "warranted by the facts alleged in the complaint." Respondent, Brewmaster International, Inc., is a marketing company engaged in selling and distributing beer and other products of Asia Brewery, Inc. On November 9, 2005, it filed a Complaint for Sum of Money against Prescillo G. Lazaro (Prescillo) and petitioner, Victorina (also known as Victoria) Alice Lazaro, with the Metropolitan Trial Court (MeTC) of Makati City. The complaint alleged as follows: 6. During the period from February 2002 to May 2002, defendants obtained on credit from plaintiff beer and other products in the total amount of ONE HUNDRED THIRTY EIGHT THOUSAND FIVE HUNDRED TWO PESOS AND NINETY TWO CENTAVOS (Php 138,502.92), evidenced by sales invoices photocopies of which are hereto attached as Annexes "A," "A-1" to "A-11," 7. Despite repeated demands, defendants have failed and refused, and up to now, still fail and refuse to pay their aforesaid obligation to plaintiff in the amount of ONE HUNDRED THIRTY EIGHT THOUSAND FIVE HUNDRED TWO PESOS AND NINETY TWO CENTAVOS (Php 138,502.92) as evidenced by the demand letters dated 21 April 2003, 12 May 2003, 5 August 2003 and 17 August 2005, photocopies of which are hereto attached as Annexes "B," "C," "C-1," "D," "D-1," "D-2," and "E," "E-1," 8. Under the terms of the sales invoices, defendants agreed that in case of litigation, the venue shall only be at the proper courts of Makati City and to pay 24% interest on all overdue accounts. WHEREFORE, it is respectfully prayed that judgment be rendered in favor of plaintiff and against the defendants, ordering the latter to pay the sum of Php138,502.92 representing plaintiff's claim and the sum of Php33,240.00 as interest. Plaintiff prays for such other or further relief and remedies that are just and equitable in the premises.2 Annexes A, A-1 to A-11 are photocopies of sales invoices3 indicating the amount of the goods purchased and showing that they were sold to "TOTAL" and received by a certain Daniel Limuco.
Prescillo filed an answer with counterclaim, denying any knowledge of the obligation sued upon. According to Prescillo, he and petitioner had lived separately since January 15, 2002 and he never authorized petitioner to purchase anything from respondent. He pointed out that the purchaser of the items, as borne out by the sales invoices attached to the complaint, was Total, which should have been the one sued by respondent.4 Petitioner, in her own answer with counterclaims, likewise denied having transacted with respondent, and averred that the documents attached to the complaint showed that it was Total which purchased goods from respondent.5 On June 14, 2006, during the scheduled preliminary conference, petitioner and her co-defendant did not appear. Hence, the MeTC declared the case submitted for decision.6 On August 22, 2006, the MeTC dismissed the complaint, ratiocinating that respondent, as plaintiff, failed to meet the burden of proof required to establish its claim by preponderance of evidence. The court a quo noted that the sales invoices attached to the complaint showed that the beer and the other products were sold to Total and were received by a certain Daniel Limuco; they did not indicate, in any way, that the goods were received by petitioner or her husband.7 Respondent elevated the case to the Regional Trial Court (RTC) through a notice of appeal. Attached to its Memorandum was additional evidence, showing that it transacted with petitioner and her husband, who were then the operators and franchisees of the Total gasoline station and convenience store where the subject goods were delivered, and that Daniel Limuco was their employee.8 Unmoved, the RTC found no reversible error in the assailed decision. It agreed with the MeTC that respondent failed to submit any evidence proving that petitioner and her husband were liable for the obligation. The RTC disregarded the documents attached to the memorandum on the ground that admission of such additional evidence would be offensive to the basic rule of fair play and would violate the other party's right to due process. Thus, the RTC affirmed the assailed decision in toto.9 Respondent then went to the CA through a petition for review. There, it succeeded in obtaining a judgment in its favor. Applying Section 710 of the Revised Rule on Summary Procedure, in conjunction with Section 611 thereof, the CA held that judgment should have been rendered "as may be warranted by the facts alleged in the complaint" considering that both defendants failed to appear during the preliminary conference. The appellate court said that "by instead referring to the sales invoices and bypassing [the] ultimate facts [alleged in the complaint], the MeTC contravened the evident purposes of the [Revised] Rule on Summary Procedure directing that the judgment be based on the allegations
