Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 161657 October 4, 2007

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
HON. VICENTE A. HIDALGO, in his capacity as Presiding Judge of the
Regional Trial Court of Manila, Branch 37, CARMELO V. CACHERO, in his
capacity as Sheriff IV, Regional Trial Court of Manila, and TARCILA
LAPERAL MENDOZA, Respondents.

DECISION

GARCIA, J.:

Via this verified petition for certiorari and prohibition under Rule 65 of the Rules of
Court, the Republic of the Philippines ("Republic," for short), thru the Office of
the Solicitor General (OSG), comes to this Court to nullify and set aside the
decision dated August 27, 2003 and other related issuances of the Regional Trial
Court (RTC) of Manila, Branch 37, in its Civil Case No. 99-94075. In directly
invoking the Court’s original jurisdiction to issue the extraordinary writs of
certiorari and prohibition, without challenge from any of the respondents, the
Republic gave as justification therefor the fact that the case involves an
over TWO BILLION PESO judgment against the State, allegedly rendered in
blatant violation of the Constitution, law and jurisprudence.

By any standard, the case indeed involves a colossal sum of money which, on
the face of the assailed decision, shall be the liability of the national government
or, in fine, the taxpayers. This consideration, juxtaposed with the constitutional
and legal questions surrounding the controversy, presents special and compelling
reasons of public interests why direct recourse to the Court should be allowed, as
an exception to the policy on hierarchy of courts.

At the core of the litigation is a 4,924.60-square meter lot once covered by

Transfer Certificate of Title (TCT) No. 118527 of the Registry of Deeds of Manila
in the name of the herein private respondent Tarcila Laperal Mendoza (Mendoza),
married to Perfecto Mendoza. The lot is situated at No. 1440 Arlegui St., San
Miguel, Manila, near the Malacañang Palace complex. On this lot, hereinafter
referred to as the Arlegui property, now stands the Presidential Guest House
which was home to two (2) former Presidents of the Republic and now appears to
be used as office building of the Office of the President. 1

The facts:

Sometime in June 1999, Mendoza filed a suit with the RTC of Manila for
reconveyance and the corresponding declaration of nullity of a deed of sale and
title against the Republic, the Register of Deeds of Manila and one Atty. Fidel
Vivar. In her complaint, as later amended, docketed as Civil Case No. 99-
94075 and eventually raffled to Branch 35 of the court, Mendoza essentially
alleged being the owner of the disputed Arlegui property which the Republic
forcibly dispossessed her of and over which the Register of Deeds of Manila
issued TCT No. 118911 in the name of the Republic.

Answering, the Republic set up, among other affirmative defenses, the State’s
immunity from suit.

The intervening legal tussles are not essential to this narration. What is material
is that in an Order of March 17, 2000, the RTC of Manila, Branch 35, dismissed
Mendoza’s complaint. The court would also deny, in another order dated May 12,
2000, Mendoza’s omnibus motion for reconsideration. On a petition for certiorari,
however, the Court of Appeals (CA), in CA-G.R. SP No. 60749, reversed the trial
court’s assailed orders and remanded the case to the court a quo for further
proceedings.2 On appeal, this Court, in G.R. No. 155231, sustained the CA’s
reversal action.3

From Branch 35 of the trial court whose then presiding judge inhibited himself
from hearing the remanded Civil Case No. 99-94075, the case was re-raffled to
Branch 37 thereof, presided by the respondent judge.

On May 5, 2003, Mendoza filed a Motion for Leave of Court to file a Third
Amended Complaint with a copy of the intended third amended complaint thereto
attached. In the May 16, 2003 setting to hear the motion, the RTC, in open court
and in the presence of the Republic’s counsel, admitted the third amended
complaint, ordered the Republic to file its answer thereto within five (5) days from
May 16, 2003 and set a date for pre-trial.

