CRIMRPO SECTIONS 1, 2, and 3 of Rule 111

Republic v. Court of Appeals GR No. 116463

June 10, 2003
J. Carpio
REPUBLIC OF THE PHILIPPINES thru the DEPARTMENT OF COURT OF APPEALS, HON. AMANDA VALERACABIGAO in
PUBLIC WORKS and HIGHWAYS (DPWH) her capacity as Presiding Judge of the Regional Trial Court,
petitioner Branch 73, Malabon, Metro Manila, and NAVOTAS
INDUSTRIAL CORPORATION
respondents
SUMMARY
The DPWH entered into a dredging contract with the Navotas Industrial Corporation for the amount of Php 194,454,000.
For the alleged failure of the DPWH to pay the full amount for the accomplished work, NIC filed a complaint for sum of
money with the Malabon Trial Court against the Republic of the Philippines through the DPWH. On the other hand, the
DPWH, through the Ombudsman, filed a case before the Sandiganbayan for estafa thru falsification of public documents
and for violation of Republic Act No. 3019 against former Minister Hipolito. Other DPWH officials involved in awarding the
dredging contracts to NIC, as well as Cipriano Bautista, president of NIC, were also named respondents. Petitioner moved
to consolidate the civil case together with the two criminal cases before the Sandiganbayan on the ground that the civil
case for collection and the criminal cases arose from the same incidents and involve the same facts. The Supreme Court
affirmed with modification the ruling of the CA, which in turn affirmed the RTC, denying the Motion to Consolidate of the
petitioner. The SC held that the cases cannot be consolidated for their failure to meet certain requirements and for being
contrary to Section 1 of Rule 111. Moreover, the SC ordered the suspension of the civil case until a fter the termination of
the criminal cases before the Sandiganbayan pursuant to Section 2 of Rule 111. *see ratio*
DOCTRINES
• Consolidation is a matter of discretion with the court. Consolidation becomes a matter of right only when the
cases sought to be consolidated involve similar questions of fact and law, provided certain requirements are met.
The purpose of consolidation is to avoid multiplicity of suits, prevent delay, clear congested dockets, simplify the
work of the trial court, and save unnecessary expense.
• An essential requisite of consolidation is that the court must have jurisdiction over all the cases consolidated
before it.
• The Rules of Court do not allow the filing of a counterclaim or a third -party complaint in a criminal case.
• If the civil and criminal cases cannot be consolidated and if such cases do not fall under the provisions of Section
3 of Rule 111 and Article 31 of the Civil Code which provide for situations where the civil case can proceed
independently and separately from the criminal case, Section 2 of Rule 111 shall apply. It states that “if the
criminal action is filed after the said civil action has already been instituted, the latter shall be suspended in
whatever stage it may be found before judgment on the merits.”
NATURE OF THE CASE
Petition for Review of the Decision of the Court of Appeals affirming the Order of the Regional Trial Court of Malabon
which denied the motion of petitioner to consolidate Civil Case No. 1153-MN pending before it with Criminal Cases Nos.
16889-16900 filed with the Sandiganbayan
FACTS
➢ Private respondent Navotas Industrial Corporation (“NIC”) is a corporation engaged in dredging operations
throughout the Philippines.
➢ On 27 November 1985, then Public Works and Highways Minister Jesus Hipolito requested former President
Ferdinand E. Marcos to release P800 million to finance the immediate implementation of dredging, flood control
and related projects in Metro Manila, Bulacan, Pampanga and Leyte.
➢ Of the total funds approved for release, P615 million went to the National Capital Region of the Ministry of Public
Works and Highways (“DPWH”).
➢ The DPWH awarded one of the twenty-one contractors, NIC, P194,454,000.00 worth of dredging work in four
contracts for completion within 350 calendar days.
➢ NIC contends that it accomplished 95.06 percent of the required total volume of work or P184,847,970.00 worth
of services based on an alleged evaluation by DPWH. However, NIC maintains that DPWH paid only 79.22 percent
of the accomplished work, leaving a balance of P30,799,676.00.
➢ On 20 September 1988, NIC filed a complaint for sum of money with the Malabon trial court against the
Republic of the Philippines, thru the DPWH. The case was docketed as Civil Case No. 1153-MN.
 ➢ In its answer, petitioner contends that upon verification and investigation, the DPWH fact-finding committee
discovered that the dredging contracts of NIC with DPWH were null and void. Petitioner claims that NIC worked