of the complaint, which were, firstly, to avoid delay and, secondly, to consider the non-appearance at the preliminary conference as an admission of the ultimate facts." The CA judiciously pronounced that: In fact, evidentiary matters (like the sales invoices attached to the complaint) were not yet to be considered as of that early stage of the proceedings known under the Rule on Summary Procedure as the preliminary conference. The evidentiary matters and facts are to be required only upon the termination of the preliminary conference and only if further proceedings become necessary to establish factual issues defined in the order issued by the court. (citing Section 9, Rule on Summary Procedure) Thus, finding the amount claimed to be warranted by the allegations in the complaint, the CA, in its September 4, 2007 Decision, reversed the trial court's decision and ordered petitioner and her husband to pay the said amount plus interests, thus: WHEREFORE, the D E C I S I O N DATED MARCH 12, 2007 is REVERSED AND SET ASIDE. The respondents are ORDERED to pay, jointly and severally, to the petitioner the amount of P138,502.92, plus interest of 6% per annum from the filing of the complaint until this judgment becomes final and executory, and 12% per annum upon finality of this judgment until full payment. The respondents are also ORDERED to pay the costs of suit. SO ORDERED.12 Petitioner filed a motion for reconsideration of the said Decision but the same was denied by the CA in its January 31, 2008 Resolution.13 Petitioner submits the following issues to this Court for resolution: Petitioner respectfully submits that the Honorable Court of Appeals erred in the interpretation of Section 6 of the Revised Rules of Summary Procedure when it reversed the Decision of the RTC, Branch 162 of Makati in Civil Case [N]o. 06-944. Petitioner further submits that the Court of Appeals erred in giving relief to the private respondent despite the lack of cause of action in its complaint against the petitioner herein.14 Petitioner contends that the Revised Rule on Summary Procedure does not warrant the automatic grant of relief in favor of the plaintiff when the complaint fails to state a cause of action. She avers that respondent's complaint fails to state a cause of action; hence, no relief can be given to respondent. Petitioner points out that the sales invoices formed part of the complaint and should be considered in determining whether respondent has a cause of action against her. Consideration of the said sales invoices, she avers, would show that there is no contractual relationship between her and respondent; the invoices did not indicate in any way that petitioner was liable for the amount stated therein. Petitioner is correct in saying that no relief can be awarded to respondent if its complaint does not state a cause of action. Indeed, if the complaint does not state a cause of action, then no relief can be
granted to the plaintiff and it would necessarily follow that the allegations in the complaint would not warrant a judgment favorable to the plaintiff. The basic requirement under the rules of procedure is that a complaint must make a plain, concise, and direct statement of the ultimate facts on which the plaintiff relies for his claim.15 Ultimate facts mean the important and substantial facts which either directly form the basis of the plaintiff's primary right and duty or directly make up the wrongful acts or omissions of the defendant.16 They refer to the principal, determinative, constitutive facts upon the existence of which the cause of action rests. The term does not refer to details of probative matter or particulars of evidence which establish the material elements.17 The test of sufficiency of the facts alleged in a complaint to constitute a cause of action is whether, admitting the facts alleged, the court could render a valid judgment upon the same in accordance with the prayer of the petition or complaint.18 To determine whether the complaint states a cause of action, all documents attached thereto may, in fact, be considered, particularly when referred to in the complaint.19 We emphasize, however, that the inquiry is into the sufficiency, not the veracity of the material allegations in the complaint.20 Thus, consideration of the annexed documents should only be taken in the context of ascertaining the sufficiency of the allegations in the complaint. Petitioner argues that the complaint fails to state a cause of action since reference to the sales invoices attached to and cited in paragraph six of the Complaint shows that it was not her who purchased and received the goods from respondent. Contrary to petitioner's stance, we find that the Complaint sufficiently states a cause of action. The following allegations in the complaint adequately make up a cause of action for collection of sum of money against petitioner: (1) that petitioner and her husband obtained beer and other products worth a total of P138,502.92 on credit from respondent; and (2) that they refused to pay the said amount despite demand. As correctly held by the CA, the sales invoices are not actionable documents. They were not the bases of respondent's action for sum of money but were attached to the Complaint only to provide details on the alleged transactions. They were evidentiary in nature and not even necessary to be stated or cited in the Complaint. At any rate, consideration of the attached sales invoices would not change our conclusion. The sales invoices, naming Total as the purchaser of the goods, do not absolutely foreclose the probability of petitioner being liable for the amounts reflected thereon. An invoice is nothing more than a detailed statement of the nature, quantity, and cost of the thing sold and has been considered not a bill of