In her adverted third amended complaint for recovery and reconveyance of

the Arlegui property, Mendoza sought the declaration of nullity of a supposed
deed of sale dated July 15, 1975 which provided the instrumentation toward the
issuance of TCT No. 118911 in the name of the Republic. And aside from the
cancellation of TCT No. 118911, Mendoza also asked for the reinstatement of her
TCT No. 118527.4 In the same third amended complaint, Mendoza averred that,
since time immemorial, she and her predecessors-in-interest had been in
peaceful and adverse possession of the property as well as of the owner’s
duplicate copy of TCT No. 118527. Such possession, she added, continued "until
the first week of July 1975 when a group of armed men representing themselves
to be members of the Presidential Security Group [PSG] of the then President
Ferdinand E. Marcos, had forcibly entered [her] residence and ordered [her] to
turn over to them her … Copy of TCT No. 118525 … and compelled her and the
members of her household to vacate the same …; thus, out of fear for their lives,
[she] handed her Owner’s Duplicate Certificate Copy of TCT No. 118527 and had
left and/or vacated the subject property." Mendoza further alleged the following:

1. Per verification, TCT No. 118527 had already been cancelled by virtue
of a deed of sale in favor of the Republic allegedly executed by her and
her deceased husband on July 15, 1975 and acknowledged before Fidel
Vivar which deed was annotated at the back of TCT No. 118527 under PE:
2035/T-118911 dated July 28, 1975; and
 2. That the aforementioned deed of sale is fictitious as she (Mendoza) and
her husband have not executed any deed of conveyance covering the
disputed property in favor of the Republic, let alone appearing before Fidel
Vivar.

Inter alia, she prayed for the following:

4. Ordering the … Republic to pay plaintiff [Mendoza] a reasonable

compensation or rental for the use or occupancy of the subject property in
the sum of FIVE HUNDRED THOUSAND (P500,000.00) PESOS a month
with a five (5%) per cent yearly increase, plus interest thereon at the legal
rate, beginning July 1975 until it finally vacates the same;

5. Ordering the … Republic to pay plaintiff’s counsel a sum equivalent to

TWENTY FIVE (25%) PER CENT of the current value of the subject
property and/or whatever amount is recovered under the premises;
Further, plaintiff prays for such other relief, just and equitable under the
premises.

On May 21, 2003, the Republic, represented by the OSG, filed a Motion for
Extension (With Motion for Cancellation of scheduled pre-trial). In it, the Republic
manifested its inability to simply adopt its previous answer and, accordingly,
asked that it be given a period of thirty (30) days from May 21, 2003 or until June
20, 2003 within which to submit an Answer.5 June 20, 2003 came and went, but
no answer was filed. On July 18, 2003 and again on August 19, 2003, the OSG
moved for a 30-day extension at each instance. The filing of the last two motions
for extension proved to be an idle gesture, however, since the trial court had
meanwhile issued an order6 dated July 7, 2003 declaring the petitioner Republic
as in default and allowing the private respondent to present her evidence ex-
parte.

The evidence for the private respondent, as plaintiff a quo, consisted of her
testimony denying having executed the alleged deed of sale dated July 15, 1975
which paved the way for the issuance of TCT No. 118911. According to her, said
deed is fictitious or inexistent, as evidenced by separate certifications, the first
(Exh. "E"), issued by the Register of Deeds for Manila and the second
(Exh. "F"), by the Office of Clerk of Court, RTC Manila. Exhibit "E"7 states that a
copy of the supposed conveying deed cannot, despite diligent efforts of records
personnel, be located, while Exhibit "F"8 states that Fidel Vivar was not a
commissioned notary public for and in the City of Manila for the year 1975. Three
other witnesses9 testified, albeit their testimonies revolved around the appraisal
and rental values of the Arlegui property.

Eventually, the trial court rendered a judgment by default 10 for Mendoza and
against the Republic. To the trial court, the Republic had veritably confiscated
Mendoza’s property, and deprived her not only of the use thereof but also denied
her of the income she could have had otherwise realized during all the years she
was illegally dispossessed of the same.

Dated August 27, 2003, the trial court’s decision dispositively reads as follows:

WHEREFORE, judgment is hereby rendered:

 1. Declaring the deed of sale dated July 15, 1975, annotated at the back
of [TCT] No. 118527 as PE:2035/T-118911, as non-existent and/or
fictitious, and, therefore, null and void from the beginning;

2. Declaring that [TCT] No. 118911 of the defendant Republic of the

Philippines has no basis, thereby making it null and void from the
beginning;

3. Ordering the defendant Register of Deeds for the City of Manila to

reinstate plaintiff [Mendoza’s TCT] No. 118527;

4. Ordering the defendant Republic … to pay just compensation in the

sum of ONE HUNDRED FORTY THREE MILLION SIX HUNDRED
THOUSAND (P143,600,000.00) PESOS, plus interest at the legal rate,
until the whole amount is paid in full for the acquisition of the subject
property;

