REMREV WEEK 2 - MIDTERMS

On December 27, 2011, First Sarmiento attempted to file a Complaint

for annulment of real estate mortgage with the Regional Trial Court.
However, the Clerk of Court refused to accept the Complaint in the
G.R. No. 202836 June 19, 2018 absence of the mortgaged properties' tax declarations, which would
First Sarmiento Property Holdings, Inc., Petitioner, be used to assess the docket fees.[13]
Vs.
Philippine Bank of Communications, Respondent. On December 29, 2011, Executive Judge Renato C. Francisco (Judge
Francisco), First Vice-Executive Judge Ma. Theresa A. Mendoza Arcega,
LEONEN, J.: Second Vice-Executive Judge Ma. Belen R. Liban, and Third Vice-
Executive Judge Basilio R. Gabo, Jr. of the Regional Trial Court of City
To determine the nature of an action, whether or not its subject of Malolos, Bulacan, granted First Sarmiento's Urgent Motion to
matter is capable or incapable of pecuniary estimation, the nature of Consider the Value of Subject Matter of the Complaint as Not Capable
the principal action or relief sought must be ascertained. If the of Pecuniary Estimation, and ruled that First Sarmiento's action for
principal relief is for the recovery of a sum of money or real property, annulment of real estate mortgage was incapable of pecuniary
then the action is capable of pecuniary estimation. However, if the estimation.[14]
principal relief sought is not for the recovery of sum of money or real
property, even if a claim over a sum of money or real property results Also on December 29, 2011, the mortgaged properties were auctioned
as a consequence of the principal relief, the action is incapable of and sold to PBCOM as the highest bidder.[15]
pecuniary estimation.
On January 2, 2012, First Sarmiento filed a Complaint for annulment
This resolves the Petition for Review[1] filed by First Sarmiento of real estate mortgage and its amendments, with prayer for the
Property Holdings, Inc. (First Sarmiento) assailing the April 3, 2012 issuance of temporary restraining order and preliminary
Decision[2] and July 25, 2012 Order[3] of Branch 11, Regional Trial injunction.[16] It paid a filing fee of P5,545.00.[17]
Court, Malolos City, Bulacan in Civil Case No. 04-M-2012.
First Sarmiento claimed in its Complaint that it never received the
The facts as established by the parties are as follows: loan proceeds of P100,000,000.00 from PBCOM, yet the latter still
sought the extrajudicial foreclosure of real estate mortgage. It prayed
On June 19, 2002,[4] First Sarmiento obtained from Philippine Bank of for the issuance of a temporary restraining order and preliminary
Communications (PBCOM) a P40,000,000.00 loan, which was secured injunction to enjoin the Ex-Officio Sheriff from proceeding with the
by a real estate mortgage[5] over 1,076 parcels of land.[6] foreclosure of the real estate mortgage or registering the certificate of
sale in PBCOM's favor with the Registry of Deeds of Bulacan.[18]
On March 15, 2003,[7] the loan agreement was amended[8] with the
increase of the loan amount to P51,200,000.00. On September 15, That same day, Judge Francisco issued an ex-parte temporary
2003, the loan agreement was further amended[9] when the loan restraining order for 72 hours, enjoining the registration of the
amount was increased to P100,000,000.00. certificate of sale with the Registry of Deeds of Bulacan.[19]

On January 2, 2006,[10] PBCOM filed a Petition for Extrajudicial On January 4, 2012, the Regional Trial Court directed the parties to
Foreclosure of Real Estate Mortgage.[11] It claimed in its Petition that it observe the status quo ante.[20]
sent First Sarmiento several demand letters, yet First Sarmiento still
failed to pay the principal amount and accrued interest on the loan. On January 24, 2012, the Clerk of Court and Ex-Officio Sheriff of
This prompted PBCOM to resort to extrajudicial foreclosure of the Malolos City, Bulacan issued a certificate of sale to PBCOM.[21]
mortgaged properties, a recourse granted to it under the loan
agreement.[12]

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In its Opposition (Re: Application for Issuance of Temporary that a complaint questioning the validity of a mortgage is an action
Restraining Order),[22] PBCOM asserted that the Regional Trial Court incapable of pecuniary estimation.[33]
failed to acquire jurisdiction over First Sarmiento's Complaint
because the action for annulment of mortgage was a real action; thus, It emphasizes that Home Guaranty Corporation v. R-II Builders, which
the filing fees filed should have been based on the fair market value the Regional Trial Court relied on to dismiss its complaint for lack of
of the mortgaged properties.[23] jurisdiction, was rendered by a division of the Supreme Court; hence,
it cannot modify or reverse a doctrine or principle of law laid down
PBCOM also pointed out that the Regional Trial Court's directive to by the Supreme Court En Banc.[34]
maintain the status quo order beyond 72 hours constituted an
indefinite extension of the temporary restraining order, a clear On September 19, 2012,[35] this Court directed respondent PBCOM to
contravention of the rules.[24] comment on the petition.

On April 3, 2012, Branch 11, Regional Trial Court, [25] Malolos City, In its Comment,[36] respondent contends that petitioner's action to
Bulacan dismissed the Complaint for lack of jurisdiction: annul the real estate mortgage and enjoin the foreclosure proceedings
did not hide the true objective of the action, which is to restore
Following the High Court's ruling in the case of Home Guaranty petitioner's ownership of the foreclosed properties.[37]
Corporation v. R. II Builders, Inc. and National Housing Authority, G.R.
No. 192549, March 9, 2011, cited by the bank in its Rejoinder, which Respondent maintains that this Court has already settled that "a
appears to be the latest jurisprudence on the matter to the effect that complaint for cancellation of sale which prayed for both permanent
an action for annulment or rescission of contract does not operate to and preliminary injunction aimed at the restoration of possession of
efface the true objective and nature of the action which is to recover the land in litigation is a real action."[38]
real property, this Court hereby RESOLVES TO DISMISS the instant
case for lack of jurisdiction, plaintiff having failed to pay the It likewise stresses that since petitioner's primary objective in filing
appropriate filing fees. its Complaint was to prevent the scheduled foreclosure proceedings
over the mortgaged properties and the conveyance of their ownership
Accordingly, the instant case is hereby DISMISSED. to the highest bidder, the case was a real action.[39]

SO ORDERED.[26] Finally, it denies that Home Guaranty Corporation modified and

reversed Lu v. Lu Ym because the factual and legal milieus of these
On July 25, 2012, the Regional Trial Court [27] denied First Sarmiento's two (2) cases were different.[40]
motion for reconsideration.[28]
On November 26, 2012,[41] this Court required petitioner to file a reply
On August 17, 2012, First Sarmiento sought direct recourse to this to the comment.
Court with its Petition for Review[29] under Rule 45. It insists that its
Complaint for the annulment of real estate mortgage was incapable of On February 1, 2013, petitioner filed its Reply[42] where it denies that
pecuniary estimation.[30] It points out that the Executive Judge and its Complaint was for the annulment of the foreclosure sale, because
Vice-Executive Judges of the Regional Trial Court likewise when it filed its Complaint, the foreclosure sale had not yet
acknowledged that its action was incapable of pecuniary estimation.[31] happened.[43]

Petitioner highlights that the Supreme Court En Banc in Lu v. Lu It proclaims that its Complaint sought the removal of the lien on the
Ym held "that an action for declaration of nullity of issuance of mortgaged properties and was not intended to recover ownership or
shares or an action questioning the legality of a conveyance is one not possession since it was still the registered owner with possession of
capable of pecuniary estimation."[32] Furthermore, petitioner maintains the mortgaged properties when it filed its Complaint.[44]
that the Supreme Court En Banc in Bunayog v. Tunas also established

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On February 27, 2013,[45] this Court noted petitioner's reply and Court a verified petition for review on certiorari. The petition shall
directed the parties to submit their respective memoranda. raise only questions of law which must be distinctly set forth.

Rule 41, Section 2(c) likewise provides:

On May 30, 2013, the parties filed their respective memoranda.[46]
Section 2. Modes of appeal. —
In its Memorandum,[47] petitioner continues to insist that it did not
receive the loan proceeds from PBCOM which is why it filed its (c) Appeal by certiorari. — In all cases where only questions of law are
Complaint for annulment of real estate mortgage in response to the raised or involved, the appeal shall be to the Supreme Court by
latter's Petition for Extrajudicial Foreclosure of Real Estate petition for review on certiorari in accordance with Rule 45.
Mortgage.[48]
Thus, there is no question that a petitioner may file a verified petition
Petitioner reiterates that its Complaint for annulment of real estate for review directly with this Court if only questions of law are at
mortgage was an action incapable of pecuniary estimation because it issue; however, if both questions of law and of facts are present, the
merely sought to remove the lien on its properties, not the recovery correct remedy is to file a petition for review with the Court of
or reconveyance of the mortgaged properties.[49] Appeals.[54]

It states that it never expressly or impliedly sought the conveyance of Doña Adela Export International v. Trade and Investment Development
the mortgaged properties because it was still the registered owner of Corp.[55] differentiated between a question of law and a question of
the mortgaged properties when its Complaint was first presented for fact as follows:
filing with the Clerk of Court.[50]
We stress that a direct recourse to this Court from the decisions, final
On the other hand, respondent in its Memorandum[51] restates its resolutions and orders of the RTC may be taken where only questions
stand that petitioner's Complaint involved a real action; hence, the of law are raised or involved. There is a question of law when the
estimated value of the mortgaged properties should have been doubt or difference arises as to what the law is on a certain state of
alleged and used as the basis for the computation of the docket facts, which does not call for an examination of the probative value of
fees.[52] the evidence presented by the parties-litigants. On the other hand,
there is a question of fact when the doubt or controversy arises as to
Respondent claims that the allegations in petitioner's Complaint the truth or falsity of the alleged facts. Simply put, when there is no
reveal the latter's real intention to assert its title and recover the real dispute as to fact, the question of whether the conclusion drawn
properties sold at the public auction.[53] therefrom is correct or not, is a question of law.[56] (Citation omitted)

The only issue for this Court's resolution is whether or not the In the case at bar, the underlying question for this Court's resolution
Regional Trial Court obtained jurisdiction over First Sarmiento pertains to jurisdiction, or to be more precise, whether the Regional
Corporation, Inc.'s Complaint for annulment of real estate mortgage. Trial Court attained jurisdiction over petitioner's Complaint with the
amount of docket fees paid.
I. Rule 45 of the Rules of Court allows for a direct recourse to this
Court by appeal from a judgment, final order, or resolution of the Considering that the issue of jurisdiction is a pure question of
Regional Trial Court. Rule 45, Section 1 provides: law,[57] petitioner did not err in filing its appeal directly with this Court
pursuant to law and prevailing jurisprudence.
Section 1. Filing of petition with Supreme Court. — A party desiring to
appeal by certiorari from a judgment or final order or resolution of II. Petitioner contends that its Complaint for annulment of real estate
the Court of Appeals, the Sandiganbayan, the Regional Trial Court or mortgage has a subject incapable of pecuniary estimation because it
other courts whenever authorized by law, may file with the Supreme was not intended to recover ownership or possession of the

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mortgaged properties sold to respondent during the auction sale.[58] It In criminal cases, first level courts are granted exclusive original
insists that it had ownership and possession of the mortgaged jurisdiction to hear complaints on violations of city or municipal
properties when it filed its Complaint; hence, it never expressly or ordinances[69] and offenses punishable with imprisonment not
impliedly sought recovery of their ownership or possession.[59] exceeding six (6) years.[70] In contrast, second level courts, with more
experienced judges sitting at the helm, are granted exclusive original
The petition is meritorious. jurisdiction to preside over all other criminal cases not within the
exclusive jurisdiction of any other court, tribunal, or body.[71]
Jurisdiction is "the power and authority of a court to hear, try and
decide a case"[60] brought before it for resolution. The same holds true for civil actions and probate proceedings, where
first level courts have the power to hear cases where the value of
Courts exercise the powers conferred on them with binding effect if personal property, estate, or amount of the demand does not exceed
they acquire jurisdiction over: "(a) the cause of action or the subject P100,000.00 or P200,000.00 if in Metro Manila. [72] First level courts
matter of the case; (b) the thing or the res; (c) the parties; and (d) the also possess the authority to hear civil actions involving title to,
remedy."[61] possession of, or any interest in real property where the value does
not exceed P20,000.00 or P50,000.00 if the real property is situated in
Jurisdiction over the thing or the res is a court's authority over the Metro Manila.[73] Second level courts then assume jurisdiction when
object subject of litigation.[62] The court obtains jurisdiction or actual the values involved exceed the threshold amounts reserved for first
custody over the object through the seizure of the object under legal level courts[74] or when the subject of litigation is incapable of
process or the institution of legal proceedings which recognize the pecuniary estimation.[75]
power and authority of the court.[63]
First level courts were also conferred with the power to hear the
Jurisdiction over the parties is the court's power to render judgment relatively uncomplicated cases of forcible entry and unlawful
that are binding on the parties. The courts acquire jurisdiction over detainer,[76] while second level courts are authorized to hear all actions
the plaintiffs when they file their initiatory pleading, while the in admiralty and maritime jurisdiction[77] with claims above a certain
defendants come under the court's jurisdiction upon the valid service threshold amount. Second level courts are likewise authorized to hear
of summons or their voluntary appearance in court.[64] all cases involving the contract of marriage and marital relations, [78] in
recognition of the expertise and probity required in deciding issues
Jurisdiction over the cause of action or subject matter of the case is which traverse the marital sphere.
the court's authority to hear and determine cases within a general
class where the proceedings in question belong. This power is Section 19(1) of Batas Pambansa Blg. 129, as amended, provides
conferred by law and cannot be acquired through stipulation, Regional Trial Courts with exclusive, original jurisdiction over "all
agreement between the parties,[65] or implied waiver due to the silence civil actions in which the subject of the litigation is incapable of
of a party.[66] pecuniary estimation."

Jurisdiction is conferred by the Constitution, with Congress given the Lapitan v. Scandia[79] instructed that to determine whether the subject
plenary power, for cases not enumerated in Article VIII, Section 5[67] of matter of an action is incapable of pecuniary estimation, the nature of
the Constitution, to define, prescribe, and apportion the jurisdiction the principal action or remedy sought must first be established. This
of various courts.[68] finds support in this Court's repeated pronouncement that
jurisdiction over the subject matter is determined by examining the
Batas Pambansa Blg. 129, or the Judiciary Reorganization Act of 1980 material allegations of the complaint and the relief sought. [80] Heirs of
as amended by Republic Act No. 7691, provided for the jurisdictional Dela Cruz v. Heirs of Cruz[81] stated, thus:
division between the first and second level courts by considering the
complexity of the cases and the experience needed of the judges It is axiomatic that the jurisdiction of a tribunal, including a quasi-
assigned to hear the cases. judicial officer or government agency, over the nature and subject

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matter of a petition or complaint is determined by the material P100,000,000.00 loan agreement.[86] This is evident in its Complaint,
allegations therein and the character of the relief prayed for, which read:
irrespective of whether the petitioner or complainant is entitled to
any or all such reliefs.[82] GROUNDS FOR THE APPLICATION OF PRELIMINARY INJUNCTION
AND TEMPORARY RESTRAINING ORDER
However, Lapitan stressed that where the money claim is only a
consequence of the remedy sought, the action is said to be one 7. Defendant PBCOM knows fully well that plaintiff did not receive
incapable of pecuniary estimation: from it the loan it (PBCOM) alleged to have granted in its favor.

A review of the jurisprudence of this Court indicates that in 8. Despite this, defendant PBCOM has filed with the Ex-Officio
determining whether an action is one the subject matter of which Sheriff of Bulacan, a petition for extra judicial foreclosure of real
is not capable of pecuniary estimation, this Court has adopted the estate mortgage, bent on foreclosing the real estate properties of
criterion of first ascertaining the nature of the principal action or plaintiff, photocopy of the petition is hereto attached as Annex
remedy sought. If it is primarily for the recovery of a sum of "F".
money, the claim is considered capable of pecuniary estimation,
and whether jurisdiction is in the municipal courts or in the 9. The auction sale of the properties is set on December 29, 2011.
courts of first instance would depend on the amount of the claim.
However, where the basic issue is something other than the right
10. Defendant PBCOM, well knowing the facts narrated above and
to recover a sum of money, or where the money claim is purely
willfully disregarding the property rights of plaintiff, wrongfully
incidental to, or a consequence of, the principal relief sought like
filed an extra judicial foreclosure of real estate mortgage and
in suits to have the defendant perform his part of the contract
pursuant to said petition, the Ex-Officio Sheriff now does offer for
(specific performance) and in actions for support, or for
sale, the real estate properties of the plaintiff as set forth in its
annulment of a judgment or to foreclose a mortgage, this Court
(PBCOM) said petition.
has considered such actions as cases where the subject of the
litigation may not be estimated in terms of money, and are
cognizable exclusively by courts of first instance. The rationale of 11. Unless defendants PBCOM and Ex-Officio Sheriff are restrained
the rule is plainly that the second class cases, besides the by this Honorable Court, they will infringe the property rights of
determination of damages, demand an inquiry into other factors the plaintiff in the manner herein before related.[87]
which the law has deemed to be more within the competence of
courts of first instance, which were the lowest courts of record at Far East Bank and Trust Company v. Shemberg Marketing
the time that the first organic laws of the Judiciary were enacted Corporation[88] stated that an action for cancellation of mortgage has a
allocating jurisdiction (Act 136 of the Philippine Commission of subject that is incapable of pecuniary estimation:
June 11, 1901).[83] (Citation omitted)
Here, the primary reliefs prayed for by respondents in Civil Case No.
Heirs of Sebe v. Heirs of Sevilla[84] likewise stressed that if the primary MAN-4045 is the cancellation of the real estate and chattel mortgages
cause of action is based on a claim of ownership or a claim of legal for want of consideration. In Bumayog v. Tumas, this Court ruled that
right to control, possess, dispose, or enjoy such property, the action where the issue involves the validity of a mortgage, the action is one
is a real action involving title to real property.[85] incapable of pecuniary estimation. In the more recent case of Russell
v. Vestil, this Court, citing Bumayog, held that an action questioning
A careful reading of petitioner's Complaint convinces this Court that the validity of a mortgage is one incapable of pecuniary estimation.
petitioner never prayed for the reconveyance of the properties Petitioner has not shown adequate reasons for this Court to
foreclosed during the auction sale, or that it ever asserted its revisit Bumayog and Russell. Hence, petitioner's contention [cannot]
ownership or possession over them. Rather, it assailed the validity of be sustained. Since respondents paid the docket fees, as computed by
the loan contract with real estate mortgage that it entered into with the clerk of court, consequently, the trial court acquired jurisdiction
respondent because it supposedly never received the proceeds of the over Civil Case No. MAN-4045.[89]

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It is not disputed that even if the Complaint were filed a few days Considering that petitioner paid the docket fees as computed by the
after the mortgaged properties were foreclosed and sold at auction to clerk of court, upon the direction of the Executive Judge, this Court is
respondent as the highest bidder, the certificate of sale was only convinced that the Regional Trial Court acquired jurisdiction over the
issued to respondent after the Complaint was filed. Complaint for annulment of real estate mortgage.

Section 6 of Act No. 3135,[90] as amended, provides that a property Furthermore, even if it is assumed that the instant case were a real
sold through an extrajudicial sale may be redeemed "at any time action and the correct docket fees were not paid by petitioner, the
within the term of one year from and after the date of the sale": case should not have been dismissed; instead, the payment of
additional docket fees should have been made a lien on the judgment
Section 6. In all cases in which an extrajudicial sale is made under the award. The records attest that in filing its complaint, petitioner
special power hereinbefore referred to, the debtor, his successors in readily paid the docket fees assessed by the clerk of court; hence,
interest or any judicial creditor or judgment creditor of said debtor, there was no evidence of bad faith or intention to defraud the
or any person having a lien on the property subsequent to the government that would have rightfully merited the dismissal of the
mortgage or deed of trust under which the property is sold, may Complaint.[94]
redeem the same at any time within the term of one year from and
after the date of the sale; and such redemption shall be governed by III. Although not raised in the Petition, this Court nonetheless deems
the provisions of sections four hundred and sixty-four to four it proper to pass upon the legality of the Regional Trial Court January
hundred and sixty-six, inclusive, of the Code of Civil Procedure, in so 4, 2012 Order, which directed the parties to observe the status quo
far as these are not inconsistent with the provisions of this Act. ante,[95] effectively extending indefinitely its 72-hour ex-parte
temporary restraining order issued on January 2, 2012. [96]
Mahinay v. Dura Tire & Rubber Industries Inc.[91] clarified that "[t]he
date of the sale' referred to in Section 6 is the date the certificate of Rule 58, Section 5 of the Rules of Court provides the instances when a
sale is registered with the Register of Deeds. This is because the sale temporary restraining order may be issued:
of registered land does not 'take effect as a conveyance, or bind the
land' until it is registered."[92] Section 5. Preliminary injunction not granted without notice;
exception. — No preliminary injunction shall be granted without
The registration of the certificate of sale issued by the sheriff after an hearing and prior notice to the party or person sought to be enjoined.
extrajudicial sale is a mandatory requirement; thus, if the certificate If it shall appear from facts shown by affidavits or by the verified
of sale is not registered with the Registry of Deeds, the property sold application that great or irreparable injury would result to the
at auction is not conveyed to the new owner and the period of applicant before the matter can be heard on notice, the court to which
redemption does not begin to run.[93] the application for preliminary injunction was made, may issue a
temporary restraining order to be effective only for a period of twenty
In the case at bar, the Ex-Officio Sheriff of the City of Malolos, Bulacan (20) days from service on the party or person sought to be enjoined,
was restrained from registering the certificate of sale with the except as herein provided. Within the said twenty-day period, the
Registry of Deeds of Bulacan and the certificate of sale was only court must order said party or person to show cause, at a specified
issued to respondent after the Complaint for annulment of real estate time and place, why the injunction should not be granted, determine
mortgage was filed. Therefore, even if the properties had already been within the same period whether or not the preliminary injunction
foreclosed when the Complaint was filed, their ownership and shall be granted, and accordingly issue the corresponding order.
possession remained with petitioner since the certificate of sale was
not registered with the Registry of Deeds. This supports petitioner's However, and subject to the provisions of the preceding sections, if
claim that it never asked for the reconveyance of or asserted its the matter is of extreme urgency and the applicant will suffer grave
ownership over the mortgaged properties when it filed its Complaint injustice and irreparable injury, the executive judge of a multiple-sala
since it still enjoyed ownership and possession over them. court or the presiding judge of a single-sala court may issue ex-parte
a temporary restraining order effective for only seventy-two (72)
hours from issuance but he shall immediately comply with the

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provisions of the next preceding section as to service of summons injunction can be heard. However, in no case shall the extension
and the documents to be served therewith. Thereafter, within the exceed 20 days.
aforesaid seventy-two (72) hours, the judge before whom the case is
pending shall conduct a summary hearing to determine whether the If the application for preliminary injunction is denied or not resolved
temporary restraining order shall be extended until the application within the given periods, the temporary restraining order is
for preliminary injunction can be heard. In no case shall the total automatically vacated and the court has no authority to extend or
period of effectivity of the temporary restraining order exceed twenty renew it on the same ground of its original issuance.
(20) days, including the original seventy-two hours provided herein.
Despite the clear wording of the rules, the Regional Trial Court issued
In the event that the application for preliminary injunction is denied a status quo ante order dated January 4, 2012, indefinitely extending
or not resolved within the said period, the temporary restraining the temporary restraining order on the registration of the certificate
order is deemed automatically vacated. The effectivity of a temporary of sale with the Registry of Deeds.
restraining order is not extendible without need of any judicial
declaration to that effect and no court shall have authority to extend
Petitioner applied for a writ of preliminary injunction, yet the
or renew the same on the same ground for which it was issued.
Regional Trial Court did not conduct any hearing for that purpose
However, if issued by the Court of Appeals or a member thereof, the
and merely directed the parties to observe the status quo ante.
temporary restraining order shall be effective for sixty (60) days from
service on the party or person sought to be enjoined. A restraining
order issued by the Supreme Court or a member thereof shall be Miriam College Foundation, Inc v. Court of Appeals [97] explained the
effective until further orders. difference between preliminary injunction and a restraining order as
follows:
It is clear that a temporary restraining order may be issued by a trial
court in only two (2) instances: first, when great or irreparable injury Preliminary injunction is an order granted at any stage of an
would result to the applicant even before the application for writ of action or proceeding prior to the judgment or final order,
preliminary injunction can be heard; and second, if the matter is of requiring a party or a court, agency or a person to perform to
extreme urgency and the applicant will suffer grave injustice and refrain from performing a particular act or acts. As an
irreparable injury. The executive judge of a multi-sala court or the extraordinary remedy, injunction is calculated to preserve or
presiding judge of a single-sala court may issue a 72-hour temporary maintain the status quo of things and is generally availed of to
restraining order. prevent actual or threatened acts, until the merits of the case can
be heard. A preliminary injunction persists until it is dissolved or
In both instances, the temporary restraining order may be issued ex until the termination of the action without the court issuing a
final injunction.
parte. However, in the first instance, the temporary restraining order
has an effectivity of only 20 days to be counted from service to the
party sought to be enjoined. Likewise, within those 20 days, the court The basic purpose of restraining order, on the other hand, is to
shall order the enjoined party to show why the injunction should not preserve the status quo until the hearing of the application for
be granted and shall then determine whether or not the injunction preliminary injunction. Under the former A§5, Rule 58 of the
should be granted. Rules of Court, as amended by A§5, Batas Pambansa Blg. 224, a
judge (or justice) may issue a temporary restraining order with a
limited life of twenty days from date of issue. If before the
In the second instance, when there is extreme urgency and the
expiration of the 20-day period the application for preliminary
applicant will suffer grave injustice and irreparable injury, the court
injunction is denied, the temporary order would thereby be
shall issue a temporary restraining order effective for only 72 hours
deemed automatically vacated. If no action is taken by the judge
upon issuance. Within those 72 hours, the court shall conduct a
on the application for preliminary injunction within the said 20
summary hearing to determine if the temporary restraining order
days, the temporary restraining order would automatically expire
shall be extended until the application for writ of preliminary
on the 20th day by the sheer force of law, no judicial declaration

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 to that effect being necessary. In the instant case, no such Complaint involved a real action and directed R-II Builders to pay the
preliminary injunction was issued; hence, the TRO earlier issued correct docket fees.[104]
automatically expired under the aforesaid provision of the Rules
of Court.[98] (Citations omitted) Instead of paying the additional docket fees, R-II Builders withdrew its
Amended and Supplemental Complaint and instead filed a motion to
A temporary restraining order cannot be extended indefinitely to take admit its Second Amended Complaint, which revived the prayer in its
the place of a writ of preliminary injunction, since a temporary original Complaint to resolve the Deed of Assignment and
restraining order is intended only to have a limited lifespan and is Conveyance and deleted the causes of action for conveyance of title
deemed automatically vacated upon the expiration of 72 hours or 20 to and/or possession of the entire Asset Pool in its Amended and
days, as the case may be. As such, the temporary restraining order Supplemental Complaint.[105] The Regional Trial Court granted the
has long expired and, in the absence of a preliminary injunction, there motion to admit the Second Amended Complaint, ratiocinating that
was nothing to stop the sheriff from registering the certificate of sale the docket fees to the original Complaint had been paid; that the
with the Registry of Deeds. Second Amended Complaint was not intended to delay the
proceedings; and that the Second Amended Complaint was consistent
This Court has repeatedly expounded on the nature of a temporary with R-II Builders' previous pleadings.[106]
restraining order[99] and a preliminary injunction.[100] Yet lower courts
consistently interchange these ancillary remedies and disregard the The Court of Appeals upheld the ruling of the Regional Trial Court
sunset clause[101] inherent in a temporary restraining order by and reiterated that the case involved a subject that was incapable of
erroneously extending it indefinitely. Such ignorance or defiance of pecuniary estimation.[107] However, Home Guaranty reversed the Court
basic remedial measures is a gross disservice to the public, who look of Appeals Decision, ruling that the Complaint and the Amended and
towards the court for legal guidance and legal remedy. More Supplemental Complaint both involved prayers for the conveyance
importantly, this cavalier attitude towards these injunctive reliefs and/or transfer of possession of the Asset Pool, causes of action
might even be construed as a deliberate effort to look the other way which were undoubtedly real actions. Thus, the correct docket fees
to favor a party, which will then sully the image of the entire had not yet been paid:[108]
judiciary. Henceforth, this Court will demand stricter compliance with
the rules from the members of the bench as regards their issuances Although an action for resolution and/or the nullification of a
of these injunctive reliefs. contract, like an action for specific performance, fall squarely into the
category of actions where the subject matter is considered incapable
IV. Finally, there is a need to reassess the place of Home Guaranty v. of pecuniary estimation, we find that the causes of action for
R-II Builders[102] in our jurisprudence. resolution and/or nullification of the [Deed of Assignment and
Conveyance] was erroneously isolated by the [Court of Appeals] from
In Home Guaranty, R-II Builders, Inc. (R-II Builders) filed a Complaint the other causes of action alleged in R-II Builders' original complaint
for the rescission of the Deed of Assignment and Conveyance it and Amended and Supplemental Complaint which prayed for the
entered into with Home Guaranty Corporation and National Housing conveyance and/or transfer of possession of the Asset Pool. In
Authority. The Complaint was initially determined to have a subject Gochan v. Gochan, this Court held that an action for specific
that is incapable of pecuniary estimation and the docket fees were performance would still be considered a real action where it seeks the
assessed and paid accordingly.[103] conveyance or transfer of real property, or ultimately, the execution
of deeds of conveyance of real property.
R-II Builders later filed a motion to admit its Amended and
Supplemental Complaint, which deleted its earlier prayer for the Granted that R-II Builders is not claiming ownership of the Asset Pool
resolution of its Deed of Assignment and Conveyance, and prayed for because its continuing stake is, in the first place, limited only to the
the conveyance of title to and/or possession of the entire Asset Pool. residual value thereof, the conveyance and/or transfer of possession
The Regional Trial Court ruled that the Amended and Supplemental of the same properties sought in the original complaint and Amended
and Supplemental Complaint both presuppose a real action for which
appropriate docket fees computed on the basis of the assessed or

Page 8 of 172
estimated value of said properties should have been assessed and Whatever confusion there might have been regarding the nature of
paid. . . .[109] (Citations omitted) actions for nullity of contracts or legality of conveyances, which
would also involve recovery of sum of money or real property, was
Home Guaranty stated that to determine whether an action is capable directly addressed by Lu v. Lu Ym.[114] Lu underscored that "where the
or incapable of pecuniary estimation, the nature of the principal basic issue is something other than the right to recover a sum of
action or remedy prayed for must first be determined.[110] Nonetheless, money, the money claim being only incidental to or merely a
in citing Ruby Shelter Builders v. Formaran, Home Guaranty looked consequence of, the principal relief sought, the action is incapable of
beyond R-II Builder's principal action for annulment or rescission of pecuniary estimation."[115]
contract to purportedly unmask its true objective and nature of its
action, which was to recover real property.[111] This finds support in numerous decisions where this Court
proclaimed that the test to determine whether an action is capable or
In a dissenting opinion in the Home Guaranty[112] June 22, 2011 incapable of pecuniary estimation is to ascertain the nature of the
Resolution that dismissed R-II Builders' motion for reconsideration, principal action or relief sought. Thus, if the principal relief sought is
Associate Justice Presbitero Velasco, Jr. stressed that one must first the recovery of a sum of money or real property, then the action is
look at the principal action of the case to determine if it is capable or capable of pecuniary estimation. However, if the principal relief
incapable of pecuniary estimation: sought is not for the recovery of money or real property and the
money claim is only a consequence of the principal relief, then the
Whether or not the case is a real action, and whether or not the action is incapable of pecuniary estimation.[116]
proper docket fees were paid, one must look to the main cause of
action of the case. In all instances, in the original Complaint, the Considering that the principal remedy sought by R-II Builders was the
Amended and Supplemental Complaint and the Amended Complaint, resolution of the Deed of Assignment and Conveyance, the action was
it was all for the resolution or rescission of the [Deed of Assignment incapable of pecuniary estimation and Home Guaranty erred in
and Conveyance], with the prayer for the provisional remedy of treating it as a real action simply because the principal action was
injunction and the appointment of a trustee and subsequently a accompanied by a prayer for conveyance of real property.
receiver. In the Second Amended Complaint, the return of the
remaining assets of the asset pool, if any, to respondent R-II Builders It is clear that subject matter jurisdiction cannot be dependent on the
would only be the result of the resolution or rescission of the [Deed supposed ultimate motive or true objective of the complaint because
of Assignment and Conveyance]. this will require the judge to speculate on the defenses of the plaintiff
beyond the material allegations contained in the complaint. Likewise,
Even if real property in the Asset Pool may change hands as a result in attempting to pinpoint the true objective of the complaint at the
of the case in the trial court, the fact alone that real property is initial stages of trial, the judge might end up dictating the result
involved does not make that property the basis of computing the outside of the evidence still to be presented during the trial, opening
docket fees. De Leon v. Court of Appeals has already settled the up the judge to charges of partiality and even impropriety.
matter. That case, citing Bautista v, Lim, held that a case for Furthermore, the judge is not aware of the evidence to be presented
rescission or annulment of contract is not susceptible of pecuniary by either party when the complaint is filed; thus, there is no reliable
estimation. On the other hand, in the Decision We rendered on July basis that can be used to infer the true objective of the complaint. It
25, 2005 in Serrano v. Delica, We ruled that the action for cancellation is imperative then that the competing claims as basis of subject
of contracts of sale and the titles is a real action. Similarly, on matter jurisdiction be textually based, finding its basis in the body of
February 10, 2009, We ruled in Ruby Shelter Builders and Realty the complaint and the relief sought without reference to extraneous
Development Corporation v. Formaran III (Ruby Shelter) that an action facts not alleged or evidence still to be presented.\
for nullification of a Memorandum of Agreement which required the
lot owner to issue deeds of sale and cancellation of the. Deeds of Sale Nonetheless, if subject matter jurisdiction is assailed during the
is a real action.[113] (Citations omitted) course of the trial and evidence is presented to prove the defense's
allegation of lack of jurisdiction, this will lead to an anomaly where

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the defense's evidence, instead of the complaint, will effectively Naguit, Eduardo Naguit, Jose Naguit, Zoilo Naguit, And Amelia
determine the remedy and cause of action. Naguit Dizon, represented by Yssel L. Naguit, Petitioners,
Vs.
In the case at bar, petitioner contends that its complaint prayed for Cesar B. Quiazon, Amanda Quiazon, Jose B. Quiazon and Reynaldo
the annulment of the real estate mortgage it entered into with B. Quiazon, represented by Jaime B. Quiazon, Respondents.
respondent and not for the recovery or reconveyance of the
mortgaged properties because it was still the registered owner when MENDOZA, J.:
it filed its complaint. The evidence on record supports petitioner's
claim; hence, there was no reason for the dismissal of its Complaint Before the Court is a petition for review on certiorari under Rule 45 of
for lack of jurisdiction. the Rules of Court assailing the March 13, 2012 Decision 1 of the Court
of Appeals (CA), in CA-G.R. CV No. 92887, which affirmed the
Home Guaranty likewise erred in dismissing the action because of Orders2 of the Regional Trial Court (RTC), Angeles City, Branch 59, in
non-payment of the correct filing fees. Fedman Development SP Civil Case No. 05-076, dismissing the complaint for quieting of title
Corporation v. Agcaoili[117] reiterated that where the assessed docket filed by the petitioners.
fees have been paid and the assessment turns out to be insufficient,
the court still acquires jurisdiction over the case, subject to payment The Facts
of the deficiency assessment.[118] The only exception is when the
deficiency in docket fees is accompanied with bad faith and an On December 16, 2005, a complaint3 for Annulment and Quieting of
intention to defraud the government.[119] It is not disputed that R-II Title was filed before the RTC-Branch59 by the petitioners, namely,
Builders paid the assessed docket fees when it filed its Complaint, Leticia Naguit Aquino, Melvin Naguit, Rommel Naguit, Elma Naguit
negating bad faith or intent on its part to defraud the government. Tayag, Yssel L. Naguit, Rosalina Naguit Aumentado, Rizel Naguit
Cunanan, Caridad Naguit Parajas, Millie Naguit Florendo, Marnel
In light of the foregoing, this Court reaffirms that the nature of an Naguit, Eduardo Naguit, Jose Naguit, Zoilo Naguit, and AmeliaNaguit
action is determined by the principal relief sought in the complaint, Dizon, represented by Yssel L. Naguit (petitioners). They alleged that
irrespective of the other causes of actions that may also crop up as a they were the heirs of the late Epifanio Makam and Severina Bautista,
consequence of the principal relief prayed for. The contrary rule who acquired a house and lot situated in Magalang, Pampanga,
espoused in Home Guaranty is thereby set aside. consisting of 557 square meters, by virtue of a Deed of Sale, dated
April 20, 1894; that since then, they and their predecessors-in-interest
WHEREFORE, this Court resolves to GRANT the Petition. The assailed had been in open, continuous, adverse, and notorious possession for
April 3, 2012 Decision and July 25, 2012 Order of Branch 11, Regional more than a hundred years, constructing houses and paying real
Trial Court, City of Malolos, Bulacan in Civil Case No. 04-M-2012 estate taxes on the property;that sometime in June 2005, they
are REVERSED and SET ASIDE. received various demand letters from the respondents, namely, Cesar
B. Quiazon, Amanda Quiazon, Jose B. Quiazon, and Reynaldo B.
The case is ordered REMANDED to Branch 11, Regional Trial Court, Quiazon, represented by Jaime B. Quiazon (respondents), claiming
City of Malolos, Bulacan for continued trial on First Sarmiento ownership over the subject property and demanding that they vacate
Property Holdings, Inc.'s Complaint for annulment of real estate the same; that upon inquiry with the Register of Deeds of San
mortgage and its amendments. Fernando, Pampanga, they confirmed that the property had been
titled in the name of respondents under Transfer Certificate of Title
SO ORDERED. (TCT) No. 213777-R; that the said title was invalid, ineffective,
voidable or unenforceable; and that they were the true owners of the
property.
G.R. No. 201248 March 11, 2015
Leticia Naguit Aquino, Melvin Naguit, Rommel Naguit, Elma Naguit
Tayag, Yssel L. Naguit, Rosalina Naguit Aumentado, Rizel Naguit Hence, they prayed that the title be cancelled and a new title be
Cunanan, Caridad Naguit Parajas, Millie Naguit Florendo, Marnel issued in their favor.

Page 10 of 172
In their Answer,4 respondents asserted that they were the absolute possession of the property in question. They argued that they were
owners of the subject land as per TCT No. 213777-R; that they had neither guilty of laches nor were they in possession of the property by
inherited the same from their predecessor-in-interest, Fausta Baluyut, mere tolerance, their possession being in the concept of owner for
one of the registered owners under Original Certificate of Title (OCT) more than a hundred years.
No. RO-1138 (11376), as per the Project of Partition and Deed of
Agreement, dated January 2, 1974; and that petitioners had been Lastly, regarding the argument on res judicata, petitioners explained
occupying the property by mere tolerance. They denied the that they were not the same plaintiffs in Civil Case No. 5487 and that
allegations in the complaint and proffered affirmative defenses with the case was dismissed without prejudice.
counterclaims.
The RTC set a preliminary hearing on the affirmative defenses.
They argued that: First, the petitioners "have no valid, legal and
sufficient cause of action"5 against them, because their deed of sale Respondents presented Atty. Charlemagne Tiqui Calilung, RTC Clerk
was spurious and could not prevail over Land Registration Decree No. of Court of San Fernando, Pampanga, who presented the record of
122511 issued on June 28, 1919 in Land Registration Case No. 5, LRC Cadastral Case No. 5, dated June 28, 1919, as well as Decree No.
Records No. 128, by the Court of First Instance of Pampanga, in favor 122511. They also presented Luis Samuel Ragodon, the Registration
of their predecessor-in-interest. The predecessors-in-interest of Examiner of the Registry of Deeds of San Fernando, Pampanga, who
petitioners were among the oppositors in the land registration presented the original copy of OCT No. 11376, reconstituted as RO-
proceeding but, nevertheless, after the trial, the subject lot was 1138, and testified that the title was derived from Decree No. 122511.
awarded, decreed and titled in favor of respondents’ predecessor-in- He further testified that the original title had been cancelled pursuant
interest, as per OCT No. RO-1138 (11376) of the Registry of Deeds of to a project of partition, which was registered on December 17, 1984,
Pampanga. Second, the action was barred by prescription and that and in lieu thereof, TCT Nos. 213775, 213776, 213777, 213778,
petitioners were guilty of laches in asserting their interest over the 213779, 213780, and 213781 were issued. He presented the original
subject lot, considering that Land Registration Decree No. 122511 was copy of TCT No. 213777-R issued in the names of respondents.
issued on June 28, 1919 and OCT No. RO-1138 (11376) was issued on
May 12, 1922. Hence, it was much too late for petitioners to institute
Henry Y. Bituin, the court interpreter who translated the June 28,
the action after more than 80 years. They also raised the settled rule
1919 decision of the Court of First Instance of Pampanga in Land
that a title registered under the Torrens system could not be defeated
Registration Case No. 5 from Spanish to English, also testified.
by adverse, open and notorious possession, or by prescription. Third,
the action was also barred by res judicata and violated the prohibition
against forum shopping, considering that petitioners had earlier filed Petitioners manifested that they were opting to submit the incident
a similar case for quieting of title against respondents, docketed as for resolution without presenting evidence, relying on their position
Civil Case No. 5487, which the RTC-Br. 56 dismissed. Petitioners filed that only the facts alleged in the complaint should be considered.
their Comment to Defendant’s Affirmative Defenses.6 Anent the
alleged lack of cause of action due to the spurious deed of sale, In their formal offer of evidence,7 respondents offered the following
petitioners argued that this contention was a matter of evidence documents: (1) the June 28, 1919 Decision and its English translation;
which might only be resolved in a full-blown trial. They insisted that (2) Transmittal Letter, dated May 6, 1922; (3) Decree No. 122511; (4)
the deed of sale was genuine and authentic and was issued and OCT No. RO-1138; (5) TCT No. 213777-R; (6) the petition, dated July
certified by the Deputy Clerk of Court of the RTC. They added that 29, 1988, and its annexes in Civil Case No. 5487;(7) the September 7,
the settled rule was that to determine the sufficiency of the cause of 1990 Order dismissing Civil Case No. 5487, without prejudice; and (8)
action, only the facts alleged in the complaint should be considered, the July 29, 1916 Decision in Expediente No. 132, G.L.R.O. Record No.
and that the allegations in their complaint sufficiently stated a cause 11958 and its English translation.
of action.
In their comment/opposition8 to the formal offer of evidence,
As regards the allegation of prescription, the petitioners countered petitioners argued (1) that the claims of Epifanio Makam and Severina
that an action to quiet title did not prescribe if the plaintiffs were in Bautista, their predecessors-in-interest, were not adjudicated in the

Page 11 of 172
June 28, 1919 decision and, thus, res judicata was inapplicable; (2) Anent petitioners’ argument that only the complaint may be
that Civil Case No. 5487 was dismissed without prejudice and that considered in determining the sufficiency of the cause of action, the
they were not the plaintiffs therein; (3) that the allegedly spurious RTC Br. 59 ruled that under Section 2 in relation to Section 6, Rule 16
nature of the deed of sale and the supposed in defeasibility of of the Rules of Court, a preliminary hearing on the affirmative
respondents’ title were matters of evidence to be resolved in a full- defense in the answer might be had at the discretion of the court,
blown trial and the trial court was only confined to the allegations in during which the parties could present their arguments and their
the complaint; (4) that their action was not barred by prescription evidence.
because an action toquiet title did not prescribe if the plaintiffs were
in possession of the subject property and that they had been in On December 22, 2008, the RTC-Br. 59 denied petitioners’ motion for
possession in the concept of owner for more than 100 years; and (5) reconsideration. It stated that the court may consider evidence
that respondents were guilty of laches having taken more than 80 presented in hearings related to the case, which was an exception to
years to attempt to enforce their claimed title to the property. the general rule that only the complaint should be taken into
consideration. It stated that petitioners were without legal or
Ruling of the RTC equitable title to the subject property, thus, lacking the legal
personality to file an action for quieting of title and, therefore, "the
On July 14, 2008, the RTC-Br. 59 issued the Order dismissing complaint was properly dismissed for failing to state a cause of
petitioners’ complaint. It found that based on the decision, dated June action."9
28, 1919, in Cadastral Case No. 5, the Baluyut siblings, respondents’
predecessors-in-interest, were declared the absolute owners of the Ruling of the CA
subject property, over the claim of Jose Makam, the predecessor-in-
interest of petitioners, who was one of the oppositors in the said case. In the assailed Decision, dated March 13, 2012, the CA dismissed
From this decision, OCT No. RO-1138 (11376) was derived, which later petitioners’ appeal. It explained that under Section 6, Rule 16 of the
became the subject of a project of partition and deed of agreement Rules of Court, a court is allowed to conduct a preliminary hearing,
among the Baluyut siblings, dated January 2, 1972, which, in turn, motu proprio, on the defendant’s affirmative defenses, including the
was annotated on the OCT as Entry No. 8132. TCT No. 213777-R, ground of "lack of cause of action or failure to state a cause of
covering the subject lot, was later derived from the partition. The action."10 It gave the reason that because the rule spoke in general
RTC-Br. 59 also noted that it was stated in the said decision that in terms, its manifest intention was to apply it to all grounds for a
1907, a warehouse was constructed on the subject lot by virtue of an motion to dismiss under the rules which were pleaded as affirmative
agreement between the Chairman of Magalang and Enrique Baluyut, defenses in the responsive pleading. Thus, it held that the trial court
with no objection from the Makams. It was further noted that the might consider other evidence aside from the averments in the
deed of sale being asserted by petitioners was not mentioned in the complaint in determining the sufficiency of the cause of action. The
1919 decision despite the claim of their predecessors-in-interest. CA explained:

The RTC-Br. 59, thus, ruled that the deed of sale had become invalid But as shown in the foregoing rule, the holding of a preliminary
by virtue of the June 28, 1919 decision. It held that although the deed hearing on any of the grounds for a motion to dismiss which is
of sale dated, April 20, 1894, was never challenged, it was pleaded as an affirmative defense is within the full discretion of the
nevertheless unenforceable by virtue of the June 28, 1919 decision. It trial court. The rule speaks of affirmative defenses that are grounds
found that petitioners had lost whatever right they had on the for a motion to dismiss. Indubitably, lack of cause of action or failure
property from the moment the said decision was rendered and an to state a cause of action, being one of the grounds for a motion to
OCT was issued. Finding that petitioners were not holders of any legal dismiss, is included thereby.
title over the property and were bereft of any equitable claim thereon,
the RTC-Branch 59 stated that the first requisite of an action to quiet Since the rule allows the trial court to conduct a preliminary hearing
title was miserably wanting. It also found the second requisite to be on this kind of an affirmative defense, it follows then that evidence
wanting because respondents had proved that the TCT registered in could be submitted and received during the proceedings which the
their names was valid.