sale.21 Had the case proceeded further, respondent could have presented evidence linking these sales invoices to petitioner. In Pea v. Court of Appeals,22 petitioners therein likewise argued that the sales invoices did not show that they had any involvement in the transactions covered by the same. What the Court said in reply to this argument bolsters our view in this petition: Although it appears in the other sales invoices that the petitioners were the salespersons who brokered the sales of the products covered by the said sales invoices to the vendees therein named, the said entries are not conclusive of the extent and the nature of the involvement of the petitioners in the sales of the products under the said sales invoices which are not absolutely binding. They may be explained and put to silence by all the facts and circumstances characterizing the true import of the dealings to which they refer. The facts contained in the said sales invoices may be contradicted by oral testimony.23 WHEREFORE, premises considered, the Court of Appeals Decision dated September 4, 2007 and Resolution dated January 31, 2008 are AFFIRMED. SO ORDERED. ANTONIO EDUARDO B Republic SUPREME Manila FIRST DIVISION G.R. No. 182403 : March 9, 2010 ATTY. RESTITUTO G. CUDIAMAT, ERLINDA P. CUDIAMAT1 and CORAZON D. CUDIAMAT, Petitioners, vs. BATANGAS SAVINGS AND LOAN BANK, INC., and THE REGISTER OF DEEDS, NASUGBU, BATANGAS, Respondents.
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DECISION CARPIO MORALES, J.: Petitioner Atty. Restituto Cudiamat and his brother Perfecto were the registered co-owners of a 320 square meter parcel of land (the property) in Balayan, Batangas, covered by TCT No. T-37889 of the Register of Deeds of Nasugbu, Batangas. Restituto, who resided in Ozamiz City with his wife, entrusted the custody of the title to who was residing in Balayan.
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In 1979, Perfecto, without the knowledge and consent of Restituto, obtained a loan from respondent Batangas Savings and Loan Bank, Inc. (the bank). To secure the payment of the loan, Perfecto mortgaged the property for the purpose of which he presented a Special Power of Attorney (SPA)
purportedly executed by Restituto, with the marital consent of his wife-herein co-petitioner Erlinda Cudiamat.
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On June 19, 1991, Restituto was informed, via letter2 dated June 7, 1991 from the bank, that the property was foreclosed. He thus, by letter3 dated June 25, 1991, informed the bank that he had no participation in the execution of the mortgage and that he never authorized Perfecto for the purpose.
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In the meantime, Perfecto died in 1990. In 1998, as Perfectos widow petitioner Corazon was being evicted from the property, she and her co-petitioner-spouses Restituto and Erlinda filed on August 9, 1999 before the Regional Trial Court (RTC) of Balayan a complaint4 "for quieting of title with damages" against the bank and the Register of Deeds of Nasugbu, docketed as Civil Case No. 3618, assailing the mortgage as being null and void as they did not authorize the encumbrance of the property.
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In its Answer to the complaint, the bank, maintaining the validity of the mortgage, alleged that it had in fact secured a title in its name, TCT No. T-48405, after Perfecto failed to redeem the mortgage; that the Balayan RTC had no jurisdiction over the case as the bank had been placed under receivership and under liquidation by the Philippine Deposit Insurance Corporation (PDIC); that PDIC filed before the RTC of Nasugbu a petition for assistance in the liquidation of the bank which was docketed as SP No. 576; and that jurisdiction to adjudicate disputed claims against it is lodged with the liquidation court-RTC Nasugbu.
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By Decision of January 17, 2006,5 Branch 9 of the Balayan RTC rendered judgment, in the complaint for quieting of title, in favor of the plaintiffs-herein petitioners. It ordered respondent Register of Deeds of Nasugbu to cancel the encumbrance annotated on TCT No. T-37889, and to cancel TCT No. T-48405 issued in the name of the bank and reinstate the former title. It also directed the bank to return the property to petitioner spouses Restituto and Erlinda and to pay P20,000 to all the petitioners to defray the costs of suit.