5. Ordering the plaintiff, upon payment of the just compensation for the
acquisition of her property, to execute the necessary deed of conveyance
in favor of the defendant Republic …; and, on the other hand, directing the
defendant Register of Deeds, upon presentation of the said deed of
conveyance, to cancel plaintiff’s TCT No. 118527 and to issue, in lieu
thereof, a new Transfer Certificate of Title in favor of the defendant
Republic;

6. Ordering the defendant Republic … to pay the plaintiff the sum of ONE
BILLION FOUR HUNDRED EIGHTY MILLION SIX HUNDRED TWENTY
SEVEN THOUSAND SIX HUNDRED EIGHTY
EIGHT (P1,480,627,688.00) PESOS, representing the reasonable rental
for the use of the subject property, the interest thereon at the legal rate,
and the opportunity cost at the rate of three (3%) per cent per annum,
commencing July 1975 continuously up to July 30, 2003, plus an
additional interest at the legal rate, commencing from this date until the
whole amount is paid in full;

7. Ordering the defendant Republic … to pay the plaintiff attorney’s fee, in

an amount equivalent to FIFTEEN (15%) PER CENT of the amount due to
the plaintiff.

With pronouncement as to the costs of suit.

SO ORDERED. (Words in bracket and emphasis added.)

Subsequently, the Republic moved for, but was denied, a new trial per order of
the trial court of October 7, 2003.11 Denied also was its subsequent plea for
reconsideration.12 These twin denial orders were followed by several orders and
processes issued by the trial court on separate dates as hereunder indicated:

1. November 27, 2003 - - Certificate of Finality declaring the August 27,

2003 decision final and executory.13
 2. December 17, 2003 - - Order denying the Notice of Appeal filed on
November 27, 2003, the same having been filed beyond the reglementary
period.14

3. December 19, 2003 - - Order15 granting the private respondent’s motion

for execution.

4. December 22, 2003 - - Writ of Execution.16

Hence, this petition for certiorari.

By Resolution17 of November 20, 2006, the case was set for oral arguments. On
January 22, 2007, when this case was called for the purpose, both parties
manifested their willingness to settle the case amicably, for which reason the
Court gave them up to February 28, 2007 to submit the compromise agreement
for approval. Following several approved extensions of the February 28, 2007
deadline, the OSG, on August 6, 2007, manifested that it is submitting the case
for resolution on the merits owing to the inability of the parties to agree on an
acceptable compromise.

In this recourse, the petitioner urges the Court to strike down as a nullity the trial
court’s order declaring it in default and the judgment by default that followed.
Sought to be nullified, too, also on the ground that they were issued in grave
abuse of discretion amounting to lack or in excess of jurisdiction, are the orders
and processes enumerated immediately above issued after the rendition of the
default judgment.

Petitioner lists five (5) overlapping grounds for allowing its petition. It starts off by
impugning the order of default and the judgment by default. To the petitioner, the
respondent judge committed serious jurisdictional error when he proceeded to
hear the case and eventually awarded the private respondent a staggering
amount without so much as giving the petitioner the opportunity to present its
defense.

Petitioner’s posture is simply without merit.

Deprivation of procedural due process is obviously the petitioner’s threshold

theme. Due process, in its procedural aspect, guarantees in the minimum the
opportunity to be heard.18 Grave abuse of discretion, however, cannot plausibly
be laid at the doorstep of the respondent judge on account of his having issued
the default order against the petitioner, then proceeding with the hearing and
eventually rendering a default judgment. For, what the respondent judge did hew
with what Section 3, Rule 9 of the Rules of Court prescribes and allows in the
event the defending party fails to seasonably file a responsive pleading. The
provision reads:

SEC. 3. Default; declaration of.- If the defending party fails to answer within the
time allowed therefor, the court shall, upon motion of the claiming party with
notice to the defending party, and proof of such failure, declare the defending
party in default. Thereupon, the court shall proceed to render judgment granting
the claimant such relief as his pleading may warrant, unless the court in its
discretion requires the claimant to submit evidence …. 19
While the ideal lies in avoiding orders of default, 20 the policy of the law being to
have every litigated case tried on its full merits, 21 the act of the respondent judge
in rendering the default judgment after an order of default was properly issued
cannot be struck down as a case of grave abuse of discretion.