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court may consider in forming its decision. It would be plain defense of lack of cause of action or failure to state a cause of action,
absurdity if the evidence already presented therein would not be where both parties were given the chance to submit arguments and
allowed to be considered in resolving whether the case should be evidence for or against the dismissal of the complaint. Furthermore,
dismissed or not. To rule otherwise would render nugatory the they argue that the Court has previously upheld cases where the court
provision of Section 6, Rule 16 and would make the holding of a took into account external factors in the dismissal of the complaint
preliminary hearing a plain exercise in futility. No well-meaning judge on the ground of lack of cause of action. They assert that since
would hold a preliminary hearing and receive evidence only to petitioners were given reasonable opportunity to present evidence to
disregard later the evidence gathered in the course thereof. If the prove their cause of action, they are now estopped from invoking the
intention of the rule is for the trial court to confine itself to the rule that only allegations in the complaint should be considered.12
allegations in the complaint in determining the sufficiency of the
cause of action, as the plaintiffs-appellants would want to impress Petitioners reiterate that they have been in possession of the property
upon this Court, then it should have been so expressly stated by in the concept of owner for more than 119 years, where they built
barring the court from conducting a preliminary hearing based on the their houses, reared their families, and paid realty taxes thereon. They
said ground. The fact, however, that the said rule speaks in general point out that their possession was never disputed by respondents,
terms, it is its manifest intention to apply it in all grounds for a and that respondents had only attempted to enforce their supposed
motion to dismiss under the rules which are pleaded as an affirmative rights over the property in 2005, or 86 years after the purported
defense in the responsive pleading. Thus, we find that that trial court decree awarding the property to them. Petitioners argue that
did not err in considering the evidence already presented and in not respondents had abandoned their right to the subject property which,
confining itself to the allegations in the plaintiffs-appeallants’ thus, rendered invalid whatever title they might have had. They argue
complaint.11 that it has been held that a registered owner’s right to recover
possession and title to property may be converted into a stale
The CA gave credence to the evidence presented by respondents and demand by virtue of laches. They also claim that the allegations
noted that, except for petitioners’ bare allegation that respondents’ contained in their complaint sufficiently state a cause of action, and
title was invalid, there was nothing more to support the same. It that it was an error for the trial court to declare it unenforceable
further noted that the deed of sale was written in a local dialect considering that the deed of sale should be considered hypothetically
without the translation and with no ascertainable reference to the admitted when determining whether the complaint sufficiently states
area of the property being conveyed. The CA, therefore, found that a cause of action.13
petitioners did not have the title required to avail of the remedy of
quieting of title, while respondents had sufficiently proven the The Court’s Ruling
validity of their Torrens title. Hence, the subject petition.
Preliminary matters
ISSUE
The Court notes that respondents raised the affirmative defense in
Whether the CA erred in affirming the dismissal of petitioners’ their Answer that petitioners "have no valid, legal and sufficient cause
complaint on the ground of lack of cause of action or failure to state of action," raising factual matters,14 which is effectively the ground of
a cause of action. "lack of cause of action." Respondents’ arguments made no assertion
that the complaint failed to state a cause of action. The ground of
Petitioners argue that the CA gravely erred in considering external "lack of cause of action" has been frequently confused with the
factors beyond the allegations in the petition. They aver that it is a ground of "failure to state a cause of action," and this is the situation
settled rule that to determine the sufficiency of a cause of action, prevailing in the present case. The terms were, in fact, used
only facts alleged in the complaint shall be considered, and it is error interchangeably by both the respondents and the lower courts.
for the court to take cognizance of external facts or hold a
preliminary hearing to determine their existence. Respondents, on the
other hand, echo the ruling of the CA that it was within the discretion
of the trial court to conduct a preliminary hearing on the affirmative

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The distinction between the grounds of "failure to state a cause of resolution during a preliminary hearing held pursuant to Section 6.
action" and "lack of cause of action" was aptly discussed in Dabuco On this point alone, the trial court clearly erred in receiving evidence
vs. Court of Appeals, to wit: on the ground of "lack of cause of action" during the preliminary
hearing. The factual matters raised by respondents in their
As a preliminary matter, we wish to stress the distinction between the affirmative defense arguing the non-existence of a cause of action,
two grounds for dismissal of an action: failure to state a cause of should have been duly resolved during a trial on the merits of the
action, on the one hand, and lack of cause of action, on the other case.
hand. The former refers to the insufficiency of allegation in the
pleading, the latter to the insufficiency of factual basis for the action. In any case, even if the Court were to treat respondents’ argument as
Failure to state a cause may be raised in a Motion to Dismiss under a "failure to state a cause of action," their defense would still fail.
Rule 16, while lack of cause may be raised any time. Dismissal for Court limited to averments in the complaint
failure to state a cause can be made at the earliest stages of an action.
Dismissal for lack of cause is usually made after questions of fact Rule 16 of the Rules of Court enumerates the grounds for a motion to
have been resolved on the basis of stipulations, admissions or dismiss. The pertinent ground is found under Section 1(g), which
evidence presented.15 reads as follows:

Although the two grounds were used interchangeably, it can be (g) That the pleading asserting the claim states no cause of action;
gleaned from the decisions of both the trial court and the CA that xxxx (Emphasis supplied) The test for determining the existence of a
respondents’ defense of "lack of cause of action" was actually treated cause of action was amply discussed in Insular Investment and Trust
as a "failure to state a cause of action," which is a ground for a motion Corporation v. Capital One Equities Corporation,19 citing Perpetual
to dismiss under Rule 16. This is apparent from their reliance on Savings Bank v. Fajardo,20 to wit:
Section 6 of Rule 16, which pertains to grounds of a motion to
dismiss raised as affirmative defenses; as well as the doctrines cited The familiar test for determining whether a complaint did or did not
in resolving the case. The CA even referred to both as one and the state a cause of action against the defendants is whether or not,
same ground for a motion to dismiss when it stated that: admitting hypothetically the truth of the allegations of fact made in
"Indubitably, lack of cause of action or failure to state a cause of the complaint, a judge may validly grant the relief demanded in the
action, being one of the grounds for a motion to dismiss, is included complaint. In Rava Development Corporation v. Court of Appeals, the
thereby."16 Court elaborated on this established standard in the following
manner:
Also confused, respondents, on their part, asserted that "it is within
the discretion of the Court a quo to conduct a preliminary hearing on "The rule is that a defendant moving to dismiss a complaint on the
the affirmative defense of lack of cause of action or failure to state a ground of lack of cause of action is regarded as having hypothetically
cause of action,"17 the very basis of their argument being hinged on admitted all the averments thereof. The test of the sufficiency of the
the application of Section 6. They also insisted on the applicability of facts found in a petition as constituting a cause of action is whether
the exceptions to the general rule that only averments in the or not, admitting the facts alleged, the court can render a valid
complaint must be considered, which pertains to the ground of judgment upon the same in accordance with the prayer thereof
"failure to state a cause of action." (Consolidated Bank and Trust Corp. v. Court of Appeals, 197 SCRA
663 [1991]).
The trial court held a preliminary hearing resolving the ground of
"lack of cause of action" pursuant to Section 6 of Rule 16, which In determining the existence of a cause of action, only the statements
allows the court to hold a preliminary hearing on grounds for in the complaint may properly be considered. It is error for the court
dismissal provided in the same rule that have been raised as an to take cognizance of external facts or hold preliminary hearings to
affirmative defense in the answer.18 The ground of "lack of cause of determine their existence. If the allegation in a complaint furnish
action," as already explained, however, is not one of the grounds for a sufficient basis by which the complaint may be maintained, the same
motion to dismiss under Rule 16, and hence, not proper for

Page 14 of 172
should not be dismissed regardless of the defenses that may be in Magalang, Pampanga, consisting of Five Hundred Seventy Seven
assessed by the defendants (supra).21 (577) square meters more or less, by virtue of a Deed of Sale,
hereby quoted for ready reference:
Thus, in determining the existence of a cause of action, only the
allegations in the complaint may properly be considered. For the 4. From 1894 and up to the present, plaintiffs and through their
court to do otherwise would be a procedural error and a denial of the predecessors-in-interest have been in open, continuous, adverse
plaintiff’s right to due process.22 and notorious possession for more than a hundred years of the
piece of property mentioned above, constructed their houses
In the case at bench, petitioners’ cause of action relates to an action thereon and dutifully and faithfully paid the real estate taxes on
to quiet title under Article 476 of the Civil Code, which provides: the said property;

Article 476. Whenever there is a cloud on title to real property or any 5. That sometime in June 2005, plaintiffs received various
interest therein, by reason of any instrument, record, claim, demand letters from defendants demanding plaintiffs to vacate
encumbrance or proceeding which is apparently valid or effective but the premises, claiming ownership of the subject property;
is in truth and in fact invalid, ineffective, voidable, or unenforceable,
and may be prejudicial to said title, an action may be brought to 6. That when plaintiffs inquired from the Office of the Register of
remove such cloud or to quiet title. Deeds of San Fernando, Pampanga, they were able to confirm that
their property had been titled in the name of herein defendants
An action may also be brought to prevent a cloud from being cast under TCT No. 213777-R;
upon title to real property or any interest therein.
7. That the said title is in fact invalid, ineffective, voidable or
A "cloud on title" is an outstanding instrument, record, claim, unenforceable, the existence of which is pre-judicial to the
encumbrance or proceeding which is actually invalid or inoperative, ownership and possession of plaintiffs who are the true owners
but which may nevertheless impair or affect injuriously the title to and actual possessors of the above described real property;
property. The matter complained of must have a prima facie
appearance of validity or legal efficacy. The cloud on title is a 8. That equity demands that the said title be surrendered by
semblance of title which appears in some legal form but which is in defendants and cancelled as it is a cloud upon the legal or
fact unfounded. The invalidity or in operativeness of the instrument equitable title to or interest of plaintiffs over the subject
is not apparent on the face of such instrument, and it has to be property.25
proved by extrinsic evidence.23
It is readily apparent from the complaint that petitioners alleged that
In order that an action for quieting of title may prosper, two (1) they had an interest over the subject property by virtue of a Deed
requisites must concur: (1) the plaintiff or complainant has a legal or of Sale, dated April 20, 1894; and that (2) the title of respondents
equitable title or interest in the real property subject of the action; under TCT No. 213777-R was invalid, ineffective, voidable or
and (2) the deed, claim, encumbrance, or proceeding claimed to be unenforceable. Hypothetically admitting these allegations as true, as
casting cloud on his title must be shown to be in fact invalid or is required in determining whether a complaint fails to state a cause
inoperative despite its prima facie appearance of validity or legal of action, petitioners may be granted their claim. Clearly, the
efficacy.24 complaint sufficiently stated a cause of action. In resolving whether
or not the complaint stated a cause of action, the trial court should
Turning then to petitioners’ complaint, the relevant allegations as to have limited itself to examining the sufficiency of the allegations in
the cause of action for quieting of title read as follows: the complaint. It was proscribed from inquiring into the truth of the
allegations in the complaint or the authenticity of any of the
3. Plaintiffs are the heirs of the late Epifanio Makam and Severina documents referred or attached to the complaint, as these were
Bautista who acquired a house and lot on 20 April 1894 situated deemed hypothetically admitted by the respondents.26

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Evangelista v. Santiago elucidates: Pointing to the exception that inquiry was not confined to the
complaint if evidence had been presented in the course of hearings
The affirmative defense that the Complaint stated no cause of action, related to the case, the CA ruled that it was within the trial court’s
similar to a motion to dismiss based on the same ground, requires a discretion to receive and consider other evidence aside from the
hypothetical admission of the facts alleged in the Complaint. In the allegations in the complaint in resolving a party’s affirmative defense.
case of Garcon v. Redemptorist Fathers, this Court laid down the rules It held that this discretion was recognized under Section 6 of Rule 16
as far as this ground for dismissal of an action or affirmative defense of the Rules of Court, which allowed the court to conduct a
is concerned: preliminary hearing, motu proprio, on the defendant’s affirmative
defense if no corresponding motion to dismiss was filed. This section
It is already well-settled that in a motion to dismiss a complaint based reads in part:
on lack of cause of action, the question submitted to the court for
determination is the sufficiency of the allegations of fact made in the Section 6. Pleading grounds as affirmative defenses. – If no motion to
complaint to constitute a cause of action, and not on whether these dismiss has been filed, any of the grounds for dismissal provided for
allegations of fact are true, for said motion must hypothetically admit in this Rule may be pleaded as an affirmative defense in the answer
the truth of the facts alleged in the complaint; that the test of the and, in the discretion of the court, a preliminary hearing may be had
sufficiency of the facts alleged in the complaint is whether or not, thereon as if a motion to dismiss had been filed.
admitting the facts alleged, the court could render a valid judgment
upon the same in accordance with the prayer of said In their answer, respondents raised the affirmative defenses of "lack
complaint.1âwphi1 Stated otherwise, the insufficiency of the cause of of cause of action, prescription, and res judicata,"31 stated in the
action must appear in the face of the complaint in order to sustain a following manner:
dismissal on this ground, for in the determination of whether or not a
complaint states a cause of action, only the facts alleged therein and 6. Plaintiffs have no valid, legal and sufficient cause of action
no other matter may be considered, and the court may not inquire against the defendants. The alleged "deed of sale" (Annex "B" –
into the truth of the allegations, and find them to be false before a Amended Complaint) is spurious and the same cannot prevail
hearing is had on the merits of the case; and it is improper to inject in over the Land Registration Decree No. 122511 issued on June 28,
the allegations of the complaint facts not alleged or proved, and use 1919 in Land Registration Case No. 5, LRC Record No. 128, by the
these as basis for said motion.27 (Emphasis and underscoring Court of First Instance of Pampanga, in favor of defendants’
supplied) predecessor-in-interest. In fact, plaintiffs’ predecessors-in-interest
were among the oppositors in that land registration proceeding
Exceptions and Section 6 of Rule 16 not applicable but after trial the lot in question was awarded, decreed and titled
in favor and in the names of defendants’ predecessors-in-interest,
The Court does not discount, however, that there are exceptions to as per Original Certificate of Title No. RO-1138 (11376) of the
the general rule that allegations are hypothetically admitted as true Registry of Deeds of Pampanga;
and inquiry is confined to the face of the complaint. First, there is no
hypothetical admission of (a) the veracity of allegations if their falsity 7. The instant action, which is actually an action of reconveyance,
is subject to judicial notice; (b) allegations that are legally impossible; is already barred by prescription. Moreover, plaintiffs are guilty of
(c) facts inadmissible in evidence; and (d) facts which appear, by laches in asserting their alleged title or interest over the subject
record or document included in the pleadings, to be lot. Said Land Registration Decree No. 122511 was issued on June
unfounded.28 Second, inquiry is not confined to the complaint if 28, 1919 and OCT No. RO 1138 (11376) was issued on May 12,
culled (a) from annexes and other pleadings submitted by the 1922. Clearly, it is much too late for the plaintiffs, after more than
parties;29 (b) from documentary evidence admitted by stipulation eighty (80) long years to institute this action against the
which disclose facts sufficient to defeat the claim; or (c) from defendants;
evidence admitted in the course of hearings related to the case.30
xxxx

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 9. The present action is also barred by res judicata and violates The lower courts also relied on the exception that external evidence
the prohibition against forum shopping. There was already a prior may be considered when received "in the course of hearings related to
similar case for quieting of title filed by plaintiffs’ predecessor-in- the case," which is rooted in the case of Tan v. Director of Forestry
interest against defendant Jaime Quiazon and his co-owners, (Tan).40 In said case, a hearing was conducted on the prayer for
before Branch 56 of this Honorable Court, docketed as Civil Case preliminary injunction where evidence was submitted by the parties.
No. 5487, which was dismissed;32 x x x x (Emphases supplied) In the meantime, a motion to dismiss was filed by the defendant,
citing as one of the grounds that the petition did not state a cause of
A review of the first ground under paragraph 6 of the answer reveals action. The trial court resolved the prayer for the issuance of a writ of
that respondents alleged that "[p]laintiffs have no valid, legal and preliminary injunction simultaneously with the motion to dismiss. It
sufficient cause of action against the defendants." It is at this point dismissed the petition for failure to state a cause of action on the
that it must again be emphasized that it is not "lack or absence of basis of the evidence presented during the hearing for preliminary
cause of action" that is a ground for dismissal of the complaint under injuction. On appeal, this Court ruled that the trial court was correct
Rule 16, but rather, that "the complaint states no cause of in considering the evidence already presented and in not confining
action."33 The issue submitted to the court was, therefore, the itself to the allegations in the petition.
determination of the sufficiency of the allegations in the complaint to
constitute a cause of action and not whether those allegations of fact Tan, however, is not on all fours with the present case. First, the trial
were true, as there was a hypothetical admission of facts alleged in court therein considered evidence presented during a preliminary
the complaint.34 An affirmative defense, raising the ground that there hearing on an injunction and not during a hearing on a motion to
is no cause of action as against the defendants poses a question of dismiss. As discussed, a preliminary hearing on a motion to dismiss
fact that should be resolved after the conduct of the trial on the is proscribed when the ground is failure to state a cause of action.
merits.35 A reading of respondents’ arguments in support of this The exception of "hearings related to the case," therefore, pertains to
ground readily reveals that the arguments relate not to the failure to hearings other than the hearing on a motion to dismiss on the ground
state a cause of action, but to the existence of the cause of action, of failure to state a cause of action. To reiterate, the ground that the
which goes into the very crux of the controversy and is a matter of complaint fails to state a cause of action should be tested only on the
evidence for resolution after a full-blown hearing. allegations of facts contained in the complaint, and no other. If the
allegations show a cause of action, or furnish sufficient basis by
The trial court may indeed elect to hold a preliminary hearing on which the complaint can be maintained, the complaint should not be
affirmative defenses as raised in the answer under Section 6 of Rules dismissed regardless of the defenses averred by the defendants. 41 The
16 of the Rules of Court. It has been held, however, that such a trial court may not inquire into the truth of the allegations, and find
hearing is not necessary when the affirmative defense is failure to them to be false before a hearing is conducted on the merits of the
state a cause of action,36 and that it is, in fact, error for the court to case.42 If the court finds the allegations to be sufficient but doubts
hold a preliminary hearing to determine the existence of external their veracity, the veracity of the assertions could be asserted during
facts outside the complaint.37 The reception and the consideration of the trial on the merits.43
evidence on the ground that the complaint fails to state a cause of
action, has been held to be improper and impermissible.38 Thus, in a Second, Tan noted that the plaintiff had readily availed of his
preliminary hearing on a motion to dismiss or on the affirmative opportunity to introduce evidence during the hearing and, as a result,
defenses raised in an answer, the parties are allowed to present was estopped from arguing that the court is limited to the allegations
evidence except when the motion is based on the ground of in the complaint.44 This is in contrast to the present case, where
insufficiency of the statement of the cause of action which must be petitioners steadfastly argued from the beginning that the trial court
determined on the basis only of the facts alleged in the complaint and was limited to the allegations in the complaint. Petitioners maintained
no other.39 Section 6, therefore, does not apply to the ground that the their stance during the preliminary hearing on the affirmative
complaint fails to state a cause of action. The trial court, thus, erred defenses, opting not to file rebuttal evidence and opposing
in receiving and considering evidence in connection with this ground. respondents’ formal offer of evidence on the same ground. Having
been consistent in their position from the start, petitioners cannot be

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estopped from arguing that the trial court was precluded from In sum, the trial court erred in dismissing the complaint on the
considering external evidence in resolving the motion to dismiss. ground of failure to state a cause of action. Evidence should have
been received not during a preliminary hearing under Section 6 of
Third, it was noted in Tan that the documentary evidence given Rule 16, but should have been presented during the course of the
credence by the trial court had effectively been admitted by trial. The case should, thus, be remanded to the RTC-Br. 59 for trial
stipulation during the hearing,45 and another had been an annex to on the merits.
the complaint,46 both of which are exceptions to the general rule that
external facts cannot be considered. Neither of the said exceptions is WHEREFORE, the petition is GRANTED. The March 13, 2012 Decision
availing in the present case. The Court notes that only the OCT of of the Court of Appeals, in CA-G.R. CV No. 92887 is REVERSED and
respondents was attached as an annex to their answer. The June 28, SET ASIDE. The case is ordered REMANDED to the Regional Trial
1919 Decision in the Cadastral case, which was given considerable Court for trial on the merits of the case.
weight by the trial court, was not attached and was only presented
during the preliminary hearing. SO ORDERED.

Fourth, Tanruled that the rigid application of the rules could not be G.R. No. 223451, March 14, 2018
countenanced considering the overriding public interest involved, Antonio F. Trillanes Iv, Petitioner,
namely, the welfare of the inhabitants of the province whose lives and Vs.
properties would be directly and immediately imperilled by forest Hon. Evangeline C. Castillo-Marigomen, in her capacity as Presiding
denudation.47 There appears to be no overriding public interest in the Judge of the Regional Trial Court, Quezon City, Branch 101 and
present case to justify a similar relaxation of the rules. Antonio L. Tiu, Respondents.

It is of note that although the trial court might not have erred in TIJAM, J.:
holding a preliminary hearing on the affirmative defenses of
prescription and res judicata, it is readily apparent from the decisions This is a Petition for Certiorari[1] under Rule 65 of the Rules of Court
of the lower courts that no disquisition whatsoever was made on over public respondent's Order[2] dated May 19, 2015 which denied
these grounds. It cannot be denied that evidence in support of the petitioner's motion to dismiss premised on the special and
ground of "lack of cause of action" was received and given great affirmative defenses in his Answer, and public respondent's
weight by the trial court. In fact, all the evidence given credence by Order[3] dated December 16, 2015 which denied petitioner's Motion
the trial court were only in support of the ground of "lack of cause of for Reconsideration, both issued in Civil Case No. R-QZN-14-10666-CV
action." This all the more highlights that the trial court erred in entitled "Antonio L. Tiu v. Antonio F. Trillanes IV."
receiving evidence to determine whether the complaint failed to state
a cause of action.
The Facts
Although neither the RTC or the CA ruled on the affirmative defenses
of prescription and res judicata, it appears that this case could not Petitioner, as a Senator of the Republic of the Philippines, filed
have been dismissed on these grounds. First, an action to quiet title is Proposed Senate Resolution No. 826 (P.S. Resolution No. 826)
imprescriptible if the plaintiffs are in possession of the directing the Senate's Committee on Accountability of Public Officials
property,48 which is the situation prevailing in the present case. and Investigations to investigate, in aid of legislation, the alleged
Second, there appears to be no res judicata nor a violation of the P1.601 Billion overpricing of the new 11-storey Makati City Hall II
prohibition against forum shopping considering that Civil Case No. Parking Building, the reported overpricing of the 22-storey Makati
5487 had been dismissed, without prejudice, years before petitioners City Hall Building at the average cost of P240,000.00 per square
initiated their complaint for quieting of title. meter, and related anomalies purportedly committed by former and
local government officials.[4]

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Petitioner alleged that at the October 8, 2014 Senate Blue Ribbon Sub- that based on his office's review of the documents, private
Committee (SBRS) hearing on P.S. Resolution No. 826, former Makati respondent appears to be a "front" or "nominee" or is acting as a
Vice Mayor Ernesto Mercado (Mercado) testified on how he helped "dummy" of the actual and beneficial owner of the estate, VP Binay. [10]
former Vice President Jejomar Binay (VP Binay) acquire and expand
what is now a 350-hectare estate in Barangay Rosario, Batangas, which On October 22, 2014, private respondent filed a Complaint for
has been referred to as the Hacienda Binay, about 150 hectares of Damages[11] against petitioner, docketed as Civil Case No. R-QZN-14-
which have already been developed, with paved roads, manicured 10666-CV, for the latter's alleged defamatory statements before the
lawns, a mansion with resort-style swimming pool, man-made lakes, media from October 8 to 14, 2014, specifically his repeated
Japanese gardens, a horse stable with practice race tracks, an accusations that private respondent is a mere "dummy" of VP Binay.
extensive farm for fighting cocks, green houses and orchards.[5]
Private respondent alleged that he is a legitimate businessman
According to petitioner, Mercado related in said hearing that because engaged in various businesses primarily in the agricultural sector, and
VP Binay's wife would not allow the estate's developer, Hillmares' that he has substantial shareholdings, whether in his own name or
Construction Corporation (HCC), to charge the development expenses through his holding companies, in numerous corporations and
against VP Binay's 13% share in kickbacks from all Makati companies, globally, some of which are publicly listed. He averred
infrastructure projects, HCC was compelled to add the same as that because of petitioner's defamatory statements, his reputation
"overprice" on Makati projects, particularly the Makati City Hall was severely tarnished as shown by the steep drop in the stock prices
Parking Building.[6] of his publicly listed companies, AgriNurture, Inc. (AgriNurture), of
which he is the Executive Chairman, and Greenergy Holdings, Inc.
Petitioner averred that private respondent thereafter claimed (Greenergy), of which he is the Chairman, President and Chief
"absolute ownership" of the estate, albeit asserting that it only Executive Officer. To illustrate this, private respondent alleged that
covered 145 hectares, through his company called Sunchamp Real on October 7, 2014, the price of a share of stock of Greenergy was
Estate Corporation (Sunchamp), which purportedly entered into a P0.011 per share and the volume of trading was at 61 Million, while
Memorandum of Agreement (MOA) with a certain Laureano R. on October 8, 2014, the price dropped to P0.0099 per share
Gregorio, Jr. (Gregorio, Jr.), the alleged owner of the consolidated (equivalent to a 10% reduction) and the volume of trading increased
estate and its improvements.[7] by more than seven times (at 475.7 Million), with the price continuing
to drop thereafter. Similarly, private respondent alleged that on
Petitioner further averred that private respondent testified before the October 8, 2014, AgriNurture experienced a six percent (6%) drop
SBRS on the so-called Hacienda Binay on October 22 and 30, 2014, from its share price of October 7, 2014 (from P2.6 to P2.45) and an
and at the October 30, 2014 hearing, the latter presented a one-page increase of more than six times in the volume of trading (from 68,000
Agreement[8] dated January 18, 2013 between Sunchamp and to 409,000), with the share price continuing to drop thereafter.
Gregorio.[9] On its face, the Agreement covered a 150-hectare property According to private respondent, the unusual drop in the share price
in Rosario, Batangas and showed a total consideration of P400 Million, and the drastic increase in trading could be attributed to the
payable in tranches and in cash and/or listed shares, adjustable based statements made by petitioner, which caused the general public to
on the fair market value. The Agreement likewise ostensibly showed doubt his capability as a businessman and to unload their shares, to
that Gregorio is obligated to cause the registration of improvements the detriment of private respondent who has substantial
in the name of Sunchamp and within two years, to deliver shareholdings therein through his holding companies.
titles/documents evidencing the real and enforceable rights of
Sunchamp, and the latter, in the interim, shall have usufruct over the Denying that he is a "dummy," private respondent alleged that he
property, which is extendible. possesses the requisite financial capacity to fund the development,
operation and maintenance of the "Sunchamp Agri-Tourism Park." He
Petitioner admitted that during media interviews at the Senate, averred that petitioner's accusations were defamatory, as they
particularly during gaps and breaks in the plenary hearings as well as dishonored and discredited him, and malicious as they were intended
committee hearings, and in reply to the media's request to respond to to elicit bias and prejudice his reputation. He further averred that
private respondent's claim over the estate, he expressed his opinion such statements were not absolutely privileged since they were not

Page 19 of 172
uttered in the discharge of petitioner's functions as a Senator, or of his legal/legislative staff that he made his statement that private
qualifiedly privileged under Article 354 of the Revised Penal respondent is a front, nominee or dummy of VP Binay.[16]
Code,[12] nor constitutive of fair commentaries on matters of public
interest. He added that petitioner's statement that he was willing to Second, petitioner posited that his statements were part of an ongoing
apologize if proven wrong, showed that he spoke without a public debate on a matter of public concern, and private respondent,
reasonable degree of care and without regard to the gravity of his who had freely entered into and thrust himself to the forefront of
sweeping accusation. said debate, has acquired the status of a public figure or quasi-public
figure. For these reasons, he argued that his statements are protected
Claiming that petitioner's statements besmirched his reputation, and by his constitutionally guaranteed rights to free speech and freedom
caused him sleepless nights, wounded feelings, serious anxiety, of expression and of the press.[17]
mental anguish and social humiliation, private respondent sought to
recover P4 Million as moral damages, P500,000.00 as exemplary Third, petitioner contended that his statements, having been made in
damages and attorney's fees in the amount of P500,000.00. the course of the performance of his duties as a Senator, are covered
by his parliamentary immunity under Article VI, Section 11 of the
In his Answer with Motion to Dismiss,[13] petitioner raised the 1987 Constitution.[18]
following Special and Affirmative Defenses:
Citing Antero J Pobre v. Sen. Miriam Defensor-Santiago,[19] petitioner
First, petitioner averred that private respondent failed to state and argued that the claim of falsity of statements made by a member of
substantiate his cause of action since petitioner's statement that Congress does not destroy the privilege of parliamentary immunity,
private respondent was acting as a "front," "nominee" or "dummy" of and the authority to discipline said member lies in the assembly or
VP Binay for his Hacienda Binay is a statement of fact.[14] the voters and not the courts.

Petitioner asserted that private respondent was unable to prove his Petitioner added that he never mentioned private respondent's two
alleged ownership of the subject estate, and that Mercado had companies in his interviews and it was private respondent who
testified that VP Binay is the actual and beneficial owner thereof, brought them up. Petitioner pointed out that private respondent only
based on his personal knowledge and his participation in the had an eight percent (8%) shareholding in one of said companies and
consolidation of the property. Petitioner noted that the titles covering no shareholding in the other, and that based on the records of the
the estate are in the names of persons related to or identified with Philippine Stock Exchange, the share prices of both companies had
Binay. He argued that the one-page Agreement submitted by private been on a downward trend long before October 8, 2014. Petitioner
respondent hardly inspires belief as it was unnotarized and lacked described the Complaint as a mere media ploy, noting that private
details expected in a legitimate document such as the technical respondent made no claim for actual damages despite the alleged
description of the property, the certificates of title, tax declarations, price drop. This, according to petitioner, showed that private
the area of the property and its metes and bounds, schedule of respondent could not substantiate his claim.[20]
payments, list of deliverables with their due dates, warranties and
undertakings and closing date. He also pointed out that while the Petitioner prayed for the dismissal of the Complaint and for the
total consideration for the Agreement was P446 Million, the award of his Compulsory Counterclaims consisting of moral and
downpayment was only P5 Million. With a yearly P30 Million revenue exemplary damages and attorney's fees.[21]
from the orchard, petitioner questioned why Gregorio would agree to
part with his possession for a mere one percent (1%) of the Petitioner subsequently filed a Motion (to Set Special and Affirmative
total consideration.[15] Petitioner likewise disputed private Defenses for Preliminary Hearing)[22] on the strength of Section 6, Rule
respondent's supposed claim that Sunchamp had introduced 16 of the Rules of Court, which allows the court to hold a preliminary
improvements in the estate amounting to P50 Million, stressing that it hearing on any of the grounds for dismissal provided in the same
took over the estate only in July 2014 and that it did not own the rule, as may have been pleaded as an affirmative defense in the
property and probably never would given the agrarian reform issues. answer.[23]
Petitioner claimed that it was based on the foregoing and the report

Page 20 of 172
Private respondent opposed the motion on the grounds that the Said 'answer with motion to dismiss' of the defendant did not contain
motion failed to comply with the provisions of the Rules of Court on any notice of hearing and was not actually heard. To the mind of the
motions, and a preliminary hearing on petitioner's special and Court, the use of the phrase 'with motion to dismiss' highlights the
affirmative defenses was prohibited as petitioner had filed a motion allegations of special and affirmative defenses which are grounds for
to dismiss. a motion to dismiss. Thus, absent any motion to dismiss as
contemplated by law, the preliminary hearing on the special and
On May 19, 2015, public respondent issued the Order[24] denying affirmative defenses of the defendant may be conducted thereon.
petitioner's motion to dismiss premised on the special and
affirmative defenses in his Answer. The Order, in pertinent part, Petitioner's motion for reconsideration was denied in public
states: respondent's Order[25] dated December 16, 2015. Public respondent
held that:
FIRST ISSUE: The Complaint failed to state a cause of action.
To reiterate the ruling in the assailed order, parliamentary immunity
Whether true or false, the allegations in the complaint, would show is subject to special circumstances which must be established in a full
that the same are sufficient to enable the court to render judgment blown trial.
according to the prayer/s in the complaint.
In the complaint, the plaintiff stated that the defamatory statements
SECOND ISSUE: The defendant's parliamentary immunity. were made in broadcast and print media, not during a Senate hearing.
Hence, between the allegations in the complaint and the affirmative
The defense of parliamentary immunity may be invoked only on defenses in the answer, the issue on whether or not the alleged
special circumstances such that the special circumstance becomes a defamatory statements were made in Congress or in any committee
factual issue that would require for its establishment the conduct of a thereof arises. It would be then up to the Court to determine whether
full blown trial. the alleged defamatory statements are covered by parliamentary
immunity after trial.
With the defense invoking the defendant's parliamentary immunity
from suit, it claims that this Court has no jurisdiction over the instant Petitioner subsequently filed the instant Petition for Certiorari,
case. Again, whether or not the courts have jurisdiction over the assailing public respondent's May 19, 2015 and December 16, 2015
instant case is determined based on the allegations of the complaint. Orders on the ground of grave abuse of discretion amounting to lack
or excess of jurisdiction. In ascribing grave abuse of discretion
xxxx against public respondent, petitioner reiterates the special and
affirmative defenses in his Answer with Motion to Dismiss, and asks
Subject to the presentation of evidence, the complaint alleged that the that the assailed Orders be nullified, reversed and set aside and a new
libelous or defamatory imputations (speech) committed by the one be issued dismissing the Complaint.
defendant against the plaintiff were made not in Congress or in any
committee thereof. This parliamentary immunity, again, is subject to In his Comment,[26] private respondent points out that the petition
special circumstances which circumstances must be established in a violates the doctrine of hierarchy of courts. He contends that
full blown trial. petitioner cannot invoke parliamentary immunity as his utterances
were made in various media interviews, beyond the scope of his
xxxx official duties as Senator, and that the constitutional right to free
speech can be raised only against the government, not against private
FOURTH. Whether or not a motion to dismiss was filed to prevent a individuals.
preliminary hearing on the defendant's special and affirmative
defenses. Private respondent asserts that his Complaint sufficiently stated a

Page 21 of 172
cause of action as petitioner's imputations, as alleged therein, were the Court of Appeals," and "[a] direct invocation of the Supreme
defamatory, malicious and made public, and the victim was clearly Court's original jurisdiction to issue these writs should be allowed
identifiable. According to him, petitioner's claim that his imputations only when there are special and important reasons therefor, clearly
were statements of fact, covered by his parliamentary immunity and and specifically set out in the petition."[30] The parties, therefore, do
not actionable under the doctrine of fair comment, are irrelevant as not have an unfettered discretion in selecting the forum to which
his motion to dismiss, based on failure to state a cause of action, their application will be directed.[31]
hypothetically admitted the allegations in the Complaint. At any rate,
he argues that truth is not a defense in an action for defamation. Adherence to the doctrine on hierarchy of courts ensures that every
level of the judiciary performs its designated role in an effective and
Private respondent further contends that he is not a public figure as efficient manner.[32] This practical judicial policy is established to
to apply the doctrine of fair comment, and that it was petitioner who obviate "inordinate demands upon the Court's time and attention
brought up his name, out of nowhere, at the October 8, 2014 SBRS which are better devoted to those matters within its exclusive
hearing. He asserts that contrary to petitioner's claim, the Courts, not jurisdiction," and to prevent the congestion of the Court's
the Senate, has jurisdiction over the case. Finally, he avers that docket.[33] The Court must remain as a court of last resort if it were to
because failure to state a cause of action and lack of jurisdiction over satisfactorily perform its duties under the Constitution.[34]
the subject matter are determined solely by the allegations of the
complaint, a preliminary hearing is unnecessary. After all, trial courts are not limited to the determination of facts
upon evaluation of the evidence presented to them.[35] They are
The Court's Ruling likewise competent to determine issues of law which may include the
validity of an ordinance, statute, or even an executive issuance in
Hierarchy of courts should have been observed relation to the Constitution.[36]

In justifying his direct recourse to the Court, petitioner alleges that It is true that the doctrine of hierarchy of courts is not an iron-clad
there is a clear threat to his parliamentary immunity as well as his rule, and this Court has allowed a direct application to this Court for
rights to freedom of speech and freedom of expression, and he had a writ of certiorari when there are genuine issues of constitutionality
no other plain, speedy and adequate remedy in the ordinary course of that must be addressed at the most immediate time.[37]
law that could protect him from such threat. Petitioner argues that
the doctrine of hierarchy of courts is not an iron-clad rule, and direct However, the issue of what parliamentary immunity encompasses, in
filing with the Court is allowed when there are genuine issues of relation to a lawmaker's speech or words spoken in debate in
constitutionality that must be addressed at the most immediate time. Congress, has been addressed as early as 1966 in the case of Nicanor
Petitioner asserts that the case encompasses an issue which would T. Jimenez v. Bartolome Cabangbang,[38] where the Court succinctly
require an interpretation of Section 11, Article VI of the 1987 held:
Constitution.
The determination of the first issue depends on whether or not the
The Court is not persuaded. aforementioned publication falls within the purview of the phrase
"speech or debate therein"-that is to say, in Congress used in this
The power to issue writs of certiorari, prohibition, and mandamus is provision.
not exclusive to this Court.[27] The Court shares the jurisdiction over
petitions for these extraordinary writs with the Court of Appeals and Said expression refers to utterances made by Congressmen in the
the Regional Trial Courts.[28] The hierarchy of courts serves as the performance of their official functions, such as speeches delivered,
general determinant of the appropriate forum for such statements made, or votes cast in the halls of Congress, while the
petitions.[29] The established policy is that "petitions for the issuance same is in session, as well as bills introduced in Congress, whether
of extraordinary writs against first level (inferior) courts should be the same is in session or not, and other acts performed by
filed with the Regional Trial Court, and those against the latter, with Congressmen, either in Congress or outside the premises housing its

Page 22 of 172
offices, in the official discharge of their duties as members of Section 15. The Senators and Members of the House of
Congress and of Congressional Committees duly authorized to Representatives shall in all cases except treason, felony, and breach of
perform its functions as such, at the time of the performance of the the peace, be privileged from arrest during their attendance at the
acts in question. (Citations omitted and emphasis ours.)[39] session of the Congress, and in going to and returning from the same;
and for any speech or debate therein, they shall not be questioned
In Jimenez, a civil action for damages was filed against a member of in any other place.[40] (Emphasis ours.)
the House of Representatives for the publication, in several
newspapers of general circulation, of an open letter to the President Section 9. A Member of the National Assembly shall, in all offenses
which spoke of operational plans of some ambitious officers of the punishable by not more than six years imprisonment, be privileged
Armed Forces of the Philippines (AFP) involving a "massive political from arrest during his attendance at its sessions, and in going to and
build-up" of then Secretary of National Defense Jesus Vargas to returning from the same; but the National Assembly shall surrender
prepare him to become a presidential candidate, a coup d'etat, and a the Member involved to the custody of the law within twenty-four
speech from General Arellano challenging Congress' authority and hours after its adjournment for a recess or its next session, otherwise
integrity to rally members of the AFP behind him and to gain civilian such privilege shall cease upon its failure to do so. A Member shall
support. The letter alluded to the plaintiffs, who were members of the not be questioned or held liable in any other place for any speech
AFP, to be under the control of the unnamed "planners," "probably or debate in the Assembly or in any committee thereof.[41] (Emphasis
belong(ing) to the Vargas-Arellano clique," and possibly "unwitting ours.)
tools" of the plans.
Section 11. A Senator or Member of the House of Representatives
Holding that the open letter did not fall under the privilege of speech shall, in all offenses punishable by not more than six years
or debate under the Constitution, the Court declared: imprisonment, be privileged from arrest while the Congress is in
session. No Member shall be questioned nor be held liable in any
The publication involved in this case does not belong to this category. other place for any speech or debate in the Congress or in any
According to the complaint herein, it was an open letter to the committee thereof.[42] (Emphasis ours.)
President of the Philippines, dated November 14, 1958, when
Congress presumably was not in session, and defendant caused said Clearly, settled jurisprudence provides sufficient standards and
letter to be published in several newspapers of general circulation in guidelines by which the trial and appellate courts can address and
the Philippines, on or about said date. It is obvious that, in thus resolve the issue of parliamentary immunity raised by petitioner. The
causing the communication to be so published, he was not Court is, thus, unconvinced that petitioner has presented an
performing his official duty, either as a member of Congress or as "exceptionally compelling reason"[43] to justify his direct application
officer or any Committee thereof. Hence, contrary to the finding for a writ of certiorari with this Court.
made by His Honor, the trial Judge, said communication is not
absolutely privileged. (Emphasis ours.) Even assuming arguendo that direct recourse to this Court is
permissible, the petition must still be dismissed.
Albeit rendered in reference to the 1935 constitutional grant of
parliamentary immunity, the Jimenez pronouncement on what Petitioner's statements in media interviews are not covered by the
constitutes privileged speech or debate in Congress still applies. The parliamentary speech or debate" privilege
same privilege of "speech or debate" was granted under the 1973 and
1987 Philippine Constitutions, with the latter Charters specifying that Petitioner admits that he uttered the questioned statements,
the immunity extended to lawmakers' speeches or debates in any describing private respondent as former VP Binay's "front" or
committee of the legislature. This is clear from the "speech or debate" "dummy" in connection with the so-called Hacienda Binay, in
clauses in the parliamentary immunity provisions of the 1935, 1973 response to media interviews during gaps and breaks in plenary and
and 1987 Constitutions which respectively provide: committee hearings in the Senate.[44] With Jimenez as our guidepost, it
is evident that petitioner's remarks fall outside the privilege of speech

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or debate under Section 11, Article VI of the 1987 Constitution. The reaching only those things "generally done in a session of the
statements were clearly not part of any speech delivered in the Senate House by one of its members in relation to the business before
or any of its committees. They were also not spoken in the course of it," Kilbourn v. Thompson, supra, at 204, or things "said or done by
any debate in said fora. It cannot likewise be successfully contended him, as a representative, in the exercise of the functions of that
that they were made in the official discharge or performance of office," Coffin v. Coffin, 4 Mass. 1, 27 (1808).
petitioner's duties as a Senator, as the remarks were not part of or
integral to the legislative process. xxx In stating that those things "in no wise related to the due
functioning of the legislative process" were not covered by the
The Speech or Debate Clause under the 1935 Constitution "was taken privilege, the Court did not in any sense imply as a corollary that
or is a copy of sec. 6, clause 1 of Art. 1 of the Constitution of the everything that "related" to the office of a Member was shielded by
United States."[45] Such immunity has come to this country from the the Clause. Quite the contrary, in Johnson we held, citing Kilbourn v.
practices of the Parliamentary as construed and applied by the Thompson, supra, that only acts generally done in the course of the
Congress of the United States.[46] process of enacting legislation were protected.

The U.S. Supreme Court's disquisition in United States v. In no case has this Court ever treated the Clause as protecting all con
Brewster[47] on the scope of the privilege is of jurisprudential duct relating to the legislative process. In every case thus far before
significance: this Court, the Speech or Debate Clause has been limited to an act
which was clearly a part of the legislative process - the due
Johnson thus stand as a unanimous holding that a Member of functioning of the process. xxx
Congress may be prosecuted under a criminal statute provided that
the Government's case does not rely on legislative acts or the (c) We would not think it sound or wise, simply out of an abundance
motivation for legislative acts. A legislative act has consistently of caution to doubly insure legislative independence, to extend the
been defined as an act generally done in Congress in relation to the privilege beyond its intended scope, its literal language, and its
business before it. In sum, the Speech or Debate Clause prohibits history, to include all things in any way related to the legislative
inquiry only into those things generally said or done in the House or process. Given such a sweeping reading, we have no doubt that there
the Senate in the performance of official duties and into the are few activities in which a legislator engages that he would be
motivation for those acts. unable somehow to "relate" to the legislative process. Admittedly, the
Speech or Debate Clause must be read broadly to effectuate its
It is well known, of course, that Members of the Congress engage in purpose of protecting the independence of the Legislative Branch,
many activities other than the purely legislative activities protected but no more than the statutes we apply, was its purpose to make
by the Speech or Debate Clause. These include a wide range of Members of Congress super-citizens, immune from criminal
legitimate "errands" performed for constituents, the making of responsibility. In its narrowest scope, the Clause is a very large, albeit
appointments with Government agencies, assistance in securing essential, grant of privilege. It has enabled reckless men to slander
Government contracts, preparing so-called "news letters" to and even destroy others with impunity, but that was the conscious
constituents, news releases, and speeches delivered outside the choice of the Framers.
Congress. The range of these related activities has grown over the
years. They are performed in part because they have come to be xxx.The authors of our Constitution were well aware of the history of
expected by constituents, and because they are a means of both the need for the privilege and the abuses that could flow from
developing continuing support for future elections. Although these too sweeping safeguards. In order to preserve other values, they
are entirely legitimate activities, they are political in nature, rather wrote the privilege so that it tolerates and protects behavior on the
than legislative, in the sense that term has been used by the Court in part of Members not tolerated and protected when done by other
prior cases. But it has never been seriously contended that these citizens. but the shield does not extend beyond what is necessary
political matters, however appropriate, have the protection afforded to preserve the integrity of the legislative process. Moreover, unlike
by the Speech or Debate Clause. Careful examination of the decided England, with no formal written constitutional limitations on the
cases reveals that the Court has regarded the protection as monarch, we defined limits on the coordinate branches, providing

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other checks to protect against abuses of the kind experienced in that statement is made by a lawmaker, but because it is uttered in
country. (Emphasis ours.) furtherance of legislation.

In Gravel v. United States,[48] the U.S. Supreme Court ruled that a The Speech or Debate Clause in our Constitution did not turn our
Senator's private publication of certain classified documents Senators and Congressmen into "super-citizens"[51] whose spoken
(popularly known as the Pentagon Papers), which the latter had taken words or actions are rendered absolutely impervious to prosecution
up at a Senate subcommittee hearing and placed in the legislative or civil action. The Constitution conferred the privilege on members
record, did not constitute "protected speech or debate," holding that of Congress "not for their private indulgence, but for the public
it "was in no way essential to the deliberations of the Senate," and was good."[52] It was intended to protect them against government pressure
"not part and parcel of the legislative process." Explaining the scope and intimidation aimed at influencing their decision-making
of the Speech or Debate Clause, the U.S. Supreme Court declared: prerogatives.[53] Such grant of legislative privilege must perforce be
viewed according to its purpose and plain language. Indeed, the
But the Clause has not been extended beyond the legislative privilege of speech or debate, which may "(enable) reckless men to
sphere. That Senators generally perform certain acts in their official slander and even destroy others,"[54] is not a cloak of unqualified
capacity as Senators does not necessarily make all such acts impunity; its invocation must be "as a means of perpetuating inviolate
legislative in nature. Members of Congress are constantly in touch the functioning process of the legislative department."[55] As this Court
with the Executive Branch of the Government and with administrative emphasized in Pobre,[56] "the parliamentary non-accountability thus
agencies - they may cajole, and exhort with respect to the granted to members of Congress is not to protect them against
administration of a federal statute - but such conduct, though prosecutions for their own benefit, but to enable them, as the
generally done, is not protected legislative activity. xxx people's representatives, to perform the functions of their
office without fear of being made responsible before the courts or
Legislative acts are not all-encompassing. The heart of the Clause is other forums outside the congressional hall."
speech or debate in either House. Insofar as the Clause is construed
to reach other matters, they must be an integral part of the Jurisdiction lies with the courts, not the Senate
deliberative and communicative processes by which Members
participate in committee and House proceedings with respect to the Petitioner argues that the RTC had no jurisdiction over the case, and
consideration and passage or rejection of proposed legislation or citing Pobre, asserts that the authority to discipline a member of
with respect to other matters which the Constitution places within Congress lies in the assembly or the voters and not the courts.
the jurisdiction of either House. xxx (Emphasis ours.)
Petitioner's reliance on Pobre is misplaced. The statements
It is, thus, clear that parliamentary non-accountability cannot be questioned in said disbarment case were part of a lawyer-Senator's
invoked when the lawmaker's speech or utterance is made outside privilege speech delivered on the Senate floor professedly with a view
sessions, hearings or debates in Congress, extraneous to the "due to future remedial legislation. By reason of the Senator's
functioning of the (legislative) process."[49] To participate in or respond parliamentary immunity, the Court held that her speech was "not
to media interviews is not an official function of any lawmaker; it is actionable criminally or in a disciplinary proceeding under the Rules
not demanded by his sworn duty nor is it a component of the process of Court." The questioned statements in this case, however, were
of enacting laws. Indeed, a lawmaker may well be able to discharge admittedly made in response to queries from the media during gaps
his duties and legislate without having to communicate with the in the Senate's plenary and committee hearings, thus, beyond the
press. A lawmaker's participation in media interviews is not a purview of privileged speech or debate under Section 11, Article VI of
legislative act, but is "political in nature,"[50] outside the ambit of the the Constitution.
immunity conferred under the Speech or Debate Clause in the 1987
Constitution. Contrary to petitioner's stance, therefore, he cannot The Court held in Pobre:
invoke parliamentary immunity to cause the dismissal of private
respondent's Complaint. The privilege arises not because the

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Courts do not interfere with the legislature or its members in the The Court is not persuaded.
manner they perform their functions in the legislative floor or in
committee rooms. Any claim of an unworthy purpose or of the falsity Under Section 6, Rule 16 of the Rules of Court, a preliminary hearing
and mala fides of the statement uttered by the member of the on the affirmative defenses may be allowed only when no motion to
Congress does not destroy the privilege. The disciplinary authority of dismiss has been filed. Section 6, however, must be construed in the
the assembly and the voters, not the courts, can properly discourage light of Section 3 of the same Rule, which requires courts to resolve a
or correct such abuses committed in the name of parliamentary motion to dismiss and prohibits deferment of such resolution on the
immunity. (Citations omitted and emphasis ours.)[57] ground of indubitability. Thus, Section 6 disallows a preliminary
hearing of affirmative defenses once a motion to dismiss has been
Clearly, the Court's pronouncement that the legislative body and the filed because such defenses should have already been resolved.[62]
voters, not the courts, would serve as the disciplinary authority to
correct abuses committed in the name of parliamentary immunity, In this case, however, petitioner's motion to dismiss had not been
was premised on the questionable remarks being made in the resolved when petitioner moved for a preliminary hearing. As public
performance of legislative functions, on the legislative floor or respondent stated in the assailed May 19, 2015 Order, the motion did
committee rooms where the privilege of speech or debate may be not contain a notice of hearing and was not actually heard. Even so, a
invoked. Necessarily, therefore, statements falling outside the preliminary hearing is not warranted.
privilege and giving rise to civil injury or criminal responsibility will
not foreclose judicial review. In his Answer with Motion to Dismiss, petitioner averred that private
respondent failed to state and substantiate his cause of action,
Furthermore, it is well-settled that jurisdiction over the subject arguing that the statement he made before the media, in which he
matter of a case is conferred by law.[58] An action for damages on described private respondent as a "front" or "dummy" of former VP
account of defamatory statements not constituting protected or Binay for the so-called Hacienda Binay, was one of fact.
privileged "speech or debate" is a controversy well within the courts'
authority to settle. The Constitution vests upon the courts the power By raising failure to state a cause of action as his defense, petitioner
and duty "to settle actual controversies involving rights which are is regarded as having hypothetically admitted the allegations in the
legally demandable and enforceable."[59] Batas Pambansa Blg. 129, as Complaint.[63]
amended, conferred jurisdiction over actions for damages upon either
the RTC or the Municipal Trial Court, depending on the total amount The test of the sufficiency of the facts stated in a complaint as
claimed.[60] So also, Article 33 of the Civil Code expressly provides that constituting a cause of action is whether or not, admitting the facts so
in cases of defamation, a civil action for damages, entirely separate alleged, the court can render a valid judgment upon the same in
and distinct from the criminal action, may be brought by the injured accordance with the plaintiff's prayer.[64] Inquiry is into the sufficiency
party, and such civil action shall proceed independently of the not the veracity of the facts so alleged.[65] If the allegations furnish
criminal prosecution, and shall require only a preponderance of sufficient basis by which the complaint may be maintained, the same
evidence. should not be dismissed regardless of the defenses that may be
raised by the defendants.[66]
In fine, petitioner cannot successfully invoke parliamentary non-
accountability to insulate his statements, uttered outside the "sphere Accordingly, in determining whether a complaint did or did not state
of legislative activity,"[61] from judicial review. a cause of action, only the statements in the complaint may properly
be considered.[67] The court cannot take cognizance of external facts
Preliminary hearing was not warranted or hold preliminary hearings to determine its existence.[68] For the
court to do otherwise would be a procedural error and a denial of the
Petitioner argues that a preliminary hearing on his special and plaintiff's right to due process.[69]
affirmative defenses is necessary to allow him to present evidence
that will warrant the immediate dismissal of the Complaint. As this Court, in Aquino, et al. v. Quiazon, et al.[70] instructs:

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The trial court may indeed elect to hold a preliminary hearing on to moral damages, by way of correction or example for the public
affirmative defenses as raised in the answer under Section 6 of Rules good, as determined by the court.[77]
16 of the Rules of Court. It has been held, however, that such a
hearing is not necessary when the affirmative defense is failure to Measured against the foregoing requisites and considerations,
state a cause of action, and that it is, in fact, error for the court to including the scope of parliamentary non-accountability, private
hold a preliminary hearing to determine the existence of external respondent's Complaint, on its face, sufficiently makes out a cause of
facts outside the complaint. The reception and the consideration of action for damages.
evidence on the ground that the complaint fails to state a cause of
action, has been held to be improper and impermissible. Thus, in a In his Complaint, private respondent alleged that petitioner gave
preliminary hearing on a motion to dismiss or on the affirmative statements during interviews by the media, describing him as the
defenses raised in an answer, the parties are allowed to present "dummy" of former VP Binay in connection with the so-
evidence except when the motion is based on the ground of called Hacienda Binay. Private respondent averred that such
insufficiency of the statement of the cause of action which must be imputation, unprivileged as it was uttered outside of petitioner's
determined on the basis only of the facts alleged in the complaint and legislative functions, actually discredited him and tarnished his
no other. Section 6, therefore, does not apply to the ground that the reputation as a legitimate businessman, and caused him sleepless
complaint fails to state a cause of action. The trial court, thus, erred nights, wounded feelings, serious anxiety, mental anguish and social
in receiving and considering evidence in connection with this ground. humiliation. The statements, presumed to be malicious and so
(Citations omitted and emphasis ours.) described by private respondent, were also alleged to have been made
public through broadcast and print media, and identified private
Complaint sufficiently states a cause of action respondent as their subject. Hypothetically admitting these
allegations as true, as is required in determining whether a complaint
Private respondent filed his Complaint for moral and exemplary fails to state a cause of action, private respondent may be granted his
damages pursuant to Article 33 of the Civil Code[71] which authorizes claim.[78]
an injured party to file a civil action for damages, separate and
distinct from the criminal action, in cases of defamation, fraud and The Complaint, therefore, cannot be dismissed on the ground of
physical injuries. failure to state a cause of action. As the RTC held, whether true or
false, the allegations in the Complaint are sufficient to enable the
As defined in Article 353 of the Revised Penal Code, a libel[72] is a court to render judgment according to private respondent's prayer.
public and malicious imputation of a crime, or of a vice or defect, real
or imaginary, or any act, omission, condition, status, or circumstance Defense of lack of cause of action requires a full-blown trial
tending to cause the dishonor, discredit, or contempt of a natural or
juridical person, or to blacken the memory of one who is dead. In moving for the outright dismissal of the Complaint, petitioner
averred that private respondent failed to prove his alleged ownership
For an imputation to be libelous, the following requisites must of the subject estate. To establish this, petitioner pointed to
concur: a) it must be defamatory; b) it must be malicious; c) it must be Mercado's testimony that former VP Binay is the actual and beneficial
given publicity and d) the victim must be identifiable. [73] Any of the owner thereof, the certificates of title covering the estate purportedly
imputations covered by Article 353 is defamatory, [74] and every in the names of persons related to or identified with former VP Binay,
defamatory imputation is presumed malicious.[75] and the one-page Agreement between Sunchamp and Gregorio which,
according to petitioner, hardly inspires belief because it was not
The Civil Code provides that moral damages include mental anguish, notarized and lacked details expected in a legitimate document, and
fright, serious anxiety, besmirched reputation, wounded feelings, because the transaction, which required Gregorio to give up
moral shock, social humiliation, and similar injury, and may be possession, entailed a measly downpayment of P5 Million, out of the
recovered in cases of libel, slander or any other form of P446 Million total consideration, for an estate with a yearly P30
defamation,[76] while exemplary damages may be recovered in addition Million revenue from its orchard.