on the project five or six months before the award of the dredging contracts to NIC. The contracts of NIC were
awarded without any public bidding. Moreover, DPWH discovered that NIC, through its corporate officers,
connived with some DPWH officials in falsifying certain public documents to make it appear that NIC had
completed a major portion of the project, when no dredging work was actually performed. The scheme enabled
NIC to collect from DPWH P146,962,072.47 as payment for work allegedly accomplished.
➢ Petitioner thus filed a counterclaim for the return of the P146,962,072.47 plus interest and exemplary damages
of P100 million.
➢ On 14 July 1986, the DPWH fact-finding committee filed with the Office of the Tanodbayan a case for estafa
thru falsification of public documents and for violation of Republic Act No. 3019 against former Minister
Hipolito. Other DPWH officials involved in awarding the dredging contracts to NIC, as well as Cipriano Bautista,
president of NIC, were also named respondents. The charges were for four counts corresponding to the four
contracts that DPWH entered into with NIC.
➢ Subsequently, the Ombudsman filed the corresponding Informations with the First Division of the Sandiganbayan
against all the respondents in TBP Case No. 8601163. The cases were docketed as Criminal Cases Nos. 16889-
16900.
➢ On 14 April 1993, petitioner filed before the Malabon trial court a Motion to Consolidate Civil Case No.
1153MN with Criminal Cases Nos. 1688916900 in the Sandiganbayan. Petitioner argued that the civil case for
collection and the criminal cases arose from the same incidents and involve the same facts. Thus, these cases
should be consolidated as mandated by Section 4(b) of Presidential Decree No. 1606, as amended.
➢ RTC of Malabon: DENIED Motion for Consolidation
➢ CA: DENIED Petition for Certiorari, Prohibition, and Mandamus filed by petitioner
ISSUE/S
I. Whether or not Civil Case No. 1153-MN pending with the Malabon trial court should be consolidated with
Criminal Cases Nos. 16889-16900 filed with the Sandiganbayan – NO
II. Whether or not NIC’s civil case before the Malabon trial court for collection of sum of money can proceed
independently of the criminal cases filed with the Sandiganbayan – NO. IT MUST BE SUSPENDED UNTIL
AFTER THE TERMINATION OF THE CRIMINAL CASES FILED WITH THE SANDIGANBAYAN.
RATIO
ON THE ISSUE OF CONSOLIDATION
✓ Consolidation is a matter of discretion with the court. Consolidation becomes a matter of right only when the
cases sought to be consolidated involve similar questions of fact and law, provided certain requirements are met.
The purpose of consolidation is to avoid multiplicity of suits, prevent delay, clear congested dockets, simplify the
work of the trial court, and save unnecessary expense.
✓ The Supreme Court said that it cannot order the consolidation of the civil case for collection with the criminal
cases for two reasons.
✓ FIRST, the Sandiganbayan has no jurisdiction over the collection case. An essential requisite of consolidatio n is
that the court must have jurisdiction over all the cases consolidated before it. PD 1606, as amended by RA 8249,
does not include civil cases for collection of sum of money among the cases falling under the jurisdiction of the
Sandiganbayan. If the collection case in the Malabon trial court will be consolidated with the criminal cases, the
Sandiganbayan will have no jurisdiction to hear and decide the collection case. Even if NIC proves it is entitled to
payment, the Sandiganbayan will have no jurisdiction to award any money judgment to NIC. NIC will still have to
file a separate case in the regular court for the collection of its claim. Thus, the avowed purpose of consolidation
which is to avoid multiplicity of suits will not be achieved.
✓ SECOND, the Rules of Court do not allow the filing of a counterclaim or a third -party complaint in a criminal
case. The consolidation of the civil case filed by NIC with the criminal cases in the Sandiganbayan will amount
to a counter claim or a third-party complaint in a criminal case. While NIC, as a corporate entity, is not an
accused in the criminal cases, a consolidation of NICs collection case with the criminal cases will have the same
effect of a counterclaim or a third-party complaint against petitioner and DPWH. In such case, the rule against
counterclaims and third-party complaints in criminal cases may be applied by analogy.
✓ Section 1, Rule 111 of the 2000 Rules on Criminal Procedure expressly requires the accused to litigate his
counterclaim separately from the criminal action.