The term "grave abuse of discretion," in its juridical sense, connotes capricious,
despotic, oppressive or whimsical exercise of judgment as is equivalent to lack of
jurisdiction.22 The abuse must be of such degree as to amount to an evasion of a
positive duty or a virtual refusal to perform a duty enjoined by law, as where the
power is exercised in a capricious manner. The word "capricious," usually used in
tandem with "arbitrary," conveys the notion of willful and unreasoning action. 23

Under the premises, the mere issuance by the trial court of the order of default
followed by a judgment by default can easily be sustained as correct and
doubtless within its jurisdiction. Surely, a disposition directing the Republic to pay
an enormous sum without the trial court hearing its side does not, without more,
vitiate, on due procedural ground, the validity of the default judgment. The
petitioner may have indeed been deprived of such hearing, but this does not
mean that its right to due process had been violated. For, consequent to being
declared in default, the defaulting defendant is deemed to have waived his right
to be heard or to take part in the trial. The handling solicitors simply squandered
the Republic’s opportunity to be heard. But more importantly, the law itself
imposes such deprivation of the right to participate as a form of penalty against
one unwilling without justification to join issue upon the allegations tendered by
the plaintiff.

And going to another point, the petitioner would ascribe jurisdictional error on the
respondent judge for denying its motion for new trial based on any or a mix of the
following factors, viz., (1) the failure to file an answer is attributable to the
negligence of the former handling solicitor; (2) the meritorious nature of the
petitioner’s defense; and (3) the value of the property involved.

The Court is not convinced. Even as the Court particularly notes what the trial
court had said on the matter of negligence: that all of the petitioner’s pleadings
below bear at least three signatures, that of the handling solicitor, the assistant
solicitor and the Solicitor General himself, and hence accountability should go up
all the way to the top of the totem pole of authority, the cited reasons advanced
by the petitioner for a new trial are not recognized under Section 1, Rule 37 of the
Rules of Court for such recourse.24 Withal, there is no cogent reason to disturb
the denial by the trial court of the motion for new trial and the denial of the
reiterative motion for reconsideration.

Then, too, the issuance by the trial court of the Order dated December 17,
200325 denying the petitioner’s notice of appeal after the court caused the
issuance on November 27, 2003 of a certificate of finality of its August 27, 2003
decision can hardly be described as arbitrary, as the petitioner would have this
Court believe. In this regard, the Court takes stock of the following key events
and material dates set forth in the assailed December 17, 2003 order, supra: (a)
The petitioner, thru the OSG, received on August 29, 2003 a copy of the RTC
decision in this case, hence had up to September 13, 2003, a Saturday, within
which to perfect an appeal; (b) On September 15, 2003, a Monday, the OSG filed
its motion for new trial, which the RTC denied, the OSG receiving a copy of the
order of denial on October 9, 2003; and (c) On October 24, 2003, the OSG
sought reconsideration of the order denying the motion for new trial. The motion
for reconsideration was denied per Order dated November 25, 2003, a copy of
which the OSG received on the same date.

Given the foregoing time perspective, what the trial court wrote in its
aforementioned impugned order of December 17, 2003 merits approval:

In the case at bar, it is clear that the motion for new trial filed on the fifteenth
(15th) day after the decision was received on August 29, 2003 was denied and
the moving party has only the remaining period from notice of notice of denial
within which to file a notice of appeal. xxx

Accordingly, when defendants [Republic et al.] filed their motion for new trial on
the last day of the fifteen day (15) prescribed for taking an appeal, which motion
was subsequently denied, they had one (1) day from receipt of a copy of the
order denying … new trial within which to perfect [an] appeal …. Since
defendants had received a copy of the order denying their motion for new trial on
09 October 2003, reckoned from that date, they only have one (1) day left within
which to file the notice of appeal. But instead of doing so, the defendants filed a
motion for reconsideration which was later declared by the Court as pro forma
motion in the Order dated 25 November 2003. The running of the prescriptive
period, therefore, can not be interrupted by a pro forma motion. Hence the filing
of the notice of appeal on 27 November 2007 came much too late for by then the
judgment had already become final and executory. 26 (Words in bracket added;
Emphasis in the original.)