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For these reasons, petitioner asserted that when he remarked before action," however, is not one of the grounds for a motion to dismiss
the media that private respondent was acting as former VP Binay's under Rule 16, hence, not proper for resolution during a preliminary
"front" or "dummy," he was simply making a statement of fact which hearing held pursuant to Section 6 thereof.[81]
he had based on documents, reports and information available to
him, and which was never intended to be an insult or a derogatory Furthermore, Aquino teaches that the existence of a cause of action
imputation. "goes into the very crux of the controversy and is a matter of evidence
for resolution after a full-blown hearing." An affirmative defense,
Petitioner also argued that because private respondent had thrust raising the ground that there is no cause of action as against the
himself into the public debate on the so-called Hacienda Binay, he defendant, poses a question of fact that should be resolved after the
should be deemed a "public figure" and the questioned statements conduct of the trial on the merits.[82]
consequently qualify for the constitutional protection of freedom of
expression. Indeed, petitioner, in asking for the outright dismissal of the
Complaint, has raised evidentiary matters and factual issues which
Private respondent, however, has notably denied being a "dummy," this Court cannot address or resolve, let alone at the first instance.
and rebuffed petitioner's claim that he had thrust himself into the The proof thereon cannot be received in certiorari proceedings before
public debate, alleging that it was petitioner who brought up his the Court, but should be established in the RTC. [83]
name, out of nowhere, at the October 8, 2014 SBRS hearing.
Thus, even granting that the petition for certiorari might be directly
Petitioner's Answer likewise repudiated private respondent's claim filed with this Court, its dismissal must perforce follow because its
that the questioned statements had brought about a steep drop in the consideration and resolution would inevitably require the
share prices of two listed companies he was managing, to the consideration and evaluation of evidentiary matters. The Court is not
detriment of his substantial shareholdings therein. Petitioner a trier of facts, and cannot accept the petition for certiorari for that
countered that said prices had been on a downward trend long before reason.[84]
he uttered the questioned statements; that he never mentioned said
companies in his interviews; and that far from substantial, private All told, for its procedural infirmity and lack of merit, the petition
respondent only had an 8% stake in one of the companies and none in must be dismissed.
the other.
WHEREFORE, the petition is DISMISSED. Public respondent's Orders
A perusal of petitioner's defenses and arguments, as above outlined, dated May 19, 2015 and December 16, 2015 in Civil Case No. RQZN-
at once reveals that the averments were grounded on lack of cause of 14-10666-CV are affirmed insofar as they are consistent with this
action. In fact, by pleading in his Answer that private respondent decision.
failed to "substantiate" his cause of action, petitioner effectively
questioned its existence, and would have the trial court inquire into SO ORDERED.
the veracity and probative value of private respondent's submissions.
G.R. No. 153788 November 27, 2009
Distinguished from failure to state a cause of action, which refers to Roger V. Navarro, Petitioner,
the insufficiency of the allegations in the pleading, lack of cause of Vs.
action refers to the insufficiency of the factual basis for the Hon. Jose L. Escobido, Presiding Judge, RTC Branch 37, Cagayan De
action.[79] Petitioner, in his Answer with Motion to Dismiss, clearly Oro City, And Karen T. Go, doing business under the name Kargo
impugned the sufficiency of private respondent's basis for filing his Enterprises, Respondents.
action for damages.
BRION, J.:
Section 6, Rule 16 allows the court to hold a preliminary hearing on This is a petition for review on certiorari1 that seeks to set aside the
affirmative defenses pleaded in the answer based on grounds for Court of Appeals (CA) Decision2 dated October 16, 2001 and
dismissal under the same rule.[80] The ground of "lack of cause of

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Resolution3 dated May 29, 2002 in CA-G.R. SP. No. 64701. These CA Plate No. GHK-378
rulings affirmed the July 26, 20004 and March 7, 20015 orders of the
Regional Trial Court (RTC), Misamis Oriental, Cagayan de Oro City, as evidenced by a LEASE AGREEMENT WITH OPTION TO
denying petitioner Roger V. Navarro’s (Navarro) motion to dismiss. PURCHASE entered into by and between KARGO ENTERPRISES,
then represented by its Manager, the aforementioned GLENN O.
Background Facts GO, and defendant ROGER NAVARRO xxx; that in accordance with
the provisions of the above LEASE AGREEMENT WITH OPTION TO
On September 12, 1998, respondent Karen T. Go filed two complaints, PURCHASE, defendant ROGER NAVARRO delivered unto plaintiff
docketed as Civil Case Nos. 98-599 (first complaint)6 and 98-598 six (6) post-dated checks each in the amount of SIXTY-SIX
(second complaint),7 before the RTC for replevin and/or sum of THOUSAND THREE HUNDRED THIRTY-THREE & 33/100 PESOS
money with damages against Navarro. In these complaints, Karen Go (₱66,333.33) which were supposedly in payment of the agreed
prayed that the RTC issue writs of replevin for the seizure of two (2) rentals; that when the fifth and sixth checks, i.e. PHILIPPINE BANK
motor vehicles in Navarro’s possession. OF COMMUNICATIONS – CAGAYAN DE ORO BRANCH CHECKS
NOS. 017112 and 017113, respectively dated January 8, 1998 and
The first complaint stated: February 8, 1998, were presented for payment and/or credit, the
same were dishonored and/or returned by the drawee bank for
the common reason that the current deposit account against
1. That plaintiff KAREN T. GO is a Filipino, of legal age, married to
which the said checks were issued did not have sufficient funds to
GLENN O. GO, a resident of Cagayan de Oro City and doing
cover the amounts thereof; that the total amount of the two (2)
business under the trade name KARGO ENTERPRISES, an entity
checks, i.e. the sum of ONE HUNDRED THIRTY-TWO THOUSAND
duly registered and existing under and by virtue of the laws of the SIX HUNDRED SIXTY-SIX & 66/100 PESOS (₱132,666.66) therefore
Republic of the Philippines, which has its business address at
represents the principal liability of defendant ROGER NAVARRO
Bulua, Cagayan de Oro City; that defendant ROGER NAVARRO is a
unto plaintiff on the basis of the provisions of the above LEASE
Filipino, of legal age, a resident of 62 Dolores Street, Nazareth,
AGREEMENT WITH RIGHT TO PURCHASE; that demands, written
Cagayan de Oro City, where he may be served with summons and
and oral, were made of defendant ROGER NAVARRO to pay the
other processes of the Honorable Court; that defendant "JOHN
amount of ONE HUNDRED THIRTY-TWO THOUSAND SIX
DOE" whose real name and address are at present unknown to HUNDRED SIXTY-SIX & 66/100 PESOS (₱132,666.66), or to return
plaintiff is hereby joined as party defendant as he may be the
the subject motor vehicle as also provided for in the LEASE
person in whose possession and custody the personal property
AGREEMENT WITH RIGHT TO PURCHASE, but said demands were,
subject matter of this suit may be found if the same is not in the
and still are, in vain to the great damage and injury of herein
possession of defendant ROGER NAVARRO;
plaintiff; xxx

2. That KARGO ENTERPRISES is in the business of, among others,

4. That the aforedescribed motor vehicle has not been the subject
buying and selling motor vehicles, including hauling trucks and
of any tax assessment and/or fine pursuant to law, or seized
other heavy equipment;
under an execution or an attachment as against herein plaintiff;

3. That for the cause of action against defendant ROGER

xxx
NAVARRO, it is hereby stated that on August 8, 1997, the said
defendant leased [from] plaintiff a certain motor vehicle which is
more particularly described as follows – 8. That plaintiff hereby respectfully applies for an order of the
Honorable Court for the immediate delivery of the above-
described motor vehicle from defendants unto plaintiff pending
Make/Type FUSO WITH MOUNTED CRANE
the final determination of this case on the merits and, for that
purpose, there is attached hereto an affidavit duly executed and
Serial No. FK416K-51680 bond double the value of the personal property subject matter
Motor No. 6D15-338735 hereof to answer for damages and costs which defendants may

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 suffer in the event that the order for replevin prayed for may be When the RTC denied Navarro’s motion for reconsideration on March
found out to having not been properly issued. 7, 2001, Navarro filed a petition for certiorari with the CA, essentially
contending that the RTC committed grave abuse of discretion when it
The second complaint contained essentially the same allegations as reconsidered the dismissal of the case and directed Karen Go to
the first complaint, except that the Lease Agreement with Option to amend her complaints by including her husband Glenn Go as co-
Purchase involved is dated October 1, 1997 and the motor vehicle plaintiff. According to Navarro, a complaint which failed to state a
leased is described as follows: cause of action could not be converted into one with a cause of action
by mere amendment or supplemental pleading.
Make/Type FUSO WITH MOUNTED CRANE
Serial No. FK416K-510528 On October 16, 2001, the CA denied Navarro’s petition and affirmed
Motor No. 6D14-423403 the RTC’s order.13 The CA also denied Navarro’s motion for
reconsideration in its resolution of May 29, 2002, 14 leading to the
The second complaint also alleged that Navarro delivered three post- filing of the present petition.
dated checks, each for the amount of ₱100,000.00, to Karen Go in
payment of the agreed rentals; however, the third check was The Petition
dishonored when presented for payment.8
Navarro alleges that even if the lease agreements were in the name of
On October 12, 19989 and October 14, 1998,10 the RTC issued writs of Kargo Enterprises, since it did not have the requisite juridical
replevin for both cases; as a result, the Sheriff seized the two vehicles personality to sue, the actual parties to the agreement are himself and
and delivered them to the possession of Karen Go. Glenn Go. Since it was Karen Go who filed the complaints and not
Glenn Go, she was not a real party-in-interest and the complaints
In his Answers, Navarro alleged as a special affirmative defense that failed to state a cause of action.
the two complaints stated no cause of action, since Karen Go was not
a party to the Lease Agreements with Option to Purchase (collectively, Navarro posits that the RTC erred when it ordered the amendment of
the lease agreements) – the actionable documents on which the the complaint to include Glenn Go as a co-plaintiff, instead of
complaints were based. dismissing the complaint outright because a complaint which does
not state a cause of action cannot be converted into one with a cause
On Navarro’s motion, both cases were duly consolidated on December of action by a mere amendment or a supplemental pleading. In effect,
13, 1999. the lower court created a cause of action for Karen Go when there was
none at the time she filed the complaints.
In its May 8, 2000 order, the RTC dismissed the case on the ground
that the complaints did not state a cause of action. Even worse, according to Navarro, the inclusion of Glenn Go as co-
plaintiff drastically changed the theory of the complaints, to his great
prejudice. Navarro claims that the lower court gravely abused its
In response to the motion for reconsideration Karen Go filed dated
discretion when it assumed that the leased vehicles are part of the
May 26, 2000,11 the RTC issued another order dated July 26, 2000
conjugal property of Glenn and Karen Go. Since Karen Go is the
setting aside the order of dismissal. Acting on the presumption that
registered owner of Kargo Enterprises, the vehicles subject of the
Glenn Go’s leasing business is a conjugal property, the RTC held that
complaint are her paraphernal properties and the RTC gravely erred
Karen Go had sufficient interest in his leasing business to file the when it ordered the inclusion of Glenn Go as a co-plaintiff.
action against Navarro. However, the RTC held that Karen Go should
have included her husband, Glenn Go, in the complaint based on
Section 4, Rule 3 of the Rules of Court (Rules).12 Thus, the lower court Navarro likewise faults the lower court for setting the trial of the case
ordered Karen Go to file a motion for the inclusion of Glenn Go as co- in the same order that required Karen Go to amend her complaints,
plaintiff.1avvphi1 claiming that by issuing this order, the trial court violated Rule 10 of
the Rules.

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Even assuming the complaints stated a cause of action against him, As a corollary, Navarro contends that the RTC acted with grave abuse
Navarro maintains that the complaints were premature because no of discretion when it ordered the inclusion of Glenn Go as co-plaintiff,
prior demand was made on him to comply with the provisions of the since this in effect created a cause of action for the complaints when
lease agreements before the complaints for replevin were filed. in truth, there was none.

Lastly, Navarro posits that since the two writs of replevin were issued We do not find Navarro’s arguments persuasive.
based on flawed complaints, the vehicles were illegally seized from
his possession and should be returned to him immediately. The central factor in appreciating the issues presented in this case is
the business name Kargo Enterprises. The name appears in the title of
Karen Go, on the other hand, claims that it is misleading for Navarro the Complaint where the plaintiff was identified as "KAREN T. GO
to state that she has no real interest in the subject of the complaint, doing business under the name KARGO ENTERPRISES," and this
even if the lease agreements were signed only by her husband, Glenn identification was repeated in the first paragraph of the Complaint.
Go; she is the owner of Kargo Enterprises and Glenn Go signed the Paragraph 2 defined the business KARGO ENTERPRISES undertakes.
lease agreements merely as the manager of Kargo Enterprises. Paragraph 3 continued with the allegation that the defendant "leased
Moreover, Karen Go maintains that Navarro’s insistence that Kargo from plaintiff a certain motor vehicle" that was thereafter described.
Enterprises is Karen Go’s paraphernal property is without basis. Significantly, the Complaint specifies and attaches as its integral part
Based on the law and jurisprudence on the matter, all property the Lease Agreement that underlies the transaction between the
acquired during the marriage is presumed to be conjugal property. plaintiff and the defendant. Again, the name KARGO ENTERPRISES
Finally, Karen Go insists that her complaints sufficiently established a entered the picture as this Lease Agreement provides:
cause of action against Navarro. Thus, when the RTC ordered her to
include her husband as co-plaintiff, this was merely to comply with This agreement, made and entered into by and between:
the rule that spouses should sue jointly, and was not meant to cure
the complaints’ lack of cause of action. GLENN O. GO, of legal age, married, with post office address at xxx,
herein referred to as the LESSOR-SELLER; representing KARGO
The Court’s Ruling ENTERPRISES as its Manager,

We find the petition devoid of merit. thus, expressly pointing to KARGO ENTERPRISES as the principal that
Glenn O. Go represented. In other words, by the express terms of this
Karen Go is the real party-in-interest Lease Agreement, Glenn Go did sign the agreement only as the
manager of Kargo Enterprises and the latter is clearly the real party to
The 1997 Rules of Civil Procedure requires that every action must be the lease agreements.
prosecuted or defended in the name of the real party-in-
interest, i.e., the party who stands to be benefited or injured by the As Navarro correctly points out, Kargo Enterprises is a sole
judgment in the suit, or the party entitled to the avails of the suit.15 proprietorship, which is neither a natural person, nor a juridical
person, as defined by Article 44 of the Civil Code:
Interestingly, although Navarro admits that Karen Go is the registered
owner of the business name Kargo Enterprises, he still insists that Art. 44. The following are juridical persons:
Karen Go is not a real party-in-interest in the case. According to
Navarro, while the lease contracts were in Kargo Enterprises’ name, (1) The State and its political subdivisions;
this was merely a trade name without a juridical personality, so the
actual parties to the lease agreements were Navarro and Glenn Go, to (2) Other corporations, institutions and entities for public interest
the exclusion of Karen Go. or purpose, created by law; their personality begins as soon as
they have been constituted according to law;

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 (3) Corporations, partnerships and associations for private does not state a cause of action because her name did not appear in
interest or purpose to which the law grants a juridical personality, the Lease Agreement that her husband signed in behalf of Kargo
separate and distinct from that of each shareholder, partner or Enterprises. Whether Glenn Go can legally sign the Lease Agreement
member. in his capacity as a manager of Kargo Enterprises, a sole
proprietorship, is a question we do not decide, as this is a matter for
Thus, pursuant to Section 1, Rule 3 of the Rules,16 Kargo Enterprises the trial court to consider in a trial on the merits.
cannot be a party to a civil action. This legal reality leads to the
question: who then is the proper party to file an action based on a Glenn Go’s Role in the Case
contract in the name of Kargo Enterprises?
We find it significant that the business name Kargo Enterprises is in
We faced a similar question in Juasing Hardware v. Mendoza,17 where the name of Karen T. Go,19 who described herself in the Complaints to
we said: be "a Filipino, of legal age, married to GLENN O. GO, a resident of
Cagayan de Oro City, and doing business under the trade name
Finally, there is no law authorizing sole proprietorships like KARGO ENTERPRISES."20 That Glenn Go and Karen Go are married to
petitioner to bring suit in court. The law merely recognizes the each other is a fact never brought in issue in the case. Thus, the
existence of a sole proprietorship as a form of business business name KARGO ENTERPRISES is registered in the name of a
organization conducted for profit by a single individual, and married woman, a fact material to the side issue of whether Kargo
requires the proprietor or owner thereof to secure licenses and Enterprises and its properties are paraphernal or conjugal properties.
permits, register the business name, and pay taxes to the national To restate the parties’ positions, Navarro alleges that Kargo
government. It does not vest juridical or legal personality upon Enterprises is Karen Go’s paraphernal property, emphasizing the fact
the sole proprietorship nor empower it to file or defend an action that the business is registered solely in Karen Go’s name. On the
in court. other hand, Karen Go contends that while the business is registered
in her name, it is in fact part of their conjugal property.
Thus, the complaint in the court below should have been filed in
the name of the owner of Juasing Hardware. The allegation in the The registration of the trade name in the name of one person – a
body of the complaint would show that the suit is brought by woman – does not necessarily lead to the conclusion that the trade
such person as proprietor or owner of the business conducted name as a property is hers alone, particularly when the woman is
under the name and style Juasing Hardware. The descriptive married. By law, all property acquired during the marriage, whether
words "doing business as Juasing Hardware" may be added to the the acquisition appears to have been made, contracted or registered
title of the case, as is customarily done.18 [Emphasis supplied.] in the name of one or both spouses, is presumed to be conjugal
unless the contrary is proved.21 Our examination of the records of the
This conclusion should be read in relation with Section 2, Rule 3 of case does not show any proof that Kargo Enterprises and the
the Rules, which states: properties or contracts in its name are conjugal. If at all, only the bare
allegation of Navarro to this effect exists in the records of the case.
As we emphasized in Castro v. Miat:22
SEC. 2. Parties in interest. – A real party in interest is the party who
stands to be benefited or injured by the judgment in the suit, or the
party entitled to the avails of the suit. Unless otherwise authorized by Petitioners also overlook Article 160 of the New Civil Code. It
law or these Rules, every action must be prosecuted or defended in provides that "all property of the marriage is presumed to be conjugal
the name of the real party in interest. partnership, unless it be prove[n] that it pertains exclusively to the
husband or to the wife." This article does not require proof that the
property was acquired with funds of the partnership. The
As the registered owner of Kargo Enterprises, Karen Go is the party
presumption applies even when the manner in which the property
who will directly benefit from or be injured by a judgment in this
was acquired does not appear.23 [Emphasis supplied.]
case. Thus, contrary to Navarro’s contention, Karen Go is the real
party-in-interest, and it is legally incorrect to say that her Complaint

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Thus, for purposes solely of this case and of resolving the issue of Under this provision, Glenn and Karen Go are effectively co-owners of
whether Kargo Enterprises as a sole proprietorship is conjugal or Kargo Enterprises and the properties registered under this name;
paraphernal property, we hold that it is conjugal property. hence, both have an equal right to seek possession of these
properties. Applying Article 484 of the Civil Code, which states that
Article 124 of the Family Code, on the administration of the conjugal "in default of contracts, or special provisions, co-ownership shall be
property, provides: governed by the provisions of this Title," we find further support in
Article 487 of the Civil Code that allows any of the co-owners to bring
Art. 124. The administration and enjoyment of the conjugal an action in ejectment with respect to the co-owned property.
partnership property shall belong to both spouses jointly. In case of
disagreement, the husband’s decision shall prevail, subject to While ejectment is normally associated with actions involving real
recourse to the court by the wife for proper remedy, which must be property, we find that this rule can be applied to the circumstances of
availed of within five years from the date of the contract the present case, following our ruling in Carandang v. Heirs of De
implementing such decision. Guzman.24 In this case, one spouse filed an action for the recovery of
credit, a personal property considered conjugal property, without
This provision, by its terms, allows either Karen or Glenn Go to speak including the other spouse in the action. In resolving the issue of
and act with authority in managing their conjugal property, i.e., Kargo whether the other spouse was required to be included as a co-plaintiff
Enterprises. No need exists, therefore, for one to obtain the consent in the action for the recovery of the credit, we said:
of the other before performing an act of administration or any act
that does not dispose of or encumber their conjugal property. Milagros de Guzman, being presumed to be a co-owner of the credits
allegedly extended to the spouses Carandang, seems to be either an
Under Article 108 of the Family Code, the conjugal partnership is indispensable or a necessary party. If she is an indispensable party,
governed by the rules on the contract of partnership in all that is not dismissal would be proper. If she is merely a necessary party,
in conflict with what is expressly determined in this Chapter or by the dismissal is not warranted, whether or not there was an order for her
spouses in their marriage settlements. In other words, the property inclusion in the complaint pursuant to Section 9, Rule 3.
relations of the husband and wife shall be governed primarily by
Chapter 4 on Conjugal Partnership of Gains of the Family Code and, Article 108 of the Family Code provides:
suppletorily, by the spouses’ marriage settlement and by the rules on
partnership under the Civil Code. In the absence of any evidence of a Art. 108. The conjugal partnership shall be governed by the rules on
marriage settlement between the spouses Go, we look at the Civil the contract of partnership in all that is not in conflict with what is
Code provision on partnership for guidance. expressly determined in this Chapter or by the spouses in their
marriage settlements.
A rule on partnership applicable to the spouses’ circumstances is
Article 1811 of the Civil Code, which states: This provision is practically the same as the Civil Code provision it
superseded:
Art. 1811. A partner is a co-owner with the other partners of specific
partnership property. Art. 147. The conjugal partnership shall be governed by the rules on
the contract of partnership in all that is not in conflict with what is
The incidents of this co-ownership are such that: expressly determined in this Chapter.

(1) A partner, subject to the provisions of this Title and to any In this connection, Article 1811 of the Civil Code provides that "[a]
agreement between the partners, has an equal right with his partner is a co-owner with the other partners of specific partnership
partners to possess specific partnership property for partnership property." Taken with the presumption of the conjugal nature of the
purposes; xxx funds used to finance the four checks used to pay for petitioners’
stock subscriptions, and with the presumption that the credits

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themselves are part of conjugal funds, Article 1811 makes Quirino Even assuming that Glenn Go is an indispensable party to the action,
and Milagros de Guzman co-owners of the alleged credit. we have held in a number of cases26 that the misjoinder or non-
joinder of indispensable parties in a complaint is not a ground for
Being co-owners of the alleged credit, Quirino and Milagros de dismissal of action. As we stated in Macababbad v. Masirag: 27
Guzman may separately bring an action for the recovery thereof. In
the fairly recent cases of Baloloy v. Hular and Adlawan v. Adlawan, Rule 3, Section 11 of the Rules of Court provides that neither
we held that, in a co-ownership, co-owners may bring actions for the misjoinder nor nonjoinder of parties is a ground for the dismissal of
recovery of co-owned property without the necessity of joining all the an action, thus:
other co-owners as co-plaintiffs because the suit is presumed to have
been filed for the benefit of his co-owners. In the latter case and in Sec. 11. Misjoinder and non-joinder of parties. Neither misjoinder nor
that of De Guia v. Court of Appeals, we also held that Article 487 of non-joinder of parties is ground for dismissal of an action. Parties
the Civil Code, which provides that any of the co-owners may bring an may be dropped or added by order of the court on motion of any
action for ejectment, covers all kinds of action for the recovery of party or on its own initiative at any stage of the action and on such
possession. terms as are just. Any claim against a misjoined party may be severed
and proceeded with separately.
In sum, in suits to recover properties, all co-owners are real parties in
interest. However, pursuant to Article 487 of the Civil Code and In Domingo v. Scheer, this Court held that the proper remedy when a
relevant jurisprudence, any one of them may bring an action, any party is left out is to implead the indispensable party at any stage of
kind of action, for the recovery of co-owned properties. Therefore, the action. The court, either motu proprio or upon the motion of a
only one of the co-owners, namely the co-owner who filed the suit for party, may order the inclusion of the indispensable party or give the
the recovery of the co-owned property, is an indispensable party plaintiff opportunity to amend his complaint in order to include
thereto. The other co-owners are not indispensable parties. They are indispensable parties. If the plaintiff to whom the order to include the
not even necessary parties, for a complete relief can be accorded in indispensable party is directed refuses to comply with the order of
the suit even without their participation, since the suit is presumed to the court, the complaint may be dismissed upon motion of the
have been filed for the benefit of all co-owners.25 [Emphasis supplied.] defendant or upon the court's own motion. Only upon unjustified
failure or refusal to obey the order to include or to amend is the
Under this ruling, either of the spouses Go may bring an action action dismissed.
against Navarro to recover possession of the Kargo Enterprises-leased
vehicles which they co-own. This conclusion is consistent with Article In these lights, the RTC Order of July 26, 2000 requiring plaintiff
124 of the Family Code, supporting as it does the position that either Karen Go to join her husband as a party plaintiff is fully in order.
spouse may act on behalf of the conjugal partnership, so long as they
do not dispose of or encumber the property in question without the Demand not required prior to filing of replevin action
other spouse’s consent.
In arguing that prior demand is required before an action for a writ of
On this basis, we hold that since Glenn Go is not strictly an replevin is filed, Navarro apparently likens a replevin action to an
indispensable party in the action to recover possession of the leased unlawful detainer.
vehicles, he only needs to be impleaded as a pro-forma party to the
suit, based on Section 4, Rule 4 of the Rules, which states:
For a writ of replevin to issue, all that the applicant must do is to file
an affidavit and bond, pursuant to Section 2, Rule 60 of the Rules,
Section 4. Spouses as parties. – Husband and wife shall sue or be sued which states:
jointly, except as provided by law.
Sec. 2. Affidavit and bond.
Non-joinder of indispensable parties not ground to dismiss action

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The applicant must show by his own affidavit or that of some other G.R. No. 201816 April 8, 2013
person who personally knows the facts: Heirs of Austino Mesina and Genoveva S. Mesina, rep. by Norman
Mesina, Petitioners,
(a) That the applicant is the owner of the property claimed, Vs.
particularly describing it, or is entitled to the possession thereof; Heirs Of Domingo Fian, Sr., Rep. By Theresa Fian Yray, et
al., Respondents.
(b) That the property is wrongfully detained by the adverse
party, alleging the cause of detention thereof according to the VELASCO, JR. J.:
best of his knowledge, information, and belief;
The Case
(c) That the property has not been distrained or taken for a tax
assessment or a fine pursuant to law, or seized under a writ of Before Us is a Petition for Review under Rule 45 of the
execution or preliminary attachment, or otherwise placed Decision1 dated April 29, 2011 of the Court of Appeals (CA) in CA-G.R.
under custodia legis, or if so seized, that it is exempt from such CV No. 01366 and its Resolution dated April 12, 2012 denying
seizure or custody; and reconsideration.

(d) The actual market value of the property. The Facts

The applicant must also give a bond, executed to the adverse party in The late spouses Faustino and Genoveva Mesina (spouses Mesina),
double the value of the property as stated in the affidavit during their lifetime, bought from the spouses Domingo Fian Sr. and
aforementioned, for the return of the property to the adverse party if MariaFian (spouses Fian) two parcels of land on installment. The
such return be adjudged, and for the payment to the adverse party of properties maybe described as follows:
such sum as he may recover from the applicant in the action.
Parcel 1 – A parcel of land, Cadastral Lot No. 6791-Rem. situated in
We see nothing in these provisions which requires the applicant to the Brgy. Of Gungab, Poblacion, Albuera, Leyte. x x x Containing an
make a prior demand on the possessor of the property before he can area of ONE THOUSAND SIX HUNDRED THIRTY TWO (1,632) SQUARE
file an action for a writ of replevin. Thus, prior demand is not a METERS x x x.
condition precedent to an action for a writ of replevin.
Parcel 2 – A parcel of land, Cadastral Lot No. 6737-Rem, situated in
More importantly, Navarro is no longer in the position to claim that a the Brgy. of Gungab, Poblacion, Albuera, Leyte. x x x Containing an
prior demand is necessary, as he has already admitted in his Answers area of THREE THOUSAND SEVEN HUNDRED THIRTY (3,730) SQUARE
that he had received the letters that Karen Go sent him, demanding METERS x x x.2
that he either pay his unpaid obligations or return the leased motor
vehicles. Navarro’s position that a demand is necessary and has not Upon the death of the spouses Fian, their heirs––whose names do not
been made is therefore totally unmeritorious. appear on the records, claiming ownership of the parcels of land and
taking possession of them––refused to acknowledge the payments for
WHEREFORE, premises considered, we DENY the petition for review the lots and denied that their late parents sold the property to the
for lack of merit. Costs against petitioner Roger V. Navarro. spouses Mesina. Meanwhile, the spouses Mesina passed away.

SO ORDERED. Notwithstanding repeated demands, the Heirs of Fian refused to

vacate the lots and to turn possession over to the heirs of the spouses
Mesina, namely: Norman S. Mesina (Norman), Victor S. Mesina (Victor),
Maria Divina S. Mesina (Maria) and Lorna Mesina-Barte (Lorna). Thus,
on August 8, 2005, Norman, as attorney-in-fact of his siblings Victor,

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Maria and Lorna, filed an action for quieting of title and damages Ruling of the RTC
before the Regional Trial Court (RTC), Branch 14 in Baybay, Leyte
against the Heirs of Fian, naming only Theresa Fian Yray (Theresa) as Finding merit in the motion to dismiss, the RTC, on November 22,
the representative of the Heirs of Fian. The case, entitled Heirs of Sps. 2005, granted the motion and dismissed the complaint, ruling that
Faustino S. Mesina & Genoveva S. Mesina, represented by Norman the Rules of Court is explicit that only natural or juridical persons or
Mesina v. Heirs of Domingo Fian, Sr., represented by Theresa Fian entities authorized by law may be parties in a civil action. Also,
Yray, was docketed as Civil Case No. B-05-08-20. The allegations of nowhere in the complaint are the Heirs of Fian individually named.
the Complaint on the parties read: The RTC Order reads:

1. Plaintiffs are the HEIRS OF SPS. FAUSTINO S. MESINO and Anent the Motion to Dismiss filed by defendant, Theresa Fian Yray
GENOVEVA S. MESINA, and represented in this instance by NORMAN through counsel, finding merit in such motion, the same is granted.
MESINA as shown by the Special Power of Attorneys x x x, of legal age,
married, Filipino, and a resident of Poblacion Albuera, Leyte, where he The Rules of Court is explicit that only natural or juridical persons or
may be served with court orders, notices, and other processes, while entities authorized by law may be parties in a civil action (Section 1,
defendants are the HEIRS OF DOMINGO FIAN, SR., likewise of legal Rule 3, Revised Rules of Court). Certainly, the Heirs of Faurstino s.
ages, Filipinos, and residents of Poblacion Albuera, Leyte, and Mesina and Genoveva S. Mesina, represented by Norman Mesina as
respresented in this instance of THERESA FIAN YRAY, where she may plaintiffs as well as Heirs of Domingo Fian, Sr. represented by Theresa
be served with summons, court orders, notices, and other processes.3 Fian Yray as defendants, do not fall within the category as natural or
juridical persons as contemplated by law to institute or defend civil
Thereafter, or on September 5, 2005, respondent Theresa filed a actions. Said heirs not having been individually named could not be
Motion to Dismiss the complaint, arguing that the complaint states no the real parties in interest. Hence, the complaint states no cause of
cause of action and that the case should be dismissed for gross action.
violation of Sections 1 and 2, Rule 3 of the Rules of Court, which state
in part: Accordingly, the case is hereby DISMISSED.

Section 1. Who may be parties; plaintiff and defendant. – Only natural SO ORDERED.4
or juridical persons, or entities authorized by law may be parties in a
civil action. x x x
On December 27, 2005, petitioners moved for reconsideration of the
November 22, 2005 Order of the RTC. The next day, or on December
Section 2. Parties in interest. – A real party in interest is the party who 28, 2005, respondent Theresa filed her Vehement Opposition to the
stands to be benefited or injured by the judgment in the suit, or the motion for reconsideration.
party entitled to the avails of the suit. x x x
On February 29, 2006, the RTC issued its Resolution denying the
She claims that the "Heirs of Mesina" could not be considered as a motion for reconsideration. The dispositive portion of the Resolution
juridical person or entity authorized by law to file a civil action. reads:
Neither could the "Heirs of Fian" be made as defendant, not being a
juridical person as well. She added that since the names of all the
WHEREFORE, the motion prayed for must necessary fail.
heirs of the late spouses Mesina and spouses Fian were not
individually named, the complaint is infirmed, warranting its
dismissal. SO ORDERED.5

On November 24, 2005, petitioners filed their Opposition to the Aggrieved, petitioners appealed to the CA.
Motion to Dismiss.

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Ruling of the CA The Court’s Ruling

In affirming the RTC, the CA, on April 29, 2011, rendered its Decision, The petition is meritorious.
ruling that all the heirs of the spouses Fian are indispensable parties
and should have been impleaded in the complaint. The appellate As regards the issue on failure to state a cause of action, the CA ruled
court explained that this failure to implead the other heirs of the late that the complaint states no cause of action because all the heirs of
spouses Fian is a legal obstacle to the trial court’s exercise of judicial the spouses Fian are indispensable parties; hence, they should have
power over the case and any order or judgment that would be been impleaded in the complaint.
rendered is a nullity in view of the absence of indispensable parties.
The CA further held that the RTC correctly dismissed the complaint The CA, affirming the RTC, held that the dismissal of the complaint is
for being improperly verified. The CA disposed of the appeal in this called for in view of its failure to state a cause of action. The CA
wise: reasoned that:

WHEREFORE, in view of all the foregoing, the appeal of petitioners is Without the presence of all the heirs of spouses Fian as defendants,
DENIED for lack of merit. The assailed November 22, 2005 Order and the trial court could not validly render judgment and grant relief to
February 28, 2006 Resolution both issued by the Regional Trial Court, petitioners. x x x The absence of an indispensable party renders all
Branch 14 of Baybay, Leyte are AFFIRMED. subsequent actions of the court null and void for want of authority to
act, not only as to the absent parties but even as to those present.
SO ORDERED.6 Hence, the court a quo correctly ordered for the dismissal of the
action on the ground that the complaint failed to name or implead all
Petitioners filed their Motion for Reconsideration, which was denied the heirs of the late spouses Fian.8
by the CA in its Resolution dated April 12, 2012.
Failure to state a cause of action refers to the insufficiency of the
Hence, this petition. pleading. A complaint states a cause of action if it avers the existence
of the three essential elements of a cause of action, namely:
Assignment of Errors
(a) The legal right of the plaintiff;
Petitioner now comes before this Court, presenting the following
assigned errors, to wit: (b) The correlative obligation of the defendant; and

A. THE CA ERRED IN AFFIRMING THE ORDER AND RESOLUTION X X X (c) The act or omission of the defendant in violation of said right.9
OF RTC, BAYBAY, LEYTE IN DISMISSING THE CASE ON THE GROUND
THAT THE COMPLAINT STATES NO CAUSE OF ACTION; By a simple reading of the elements of a failure to state a cause of
action, it can be readily seen that the inclusion of Theresa’s co-heirs
B. PETITIONERS HAVE SUBSTANTIALLY COMPLIED WITH THE RULE does not fall under any of the above elements. The infirmity is, in
ON VERIFICATION AND CERTIFICATION AGAINST FORUM SHOPPING; fact, not a failure to state a cause of action but a non-joinder of an
AND indispensable party.

C. CASES SHOULD BE DECIDED ON THE MERITS AND NOT ON MERE Non-joinder means the "failure to bring a person who is a necessary
TECHNICALITIES.7 party or in this case an indispensable party into a lawsuit." 10 An
indispensable party, on the other hand, is a party-in-interest without
whom no final determination can be had of the action, and who shall
be joined either as plaintiff or defendant.11

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As such, this is properly a non-joinder of indispensable party, the 2. The allegations herein are true and correct to the best of our
indispensable parties who were not included in the complaint being knowledge;13 x x x
the other heirs of Fian, and not a failure of the complaint to state a
cause of action. Both the RTC and the CA found said verification defective, since the
phrase "or based on authentic records," as indicated under the second
Having settled that, Our pronouncement in Pamplona Plantation paragraph of Sec. 4, Rule 7 as afore-quoted, was omitted.
Company, Inc. v. Tinghil is instructive as regards the proper course of
action on the part of the courts in cases of non-joinder of We do not agree.
indispensable parties, viz:
That the verification of the complaint does not include the phrase "or
The non-joinder of indispensable parties is not a ground for the based on authentic records" does not make the verification defective.
dismissal of an action. At any stage of a judicial proceeding and/or at Notably, the provision used the disjunctive word "or." The word "or" is
such times as are just, parties may be added on the motion of a party a disjunctive article indicating an alternative.14 As such, "personal
or on the initiative of the tribunal concerned. If the plaintiff refuses to knowledge" and "authentic records" need not concur in a verification
implead an indispensable party despite the order of the court, that as they are to be taken separately.
court may dismiss the complaint for the plaintiff’s failure to comply
with the order. The remedy is to implead the non-party claimed to be Also, verification, like in most cases required by the rules of
indispensable.12 x x x (Emphasis Ours.) procedure, is a formal requirement, not jurisdictional. It is mainly
intended to secure an assurance that matters which are alleged are
Thus, the dismissal of the case for failure to state a cause of action is done in good faith or are true and correct and not of mere
improper. What the trial court should have done is to direct petitioner speculation. Thus, when circumstances so warrant, as in the case at
Norman Mesina to implead all the heirs of Domingo Fian, Sr. as hand, "the court may simply order the correction of unverified
defendants within a reasonable time from notice with a warning that pleadings or act on it and waive strict compliance with the rules in
his failure to do so shall mean dismissal of the complaint. order that the ends of justice may thereby be served."15

Anent the issue on defective verification, Section 4, Rule 7 of the WHEREFORE, premises considered, the petition is GRANTED. The
Rules of Court provides as follows: assailed April 29, 2011 Decision and April 12, 2012 Resolution of the
CA in CA-G.R. CV No. 01366, and the November 22, 2005 Order and
Sec. 4. Verification. – Except when otherwise specifically required by February 29,2006 Resolution of the RTC, Branch 14 in Baybay, Leyte,
law or rule, pleadings need not be under oath, verified or dismissing the complaint in Civil Case No. 8-05-08-20, are hereby
accompanied by affidavit. REVERSED and SET ASIDE. Petitioner Norman Mesina is ORDERED to
implead all the Heirs of Domingo Fian, Sr. as defendants in said civil
A pleading is verified by an affidavit that the affiant has read the case within thirty (30) days from notice of finality of this Decision.
pleading and that the allegations therein are true and correct of his Failure on the part of petitioner Mesina to comply with this directive
personal knowledge or based on authentic records. (Emphasis Ours.) shall result in the dismissal of Civil Case No. B-05-08-20. Upon
compliance by petitioner Mesina with this directive, the RTC, Branch
The alleged defective verification states that: 14 in Baybay, Leyte is ORDERED to undertake appropriate steps and
proceedings to expedite adjudication of the case.
I, NORMAN S. MESINA, legal age, married, Filipino, and a resident of
Poblacion, Albuera, Leyte, after having been duly sworn to in SO ORDERED.
accordance with law, hereby depose and say that:

xxxx

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G.R. No. 168979 December 2, 2013 appear in the SEC documents that the family business was operated
Rebecca Pacaña-Contreras and Rosalie Pacaña, Petitioners, in a place other than the Pacaña residence. Thereafter, the
Vs. respondents used the Pacaña family’s receipts and the deliveries and
Rovila Water Supply, Inc., Earl U Kokseng, Lilia Torres, Dalla P. sales were made to appear as those of the respondent Rovila Inc.
Romanillos and Marissa Gabuya, Respondents. Using this scheme, the respondents fraudulently appropriated the
collections and payments.8
BRION, J.:
The petitioners filed the complaint in their own names although
Before the Court is a petition for review on certiorari under Rule 4 of
1 Rosalie was authorized by Lourdes through a sworn declaration and
the Rules of Court seeking the reversal of the decision2 dated January special power of attorney (SPA). The respondents filed a first motion
27, 2005 and the resolution3 dated June 6, 2005 of the Courts of to dismiss on the ground that the RTC had no jurisdiction over an
Appeals (CA) in CA-G.R. SP No. 71551. The CA set aside the orders intra-corporate controversy.9
dated February 28, 20024 and April 1, 20025 of the Regional Trial
Court (RTC), Branch 8, Cebu City, which denied the motion to dismiss The RTC denied the motion. On September 26, 2000, Lourdes
for reconsideration respectively, of respondents Rovila Water Supply, died10 and the petitioners amended their complaint, with leave of
Inc. (Rovilla, Inc.), Earl U. Kokseng, Lialia Torres, Dalla P. Romanillos court, on October 2, 2000 to reflect this development.11
and Marissa Gabuya.
They still attached to their amended complaint the sworn declaration
The Factual Antecedents with SPA, but the caption of the amended complaint remained the
same.12
Petitioners Rebecca Pacaña-Contreras and Rosalie Pacaña, children of
Lourdes Teves Pacaña and Luciano Pacaña, filed the present case On October 10, 2000, Luciano also died.13
against Rovila Inc., Earl, Lilia, Dalla and Marisa for accounting and
damages.6 The respondents filed their Answer on November 16, 2000.14

The petitioners claimed that their family has long been known in the The petitioners’ sister, Lagrimas Pacaña-Gonzales, filed a motion for
community to be engaged in the water supply business; they operated leave to intervene and her answer-in-intervention was granted by the
the "Rovila Water Supply" from their family residence and were trial court. At the subsequent pre-trial, the respondents manifested to
engaged in the distribution of water to customers in Cebu City. The the RTC that a substitution of the parties was necessary in light of the
petitioners alleged that Lilia was a former trusted employee in the deaths of Lourdes and Luciano. They further stated that they would
family business who hid business records and burned and ransacked seek the dismissal of the complaint because the petitioners are not
the family files. Lilia also allegedly posted security guards and barred the real parties in interest to prosecute the case. The pre-trial pushed
the members of the Pacaña family from operating their business. She through as scheduled and the RTC directed the respondents to put
then claimed ownership over the family business through a into writing their earlier manifestation. The RTC issued a pre-trial
corporation named "Rovila Water Supply, Inc." (Rovila Inc.) Upon order where one of the issues submitted was whether the complaint
inquiry with the Securities and Exchange Commission (SEC), the should be dismissed for failure to comply with Section 2, Rule 3 of
petitioners claimed that Rovila Inc. was surreptitiously formed with the Rules of Court which requires that every action must be
the respondents as the majority stockholders. The respondents did so prosecuted in the name of the real party in interest.15
by conspiring with one another and forming the respondent
corporation to takeover and illegally usurp the family business’ On January 23, 2002,16 the respondents again filed a motion to
registered name.7 dismiss on the grounds, among others, that the petitioners are not
the real parties in interest to institute and prosecute the case and that
In forming the respondent corporation, the respondents allegedly they have no valid cause of action against the respondents.
used the name of Lourdes as one of the incorporators and made it

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Ruling of the RTC interest; and 2) that they had no legal right to institute the action in
behalf of their parents.25
The RTC denied the respondents’ motion to dismiss. It ruled that,
save for the grounds for dismissal which may be raised at any stage That the motion to dismiss was filed after the period to file an answer
of the proceedings, a motion to dismiss based on the grounds has lapsed is of no moment. The RTC judge entertained it and passed
invoked by the respondents may only be filed within the time for, but upon its merit. He was correct in doing so because in the pre-trial
before, the filing of their answer to the amended complaint. Thus, order, one of the submitted issues was whether the case must be
even granting that the defenses invoked by the respondents are dismissed for failure to comply with the requirements of the Rules of
meritorious, their motion was filed out of time as it was filed only Court. Furthermore, in Dabuco v. Court of Appeals,26 the Court held
after the conclusion of the pre-trial conference. Furthermore, the rule that the ground of lack of cause of action may be raised in a motion
on substitution of parties only applies when the parties to the case to dismiss at anytime.27
die, which is not what happened in the present case.17
The CA further ruled that, in denying the motion to dismiss, the RTC
The RTC likewise denied the respondents’ motion for judge acted contrary to established rules and jurisprudence which
reconsideration.18 may be questioned via a petition for certiorari. The phrase "grave
abuse of discretion" which was traditionally confined to "capricious
The respondents filed a petition for certiorari under Rule 65 of the and whimsical exercise of judgment" has been expanded to include
Rules of Court with the CA, invoking grave abuse of discretion in the any action done "contrary to the Constitution, the law or
denial of their motion to dismiss. They argued that the deceased jurisprudence[.]"28
spouses Luciano and Lourdes, not the petitioners, were the real
parties in interest. Thus, the petitioners violated Section 16, Rule 3 of The Parties’ Arguments
the Rules of Court on the substitution of parties. 19
The petitioners filed the present petition and argued that, first, in
Furthermore, they seasonably moved for the dismissal of the annulling the interlocutory orders, the CA unjustly allowed the
case20 and the RTC never acquired jurisdiction over the persons of the motion to dismiss which did not conform to the rules.29
petitioners as heirs of Lourdes and Luciano.21
Specifically, the motion was not filed within the time for, but before
Ruling of the CA the filing of, the answer to the amended complaint, nor were the
grounds raised in the answer. Citing Section 1, Rule 9 of the Rules of
The CA granted the petition and ruled that the RTC committed grave Court, the respondents are deemed to have waived these grounds, as
abuse of discretion as the petitioners filed the complaint and the correctly held by the RTC.30
amended complaint as attorneys-in-fact of their parents. As such,
they are not the real parties in interest and cannot bring an action in Second, even if there is non-joinder and misjoinder of parties or that
their own names; thus, the complaint should be dismissed22 pursuant the suit is not brought in the name of the real party in interest, the
to the Court’s ruling in Casimiro v. Roque and Gonzales.23 remedy is not outright dismissal of the complaint, but its amendment
to include the real parties in interest.31
Neither are the petitioners suing as heirs of their deceased
parents.1awp++i1 Pursuant to jurisprudence,24 the petitioners should Third, the petitioners sued in their own right because they have actual
first be declared as heirs before they can be considered as the real and substantial interest in the subject matter of the action as heirs or
parties in interest. This cannot be done in the present ordinary civil co-owners, pursuant to Section 2, Rule 3 of the Rules of Court.32
case but in a special proceeding for that purpose. The CA agreed with
the respondents that they alleged the following issues as affirmative Their declaration as heirs in a special proceeding is not necessary,
defenses in their answer: 1) the petitioners are not the real parties in pursuant to the Court’s ruling in Marabilles, et al. v. Quito.33

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Finally, the sworn declaration is evidentiary in nature which remains interest because: 1) the petitioners should not have filed the case in
to be appreciated after the trial is completed.34 their own names, being merely attorneys-in-fact of their mother; and
2) the petitioners should first be declared as heirs. A review of the
The respondents reiterated in their comment that the petitioners are 1940, 1964 and the present 1997 Rules of Court shows that the
not the real parties in interest.35 fundamentals of the ground for dismissal based on "failure to state a
cause of action" have drastically changed over time. A historical
They likewise argued that they moved for the dismissal of the case background of this particular ground is in order to preclude any
during the pre-trial conference due to the petitioners’ procedural confusion or misapplication of jurisprudence decided prior to the
lapse in refusing to comply with a condition precedent, which is, to effectivity of the present Rules of Court. The 1940 Rules of Court
substitute the heirs as plaintiffs. Besides, an administrator of the provides under Section 10, Rule 9 that:
estates of Luciano and Lourdes has already been appointed.36
Section 10. Waiver of defenses- Defenses and objections not pleaded
The respondents also argued that the grounds invoked in their either in a motion to dismiss or in the answer are deemed waived;
motion to dismiss were timely raised, pursuant to Section 2, except the defense of failure to state a cause of action, which may be
paragraphs g and i, Rule 18 of the Rules of Court. Specifically, the alleged in a later pleading, if one is permitted, or by motion for
nature and purposes of the pre-trial include, among others, the judgment on the pleadings, or at the trial on the merits; but in the
dismissal of the action, should a valid ground therefor be found to last instance, the motion shall be disposed of as provided in section 5
exist; and such other matters as may aid in the prompt disposition of of Rule 17 in the light of any evidence which may have been received.
the action. Finally, the special civil action of certiorari was the proper Whenever it appears that the court has no jurisdiction over the
remedy in assailing the order of the RTC.37 subject-matter, it shall dismiss the action. [underscoring supplied]

The Court’s Ruling This provision was essentially reproduced in Section 2, Rule 9 of the
1964 Rules of Court, and we quote:
We find the petition meritorious.
Section 2. Defenses and objections not pleaded deemed waived. —
Defenses and objections not pleaded either in a motion to dismiss or
Petition for certiorari under Rule 65 is a proper remedy for a denial of
in the answer are deemed waived; except the failure to state a cause
a motion to dismiss attended by grave abuse of discretion
of action which may be alleged in a later pleading, if one is permitted,
or by motion for judgment on the pleadings, or at the trial on the
In Barrazona v. RTC, Branch 61, Baguio City,38 the Court held that merits; but in the last instance, the motion shall be disposed of as
while an order denying a motion to dismiss is interlocutory and non- provided in section 5 of Rule 10 in the light of any evidence which
appealable, certiorari and prohibition are proper remedies to address may have been received. Whenever it appears that the court has no
an order of denial made without or in excess of jurisdiction. The writ jurisdiction over the subject-matter, it shall dismiss the action.
of certiorari is granted to keep an inferior court within the bounds of [underscoring supplied]
its jurisdiction or to prevent it from committing grave abuse of
discretion amounting to lack or excess of jurisdiction.
Under the present Rules of Court, this provision was reflected in
Section 1, Rule 9, and we quote:
The history and development of the ground "fails to state a cause of
action" in the 1940, 1964 and the present 1997 Rules of Court
Section 1. Defenses and objections not pleaded. — Defenses and
Preliminarily, a suit that is not brought in the name of the real party
objections not pleaded either in a motion to dismiss or in the answer
in interest is dismissible on the ground that the complaint "fails to
are deemed waived. However, when it appears from the pleadings or
state a cause of action."39
the evidence on record that the court has no jurisdiction over the
subject matter, that there is another action pending between the same
Pursuant to jurisprudence,40 this is also the ground invoked when the parties for the same cause, or that the action is barred by a prior
respondents alleged that the petitioners are not the real parties in

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judgment or by statute of limitations, the court shall dismiss the With this clarification, we now proceed to the substantial issues of the
claim. [underscoring supplied] petition.1âwphi1