SECTION 1. Institution of criminal and civil actions.—

 (a) x x x No counterclaim, cross-claim or third-party complaint may be filed by the accused in the criminal case, but
any cause of action which could have been the subject thereof may be litigated in a separate civil action.

✓ A counterclaim in a criminal case must be litigated separately to avoid complication and co nfusion in the
resolution of the criminal cases. This is the rationale behind Section 1 of Rule 111. The same rationale applies to
NIC’s collection case against petitioner and DPWH. Thus, NIC’s collection case must be litigated separately before
the Malabon trial court to avoid confusion in resolving the criminal cases with the Sandiganbayan.

ON THE ISSUE OF W/N THE CIVIL ACTION CAN PROCEED INDEPENDENTLY AND SEPARATELY FROM THE CRIMINAL CASE
✓ Under Section 3 of Rule 111, civil actions falling under Articles 32, 33, 34 or 2176 may proceed independently and
separately from the criminal case. However, NIC’s collection case for unpaid services from its dredging contracts
with DPWH obviously does not fall under Articles 32, 33 or 34 (on Human Relations) of the Civil Code. Neither
does it fall under Article 2176 (on quasi-delict) of the Civil Code. THUS, NIC cannot invoke any of these articles.
✓ The only other possibility is for NIC’s civil action to fall under Article 31 of the Civil Code which provides that
“when the civil action is based on an obligation not arising from the act or omission complained of as a felony,
such civil action may proceed independently of the criminal proceedings and regardless of the result of the
latter.”
✓ Article 31 speaks of a civil action “based on an obligation not arising from the act x x x complained of as a felony.”
This clearly means that the obligation must arise from an act not constituting a crime. Hence, when the civil
action is based on a purported contract that is assailed as illegal per se, Article 31 does not apply.
✓ Clearly, NIC’s civil case before the Malabon trial court does not fall under Article 31 of the Civil Code. Under
Section 3 (g) of the Anti-Graft and Corrupt Practices Act, entering into a contract that is manifestly and grossly
disadvantageous to the government is “declared to be unlawful.” If the act of entering into the contract is
assailed as a crime in itself, then the issue of whether the contract is illegal must first be resolved before any civil
action based on the contract can proceed. Only the Sandiganbayan has the jurisdiction to decide whether the act
of entering into such contract is a crime, where the salary grade of one of the accused is grade 27 or higher, as in
Criminal Cases Nos. 16889-16900 filed with the Sandiganbayan.
✓ This calls then for the application of the second paragraph of Section 2 of Rule 111 which states that “if the
criminal action is filed after the said civil action has already been instituted, the latter shall be suspended in
whatever stage it may be found before judgment on the merits.” Consequently, the civil case for collection
pending in the Malabon trial court must be suspended until after the termination of the criminal cases filed
with the Sandiganbayan.
✓ The suspension of the civil case for collection of sum of money will avoid the possibility of conflicting decisions
between the Sandiganbayan and the Malabon trial court on the validity of NIC’s dredging contracts. If the
Sandiganbayan declares the dredging contracts illegal and void ab initio, and such declaration becomes final, then
NIC’s civil case for collection of sum of money will have no legal leg to stand on. However, if the Sandiganbayan
finds the dredging contracts valid, then NIC’s collection case before the Malabon trial court can then proceed to
trial.
RULING
WHEREFORE, the petition is DENIED and the Decision of the Court of Appeals dated 18 July 1994 is AFFIRMED with
MODIFICATION. The counterclaim of petitioner in Civil Case No. 1153-MN pending with the Regional Trial Court of
Malabon, Branch 73, is deemed abandoned. The Regional Trial Court of Malabon, Branch 73, is ordered to suspend the
trial of Civil Case No. 1153-MN until the termination of Criminal Cases Nos. 16889-16900 filed with the Sandiganbayan. SO
ORDERED.
GUINTO