It cannot be over-emphasized at this stage that the special civil action

of certiorari is limited to resolving only errors of jurisdiction; it is not a remedy to
correct errors of judgment. Hence, the petitioner’s lament, partly covered by and
discussed under the first ground for allowing its petition, about the trial court
taking cognizance of the case notwithstanding private respondent’s claim or
action being barred by prescription and/or laches cannot be considered favorably.
For, let alone the fact that an action for the declaration of the inexistence of a
contract, as here, does not prescribe;27 that a void transfer of property can be
recovered by accion reivindicatoria;28 and that the legal fiction of indefeasibility of
a Torrens title cannot be used as a shield to perpetuate fraud, 29 the trial court’s
disinclination not to appreciate in favor of the Republic the general principles of
prescription or laches constitutes, at best, errors of judgment not correctable
by certiorari.

The evidence adduced below indeed adequately supports a conclusion that the
Office of the President, during the administration of then President Marcos,
wrested possession of the property in question and somehow secured a
certificate of title over it without a conveying deed having been executed to legally
justify the cancellation of the old title (TCT No. 118527) in the name of the private
respondent and the issuance of a new one (TCT No. 118911) in the name of
petitioner Republic. Accordingly, granting private respondent’s basic plea for
recovery of the Arlegui property, which was legally hers all along, and the
reinstatement of her cancelled certificate of title are legally correct as they are
morally right. While not exactly convenient because the Office of the President
presently uses it for mix residence and office purposes, restoring private
respondent to her possession of the Arlegui property is still legally and physically
feasible. For what is before us, after all, is a registered owner of a piece of land
who, during the early days of the martial law regime, lost possession thereof to
the Government which appropriated the same for some public use, but without
going through the legal process of expropriation, let alone paying such owner just
compensation.

The Court cannot, however, stop with just restoring the private respondent to her
possession and ownership of her property. The restoration ought to be
complemented by some form of monetary compensation for having been unjustly
deprived of the beneficial use thereof, but not, however, in the varying amounts
and level fixed in the assailed decision of the trial court and set to be executed by
the equally assailed writ of execution. The Court finds the monetary award set
forth therein to be erroneous. And the error relates to basic fundamentals of law
as to constitute grave abuse of discretion.

As may be noted, private respondent fixed the assessed value of her Arlegui
property at ₱2,388,990.00. And in the prayer portion of her third amended
complaint for recovery, she asked to be restored to the possession of her
property and that the petitioner be ordered to pay her, as reasonable
compensation or rental use or occupancy thereof, the sum of ₱500,000.00 a
month, or ₱6 Million a year, with a five percent (5%) yearly increase plus interest
at the legal rate beginning July 1975. From July 1975 when the PSG allegedly
took over the subject property to July 2003, a month before the trial court
rendered judgment, or a period of 28 years, private respondent’s total rental claim
would, per the OSG’s computation, only amount to ₱371,440,426.00. In its
assailed decision, however, the trial court ordered the petitioner to pay private
respondent the total amount of over ₱1.48 Billion or the mind-boggling amount
of ₱1,480,627,688.00, to be exact, representing the reasonable rental for the
property, the interest rate thereon at the legal rate and the opportunity cost. This
figure is on top of the ₱143,600,000.00 which represents the acquisition cost of
the disputed property. All told, the trial court would have the Republic pay the total
amount of about ₱1.624 Billion, exclusive of interest, for the taking of a property
with a declared assessed value of ₱2,388,900.00. This is not to mention the
award of attorney’s fees in an amount equivalent to 15% of the amount due the
private respondent.

In doing so, the respondent judge brazenly went around the explicit command of
Rule 9, Section 3(d) of the Rules of Court30 which defines the extent of the relief
that may be awarded in a judgment by default, i.e., only so much as has been
alleged and proved. The court acts in excess of jurisdiction if it awards an amount
beyond the claim made in the complaint or beyond that proved by the
evidence.31 While a defaulted defendant may be said to be at the mercy of the
trial court, the Rules of Court and certainly the imperatives of fair play see to it
that any decision against him must be in accordance with law. 32 In the abstract,
this means that the judgment must not be characterized by outrageous one-
sidedness, but by what is fair, just and equitable that always underlie the
enactment of a law.