Notably, in the present rules, there was a deletion of the ground of The motion to dismiss in the present case based on failure to state a
"failure to state a cause of action" from the list of those which may be cause of action was not timely filed and was thus waived
waived if not invoked either in a motion to dismiss or in the answer.
Another novelty introduced by the present Rules, which was totally Applying Rule 16 of the Rules of Court which provides for the
absent in its two precedents, is the addition of the period of time grounds for the dismissal of a civil case, the respondents’ grounds for
within which a motion to dismiss should be filed as provided under dismissal fall under Section 1(g) and (j), Rule 16 of the Rules of Court,
Section 1, Rule 16 and we quote: particularly, failure to state a cause of action and failure to comply
with a condition precedent (substitution of parties), respectively. The
Section 1. Grounds. — Within the time for but before filing the answer first paragraph of Section 1,42
to the complaint or pleading asserting a claim, a motion to dismiss
may be made on any of the following grounds: xxx [underscoring Rule 16 of the Rules of Court provides for the period within which to
supplied] file a motion to dismiss under the grounds enumerated. Specifically,
the motion should be filed within the time for, but before the filing
All these considerations point to the legal reality that the new Rules of, the answer to the complaint or pleading asserting a claim. Equally
effectively restricted the dismissal of complaints in general, especially important to this provision is Section 1,43
when what is being invoked is the ground of "failure to state a cause
of action." Thus, jurisprudence governed by the 1940 and 1964 Rules Rule 9 of the Rules of Court which states that defenses and objections
of Court to the effect that the ground for dismissal based on failure not pleaded either in a motion to dismiss or in the answer are
to state a cause of action may be raised anytime during the deemed waived, except for the following grounds: 1) the court has no
proceedings, is already inapplicable to cases already governed by the jurisdiction over the subject matter; 2) litis pendencia; 3) res judicata;
present Rules of Court which took effect on July 1, 1997. As the rule and 4) prescription. Therefore, the grounds not falling under these
now stands, the failure to invoke this ground in a motion to dismiss four exceptions may be considered as waived in the event that they
or in the answer would result in its waiver. According to Oscar M. are not timely invoked. As the respondents’ motion to dismiss was
Herrera,41 the reason for the deletion is that failure to state a cause of based on the grounds which should be timely invoked, material to the
action may be cured under Section 5, Rule 10 and we quote: resolution of this case is the period within which they were raised.
Both the RTC and the CA found that the motion to dismiss was only
Section 5. Amendment to conform to or authorize presentation of filed after the filing of the answer and after the pre-trial had been
evidence. — When issues not raised by the pleadings are tried with concluded. Because there was no motion to dismiss before the filing
the express or implied consent of the parties they shall be treated in of the answer, the respondents should then have at least raised these
all respects as if they had been raised in the pleadings. Such grounds as affirmative defenses in their answer. The RTC’s assailed
amendment of the pleadings as may be necessary to cause them to orders did not touch on this particular issue but the CA ruled that the
conform to the evidence and to raise these issues may be made upon respondents did, while the petitioners insist that the respondents did
motion of any party at any time, even after judgment; but failure to not. In the present petition, the petitioners reiterate that there was a
amend does not effect the result of the trial of these issues. If blatant non-observance of the rules when the respondents did not
evidence is objected to at the trial on the ground that it is not within amend their answer to invoke the grounds for dismissal which were
the issues made by the pleadings, the court may allow the pleadings raised only during the pre-trial and, subsequently, in the subject
to be amended and shall do so with liberality if the presentation of motion to dismiss.44
the merits of the action and the ends of substantial justice will be
subserved thereby. The court may grant a continuance to enable the The divergent findings of the CA and the petitioners’ arguments are
amendment to be made. essentially factual issues. Time and again, we have held that the
jurisdiction of the Court in a petition for review on certiorari under

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Rule 45, such as the present case, is limited only to questions of law, surprise, hence, the parties are expected to disclose at the pre-trial
save for certain exceptions. One of these is attendant herein, which is, conference all issues of law and fact which they intend to raise at the
when the findings are conclusions without citation of specific trial, except such as may involve privileged or impeaching matter." 53
evidence on which they are based.45
The issues submitted during the pre-trial are thus the issues that
In the petition filed with the CA, the respondents made a passing would govern the trial proper. The dismissal of the case based on the
allegation that, as affirmative defenses in their answer, they raised grounds invoked by the respondents are specifically covered by Rule
the issue that the petitioners are not the real parties in interest.46 16 and Rule 9 of the Rules of Court which set a period when they
should be raised; otherwise, they are deemed waived.
On the other hand, the petitioners consistently argued otherwise in
their opposition47 to the motion to dismiss, and in their The Dabuco ruling is inapplicable in the present case; the ground for
comment48 and in their memorandum49 on the respondents’ petition dismissal "failure to state a cause of action" distinguished from "lack
before the CA. Our examination of the records shows that the CA had of cause of action"
no basis in its finding that the respondents alleged the grounds as
affirmative defenses in their answer. The respondents merely stated To justify the belated filing of the motion to dismiss, the CA reasoned
in their petition for certiorari that they alleged the subject grounds in out that the ground for dismissal of "lack of cause of action" may be
their answer. However, nowhere in the petition did they support this raised at any time during the proceedings, pursuant to Dabuco v.
allegation; they did not even attach a copy of their answer to the Court of Appeals.54
petition. It is basic that the respondents had the duty to prove by
substantial evidence their positive assertions. Considering that the This is an erroneous interpretation and application of Dabuco as will
petition for certiorari is an original and not an appellate action, the be explained below.
CA had no records of the RTC’s proceedings upon which the CA could
refer to in order to validate the respondents’ claim. Clearly, other
First, in Dabuco, the grounds for dismissal were raised as affirmative
than the respondents’ bare allegations, the CA had no basis to rule,
defenses in the answer which is in stark contrast to the present case.
without proof, that the respondents alleged the grounds for dismissal
as affirmative defenses in the answer. The respondents, as the parties
with the burden of proving that they timely raised their grounds for Second, in Dabuco, the Court distinguished between the dismissal of
dismissal, could have at least attached a copy of their answer to the the complaint for "failure to state a cause of action" and "lack of
petition. This simple task they failed to do. That the respondents did cause of action." The Court emphasized that in a dismissal of action
not allege in their answer the subject grounds is made more apparent for lack of cause of action, "questions of fact are involved, [therefore,]
through their argument, both in their motion to dismiss 50 and in their courts hesitate to declare a plaintiff as lacking in cause of action.
comment,51 that it was only during the pre-trial stage that they Such declaration is postponed until the insufficiency of cause is
verbally manifested and invited the attention of the lower court on apparent from a preponderance of evidence.
their grounds for dismissal. In order to justify such late invocation,
they heavily relied on Section 2(g) and (i), Rule 1852 of the Rules of Usually, this is done only after the parties have been given the
Court that the nature and purpose of the pre-trial include, among opportunity to present all relevant evidence on such questions of
others, the propriety of dismissing the action should there be a valid fact."55
ground therefor and matters which may aid in the prompt disposition
of the action. The respondents are not correct. The rules are clear and In fact, in Dabuco, the Court held that even the preliminary hearing
require no interpretation. Pursuant to Section 1, Rule 9 of the Rules of on the propriety of lifting the restraining order was declared
Court, a motion to dismiss based on the grounds invoked by the insufficient for purposes of dismissing the complaint for lack of
respondents may be waived if not raised in a motion to dismiss or cause of action. This is so because the issues of fact had not yet been
alleged in their answer. On the other hand, "the pre-trial is primarily adequately ventilated at that preliminary stage. For these reasons, the
intended to make certain that all issues necessary to the disposition Court declared in Dabuco that the dismissal by the trial court of the
of a case are properly raised. The purpose is to obviate the element of complaint was premature. In the case of Macaslang v. Zamora,56 the

Page 43 of 172
Court noted that the incorrect appreciation by both the RTC and the between a real party in interest and an indispensable party is in order.
CA of the distinction between the dismissal of an action, based on In Carandang v. Heirs of de Guzman, et al.,57 the Court clarified these
"failure to state a cause of action" and "lack of cause of action," two concepts and held that "[a] real party in interest is the party who
prevented it from properly deciding the case, and we quote: stands to be benefited or injured by the judgment of the suit, or the
party entitled to the avails of the suit. On the other hand, an
Failure to state a cause of action and lack of cause of action are really indispensable party is a party in interest without whom no final
different from each other. On the one hand, failure to state a cause of determination can be had of an action, in contrast to a necessary
action refers to the insufficiency of the pleading, and is a ground for party, which is one who is not indispensable but who ought to be
dismissal under Rule 16 of the Rules of Court. On the other hand, joined as a party if complete relief is to be accorded as to those
lack of cause [of] action refers to a situation where the evidence does already parties, or for a complete determination or settlement of the
not prove the cause of action alleged in the pleading. Justice claim subject of the action. xxx If a suit is not brought in the name of
Regalado, a recognized commentator on remedial law, has explained or against the real party in interest, a motion to dismiss may be filed
the distinction: xxx What is contemplated, therefore, is a failure to on the ground that the complaint states no cause of action. However,
state a cause of action which is provided in Sec. 1(g) of Rule 16. This the dismissal on this ground entails an examination of whether the
is a matter of insufficiency of the pleading. Sec. 5 of Rule 10, which parties presently pleaded are interested in the outcome of the
was also included as the last mode for raising the issue to the court, litigation, and not whether all persons interested in such outcome are
refers to the situation where the evidence does not prove a cause of actually pleaded. The latter query is relevant in discussions
action. This is, therefore, a matter of insufficiency of evidence. Failure concerning indispensable and necessary parties, but not in
to state a cause of action is different from failure to prove a cause of discussions concerning real parties in interest. Both indispensable
action. The remedy in the first is to move for dismissal of the and necessary parties are considered as real parties in interest, since
pleading, while the remedy in the second is to demur to the evidence, both classes of parties stand to be benefited or injured by the
hence reference to Sec. 5 of Rule 10 has been eliminated in this judgment of the suit."
section. The procedure would consequently be to require the pleading
to state a cause of action, by timely objection to its deficiency; or, at At the inception of the present case, both the spouses Pacaña were
the trial, to file a demurrer to evidence, if such motion is warranted. not impleaded as parties-plaintiffs. The Court notes, however, that
[italics supplied] they are indispensable parties to the case as the alleged owners of
Rovila Water Supply. Without their inclusion as parties, there can be
Based on this discussion, the Court cannot uphold the dismissal of no final determination of the present case. They possess such an
the present case based on the grounds invoked by the respondents interest in the controversy that a final decree would necessarily affect
which they have waived for failure to invoke them within the period their rights, so that the courts cannot proceed without their presence.
prescribed by the Rules. The Court cannot also dismiss the case based Their interest in the subject matter of the suit and in the relief sought
on "lack of cause of action" as this would require at least a is inextricably intertwined with that of the other parties.58
preponderance of evidence which is yet to be appreciated by the trial
court. Therefore, the RTC did not commit grave abuse of discretion in Jurisprudence on the procedural consequence of the inclusion or non-
issuing the assailed orders denying the respondents’ motion to inclusion of an indispensable party is divided in our jurisdiction. Due
dismiss and motion for reconsideration. The Court shall not resolve to the non-inclusion of indispensable parties, the Court dismissed the
the merits of the respondents’ grounds for dismissal which are case in Lucman v. Malawi, et al.59 and Go v. Distinction Properties
considered as waived. Development Construction, Inc.,60 while in Casals, et al. v. Tayud Golf
and Country Club et al.,61 the Court annulled the judgment which was
Other heirs of the spouses Pacaña to be impleaded in the case. rendered without the inclusion of the indispensable parties. In
Arcelona et al. v. Court of Appeals62 and Bulawan v. Aquende,63 and
It should be emphasized that insofar as the petitioners are concerned, Metropolitan Bank & Trust Company v. Alejo et al. 64 the Court ruled
the respondents have waived the dismissal of the complaint based on that the burden to implead or order the impleading of an
the ground of failure to state a cause of action because the petitioners indispensable party rests on the plaintiff and on the trial court,
are not the real parties in interest. At this juncture, a distinction respectively. Thus, the non-inclusion of the indispensable parties,

Page 44 of 172
despite notice of this infirmity, resulted in the annulment of these of indispensable parties is founded on equity. And the spirit of the
cases. In Plasabas, et al. v. Court of Appeals, et al.,65 the Court held law is reflected in Section 11, Rule 3 of the 1997 Rules of Civil
that the trial court and the CA committed reversible error when they Procedure. It prohibits the dismissal of a suit on the ground of non-
summarily dismissed the case, after both parties had rested their joinder or misjoinder of parties and allows the amendment of the
cases following a protracted trial, on the sole ground of failure to complaint at any stage of the proceedings, through motion or on
implead indispensable parties. Non-joinder of indispensable parties is order of the court on its own initiative. Likewise, jurisprudence on the
not a ground for the dismissal of an action. The remedy is to implead Federal Rules of Procedure, from which our Section 7, Rule 3 on
the non-party claimed to be indispensable. However, in the cases of indispensable parties was copied, allows the joinder of indispensable
Quilatan, et al. v. Heirs of Quilatan, et al.66 and Lagunilla, et al. v. parties even after judgment has been entered if such is needed to
Monis, et al.,67 the Court remanded the case to the RTC for the afford the moving party full relief. Mere delay in filing the joinder
impleading of indispensable parties. On the other hand, in Lotte Phil. motion does not necessarily result in the waiver of the right as long
Co., Inc. v. Dela Cruz,68 PepsiCo, Inc. v. Emerald Pizza, 69 and Valdez as the delay is excusable.
Tallorin, v. Heirs of Tarona, et al.,70 the Court directly ordered that the
indispensable parties be impleaded. Mindful of the differing views of In Galicia, et al. v. Vda. De Mindo, et al.,72 the Court ruled that in line
the Court as regards the legal effects of the non-inclusion of with its policy of promoting a just and inexpensive disposition of a
indispensable parties, the Court clarified in Republic of the case, it allowed the intervention of the indispensable parties instead
Philippines v. Sandiganbayan, et al.,71 that the failure to implead of dismissing the complaint. Furthermore, in Commissioner Domingo
indispensable parties is a curable error and the foreign origin of our v. Scheer,73 the Court cited Salvador, et al. v. Court of Appeals, et
present rules on indispensable parties permitted this corrective al.74 and held that the Court has full powers, apart from that power
measure. This cited case held: and authority which are inherent, to amend the processes, pleadings,
proceedings and decisions by substituting as party-plaintiff the real
Even in those cases where it might reasonably be argued that the party in interest. The Court has the power to avoid delay in the
failure of the Government to implead the sequestered corporations as disposition of this case, and to order its amendment in order to
defendants is indeed a procedural aberration xxx, slight reflection implead an indispensable party. With these discussions as premises,
would nevertheless lead to the conclusion that the defect is not fatal, the Court is of the view that the proper remedy in the present case is
but one correctible under applicable adjective rules – e.g., Section 10, to implead the indispensable parties especially when their non-
Rule 5 of the Rules of Court [specifying the remedy of amendment inclusion is merely a technical defect. To do so would serve proper
during trial to authorize or to conform to the evidence]; Section 1, administration of justice and prevent further delay and multiplicity of
Rule 20 [governing amendments before trial], in relation to the rule suits. Pursuant to Section 9, Rule 3 of the Rules of Court, parties may
respecting omission of so-called necessary or indispensable parties, be added by order of the court on motion of the party or on its own
set out in Section 11, Rule 3 of the Rules of Court. It is relevant in this initiative at any stage of the action. If the plaintiff refuses to implead
context to advert to the old familiar doctrines that the omission to an indispensable party despite the order of the court, then the court
implead such parties "is a mere technical defect which can be cured at may dismiss the complaint for the plaintiff’s failure to comply with a
any stage of the proceedings even after judgment"; and that, lawful court order.75
particularly in the case of indispensable parties, since their presence
and participation is essential to the very life of the action, for without The operative act that would lead to the dismissal of the case would
them no judgment may be rendered, amendments of the complaint in be the refusal to comply with the directive of the court for the joinder
order to implead them should be freely allowed, even on appeal, in of an indispensable party to the case.76
fact even after rendition of judgment by this Court, where it appears
that the complaint otherwise indicates their identity and character as Obviously, in the present case, the deceased Pacañas can no longer be
such indispensable parties." Although there are decided cases wherein included in the complaint as indispensable parties because of their
the non-joinder of indispensable parties in fact led to the dismissal of death during the pendency of the case. Upon their death, however,
the suit or the annulment of judgment, such cases do not jibe with their ownership and rights over their properties were transmitted to
the matter at hand. The better view is that non-joinder is not a their heirs, including herein petitioners, pursuant to Article 774 77 in
ground to dismiss the suit or annul the judgment. The rule on joinder relation with Article 77778 of the Civil Code.

Page 45 of 172
In Orbeta, et al. v. Sendiong,79 the Court acknowledged that the heirs, LEONARDO-DE CASTRO, J.:
whose hereditary rights are to be affected by the case, are deemed
indispensable parties who should have been impleaded by the trial The present controversy arose from a Petition for Certiorari and
court. Therefore, to obviate further delay in the proceedings of the prohibition challenging the constitutionality of Executive Order No.
present case and given the Court’s authority to order the inclusion of 378 dated October 25, 2004, issued by President Gloria Macapagal
an indispensable party at any stage of the proceedings, the heirs of Arroyo (President Arroyo). Petitioners characterize their action as a
the spouses Pacaña, except the petirioners who are already parties to class suit filed on their own behalf and on behalf of all their co-
the case are Lagrimas Pacaña-Gonzalez who intervened in the case, employees at the National Printing Office (NPO).
are hereby ordered impleaded as parties-plaintiffs.
The NPO was formed on July 25, 1987, during the term of former
WHEREFORE, the petition is GRANTED. The decision dated January President Corazon C. Aquino (President Aquino), by virtue of
27, 2005 and the resolution date June 6, 2005 of the Court of Appeals Executive Order No. 2851 which provided, among others, the creation
in CA-G.R. SP No. 71551 are REVERSED and SET ASIDE. The heirs of of the NPO from the merger of the Government Printing Office and
the spouses Luciano and Lourdes Pacaña, except herein petitioner and the relevant printing units of the Philippine Information Agency (PIA).
Lagrimas Pacaña-Gonzalez, are ORDERED IMPLEADED as parties Section 6 of Executive Order No. 285 reads:
plaintiffs and the RTC is directed tp proceed with the trial of the case
with DISPATCH. SECTION 6. Creation of the National Printing Office. – There is hereby
created a National Printing Office out of the merger of the
SO ORDERED. Government Printing Office and the relevant printing units of the
Philippine Information Agency. The Office shall have exclusive
G.R. No. 166620 April 20, 2010 printing jurisdiction over the following:
Atty. Sylvia Banda, Consoricia O. Penson, Radito V. Padrigano, Jean
R. De Mesa, Leah P. Dela Cruz, Andy V. Macasaquit, Senen B. a. Printing, binding and distribution of all standard and
Cordoba, Albert Brillantes, Gloria Bisda, Jovita V. Concepcion, accountable forms of national, provincial, city and municipal
Teresita G. Carvajal, Rosanna T. Maliwanag, Richard Oderon, Cecilia governments, including government corporations;
Esternon, Benedicto Cabral, Ma. Victoria E. Laroco, Cesar Andra,
Felicisimo Galacio, Elsa R. Calma, Filomena A. Galang, Jean Paul b. Printing of officials ballots;
Melegrito, Claro G. Santiago, Jr., Eduardo Frias, Reynaldo O. Andal,
Nephtalie Imperio, Ruel Balagtas, Victor R. Ortiz, Francisco P.
c. Printing of public documents such as the Official Gazette,
Reyes, Jr., Eliseo M. Balagot, Jr., Jose C. Monsalve, Jr., Arturo
General Appropriations Act, Philippine Reports, and development
Adsuara, F.C. Ladrero, Jr., Nelson Padua, Marcela C. Sayao, Angelito
information materials of the Philippine Information Agency.
Malakas, Gloria Ramento, Juliana Supleo, Manuel Mendrique, E.
Taylan, Carmela Bobis, Danilo Vargas, Roy-Leo C. Pablo, Allan
Villanueva, Vicente R. Velasco, Jr., Imelda Ereno, Floriza M. Catiis, The Office may also accept other government printing jobs, including
Raniel R. Basco, E. Jalijali, Mario C. Caraan, Dolores M. Aviado, government publications, aside from those enumerated above, but
Michael P. Laplana, Guillermo G. Soriano, Alice E. Sojo, Arthur G. not in an exclusive basis.
Narne, Leticia Soriano, Federico Ramos, Jr., Peterson Caampued,
Rodelio L. Gomez, Antonio D. Garcia, Jr., Antonio Galo, A. Sanchez, The details of the organization, powers, functions, authorities, and
Sol E. Tamayo, Josephine A.M. Cocjin, Damian Quinto, Jr., Edlyn related management aspects of the Office shall be provided in the
Mariano, M.A. Malanum, Alfredo S. Estrella, and Jesus Mel implementing details which shall be prepared and promulgated in
Sayo, Petitioners, accordance with Section II of this Executive Order.
Vs.
Eduardo R. Ermita, in his capacity as Executive Secretary, The The Office shall be attached to the Philippine Information Agency.
Director General of the Philippine Information Agency and the
National Treasurer, Respondents.

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On October 25, 2004, President Arroyo issued the herein assailed powers of President Arroyo to amend or repeal Executive Order No.
Executive Order No. 378, amending Section 6 of Executive Order No. 285 issued by former President Aquino when the latter still exercised
285 by, inter alia, removing the exclusive jurisdiction of the NPO over legislative powers; and (2) Executive Order No. 378 violates
the printing services requirements of government agencies and petitioners’ security of tenure, because it paves the way for the
instrumentalities. The pertinent portions of Executive Order No. 378, gradual abolition of the NPO.
in turn, provide:
We dismiss the petition.
SECTION 1. The NPO shall continue to provide printing services to
government agencies and instrumentalities as mandated by law. Before proceeding to resolve the substantive issues, the Court must
However, it shall no longer enjoy exclusive jurisdiction over the first delve into a procedural matter. Since petitioners instituted this
printing services requirements of the government over standard and case as a class suit, the Court, thus, must first determine if the
accountable forms. It shall have to compete with the private sector, petition indeed qualifies as one. In Board of Optometry v. Colet,2 we
except in the printing of election paraphernalia which could be shared held that "[c]ourts must exercise utmost caution before allowing a
with the Bangko Sentral ng Pilipinas, upon the discretion of the class suit, which is the exception to the requirement of joinder of all
Commission on Elections consistent with the provisions of the indispensable parties. For while no difficulty may arise if the decision
Election Code of 1987. secured is favorable to the plaintiffs, a quandary would result if the
decision were otherwise as those who were deemed impleaded by
SECTION 2. Government agencies/instrumentalities may source their self-appointed representatives would certainly claim denial of
printing services outside NPO provided that: due process."

2.1 The printing services to be provided by the private sector is Section 12, Rule 3 of the Rules of Court defines a class suit, as
superior in quality and at a lower cost than what is offered by the follows:
NPO; and
Sec. 12. Class suit. – When the subject matter of the controversy is
2.2 The private printing provider is flexible in terms of meeting one of common or general interest to many persons so numerous that
the target completion time of the government agency. it is impracticable to join all as parties, a number of them which the
court finds to be sufficiently numerous and representative as to fully
SECTION 3. In the exercise of its functions, the amount to be protect the interests of all concerned may sue or defend for the
appropriated for the programs, projects and activities of the NPO in benefit of all. Any party in interest shall have the right to intervene to
the General Appropriations Act (GAA) shall be limited to its income protect his individual interest.
without additional financial support from the government. (Emphases
and underscoring supplied.) From the foregoing definition, the requisites of a class suit are: 1) the
subject matter of controversy is one of common or general interest to
Pursuant to Executive Order No. 378, government agencies and many persons; 2) the parties affected are so numerous that it is
instrumentalities are allowed to source their printing services from impracticable to bring them all to court; and 3) the parties bringing
the private sector through competitive bidding, subject to the the class suit are sufficiently numerous or representative of the class
condition that the services offered by the private supplier be of and can fully protect the interests of all concerned.
superior quality and lower in cost compared to what was offered by
the NPO. Executive Order No. 378 also limited NPO’s appropriation in In Mathay v. The Consolidated Bank and Trust Company,3 the Court
the General Appropriations Act to its income. held that:

Perceiving Executive Order No. 378 as a threat to their security of An action does not become a class suit merely because it is
tenure as employees of the NPO, petitioners now challenge its designated as such in the pleadings. Whether the suit is or is not a
constitutionality, contending that: (1) it is beyond the executive class suit depends upon the attending facts, and the complaint, or

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other pleading initiating the class action should allege the existence seek to represent are diametrically opposed, the class suit will not
of the necessary facts, to wit, the existence of a subject matter of prosper.
common interest, and the existence of a class and the number of
persons in the alleged class, in order that the court might be enabled It is worth mentioning that a Manifestation of Desistance,9 to which
to determine whether the members of the class are so numerous as to the previously mentioned Affidavit of Desistance10 was attached, was
make it impracticable to bring them all before the court, to contrast filed by the President of the National Printing Office Workers
the number appearing on the record with the number in the class and Association (NAPOWA). The said manifestation expressed NAPOWA’s
to determine whether claimants on record adequately represent the opposition to the filing of the instant petition in any court. Even if we
class and the subject matter of general or common interest. take into account the contention of petitioners’ counsel that the
(Emphases ours.) NAPOWA President had no legal standing to file such manifestation,
the said pleading is a clear indication that there is a divergence of
Here, the petition failed to state the number of NPO employees who opinions and views among the members of the class sought to be
would be affected by the assailed Executive Order and who were represented, and not all are in favor of filing the present suit. There is
allegedly represented by petitioners. It was the Solicitor General, as here an apparent conflict between petitioners’ interests and those of
counsel for respondents, who pointed out that there were about 549 the persons whom they claim to represent. Since it cannot be said
employees in the NPO.4 The 67 petitioners undeniably comprised a that petitioners sufficiently represent the interests of the entire class,
small fraction of the NPO employees whom they claimed to represent. the instant case cannot be properly treated as a class suit.
Subsequently, 32 of the original petitioners executed an Affidavit of
Desistance, while one signed a letter denying ever signing the As to the merits of the case, the petition raises two main grounds to
petition,5 ostensibly reducing the number of petitioners to 34. We assail the constitutionality of Executive Order No. 378:
note that counsel for the petitioners challenged the validity of the
desistance or withdrawal of some of the petitioners and insinuated First, it is contended that President Arroyo cannot amend or repeal
that such desistance was due to pressure from people "close to the Executive Order No. 285 by the mere issuance of another executive
seat of power."6 Still, even if we were to disregard the affidavit of order (Executive Order No. 378). Petitioners maintain that former
desistance filed by some of the petitioners, it is highly doubtful that a President Aquino’s Executive Order No. 285 is a legislative enactment,
sufficient, representative number of NPO employees have instituted as the same was issued while President Aquino still had legislative
this purported class suit. A perusal of the petition itself would show powers under the Freedom Constitution;11 thus, only Congress
that of the 67 petitioners who signed the Verification/Certification of through legislation can validly amend Executive Order No. 285.
Non-Forum Shopping, only 20 petitioners were in fact mentioned in
the jurat as having duly subscribed the petition before the notary
Second, petitioners maintain that the issuance of Executive Order No.
public. In other words, only 20 petitioners effectively instituted the
378 would lead to the eventual abolition of the NPO and would violate
present case.
the security of tenure of NPO employees.
Indeed, in MVRS Publications, Inc. v. Islamic Da’wah Council of the
Anent the first ground raised in the petition, we find the same
Philippines, Inc.,7 we observed that an element of a class suit or
patently without merit.
representative suit is the adequacy of representation. In determining
the question of fair and adequate representation of members of a
class, the court must consider (a) whether the interest of the named It is a well-settled principle in jurisprudence that the President has
party is coextensive with the interest of the other members of the the power to reorganize the offices and agencies in the executive
class; (b) the proportion of those made a party, as it so bears, to the department in line with the President’s constitutionally granted power
total membership of the class; and (c) any other factor bearing on the of control over executive offices and by virtue of previous delegation
ability of the named party to speak for the rest of the class. of the legislative power to reorganize executive offices under existing
statutes.
Previously, we held in Ibañes v. Roman Catholic Church8 that where
the interests of the plaintiffs and the other members of the class they

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In Buklod ng Kawaning EIIB v. Zamora,12 the Court pointed out that by reason of economy or redundancy of functions." It takes place
Executive Order No. 292 or the Administrative Code of 1987 gives the when there is an alteration of the existing structure of government
President continuing authority to reorganize and redefine the offices or units therein, including the lines of control, authority and
functions of the Office of the President. Section 31, Chapter 10, Title responsibility between them. The EIIB is a bureau attached to the
III, Book III of the said Code, is explicit: Department of Finance. It falls under the Office of the President.
Hence, it is subject to the President’s continuing authority to
Sec. 31. Continuing Authority of the President to Reorganize his reorganize.13 (Emphasis ours.)
Office. – The President, subject to the policy in the Executive Office
and in order to achieve simplicity, economy and efficiency, shall have It is undisputed that the NPO, as an agency that is part of the Office
continuing authority to reorganize the administrative structure of the of the Press Secretary (which in various times has been an agency
Office of the President. For this purpose, he may take any of the directly attached to the Office of the Press Secretary or as an agency
following actions: under the Philippine Information Agency), is part of the Office of the
President.14
(1) Restructure the internal organization of the Office of the
President Proper, including the immediate Offices, the President Pertinent to the case at bar, Section 31 of the Administrative Code of
Special Assistants/Advisers System and the Common Staff 1987 quoted above authorizes the President (a) to restructure the
Support System, by abolishing, consolidating or merging units internal organization of the Office of the President Proper, including
thereof or transferring functions from one unit to another; the immediate Offices, the President Special Assistants/Advisers
System and the Common Staff Support System, by abolishing,
(2) Transfer any function under the Office of the President to any consolidating or merging units thereof or transferring functions from
other Department or Agency as well as transfer functions to the one unit to another, and (b) to transfer functions or offices from the
Office of the President from other Departments and Agencies; and Office of the President to any other Department or Agency in the
Executive Branch, and vice versa.
(3) Transfer any agency under the Office of the President to any
other department or agency as well as transfer agencies to the Concomitant to such power to abolish, merge or consolidate offices in
Office of the President from other Departments or agencies. the Office of the President Proper and to transfer functions/offices
(Emphases ours.) not only among the offices in the Office of President Proper but also
the rest of the Office of the President and the Executive Branch, the
Interpreting the foregoing provision, we held in Buklod ng Kawaning President implicitly has the power to effect less radical or less
EIIB, thus: substantive changes to the functional and internal structure of the
Office of the President, including the modification of functions of
such executive agencies as the exigencies of the service may require.
But of course, the list of legal basis authorizing the President to
reorganize any department or agency in the executive branch does
not have to end here. We must not lose sight of the very source of the In the case at bar, there was neither an abolition of the NPO nor a
power – that which constitutes an express grant of power. Under removal of any of its functions to be transferred to another agency.
Section 31, Book III of Executive Order No. 292 (otherwise known as Under the assailed Executive Order No. 378, the NPO remains the
the Administrative Code of 1987), "the President, subject to the policy main printing arm of the government for all kinds of government
in the Executive Office and in order to achieve simplicity, economy forms and publications but in the interest of greater economy and
and efficiency, shall have the continuing authority to reorganize the encouraging efficiency and profitability, it must now compete with
administrative structure of the Office of the President." For this the private sector for certain government printing jobs, with the
purpose, he may transfer the functions of other Departments or exception of election paraphernalia which remains the exclusive
Agencies to the Office of the President. In Canonizado v. Aguirre [323 responsibility of the NPO, together with the Bangko Sentral ng
SCRA 312 (2000)], we ruled that reorganization "involves the Pilipinas, as the Commission on Elections may determine. At most,
reduction of personnel, consolidation of offices, or abolition thereof there was a mere alteration of the main function of the NPO by

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limiting the exclusivity of its printing responsibility to election decentralizing is included in the subsequent provision of Section 62,
forms.15 which provides that:

There is a view that the reorganization actions that the President may "Sec. 62. Unauthorized organizational changes. — Unless otherwise
take with respect to agencies in the Office of the President are strictly created by law or directed by the President of the Philippines, no
limited to transfer of functions and offices as seemingly provided in organizational unit or changes in key positions in any department or
Section 31 of the Administrative Code of 1987. agency shall be authorized in their respective organization structures
and be funded from appropriations by this Act."
However, Section 20, Chapter 7, Title I, Book III of the same Code
significantly provides: The foregoing provision evidently shows that the President is
authorized to effect organizational changes including the creation of
Sec. 20. Residual Powers. – Unless Congress provides otherwise, the offices in the department or agency concerned.
President shall exercise such other powers and functions vested in
the President which are provided for under the laws and which are The contention of petitioner that the two provisions are riders
not specifically enumerated above, or which are not delegated by the deserves scant consideration. Well settled is the rule that every law
President in accordance with law. (Emphasis ours.) has in its favor the presumption of constitutionality. Unless and until
a specific provision of the law is declared invalid and
Pursuant to Section 20, the power of the President to reorganize the unconstitutional, the same is valid and binding for all intents and
Executive Branch under Section 31 includes such powers and purposes.17 (Emphases ours)
functions that may be provided for under other laws. To be sure, an
inclusive and broad interpretation of the President’s power to Buklod ng Kawaning EIIB v. Zamora,18 where the Court upheld as valid
reorganize executive offices has been consistently supported by then President Joseph Estrada’s Executive Order No. 191
specific provisions in general appropriations laws. "deactivating" the Economic Intelligence and Investigation Bureau
(EIIB) of the Department of Finance, hewed closely to the reasoning in
In the oft-cited Larin v. Executive Secretary,16 the Court likewise Larin. The Court, among others, also traced from the General
adverted to certain provisions of Republic Act No. 7645, the general Appropriations Act19 the President’s authority to effect organizational
appropriations law for 1993, as among the statutory bases for the changes in the department or agency under the executive structure,
President’s power to reorganize executive agencies, to wit: thus:

Section 48 of R.A. 7645 provides that: We adhere to the precedent or ruling in Larin that this provision
recognizes the authority of the President to effect organizational
"Sec. 48. Scaling Down and Phase Out of Activities of Agencies Within changes in the department or agency under the executive structure.
the Executive Branch. — The heads of departments, bureaus and Such a ruling further finds support in Section 78 of Republic Act No.
offices and agencies are hereby directed to identify their respective 8760. Under this law, the heads of departments, bureaus, offices and
activities which are no longer essential in the delivery of public agencies and other entities in the Executive Branch are directed (a) to
services and which may be scaled down, phased out or abolished, conduct a comprehensive review of their respective mandates,
subject to civil [service] rules and regulations. x x x. Actual scaling missions, objectives, functions, programs, projects, activities and
down, phasing out or abolition of the activities shall be effected systems and procedures; (b) identify activities which are no longer
pursuant to Circulars or Orders issued for the purpose by the Office essential in the delivery of public services and which may be scaled
of the President." down, phased-out or abolished; and (c) adopt measures that will
result in the streamlined organization and improved overall
performance of their respective agencies. Section 78 ends up with the
Said provision clearly mentions the acts of "scaling down, phasing out
mandate that the actual streamlining and productivity improvement
and abolition" of offices only and does not cover the creation of
in agency organization and operation shall be effected pursuant to
offices or transfer of functions. Nevertheless, the act of creating and

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Circulars or Orders issued for the purpose by the Office of the Implicitly, the aforequoted provisions in the appropriations law
President. x x x.20 (Emphasis ours) recognize the power of the President to reorganize even executive
offices already funded by the said appropriations act, including the
Notably, in the present case, the 2003 General Appropriations Act, power to implement structural, functional, and operational
which was reenacted in 2004 (the year of the issuance of Executive adjustments in the executive bureaucracy and, in so doing, modify or
Order No. 378), likewise gave the President the authority to effect a realign appropriations of funds as may be necessary under such
wide variety of organizational changes in any department or agency reorganization. Thus, insofar as petitioners protest the limitation of
in the Executive Branch. Sections 77 and 78 of said Act provides: the NPO’s appropriations to its own income under Executive Order
No. 378, the same is statutorily authorized by the above provisions.
Section 77. Organized Changes. – Unless otherwise provided by law or
directed by the President of the Philippines, no changes in key In the 2003 case of Bagaoisan v. National Tobacco
positions or organizational units in any department or agency shall Administration,21 we upheld the "streamlining" of the National
be authorized in their respective organizational structures and Tobacco Administration through a reduction of its personnel and
funded from appropriations provided by this Act. deemed the same as included in the power of the President to
reorganize executive offices granted under the laws, notwithstanding
Section 78. Institutional Strengthening and Productivity Improvement that such streamlining neither involved an abolition nor a transfer of
in Agency Organization and Operations and Implementation of functions of an office. To quote the relevant portion of that decision:
Organization/Reorganization Mandated by Law. The Government
shall adopt institutional strengthening and productivity improvement In the recent case of Rosa Ligaya C. Domingo, et al. vs. Hon. Ronaldo
measures to improve service delivery and enhance productivity in the D. Zamora, in his capacity as the Executive Secretary, et al., this Court
government, as directed by the President of the Philippines. The has had occasion to also delve on the President’s power to reorganize
heads of departments, bureaus, offices, agencies, and other entities of the Office of the President under Section 31(2) and (3) of Executive
the Executive Branch shall accordingly conduct a comprehensive Order No. 292 and the power to reorganize the Office of the
review of their respective mandates, missions, objectives, functions, President Proper. x x x
programs, projects, activities and systems and procedures; identify
areas where improvements are necessary; and implement The first sentence of the law is an express grant to the President of a
corresponding structural, functional and operational adjustments continuing authority to reorganize the administrative structure of the
that will result in streamlined organization and operations and Office of the President. The succeeding numbered paragraphs are not
improved performance and productivity: PROVIDED, That actual in the nature of provisos that unduly limit the aim and scope of the
streamlining and productivity improvements in agency organization grant to the President of the power to reorganize but are to be viewed
and operations, as authorized by the President of the Philippines for in consonance therewith. Section 31(1) of Executive Order No. 292
the purpose, including the utilization of savings generated from such specifically refers to the President’s power to restructure the internal
activities, shall be in accordance with the rules and regulations to be organization of the Office of the President Proper, by abolishing,
issued by the DBM, upon consultation with the Presidential consolidating or merging units hereof or transferring functions from
Committee on Effective Governance: PROVIDED, FURTHER, That in the one unit to another, while Section 31(2) and (3) concern executive
implementation of organizations/reorganizations, or specific changes offices outside the Office of the President Proper allowing the
in agency structure, functions and operations as a result of President to transfer any function under the Office of the President to
institutional strengthening or as mandated by law, the appropriation, any other Department or Agency and vice-versa, and the transfer of
including the functions, projects, purposes and activities of agencies any agency under the Office of the President to any other department
concerned may be realigned as may be necessary: PROVIDED, or agency and vice-versa.
FINALLY, That any unexpended balances or savings in appropriations
may be made available for payment of retirement gratuities and In the present instance, involving neither an abolition nor transfer of
separation benefits to affected personnel, as authorized under offices, the assailed action is a mere reorganization under the general
existing laws. (Emphases and underscoring ours.) provisions of the law consisting mainly of streamlining the NTA in the
interest of simplicity, economy and efficiency. It is an act well within

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the authority of the President motivated and carried out, according to it. The agencies under the Office of the President are identified in
the findings of the appellate court, in good faith, a factual assessment Section 23, Chapter 8, Title II of the Administrative Code:
that this Court could only but accept.22 (Emphases and underscoring
supplied.) Sec. 23. The Agencies under the Office of the President.—The agencies
under the Office of the President refer to those offices placed under
In the more recent case of Tondo Medical Center Employees the chairmanship of the President, those under the supervision and
Association v. Court of Appeals,23 which involved a structural and control of the President, those under the administrative supervision
functional reorganization of the Department of Health under an of the Office of the President, those attached to it for policy and
executive order, we reiterated the principle that the power of the program coordination, and those that are not placed by law or order
President to reorganize agencies under the executive department by creating them under any specific department.
executive or administrative order is constitutionally and statutorily
recognized. We held in that case: The power of the President to reorganize the executive department is
likewise recognized in general appropriations laws.
This Court has already ruled in a number of cases that the President
may, by executive or administrative order, direct the reorganization Clearly, Executive Order No. 102 is well within the constitutional
of government entities under the Executive Department. This is also power of the President to issue. The President did not usurp any
sanctioned under the Constitution, as well as other statutes. legislative prerogative in issuing Executive Order No. 102. It is an
exercise of the President’s constitutional power of control over the
Section 17, Article VII of the 1987 Constitution, clearly states: "[T]he executive department, supported by the provisions of the
president shall have control of all executive departments, bureaus Administrative Code, recognized by other statutes, and consistently
and offices." Section 31, Book III, Chapter 10 of Executive Order No. affirmed by this Court.24 (Emphases supplied.)
292, also known as the Administrative Code of 1987 reads:
Subsequently, we ruled in Anak Mindanao Party-List Group v.
SEC. 31. Continuing Authority of the President to Reorganize his Executive Secretary25 that:
Office - The President, subject to the policy in the Executive Office
and in order to achieve simplicity, economy and efficiency, shall have The Constitution’s express grant of the power of control in the
continuing authority to reorganize the administrative structure of the President justifies an executive action to carry out reorganization
Office of the President. For this purpose, he may take any of the measures under a broad authority of law.
following actions:
In enacting a statute, the legislature is presumed to have deliberated
In Domingo v. Zamora [445 Phil. 7 (2003)], this Court explained the with full knowledge of all existing laws and jurisprudence on the
rationale behind the President’s continuing authority under the subject. It is thus reasonable to conclude that in passing a statute
Administrative Code to reorganize the administrative structure of the which places an agency under the Office of the President, it was in
Office of the President. The law grants the President the power to accordance with existing laws and jurisprudence on the President’s
reorganize the Office of the President in recognition of the recurring power to reorganize.
need of every President to reorganize his or her office "to achieve
simplicity, economy and efficiency." To remain effective and efficient, In establishing an executive department, bureau or office, the
it must be capable of being shaped and reshaped by the President in legislature necessarily ordains an executive agency’s position in the
the manner the Chief Executive deems fit to carry out presidential scheme of administrative structure. Such determination is primary,
directives and policies. but subject to the President’s continuing authority to reorganize the
administrative structure. As far as bureaus, agencies or offices in the
The Administrative Code provides that the Office of the President executive department are concerned, the power of control may justify
consists of the Office of the President Proper and the agencies under the President to deactivate the functions of a particular office. Or a
law may expressly grant the President the broad authority to carry

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out reorganization measures. The Administrative Code of 1987 is one Associate Justice Antonio T. Carpio, the objective behind Executive
such law.26 Order No. 378 is wholly consistent with the state policy contained in
Republic Act No. 9184 or the Government Procurement Reform Act to
The issuance of Executive Order No. 378 by President Arroyo is an encourage competitiveness by extending equal opportunity to private
exercise of a delegated legislative power granted by the contracting parties who are eligible and qualified.27
aforementioned Section 31, Chapter 10, Title III, Book III of the
Administrative Code of 1987, which provides for the continuing To be very clear, this delegated legislative power to reorganize
authority of the President to reorganize the Office of the President, pertains only to the Office of the President and the departments,
"in order to achieve simplicity, economy and efficiency." This is a offices and agencies of the executive branch and does not include the
matter already well-entrenched in jurisprudence. The reorganization Judiciary, the Legislature or the constitutionally-created or mandated
of such an office through executive or administrative order is also bodies. Moreover, it must be stressed that the exercise by the
recognized in the Administrative Code of 1987. Sections 2 and 3, President of the power to reorganize the executive department must
Chapter 2, Title I, Book III of the said Code provide: be in accordance with the Constitution, relevant laws and prevailing
jurisprudence.
Sec. 2. Executive Orders. - Acts of the President providing for rules of
a general or permanent character in implementation or execution of In this regard, we are mindful of the previous pronouncement of this
constitutional or statutory powers shall be promulgated in Court in Dario v. Mison28 that:
executive orders.
Reorganizations in this jurisdiction have been regarded as valid
Sec. 3. Administrative Orders. - Acts of the President which relate to provided they are pursued in good faith. As a general rule, a
particular aspects of governmental operations in pursuance of his reorganization is carried out in "good faith" if it is for the purpose of
duties as administrative head shall be promulgated in economy or to make bureaucracy more efficient. In that event, no
administrative orders. (Emphases supplied.) dismissal (in case of a dismissal) or separation actually occurs
because the position itself ceases to exist. And in that case, security
To reiterate, we find nothing objectionable in the provision in of tenure would not be a Chinese wall. Be that as it may, if the
Executive Order No. 378 limiting the appropriation of the NPO to its "abolition," which is nothing else but a separation or removal, is done
own income. Beginning with Larin and in subsequent cases, the Court for political reasons or purposely to defeat security of tenure, or
has noted certain provisions in the general appropriations laws as otherwise not in good faith, no valid "abolition" takes place and
likewise reflecting the power of the President to reorganize executive whatever "abolition" is done, is void ab initio. There is an invalid
offices or agencies even to the extent of modifying and realigning "abolition" as where there is merely a change of nomenclature of
appropriations for that purpose. positions, or where claims of economy are belied by the existence of
ample funds. (Emphasis ours.)
Petitioners’ contention that the issuance of Executive Order No. 378 is
an invalid exercise of legislative power on the part of the President Stated alternatively, the presidential power to reorganize agencies
has no legal leg to stand on. and offices in the executive branch of government is subject to the
condition that such reorganization is carried out in good faith.
In all, Executive Order No. 378, which purports to institute necessary
reforms in government in order to improve and upgrade efficiency in If the reorganization is done in good faith, the abolition of positions,
the delivery of public services by redefining the functions of the NPO which results in loss of security of tenure of affected government
and limiting its funding to its own income and to transform it into a employees, would be valid. In Buklod ng Kawaning EIIB v.
self-reliant agency able to compete with the private sector, is well Zamora,29 we even observed that there was no such thing as an
within the prerogative of President Arroyo under her continuing absolute right to hold office. Except those who hold constitutional
delegated legislative power to reorganize her own office. As pointed offices, which provide for special immunity as regards salary and
out in the separate concurring opinion of our learned colleague,

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tenure, no one can be said to have any vested right to an office or REMREV WEEK 3 - MIDTERMS
salary.30
G.R. No. 196795
This brings us to the second ground raised in the petition – that Intramuros Administration, Petitioner
Executive Order No. 378, in allowing government agencies to secure Vs.
their printing requirements from the private sector and in limiting the Offshore Construction Development Company, Respondent
budget of the NPO to its income, will purportedly lead to the gradual
abolition of the NPO and the loss of security of tenure of its present
employees. In other words, petitioners avow that the reorganization LEONEN, J.:
of the NPO under Executive Order No. 378 is tainted with bad faith.
The basic evidentiary rule is that he who asserts a fact or the The sole issue in ejectment proceedings is determining which of the
affirmative of an issue has the burden of proving it.31 parties has the better right to physical possession of a piece of
property. The defendant's claims and allegations in its answer or
A careful review of the records will show that petitioners utterly motion to dismiss do not oust a trial court's jurisdiction to resolve
failed to substantiate their claim. They failed to allege, much less this issue.
prove, sufficient facts to show that the limitation of the NPO’s budget
to its own income would indeed lead to the abolition of the position, This is a Petition for Review on Certiorari1 under Rule 45 of the Rules
or removal from office, of any employee. Neither did petitioners of Court, assailing the April 14, 2011 Decision 2 of Branch 173,
present any shred of proof of their assertion that the changes in the Regional Trial Court, Manila in Civil Case No. 10-124740. The Regional
functions of the NPO were for political considerations that had Trial Court affirmed in toto the October 19, 2010 Order3 of Branch 24,
nothing to do with improving the efficiency of, or encouraging Metropolitan Trial Court, Manila in Civil Case No. 186955-CV,
operational economy in, the said agency. dismissing Intramuros Administration's (Intramuros) Complaint for
Ejectment against Offshore Construction and Development Company
In sum, the Court finds that the petition failed to show any (Offshore Construction) on the grounds 6f forum shopping and lack
constitutional infirmity or grave abuse of discretion amounting to of jurisdiction.
lack or excess of jurisdiction in President Arroyo’s issuance of
Executive Order No. 378. In 1998, Intramuros leased certain real properties of the national
government, which it administered to Offshore Construction. Three
WHEREFORE, the petition is hereby DISMISSED and the prayer for a (3) properties were subjects of Contracts of Lease: Baluarte De San
Temporary Restraining Order and/or a Writ of Preliminary Injunction Andres, with an area of 2, 793 sq. m.;4 Baluarte De San Francisco De
is hereby DENIED. No costs. Dilao, with an area of 1,880 sq. m.;5 and Revellin De Recoletos, with an
area of 1,036 sq. m.6 All three (3) properties were leased for five (5)
years, from September 1, 1998 to August 31, 2003. All their lease
SO ORDERED. contracts also made reference to an August 20, 1998 memorandum of
stipulations, which included a provision for lease renewals every five
(5) years upon the parties' mutual agreement.7

Offshore Construction occupied and introduced improvements in the

leased premises. However, Intramuros and the Department of
Tourism halted the projects due to Offshore Construction's non-
conformity with Presidential Decree No. 1616, which required 16th to
19th centuries' Philippine-Spanish architecture in the
area.8 Consequently, Offshore Construction filed a complaint with
prayer for preliminary injunction and temporary restraining order
against Intramuros and the Department of Tourism before the Manila

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Regional Trial Court,9 which was docketed as Civil Case No. 98- During the lease period, Offshore Construction failed to pay its utility
91587.10 bills and rental fees, despite several demand letters.15 Intramuros
tolerated the continuing occupation, hoping that Offshore
Eventually, the parties executed a Compromise Agreement on July 26, Construction would pay its arrears. As of July 31, 2004, these arrears
1999,11 which the Manila Regional Trial Court approved on February 8, allegedly totaled P6,762,153.70.16
2000.12 In the Compromise Agreement, the parties affirmed the
validity of the two (2) lease contracts but terminated the one over To settle its arrears, Offshore Construction proposed to pay the
Revellin de Recoletos.13 The Compromise Agreement retained the five Department of Tourism's monthly operational expenses for lights and
(5)-year period of the existing lease contracts and stated the areas sound equipment, electricity, and performers at the Baluarte Plano
that may be occupied by Offshore Construction: Luneta de Sta. Isabel. Intramuros and the Department of Tourism
accepted the offer, and the parties executed a Memorandum of
FROM: Agreement covering the period of August 15, 2004 to August 25,
(1) Baluarte de San Andres 2005.17

TO: However, Offshore Construction continued to fail to pay its arrears,

(1) Only the stable house, the gun powder room and two (2) which amounted to ₱13,448,867.45 as of December 31, 2009. On
March 26, 2010, Offshore Construction received Intramuros' latest
Chambers with comfort rooms, will be utilized for restaurants. All demand letter.18
other structures built and introduced including trellises shall be
transferred/relocated to: Intramuros filed a Complaint for Ejectment before the Manila
Metropolitan Trial Court on April 28, 2010. 19 Offshore Construction
(a) Two (2) restaurants as Asean Garden. Each will have an aggregate filed its Answer with Special and Affirmative Defenses and
area of two hundred square meters (200 sq. mtrs.); Compulsory Counterclaim.20

b) One (1) kiosk at Puerta Isabel Garden fronting Terraza de la Reyna On July 12, 2010, Offshore Construction filed a Very Urgent
with an aggregate area of twenty (20) square meters; Motion,21 praying that Intramuros' complaint be dismissed on the
grounds of violation of the rule on non-forum shopping, lack of
jurisdiction over the case, and litis pendentia. First, it claimed that
(c) Three (3) restaurants at the chambers of Puerta Isabel II with an
Intramuros failed to inform the Metropolitan Trial Court that there
aggregate area of 1,180.5 sq.m.;
were two (2) pending cases with the Manila Regional Trial Court over
Puerta de Isabel II.22 Second, it argued that the Metropolitan Trial
(d) One (1) restaurant at Fort Santiago American Barracks. Subject to Court did not acquire jurisdiction over the case since the relationship
IA Guidelines, the maximum floor area will be the perimeter walls of between the parties was not one of lessor-lessee but governed by a
the old existing building; concession agreement.23 Finally, it contended that Intramuros' cause
of action was barred by litis pendentia, since the pending Regional
FROM: Trial Court cases were over the same rights, claims, and interests of
(2) Baluarte De San Francisco Dilao the parties.24