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The bank appealed to the Court of Appeals, contending, inter alia, that the Balayan RTC had no jurisdiction over petitioners complaint for quieting of title.
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By the assailed Decision of December 21, 2007,6 the appellate court, ruling in favor of the bank, dismissed petitioners complaint for quieting of title, without prejudice to the right of petitioners to take up their claims with the Nasugbu RTC sitting as a liquidation court.
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To the appellate court, the Balayan RTC, as a court of general jurisdiction, should have deferred to the Nasugbu RTC which sits as a liquidation court, given that the bank was already under receivership when petitioners filed the complaint for quieting of title.
Petitioners Motion for Reconsideration having been denied by the appellate court by Resolution of March 27, 2008, they filed the present petition for review on certiorari.
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Assailing the appellate courts ruling that the Balayan RTC had no jurisdiction over their complaint, petitioners argue that their complaint was filed earlier than PDICs petition for assistance in the liquidation; and that the bank is now estopped from questioning the jurisdiction of the Balayan RTC because it actively participated in the proceedings thereat. The petition is impressed with merit. Estoppel bars the bank from raising the issue of lack of jurisdiction of the Balayan RTC.
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In Lozon v. NLRC,7 the Court came up with a clear rule on when jurisdiction by estoppel applies and when it does not:
The operation of estoppel on the question of jurisdiction seemingly depends on whether the lower court actually had jurisdiction or not. If it had no jurisdiction, but the case was tried and decided upon the theory that it had jurisdiction, the parties are not barred, on appeal, from assailing such jurisdiction, for the same "must exist as a matter of law, and may not be conferred by the consent of the parties or by estoppel." However, if the lower court had jurisdiction, and the case was heard and decided upon a given theory, such, for instance, as that the court had no jurisdiction, the party who induced it to adopt such theory will not be permitted, on appeal, to assume an inconsistent position that the lower court had jurisdiction (underscoring supplied) The ruling was echoed in Metromedia Times Corporation v. Pastorin.8
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In the present case, the Balayan RTC, sitting as a court of general jurisdiction, had jurisdiction over the complaint for quieting of title filed by petitioners on August 9, 1999. The Nasugbu RTC, as a liquidation court, assumed jurisdiction over the claims against the bank only on May 25, 2000, when PDICs petition for assistance in the liquidation was raffled thereat and given due course.
While it is well-settled that lack of jurisdiction on the subject matter can be raised at any time and is not lost by estoppel by laches, the present case is an exception. To compel petitioners to re-file and relitigate their claims before the Nasugbu RTC when the parties had already been given the opportunity to present their respective evidence in a full-blown trial before the Balayan RTC which had, in fact, decided petitioners complaint (about two years before the appellate court rendered the assailed decision) would be an exercise in futility and would unjustly burden petitioners.
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The Court, in Valenzuela v. Court of Appeals,9 held that as a general rule, if there is a judicial liquidation of an insolvent bank, all claims against the bank should be filed in the liquidation proceeding. The Court in Valenzuela, however, after considering the circumstances attendant to the case, held that the general rule should not be applied if to order the aggrieved party to refile or relitigate its case before the litigation court would be "an exercise in futility." Among the circumstances the Court considered in that case is the fact that the claimants were poor and the disputed parcel of land was their only property, and the parties claims and defenses were properly ventilated in and considered by the judicial court.
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In the present case, the Court finds that analogous considerations exist to warrant the application of Valenzuela. Petitioner Restituto was 78 years old at the time the petition was filed in this Court, and his co-petitioner-wife Erlinda died10 during the pendency of the case. And, except for co-petitioner Corazon, Restituto is a resident of Ozamis City. To compel him to appear and relitigate the case in the liquidation court-Nasugbu RTC when the issues to be raised before it are the same as those already exhaustively passed upon and decided by the Balayan RTC would be superfluous.
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WHEREFORE, the petition is GRANTED. The Decision of December 21, 2007 and Resolution dated March 27, 2008 of the Court of Appeals are SET ASIDE. The Decision dated January 17, 2006 of the Regional Trial Court of Balayan, Batangas, Branch 9 is REINSTATED.

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