Given the above perspective, the obvious question that comes to mind is the
level of compensation which – for the use and occupancy of the Arlegui property -
would be fair to both the petitioner and the private respondent and, at the same
time, be within acceptable legal bounds. The process of balancing the interests of
both parties is not an easy one. But surely, the Arlegui property cannot possibly
be assigned, even perhaps at the present real estate business standards, a
monthly rental value of at least ₱500,000.00 or ₱6,000,000.00 a year, the amount
private respondent particularly sought and attempted to prove. This asking figure
is clearly unconscionable, if not downright ridiculous, attendant circumstances
considered. To the Court, an award of ₱20,000.00 a month for the use and
occupancy of the Arlegui property, while perhaps a little bit arbitrary, is reasonable
and may be granted pro hac vice considering the following hard realities which
the Court takes stock of:

1. The property is relatively small in terms of actual area and had an

assessed value of only P2,388,900.00;

2. What the martial law regime took over was not exactly an area with a
new and imposing structure, if there was any; and

3. The Arlegui property had minimal rental value during the relatively long
martial law years, given the very restrictive entry and egress conditions
prevailing at the vicinity at that time and even after.

To be sure, the grant of monetary award is not without parallel. In Alfonso v.

Pasay City,33 a case where a registered owner also lost possession of a piece of
lot to a municipality which took it for a public purposes without instituting
expropriation proceedings or paying any compensation for the lot, the Court,
citing Herrera v. Auditor General,34 ordered payment of just compensation but in
the form of interest when a return of the property was no longer feasible.

The award of attorney’s fees equivalent to 15% of the amount due the private
respondent, as reduced herein, is affirmed.

The assessment of costs of suit against the petitioner is, however, nullified, costs
not being allowed against the Republic, unless otherwise provided by law. 35

The assailed trial court’s issuance of the writ of execution 36 against government
funds to satisfy its money judgment is also nullified. It is basic that government
funds and properties may not be seized under writs of execution or garnishment
to satisfy such judgments.37 Republic v. Palacio38 teaches that a judgment against
the State generally operates merely to liquidate and establish the plaintiff’s claim
in the absence of express provision; otherwise, they can not be enforced by
processes of law.

Albeit title to the Arlegui property remains in the name of the petitioner
Republic, it is actually the Office of the President which has beneficial
possession of and use over it since the 1975 takeover. Accordingly, and in accord
with the elementary sense of justice, it behooves that office to make the
appropriate budgetary arrangements towards paying private respondent what is
due her under the premises. This, to us, is the right thing to do. The imperatives
of fair dealing demand no less. And the Court would be remiss in the discharge of
its duties as dispenser of justice if it does not exhort the Office of the President to
comply with what, in law and equity, is its obligation. If the same office will
undertake to pay its obligation with reasonable dispatch or in a manner
acceptable to the private respondent, then simple justice, while perhaps delayed,
will have its day. Private respondent is in the twilight of her life, being now over 90
years of age.39 Any delay in the implementation of this disposition would be a
bitter cut.
1âwphi1

WHEREFORE, the decision of the Regional Trial Court of Manila dated August
27, 2003 insofar as it nullified TCT No. 118911 of petitioner Republic of the
Philippines and ordered the Register of Deeds of Manila to reinstate private
respondent Tarcila L. Mendoza’s TCT No. 118527, or to issue her a new
certificate of title is AFFIRMED. Should it be necessary, the Register of Deeds of
Manila shall execute the necessary conveying deed to effect the reinstatement of
title or the issuance of a new title to her.

It is MODIFIED in the sense that for the use and occupancy of the Arlegui
property, petitioner Republic is ordered to pay private respondent the reasonable
amount of ₱20,000.00 a month beginning July 1975 until it vacates the same and
the possession thereof restored to the private respondent, plus an additional
interest of 6% per annum on the total amount due upon the finality of this
Decision until the same is fully paid. Petitioner is further ordered to pay private
respondent attorney's fees equivalent to 15% of the amount due her under the
premises.

Accordingly, a writ of certiorari is hereby ISSUED in the sense that:

1. The respondent court’s assailed decision of August 27, 2003 insofar as

it ordered the petitioner Republic of the Philippines to pay private
respondent Tarcila L. Mendoza the sum of One Billion Four Hundred
Eighty Million Six Hundred Twenty Seven Thousand Six Hundred Eighty
Eight Pesos (₱1,480,627,688.00) representing the purported rental use of
the property in question, the interest thereon and the opportunity cost at
the rate of 3% per annum plus the interest at the legal rate added thereon
is nullified. The portion assessing the petitioner Republic for costs of suit
is also declared null and void.

2. The Order of the respondent court dated December 19, 2003 for the
issuance of a writ of execution and the Writ of Execution dated December
22, 2003 against government funds are hereby declared null and void.
Accordingly, the presiding judge of the respondent court, the private
respondent, their agents and persons acting for and in their behalves are
permanently enjoined from enforcing said writ of execution.