TO: In its October 19, 2010 Order,25 the Metropolitan Trial Court granted
(2) All seven (7) structures including the [Offshore Construction] the motion and dismissed the case. Preliminarily, it found that while a
Administration Building and Trellises shall be transferred [t]o Cuartel motion to dismiss is a prohibited pleading under the Rule on
de Sta. Lucia, [O]therwise known as the PC Barracks[.]14 Summary Procedure, Offshore Construction's motion was grounded
on the lack of jurisdiction over the subject matter.26

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The Metropolitan Trial Court found that Intramuros committed forum Intramuros appealed the October 19, 2010 Order with the Regional
shopping and that it had no jurisdiction over the case.27 Trial Court. On April 14, 2011, the Regional Trial Court affirmed the
Municipal Trial Court October 19, 2010 Order in toto.33
First, it pointed out that there were two (2) pending cases at the time
Intramuros filed its complaint: Civil Case No. 08-119138 for specific On May 25, 2011, Intramuros, through the Office of the Solicitor
performance filed by Offshore Construction against Intramuros, and General, filed a Motion for Extension of Time to File Petition for
SP CA No. 10-123257 for interpleader against Offshore Construction Review on Certiorari (Motion for Extension) before this Court. It
and Intramuros filed by 4H Intramuros, Inc. (4H Intramuros),28 which prayed for an additional 30 days, or until June 16, 2011, within which
claimed to be a group of respondent's tenants.29 to file its petition for review on solely on questions of law.34

The Metropolitan Trial Court found that the specific performance On June 16, 2011, Intramuros filed its Petition for Review
case was anchored on Offshore Construction's rights under the on Certiorari,35 assailing the April 14, 2011 Decision of the Regional
Compromise Agreement. In that case, Offshore Construction claimed Trial Court.
that it complied with its undertakings, but Intramuros failed to
perform its obligations when it refused to offset Offshore In its Petition for Review, Intramuros argues that the Regional Trial
Construction's expenses with the alleged unpaid rentals. The Court erred in upholding the Metropolitan Trial Court findings that it
interpleader case, on the other hand, dealt with Offshore had no jurisdiction over Intramuros' ejectment complaint36 and that it
Construction's threats to evict the tenants of Puerta de Isabel II. 4H committed forum shopping.37
Intramuros prayed that the Regional Trial Court determine which
between Offshore Construction and Intramuros was the rightful First, Intramuros argues that Offshore Construction's Very Urgent
lessor of Puerta de Isabel II.30 Motion should not have been entertained by the Metropolitan Trial
Court as it was a motion to dismiss, which was prohibited under the
The Metropolitan Trial Court found that the cause of action in Rule on Summary Procedure.38 It claims that the Metropolitan Trial
Intramuros' complaint was similar with those in the specific Court could have determined the issue of jurisdiction based on the
performance and intetj)leader cases. Any judgment in any of those allegations in its complaint. It points out that "jurisdiction over the
cases would affect the resolution or outcome in the ejectment case, subject matter is determined by the allegations [in] the complaint"
since they would involve Offshore Construction's right to have its and that the trial court's jurisdiction is not lost "just because the
expenses offset from the rentals it owed Intramuros, and the defendant makes a contrary allegation" in its defense.39 In ejectment
determination of the rightful lessor of Puerta de Isabel II. The cases, courts do not lose jurisdiction by a defendant's mere allegation
Metropolitan Trial Court pointed to the arrears in rentals that that it has ownership over the litigated property. It holds that the
Intramuros prayed for as part of its complaint. Further, Intramuros Metropolitan Trial Court did not lose jurisdiction when Offshore
failed to disclose the specific performance and interpleader cases in Construction alleged that its relationship with Intramuros is one of
its certification against forum shopping.31 concession, that the cause of action accrued in 2003, and that there
was litis pendentia and forum shopping. It contends that the sole
Second, the Metropolitan Trial Court held that it had no jurisdiction issue in an ejectment suit is the summary restoration of possession
over the complaint. While there were lease contracts between the of a piece of land or building to the party that was deprived of
parties, the existence of the other contracts between them made it.40 Thus, the Metropolitan Trial Court gravely erred in granting
Intramuros and Offshore Construction's relationship as one of Offshore Construction's motion to dismiss despite having jurisdiction
concession. Under this concession agreement, Offshore Construction over the subject matter of Intramuros' complaint.41
undertook to develop several areas of the Intramuros District, for
which it incurred expenses. The trial court found that the issues Second, Intramuros avers that it did not commit forum shopping as
could not be mere possession and rentals only.32 to warrant the dismissal of its complaint. It claims that while there
were pending specific performance and interpleader cases related to
the ejectment case, Intramuros was not guilty of forum shopping

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since it instituted neither action and did not seek a favorable ruling as On March 12, 2012, Intramuros filed its Reply54 to the Comment. It
a result of an earlier adverse opinion in these cases.42 Intramuros argues that direct resort to this Court is proper because the issues it
points out that it was Offshore Construction and 4H Intramuros raises in its Petition for Review do not require review of evidence to
which filed the specific performance and interpleader cases, resolve, and the facts of the case are undisputed.55 It claims that the
respectively.43 In both cases, Intramuros was the defendant and did nature of Intramuros and Offshore Construction's relationship is
not seek fossession of Puerta de Isabel II as a relief in its answers to never an issue because all the documents referenced and relied upon
the complaints.44 Moreover, the issues raised in these earlier cases by the parties were lease agreements.56
were different from the issue of possession in the ejectment case. The
issue in the specific performance case was whether or not Intramuros On August 23, 2012, this Court gave due course to the Petition for
should offset the rentals in arrears from Offshore Construction's Review and ordered both parties to submit their memoranda.57
expenses in continuing the WOW Philippines Project.45 Meanwhile, the
issue in the interpleader case was to determine which between On January 7, 2013, Intramuros filed its Memorandum,58 while
Intramuros and Offshore Construction was the rightful lessor of Offshore Construction filed its Memorandum59 on August 16, 2013.
Puerta de Isabel II.46
In its Memorandum, Offshore Construction claims that it occupies
Finally, Intramuros maintains that there is no concession agreement Puerta de Isabel II by virtue of a legal concession based not only on
between the parties, only lease contracts that have already expired the parties' contracts but also on the contemporaneous and
and are not renewed. It argues that there is no basis for alleging the subsequent acts of Intramuros and Offshore Construction. It argues
existence of a concession agreement. It points out that in the that under the Contracts of Lease, Offshore Construction was
Contracts of Lease and Memorandum of Agreement entered into by required to invest around ₱20,000,000.00 worth of investments in the
Intramuros and Offshore Construction, the expiry of the leases would leased properties and that it lost its initial investments, which were
be on August 31, 2003. Afterwards, Intramuros tolerated Offshore demolished due to adverse criticism by then Intramuros
Construction's continued occupation of its properties in hopes that it Administrator Anna Maria L. Harper. Under the Compromise
would pay its arrears in due course.47 Agreement, Offshore Construction was again required to make new
developments, again worth millions of pesos. Offshore Construction
On July 20, 2011, this Court issued its Resolution48 granting the claims that these conditions make their relationship not one of mere
Motion for Extension and requiring Offshore Construction to lessor and lessee.60
comment on the Petition for Review.
Further, it attests that Intramuros committed illegal and inhuman
On October 10, 2011, Offshore Construction filed its Coniment 49 to acts, and injustice against it and its sublessees, allegedly because the
the Petition for Review. In its Comment, Offshore Construction argues Contracts of Lease had expired.61 Moreover, it points out that
that the Petition for Review should be dismissed because it violates Intramuros only filed the ejectment complaint in 2010, even though
the principle of hierarchy of courts and raises questions of fact. 50 It the Contracts of Lease expired on August 31, 2003. It argues that
points out that Intramuros did not move for the reconsideration of Intramuros was guilty of estoppel in pais, since it continued to accept
the Regional Trial Court April 14, 2011 Decision. Instead of directly rental payments as late as July 10, 2009.62 Assuming that the lease
filing with this Court, Intramuros should have filed a Petition for contracts had expired, these contracts were impliedly renewed by the
Review with the Court of Appeals, in accordance with Rule 42 of the mutual and voluntary acts of the parties, in accordance with Article
Rules of Court.51 It claims that Intramuros raises questions of fact in 1670 of the Civil Code.63 Offshore Construction claims that there is
its Petition for Review, namely, the expiration of the Contracts of now novation of the Contracts of Lease, and the courts may fix a
Lease and the business concession in favor of Offshore period for them,64 pursuant to Article 1687 of the Civil Code.65 It
Construction.52 reiterates its prayer that the Petition for Review be dismissed, due to
questions of fact more properly cognizable by the Court of Appeals. 66
In its November 21, 2011 Resolution, this Court noted the Comment
and required Intramuros to file its Reply.53 The issues to be resolved by this Court are:

Page 57 of 172
First, whether or not direct resort to this Court is proper; failed to disclose two (2) pending cases, one filed by respondent
Offshore Construction and the other filed by respondent's group of
Second, whether or not the Metropolitan Trial Court had jurisdiction tenants, 4H Intramuros. Both of these cases raise questions of law,
over the ejectment complaint filed by Intramuros Administration; which are cognizable by the Court of Appeals in a petition for review
under Rule 42.
Third, whether or not Intramuros Administration committed forum
shopping when it filed its ejectment complaint despite the pending "A question of law exists when the law applicable to a particular set
cases for specific performance and interpleader; and of facts is not settled, whereas a question of fact arises when the
truth or falsehood of alleged facts is in doubt."67 This Court has ruled
Finally, whether or not Intramuros Administration is entitled to that the jurisdiction of a court over the subject matter of a
possess the leased premises and to collect unpaid rentals. complaint68 and the existence of forum shopping69 are questions of
law.
I - At the outset, petitioner should have filed a petition for review
under Rule 42 of the Rules of Court to assail the Regional Trial A petition for review under Rule 42 may include questions of fact, of
Court's ruling upholding the Metropolitan Trial Court October 19, law, or mixed questions of fact and law.70 This Court has recognized
2010 Order instead of filing a petition for review on certiorari under that the power to hear cases on appeal in which only questions of law
Rule 45 with this Court. are raised is not vested exclusively in this Court. 71 As provided in Rule
42, Section 2, errors of fact or law, or both, allegedly committed by
the Regional Trial Court in its decision must be specified in the
Under Rule 42, Section 1 of the Rules of Court, the remedy from an petition for review:
adverse decision rendered by a Regional Trial Court exercising its
appellate jurisdiction is to file a verified petition for review with the
Court of Appeals: Section 2. Form and Contents. - The petition shall be filed in seven (7)
legible copies, with the original copy intended for the court being
indicated as such by the petitioner, and shall (a) state the full names
Section 1. How appeal taken; time for filing. -A party desiring to
of the parties to the case, without impleading the lower courts or
appeal from a decision of the Regional Trial Court rendered in the
judges thereof either as petitioners or respondents; (b) indicate the
exercise of its appellate jurisdiction may file a verified petition for
specific material dates showing that it was filed on time; (c) set forth
review with the Court of Appeals, paying at the same time to the clerk concisely a statement of the matters involved, the issues raised, the
of said court the corresponding docket and other lawful fees, specification of errors of fact or law, or both, allegedly committed by
depositing the amount of ₱500.00 for costs, and furnishing the
the Regional Trial Court, and the reasons or arguments relied upon
Regional Trial Court and the adverse party with a copy of the petition.
for the allowance of the appeal; (d) be accompanied by clearly legible
The petition shall be filed and served within fifteen (15) days from
duplicate originals or true copies of the judgments or final orders of
notice of the decision sought to be reviewed or of the denial of both lower courts, certified correct by the clerk of court of the
petitioner's motion for new trial or reconsideration filed in due time Regional Trial Court, the requisite number of plain copies thereof and
after judgment. Upon proper motion and the payment of the full of the pleadings and other material portions of the record as would
amount of the docket and other lawful fees and the deposit for costs support the allegations of the petition.
before the expiration of the reglementary period, the Court of
Appeals may grant an additional period of fifteen (15) days only
within which to file the petition for review. No further extension shall The petitioner shall also submit together with the petition a
be granted except for the most compelling reason and in no case to certification under oath that he has not theretofore commenced any
exceed fifteen (15) days. other action involving the same issues in the Supreme Court, the
Court of Appeals or different divisions thereof, or any other tribunal
or agency; if there is such other action or proceeding, he must state
Petitioner puts in issue before this Court the findings of the the status of the same; and if he should thereafter learn that a similar
Metropolitan Trial Court that it has no jurisdiction over the ejectment action or proceeding has been filed or is pending before the Supreme
complaint and that petitioner committed forum shopping when it Court, the Court of Appeals, or different divisions thereof, or any

Page 58 of 172
other tribunal or agency, he undertakes to promptly inform the questions of law. Under Section 5 of Article VIII of the Constitution,
aforesaid courts and other tribunal or agency thereof within five (5) the Supreme Court has the power to
days therefrom. (Emphasis supplied)
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari as
Petitioner's direct resort to this Court, instead of to the Court of the law or the Rules of Court may provide, final judgments and
Appeals for intermediate review as sanctioned by the rules, violates orders of lower courts in:
the principle of hierarchy of courts.72 In Diocese of
Bacolod v. Commission onElections: 73
(e) All cases in which only an error or question of law is involved.

The doctrine that requires respect for the hierarchy of courts was This kind of direct appeal to this Court of RTC judgments, final
created by this court to ensure that every level of the judiciary orders or resolutions is provided for in Section 2(c) of Rule 41, which
performs its designated roles in an effective and efficient manner. reads:
Trial courts do not only determine the facts from the evaluation of
the evidence presented before them. They are likewise competent to SEC. 2. Modes of appeal.
determine issues of law which may include the validity of an
ordinance, statute, or even an executive issuance in relation to the
(c) Appeal by certiorari. - In all cases where only questions of law are
Constitution. To effectively perform these functions, they are
raised or involved, the appeal shall be to the Supreme Court by
territorially organized into regions and then into branches. Their
petition for review on certiorari in accordance with Rule 45.
writs generally reach within those territorial boundaries. Necessarily,
they mostly perform the all-important task of inferring the facts from
the evidence as these are physically presented before them. In many Procedurally then, petitioners could have appealed the RTC Decision
instances, the facts occur within their territorial jurisdiction, which affirming the MTC (1) to this Court on questions of law only; or (2) if
properly present the 'actual case' that makes ripe a determination of there are factual questions involved, to the CA - as they in fact did.78
the constitutionality of such action. The consequences, of course,
would be national in scope. There are, however, some cases where Thus, petitioner's resort to this Court is proper and warranted under
resort to courts at their level would not be practical considering their the circumstances.
decisions could still be appealed before the higher courts, such as the
Court of Appeals.74 (Citation omitted) II. In dismissing the complaint, the Metropolitan Trial Court found
that "[t]he issues . . . between the parties cannot be limited to a simple
Nonetheless, the doctrine of hierarchy of courts is not inviolable, and determination of who has the better right of possession of the subject
this Court has provided several exceptions to the doctrine.75 One of premises or whether or not [petitioner] is entitled [to] rentals in
these exceptions is the exigency of the situation being arrears."79 It held that the relationship between the parties was a
litigated.76 Here, the controversy between the parties has been "more complicated situation where jurisdiction is better lodged with
dragging on since 2010, which should not be the case when the initial the regional trial court,"80 upon a finding that there was a concession,
dispute-an ejectment case-is, by nature and design, a summary rather than a lease relationship between the parties.81
procedure and should have been resolved with expediency.
It is settled that the only issue that must be settled in an ejectment
Moreover, this Court's rules of procedure permit the direct resort to proceeding is physical possession of the property
this Court from a decision of the Regional Trial Court upon questions involved.82 Specifically, action for unlawful detainer is brought against
of law, such as those which petitioner raises in this case. In Barcenas a possessor who unlawfully withholds possession after the
v. Spouses Tomas and Caliboso: 77 termination and expiration of the right to hold possession.83

Nonetheless, a direct recourse to this Court can be taken for a review To determine the nature of the action and the jurisdiction of the
of the decisions, final orders or resolutions of the RTC, but only on court, the allegations in the complaint must be examined. The

Page 59 of 172
jurisdictional facts must be evident on the face of the The Metropolitan Trial Court seriously erred in finding that it did not
complaint.84 There is a case for unlawful detainer if the complaint have jurisdiction over petitioner's complaint because the parties'
states the following: situation has allegedly become "more complicated"90 than one of
lease. Respondent's defense that its relationship with petitioner is one
(1) initially, possession of property by the defendant was by contract of concession rather than lease does not determine whether or not
with or by tolerance of the plaintiff; the Metropolitan Trial Court has jurisdiction over petitioner’s
complaint. The pleas or theories set up by a defendant in its answer
(2) eventually, such possession became illegal upon notice by plaintiff or motion to dismiss do not affect the court’s jurisdiction.91 In Morta
to defendant of the termination of the latter's right of possession; v. Occidental:92

(3) thereafter, the defendant remained in possession of the property It is axiomatic that what determines the nature of an action as well as
and deprived the plaintiff of the enjoyment thereof; and which court has jurisdiction over it, are the allegations in the
complaint and the character of the relief sought. "Jurisdiction over
the subject matter is determined upon the allegations made in the
(4) within one year from the last demand on defendant to vacate the
complaint, irrespective of whether the plaintiff is entitled to recover
property, the plaintiff instituted the complaint for
upon a claim asserted therein - a matter resolved only after and as a
ejectment.85 (Citation omitted)
result of the trial. Neither can the jurisdiction of the court be made to
depend upon the defenses made by the defendant in his answer or
A review of petitioner's Complaint for Ejectment shows that all of motion to dismiss. If such were the rule, the question of jurisdiction
these allegations were made. would depend almost entirely upon the defendant."93 (Citations
omitted)
First, petitioner alleges that respondent is its lessee by virtue of three
(3) Contracts of Lease. The validity of these contracts was later Not even the claim that there is an implied new lease or tacita
affirmed in a Compromise Agreement, which modified certain reconduccion will remove the Metropolitan Trial Court's jurisdiction
provisions of the previous leases but retained the original lease over the complaint.94 To emphasize, physical possession, or de
period. Respondent does not dispute these contracts' existence or facto possession, is the sole issue to be resolved in ejectment
their validity. proceedings. Regardless of the claims or defenses raised by a
defendant, a Metropolitan Trial Court has jurisdiction over an
Second, following respondent's failure to pay rentals, petitioner ejectment complaint once it has been shown that the requisite
alleges that it has demanded that respondent vacate the leased jurisdictional facts have been alleged, such as in this case. Courts are
premises. reminded not to abdicate their jurisdiction to resolve the issue of
physical possession, as there is a public need to prevent a breach of
Third, respondent continues to occupy and possess the leased the peace by requiring parties to resort to legal means to recover
premises despite petitioner's demand. This is admitted by possession of real property.95
respondent, which seeks to retain possession and use of the
properties to "recoup its multimillion pesos worth of investment."86 III. In its October 19, 2010 Order, the Metropolitan Trial Court found
that petitioner committed forum shopping when it failed to disclose
Fourth, petitioner filed its Complaint for Ejectment on April 28, that there were two (2) pending cases in other trial courts concerning
2010,87 within one (1) year of its last written demand to respondent, the same parties and similar causes of action. These two (2) cases
made on March 18, 2010 and received by respondent on March 26, were Civil Case No. 08- 119138 for specific performance filed by
2010.88 Contrary to respondent's claim, the one (1)-year period to file respondent against petitioner; and SP CA Case No. 10-123257 for
the complaint must be reckoned from the date of last demand, in interpleader filed by 4H Intramuros. Both cases were pending with the
instances when there has been more than one (1) demand to vacate.89 Manila Regional Trial Court. The Metropolitan Trial Court found that
if it decides petitioner's Complaint for Ejectment, its ruling would
conflict with any resolution in the specific performance and

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interpleader cases, since the same contracts were involved in all three July 27, 2004 Memorandum of Agreement. Concededly, one of
(3) cases. It found that the parties were the same and the reliefs respondent's reliefs prayed for is for petitioner to respect
prayed for were the same. respondent's lease over Puerta de Isabel II, Asean Garden and Revellin
de Recoletos:
Forum shopping is the practice of resorting to multiple fora for the
same relief, to increase the chances of obtaining a favorable 2. Order [Department of Tourism], [Intramuros Administration] and
judgment.96 In Spouses Reyes v. Spouses Chung:97 [Anna Maria L. Harper] to perform their obligation under the
"Memorandum of Agreement" dated 27 July 2004 by OFFSETTING the
It has been jurisprudentially established that forum shopping exists rentals in arrears from the expenses incurred by Offshore in the
when a party avails himself of several judicial remedies in different continuance of the Department of Tourism's WOW Philippines Project
courts, simultaneously or successively, all substantially founded on and to allow Offshore to recover their investment at Intramuros by
the same transactions and the same essential facts and respecting their lease over Puerta Isabel II, Asean Garden and Revellin
circumstances, and all raising substantially the same issues either de Recoletos[.]100
pending in or already resolved adversely by some other courts.
Nevertheless, the Memorandum of Agreement expressly stated that
The test to determine whether a party violated the rule against forum its purpose was for respondent to pay petitioner and the Department
shopping is whether the elements of litis pendentia are present, or of Tourism rentals in arrears as of July 31, 2004:
whether a final judgment in one case will amount to res judicata in
another. Simply put, when litis pendentia or res judicata does not WHEREAS, [respondent] has been indebted to [petitioner] in the form
exist, neither can forum shopping exist. of rental and utility consumption arrears for the occupancy of Puerta
Isabel Chambers, Asean Gardens and Baluarte de San Andres (Stable
The requisites of litis pendentia are: (a) the identity of parties, or at House) in the amount of Six Million Seven Hundred Sixty[-]Two
least such as representing the same interests in both actions; (b) the Thousand One Hundred Fifty[-]Three and 70/100 (P6,762,153.70) as
identity of rights asserted and relief prayed for, the relief being of July 31, 2004 and as a way of settling said arrears, [respondent]
founded on the same facts; and (c) the identity of the two cases such had proposed to pay its obligations with [petitioner] as shown in the
that judgment in one, regardless of which party is successful, would breakdown in "Annex A" hereof through [respondent's] assumption of
amount to res judicata in the other. On the other hand, the elements [Department of Tourism's] monthly operational expenses for lights
of res judicata, also known as bar by prior judgment, are: (a) the and sound equipment, electricity, and performers at the Baluarte
former judgment must be final; (b) the court which rendered it had Plano Luneta de Sta. Isabel in Intramuros, Manila[.]101
jurisdiction over the subject matter and the parties; (c) it must be a
judgment on the merits; and (d) there must be, between the first and This was affirmed in petitioner's May 29, 2005 letter to respondent, in
second actions, identity of parties, subject matter, and causes of which petitioner stated:
action.98 (Citation omitted)
During our meeting last May 5, 2005 with Mr. Rico Cordova, it was
As observed by the Metropolitan Trial Court, there is an identity of reiterated that the subject of the [Memorandum of Agreement] for the
parties in the specific performance and interpleader cases, and the lights and sound at Plano Luneta de Sta. Isabel was your accumulated
Complaint for Ejectment. However, there is no identity of asserted account as of July 2004. Subsequent rentals have to be remitted to
rights or reliefs prayed for, and a judgment in any of the three (3) [Intramuros] as they become due and demandable. We have
cases will not amount to res judicata in the two others. emphasized this concern in our letter of November 12, 2004.102

In respondent’s amended complaint for specific performance, it prays A final judgment in the specific performance case will not affect the
that petitioner be compelled to offset respondent's unpaid rentals, outcome of the ejectment case. As pointed out by petitioner,
with the expenses that respondent supposedly incurred due to the respondent's right to possess the leased premises is founded initially
Department of Tourism's WOW Philippines project,99 pursuant to a on the Contracts of Lease and, upon their expiration, on petitioner's

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tolerance in hopes of payment of outstanding arrears. The July 27, In its complaint for specific performance, respondent claimed that
2004 Memorandum of Agreement subject of the specific performance petitioner should offset its outstanding rentals and that it was
case cannot be the source of respondent's continuing right of petitioner which had an outstanding debt to respondent:
possession, as it expressly stated there that the offsetting was only
for respondent's outstanding arrears as of July 31, 2004. Any 16. In compliance with the Memorandum of Agreement, Offshore
favorable judgment compelling petitioner to comply with its incurred expenses amounting to Seven Million Eight Hundred
obligation under this agreement will not give new life to the expired Twenty[] Five Thousand Pesos (P7,825,000.00) by way of Expenses for
Contracts of Lease, such as would repel petitioner's unlawful detainer Rentals of Lights & Sound System, Electrical Bill and Performers Fees.
complaint. This amount is excluding the expenses incurred during the period
Offshore supplied the Light & Sound System, as well as Performers,
In its Amended Answer in the specific performance case, petitioner aforementioned started in October 2004. A copy of the Statement of
sets up the counterclaim that "[respondent] be ordered to pay its Account is hereto appended as ANNEX "H" to "H-4";
arrears of (₱13,448,867.45) as of December 31, 2009 plus such rent
and surcharges as may be incurred until [respondent] has completely 17. Based on Offshore's records, upon re-computation of Actual Area
vacated the [leased] premises."103 This counterclaim is exactly the used during all these period[s] from July 2001 to March 30, 2008,
same as one of petitioner's prayers in its ejectment complaint: copy of Statement of Accounts has been sent to Intramuros
Administration for reconciliation, Offshore’s total obligation by way
WHEREFORE, premises considered, it is most respectfully prayed that of back and current rentals up to March 30, 2008 is only in the
JUDGMENT be rendered ORDERING: amount of Six Million Four Hundred Three Thousand Three Hundred
Sixty[-]Four Pesos (P6,403,364.00);
....
18. Obviously, when both accounts are offset, it will clearly show that
(2) DEFENDANT [OFFSHORE CONSTRUCTION] TO PAY ITS ARREARS [Intramuros] still owes Offshore the amount of One Million Four
OF THIRTEEN MILLION FOUR HUNDRED FORTYEIGHT THOUSAND, Hundred Twenty[-]One Thousand Six Hundred Thirty[-]Six Pesos
EIGHT HUNDRED SIXTY-SEVEN PESOS AND FORTY-FIVE CENTAVOS (P1,421,636.00) as of March 2008;
(₱13,448,867.45), PLUS INTEREST OF 1% PER MONTH AS STIPULATED
IN THE LEASE CONTRACTS[.]104 19. Unfortunately, despite this glaring fact that [Intramuros] owes
Offshore, Defendant [Anna Maria L.] Harper (who has already showed
A compulsory counterclaim is a defendant's claim for money or other sour and adverse treatment of Offshore in the past), being the new
relief which arises out of, or is necessarily connected with, the subject Administrator of Intramuros Administration, sent a Letter dated 09
matter of the complaint. In Spouses Ponciano v. Hon. Parentela, Jr.:105 April 2008 demanding from Offshore to pay [Intramuros] alleged
rentals in arrears in the amount of P12,478[,]461.74, within seven (7)
A compulsory counterclaim is any claim for money or other relief days from receipt. A copy of the Letter is hereto attached and marked
which a defending party may have against an opposing party, which as Annex "I" to "1-1";
at the time of suit arises out of, or is necessarily connected with, the
same transaction or occurrence that is the subject matter of plaintiff's 20. It can be deduced from the attachment to the aforementioned
complaint. letter that [Intramuros] did not honor the obligations imposed in the
Memorandum of Agreement because the monthly expenses incurred
It is compulsory in the sense that if it is within the jurisdiction of the by Offshore for the payment of the Lights and Sound System,
court, and does not require for its adjudication the presence of third Electricity and Performers Fees for the continuance of the Department
parties over whom the court cannot acquire jurisdiction, it must be of Tourism WOW Project at Baluarte Plano, Luneta de Sta. Isabel
set up therein, and will be barred in the future if not set which were duly furnished [Intramuros] in the amount of Seven
up.106 (Citation omitted) Million Eight Hundred Twenty[-]Five Thousand Pesos (P7,825,000.00)
as expressly agreed by [Department of Tourism], [Intramuros] and

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Offshore in the Memorandum of Agreement were NOT deducted from Baluarte de San Andres in the amount of six million seven hundred
the rentals due[.]107 sixty[-]two thousand one hundred fifty[-]three and seventy centavos
(P6, 762, 153. 70) ....
Petitioner's counterclaim in its Amended Answer was set up to defend
itself against such a claim: ....

26. [Offshore Construction] has not established its right, or the reality 32. Even after July 27, 2004, and up to this time, [Offshore
is, [Offshore Constructioin] has been delinquent in the payment of its Construction] remained in possession of, used and/or subleased the
financial obligations which are specifically provided in its contract subject premises. As such, [Offshore Construction] still has to pay
with defendant [Intramuros], such as rental fees. rental fees, aside from the aforesaid arrears. The rental fees
continued to pile up and triggered the imposition of surcharges as
27. [Offshore Construction] has to pay rent for being still in [Offshore Construction] again failed to remit payments thereon. This
possession of Puerta Isabel II and Asean Garden. Moreover, plaintiff explains the demandable amount of P13,448,867.45 (Annex I to 11 of
has enjoyed the fruits of subleasing these premises for years and yet Complaint). [Offshore Construction] is therefore mistaken in believing
it has continuously failed to remit all rental fees and surcharges that it only owes defendant [Intramuros] the arrears subject of the
despite repeated demands from defendants. It bears stressing that as [Memorandum of Agreement] of July 27, 2004 and nothing more.108
of December 31, 2009, [Offshore Construction's] arrears has already
ballooned to thirteen million four hundred and forty[-]eight thousand Clearly, petitioner's counterclaim is compulsory, arising as it did out
eight hundred and sixty[] seven pesos and forty[-]five centavos of, and being necessarily connected with, the parties' respective
(PB,448,867.45). obligations under the July 27, 2004 Memorandum of Agreement.
Petitioner cannot be faulted for raising the issue of unpaid rentals in
28. Glaringly, [Offshore Construction] has been remiss in performing the specific performance case or for raising the same issue in the
its obligations stated in the Lease Contracts (Annexes A to A- 15; B to present ejectment case, since it appears that respondent's alleged
B-14 and C to C-14 of the Complaint), Compromise Agreement failure to pay the rent led to the nonrenewal of the Contracts of
(Annexes E to E-17 of the Complaint) and Memorandum of Agreement Lease. However, it must be emphasized that any recovery made by
(Annexes F to F-16 of the Complaint). [Intramuros and Anna Maria L. petitioner of unpaid rentals in either its ejectment case or in the
Harper] are therefore constrained to demand payment from [Offshore specific performance case must bar recovery in the other, pursuant to
Construction] for the latter's failure or refusal to honor its just and the principle of unjust enrichment.109
valid obligations. Necessarily, [Intramuros and Anna Maria L. Harper]
will not hesitate to seek legal remedies if [Offshore Construction] A judgment in the Complaint for Interpleader will likewise not be res
continues to be delinquent. judicata against the ejectment complaint. The plaintiff in the
interpleader case, 4H Intramuros, allegedly representing the tenants
29. Essentially, [Offshore Construction] is protesting the computation occupying Puerta de Isabel II, does not expressly disclose in its
of its arrears (P12,478,461.74) in the demand letter sent by Complaint110 for Interpleader the source of its right to occupy those
Administrator [Anna Maria L.] Harper on April 9, 2008. [Offshore premises. However, it can be determined from petitioner's
Construction] also asserts that it only owes defendant [Intramuros] Answer111 and from respondent's Memorandum112 that the members of
six million four hundred three thousand and three hundred sixty[- 4H Intramuros are respondent's sublessees.
]four pesos (P6,403,364.00).
A sublessee cannot invoke a superior right over that of the
30. [Offshore Construction] is misguided. The [Memorandum of sublessor.113 A judgment of eviction against respondent will affect its
Agreement] dated July 27, 2004 was executed because [Offshore sublessees since the latter's right of possession depends entirely on
Construction], at that time, had been indebted to defendant that of the former.114 A complaint for interpleader by sublessees
[Intramuros] in the form of rental and utility consumption arrears for cannot bar the recovery by the rightful possessor of physical
the occupancy of Puerta Isabel Chambers, Asean Gardens and possession of the leased premises.

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Since neither the specific performance case nor the interpleader case When a demand to vacate has been made, as what petitioner had
constituted forum shopping by petitioner, the Metropolitan Trial done, respondent’s possession became illegal and it should have left
Court erred in dismissing its Complaint for Ejectment. the leased premises.1âwphi1 In Caniza v. Court of Appeals:125

IV. Ordinarily, this case would now be remanded to the Metropolitan The Estradas’ first proffered defense derives from a literal
Trial Court for the determination of the rightful possessor of the construction of Section 1, Rule 70 of the Rules of Court which inter
leased premises. However, this would cause needless delay alia authorizes the institution of an unlawful detainer suit when "the
inconsistent with the summary nature of ejectment possession of any land or building is unlawfully withheld after the
proceedings.115 Given that there appears sufficient evidence on record expiration or termination of the right to hold possession, by virtue of
to make this determination, judicial economy dictates that this Court any contract, express or implied." They contend that since they did
now resolve the issue of possession.116 not acquire possession of the property in question "by virtue of any
contract, express or implied" - they having been, to repeat, "allowed to
It is undisputed that respondent's occupation and use of Baluarte de live temporarily ... (therein) for free, out of ... (Cañiza’s) kindness" - in
San Andres, Baluarte de San Francisco de Dilao, and Revellin de no sense could there be a4n "expiration or termination of . . . (their)
Recoletos started on September 1, 1998 by virtue of Contracts of right to hold possession, by virtue of any contract, express or
Lease all dated August 20, 1998.117 The Contracts of Lease were implied." Nor would an action for forcible entry lie against them, since
modified through Addendums to the Contracts likewise dated August there is no claim that they had "deprived (Cañiza) of the possession of
20, 1998.118 ... (her property) by force, intimidation, threat, strategy, or stealth."

Then, to amicably settle Civil Case No. 98-91587 entitled Offshore The argument is arrant sophistry. Cañiza’s act of allowing the
Construction and Development Company v. Hon. Gemma Cruz- Estradas to occupy her house, rent-free, did not create a permanent
Araneta and Hon. Dominador Ferrer, Jr., then pending before Branch and indefeasible right of possession in the latter's favor. Common
47, Regional Trial Court, Manila,119 the parties and the Department of sense, and the most rudimentary sense of fairness clearly require that
Tourism entered into a July 26, 1999 Compromise Agreement. In the act of liberality be implicitly, but no less certainly, accompanied by
Compromise Agreement, the parties affirmed the validity of the lease the necessary burden on the Estradas of returning the house to
contracts, but agreed to transfer the areas to be occupied and used by Cañiza upon her demand. More than once has this Court adjudged
respondent in Baluarte de San Andres and Baluarte de San Francisco that a person who occupies the land of another at the latter's
de Dilao due to improvements that it had introduced to the leased tolerance or permission without any contract between them is
premises.120 The lease over Revellin de Recoletos was terminated.121 It necessarily bound by an implied promise that he will vacate upon
appears that under this Compromise Agreement, the original five (5)- demand, failing which a summary action for ejectment is the proper
year period of the Contracts of Lease were retained,122 such that the remedy against him. The situation is not much different from that of a
leases would expire on August 31, 2003, and renewable for another tenant whose lease expires but who continues in occupancy by
five (5) years upon the parties' mutual agreement.123 tolerance of the owner, in which case there is deemed to be an
unlawful deprivation or withholding of possession as of the date of the
Thereafter, the Contracts of Lease expired. Respondent does not demand to vacate. In other words, one whose stay is merely tolerated
concede this, but there is no proof that there has been any contract becomes a deforciant illegally occupying the land or property the
mutually agreed upon by the parties for any extensions of the leases. moment he is required to leave. Thus, in Asset Privatization Trust vs.
Respondent can only argue that petitioner's continuing tolerance of Court of Appeals, where a company, having lawfully obtained
respondent's possession and acceptance of respondent's rental possession of a plant upon its undertaking to buy the same, refused
payments impliedly renewed the Contracts of Lease.124 to return it after failing to fulfill its promise of payment despite
demands, this Court held that "(a)fter demand and its repudiation, ...
(its) continuing possession ... became illegal and the complaint for
But petitioner's tolerance of respondent's occupation and use of the
unlawful detainer filed by the ... (plant’s owner) was its proper
leased premises after the end of the lease contracts does not give the remedy."126 (Emphasis supplied, citations omitted)
latter a permanent and indefeasible right of possession in its favor.

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The existence of an alleged concession agreement between petitioner August 31, 2003, renewable for another period of FIVE YEARS (5 YRS)
and respondent is unsupported by the evidence on record. The under such terms and condition that may be mutually agreed upon in
Metropolitan Trial Court found that a concession agreement existed writing by the parties[.]129
due to the agreements entered into by the parties:
The subsequent contracts, namely, the July 26, 1999 Compromise
This Court agrees with the defendant. The various contracts of lease Agreement and the July 27, 2004 Memorandum of Agreement, also do
between the parties notwithstanding, the existence of the other not point to any creation of a "concession" in favor of respondent.
agreements involved herein cannot escape the scrutiny of this Court. The Compromise Agreement affirms the validity of the lease
Although couched in such words as "contracts of lease", the contracts, while the Memorandum of Agreement was for the payment
relationship between the parties has evolved into another kind - that of respondent's arrears until July 2004.
of a concession agreement whereby defendant [Offshore
Construction] undertook to develop several areas of the Intramuros However, this Court cannot award unpaid rentals to petitioner
District, defendant [Offshore Construction] actually commenced the pursuant to the ejectment proceeding, since the issue of rentals in
development of the subject premises and incurred expenses for the Civil Case No. 08-119138 is currently pending with Branch 37,
said development, effectively making the relationship more than an Regional Trial Court, Manila, by virtue of petitioner's counterclaim. As
ordinary lessor-lessee but one governed by concession whereby both the parties dispute the amounts to be offset under the July 27, 2004
parties undertook other obligations in addition to their basic Memorandum of Agreement and respondent’s actual back and
obligations under the contracts of lease. Consensus facit legem (The current rentals due,130 the resolution of that case is better left to the
parties make their own law by their agreement). It behooves this Regional Trial Court for trial on the merits.
Court to respect the parties' contracts, including the memoranda of
agreement that ensued after it. ...127 WHEREFORE, the Petition for Review on Certiorari is GRANTED. The
April 14, 2011 Decision of Branch 173, Regional Trial Court, Manila in
Respondent claims that the parties’ agreement was for it to operate Civil Case No. 10-124740 is REVERSED AND SET ASIDE, and a new
the leased premises to recover its investments and to make decision is hereby rendered ordering respondent Offshore
profits.1âwphi1 However, a review of the Contracts of Lease show Construction and Development Company and any and all its
that they are lease contracts, as defined in Article 1643 of the Civil sublessees and successors-in-interest to vacate the leased premises
Code: immediately.

Article 1643. In the lease of things, one of the parties binds himself to Branch 37, Regional Trial Court, Manila is DIRECTED to resolve Civil
give to another the enjoyment or use of a thing for a price certain, Case No. 08-119138 with dispatch.
and for a period which may be definite or indefinite. However, no
lease for more than ninety-nine years shall be valid. SO ORDERED.

The restrictions and limitations on respondent's use of the leased G.R. No. 210475
premises are consistent with petitioner’s right as lessor to stipulate Ramon K. Ilusorio, Ma. Lourdes C. Cristobal, Romeo G. Rodriguez,
the use of the properties being leased.128 Neither the Contracts of Eduardo C. Rojas, Cesar B. Crisol, Violeta J. Josef, Erlinda K.
Lease nor their respective Addendums to the Contract contain any Ilusorio, Shereen K. Ilusorio, And Ceciliaa. Bisuna,, Petitioners
stipulation that respondent may occupy and use the leased premises Vs
until it recovers the expenses it incurred for improvements it Sylvia K. Ilusorio, Respondent
introduced there. Instead, the lease period was fixed at five (5) years,
renewable for another five (5) years upon mutual agreement:
PERALTA, J.:
3. CONTRACT TERM. (Leased Period) This lease shall be for a period
of FIVE YEARS (5 YRS) commencing from September 1, 1998 to This petition for review on certiorari under Rule 45 of the Rules of
Court (Rules) with prayer for temporary restraining order (TRO) or

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writ of preliminary injunction (WPI) seeks to annul and set aside the probable cause indeed exists for the issuance of a warrant of arrest
Resolutions dated July 17, 20131 and November 21, 2013,2 of the against all the accused herein.
Court of Appeals (CA) in CA-G.R. SP No. 130416, which denied due
course and dismissed the petition for certiorari filed by petitioners The gravamen of libel is that words, written or printed, caused
assailing the Order3 dated April 3, 2013 of the Regional Trial discredit to a person in the minds of any considerable and
Court (RTC), Branch 52, Manila. respectable class in the community, taking into account the emotions,
prejudices and intolerance of every one surrounding the person being
Based on a complaint for libel of respondent Sylvia K. Ilusorio, an discredited.
Information4 dated December 18, 2008 was filed against petitioners
Ramon K. Ilusorio, Ma. Lourdes C. Cristobal, Romeo G. Rodriguez, Guided thereby, did the excerpts come into the purview of being a
Eduardo C. Rojas, Cesar B. Crisol, Violeta J. Josef, Erlinda K. Ilusorio, libelous matter? The Court believes so. After a perusal of the records,
Shereen K. Ilusorio, and Cecilia A. Bisuña, together with their co- this Court finds that there is a probability that the crime of libel had
defendants Orlando D. Nepomuceno, Erwin C. Mutuc, Daniel C. indeed been committed and the herein accused are probably guilty
Subido, and Marietta K. Ilusorio.5 It stemmed from the alleged libelous thereof. A mere cursory reading of the alleged excerpts from the
book entitled "On the Edge of Heaven" authored by Erlinda and aforementioned book would indeed instill upon the mind of a
circulated by the Directors/Officers of PIEKI Foundation (formerly reasonable man that the person being mentioned therein had
House of St. Joseph Foundation), Senior Partners Foundation, Inc. committed the alleged crimes or wrongdoings. As herein beforehand
(formerly Quantum Foundation of the Philippines), and Multinational stated, the Court, at this point, does not delve into the certainty of the
Investment Bancorporation. offense but only on the probability thereof.

The case was docketed as Criminal Case No. 09-270043 and was It is not disputed, as in fact it was admitted, that Erlinda K. Ilusorio
initially raffled to the Manila RTC Br. 6. In August 2009, the was the source of the alleged writings, hence, she should be made to
defendants filed a Motion for Determination of Probable Cause (With answer the Information filed in this Court. As to who shall be held
Prayer to Defer the Issuance of Warrant of Arrest).6 The exchange of accountable together with Erlinda K. Ilusorio, the Court, based on the
pleadings revealed that the charge against the defendants was documents attached to the records, finds that all the other accused,
dismissed on August 12, 2005 by the Department of being officers of the publishing foundation, PI-EKI Foundation, must
Justice (DOJ) Investigating Panel and Sylvia's motion for likewise be held accountable for the publication of the alleged
reconsideration (MR) was denied on November 10, 2005; that DOJ libelous book.
Secretary Raul Gonzales motu proprio dismissed Sylvia's petition for
review on August 10, 2006, but, upon MR, reversed the Resolution on Anent the other matters raised in the pleadings, the Court sees no
November 6, 2006; that the defendants filed their MR, which was need to discuss the same. To the mind of this Court, the same can be
denied on October 27, 2008; and, they filed a petition best ventilated in court during a full blown hearing, it being a matter
for certiorari before the CA, which did not issue any TRO or WPI of defense and is evidentiary in nature.8
against the filing of the Information. The defendants asserted that the
findings of the DOJ Investigating Panel and the initial resolution of
A MR with motion to inhibit was filed by the defendants. 9 After Judge
the DOJ Secretary as to the non-existence of probable cause to issue a
warrant of arrest should be upheld. Rodriguez inhibited from the case,10 it was re-raffled to the Manila
RTC Br. 52. On June 5, 2012, Acting Presiding Judge Ruben Reynaldo
G. Roxas resolved to deny the MR, opining that the grounds raised
On January 28, 2010, Presiding Judge Jansen R. Rodriguez denied the have already been passed upon and exhaustively discussed in the
defendants' motion.7 The Order stated: challenged Order and that no additional evidence was presented to
reverse or modify the same.11
After a judicious scrutiny of the records, i.e., the Information, the
Resolution of the Secretary of Justice, the Complaint-Affidavit, the Subsequently, the defendants12 filed a Motion to Quash13 on the
Counter-Affidavits and the excerpts taken from the book entitled "On grounds that: (1) the court has no jurisdiction over the offense
the Edge of Heaven," this Court strongly opines and holds that

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charged (as the Information failed to allege the actual residence of x x x Where a petition for certiorari, as in this case, is incipiently
Sylvia or where the libelous matter was printed or first published); (2) defective in form and substance, [petitioners'] attempt to cure it
the Assistant Prosecutor who filed the Information had no authority beyond the 60-day non-extendible period cannot be allowed, lest such
to do so (as Sylvia was not alleged as a resident of Manila and that the limitation be improperly circumvented. Further, the allegations in the
libelous matter was printed or first published in Manila); (3) the facts amended petition sought to be admitted do not substantiate the
charged do not constitute the offense of libel (as the book itself was imputation of grave abuse of discretion on public respondent as to
not attached as part of the Information and its author or editor was otherwise warrant the availment of the extraordinary remedy
not identified); and (4) the alleged criminal action for libel has been of certiorari.17
extinguished (as the Information did not allege the date when the
book was printed or first published). The petition is granted.

Justifying that the issues raised have already been discussed in the The failure of petitioners to state in their prayer the declaration of
Order dated January 28, 2010 and that there is no reason to deviate nullity of the RTC Order dated April 3, 2013 is a mere formal defect.
therefrom, the court denied the motion on April 3, 2013.14 Judge It was a result of a mere inadvertence; hence, constituting excusable
Roxas noted that the MR of the Order dated January 28, 2010 was negligence.
already denied in the Order dated June 5, 2012; thus, any other
motions to be filed pertaining or related to the issues raised in the MR The CA should have disregarded the fact that the prayer of the
and in the motions subject of the April 3, 2013 Order in the guise of a petition in CA-G.R. SP No. 130416 did not specifically seek to declare
MR or otherwise would no longer be entertained. as void the Order dated April 3, 2013. On its face, the main object of
the petition was clear and unmistakable considering that the
Immediately, petitioners filed before the CA a petition following errors were assigned:
for certiorari with prayer for TRO and/or WPI.1âwphi1 They prayed:
A. Respondent presiding judge gravely abused his discretion
1. In view of extreme urgency and in order that the petitioners may amounting to lack or excess of of (sic) jurisdiction when he stated in
not suffer great and irreparable injuries, a Temporary Restraining his order that he shall no longer [entertain] any motion for
Order/Preliminary Injunction enjoining the respondents from reconsideration.
proceeding with the subject criminal case;
B. Respondent presiding judge gravely abused his discretion
2. The petitioners are willing to post a bond for this purpose as may amounting to lack or excess of jurisdiction in issuing the order dated
be directed by this Honorable Court; [and] April 03, 2013 denying the petitioners' motion to quash.18

3. The petitioners pray for other legal and equitable reliefs[.]15 To add, the petition alleged:

On July 17, 2013, the petition, which was docketed as CA-G.R. SP No. 1. "3. Respondent Acting Presiding Judge has been impleaded in his
130416, was denied due course and dismissed. According to the CA, official capacity for having issued the Order dated April 03, 2013, a
petitioners are only seeking injunctive relief sans the requisite copy of which is hereto attached as [Annex] 'A' x x x" (page 2)19
principal action for the nullification of any issuances rendered by the
RTC. It ruled that the petition indubitably failed for lack of principal 2. "This petition is being filed under Rule 65, Rules of Court, the
action on which the prayer for injunction relief rests. questioned Order having been issued with grave abuse of discretion,
and/or with lack or excess of jurisdiction." (page 2)20
Petitioners filed a MR and/or Admit Amended Petition
for Certiorari, attaching therein the amended petition.16 However, it 3. "Sought to be declared void is the Order dated April 03, 2013 x x x
was denied on November 21, 2013, saying: issued by respondent Presiding Judge which denied petitioners'
Motion to Quash x x x" (page 3)21

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The pleading shall specify the relief sought, but it may add a general respectively.31 On the basis thereof, Judge Emma S. Young of the
prayer for such further or other relief as may be deemed just or Manila RTC Br. 36,32 granted the motion for the withdrawal of the
equitable.22 While the petition did not categorically state the reversal Information on December 8, 2015.33 When the trial court denied
and setting aside of the Order dated April 3, 2013 as one of the Sylvia's MR on March 21, 2016,34 she filed a petition
specific reliefs desired, causing the CA to hastily conclude that there for certiorari before the CA. Based on records at hand, said case,
was no principal action sought by petitioners, it did contain a general docketed as CA-G.R. SP No. 145999, is still pending resolution.
prayer "for other legal and equitable reliefs."23 This general prayer
should be interpreted to include the plea for the nullity of the Order WHEREFORE, the petition for review on certiorari is GRANTED. The
because it is already evident from the allegations contained in the Resolutions dated July 17, 2013 and November 21, 2013, of the Court
body of the petition. As held in Spouses Gutierrez v. Spouses Valiente, of Appeals in CA-G.R. SP No. 130416, which denied due course and
et al.:24 dismissed the petition for certiorari filed by petitioners assailing the
Order dated April 3, 2013 of the Regional Trial Court, Branch 52,
x x x [The] general prayer is broad enough "to justify extension of a Manila, are REVERSED and SET ASIDE. The case is REMANDED to the
remedy different from or together with the specific remedy sought." Court of Appeals to resolve the same on the merits with reasonable
Even without the prayer for a specific remedy, proper relief may be dispatch.
granted by the court if the facts alleged in the complaint and the
evidence introduced so warrant. The court shall grant relief warranted SO ORDERED.
by the allegations and the proof, even if no such relief is prayed for.
The prayer in the complaint for other reliefs equitable and just in the G.R. No. 200191 August 20, 2014
premises justifies the grant of a relief not otherwise specifically Lourdes C. Fernandez, Petitioner,
prayed for.25 Vs.
Norma Villegas And Any Person Acting In Her Behalf Including Her
Certainly, a general prayer for "other reliefs just and equitable" Family, Respondents.
appearing on a complaint or pleading (a petition in this case)
normally enables the court to award reliefs supported by the PERLAS-BERNABE, J.:
complaint or other pleadings, by the facts admitted at the trial, and
by the evidence adduced by the parties, even if these reliefs are not
specifically prayed for in the complaint.26 Assailed in this petition for review on certiorari1 are the Resolutions
dated June 22, 20112 and December 28, 20113 of the Court of Appeals
(CA) in CA-G.R. SP No. 116143 which dismissed the petition for review
Procedural imperfection should not serve as basis of decisions. 27 To under Rule 42 of the Rules of Court4 (CA petition) due to defective
prevent injustice, it is a better policy to dispose of a case on the verification and certification against forum shopping.
merits rather than on a technicality, affording every party-litigant the
amplest opportunity for the proper and just determination of his or
her cause.28 The Facts

It is significant to note that the DOJ Resolutions dated November 6, On August 21, 2008, petitioner Lourdes C. Fernandez (Lourdes) and
2006 and October 27, 2008, which were the basis of the Information her sister, Cecilia Siapno (Cecilia), represented by her attorney-in-fact,
dated December 18, 2008 finding probable cause to indict petitioners Imelda S. Slater (Imelda), filed a Complaint for Ejectment 5 before the
of libel, were annulled and set aside by the CA in CA-G.R. SP Nos. Municipal Trial Court in Cities, Branch 1, Dagupan City(MTCC),
106111 and 106312 on April 24, 2013. 29 The appellate court, likewise, docketed as Civil Case No. 15980, against respondent Norma Villegas
denied Sylvia's MR on October 20, 2014. 30 Her petition for review (Norma) and any person acting in her behalf including her family
on certiorari, which was docketed as G.R. Nos. 215004-05, as well as (respondents), seeking to recover possession of a parcel of land
her Motion for Leave of Court to File and to Admit Motion for situated in Guilig Street, Dagupan City covered by Transfer Certificate
Reconsideration with Amended Petition were denied by this Court in of Title (TCT) No. 191706 (subject property).
a Resolution dated March 11, 2015 and July 13, 2015,

Page 68 of 172
In their complaint, Lourdes and Cecilia(plaintiffs) averred that they Ruling of the RTC
are the registered owners of the subject property on which both
Lourdes and respondents previously lived under oneroof. However, In a Decision20 dated March 16, 2010, the RTC, Branch 40 granted
when their house was destroyed by typhoon "Cosme," Lourdes respondents’ appeal and ordered the dismissal of plaintiffs’
transferred to a nipahut on the same lot, while Norma, Cecilia’s complaint based on the following grounds: (a) there was no
daughter-in-law, and her family were advised to relocate but, in the substantial compliance with the mandatory conciliation and
meantime, allowed to use a portion thereof.7 Instead, respondents mediation process before the barangay, especially considering that
erecteda house thereon over plaintiffs’ objections and, despite the parties are very close relatives;21 and (b) respondents are builders
demands, refused to vacate and surrender possession of the subject in good faith and cannot be summarily ejected from the subject
property.8 The dispute was referred to the Barangay Office of property without compliance with the provisions of Articles 448, 546,
Pugo9 Chico and the Public Attorney’s Office, both of Dagupan City, and 548 of the Civil Code.22
but no settlement was reached.10
The RTC, Branch 40 further ordered plaintiffs to jointly and severally
For their part, respondents, in their Answer,11 averred that the pay respondents the amount of ₱50,000.00 as attorney’s fees.23
complaint stated no cause of action,considering that Lourdes has no
standing to question their possession ofthe subject property as she Aggrieved, plaintiffs filed a motion for reconsideration24 which was
had already donated her portion in favor of Cecilia,12 adding too that denied by the RTC, Branch 4425 in a Resolution26 dated August 18,
the latter is bound by her declaration that"the house and lot belong[s] 2010, prompting the filing of the CA petition.
to Eddie," who is Norma’s late husband.13 Respondents further
asserted that there was no compliance with the required conciliation
The CA Proceedings
and mediation under the Katarungang Pambarangay Law14 as no
Certificate to File Action was attached to the complaint,15 thereby
rendering the complaint dismissible. In response to plaintiffs’ CA petition, respondents filed a Motion to
Dismiss Appeal on the grounds that: (a) Cecilia failed to personally
verify the petition; and (b) the appeal is dilatory.27 In their comment,
Ruling of the MTCC
plaintiffs maintained that Lourdes, as co-owner of the subject
property, has the right to file an ejectment case by herself, without
In a Decision16 dated September 30, 2009,the MTCC found that joining her co-owner, Cecilia, as provided under Article 487 of the
respondents failed to impugn the validity of plaintiffs’ ownership Civil Code. Moreover, Lourdes was specially authorized by Imelda to
over the subject property. As owners, plaintiffs therefore have the file the CA petition.28
right to enjoy the use and receive the fruits from the said property, as
well as to exclude one from its enjoyment pursuant to Articles 428
In a Resolution29 dated June 22, 2011, the CA granted respondents’
and 429 of the Civil Code.17 Accordingly, the MTCC ordered
Motion to Dismiss Appeal, holding that the verification and
respondents to: (a) vacate the subject property and pay plaintiffs the
amount of ₱1,000.00 per month as reasonable compensation for the certification30 against forum shopping attached to the CA petition was
defective since it was signed only by Lourdes, one of the plaintiffs in
use and occupation of the portion of the lot occupied by them,
the case, in violation of Section 5,31 Rule 7 of the Rules of Court which
reckoned from the filing of the complaint; (b) pay plaintiffs
₱10,000.00 as attorney’s fees; and (c) pay the cost of suit.18 requires all the plaintiffs to sign the same.32 There was also no
showing that Lourdes was authorized by her co-plaintiff, Cecilia, to
represent the latter and to sign the said certification, and neither did
Dissatisfied with the MTCC’s ruling, respondents filed an the submission of the special powers of attorney of Cecilia and
appeal19 before the Regional Trial Court of Dagupan City (RTC), Imelda to that effect constitute substantial compliance with the
Branch 40, docketed as Civil Case No. 2009-0224-D. rules.33 The CA further noted that plaintiffs failed to comply with its
prior Resolution dated October 11, 2010 requiring the submission of
an amended verification/certification against forum shopping within

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five (5) days from notice, warranting the dismissal of the CA petition "substantial compliance" or presence of "special circumstances or
on this score.34 compelling reasons."

At odds with the CA’s resolution, plaintiffs sought 5) The certification against forum shopping must be signed by all
reconsideration35 but the same was denied in a Resolution36 dated the plaintiffs or petitioners in a case; otherwise, those who did not
December 28, 2011, hence, the instant petition filed by Lourdes alone sign will be dropped as parties to the case. Under reasonable or
justifiable circumstances, however, as when all the plaintiffs or
The Issue Before the Court petitioners share a common interest and invoke a common cause
of action or defense, the signature of only one of them in the
The primordial issue in this case is whether or not the CA erred in certification against forum shopping substantially complies with
dismissing outright the CA petition due to a defective verification and the Rule.
certification against forum shopping attached to the CA petition.
6) Finally, the certification against forum shopping must be
The Court’s Ruling executed by the party-pleader, not by his counsel. If, however, for
reasonable or justifiable reasons, the party-pleader is unable to
sign, he must execute a Special Power of Attorney designating his
The present petition has merit.
counsel of record to sign on his behalf.37 (Emphases supplied)

The Court laid down the following guidelines with respect to

Applying these guidelines to the case at bar, particularly, those stated
noncompliance with the requirements on or submission of a defective
in paragraphs 3 and 5 highlighted above, the Court finds that the CA
verification and certification against forum shopping, viz.:
committed reversible error in dismissing the CA petition due to a
defective verification and certification against forum shopping.
1) A distinction must be made between non-compliance with the
requirement on or submission of defective verification, and A. Substantial Compliance with the Verification Requirement.
noncompliance with the requirement on or submission of
defective certification against forum shopping.
It is undisputed that Lourdes is not only a resident of the subject
property but is a co-owner thereof together with her co-
2) As to verification, non-compliance therewith or a defect therein
plaintiff/sister, Cecilia. As such, she is "one who has ample knowledge
does not necessarily render the pleading fatally defective. The
to swear to the truth of the allegations in the x x x [CA] petition" and
court may order its submission or correction or act on the
is therefore qualified to "sign x x x the verification" attached thereto
pleading if the attending circumstances are such that strict in view of paragraph 3 of the above-said guidelines.1âwphi1
compliance with the Rule may be dispensed with in order that the
ends of justice may be served thereby.
In fact, Article 487 of the Civil Code explicitly provides that any of the
co-owners may bring an action for ejectment, without the necessity of
3) Verification is deemed substantially complied with when one
joining all the other co-owners as co-plaintiffs because the suit is
who has ample knowledge to swear to the truth of the allegations
deemed to be instituted for the benefit of all.38 To reiterate, both
in the complaint or petition signs the verification, and when
Lourdes and Cecilia are co-plaintiffs in the ejectment suit. Thus, they
matters alleged in the petition have been made in good faith or
share a commonality of interest and cause of action as against
are true and correct.
respondents. Notably, even the petition for review filed before the CA
indicated that they are the petitioners therein and that the same was
4) As to certification against forum shopping, non-compliance filed on their behalf. Hence, the lone signature of Lourdes on the
therewith or a defect therein, unlike in verification, is generally verification attached to the CA petition constituted substantial
not curable by its subsequent submission or correction thereof, compliance with the rules.39 As held in the case of Medado v. Heirs of
unless there is a need to relax the Rule on the ground of the Late Antonio Consing:40

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[W]here the petitioners are immediate relatives, who share a common WHEREFORE, the petition is GRANTED. The Resolutions dated
interest in the property subject of the action, the fact that only one of January 22, 2011 and December 28, 2011 of the Court of Appeals
the petitioners executed the verification or certification of forum (CA) in CA-G.R. SP No. 116143 are hereby REVERSED and SET ASIDE.
shopping will not deter the court from proceeding with the Accordingly, the case is REINSTATED and REMANDED to the CA for
action.41 (Emphases and underscoring supplied) proper and immediate disposition.

Besides, it is settled that the verification of a pleading is only a SO ORDERED.

formal, not a jurisdictional requirement intended to secure the
assurance that the matters alleged in a pleading are true and correct. G.R. No. 202324
Therefore, the courts may simply order the correction of the Conchita Gloria And Maria Lourdes Gloriapa Yduan, Petitioners
pleadings or act on them and waive strict compliance with the Vs.
rules,42 as in this case. Builders Savings And Loan Association, Inc., Respondent

B. Substantial Compliance with the Certification Against Forum DEL CASTILLO, J.:
Shopping Requirement.
This Petition for Review on Certiorari1 assails the March 13, 2012
Following paragraph 5 of the guidelines as aforestated, there was also Decision2 and June 18, 2012 Resolution3 of the Cou1t of Appeals (CA)
substantial compliance with the certification against forum shopping in CA-G.R. CV No. 82774, which respectively reversed the March 12,
requirement, notwithstanding the fact that only Lourdes signed the 2004 Order4 of the Quezon City Regional Trial Court, Branch 224
same. (RTC) in Civil Case No. Q-93-16621 and denied herein petitioners'
Motion for Reconsideration.5
It has been held that under reasonable or justifiable circumstances -
as in this case where the plaintiffs or petitioners share a common Factual Antecedents
interest and invoke a common cause of action or defense - the rule
requiring all such plaintiffs or petitioners to sign the certification Spouses Juan and herein petitioner Conchita Gloria (Conchita) are
against forum shopping may be relaxed.43 Consequently, the CA erred registered owners of a parcel of land located in Kamuning, Quezon
in dismissing the petition on this score. City covered by Transfer Certificate of Title No. 35814 (TCT
35814).6 Petitioner Maria Lourdes Gloria-Payduan (Lourdes) is their
Similar to the rules on verification, the rules on forum shopping are daughter. 7
designed to promote and facilitate the orderly administration of
justice; hence, it should not be interpreted with such absolute On August 14, 1987, Juan passed away.8
literalness as to subvert its own ultimate and legitimate objectives.
The requirement of strict compliance with the provisions on
certification against forum shopping merely underscores its On December 7, 1993, Conchita and Lourdes filed before the RTC a
mandatory nature to the effect that the certification cannot altogether Second Amended Complaint9 against respondent Builders Savings and
be dispensed with or its requirements completely disregarded. It does Loan Association, Inc. (Builders Savings), Benildo Biag (Biag), and
not prohibit substantial compliance with the rules under justifiable Manuel F. Lorenzo for "declaration of null and void real estate
circumstances,44 as also in this case. mortgage, promissory note, cancellation of notation in the transfer
certificate of title, and damages"10 with prayer for injunctive relief The
case was docketed as Civil Case No. Q-93-16621. Petitioners claimed
As there was substantial compliance with the above-discussed that Biag duped them into surrendering TCT 35814 to him under the
procedural requirements at the onset, plaintiffs' subsequent failure to pretense that Biag would verify the title, which he claimed might have
file an amended verification and certification, as directed by the been fraudulently transferred to another on account of a fire that
October 11, 2010 CA Resolution, should not have warranted the gutted the Quezon City Registry of Deeds; that Biag claimed that the
dismissal of the CA petition. title might need to be reconstituted; that Biag instead used the title to

Page 71 of 172
mortgage the Kamuning property to respondent Builders Savings; that Ruling of the RTC
Conchita was fraudulently made to sign the subject loan and
mortgage documents by Biag, who deceived Conchita into believing On September 26, 2003, the RTC issued its Decision in Civil Case No.
that it was actually Lourdes who requested that these documents be Q- 93-16621 dismissing petitioners' complaint for lack of merit. The
signed; that the subject Mortgage 11 and Promissory Note12 contained counterclaims and crossclaims were likewise dismissed.
the signature not only of Conchita, but of Juan, who was by then
already long deceased, as mortgagor and co-maker; that at the time Petitioners moved to reconsider.
the loan and mortgage documents were supposedly executed,
Conchita was already sickly and senile, and could no longer leave her
On March 12, 2004, the RTC issued its Order granting petitioners'
house; that Biag and Builders Savings conspired in the execution of
motion for reconsideration. The trial court held:
the forged loan and mortgage documents; that the forged loan and
mortgage documents were not signed/affirmed before a notary
public; that on account of Biag and Builders Savings' collusion, the When plaintiff Marides Gloria Payduan testified, she told the Court
subject property was foreclosed and sold at auction to the latter; and that Benildo Biag was introduced to her by her husband for the
that the loan and mortgage documents, as well as the foreclosure and purpose of reconstituting TCT No. 35814 because it was one of those
sale proceedings, were null and void and should he annulled. burned. Benildo Biag told them that he [knows] of someone who could
Petitioners thus prayed that the Mortgage and Promissory Note be help them reconstitute the title. This happened sometime [in] June of
declared null and void; that the encumbrances/annotations in the 1988. So, they gave him the original copy of the title on June 26 at
subject title be cancelled; that the certificate of title be returned to their residence at 161 K-3rd Street, Kamuning, Quezon City. Mr.
them; and that they be awarded ₱500,000.00 moral damages, Benildo Biag promised to return the title to them, but failed to [do so)
₱50,000.00 exemplary damages, ₱20,000.00 actual damages, until they knew that it has already been mortgaged. (TSN April 25,
₱20,000.00 attorney's fees and other legal expenses, and costs of suit. 1997, pp. 21 to 26).

On the other hand, Builders Savings claimed that - [Thus, when p]laintiff Conchita Gloria xx x signed the promissory
note and the real estate mortgage [,she] was not acting freely and with
all her faculties functioning. She signed the papers given to her by
xx x Lourdes Payduan had neither the capacity to sue nor the
Benildo Biag under the thought that this will be used in the
authority and interest to file the case a quo. She was merely an
reconstitution of her original certificate of title but it turned out
"ampon" or "palaki" of the Spouses Juan and Conchita Gloria and was
however that Benildo Biag used them to secure the loan proceeds
not legally adopted by them. Moreover, Conchita neither signed the
from the defendant Builders.
verification attached to the complaint nor executed a special power of
attorney to authorize her daughter Maria Lourdes to pursue the
case a quo. Further, Conchita never appeared in court to testify Under Alticle 1330 of the Civil Code, a contract where consent is
during trial. BLSA presented its Credit Investigator Danilo Reyes who given through mistake, violence, intimidation, W1Clue influence or
testified that he personally met Spouses Juan and Conchita Gloria, fraud is voidable.
Maria Lomdes and her husband, and Benildo Biag when they went to
their office to apply for a loan. He also saw the identification card Under the circumstances, defendant Builders should have exe1ted
presented by Juan to verify and confi1m his identity. Likewise, extra diligence before it approved the loan application of Benildo Biag
Conchita was a retired public school teacher who could not be cajoled and had it [exerted) extra effort in investigating the factual
by Benildo to execute a real estate mo1tgage on her propetty against circumstances of the loan application, it could have discovered that
her will. In the same vein, the fact that Conchita submitted floor plans plaintiff Conchita Gloria's signature in the prornisso1y note x x x and
of her house and its tax declarations only signified that she the deed of real estate mortgage x x x were not authorized and that
voluntarily mortgaged her property. 13 her husband Juan Gloria had died xx x before the filing of the loan
application. These are factual milieu which militates against Builders.
As held in Gatioan vs. Gatfud (27 SCRA 706), before a bank grants a
loan on the security of land, it must unde11ake a careful examination

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of the title of the applicant as well as a physical and on the spot Under Article 2217 of the New Civil Code, moral damages include
investigation of the land offered as a security. There is a dearth of physical suffering, mental anguish, fright, serious anxiety, besmirched
proof in the Builders evidence that it has investigated the person of reputation, wounded feelings, moral shock, social humiliation, and
plaintiff Conchita Gloria and the land offered as a collateral. similar injury Though incapable of pecuniary estimation, moral
damages may be recovered if they are the proximate result of the
The case of Rural Bank of Caloocan City vs. CA (104 SCRA 151) is also defendant's wrongful act or omission. An amount of ₱2200,000.00 to
four square. It was held therein that 'A contract may be annulled on answer for her sufferings, anguish and ·fright appears to be
the ground of vitiated consent, if deceit by a third person, even reasonable and fair.
without connivance or complicity with one of the contracting patties,
resulted in mutual error on the part of the parties to the contract. x x The Court likewise finds it proper to award an attorney's fees in the
x The possibility of her not knowing that she signed the promissory amount of ₱20,000.00 in favor of the plaintiffs as they were
note as co-maker x x x, and that her prope1ty was mo1tgaged to compelled to litigate the instant case through their counsel. x x x
secure the xx x loans, in view of her personal circumtances -
ignorance, lack of education and old age - should have placed the Accordingly, therefore, the decision of U1e Court dated September 26,
Bank on prudent inqui1y to protect its interest and that of the public 2003 is hereby reconsidered and set aside and a new one is entered in
it serves. With the recent occurrence of events that have supposedly favor of the plaintiff[s] and as against the defendant:
affected adversely our banking system, attributable to laxity in the
conduct of bank business by its bank officials, the need [for] extreme a) declaring the real estate mortgage dated June 26, 200 l and the
caution and prudence by said officials and employees in the discharge promissory note dated June 28, 2001 null and void;
of their functions cannot be overemphasized.'
b) directing the cancellation of the annotations in the TCT No. 358
Art. 2085 of the Civil Code, is also appropriate. It provides that: 14 of Conchita Gloria;

xxxx c) directing the defendant Builders Savings and Loan Association,

Inc. to return to plaintiffs TCT No. 35814 of the Registry of Deeds
3. The mortgagor should have the free disposal of the property of Quezon City free from all liens and encumbrances;
mortgaged and in the absence thereof, he should be authorized for
the purpose. d) directing the defendant Builders to pay plaintiffs moral
damages in the amount of ₱200,000.00; and
Thus, it is settled that if a forger mortgages another's property, the
mo1tgage is void. (De Lara vs. Ayroso, 95 Phil. 185) e) directing the defendant builders to pay plaintiffs attorney's fees
in the amount of ₱20,000.00.
Similarly, in Parqui vs. PNB (96 Phil. 157), the Court said, ' there can
be no question that the mortgage under consideration is a nullity, the SO ORDERED. 14

san1e having been executed by an impostor without the authority of

the owner of the interest mortgaged. Its registration under the Land
Registration Law lends no validity because, according to the Ruling of the CA
last proviso to the second paragraph of Section 55 of that law,
registration procured by the presentati0n of a forged deed is null and Respondent interposed an appeal before the CA. On March 13, 2012,
void.’ the CA issued the assailed Decision, decreeing as follows:

The evidence extant in the records being preponderant to establish In fine, BSLA asse1ts that x x x Conchita voluntarily executed the real
the negligence of Builders, the Court next looks at plaintiffs' claim for estate mortgage who submitted supporting documents to secure the
damages. x x x loan of Benildo Biag. The testimony of Maria Lourdes assailing the

Page 73 of 172
contract was merely hearsay and could not be used as evidence and We are not persuaded.
basis for the nullification of the contract.
When an alleged heir [sues] to nullify a document which would impair
The appeal is impressed with merit. her interest as such heir, heirs, her successional rights must first be
determined in a special proceedings. x x x
Here, after a careful perusal of the records, this Court finds that there
are procedural infirmities that warrant the dismissal of the Thus, in order that Maria Lourdes be clothed with personality to
complaint a quo. institute the complaint a quo, she must show that she has a real
interest which would suffer any detriment by its perfo1mance or
First, the complaint sought for the nullification of real estate annulment. This she must do only after establishing that she is a legal
mortgage contract and promissory note executed by Conchita to heir of Juan and that she inherited the property subject of the
secure the loan of Benildo with BSLA on the ground that Conchita's mortgage and accordingly, a co-owner thereof. This, however, Maria
signature was obtained through fraud, without her full knowledge of failed to do. Nothing in the records appear that a judicial or
the import of her act. extrajudicial partition was made by Juan's heirs. Neither does it
appear that the only prope1ty left by Juan is the same prope1ty
The parties to a contract are the real parties in interest in an action subject of the mortgage. Further, Maria Lourdes did not present ru1y
upon it. Thus, Rule 3 of the Rules of Court defines a real party in evidence to establish her rights as heir or prove that Juru1 had no
interest, thus: other heirs who are not pa1ties in this case. Apparently, there is yet a
need to first determine Maria Lourdes' rights through a special
proceeding. Clearly, then, Maria Lourdes could not be considered a
Sec. 2. Parties in interest. - A real party in interest is the party who
real party in interest to institute the action in the court a quo to
stands to be benefited or injured by the judgment in the suit, or the
nullify the real estate mortgage executed by Conchita absent any
patty entitled to the avails of the suit. Unless othe1wise authorized by proof to show that she has an interest over the subject property.
law or these Rules, every action must be prosecuted or defended in
the name of the real patty in interest.
On this note, this brings us to the second point in issue. A careful
perusal of the record shows that plaintiffs-appellees' Second
The aforestated provision has two (2) requirements: 1) to institute an Amended Complaint appears to have been accompanied with a
action, the plaintiff must be the real patty in interest, and 2) the
defective verification which was signed by Maria Lourdes only and not
action must be prosecuted in the nan1e of the real patty in interest. x
Conchita, with no reasonable justification for the omission
x x When the plaintiff is not the real patty in interest, the case is
whatsoever. It was likewise not accompanied by a certification against
dismissible on the ground of lack of cause of action. Accordingly,
non-forum shopping [sic] with no justification presented by plaintiffs-
only the contracting parties are bound by the stipulations in the
appellees. x x x
contract since they are the ones who would benefit from and could
violate it. Hence, one who is not a party thereto, and for whose
benefit it was not expressly made, cannot maintain an action on it. x It is true that detect in the verification will not render the pleading
xx In the case at bar, the real party in interest was Conchita being the fatally defective. This, however, does not hold true for a certification
person who executed the real estate mo1tgage contract. It was she against forum shopping which must be signed by all the plaintiffs.
who would stand to suffer by the fu fulfillment of its terms because Failure to do so will result to the dropping of the patties who did not
she obligated herself as a mortgagor who would ar1swer to BSLA sign. Here, the failure of Conchita to sign the certification against
upon the default of Benildo. non-forum shopping [sic], not once, but thrice, [in) the Complaint,
Amended Complaint, and Second Amended Complaint, would result to
dropping her from the case as plaintiff therein. She was not able to
On the other hand, Maria Lourdes claimed that she is a real party in
provide any justification for this omission to warrant the relaxation
interest because she is a co-owner of the properly for having inherited
of the rules. Moreover, Conchita and Maria Lourdes do not hold a
a portion thereof from her deceased father, Juan.
common interest because Conchita was the party who executed the
real estate mortgage contract and the registered owner of the subject

Page 74 of 172
property, while as above-discussed, Maria Lourdes's interest was not Petitioners' Arguments
established.
Petitioners contend that Lourdes had proved that she was the
Assuming arguendo that Conchita will not be dropped as party to the daughter of Conchita and Juan; that the subject property was
case, the evidence presented by plaintiffs-appellees arc not sufficient conjugal property belonging to both Juan and Conchita; that when
to support the grant of their complaint. The allegations of fraud were Juan died in 1987, Lourdes became a co-owner of the subject property
established only through the testimony of Maria Lourdes who had no by virtue of her being a compulsory heir of Juan; that as co-owner of
personal knowledge of the circumstances that would constitute the the subject property, she has the required interest to prosecute Civil
fraud allegedly committed by BSLA. She merely relied on the Case No. Q-93-16621 ; that the CA erred in declaring that Lourdes
statement made by Conchita that she was misled into signing the must first obtain a declaration of heirship, since Article 777 of the
contract making her believe that it was for the reconstitution of her Civil Code specifically provides that successional rights are
title with the Register of Deeds. Thus, Maria Lourdes' statement has transmitted from the decedent to his/her heirs from the moment of
no probative value absent ru1y showing that the evidence falls within death of the former; that even if there were no pending settlement
the exception to the hearsay evidence rule. proceedings for the distribution of a decedent's estate, there was no
need for a prior declaration of heirship before the heirs may
Based on the foregoing, this Court is constrained to dismiss plaintiffs- commence an action arising from any right of the deceased, such as
appellees' complaint. the right to bring an action to annul a sale; 17 that the issue of lack or
improper verification was never raised by the respondent at any stage
WHEREFORE, the Order dated March 12, 2004 of the Regional Trial of the proceedings, yet the CA unduly took cognizance thereof; that
Cou1t (RTC), National Capital Judicial Region, Branch 224, Quezon even if Conchita failed to sign the amended complaint, this could not
City, in Civil Case No. Q-93-16621, entitled "Conchita Gloria, et al., affect the same since both she and Lourdes shared a common interest
Plaintiffs, versus Builders Savings and Loan Association Inc., et al., in the subject property as co-owners thereof; and that the subject real
Defendants, is REVERSED AND SET ASIDE. The Second Amended estate mortgage and promissory note were null and void for being
Complaint dated December 3, 1993 filed by plaintiffs-appellees simulated, since they were supposedly signed and executed by Juan in
Conchita Gloria and Maria Lourdes Payduan is DISMISSED. 1991, when he actually passed away in 1987.

SO ORDERED.15 Petitioners pray that the CA dispositions be annulled and in lieu

thereof, the RTC's March 12, 2004 Order be reinstated.
Petitioners moved to reconsider, but in a June 18, 2012 Resolution,
the CA held its ground. Hence, the present Petition. Respondent's Arguments

Issues Respondent, on the other hand, failed to comment on the Petition

despite repeated directives from the Court.
Petitioners submit the following issues to be resolved:
Our Ruling
1. WHETHER xx x PETITIONER MARIA LOURDES GLORIA-PA YDUAN
AS CO-OWNER OF SUBJECT REAL PROPERTY, IS A REAL PARTY IN The Petition is granted.
INTEREST IN THIS CASE.
The evidence reveals that Lourdes is the daughter of Juan and
2. WHETHER x x x IT IS APPROPRIATE FOR THE APPELLATE COURT Conchita. There is on record a Certification of Birth 18 issued by the
TO PASS UPON ISSUE NOT RAISED BY APPELLANT IN ITS Lipa City Office of the Local Civil Registrar indicating that Lourdes
APPELLANT'S BRIEF'S ASSIGNMENT OF ERRORS.16 was born to Juan and Conchita; this document was marked as
Exhibit "H" during the proceedings below, and remains uncontested.

Page 75 of 172
Moreover, Lourdes categorically testified during trial that she was the Claro Quison died in 1902. It was proven at the trial that the present
natural child of Juan and Conchita, thus: plaintiffs are next of kin and heirs, but it is said by the appellants
that they [were] not entitled to maintain this action because there
CROSS-EXAMINATION [was] no evidence that any proceedings [had] been taken in court for
the settlement of the estate of Claro Quison; and that without such
ATTY. TAMPOC - Ms. Marides Gloria, you claimed to be the daughter settlement, the heirs cannot maintain this action. There is nothing in
of Conchita Gloria, one of the plaintiffs in this case? this point. [Under) the Civil Code [and/or] Code of Civil Procedure, the
title to the property owned by a person who dies intestate passes at
once to his heirs. Such transmission is, under the present law, subject
A - Yes, sir.
to the claims of administration and the property may be taken from
the heirs for the pw-pose of paying debts and expenses, but this does
Q - You are, however, claiming only to be the adopted daughter of not prevent an immediate passage of the title, upon the death of the
plaintiff Conchita Gloria, correct? intestate, from himself to his heirs. Without some showing that a
judicial administrator had been appointed in proceedings to settle the
- No, sir, I am the true daughter, sir. estate of Claro Quison, the right of the plaintiffs to maintain this
action is established.
COURT - Tunay na anak?
Conformably with the ·foregoing and taken in conjunction with Atty.
A - I was the daughter, Yow· Honor. 777 and 494 of the Civil Code, from the death of Lourdes Sampayo
her rights as a co-owner, incidental to which is the right to ask for
Q - Being a daughter she is a compulsory heir, Atty. Tampo. partition at any time or to te1minate the co-ownership, were
transmitted to her rightful heirs. In so demanding partition private
respondents merely exercised the right originally pe1tai1ling to the
xxxx
decedent, their predecessor-in-interest.21 (Citations omitted)

COURT - Ano ka ba, tunay na anak o adopted ka lang?

As regards the supposed defective verification occasioned by
Conchita's failure to sign the amended complaint with its
A - I am a true daughter, Your Honor. In fact, I have a birth concomitant verification and certification against forum shopping,
certificate. 19 the Court has repeatedly held that in a case involving co-owners of
property where said property is the subject matter of the suit, the
Being the daughter of the deceased Juan and Conchita, Lourdes has failure of the other co-owners to sign the verification and certification
an interest in the subject property as heir to Juan and co-owner with against forum shopping is not fatal, as the signing by only one or
Conchita The fact that she was not judicially declared as heir is of no some of them constitutes substantial compliance with the rule.
moment, for, as correctly argued by petitioners, there was no need for
a prior declaration of heirship before heirs may commence an action Finally, we find no merit in respondents' argument that the present
arising from any right of their predecessor, such as one for petition should be dismissed for failure of the od1er co-heirs/co-
annulment of mortgage. "[N]o judicial declaration of heirship is petitioners to sign the verification and certification against forw11-
necessary in order that an heir may assert his or her right to the shopping as required by Sections 4 and 5, Rule 7 of the 1997 Rules
property of the deceased."20 of Civil Procedure.

x x x. A prior settlement of the estate is not essential before the heirs In the case of Iglesia Ni Cristo v. Judge Ponferrada we expounded on
can commence any action originally pertaining to the deceased as we the purpose and sufficiency of compliance with the verification and
explained in Quison v. Salud- ce1tification against forum shopping requirements, viz.:

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The issue in the present case is not the lack of verification but the interest of all the parties with respect to the subject of the
sufficiency of one executed by only one of (the] plaintiffs. This Cou1t controversy.22 (Citations omitted)
held in Ateneo de Naga University v. Manalo, that the verification
requirement is deemed substantially complied with when, as in the "As such co-owners, each of the heirs may properly bring an action
present case, only one of the heirs-plaintiffs, who has sufficient for ejectment, forcible entry and detainer, or any kind of action for
knowledge and belief to swear to the truth of the allegations in the the recovery of possession of the subject properties. Thus, a co-owner
petition (complaint), signed the verification attached to it. Such may bring such an action, even without joining all the other co-
verification is deemed sufficient assurance that the matters alleged in owners as co-plaintiffs, because the suit is deemed to be instituted
the petition have been made in good faith or are true and correct, not for the benefit of all."23
merely speculative.
Finally, the Court finds the trial court to be correct in issuing the
The same liberality should likewise be applied to the certification March 12, 2004 Order granting petitioners' motion for
against forum shopping.1âwphi1 The general rule is that the reconsideration and declaring the mortgage and promissory note as
certification must be signed by all plaintiffs in a case and the null and void. The evidence indicates that these documents were
signature of only one of them is insufficient. However, the Court has indeed simulated; as far as petitioners were concerned, they merely
also stressed in a number of cases that the rules on form shopping entrusted the title to the subject property to Biag for the purpose of
were designed to promote and facilitate the orderly administration of reconstituting the same as he claimed that the title on file with the
justice and thus should not be interpreted with such absolute Registrar of Deeds of Quezon City may have been lost by fire.
literalness as to subve1t its own ultin1ate and legitimate objective. Petitioners did not intend for Biag to mortgage the subject property in
The rule of substantial compliance may be availed of with respect to 1991 to secure a loan; yet the latter, without petitioners' knowledge
the contents of the certification. This is because the requirement of and consent, proceeded to do just that, and in the process, he
strict compliance with the provisions merely w1derscores its falsified the loan and mortgage documents and the accompanying
mandatory nature in that the certification cannot be altogether promissory note by securing Conchita's signatures thereon through
dispensed with or its requirements completely disregarded. fraud and misrepresentation and taking advantage of her advanced
age and naivete and forged Juan's signature and made it appear that
The substantial compliance rule has been applied by this Court in a the latter was still alive at the time, when in truth and in fact, he had
number of cases: Cavile v. Heirs of Cavile, where the Court sustained passed away in 1987. A Certificate of Death24 issued by the Quezon
the validity of the certification signed by only one of petitioners City Local Civil Registrar and marked as Exhibit "D" and admitted by
because he is a relative of the other petitioners and co-owner of the the trial court proves this fact. Under the Civil Code,
prope1ties in dispute; Heirs of Agapito T Olarte v. Office of the
President of the Philippines, where the Cou1t allowed a certification Art. 1346. An absolutely simulated or fictitious contract is void. x x x
signed by only two petitioners because the case involved a family
home in which all the petitioners shared a common interest; Gudoy v. Art. 1409. The following contracts are inexistent and void from the
Guadalquiver, where the Court considered as valid the ce1tification beginning:
signed by only four of the nine petitioners because all petitioners
filed as co-owners pro indiviso a complaint against respondents for
(l)xxx;
quieting of title and damages, as such, they all have joint interest in
the undivided whole; and Dar v. Alonzo-Legasto, where the Court
sustained the certification signed by only one of the spouses as they (2) Those which are absolutely simulated or fictitious;
were sued jointly involving a prope1ty in which they had a common
interest. In the case of Spouses Solivel v. Judge Francisco,25 the Court made the
following pronouncement:
It is noteworthy that in all of the above cases, the Court applied the
rule on substantial compliance because of the commonality of x x x Thus, in Ayroso, this Court annulled a mortgage executed by an
impostor who had unauthorizedly gained possession of the

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ce1tificate of title thru the owner's daughter and forged said owner's red flag and xx x should have induced the [mortgagee] to make
name to the deed of mo1tgage which was subsequently registered. In inquiries into and confirm [the authority of the mortgagor]."28
so doing, the Court found more applicable the case of Ch. Veloso vs.
La Urbana and Del Mar, which also voided a mortgage of real WHEREFORE, the Petition is GRANTED. The assailed March 13, 2012
prope1ty owned by plaintiff Veloso constituted by her brother-in-law, Decision and June 18, 2012 Resolution of the Court of Appeals in CA-
the defendant Del Mar, using two powers-of-attorney to which he had G.R. CV No. 82774 are ANNULLED and SET ASIDE. The March 12,
forged the signatures of said plaintiff and her husband, and which 2004 Order of the Quezon City Regional Trial Court, Branch 224 in
mortgage was later registered with the aid of the ce1tificate of title Civil Case No. Q-90-16621 is REINSTATED
that had come into Del Mar’s possession by unknown means. x x x
SO ORDERED.
Even more in point and decisive of the issue here raised, however, is
the much later case of Joaquin vs. Madrid, where the spouses G.R. No. 217194
Abundio Madrid and Rosalinda Yu, owners of a residential lot in SOCIETE DES PRODUITS, NESTLE, S.A., Petitioner
Makati, seeking a building construction loru1 from the then Vs.
Rehabilitation Finance Corporation, entrusted their ce1tificate of title PUREGOLD PRICE CLUB, INC.,, Respondent
for Surrender to the RFC to Rosalinda's godmother, a ce1tain
Carmencita de Jesus, who had offered to expedite the approval of the
loan. Later having obtained a loan from another source, the spouses CARPIO, Acting C.J.:
decided to withdraw the application they had filed with the RFC and
asked Carmencita to retrieve their title and return it to them. The Case
Carmencita failed to do so, giving the excuse that the employee in
charge of keeping the title was on leave. It turned out, however, that Before the Court is a petition for review on certiorari1 assailing the 15
through the machinations of Carmencita, the property had been May 2014 Resolution2 and the 14 October 2014 Resolution3 of the
mortgaged to Constancio Joaquin in a deed signed by two persons Court of Appeals (CA) in CA-G.R. SP No. 134592.
posing as the owners and that after said deed had been registered,
the amount for which the mortgage was constituted had been given to The Facts
the person who had passed herself off as Rosalinda Yu. x x x
(Citations omitted) Petitioner Societe des Produits Nestle, S.A. (Nestle) is a corporation
organized and existing under the laws of Switzerland which is
As a consequence of Biag's fraud and forgery of the loan and engaged in the business of marketing and selling of coffee, ice cream,
mortgage documents, the same were rendered null and void. This chocolates, cereals, sauces, soups, condiment mixes, dairy and non-
proceeds from the fact that Biag was not the owner of the subject dairy products, etc.4 Respondent Puregold Price Club, Inc. (Puregold)
property and may not thus validly mortgage it, as well as the well- is a corporation organized under Philippine law which is engaged in
entrenched rule that a forged or fraudulent deed is a nullity and the business of trading goods such as consumer goods on wholesale
conveys no title. "In a real estate mo1igage contract, it is essential or on retail basis.5
that the mortgagor be the absolute owner of the property to be
mortgaged; otherwise, the mortgage is void."26 And "when the On 14 June 2007, Puregold filed an application6 for the registration of
instrument presented for registration is forged, even if accompanied the trademark "COFFEE MATCH" with the lqtellectual Property Office
by the owner's duplicate certificate of title, the registered owner does (IPO). The registration was filed by Puregold for use on coffee, tea,
not thereby lose his title, and neither does the mortgagee acquire any cocoa, sugar, artificial coffee, flour and preparations made from
right or title to the property. In such a case, the mortgagee under the cereals, bread, pastry and confectionery, and honey under Class 30 of
forged instrument is not a mortgagee protected by law."27 Lastly, when the International Classification of Goods.7
"the person applying for the loan is other than the registered owner
of the real property being mortgaged[, it] should have already raised a

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On 5 December 2008, Nestle filed an opposition8 against Puregold's SO ORDERED.15
application for registration. Nestle alleged that it is the exclusive
owner of the "COFFEE-MATE" trademark and that there is confusing On 11 June 2012, Nestle filed an appeal16 with the Office of the
similarity between the "COFFEE-MATE" trademark and Puregold's Director General of the Intellectual Property Office (ODG-IPO).
"COFFEE MATCH" application.9 Nestle alleged that "COFFEE-MATE" has
been declared an internationally well-known mark and Puregold's use The Decision of the ODG-IPO
of "COFFEE MATCH" would indicate a connection with the goods
covered in Nestle's "COFFEE-MATE" mark because of its distinct
In a Decision17 dated 7 February 2014, the Office of the ODG-IPO
similarity. Nestle claimed that it would suffer damages if the
dismissed Nestle's appeal. The ODG-IPO held that Barot's authority to
application were granted since Puregold's "COFFEE MATCH" would
likely mislead the public that the mark originated from Nestle.10 sign the certification against forum shopping was not sufficiently
proven by Nestle. The ODG-IPO ruled that Barot's authority, which
was contained in the power of attorney executed, should not be given
The Decision of the Bureau of Legal Affairs-Intellectual Property weight unless accompanied by proof or evidence of his authority
Office from Nestle.18 The ODG-IPO held that the competing marks are not
confusingly similar and that consumers would unlikely be deceived or
In a Decision11 dated 16 April 2012, the Bureau of Legal Affairs confused from Puregold's use of "COFFEE MATCH." The ODG-IPO
Intellectual Property Office (BLA-IPO) dismissed Nestle's opposition. ruled that the common feature of "COFFEE" between the two marks
The BLA-IPO ruled that Nestle's opposition was defective because the cannot be exclusively appropriated since it is generic or descriptive of
verification and certification against forum shopping attached to the goods in question. The ODG-IPO ruled that there is no visual,
Nestle's opposition did not include a board of directors' resolution or phonetic, or conceptual similarity between the two marks. Visual
secretary's certificate stating Mr. Dennis Jose R. Barot's (Barot) similarity is not present in the two marks, as Nestle's mark consists
authority to act on behalf of Nestle. The BLA-IPO ruled that the defect of a hyphenated word with the paired word being "MATE" while
in Nestle's opposition was sufficient ground to dismiss.12 Puregold's mark consists of the paired word "MATCH." While it is true
that the first three letters "M," "A," and "T" are common in the two
The BLA-IPO held that the word "COFFEE" as a mark, or as part of a marks, Puregold's mark, which are two separate words, with the
trademark, which is used on coffee and similar or closely related capitalization of the letters "C" and "M," is readily apparent when
goods, is not unique or highly distinctive. Nestle combined the word "COFFEE MATCH" and "COFFEE-MATE" are compared side by side.19
"COFFEE" with the word "-MATE," while Puregold combined the word
"COFFEE" with the word "MATCH." The BLA-IPO ruled that while both The dispositive portion of the Decision states:
Nestle's "-MATE" and Puregold's "MATCH" contain the same first three
letters, the last two in Puregold's mark rendered a visual and aural WHEREFORE, premises considered, the appeal is hereby DISMISSED.
character that makes it easily distinguishable from Nestle's "COFFEE- Let a copy of this Decision and the records of this case be furnished
MATE."13 Also, the letter "M" in Puregold's mark is written as an upper and returned to the Director of Bureau of Legal Affairs for
case character and the eyes of a consumer would not be confused or appropriate action. Further, let also the Director of the Bureau of
deceived by Nestle's "COFFEEMATE" where the letter "M" is written in Trademarks and the library of the Documentation, Information and
lower case. Consequently, the BLA-IPO held that the consumer cannot Technology Transfer Bureau be furnished a copy of this Decision for
mistake the mark and the products of Nestle as those of Puregold's.14 information, guidance, and records purposes.

The dispositive portion of the Decision states: SO ORDERED.20

WHEREFORE, premises considered, the instant opposition is hereby On 14 April 2014, Nestle filed a Petition for Review21 with the Court of
DISMISSED. Let the filewrapper of Trademark Application Serial No. 4- Appeals.
2007-006134 be returned, together with a copy of this DECISION, to
the Bureau of Trademarks for information and appropriate action.

Page 79 of 172
Ruling of the CA its appearance before the IPO, no evidence was submitted before this
Court showing that the Bengzon Law Offices was properly substituted
In a Resolution dated 15 May 2014, the CA dismissed Nestle's petition as petitioner's counsel in place of SVBB Law Offices (petitioner's
for review on procedural grounds. counsel of record). Thus, the 15-day reglementary period started to
run from the date SVBB Law Offices received a copy of the Decision.
The Resolution states:
Clearly, when petitioner filed the Motion for Extension on 27 March
A perusal of the Petition for Review shows that: 2014, and the Petition on 14 April 2014, the reglementary period had
already lapsed.
1. the title thereof does not bear the name of party respondent
Puregold Price Club, Inc. Further, the petitioner obstinately refuses to cure the procedural
infirmities we observed in the Resolution of 15 May 2014.
2. there is no board resolution and/or secretary's certificate to prove
the authority of Dennis Jose R. Barnt to file the petition and to sign SO ORDERED.25
the Verification/Certification of Non-Forum Shopping on behalf of
petitioner-corporation; and The Issues

3. certified true copies of material [portions] of the record which were Nestle presented the following issues in this petition:
mentioned therein were not attached, such as respondent's trademark
application (rollo, p. 12), petitioner's Opposition thereto, Reply, the 1. The Honorable Court of Appeals erred in dismissing petitioner's
parties' respective position papers, petitioner's appeal, respondent's motion for reconsideration upon an erroneous appreciation of certain
Comment, the parties' respective memoranda, etc. The above antecedent facts, and similarly erred in dismissing the petition for
considering, the Court RESOLVES to DISMISS the petition outright.22 review onyrocedural grounds.

On 13 June 2014, Nestle filed a Motion for Reconsideration23 which 2. There is merit to the substantive issues raised by petitioner, which
was denied by the CA on 14 October 2014. 24 The Resolution of the CA deserves to be given due course and a final ruling. 26
states: >>
Ruling of this Court
We DENY the Motion for Reconsideration because it is without merit.
We deny the petition.
The petitioner filed the Petition beyond the 15-day reglementary
period. Before discussing the substantive issues, we shall first discuss the
procedural issues in this case.
Under Rule 43, Section 4 of the Rules of Court, a party may file an
appeal to this Court from quasi-judicial bodies like the Intellectual Nestle filed its petition for review within the period granted by the
Property Office, within 15 days from receipt of the assailed judgment, Court of Appeals.
order, or resolution.
The CA dismissed Nestle's petition for review on the ground that
Petitioner's counsel of record before the Intellectual Property Office Nestle filed its petition for review after the 15-day reglementary
("IPO"), the Sapalo Velez Bundang & Bulilan Law Offices ("SVBB Law period required by Section 4, Rule 43 of the Rules of Court.
Offices") received a copy of the assailed Decision on 19 February
2014. Thus, petitioner had until 7 March 2014 to appeal. While the The CA is wrong.
Bengzon Negre & Untalan Law Offices ("Bengzon Law Offices") entered

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Section 4, Rule 43 of the Rules of Court states: review. Nestle did file the petition for review with the CA on 14 April
2014. Accordingly, the CA committed a grave error when it ruled that
Section 4. Period of appeal. - The appeal shall be taken within fifteen Nestle's petition for review was filed beyond the prescribed period.
(15) days from notice of the award, judgment, final order or
resolution, or from the date of its last publication, if publication is Nestle failed to properly execute a certification against forum
required by law for its effectivity, or of the denial of petitioner's shopping as required by Section 5, Rule 7 of the Rules of Court.
motion for new trial or reconsideration duly filed in accordance with
the governing law of the court or agency a quo. Only one (1) motion Section 5, Rule 7 of the Rules of Court provides:
for reconsideration shall be allowed. Upon proper motion and the
payment of the full amount of the docket fee before the expiration of Section 5. Certification against forum shopping. -The plaintiff or
the reglementary period, the Court of Appeals may grant an principal party shall certify under oath in the complaint or other
additional period of fifteen (15) days only within which to file the initiatory pleading asserting a claim for relief, or in a sworn
petition for review. No further extension shall be granted except for certification annexed thereto and simultaneously filed therewith: (a)
the most compelling reason and in no case to exceed fifteen (15) days. that he has not theretofore commenced any action or filed any claim
involving the same issues in any court, tribunal or quasi-judicial
During the proceedings in the ODG-IPO, Nestle substituted its agency and, to the best of his knowledge, no such other action or
counsel, Sapalo, Velez, Bundang and Bulilan Law Offices, with claim is pending therein; (b) if there is such other pending action or
Bengzon, Negre and Untalan Law Offices (Nestle's substituted claim, a complete statement of the present status thereof; and (c) ifhe
counsel). On 20 September 2013, Nestle's substituted counsel entered should thereafter learn that the same or similar action or claim has
its appearance in the ODG-IP0.27 In an Order28 dated 1 October 2013, been filed or is pending, he shall report that fact within five (5) days
the ODG-IPO noted the appearance of Nestle's substituted counsel therefrom to the court wherein his aforesaid complaint or initiatory
and included their appearance in the records of the case, to wit: pleading has been filed.