However, consistent with the basic tenets of justice, fairness and equity, petitioner
Republic, thru the Office of the President, is hereby strongly enjoined to take
the necessary steps, and, with reasonable dispatch, make the appropriate
budgetary arrangements to pay private respondent Tarcila L. Mendoza or her
assigns the amount adjudged due her under this disposition.

SO ORDERED.

CANCIO C. GARCIA
Associate Justice
WE CONCUR:

REYNATO S. PUNO
Chief Justice
Chairperson

ANGELINA SANDOVAL-
RENATO C. CORONA
GUTIERREZ
Associate Justice
Associate Justice

ADOLFO S. AZCUNA
Associate Justice

C E RTI F I CATI O N

Pursuant to Section 13, Article VIII of the Constitution, I certify that the
conclusions in the above decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO
Chief Justice

Footnotes

1
Page 12 of the Decision of the RTC of Manila, Br. 37; rollo, p. 59.

2
Annex "I," Petition; id. at 77 et seq.

3
Annex "J," Petition, id. at 93.

4
Annex "K," Petition; id. at 94 et seq.

5
Annex "M," Petition; id. at 108.

6
Annex "A,’ Petition; id. at 47.

7
Id. at 105.

8
Id. at 106.

9
Engr. Hernando Gozon, Jr. of the Cuervo Appraisers, Inc.; Mr. Renato
Chico of the Land Bank; and Engr. Israel Soguilon.

10
Per Judge Vicente A. Hidalgo; Annex "B," Petition; rollo, pp. 48 et seq.

11
Annex "C," Petition; id. at 62 et seq.

12
Annex "D," Petition; id. at 70.
13
Annex "E," Petition; id. at 71.

14
Annex "F," Petition; id. at 72 et seq.

15
Annex "G," Petition; id. at 75.

16
Annex "H," Petition; id. at 76.

17
Rollo, p. 341.

Roces v. Aportadera, Adm. Case No. 2936, March 31, 1995, 243 SCRA
18

108, citing cases.

19
First par. of Sec. 3

Citibank, N.A. v. Chua, G.R. No. 102300, March 17, 1993, 220 SCRA
20

75.

Lesaca v. Court of Appeals, G.R. No. 96432, October 21, 1992, 215
21

SCRA 17, citing Coombs v. Santos, 24 Phil 446 (1913).

Regalado, Remedial Law Compendium, Vol. 1, 8th Revised Edition, p.

22

718, citing Benito v. COMELEC, G.R. No. 134913, Jan. 19, 2001, 349
SCRA 705.

Olanolan v. COMELEC, G.R. No. 165491, March 31, 2005, 454 SCRA
23

807, citing cases.

24
Section. 1. Grounds of and period for filing motion for new trial or
reconsideration. – xxx (a) Fraud, accident, mistake or excusable
negligence which ordinary prudence could not have guarded against and
by reason of which such aggrieved party has probably been impaired in
his right; or (b) Newly discovered evidence ….

25
Supra note 14.

26
Rollo, pp. 72-73.

27
Art. 1410, Civil Code.

Tolentino, Commentaries and Jurisprudence on the Civil Code, Vol. IV,

28

1991 ed., p. 632.

Republic v. Court of Appeals, G.R. No. 60169, March 23, 1990, 183
29

SCRA 1990, citing Acot v. Kempis, 55 O.G. 2907.

30
(d) Extent of relief to be awarded. - A judgment rendered against a party
in default shall not exceed the amount or different in kind from that prayed
for nor award unliquidated damages.
 Regalado, Remedial Law Compendium, Vol. 1, 8th ed., p. 173, citing
31

Pascua v. Florendo, L- 38047, April 30, 1985, 136 SCRA 208.

32
Lim Tanhu v. Remolete, No. L-40098, August 29, 1975, 66 SCRA 452.

33
106 Phil. 1017 (1960).

34
102 Phil. 875 (1958).

35
Sec. 1, Rule 142 of the Rules of Court.

36
Supra note 16.

Commissioner of Public Highways v. San Diego, No. L-30098, February

37

18, 1970, 31 SCRA 616.

No. L-20322, May 29, 1968, 23 SCRA 899, citing Merritt v. Insular
38

Government, 34 Phil. 311 (1916).

See Motion for the Issuance of the Writ of Execution, Annex "Q,"
39

Petition; rollo, pp. 134 et seq.