Wherefore, the APPEARANCE is hereby noted and included in the Failure to comply with the foregoing requirements shall not be
records. Accordingly, let copies of all pleadings, orders, notices and curable by mere amendment of the complaint or other initiatory
communications, be sent to the aforementioned address. pleading but shall be cause for the dismissal of the case without
prejudice, unless otherwise provided, upon motion and after hearing.
SO ORDERED.29 The submission of a false certification or non-compliance with any of
the undertakings therein shall constitute indirect contempt of court,
The Decision of the ODG-IPO was received by Nestle's substituted without prejudice to the corresponding administrative and criminal
counsel on 14 March 2014. On 27 March 2014, within the 15-day actions. If the acts of the party or his counsel clearly constitute willful
reglementary period provided for by Section 4 of Rule 43, Nestle filed and deliberate forum shopping, the same shall be ground for
a Motion for Extension of Time to file Verified Petition for summary dismissal with prejudice and shall constitute direct
Review30 (motion for extension) with the CA. In a Resolution31 dated 3 contempt, as well as a cause for administrative sanctions. (Emphasis
April 2014, the CA granted Nestle's motion for extension and gave supplied)
Nestle until 13 April 2014 to file its petition for review. The
resolution states: In Zulueta v. Asia Brewery, Inc.,33 this Court ruled that the
requirements under the Rules of Court involving the certification
The Court GRANTS petitioner's Motion for Extension of Time to File against forum shopping apply both to natural and juridical persons,
Verified Petition for Review and gives petitioner until April 13, 2014 to wit: "[t]he requirement that the petitioner should sign the
within which to do so.32 certificate of non-forum shopping applies even to corporations,
considering that the mandatory directives of the Circular and the
Since 13 April 2014 fell on a Sunday, Nestle had until 14 April 2014, Rules of Court make no distinction between natural and juridical
which was the next working day, within which to file the petition for persons."34

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In Fuentebella v. Castro,35 this Court held that the certification against certification signed by counsel alone is defective and constitutes a
forum shopping must be signed by the principal party. In case the valid cause for the dismissal of the petition.41
principal party cannot sign, the one signing on his or her behalf must
have been duly authorized, to wit: "the petitioner or the principal Nestle, itself, acknowledged in this petition the absence of a board
party must execute the certification against forum shopping. The resolution or secretary's certificate issued by the board of directors of
reason for this is that the principal party has actual knowledge Nestle to prove the authority of Barot to sign the certification against
whether a petition has previously been filed involving the same case forum shopping on behalf of Nestle, to wit: "[t]hus, while there is no
or substantially the same issues. If, for any reason, the principal party board resolution and/or secretary's certificate to prove the
cannot sign the petition, the one signing on his behalf must have been authority of Dennis Jose R. Barot to file the petition and
duly authorized."36 Verification/Certification of NonForum Shopping on behalf of
petitioner-corporation, there is a Power of Attorney evidencing such
Juridical persons, including corporations, that cannot personally sign authority."42 The power of attorney submitted by Nestle in favor of
the certification against forum shopping, must act through an Barot was signed by Celine Jorge. However, the authority of Celine
authorized representative.1âwphi1 The exercise of corporate powers Jorge to sign the power of attorney on behalf of Nestle, allowing Barot
including the power to sue is lodged with the board of directors to represent Nestle, was not accompanied by a board resolution or
which acts as a body representing the stockholders. For corporations, secretary's certificate from Nestle showing that Celine Jorge was
the authorized representative to sign the certification against forum authorized by the board of directors of Nestle to execute the power of
shopping must be selected or authorized collectively by the board attorney in favor of Barot. In Development Bank of the Philippines v.
of directors. In Eslaban, Jr. v. Vda. de Onorio,37 this Court ruled that if Court of Appeals,43 this Court held that the failure to attach a copy of
the real party in interest is a corporation, an officer of the a board resolution proving the authority of the representative to sign
corporation acting alone has no authority to sign the certification the certification against forum shopping was fatal to its petition and
against forum shopping. An officer of the corporation can only validly was sufficient ground to dismiss since the courts are not expected to
sign the certification against forum shopping if he or she is take judicial notice of board resolutions or secretary's certificates
authorized by the board of directors through a board resolution or issued by corporations, to wit:
secretary's certificate. In Gonzales v. Climax Mining Ltd. ,38 this Court
ruled that a board resolution authorizing a corporate officer to What petitioners failed to explain, however, is their failure to attach a
execute the certification against forum shopping is a necessary certified true copy of Resolution No. 0912 to their petition
requirement under the Rules. A certification signed by a person who for certiorari in CA-G.R. SP No. 60838. Their omission is fatal to their
was not duly authorized by the board of directors renders the case. Courts are not, after all, expected to take judicial notice of
petition for review subject to dismissal.39 corporate board resolutions or a corporate officer's authority to
represent a corporation. To be sure, petitioners' failure to submit
The authority of the representative of a corporation to sign the proof that Atty. Demecillo has been authorized by the DBP to file the
certification against forum shopping originates from the board of petition is a "sufficient ground for the dismissal thereof."44 (Emphasis
directors through either a board of directors' resolution or secretary's supplied)
certificate which must be submitted together with the certification
against forum shopping. In Zulueta, this Court declared invalid a Accordingly, the CA did not err in ruling that the petition for review
petition for review with a certification against forum shopping signed should be dismissed due to the failure of Nestle to comply with the
by the party's counsel which was not supported by a board resolution proper execution of the certification against forum shopping required
or secretary's certificate proving the counsel's authority. This Court by Section 5, Rule 7 of the Rules of Court.
dismissed the case and held: "[t]he signatory in the Certification of
the Petition before the CA should not have been respondents' Puregold's mark may be registered.
retained counsel, who would not know whether there were other
similar cases of the corporation. Otherwise, this requirement would
easily be circumvented by the signature of every counsel representing A trademark is any distinctive word, name~ symbol, emblem, sign, or
corporate parties."40 Likewise, in Eslaban, this Court held that a device, or any combination thereof, adopted and used by a

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manufacturer or merchant on his goods to identify and distinguish (g) Is likely to mislead the public, particularly as to the nature, quality,
them from those manufactured, sold, or dealt by others.45 Section 123 characteristics or geographical origin of the goods or services;
of Republic Act No. 829346 (RA 8293) provides for trademarks which
cannot be registered, to wit: (h) Consists exclusively of signs that are generic for the goods or
services that they seek to identify; x x x x (Emphasis supplied)
Sec. 123. Registrability. -
In Coffee Partners, Inc. v. San Francisco & Roastery, Inc.,48 this Court
123 .1 A mark cannot be registered if it:
47
held that the gravamen of trademark infringement is the likelihood of
confusion. There is no absolute standard for the likelihood of
xxxx confusion. Only the particular, and sometimes peculiar,
circumstances of each case can determine its existence. Thus, in
(d) Is identical with a registered mark belonging to a different infringement cases, precedents must be evaluated in the light of each
proprietor or a mark with an earlier filing or priority date, in particular case.49
respect of:
In determining similarity or likelihood of confusion, our
(i) The same goods or services, or jurisprudence has developed two tests: the dominancy test and the
holistic test.50 The dominancy test focuses on the similarity of the
prevalent features of the competing trademarks that might cause
(ii) Closely related goods or services, or
confusion and deception. If the competing trademark contains the
main, essential, and dominant features of another, and confusion or
(iii) If it nearly resembles such a mark as to be likely to deceive deception is likely to result, likelihood of confusion exists. The
or cause confusion; question is whether the use of the marks involved is likely to cause
confusion or mistake in the mind of the public or to deceive
(e) Is identical with, or confusingly similar to, or constitutes a consumers.51 In McDonald's Corporation v. L.C. Big Mak Burger,
translation of a mark which is considered by the competent authority lnc.,52 this Court gave greater weight to the similarity of the
of the Philippines to be wellknown internationally and in the appearance of the product arising from the adoption of the dominant
Philippines, whether or not it is registered here, as being already the features of the registered mark, to wit: "[c]ourts will consider more
mark of a person other than the applicant for registration, and used the aural and visual impressions created by the marks in the public
for identical or similar goods or services: Provided, That in mind, giving little weight to factors like prices, quality, sales outlets
determining whether a mark is well-known, account shall be taken of and market segments."53 The dominancy test is now incorporated into
the knowledge of the relevant sector of the public, rather than of the law in Section 155.1 of RA 8293 which states:
public at large, including knowledge in the Philippines which has been
obtained as a result of the promotion of the mark; SECTION 155. Remedies; Infringement. - Any person who shall,
without the consent of the owner of the registered mark:
(f) Is identical with, or confusingly similar to, or constitutes a
translation of a mark considered well-known in accordance with the 155.l Use in commerce any reproduction, counterfeit, copy, or
preceding paragraph, which is registered in the Philippines with colorable imitation of a registered mark or the same container or a
respect to goods or services which are not similar to those with dominant feature thereof in connection with the sale, offering for
respect to which registration is applied for: Provided, That use of the sale, distribution, advertising of any goods or services including other
mark in relation to those goods or services would indicate a preparatory steps necessary to carry out the sale of any goods or
connection between those goods or services, and the owner of the services on or in connection with which such use is likely to cause
registered mark: Provided further, That the interests of the owner of confusion, or to cause mistake, or to deceive; (Emphasis supplied)
the registered mark are likely to be damaged by such use;

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In contrast, the holistic test entails a consideration of the entirety of G.R. No. 204183, June 20, 2018
the marks as applied to the products, including the labels and Barangay Tongonan, Ormoc City, represented by its Punong
packaging, in determining confusing similarity. The discerning eye of Barangay, Isagani R. Bañez, Petitioner,
the observer must focus not only on the predominant words but also Vs.
on the other features appearing on both marks in order that the Hon. Apolinario M. Buaya, in his capacity as Presiding Judge,
observer may draw his conclusion whether one is confusingly similar Regional Trial Court, Branch 35, Ormoc City, City Government of
to the other.54 Ormoc, represented by its Mayor, Honorable Eric C. Codilla, The
Municipality of Kananga, Leyte, represented by its Mayor,
The word "COFFEE" is the common dominant feature between Nestle's Honorable Giovanni M. Napari, and Philippine National
mark "COFFEE-MATE" and Puregold's mark "COFFEE MATCH." Development Corp.* (Pnoc-Edc), represented by its President Mr.
However, following Section 123, paragraph (h) of RA 8293 which Paul Aquino, Respondents.
prohibits exclusive registration of generic marks, the word "COFFEE"
cannot be exclusively appropriated by either Nestle or Puregold since TIJAM, J.:
it is generic or descriptive of the goods they seek to identify. In Asia
Brewery, Inc. v. Court of Appeals,55 this Court held that generic or Assailed in this Petition for Review on Certiorari1 under Rule 45 of the
descriptive words are not subject to registration and belong to the Rules of Court are the Resolution2 dated November 24, 2011 and
public domain. Consequently, we must look at the word or words Resolution3 dated September 27, 2012 of the Court of Appeals (CA),
paired with the generic or descriptive word, in this particular case "- Cebu City in CA-G.R. CEB SP No. 02691 which dismissed petitioner's
MATE" for Nestle's mark and "MATCH" for Puregold's mark, to Amended Petition for Declaration of Nullity and/or Annulment of
determine the distinctiveness and registrability of Puregold's mark Court Order and Amicable Settlement due to a defective Verification
"COFFEE MATCH." and Certification Against Non-forum Shopping.

We agree with the findings of the BLA-IPO and ODG-IPO. The The Antecedents
distinctive features of both marks are sufficient to warn the
purchasing public which are Nestle's products and which are The instant petition has as its factual background a boundary dispute
Puregold's products. While both "-MATE" and "MATCH" contain the between respondents Ormoc City and the Municipality of Kananga. To
same first three letters, the last two letters in Puregold's mark, "C" settle the controversy, Ormoc City and the Municipality of Kananga
and "H," rendered a visual and aural character that made it easily entered into an Amicable Settlement dated February 27, 2003, which
distinguishable from Nestle's mark. Also, the distinctiveness of compromise agreement was subsequently approved by respondent
Puregold's mark with two separate words with capital letters "C" and court a quo.4
"M" made it distinguishable from Nestle's mark which is one word
with a hyphenated small letter "-m" in its mark. In addition, there is a
Claiming that the Amicable Settlement constitutes an illegal
phonetic difference in pronunciation between Nestle's "-MATE" and
relinquishment of the patrimony of Ormoc City in general and of
Puregold's "MATCH." As a result, the eyes and ears of the consumer
petitioner in particular which greatly altered its boundaries and
would not mistake Nestle's product for Puregold's product.
Accordingly, this Court sustains the findings of the BLA-IPO and ODG- reduced its territory by 325 hectares, petitioner lodged a petition
IPO that the likelihood of confusion between Nestle's product and before the CA Cebu City seeking to annul the Amicable Settlement as
well as the court a quo's Order approving the same.5
Puregold's product does not exist and upholds the registration of
Puregold's mark.
Because of certain procedural defects,6 the petition for annulment was
WHEREFORE, we DENY the petition. We AFFIRM the 15 May 2014 initially dismissed by the CA Cebu City in its Resolution dated June
18, 2010.7 However, on petitioner's motion for reconsideration with
Resolution and the 14 October 2014 Resolution of the Court of
Appeals in CA-G.R. SP No. 134592. motion to admit amended petition, the CA Cebu City reinstated the
petition, noting that petitioner promptly corrected the procedural
infirmities besetting its petition. Accordingly, the CA Cebu City
SO ORDERED.

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directed the issuance of summons to the respondents.8 It appears that Petitioner also submitted a Verification and Certification of Non-
only respondents Municipality of Kananga and the Philippine National Forum Shopping subscribed and sworn by Punong Barangay Periander
Oil Company-Energy Development Corporation (PNOC-EDC) filed their R. Bañez before the Clerk of Court of Regional Trial Court Branch
respective answers,9 while Ormoc City filed its comment joining 45.14 As proof of identity, Punong Barangay Periander R. Bañez
petitioner and imploring the CA Cebu City to give the latter's submitted his Postal I.D.15 and his Community Tax Certificate.16
amended petition due course.10
The foregoing notwithstanding, the CA Cebu City in its second
However, on November 24, 2011, the CA Cebu City issued its assailed Resolution denied petitioner's motion for reconsideration.
presently assailed Resolution11 dismissing petitioner's amended With this denial, petitioner comes before the Court through the
petition in the following manner: instant petition arguing that its amended petition did not suffer from
procedural infirmities because it in fact submitted a certified true
1. petitioner, a local government unit and juridical entity, failed to copy of the Barangay Council Resolution authorizing then Punong
submit the original of the Resolution of the Barangay Council, which Barangay Isagani R. Bañez to file the amended petition; the latter's
specifically authorized Isagani R. Bañez, the Punong Barangay, to sign identity as duly authorized representative was sufficiently established
the Verification and Certification Against Non-Forum Shopping and to considering that the members of the Barangay Council unanimously
file the instant Amended Petition in behalf of petitioner. There must approved the Resolution; and that subscription before an Assistant
be a Resolution of the Barangay Council authorizing the person to Provincial Prosecutor is allowable.17
make the Certification which must be attached to the Petition. Withal,
the Verification and Certification Against Non-Forum Shopping must By way of comment, the Municipality of Kananga stressed that the
be accompanied by a Barangay Council's Resolution authorizing belated submission of the Certification and Verification of Non-Forum
Isagani R. Bañez to sign the Certification. Moreover, a Certification Shopping will not cure the defect in the certification. Ormoc City, on
not signed by a duly authorized person rendered the instant Petition the other hand, having assumed a stance similar to that of petitioner,
subject to dismissal[;] joins the latter in seeking that the assailed CA Cebu City's Resolutions
be reversed in the interest of justice. PNOC, as represented by the
2. there was no competent evidence regarding the identity of Office of the Solicitor General (OSG), on the other hand, was excused
petitioner's representative on the attached Verification and from further participating in the instant petition for lack of material
Certification Against Non-Forum Shopping, as required by Section 12, interest to the case.
Rule II of the 2004 Rules on Notarial Practice; and
Plainly, the issue to be resolved is whether the identified infirmities
3. the Verification and Certification Against Non-Forum Shopping was merit dismissal of petitioner's amended petition.
subscribed and sworn to before an Assistant Provincial Prosecutor.
Ruling of the Court
Accordingly, the [amended petition] for Annulment of Judgment
dated June 18, 2007 is hereby DISMISSED. There is merit in the petition.

SO ORDERED.12 (Italics in the original) Petitioner's amended petition seeking to annul what it perceived to be
an illegal compromise concerning a boundary dispute between Ormoc
Petitioner moved for reconsideration and, in order to rectify the City and the Municipality of Kananga was dismissed by the CA Cebu
above-identified infirmities, petitioner submitted the original of City essentially due to petitioner's failure to submit the original of the
Barangay Council Resolution No. 50,13 Series of 2011 dated December Barangay Council Resolution authorizing its representative to file the
26, 2011 authorizing then incumbent Punong Barangay Periander R. petition and to sign the requisite Certification and Verification of
Bañez "to sign and file the [amended petition] and to sign its Non-forum Shopping. The CA Cebu City also deems as defective the
Certification and Verification of Non-Forum Shopping as well as to submitted Certification and Verification of Non-forum Shopping for
submit an original copy of this Resolution to [CA Cebu City]."

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lack of proof of identity of the affiant and for having been subscribed The Court had laid down guidelines with respect to the non-
before an official allegedly not authorized to administer oath. compliance with the requirements on or submission of a defective
Verification and Certification of Non-forum Shopping, as follows:
The Court is very much aware of the necessity of submitting a
petition for annulment of judgment that is verified and of submitting 1) A distinction must be made between non-compliance with the
a sworn certification of non-forum shopping as required under Rule requirement on or submission of defective verification, and
47, Section 4.18 Nevertheless, the strict interpretation of the noncompliance with the requirement on or submission of defective
procedural requirements, especially when there has been substantial certification against forum shopping.
compliance with the rules, does not find application in the instant
case. 2) As to verification, non-compliance therewith or a defect therein
does not necessarily render the pleading fatally defective. The court
To begin with, We note that the CA Cebu City itself in its Resolution may order its submission or correction or act on the pleading if the
dated June 18, 2010, had in fact reinstated and gave due course to the attending circumstances are such that strict compliance with the
amended petition (which was initially dismissed also on procedural Rule may be dispensed with in order that the ends of justice may
defects) and even directed the issuance of summons to the be served thereby.
respondents, only to later on regard the very same amended petition
as being fatally defective. 3) Verification is deemed substantially complied with when one who
has ample knowledge to swear to the truth of the allegations in the
Further, the amended petition was in fact accompanied by a certified complaint or petition signs the verification, and when matters alleged
true copy of the Barangay Resolution authorizing then Punong in the petition have been made in good faith or are true and correct.
Barangay Isagani R. Bañez to file the amended petition. Hence, at the
time the amended petition was filed, then Punong Barangay Isagani R. 4) As to certification against forum shopping, non-compliance
Bañez had sufficient authority to file the amended petition. therewith or a defect therein, unlike in verification, is generally not
curable by its subsequent submission or correction thereof, unless
What is lacking, however, is the authority coming from the Barangay there is a need to relax the Rule on the ground of "substantial
Council for Punong Barangay Isagani R. Bañez to likewise execute the compliance" or presence of "special circumstances or compelling
Certification and Verification of Non-forum shopping. Expectedly, reasons."
when the petitioner is a juridical person, the certification is to be
executed by a natural person to whom the power to execute such 5) The certification against forum shopping must be signed by all the
certification has been validly conferred by the corporate board of plaintiffs or petitioners in a case; otherwise, those who did not sign
directors and/or duly authorized officers and agents. Thus, generally, will be dropped as parties to the case. Under reasonable or justifiable
a petition is dismissible if the certification submitted was circumstances, however, as when all the plaintiffs or petitioners share
unaccompanied by proof of the signatory's authority.19 a common interest and invoke a common cause of action or defense,
the signature of only one of them in the certification against forum
Petitioner attempted to cure this defect by submitting with its motion shopping substantially complies with the Rule.
for reconsideration a new Barangay Council Resolution issued in favor
of the succeeding Punong Barangay Periander R. Bañez and a new 6) Finally, the certification against forum shopping must be executed
Certification and Verification of Non-forum Shopping executed by the by the party-pleader, not by his counsel. If, however, for reasonable or
latter before the Regional Trial Court Branch Clerk of Court with justifiable reasons, the party-pleader is unable to sign, he must
accompanying Postal I.D. as competent proof of identity. The execute a Special Power of Attorney designating his counsel of record
question therefore is whether such belated submission of the to sign on his behalf.20 (Emphasis ours)
Barangay Council Resolution and the Certification and Verification of
Non-forum Shopping cured the defect. By jurisprudence, the Court has likewise allowed the belated filing of
the certification on the justification that such act constitutes

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substantial compliance. In Mediserv, Inc. v. Court of Appeals, et not prohibit substantial compliance with the rules under justifiable
al.,21 the Court held that the failure to submit proof of the circumstances, as also in this case.
representative's authority to sign the verification/certification on non-
forum shopping on the corporation's behalf was rectified when the WHEREFORE, the petition is GRANTED. The Resolution dated
required document was subsequently submitted to the CA. As cited November 24, 2011 and Resolution dated September 27, 2012 of the
in Mediserv, the Court in Uy v. Land Bank of the Court of Appeals in CA-G.R. CEB SP No. 02691 are REVERSED and SET
Philippines,22 reinstated a petition on the ground of substantial ASIDE. The case is REINSTATED and REMANDED to the Court of
compliance even though the verification and certification were Appeals for proper disposition.
submitted only after the petition had already been originally
dismissed. So too, in Havtor Management Phils. Inc. v. SO ORDERED.
NLRC,23 likewise cited in Mediserv, the Court acknowledged
substantial compliance when the lacking secretary's certificate was
submitted by the petitioners as an attachment to the motion for G.R. No. 200134 August 15, 2012
Roberto Otero, Petitioner,
reconsideration seeking reversal of the original decision dismissing
the petition for its earlier failure to submit such requirement. Vs.
Roger Tan, Respondent.
In this case, petitioner submitted the original of the Barangay Council
Resolution authorizing the succeeding Punong Barangay Periander R. REYES, J.:
Bañez to file the amended petition and to sign the certification as an
attachment to its motion for reconsideration. In line with the Before this Court is a petition for review on certiorari under Rule 45
foregoing jurisprudence, We find that this act constitutes substantial of the Rules of Court seeking to annul and set aside the
compliance. That the Barangay Council Resolution authorized a Decision1 dated April 29, 2011 rendered by the Court of Appeals (CA)
different representative to file and pursue the petition for annulment in CA-G.R. SP No. 02244, which affirmed the Judgment 2 dated
and to sign the certification could not be cause for the denial of the December 28, 2007 issued by the Regional Trial Court (RTC), Cagayan
motion for reconsideration as such was necessitated by the fact that de Oro City, Branch 23 in Civil Case No. 2007-90.
there was a change in the leadership of the Barangay brought about
by the supervening elections while the amended petition was pending The Antecedent Facts
resolution.
A Complaint3 for collection of sum of money and damages was filed
In any case, the Court finds that the ends of substantive justice is by Roger Tan (Tan) with the Municipal Trial Court in Cities (MTCC),
better served by the resolution of the issue on whether or not there Cagayan de Oro City on July 28, 2005 against Roberto Otero (Otero).
was a valid compromise concerning the boundary dispute between Tan alleged that on several occasions from February 2000 to May
Ormoc City and the Municipality of Kananga, rather than dismiss the 2001, Otero purchased on credit petroleum products from his Petron
same on procedural technicality. outlet in Valencia City, Bukidnon in the aggregate amount of ₱
270,818.01. Tan further claimed that despite several verbal demands,
As the Court in Fernandez v. Villegas24 held: Otero failed to settle his obligation.

Similar to the rules on verification, the rules on forum shopping are Despite receipt of the summons and a copy of the said complaint,
designed to promote and facilitate the orderly administration of which per the records of the case below were served through his wife
justice; hence, it should not be interpreted with such absolute Grace R. Otero on August 31, 2005, Otero failed to file his answer
literalness as to subvert its own ultimate and legitimate objectives. with the MTCC.
The requirement of strict compliance with the provisions on
certification against forum shopping merely underscores its On November 18, 2005, Tan filed a motion with the MTCC to declare
mandatory nature to the effect that the certification cannot altogether Otero in default for his failure to file his answer. Otero opposed Tan’s
be dispensed with or its requirements completely disregarded. It does motion, claiming that he did not receive a copy of the summons and a

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copy of Tan’s complaint. Hearing on the said motion was set on of the summons together with a copy of the Complaint and its
January 25, 2006, but was later reset to March 8, 2006, Otero corresponding annexes on August 31, 2005, per Return of Service
manifesting that he only received the notice therefor on January 23, made by Angelita N. Bandoy, Process Server of OCC-MTCC of Davao
2006. The hearing on March 8, 2006 was further reset to April 26, City. He was furnished with a copy of the Motion to Declare
2006 since the presiding judge was attending a convention. Otero Defendant in Default on November 18, 2005, per Registry Receipt No.
failed to appear at the next scheduled hearing, and the MTCC issued 2248 which was received by the defendant. Instead of filing his
an order declaring him in default. A copy of the said order was sent answer or any pleading to set aside the Order of default, he filed his
to Otero on May 9, 2006. Tan was then allowed to present his Comment to the Motion to Declare Defendant in Default of which
evidence ex parte. plaintiff filed his Rejoinder to Defendant’s Comment.

Tan adduced in evidence the testimonies of Rosemarie Doblado and The case was set for hearing on January 23, 2006, but defendant
Zita Sara, his employees in his Petron outlet who attended Otero when through counsel sent a telegram that he only received the notice on
the latter made purchases of petroleum products now the subject of the day of the hearing thereby he was unable to appear due to his
the action below. He likewise presented various statements of previous scheduled hearings. Still, for reasons only known to him,
account4 showing the petroleum products which Otero purchased defendant failed to lift the Order of Default.
from his establishment. The said statements of account were
prepared and checked by a certain Lito Betache (Betache), apparently The hearing on January 23, 2006 was reset on March 8, 2006 and
likewise an employee of Tan. again reset on April 26, 2006 by agreement of counsels x x x.

The MTCC Decision It is not therefore correct when defendant said that he was deprived
of due process.7
On February 14, 2007, the MTCC rendered a Decision5 directing Otero
to pay Tan his outstanding obligation in the amount of ₱ 270,818.01, Otero sought reconsideration of the Judgment dated December 28,
as well as attorney’s fees and litigation expenses and costs in the 2007 but it was denied by the RTC in its Order 8 dated February 20,
amounts of ₱ 15,000.00 and ₱ 3,350.00, respectively. The MTCC 2008.
opined that Otero’s failure to file an answer despite notice is a tacit
admission of Tan’s claim. Otero then filed a petition for review9 with the CA asserting that both
the RTC and the MTCC erred in giving credence to the pieces of
Undeterred, Otero appealed the MTCC Decision dated February 14, evidence presented by Tan in support of his complaint. Otero
2007 to the RTC, asserting that the MTCC’s disposition is factually explained that the statements of account, which Tan adduced during
baseless and that he was deprived of due process. the ex parte presentation of his evidence, were prepared by a certain
Betache who was not presented as a witness by Tan. Otero avers that
Ruling of the RTC the genuineness and due execution of the said statements of account,
being private documents, must first be established lest the said
On December 28, 2007, the RTC rendered a Judgment 6 affirming the documents be rendered inadmissible in evidence. Thus, Otero asserts,
MTCC Decision dated February 14, 2007. The RTC held that the the MTCC and the RTC should not have admitted in evidence the said
statements of account that were presented by Tan before the MTCC statements of account as Tan failed to establish the genuineness and
were overwhelming enough to prove that Otero is indeed indebted to due execution of the same.
Tan in the amount of ₱ 270,818.01. Further, brushing aside Otero’s
claim of denial of due process, the RTC pointed out that: Ruling of the CA

As to the second assignment of error, suffice to say that as borne out On April 29, 2011, the CA rendered the assailed Decision10 which
by the record of the case, defendant-appellant was given his day in denied the petition for review filed by Otero. In rejecting Otero’s
Court contrary to his claim. His wife, Grace R. Otero received a copy allegation with regard to the genuineness and due execution of the

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statements of account presented by Tan, the CA held that any defense thus, already barred from raising the alleged infirmity in the
which Otero may have against Tan’s claim is already deemed waived presentation of the statements of account.
due to Otero’s failure to file his answer. Thus:
We do not agree.
Otero never denied that his wife received the summons and a copy of
the complaint. He did not question the validity of the substituted A defendant who fails to file an answer loses his standing in court.
service. Consequently, he is charged with the knowledge of Tan’s
monetary claim. Section 1, Rule 9 of the Rules of Court explicitly The effect of a defendant’s failure to file an answer within the time
provides that defenses and objections not pleaded are deemed allowed therefor is primarily governed by Section 3, Rule 9 of the
waived. Moreover, when the defendant is declared in default, the Rules of Court, viz:
court shall proceed to render judgment granting the claimant such
relief as his pleading may warrant.
Sec. 3. Default; declaration of. – If the defending party fails to answer
within the time allowed therefor, the court shall, upon motion of the
Due to Otero’s failure to file his Answer despite being duly served claiming party with notice to the defending party, and proof of such
with summons coupled with his voluntary appearance in court, he is failure, declare the defending party in default. Thereupon, the court
deemed to have waived whatever defenses he has against Tan’s claim. shall proceed to render judgment granting the claimant such relief as
Apparently, Otero is employing dilatory moves to defer the payment his pleading may warrant, unless the court in its discretion requires
of his obligation which he never denied.11 (Citation omitted) the claimant to submit evidence. Such reception of evidence may be
delegated to the clerk of court. x x x (Emphasis ours)
Otero’s Motion for Reconsideration12 was denied by the CA in its
Resolution13 dated December 13, 2011. A defendant who fails to file an answer may, upon motion, be
declared by the court in default. Loss of standing in court, the
Hence, the instant petition. forfeiture of one’s right as a party litigant, contestant or legal
adversary, is the consequence of an order of default. A party in
Issues default loses his right to present his defense, control the proceedings,
and examine or cross-examine witnesses. He has no right to expect
Essentially, the fundamental issues to be resolved by this Court are that his pleadings would be acted upon by the court nor may be
the following: first, whether Otero, having been declared in default by object to or refute evidence or motions filed against him.14
the MTCC, may, in the appellate proceedings, still raise the failure of
Tan to authenticate the statements of account which he adduced in A defendant who was declared in default may nevertheless appeal
evidence; and second, whether Tan was able to prove the material from the judgment by default, albeit on limited grounds.
allegations of his complaint.
Nonetheless, the fact that a defendant has lost his standing in court
The Court’s Ruling for having been declared in default does not mean that he is left sans
any recourse whatsoever. In Lina v. CA, et al.,15 this Court enumerated
The petition is denied. the remedies available to party who has been declared in default, to
wit:
First Issue: Authentication of the Statements of Account
a) The defendant in default may, at any time after discovery
The CA, in denying the petition for review filed by Otero, held that thereof and before judgment, file a motion, under oath, to set
since he was declared in default by the MTCC, he is already deemed to aside the order of default on the ground that his failure to answer
have waived whatever defenses he has against Tan’s claim. He is, was due to fraud, accident, mistake or excusable neglect, and that
he has meritorious defenses; (Sec 3, Rule 18)

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 b) If the judgment has already been rendered when the defendant right which he lost in the trial court when he was declared in default,
discovered the default, but before the same has become final and and which he failed to have vacated. In this case, the petitioner
executory, he may file a motion for new trial under Section 1(a) of sought the modification of the decision of the trial court based on the
Rule 37; evidence submitted by it only in the Court of Appeals.20 (Citations
omitted and emphasis ours)
c) If the defendant discovered the default after the judgment has
become final and executory, he may file a petition for relief under Here, Otero, in his appeal from the judgment by default, asserted that
Section 2 of Rule 38; and Tan failed to prove the material allegations of his complaint. He
contends that the lower courts should not have given credence to the
d) He may also appeal from the judgment rendered against him as statements of account that were presented by Tan as the same were
contrary to the evidence or to the law, even if no petition to set not authenticated. He points out that Betache, the person who
aside the order of default has been presented by him. (Sec. 2, Rule appears to have prepared the said statements of account, was not
41)16 (Emphasis ours) presented by Tan as a witness during the ex parte presentation of his
evidence with the MTCC to identify and authenticate the same.
Indeed, a defending party declared in default retains the right to Accordingly, the said statements of account are mere hearsay and
appeal from the judgment by default. However, the grounds that may should not have been admitted by the lower tribunals as evidence.
be raised in such an appeal are restricted to any of the following:
first, the failure of the plaintiff to prove the material allegations of Thus, essentially, Otero asserts that Tan failed to prove the material
the complaint; second, the decision is contrary to law; and third, the allegations of his complaint since the statements of account which he
amount of judgment is excessive or different in kind from that presented are inadmissible in evidence. While the RTC and the CA, in
prayed for.17 In these cases, the appellate tribunal should only resolving Otero’s appeal from the default judgment of the MTCC,
consider the pieces of evidence that were presented by the plaintiff were only required to examine the pieces of evidence that were
during the ex parte presentation of his evidence. presented by Tan, the CA erred in brushing aside Otero’s arguments
with respect to the admissibility of the said statements of account on
A defendant who has been declared in default is precluded from the ground that the latter had already waived any defense or
raising any other ground in his appeal from the judgment by default objection which he may have against Tan’s claim.
since, otherwise, he would then be allowed to adduce evidence in his
defense, which right he had lost after he was declared in Contrary to the CA’s disquisition, it is not accurate to state that
default.18 Indeed, he is proscribed in the appellate tribunal from having been declared in default by the MTCC, Otero is already
adducing any evidence to bolster his defense against the plaintiff’s deemed to have waived any and all defenses which he may have
claim. Thus, in Rural Bank of Sta. Catalina, Inc. v. Land Bank of the against Tan’s claim.
Philippines,19 this Court explained that:
While it may be said that by defaulting, the defendant leaves himself
It bears stressing that a defending party declared in default loses his at the mercy of the court, the rules nevertheless see to it that any
standing in court and his right to adduce evidence and to present his judgment against him must be in accordance with the evidence
defense. He, however, has the right to appeal from the judgment by required by law. The evidence of the plaintiff, presented in the
default and assail said judgment on the ground, inter alia, that the defendant’s absence, cannot be admitted if it is basically incompetent.
amount of the judgment is excessive or is different in kind from that Although the defendant would not be in a position to object,
prayed for, or that the plaintiff failed to prove the material allegations elementary justice requires that only legal evidence should be
of his complaint, or that the decision is contrary to law. Such party considered against him. If the same should prove insufficient to
declared in default is proscribed from seeking a modification or justify a judgment for the plaintiff, the complaint must be dismissed.
reversal of the assailed decision on the basis of the evidence And if a favorable judgment is justifiable, it cannot exceed in amount
submitted by him in the Court of Appeals, for if it were otherwise, he or be different in kind from what is prayed for in the complaint. 21
would thereby be allowed to regain his right to adduce evidence, a

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Thus, in SSS v. Hon. Chaves,22 this Court emphasized that: a private document requires authentication in the manner allowed by
law or the Rules of Court before its acceptance as evidence in court.
We must stress, however, that a judgment of default against the The requirement of authentication of a private document is excused
petitioner who failed to appear during pre-trial or, for that matter, only in four instances, specifically: (a) when the document is an
any defendant who failed to file an answer, does not imply a waiver of ancient one within the context of Section 21, Rule 132 of the Rules of
all of their rights, except their right to be heard and to present Court; (b) when the genuineness and authenticity of an actionable
evidence to support their allegations. Otherwise, it would be document have not been specifically denied under oath by the
meaningless to request presentation of evidence every time the other adverse party; (c) when the genuineness and authenticity of the
party is declared in default. If it were so, a decision would then document have been admitted; or (d) when the document is not being
automatically be rendered in favor of the non-defaulting party and offered as genuine.24
exactly to the tenor of his prayer. The law also gives the defaulting
parties some measure of protection because plaintiffs, despite the The statements of account which Tan adduced in evidence before the
default of defendants, are still required to substantiate their MTCC indubitably are private documents. Considering that these
allegations in the complaint.23 (Citations omitted and emphasis ours) documents do not fall among the aforementioned exceptions, the
MTCC could not admit the same as evidence against Otero without
The statements of account presented by Tan were merely hearsay the required authentication thereof pursuant to Section 20, Rule 132
as the genuineness and due execution of the same were not of the Rules of Court. During authentication in court, a witness
established. positively testifies that a document presented as evidence is genuine
and has been duly executed, or that the document is neither spurious
Anent the admissibility of the statements of account presented by nor counterfeit nor executed by mistake or under duress.25
Tan, this Court rules that the same should not have been admitted in
evidence by the lower tribunals. Here, Tan, during the ex parte presentation of his evidence, did not
present anyone who testified that the said statements of account
Section 20, Rule 132 of the Rules of Court provides that the were genuine and were duly executed or that the same were neither
authenticity and due execution of a private document, before it is spurious or counterfeit or executed by mistake or under duress.
received in evidence by the court, must be established. Thus: Betache, the one who prepared the said statements of account, was
not presented by Tan as a witness during the ex parte presentation of
his evidence with the MTCC.
Sec. 20. Proof of private document. – Before any private document
offered as authentic is received in evidence, its due execution and
authenticity must be proved either: Considering that Tan failed to authenticate the aforesaid statements
of account, the said documents should not have been admitted in
evidence against Otero. It was thus error for the lower tribunals to
a) By anyone who saw the document executed or written; or
have considered the same in assessing the merits of Tan’s Complaint.

b) By evidence of the genuineness of the signature or handwriting of

Second Issue: The Material Allegations of the Complaint
the maker.
In view of the inadmissibility of the statements of account presented
Any other private document need only be identified as that which it is
by Tan, the remaining question that should be settled is whether the
claimed to be.
pieces of evidence adduced by Tan during the ex parte presentation
of his evidence, excluding the said statements of account, sufficiently
A private document is any other writing, deed, or instrument prove the material allegations of his complaint against Otero.
executed by a private person without the intervention of a notary or
other person legally authorized by which some disposition or We rule in the affirmative.
agreement is proved or set forth. Lacking the official or sovereign
character of a public document, or the solemnities prescribed by law,

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In civil cases, it is a basic rule that the party making allegations has Vs.
the burden of proving them by a preponderance of evidence. The Sandiganbayan 5th Division, Republic of the Philippines,
parties must rely on the strength of their own evidence and not upon represented by the Presidential Commission on Good Government
the weakness of the defense offered by their opponent.26 This rule (Pcgg), Respondent.
holds true especially when the latter has had no opportunity to
present evidence because of a default order. Needless to say, the G.R. No. 195795
extent of the relief that may be granted can only be so much as has Republic of the Philippines, represented by the Presidential
been alleged and proved with preponderant evidence required under Commission on Good Government, Petitioner,
Section 1 of Rule 133.27 Vs.
Hon. Sandiganbayan, Palm A Venue Realty and Development
Notwithstanding the inadmissibility of the said statements of Corporation and Palm Avenue Holding Company, Inc., Respondents.
account, this Court finds that Tan was still able to prove by a
preponderance of evidence the material allegations of his complaint PERALTA, J.:
against Otero.
For resolution before the Court are the consolidated cases of G.R. No.
First, the statements of account adduced by Tan during the ex parte 173082 and G.R. No. 195795. In G.R. No. 173082, Palm Avenue
presentation of his evidence are just summaries of Otero's unpaid Holding Co., Inc. and Palm Avenue Realty and Development
obligations, the absence of which do not necessarily disprove the Corporation (the Palm Companies), through a Petition for Certiorari
latter's liability. under Rule 65 of the Rules of Court, seek to annul the Resolutions of
the Sandiganbayan (Fifth Division), promulgated on January 10,
Second, aside from the statements of account, Tan likewise adduced 20031 and June 14, 20062 in Civil Case No. 0035, entitled Republic of
in evidence the testimonies of his employees in his Petron outlet who the Philippines v. Benjamin "Kokoy" Romualdez [in which intervention
testified that Otero, on various occasions, indeed purchased on credit by Trans Middle East (Phil.) Equities, Inc. was allowed]. On the other
petroleum products from the former and that he failed to pay for the hand, the Republic of the Philippines (the Republic), in G.R. No.
same. It bears stressing that the MTCC, the R TC and the CA all gave 195795, via a Petition for Certiorari and Prohibition, with application
credence to the said testimonial evidence presented by Tan and, for temporary restraining order and/or writ of preliminary injunction,
accordingly, unanimously found that Otero still has unpaid prays for the nullification of the Sandiganbayan Resolutions dated
outstanding obligation in favor of Tan in the amount of ₱ 270,818.01. October 21, 20103 and January 11, 20114 rendered in the same case.

Well-established is the principle that factual findings of the trial The factual and procedural antecedents are as follows:
court, when adopted and confirmed by the CA, are binding and
conclusive on this Court and will generally not be reviewed on Through a writ of sequestration dated October 27, 1986, the
appeal.28 The Court sees no compelling reason to depart from the Presidential Commission on Good Government (PCGG) sequestered all
foregoing finding of fact of the lower courts. the assets, properties, records, and documents of the Palm
Companies. Said sequestered assets included 16,237,339 Benguet
WHEREFORE, in consideration of the foregoing disquisitions, the Corporation shares of stock, registered in the name of the Palm
petition is DENIED. The Decision dated April 29, 2011 rendered by Companies. The PCGG had relied on a letter from the Palm
the Court of Appeals in CA-G.R. SP No. 02244 is AFFIRMED. Companies’ Attorney-in-Fact, Jose S. Sandejas, specifically identifying
Benjamin "Kokoy" Romualdez, a known crony of former President
SO ORDERED. Ferdinand E. Marcos, as the beneficial owner of the Benguet
Corporation shares in the Palm Companies’ name.
G.R. No. 173082 August 6, 2014
Palm Avenue Holding Co., Inc., and Palm A Venue Realty and The Republic, represented by the PCGG, filed a complaint with the
Development Corporation, Petitioners, Sandiganbayan docketed as Civil Case No. 0035 but did not initially

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implead the Palm Companies as defendants. However, the January 18, 2007, the Sandiganbayan granted said motion and
Sandiganbayan issued a Resolution dated June 16, 1989 where it ordered the release of the sequestered funds for the purchase of
ordered said companies to be impleaded. The Court subsequently additional shares in Benguet Corporation, and appointed a
affirmed this order to implead in G.R. No. 90667 5 on November 5, comptroller for this purpose. On May 29, 2007, the companies filed a
1991. Pursuant to said order, the Republic filed an amended Motion for Bill of Particulars to direct the Republic to submit a bill of
complaint dated January 17, 1997 and named therein the Palm particulars regarding matters in the amended complaint which were
Companies as defendants. The graft court admitted the amended not alleged with certainty or particularity. On December 21, 2007, the
complaint on October 15, 2001. Republic submitted its bill of particulars. Thereafter, the Palm
Companies filed a motion to dismiss the Republic’s complaint. They
In the meantime, on February 11, 1997, the Palm Companies filed an argued that the bill of particulars did not satisfactorily comply with
Urgent Motion to Lift the Writ of Sequestration, but was denied on the requested details.
January 10, 2003. The dispositive portion of the Sandiganbayan
Resolution reads: On August 5, 2008, the Palm Companies filed a Motion to Order
Payment of Interest on Balance of the Sequestered Funds. Later, on
WHEREFORE, in view of the foregoing: September 29, 2008, the Sandiganbayan granted the Palm Companies’
motion to dismiss and dismissed the Republic’s complaint as to them.
1) The "URGENT MOTION TO NULLIFY WRIT OF SEQUESTRATION" This was affirmed by the Court in a Resolution7 dated January 20,
dated January 28, 1997 filed by movant Trans Middle East (Phils.) 2010 in G.R. No. 189771. The Sandiganbayan also granted the Palm
Equities, Inc., is hereby GRANTED. Accordingly, Sequestration Companies’ Motion to Order Payment of Interest on Balance of the
Order No. 86-0056 dated April 15, 1986 is hereby declared null Sequestered Funds on October 28, 2009.
and void for having been issued by one PCGG Commissioner only
in direct contravention of Section 3 of the PCGG’s own Rules and Thereafter, the Palm Companies filed another motion dated May 14,
Regulations. Conformably, however, with the manifestation of the 2010, this time, to order the PCGG to release all the companies’
movant Trans Middle East (Phils.) Equities, Inc. itself, the Court shares of stock and funds in its custody. The Sandiganbayan then
will not order the return of its shares of stocks sequestered per issued its October 21, 2010 Resolution, granting the companies’
Sequestration Order No. 86-0056 dated April 15, 1986, but orders foregoing motion. The graft court disposed of the case as follows:
that the same, including the interests earned thereon, to be
deposited with the Land Bank of the Philippines in escrow for the WHEREFORE, in view of the foregoing, Palm Avenue Holding
persons, natural or juridical, who shall eventually be adjudged Company, Inc. and Palm Avenue Realty and Development
lawfully entitled thereto. Corporation’s Motion to Order the PCGG to Release to the Palm
Companies all the shares of stocks and funds in their custody that
2) The "URGENT MOTION TOLIFT THE WRIT OF SEQUESTRATION" pertain to the Palm Companies is hereby GRANTED.
dated February 11, 1997 of Palm Avenue Realty and Development
Corporation and Palm Avenue Holdings, Co., Inc. is hereby SO ORDERED.8
DENIED for lack of merit.
Upon denial of the Republic’s motion for reconsideration, it filed the
SO ORDERED.6 petition in G.R. No. 195795.

They filed a Motion for Reconsideration, but the same was likewise In G.R. No. 173082, the Palm Companies present this lone issue to be
denied on June 14, 2006. Hence, the Palm Companies filed the resolved by the Court:
petition in G.R. No. 173082.
[WHETHER OR NOT] RESPONDENT COURT ACTED WITH GRAVE
On September 22, 2006, the Palm Companies filed a Motion to Release ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
Sequestered Funds with the Sandiganbayan. In a Resolution dated DENYING PETITIONERS’ MOTION TO LIFT THE WRIT OF

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SEQUESTRATION NOTWITHSTANDING THE FACT [THAT] SAID WRIT Presidential Commission on Good Government v.
SHOULD BE DEEMED AUTOMATICALLY LIFTED PURSUANT TO Sandiganbayan,12 which remains good law, reiterates the necessity of
SECTION 26, ARTICLE XVIII OF THE 1987 CONSTITUTION FOR the Republic to actually implead corporations as defendants in the
FAILURE TO IMPLEAD PETITIONERS WITHIN THE PERIOD OF SIX (6) complaint, out of recognition for their distinct and separate
MONTHS PRESCRIBED IN THE SAID CONSTITUTION.9 personalities, failure to do so would necessarily be denying such
entities their right to due process.13 Here, the writ of sequestration
The Palm Companies pray for the lifting of the Writ of Sequestration issued against the assets of the Palm Companies is not valid because
against their assets, since they were not impleaded as parties- the suit in Civil Case No. 0035 against Benjamin Romualdez as
defendants in Civil Case No. 0035 within the period prescribed by the shareholder in the Palm Companies is not a suit against the latter.
Constitution. The Court has held, contrary to the assailed Sandiganbayan
Resolution in G.R. No. 173082, that failure to implead these
On the other hand, the Republic, through the PCGG, contends in G.R. corporations as defendants and merely annexing a list of such
No. 195795 that: corporations to the complaints is a violation of their right to due
process for it would be, in effect, disregarding their distinct and
separate personality without a hearing.14 Here, the Palm Companies
THE RESPONDENT COURT COMMITTED GRAVE ABUSE OF
were merely mentioned as Item Nos. 47 and 48, Annex A of the
DISCRETION AMOUNTING TO EXCESS OF JURISDICTION IN
Complaint, as among the corporations where defendant Romualdez
GRANTING THE PALM COMPANIES’ MOTION TO RELEASE ALL SHARES
owns shares of stocks. Furthermore, while the writ of sequestration
OF STOCK AND FUNDS IN THE CUSTODY OF THE PCGG.10 The
was issued on October 27, 1986, the Palm Companies were impleaded
Republic argues that the dismissal of the complaint as to the Palm
in the case only in 1997, or already a decade from the ratification of
Companies is not tantamount to a declaration that their sequestered
the Constitution in 1987, way beyond the prescribed period.
assets are no longer ill-gotten.
The argument that the beneficial owner of these corporations was,
The issues presented being essentially interrelated, the Court shall
anyway, impleaded as party-defendant can only be interpreted as a
make a simultaneous discussion.
tacit admission of the failure to file the corresponding judicial action
against said corporations pursuant to the constitutional mandate.
Section 26, Article XVIII of the 1987 Constitution provides: Whether or not the impleaded defendant in Civil Case No. 0035 is
indeed the beneficial owner of the Palm Companies is a matter which
A sequestration or freeze order shall be issued only upon showing of the PCGG merely assumes and still has to prove in said case.15 The
a prima facie case. The order and the list of the sequestered or frozen sequestration order issued against the Palm Companies is therefore
properties shall forthwith be registered with the proper court. For deemed automatically lifted due to the failure of the Republic to
orders issued before the ratification of this Constitution, the commence the proper judicial action or to implead them therein
corresponding judicial action or proceeding shall be filed within six within the period under the Constitution. However, the lifting of the
months from its ratification. For those issued after such ratification, writ of sequestration will not necessarily be fatal to the main case
the judicial action or proceeding shall be commenced within six since the same does not ipso facto mean that the sequestered
months from the issuance thereof. properties are, in fact, not ill gotten. The effect of the lifting of the
sequestration will merely be the termination of the government’s role
The sequestration or freeze order is deemed automatically lifted if no as conservator. In other words, the PCGG may no longer exercise
judicial action or proceeding is commenced as herein provided.11 administrative or housekeeping powers, and its nominees may no
longer vote the sequestered shares to enable them to sit in the
The aforesaid provision mandates the Republic to file the corporate board of the subject company.16
corresponding judicial action or proceedings within a six-month
period (from its ratification on February 2, 1987)in order to maintain The Republic, through the PCGG, may argue that it has substantially
sequestration, non-compliance with which would result in the complied with the Constitutional requirements to support its
automatic lifting of the sequestration order. The Court’s ruling in sequestration order when it filed an amended complaint which

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impleaded the Palm Companies, and which was subsequently deficient inasmuch as the question of what are the alleged illegally
admitted by the Sandiganbayan. Even so, a careful perusal of the acquired funds or properties of the Palm Avenue Companies which
records reveals the existence of legal and factual grounds to warrant they are liable to return, remains unanswered, a product of
the lifting of the writ of sequestration against the assets of the Palm uncertainty.
Companies.
In sum, the allegations contained in plaintiff Republic’s Bill of
Since the Republic did not originally include the Palm Companies in Particulars are incomplete and indefinite as they merely express
Civil Case No. 0035, the Sandiganbayan issued a Resolution ordering conclusions of law and presumptions unsupported by factual
said companies to be impleaded, which was affirmed by the Court in premises.
G.R. No. 90667 on November 5, 1991. The Court declared in said case
that the Palm Companies are real parties-in-interest in Civil Case No. Furthermore, the details desired by defendants Palm Avenue
0035, because they still appear to be the registered owners of the Companies in their motion for bill of particulars, such as the acts
remaining disputed shares. That Romualdez is considered as their constituting their involvement in the Marcoses’ alleged scheme to
true or real owner is just a claim that still needs to be proved in pillage the nation’s wealth, the alleged properties which they
court.17 Section 2, Rule 3 of the Rules of Court states: supposedly acquired illegally and therefore should return to the
government, and other relevant facts, are not evidentiary in nature.
Sec. 2. Parties in interest. – A real party-in-interest is the party who On the contrary, those particulars are material facts that should be
stands to be benefited or injured by the judgment in the suit, or the clearly and definitely averred in the complaint in order that the
party entitled to the avails of the suit. Unless otherwise authorized by defendants may, in fairness, be informed of the claims against them
law or these Rules, every action must be prosecuted or defended in to the end that they may be prepared to meet the issues at trial.
the name of the real party-in-interest.
In view, therefore, of plaintiff Republic’s failure to file the proper bill
This provision has two requirements:1) to institute an action, the of particulars which would completely amplify the charges against
plaintiff must be the real party-in-interest; and 2) the action must be defendant Palm Avenue Companies, and applying the above quoted
prosecuted in the name of the real party-in-interest. Interest within ruling of the High Court in the Virata case, this Court deems it just
the meaning of the Rules of Court means material interest or an and proper to order the dismissal of the Third Amended Complaint in
interest in issue to be affected by the decree or judgment of the case, so far as the charges against the Palm Avenue Companies are
as distinguished from mere curiosity about the question involved. concerned.
One having no material interest to protect cannot invoke the
jurisdiction of the court as the plaintiff in an action. When the Finally, we sustain defendant-movants’ argument that the failure of
plaintiff is not the real party-in-interest, the case is dismissible on the the plaintiff to sufficiently provide the ultimate and material facts
ground of lack of cause of action. they required in their motion for bill of particulars, makes the third
amended complaint dismissible for failure to state a cause of action.18
Pursuant to said order, the Republic filed an amended complaint
which named the Palm Companies as defendants. Thereafter, the Simple justice demands that the Palm Companies must know what
companies filed a Motion for Bill of Particulars for the Republic to the complaint against them is all about. The law requires no less.In
clarify certain matters in its amended complaint. Upon submission of the similar case of Virata v. Sandiganbayan,19 petitioner Virata filed a
the bill of particulars, the Palm Companies filed a motion to dismiss motion for a bill of particulars, asserting that the allegations against
the Republic’s complaint. Later, the Sandiganbayan, sustained by the him are vague and are not averred with sufficient definiteness as to
Court in G.R. No. 189771, granted said motion to dismiss. The enable him to effectively prepare his responsive pleading. The Court
Sandiganbayan thus pronounced: held therein that a complaint must contain the ultimate facts
constituting plaintiff's cause of action. A cause of action has the
Clearly, as in the previously discussed paragraphs, the above answers following elements: (1) a right in favor of the plaintiff; (2) an
set forth by the plaintiff in its Bill of Particulars are indefinite and obligation on the part of the named defendant to respect such right;

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and (3) an act or omission on the part of such defendant violative of The Republic cannot simply rely on the presumption that the PCGG
the right of the plaintiff or constituting a breach of the obligation of has acted pursuant to law and based on prima facie evidence, for the
the defendant to the plaintiff. As long as the complaint contains these same will undermine the basic constitutional principle that public
three elements, a cause of action exists. Although the allegations officers and employees must at all times be accountable to the
therein may be vague, dismissal of the action is not the proper people. Indeed, sequestration is an extraordinary and harsh remedy.
remedy because the defendant may ask for more particulars. As such, As such, it should be confined to its lawful parameters and exercised
a party may move for a more definite statement or for a bill of with due regard to the requirements of fairness, due process, and
particulars of any matter which is not averred with sufficient justice.22 While the Court acknowledges the Government's admirable
definiteness or particularity. This is to enable him to properly prepare efforts to recover ill-gotten wealth allegedly taken by the
his responsive pleading or to prepare for trial. 20 The Court in said corporations, it cannot, however, choose to tum a blind eye to the
case found that there were certain matters in the allegations which demands of the law, justice, and faimess.23
lacked in substantial particularity. They were broad and definitely
vague which required specifications in order that Virata could WHEREFORE, in view of the foregoing, the petition in G.R. No. 173082
properly define the issues and formulate his defenses. The two bills is GRANTED. The Resolutions of the Sandiganbayan (Fifth Division)
of particulars filed by the Republic were ruled to have failed in promulgated on January 10, 2003 and June 14, 2006 in Civil Case No.
properly amplifying the charges leveled against Virata because, not 0035 are REVERSED AND SET ASIDE, and the writ of sequestration
only are they mere reiteration or repetition of the allegations set forth against the assets and properties of Palm A venue Holding Co., Inc.
in the expanded Second Amended Complaint, but, to the large extent, and Palm Avenue Realty and Development Corporation is
they contain vague, immaterial and generalized assertions which are consequently LIFTED. The petition in G.R. No. 195795 is DISMISSED
inadmissible under our procedural rules. As such, for failure of the for lack of merit. The Sandiganbayan Resolutions dated October 21,
Republic to obey the Court's directive and the Sandiganbayan's order 2010 and January 11, 2011 are hereby AFFIRMED.
to file the proper bill of particulars which would completely amplify
the charges against Virata, the Court deemed it just and proper to SO ORDERED.
order the dismissal of the expanded Second Amended Complaint,
insofar as the charges against Virata are concerned. The Court relied
on Section 3, Rule 17 of the Rules of Court, which provides that:

Sec. 3. Failure to prosecute. — If plaintiff fails to appear at the time of REMREV WEEK 4 - MIDTERMS
the trial, or to prosecute his action for an unreasonable length of
time, or to comply with these rules or any order of the court, the
action may be dismissed upon motion of the defendant or upon the G.R. No. 191616
Francis C. Cervantes, Petitioner,
court's own motion. This dismissal shall have the effect of an
adjudication upon the merits, unless otherwise provided by court.21 Vs.
City Service Corporation And Valentin Prieto, Jr., Respondents.
Similarly, the Republic in the case at bar failed to file a proper bill of
particulars which would completely clarify and amplify the charges PERALTA, J.:
against the Palm Companies. For said failure to comply with the graft
court's order to file the required bill of particulars that would This is a Petition for Review on Certiorari under Rule 45 of the
completely and fully inform the Palm Companies of the charges Revised Rules of Court filed by petitioner Francis Cervantes assailing
against them, the amended complaint impleading said companies the Resolutions of the Court of Appeals (CA), dated October 30,
necessarily failed to state a cause of action, warranting the dismissal 2009 1 and March 11, 20102 in CA-G.R. SP No. 111037, which
of the case as to them. By the dismissal of the case as against the dismissed petitioner's petition for certiorari for having been filed out
Palm Companies, there is ipso facto no more writ of sequestration to of time and denied the petitioner's motion for reconsideration,
speak of. respectively.

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The instant petition stemmed from a Complaint for illegal dismissal WHETHER OR NOT THE HONORABLE COURT OF APPEALS
dated December 19, 2007 filed before the National Labor Relations COMMITTED AN ERROR OF LAW FOR RECKONING THE PERIOD FOR
Commission (NLRC) by petitioner Francis C. Cervantes against FILING A PETITION FOR CERTIORARI UNDER RULE 65 FROM RECEIPT
respondents City Service Corporation and/or Valentin Prieto, Jr. for OF THE ASSAILED RESOLUTION OF THE NLRC DATED JULY 22, 2009
illegal dismissal, underpayment of salaries/wages, overtime pay,
holiday pay, holiday premium, rest day premium, service incentive WHETHER OR NOT THE COURT OF APPEALS COMMITTED AN ERROR
leave, separation pay, ECOLA, moral and exemplary damages, and OF LAW FOR RULING THAT THE SAID PETITION SHOULD HA VE BEEN
attorney's fees. DISMISSED ANYWAY BECAUSE PETITIONER FAILED TO ATTACH
COPIES OF RESPONDENT'S REPLY MEMORANDUM AND COMMENT TO
On June 30, 2008, the Labor Arbiter, in NLRC-NCR-12-14080-07, THE MOTION FOR RECONSIDERATION FILED WITH THE NLRC; AND
dismissed the complaint for lack of merit. It found that it was
Cervantes who refused to work after he was transferred to another WHETHER OR NOT THE COURT OF APPEALS COMMITTED AN ERROR
client of City Service. The Labor Arbiter stressed that employees of OF LAW THAT THE NLRC DID NOT COMMIT GRAVE ABUSE OF
local manpower agencies, which are assigned to clients, do not DISCRETION FOR SUSTAINING THE DECISION OF THE LABOR
become employees of the client. ARBITER THAT PETITIONER WAS NOT ILLEGALLY DISMISSED.

Cervantes appealed the Labor Arbiter's decision, but was denied in a Procedurally, petitioner insists that he filed the petition
Resolution dated February 5, 2008. Undaunted, Cervantes moved for for certiorari on time, which should be reckoned from the moment
reconsideration, but was denied anew in a Resolution3 dated July 22, his counsel was informed about the Resolution denying his motion
2009. for reconsideration, and not from the date his mother received a copy
of the NLRC Resolution.
Thus, on October 6, 2009, Cervantes, through counsel Atty. Angelito
R. Villarin, filed before the CA a Petition for Certiorarz4 under Rules The petition is partly meritorious.
65 of the Rules of Court, alleging grave abuse of discretion amounting
to lack or · In practice, service means the delivery or communication of a
pleading, notice or some other paper in a case, to the opposite party
excess of jurisdiction on the part of the NLRC in affirming the so as to charge him with receipt of it and subject him to its legal
assailed Resolutions dated February 9, 2009 and July 22, 2009 which effect. The purpose of the
dismissed Cervantes' complaint for illegal dismissal and denied his
motion for reconsideration, respectively. rules on service is to make sure that the party being served with the
pleading, order or judgment is duly informed of the same so that he
In the assailed Resolution5 dated October 30, 2009, the CA dismissed can take steps to protect his interests; i.e., enable a party to file an
Cervantes' petition for certiorari for having been filed out of time. appeal or apply for other appropriate reliefs before the decision
The appellate court argued that, by petitioner's admission, his mother becomes final. 7
received the assailed Resolution of the NLRC denying his motion for
reconsideration on July 30, 2009. Thus, counting sixty (60) days The rule is –
therefrom, petitioner had only until September 28, 2009 within which
to file the petition. However, the petition for certiorari was filed only
where a party appears by attorney in an action or proceeding in a
on October 7, 2009, or nine (9) days late.
court of record, all notices required to be given therein must be given
to the attorney of record; and service of the court's order upon any
Cervantes moved for reconsideration, but was denied in person other
Resolution6 dated March 11, 2010. Thus, the instant petition for
review on certiorari raising the following issues:
than the counsel of record is not legally effective and binding upon
the party, nor may it start the corresponding reglementary period for

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the subsequent procedural steps that may be taken by the attorney. Also, in Ginete v. Sunrise Manning Agency, et al., 10 the Court held that
Notice should be made upon the counsel of record at his exact given "the period for filing a petition for certiorari should be reckoned from
address, to which notice of all kinds emanating from the court should the time the counsel of record received a copy of the Resolution
be sent in the absence of a proper and adequate notice to the court of denying the motion for reconsideration." 11 The Court further clarified
a change of address. that the period or manner of "appeal" from the NLRC to the Court of
Appeals is governed by Rule 65, pursuant to the ruling of the Court in
When a party is represented by counsel of record, service of orders the case of St. Martin Funeral
and notices must be made upon said attorney; and notice to the client
and to any other lawyer, not the counsel of record, is not notice in Homes v. NLRC12 in light of Section 4 of Rule 65, as amended, which
law.8 states that the "petition may be filed not later than sixty (60) days
from notice of the judgment, or resolution sought to be assailed."
The NLRC Rules governing the issuance and service of notices and
resolutions is, likewise, no different: The Court further expounded therein, to wit:

SECTION 4. SERVICE OF NOTICES, RESOLUTIONS, ORDERS AND Corollarily, Section 4, Rule III of the New Rules of Procedure of the
DECISIONS. - a) Notices and copies of resolutions or orders, shall be NLRC expressly mandates that "(F)or the purpose(s) of computing the
served personally upon the parties by the bailiff or duly authorized period of appeal, the same shall be counted from receipt of such
public officer within three (3) days from his/her receipt thereof or by decisions, awards, or orders by the counsel of record. "Although this
registered mail or by private courier; rule explicitly contemplates an appeal before tile Labor Arbiter and tile
NLRC, we do not see any cogent reason why tile same rule should not
b) In case of decisions and final awards, copies thereof shall be apply to petitions for certiorari filed with the Court of Appeals from
served on both parties and their counsel or representative by decisions of the NLRC. This procedure is in line with the established
registered mail or by private courier; Provided that, in cases rule that notice to counsel is notice to party and when a party is
where a party to a case or his/her counsel on record personally represented by counsel, notices should be made upon the counsel of
seeks service of the decision upon inquiry thereon, service to said record at his given address to which notices of all kinds emanating
party shall be deemed effected as herein provided. Where parties from the court should be sent. It is to be noted also that Section 7 of
are numerous, service shall be made on counsel and upon such the NLRC Rules of Procedure provides that "(A)ttorneys and other
number of complainants, as may be practicable and shall representatives of parties shall have authority to bind their clients in
be considered substantial compliance with Article 224 (a) of the all matters of procedure"' a provision which is similar to Section 23,
Labor Code, as amended. For purposes of appeal, the period Rule 138 of the Rules of Court. More importantly, Section 2, Rule 13
shall be counted from receipt of such decisions, resolutions, or of the 1997 Rules of Civil Procedure analogously provides that if any
orders by the counsel or representative of record. party has appeared by counsel, service upon him shall be made upon
his counsel. 13
c) The bailiff or officer serving the notice, order, or resolution
shall submit his/her return within two (2) days from date of In Bello v. NLRC, 14 citing anew Ginete v. Sunrise Manning Agency, et
service thereof, stating legibly in his/her return his/her name, the al., 15 the Court held that "the period for filing a petition
names of the persons served and the date of receipt, which return for certiorari should be reckoned from the time the counsel of record
shall be immediately attached and shall form part of the records received a copy of the
of the case. In case of service by registered mail or by private
courier, the name of the addressee and the date of receipt of the Resolution denying the motion for reconsideration." 16

notice, order or resolution shall be written in the return card or in

the proof of service issued by the private courier. If no service was Thus, based on the foregoing, while in cases of decisions and final
effected, the reason thereof shall be so stated. 9 awards, copies thereof shall be served on both parties and their
counsel/representative by registered mail, for purposes of appeal,

Page 98 of 172
however, the period shall be counted from receipt of such decisions, reassigned him to Mercury Drug Fairview which he refused to accept.
resolutions, or orders by the counsel or representative of record. Despite notices requiring him to report back to work, petitioner
refused to heed. Considering that it was petitioner who went on
In the instant case, it is not disputed that during the NLRC absence without official leave (AWOL), the same negates the allegation
proceedings, petitioner was represented by counsel, Atty. Romeo S. of illegal dismissal.
Occena, as in fact the NLRC albeit belated, furnished a copy of its July
29, 2009 Resolution to Atty. Occena on November 19, 2009. WHEREFORE, premises considered, the petition is DENIED. The NLRC
Petitioner's several motions during the proceedings before the NLRC Resolutions dated February 9, 2009 and July 22, 2009 are AFFIRMED.
were likewise all signed by Atty. Occena as counsel. Consequently,
following the policy that the period to appeal shall be counted from SO ORDERED.
receipt of resolution by the counsel of record, considering that
petitioner is represented by a counsel, the latter is considered to have G.R. No. 194262, February 28, 2018
received notice of the NLRC Resolution dated July 22, 2009 on Bobie Rose D. V. Frias, as represented by Marie Regine F.
November 19, 2009, the date when his representative and counsel, Fujita, Petitioner,
Atty. Occena was served notice thereof and not on July 30, 2009, or V.
the date when petitioner's mother received the same decision. Rolando F. Alcayde, Respondent.

Accordingly, the 60-day period for filing the petition for certiorari TIJAM, J.:
with the CA should be counted from the receipt by the petitioner's
counsel of a copy of the NLRC Decision dated July 22, 2009 on
"Due process dictates that jurisdiction over the person of a defendant
November 19, 2009. It should be stressed that the NLRC sent the
can only be acquired by the courts after a strict compliance with the
notice of Resolution to petitioner's counsel only on November 19,
rules on the proper service of summons."1
2009. While there was a notice of Resolution dated July 22, 2009, said
notice was not served upon petitioner's counsel. Thus, strictly
speaking, the running of the 60-day period to appeal should be Challenged in this appeal2 is the Decision3 dated May 27, 2010 and
counted from November 19, 2009 when the notice of Resolution Resolution4 dated October 22, 2010 of the Court of Appeals (CA) in
dated July 22, 2009 was served on petitioner's counsel. Considering CA-G.R. SP No. 109824.
that petitioner filed his petition for certiorari on October 7, 2009, the
same was well within the prescribed period to appeal.1âwphi1 The The facts are as follows:
petition for certiorari was filed on time.
On December 5, 2003, petitioner Bobie Rose D.V. Frias, as lessor and
However, the foregoing discussion notwithstanding, we have reviewed respondent Rolando Alcayde, as lessee, entered into a Contract of
the records of the case at bar and find no reversible error committed Lease involving a residential house and lot (subject property) located
by the NLRC concerning the merits of the present petition. While the at No. 589 Batangas East, Ayala Alabang Village, Muntinlupa City, for
petition for certiorari was timely filed with the CA, the instant a period of one year, starting on December 5, 2003 up until December
petition would still suffer the same verdict of dismissal in view of the 4, 2004, with a monthly rental of Thirty Thousand Pesos (P30,000).
identical findings of the Labor Arbiter and the NLRC. The findings of Respondent refused to perform any of his contractual obligations,
fact made by Labor Arbiters and affirmed by the NLRC are not only which had accumulated for 24 months in rental arrearages as of
entitled to great respect, but even finality, and are considered binding December 2005.5
if the same are supported by substantial evidence.
This prompted petitioner to file a Complaint for Unlawful
We find that the NLRC correctly upheld petitioner's dismissal to be Detainer,6 docketed as CV Case No. 6040, with the Metropolitan Trial
valid. Records show that petitioner was relieved from his post in UST Court (MeTC), Muntinlupa City, Branch 80, against the respondent. 7 As
due to his poor work performance and attitude. However, while per the Process Server's Return8 dated February 14, 2006, the process
petitioner was removed from UST, private respondent immediately server, Tobias N. Abellano (Mr. Abellano) tried to personally serve the

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summons to respondent on January 14 and 22, 2006, but to no avail. 2007, Sheriff IV Jocelyn S. Tolentino (Sheriff Tolentino) caused the
Through substituted service, summons was served upon respondent's "service of a Notice of Raffle and Summons together with a copy of
caretaker, May Ann Fortiles (Ms. Fortiles). the complaints and its annexes" to the petitioner, through Sally
Gonzales (Ms. Gonzales), the secretary of petitioner's counsel, Atty.
On July 26, 2006, the MeTC rendered a Decision, 9 in favor of the Daniel S. Frias (Atty. Frias).
petitioner and ordered respondent to vacate the subject premises and
to pay the petitioner the accrued rentals at 12% legal interest, plus On September 7, 2007, the RTC, through Judge Pedro M. Sabundayo,
P10,000 in attorney's fees. The dispositive portion reads, thus: Jr. issued an Order,15 containing therein the manifestation of
respondent that he is withdrawing his application for a TRO and is
WHEREFORE, judgment is hereby rendered in favor of the [petitioner] now pursuing the main case for annulment of judgment.
and against [respondent] ordering:
On September 25, 2007, respondent filed an Ex-Parte Motion,16 to
1. The [respondent] and all persons claiming right over him to declare petitioner in default, on the ground that despite her receipt of
immediately vacate the subject premises located at No. 589 Batangas the summons, she has yet to file any pleading.1
East, Ayala Alabang Village, Muntinlupa City and peacefully surrender
possession thereof to the [petitioner]; On October 3, 2007, the petitioner filed a Special
Appearance/Submission (Jurisdictional Infirmity Raised),18 alleging
2. The [respondent] to pay the accrued rental arrearages from among others, that respondent's Motion to Revive Relief re: Issuance
December 2003 up to the time he vacates the property in the amount of a TRO merits neither judicial cognizance nor consideration. 19
of THIRTY THOUSAND PESOS (Php30,000.00) per month with twelve
(12%) percent legal interest; and On October 30, 2007 the MeTC issued a Writ of Execution,20 for the
purpose of implementing its July 26, 2006 Decision.
3. The [respondent] to pay the [petitioner] the amount of TEN
THOUSAND PESOS (Php10,000.00) as reasonable attorney's fees and On November 5, 2007, Sheriff III Armando S. Camacho, sent a Notice
to pay the cost of the suit. to Pay and to Vacate21 to respondent. Attached to the notice was the
October 30, 2007 Writ of Execution.
SO ORDERED.10
In the RTC's Order22 dated November 15, 2007, the RTC issued a TRO
On July 4, 2007, the MeTC issued an Order, granting petitioner's
11 enjoining the MeTC from implementing its July 26, 2006 Decision,
Motion to execute the Decision dated July 26, 2006, and denying and setting the hearing for respondent's prayer for writ of
respondent's Omnibus Motion thereto. preliminary injunction.23

On July 25, 2007, respondent filed a Petition for Annulment of On November 29, 2007, petitioner, through her representative, Marie
Judgment with Prayer for Issuance of TRO and/or Injunction, 12 with Regine F. Fujita (Ms. Fujita), filed a Preliminary Submission to Dismiss
the Regional Trial Court (RTC), Muntinlupa City, Branch 203. Petition - Special Appearance Raising Jurisdictional Issues
Respondent averred that the MeTC's July 26, 2006 Decision does not (Preliminary. Submission), on the ground of lack of jurisdiction over
bind him since the court did not acquire jurisdiction over his person. her person.24 She pointed out that the defect in the service of
Respondent likewise averred that the MeTC lacked jurisdiction over summons is immediately apparent on the Officer's Return, since it
the case for two reasons: (1) petitioners' complaint has no cause of did not indicate the impossibility of a personal service within a
action for failure to make a prior demand to pay and to vacate; and reasonable time; it did not specify the efforts exerted by Sheriff
(2) petitioner's non-referral of the case before the barangay.13 Tolentino to locate the petitioner; and it did not certify that the
person in the office who received the summons in petitioner's behalf
A copy of the petition for annulment of judgment was allegedly was one with whom the petitioner had a relation of confidence
served to the petitioner. Based on the Officer's Return14 dated July 27,

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ensuring that the latter would receive or would be notified of the petition for annulment of judgment.32 The dispositive portion of
summons issued in her name.25 which reads, thus:

On December 3, 2007, the RTC issued an Order,26 granting WHEREFORE, premises considered, the preliminary submission to
respondent's prayer for the issuance of a writ of preliminary dismiss petition and Omnibus Motion filed by [petitioner] Bobbie Rose
injunction, to enjoin the MeTC's July 26, 2006 Decision. The RTC DV Frias are granted and the petition for annulment of judgment filed
ruled that although Atty. Frias maintained his. special appearance, he by Rolando Alcayde is DISMISSED. The Order of the court dated
actively participated in the proceedings by attending the summary December 3, 2007 granting the issuance of a preliminary injunction is
hearing in the prayer for the issuance of the TRO on November 9, recalled and set aside considering that since the court has not
2007 and November 20, 2007. The dispositive portion reads, thus: acquired jurisdiction over the person of the [petitioner], all the
proceedings in this case are without any force and effect.
WHEREFORE, premises considered, the Court grants [respondent's SO ORDERED.33
prayer for the issuance of a preliminary injunction. Accordingly, the
Court enjoins respondent and the Court Sheriff of Metropolitan Trial On September 4, 2008, respondent filed a Manifestation and
Court, Branch 80, Muntinlupa City and or his deputy or duly Motion,34 praying for the recall of the August 22, 2008 Order and/or
authorized representative(s) from implementing or enforcing the to maintain the status quo.
decision dated July 26, 2006 in Civil Case No. 6040 during the
pendency of this action. On September 15, 2008, respondent filed a Motion for
Reconsideration35 of the August 22, 2008 Order.
SO ORDERED.27
On October 6, 2008, petitioner filed a Consolidated
On July 25, 2008, the law office of Real Brotarlo & Real entered its Opposition,36 alleging that the RTC held in abeyance the resolution of
appearance as collaborating counsel for the petitioner.28 her November 29, 2007 Preliminary Submission, for eight (8) months
until it issued its August 22, 2008 Order. She likewise alleged that
On August 11, 2008, petitioner filed a Manifestation and Omnibus there was nothing in the RTC's December 3, 2007 Order that
Motion to Dismiss Petition for Annulment of Judgment and to Set categorically denied the November 29, 2007 Preliminary Submission. 37
Aside and/or Reconsider29 the RTC's December 3, 2007 Order,
reiterating in substance the November 29, 2007 Preliminary On November 3, 2008, the RTC, through Judge Juanita T. Guerrero,
Submission. Petitioner alleged, among others, that the RTC's issued an Order,38 granting respondent's Motion for Reconsideration,
December 3, 2007 Order violated the well-settled rule that a writ of on the ground that he was not given an opportunity to file his
injunction is not proper where its purpose is to take property out of Comment or Opposition to petitioner's August 11, 2008 Manifestation
the possession or control of one person and place the same in the and Omnibus Motion. The dispositive portion of the order reads, thus:
hands of another where title has not been clearly established by law. 30
IN VIEW THEREOF, the Motion for Reconsideration is hereby
On August 22, 2008, the RTC issued an Order,31 granting petitioner's GRANTED. The Order of the Court dated August 22, 2008 is recalled
November 29, 2007 Preliminary Submission. The RTC ruled that the and set aside. The [respondent] is given fifteen (15) days from receipt
summons and copies of the petition and its attachments were not of this order to file his Comment or Opposition or reiterates the one
duly served upon petitioner, either personally or through substituted he filed, on the Manifestation and Omnibus Motion (i.) to Dismiss
service of summons strictly in accordance with the Rules. The RTC Petition for Annulment of Judgment (ii.) to Set Aside and/or
continued that there is no proof that Ms. Gonzales or Atty. Frias was Reconsider the Order dated December 3, 2007 and [petitioner] Bobbie
authorized by the petitioner to receive summons on her behalf. Since Rose D.V. Frias through his counsel is given fifteen (15) days
the face of the Officer's Return is patently defective, the RTC ruled therefrom to file his Reply if necessary. Thereafter, said Manifestation
that the presumption of regularity of performance of duty under the and Omnibus Motion is considered submitted for resolution.
Rules does not apply. The RTC, thus, ordered the dismissal of the

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 The Motion for Reconsideration,51 having been denied by the CA in its
SO ORDERED. 39
Resolution dated October 22, 2010,52 petitioner filed this Petition for
Review on Certiorari, raising the following issues:
On November 17, 2008, respondent filed a Manifestation (in
compliance with the Order dated November 3, 2008) and I. WHETHER OR NOT THE PUBLIC RESPONDENT COURT OF AP[P]EALS
Supplement,40 substantially reiterating his September 15, 2008 Motion ERRED IN NOT HOLDING THAT THE PAIRING JUDGE OF RTC 203
for Reconsideration. COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
OR EXCESS OF JURISDICTION IN NOT DISMISSING [RESPONDENT'S
On November 28, 2008, petitioner filed a Manifestation and Reply (to PETITION FOR ANNULMENT OF JUDGMENT ON A GROUND THAT THE
Alcayde's Comment dated August 19, 2008 and Supplement dated RTC 203 DID NOT ACQUIRE JURISDICTION OVER THE PETITIONER.
November 12, 2008).41
II. WHETHER OR NOT THE PUBLIC RESPONDENT COURT OF APPEALS
On February 2, 2009, the RTC issued an Order denying petitioner's.
42 GRAVELY ERRED IN HOLDING THAT THE RTC 203 NEED NOT
August 11, 2008 Manifestation and Omnibus Motion, the dispositive ACQUIRE JURISDICTION OVER THE PETITIONER AS LONG AS SAID
portion of which reads, thus: RTC 203 HAS ACQUIRED JURISDICTION OVER THE RES.

III. WHETHER OR NOT THE PUBLIC RESPONDENT COURT OF APPEALS

WHEREFORE, finding no reason to deviate from the Order of the
ERRED IN NOT HOLDING THAT THE PAIRING JUDGE OF RTC 203
Court dated December 3, 2007, the same is hereby maintained with
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
modification that the Writ of Preliminary Injunction shall be issued
OR EXCESS OF JURISDICTION IN NOT SETTING ASIDE THE ORDER
upon filing of a bond in the amount of Php500,000.00 by the
DATED DECEMBER 3, 2007 OF THE RTC ENJOINING PETITIONER AND
[respondent]. For emphasis, the Motion to Dismiss this petition for
SHERIFF OF THE METROPOLITAN TRIAL COURT, BRANCH 80 OF
lack of jurisdiction is hereby DENIED.
MUNTINLUPA CITY FROM IMPLEMENTING ITS FINAL AND
EXECUTORY DECISION DATED JULY 26, 2006.53
The petitioner BOBIE ROSE D. FRIAS is directed to file his ANSWER
within a non-extendible period of ten (10) days from receipt of this
On the one hand, petitioner contends that the CA erred in not
Order.
dismissing respondent's petition for annulment of judgment on the
ground of lack of jurisdiction over her person. She maintains that
SO ORDERED.43
since an annulment of judgment is a personal action, it is necessary
for the RTC to acquire jurisdiction over her person. She likewise
On February 20, 2009, petitioner moved for the reconsideration44 of insists that the CA erred in not setting aside the RTC's Decision dated
the RTC's February 2, 2009 Order, but the same was denied in the December 3, 2007.
RTC's Order45 dated June 5, 2009.
On the other hand, the CA ruled that a petition for annulment of
On July 15, 2009, respondent filed an Ex-Parte Motion for Default,46 to judgment is not an action in personam, thus, the court need not
declare petitioner in default for the latter's failure to comply with the acquire jurisdiction over the person of the petitioner, as long as it has
RTC's February 2, 2009 order requiring her to file an answer to the acquired jurisdiction over the res, which in this case was through the
Petition for Annulment of Judgment. filing of the petition for annulment of judgment with the RTC. This
pronouncement was adopted by the respondent in his comment to
Aggrieved, petitioner filed a Petition for Certiorari47 with the CA, to the instant petition.
which respondent answered by way of a Comment.48 After the filing of
petitioner's Reply,49 the CA on May 27, 2010 rendered a The petition is meritorious.
Decision,50 denying the petitioner's Petition for Certiorari for lack of
merit.

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It is elementary that courts acquire jurisdiction over the plaintiff or Nature of a petition for annulment of judgment for purposes of
petitioner once the complaint or petition is filed. On the other hand, service of summons
there are two ways through which jurisdiction over the defendant or
respondent is acquired through coercive process - either through the For a proper perspective, it is crucial to underscore the necessity of
service of summons upon them or through their voluntary determining first whether the action subject of this appeal is in
appearance in court. personam, in rem, or quasi in rem because the rules on service of
summons under Rule 14 apply according to the nature of the action.57
The function of summons in court actions
An action in personam is a proceeding to enforce personal rights and
In the case of Guiguinto Credit Cooperative, Inc. (GUCCI) v. obligations brought against the person and is based on the
Torres,54 We discussed the function of summons in court actions, in jurisdiction of the person, although it may involve his right to, or the
this wise — exercise of ownership of, specific property, or seek to compel him to
control or dispose of it in accordance with the mandate of the court.
Fundamentally, the service of summons is intended to give official Its purpose is to impose, through the judgment of a court, some
notice to the defendant or respondent that an action has been responsibility or liability directly upon the person of the defendant.
commenced against it. The defendant or respondent is thus put on Of this character are suits to compel a defendant to specifically
guard as to the demands of the plaintiff as stated in the perform some act or actions to fasten a pecuniary liability on
complaint. The service of summons upon the defendant becomes an him.58 The following are some of the examples of actions in personam:
important element in the operation of a court's jurisdiction upon a action for collection of sum of money and damages; action for
party to a suit, as service of summons upon the defendant is the means unlawful detainer or forcible entry; action for specific performance;
by which the court acquires jurisdiction over his person. Without action to enforce a foreign judgment in a complaint for a breach of
service of summons, or when summons are improperly made, both the contract.
trial and the judgment, being in violation of due process, are null and
void, unless the defendant waives the service of summons by Actions in rem are actions against the thing itself. They are binding
voluntarily appearing and answering the suit. upon the whole world.59 The phrase, "against the thing," to describe in
rem. actions is a metaphor. It is not the "thing" that is the party to
When a defendant voluntarily appears, he is deemed to have an in rem action; only legal or natural persons may be parties even
submitted himself to the jurisdiction of the court. This is not, in in rem actions.60 The following are some of the examples of
however, always the case. Admittedly, and without subjecting himself actions in rem: petitions directed against the "thing" itself or
to the court's jurisdiction, the defendant in an action can, by special the res which concerns the status of a person, like a petition for
appearance object to the court's assumption on the ground of lack adoption, correction of entries in the birth certificate; or annulment
of jurisdiction. If he so wishes to assert this defense, he must do so of marriage; nullity of marriage; petition to establish illegitimate
seasonably by motion for the purpose of objecting to the jurisdiction filiation; registration of land under the Torrens system; and forfeiture
of the court, otherwise, he shall be deemed to have submitted himself proceedings.
to that jurisdiction.55
A proceeding quasi in rem is one brought against persons seeking to
subject the property of such persons to the discharge of the claims
Elsewhere, We declared that jurisdiction of the court over the person assailed.61 In an action quasi in rem, an individual is named as
of the defendant or respondent cannot be acquired notwithstanding defendant and the purpose of the proceeding is to subject his
his knowledge of the pendency of a case against him unless he was interests therein to the obligation or loan burdening the property.62 In
validly served with summons. Such is the important role a valid an action quasi in rem, an individual is named as defendant. But,
service of summons plays in court actions.56 unlike suits in rem, a quasi in rem judgment is conclusive only
between the parties.63 The following are some of the examples of
actions quasi in rem: suits to quiet title; actions for foreclosure; and
attachment proceedings.

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In actions in personam, the judgment is for or against a person or progression of the same case. Thus, regardless of the nature of the
directly. Jurisdiction over the parties is required in actions in original action in the decision sought to be annulled, be it in
personam because they seek to impose personal responsibility or personam, in rem or quasi in rein, the respondent should be duly
liability upon a person.64 "In a proceeding in rem or quasi in rem, notified of the petition seeking to annul the court's decision over
jurisdiction over the person of the defendant is not a prerequisite to which the respondent has a direct or indirect interest.
confer jurisdiction on the court, provided that the latter has
jurisdiction over the res. Jurisdiction over the res is acquired either (a) To consider a petition for annulment of judgment as either in
by the seizure of the property under legal process, whereby it is rem or quasi-in-rem, would create an absurdity wherein the petitioner
brought into actual custody of the law; or (b) as a result of the would simply file the petition in court, without informing the
institution of legal proceedings, in which the power of the court is respondent of the same, through a valid service of summons. This is
recognized and made effective. "65 exactly what the CA reasoned out in its decision. The CA held that the
court need only acquire jurisdiction over the res, which was "through
Here, respondent filed a petition to annul the MeTC's July 26, 2006 the institution of the petition for annulment of judgment" with the
Decision, which ordered him to vacate the premises of the subject RTC, conveniently invoking that "jurisdiction over the res x x x is x x x
property and to pay the petitioner the accrued rentals thereon, in acquired x x x as a result of the institution of legal proceedings with the
violation of the parties' lease contract. court"70 If left unchecked, this disposition would set a dangerous
precedent that will sanction a violation of due process. It will foil a
Annulment of judgment, as provided for in Rule 47, is based only on respondent from taking steps to protect his interest, merely because
the grounds of extrinsic fraud and lack of jurisdiction. Jurisprudence, he was not previously informed of the pendency of the petition for
however, recognizes lack ,of due process as an additional ground to annulment of judgment filed in court.
annul a judgment.66 It is a recourse that presupposes the filing of a
separate and original action for the purpose of annulling or avoiding Second, a petition for annulment of judgment and the court's
a decision in another case. Annulment is a remedy in law independent subsequent decision thereon will affect the parties alone. It will not
of the case where the judgment sought to be annulled is rendered. 67 It be enforceable against the whole world. Any judgment therein will
is unlike a motion for reconsideration, appeal or even a petition for eventually bind only the parties properly impleaded.
relief from judgment, because annulment is not a continuation or
progression of the same case, as in fact the case it seeks to annul is Pursuant to Section 7, Rule 47,71 a judgment of annulment shall set
already final and executory. Rather, it is an extraordinary remedy that aside the questioned judgment or final order or resolution and render
is equitable in character and is permitted only in exceptional cases.68 the same null and void.

Annulment of judgment involves the exercise of original jurisdiction, In this case, had the RTC granted the respondent's petition, the
as expressly conferred on the CA by Batas Pambansa Bilang (BP Blg.) MeTC's July 26 2006 judgment would have been declared a nullity.
129, Section 9(2). It also implies power by a superior court over a This would have resulted to the following consequences: as to the
subordinate one, as provided for in Rule 47, wherein the appellate respondent, he would no longer be required to pay the rentals and
court may annul a decision of the regional trial court, or the latter vacate the subject property; and, as to the petitioner, she would be
court may annul a decision of the municipal or metropolitan trial deprived of her right to demand the rentals and to legally eject the
court.69 respondent. Clearly, through the RTC's judgment on the petition, only
the parties' interests, i.e., rights and obligation, would have been
For purposes of summons, this Court holds that the nature of a affected. Thus, a petition for annulment of judgment is one in
petition for annulment of judgment is in personam, on the basis of personam. It is neither an action in rem nor an action quasi in rem.
the following reasons:
We disagree with the CA's disquisition that since jurisdiction over the
First, a petition for annulment of judgment is an original action, res is sufficient to confer jurisdiction on the RTC, the jurisdiction
which is separate, distinct and independent of the case where the over the person of herein petitioner may be dispensed with. Citing the
judgment sought to be annulled is rendered. It is not a continuation

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case of Villanueva v. Nite,72 the CA concluded that the petition is not This Court explained the nature and enumerated the requisites of
an action in personam since it can be filed by one who was not a party substituted service in Manotoc v. Court of Appeals, et al.,80 which We
to the case. Suffice it to say that in Villanueva, this Court did not give summarize and paraphrase below:
a categorical statement to the effect that a petition for annulment of
judgment is not an action in personam. Neither did We make a remark (1) Impossibility of Prompt Personal Service –
that said petition is either an action in rem or a quasi in rem. The
issue in Villanueva was simply whether or not the CA erred in The party relying on substituted service or the sheriff must show that
annulling and setting aside the RTC's decision on the ground of defendant cannot be served promptly or there is impossibility of
extrinsic fraud. Unlike in this case, there were no issues pertaining to prompt service.
the proper service of summons, to the nature of a. petition for
annulment of judgment or to the denial of due process by reason of a
"Reasonable time" under Section 8, Rule 14, is defined as "so much time
defect in the service of summons.
as is necessary under the circumstances for a reasonably prudent and
diligent man to do, conveniently, what the contract or duty requires
We cannot likewise lend credence to the respondent's claim that a that should be done, having a regard for the rights and possibility of
petition for annulment of judgment is either an action in rem or quasi loss, if any, to the other party."
in rem. Suffice it to say that the petition cannot be converted either to
an action in rem or quasi in rem since there was no showing that the
To the plaintiff, "reasonable time" means no more than seven (7) days
respondent attached any of the properties of the petitioner located
since an expeditious processing of a complaint is what a plaintiff
within the Philippines.73
wants. To the sheriff, "reasonable time" means 15 to 30 days because
at the end of the month, it is a practice for the branch clerk of court to
Assuming arguendo, that a petition for annulment of judgment is require the sheriff to submit a return of the summons assigned to the
either an action in rem or quasi in rem, still the observance of due sheriff for service. Thus, one (1) month from the issuance of
process for purposes of service of summons cannot be deliberately summons can be considered "reasonable time" with regard to
ignored. For courts, as guardians of constitutional rights cannot be personal service on the defendant.
expected to deny persons their due process rights while at the same
time be considered as acting within their jurisdiction.74
Sheriffs are asked to discharge their duties on the service of summons
with due care, utmost diligence, and reasonable promptness and speed
There was neither a valid service of summons in person nor a valid so as not to prejudice the expeditious dispensation of justice. Thus, they
substituted service of summons over the person of the petitioner are enjoined to try their best efforts to accomplish personal service
on defendant. On the other hand, since the defendant is expected to
At any rate, regardless of the type of action - whether it is in try to avoid and evade service of summons, the sheriff must
personam, in rem or quasi in rem — the proper service of summons is be resourceful, persevering, canny, and diligent in serving the process
imperative.75 on the defendant.
Where the action is in personam and the defendant is in the
Philippines, as in this case, the service of summons may be done by For substituted service of summons to be available, there must be
personal or substituted service as laid out in Sections 676 and 777 of several attempts by the sheriff to personally serve the summons
Rule 14. Indeed, the preferred mode of service of summons is within a reasonable period of one (1) month which eventually resulted
personal service.78 To warrant the substituted service of the summons in failure to prove impossibility of prompt service. "Several attempts"
and copy of the complaint, (or, as in this case, the petition for means at least three (3) tries, preferably on at least two (2) different
annulment of judgment), the serving officer must first attempt to dates. In addition, the sheriff must cite why such efforts were
effect the same upon the defendant in person. Only after the attempt unsuccessful. It is only then that impossibility of service can be
at personal service has become impossible within a reasonable time confirmed or accepted.
may the officer resort to substituted service.79

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(2) Specific Details in the Return – defendant, such as the president or manager; and such individual must
have sufficient knowledge to understand the obligation of the
The sheriff must describe in the Return of Summons the facts and defendant in the summons, its importance, and the prejudicial effects
circumstances surrounding the attempted personal service. The efforts arising from inaction on the summons. Again, these details must be
made to find the defendant and the reasons behind the failure must be contained in the Return. [Emphasis and italics supplied].81
clearly narrated in detail in the Return. The date and time of the
attempts on personal service, the inquiries made to locate the A copy of Sheriff Tolentino's Return dated July 27, 2007 reads, thus:
defendant, the name/s of the occupants of the alleged residence or
house of defendant and all other acts done, though futile, to serve the OFFICER'S RETURN
summons on defendant must be specified in the Return to justify
substituted service. This is to certify the on the 27th day of July 2007, the undersigned
caused the service of the Notice of Raffle and Summons together with
a copy of the complaints and its annexes, to the following defendants,
(3) A Person of Suitable Age and Discretion – to wit:

If the substituted service will be effected at defendant's house or BOBBIE ROSE DV FRIAS — served thru Ms. Sally Gonzales, a secretary
residence, it should be left with a person of "suitable age and of her counsel Atty. Daniel S. Frias, a person employed thereat of
discretion then residing therein." A person of suitable age and suitable age and discretion to receive such court processes. Inspite of
discretion is one who has attained the age of full legal capacity (18 diligent efforts exerted by the undersigned to effect personal service
years old) and is considered to have enough discernment to to the defendant, but still no one's around at her given address.
understand the importance of a summons. "Discretion" is defined as
"the ability to make decisions which represent a responsible choice and HON. PAULINO GALLEGOS, Presiding Judge –
for which an understanding of what is lawful, right or wise may be MTC Branch LXXX, Muntinlupa City and
presupposed." Thus, to be of sufficient discretion, such person must Sheriff Armando Camacho of MTC - Br. 80,
know how to read and understand English to comprehend the import Muntinlupa City –
of the summons, and fully realize the need to deliver the summons
and complaint to the defendant at the earliest possible time for the
person to take appropriate action. Thus, the person must have the served thru their authorized receiving clerk, Mr. Jay-R Honorica, a
"relation of confidence" to the defendant, ensuring that the latter person employed thereat of suitable age and discretion to receive
such court processes.
would receive or at least be notified of the receipt of the summons. The
sheriff must therefore determine if the person found in the alleged
dwelling or residence of defendant is of legal age, what the recipient's As evidenced by their signature's and stamp received appearing on
relationship with the defendant is, and whether said person the original copy of the Notice of Raffle and Summons.
comprehends the significance of the receipt of the summons and his
duty to immediately deliver it to the defendant or at least notify the WHEREFORE, in view of the foregoing, I am now returning herewith
defendant of said receipt of summons. These matters must be clearly the original copy of the Notice of Raffle and Summons to the
and specifically described in the Return of Summons. Honorable Court of origin, DULY SERVED, for its record's [sic] and
information.
(4) A Competent Person in Charge –
Muntinlupa City, July 27, 2007.82
If the substituted service will be done at defendant's office or regular
place of business, then it should be served on a competent person in A perusal, however, of the Officer's Return discloses that the
charge of the place. Thus, the person on whom the substituted service following circumstances, as required in Manotoc, were not clearly-
will be made must be the one managing the office or business of established: (a) personal service of summons within a reasonable time
was impossible; (b) efforts were exerted to locate the party; and (c)

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the summons was served upon a person of sufficient age and court's jurisdiction over his person cannot be considered to have
discretion residing at the party's residence or upon a competent submitted to its authority, thus:
person in charge of the party's office or place of business.83
Preliminarily, jurisdiction over the defendant in a civil case is
The Officer's Return likewise revealed that no diligent effort was acquired either by the coercive power of legal processes exerted over
exerted and no positive step was taken to locate and serve the his person, or his voluntary appearance in court. As a general
summons personally on the petitioner. Upon having been satisfied proposition, one who seeks an affirmative relief is deemed to have
that the petitioner was not present at her given address, Sheriff submitted to the jurisdiction of the court. It is by reason of this rule
Tolentino immediately resorted to substituted service of summons by that we have had occasion to declare that the filing of motions to
proceeding to the office of Atty. Frias, petitioner's counsel. Evidently, admit answer, for additional time to file answer: for reconsideration of
Sheriff Tolentino failed to show that she made several attempts to a default judgment, and to lift order of default with motion for
effect personal service for at least three times on at least two reconsideration, is considered voluntary submission to the court's
different dates. It is likewise evident that Sheriff Tolentino simply left jurisdiction. This, however, is tempered by the concept of conditional
the "Notice of Raffle and Summons" with Ms. Gonzales, the alleged appearance, such that a party who makes a special appearance to
secretary of Atty. Frias. She did not even bother to ask her where the challenge, among others, the court's jurisdiction over his person
petitioner might be. There were no details in the Officer's Return that cannot be considered to have submitted to its authority.
would suggest that Sheriff Tolentino inquired as to the identity of Ms.
Gonzales. There was no showing that Ms. Gonzales was the one Prescinding from the foregoing, it is thus clear that:
managing the office or business of the petitioner, such as the
president or manager; and that she has sufficient knowledge to (1) Special appearance operates as an exception to the general rule on
understand the obligation of the petitioner in the summons, its voluntary appearance;
importance, and the prejudicial effects arising from inaction on the
summons.
(2) Accordingly, objections to the jurisdiction of the court over the
person of the defendant must be explicitly made, i.e., set forth in an
Indeed, without specifying the details of the attendant circumstances
unequivocal manner; and
or of the efforts exerted to serve the summons, a general statement
that such efforts were made will not suffice for purposes of
complying with the rules of substituted service of summons. 84 This is (3) Failure to do so constitutes voluntary submission to the
necessary because substituted service is in derogation of the usual jurisdiction of the court, especially' in instances where a pleading or
method of service. It is a method extraordinary in character and motion seeking affirmative relief is filed and submitted to the court
hence may be used only as prescribed and in the circumstances for resolution.88
authorized by statute.85 Sheriff Tolentino, however, fell short of these
standards. For her failure to faithfully, strictly, and fully comply with Measured against these standards, it is readily apparent that the
the requirements of substituted service, the same is rendered petitioner did not acquiesce to the jurisdiction of the trial court.
ineffective. As such, the presumption of regularity in the performance
of official functions, which is generally accorded to a sheriffs The records show that the petitioner never received any copy of the
return,86 does not obtain in this case. the respondent's petition to annul the final and executory judgment
of the MeTC in the unlawful detainer case. As explained earlier, the
Special appearance to question a court's jurisdiction is not copy of the said petition which was served to Ms. Gonzales was
voluntary appearance defective under the Rules of Court. Consequently, in order to
question the trial court's jurisdiction, the petitioner filed the
In Prudential Bank v. Magdam.it, Jr.87 We had the occasion to elucidate following pleadings and motions: Special Appearance/Submission
the concept of voluntary or conditional appearance, such that a party (Jurisdictional Infirmity Raised); Preliminary Submission to Dismiss
who makes a special appearance to challenge, among others, the Petition (Special Appearance Raising Jurisdictional Issues);
Manifestation and Omnibus Motion to Dismiss Petition for Annulment

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of Judgment and to Set Aside and/or Reconsider89 the RTC's December jurisdiction of the trial court over the person of the defendant, the
3, 2007 Order, Consolidated Opposition, Manifestation and Reply (to parties showed the intention to participate or be bound by the
Alcayde's Comment dated August 19, 2008 and Supplement dated proceedings through the filing of a motion, a plea or an answer.
November 12, 2008); and Motion for Reconsideration against the RTC's
February 2, 2009 Order. Neither is the service of the notice of hearing on the application for a
TRO on a certain Rona Adol binding on respondent enterprise. The
In all these pleadings and motions, the petitioner never faltered in records show that Rona Adol received the notice of hearing on behalf
declaring that the trial court did not acquire jurisdiction over her of an entity named JCB. More importantly, for purposes of acquiring
person, due to invalid and improper service of summons. It is jurisdiction over the person of the defendant, the Rules require the
noteworthy that when the petitioner filed those pleadings and service of summons and not of any other court processes. [Emphasis
motions, it was only in a "special" character, conveying the fact that and italics supplied].91
her appearance before the trial court was with a qualification, i.e., to
defy the RTC's lack of jurisdiction over her person. As we have consistently pronounced, if the appearance of a party in a
suit is precisely to question the jurisdiction of the said tribunal over
This Court is of the view that the petitioner never abandoned her the person of the defendant, then this appearance is not equivalent to
objections to the trial court's jurisdiction even when she elevated the service of summons, nor does it constitute an acquiescence to the
matter to the CA through her petition for certiorari. The filing of her court's jurisdiction.92
pleadings and motions, including that of her subsequent posturings,
were all in protest of the respondent's insistence on holding her to To recapitulate, the jurisdiction over the person of the petitioner was
answer the petition for annulment of judgment in the RTC, which she never vested with the RTC despite the mere filing of the petition for
believed she was not subject to. Indeed, to continue the proceeding in annulment of judgment. The manner of substituted service by the
such case would not only be useless and a waste of time, but would process server was apparently invalid and ineffective. As such, there
violate her right to due process. was a violation of due process. In its classic formulation, due process
means that any person with interest to the thing in litigation, or the
In its Order dated December 3, 2007, the RTC harped on the fact that outcome of the judgment, as in this case, must be notified and given
petitioner's counsel, Atty. Frias, attended the summary hearing on an opportunity to defend that interest.93 Thus, as the essence of due
November 9, 2007 of the respondent's prayer for the issuance of a process lies in the reasonable opportunity to be heard and to submit
TRO. This, however, can hardly be construed as voluntary appearance. any evidence the defendant may have in support of her defense, the
There was no clear intention on the part of Atty. Frias to be bound by petitioner must be properly served the summons of the court. In
the proceedings. Precisely, his "special" appearance in the hearing was other words, the service of summons is a vital and indispensable
to challenge the RTC's lack of jurisdiction over her client. This Court ingredient of due process94 and compliance with the rules regarding
held in Ejercito, et al. v. M.R. Vargas Construction, et al. 90 that the the service of the summons is as much an issue of due process as it is
presence or attendance at the hearing on the application of a TRO of jurisdiction.95 Regrettably, as had been discussed, the
should not be equated with voluntary appearance, thus: Constitutional right of the petitioner to be properly served the
summons and be notified has been utterly overlooked by the officers
Despite Agarao's not being a party-respondent, petitioners of the trial court.
nevertheless confuse his presence or attendance at the hearing on the
application for TRO with the notion of voluntary appearance, which Petition for annulment of judgment is an improper remedy
interpretation has a legal nuance as far as jurisdiction is
concerned. While it is true that an appearance in whatever form, In any event, respondent's petition to annul the MeTC's July 26, 2006
without explicitly objecting to the jurisdiction of the court over the judgment cannot prosper for being the wrong remedy.
person, is a submission to the jurisdiction of the court over the
person, the appearance must constitute a positive act on the part of A principle almost repeated to satiety is that an action for annulment
the litigant manifesting an intention to submit to the court's of judgment cannot and is not a substitute for the lost remedy of
jurisdiction. Thus, in the instances where the Court upheld the

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appeal.96 Its obvious rationale is to prevent the party from benefiting G.R. No. 172204 July 2, 2014
from his inaction or negligence.97 Cathay Metal Corporation, Petitioner,
Vs.
In this case, it is evident that respondent failed to interpose an Laguna West Multi-Purpose Cooperative, Inc., Respondent.
appeal, let alone a motion for new trial or a petition for relief from
the MeTC July 26, 2006 Decision rendering the same final and LEONEN, J.:
executory. Hence, the October 30, 2007 Order granting its execution
was properly issued. The Rules of Court governs court procedures, including the rules on
service of notices and summons. The Cooperative Code provisions on
It is doctrinal that when a decision has acquired finality, the same notices cannot replace the rules on summons under the Rules of
becomes immutable and unalterable. By this principle of immutability Court. Rule 14, Section 11 of the Rules of Court provides an-exclusive
of judgments, the RTC is now precluded from further examining the enumeration of the persons authorized to receive summons for
MeTC Decision and to further dwell on petitioner's perceived errors juridical entities. These persons are the juridical entity's president,
therein, i.e., that petitioners' complaint has no cause of action for managing partner, general manager, corporate secretary, treasurer, or
failure to make a prior demand to pay and to vacate; and, that in-house counsel.
petitioner failed to refer the case before the barangay.
This petition under Rule 45 assails the Court of Appeals’ decision
Resultantly, the implementation and execution of judgments that had dated November 25, 2005, and its resolution dated April 5, 2006. The
attained finality are already ministerial on the courts. Public policy Court of Appeals remanded the case to the trial court for
also dictates that once a judgment becomes final, executory, and respondent’s presentation of evidence.
unappealable, the prevailing party should not be denied the fruits of
his victory by some subterfuge devised by the losing Respondent Laguna West Multi-Purpose Cooperative is a cooperative
party.98 Unjustified delay in the enforcement of a judgment sets at recognized under Republic Act No. 6657 or the Comprehensive
naught the role of courts in disposing justiciable controversies with Agrarian Reform Law.1 It allegedly entered into a joint venture
finality.99 agreement with farmer-beneficiaries through Certificates of Land
Ownership Award (CLOA) in Silang, Cavite.2 While respondent was
Verily, once a judgment becomes final, the prevailing party is entitled negotiating with the farmer-beneficiaries, petitioner Cathay Metal
as a matter of right to a writ of execution, the issuance of which is the Corporation entered into Irrevocable Exclusive Right to Buy (IERB)
trial court's ministerial duty. So is it in this case. contracts with the same farmerbeneficiaries.3 Under the IERB, the
farmer-beneficiaries committed themselves to sell to petitioner their
WHEREFORE, the Petition is GRANTED. The Decision dated May 27, agricultural properties upon conversion to industrial or commercial
2010 and Resolution dated October 22, 2010 of the Court of Appeals properties or upon expiration of the period of prohibition from
in CA-G.R. SP No. 109824, are hereby REVERSED and SET ASIDE, and transferring title to the properties.4
a new judgment is rendered ordering the DISMISSAL of the
respondent Rolando F. Alcayde's petition for annulment of judgment. In 1996, respondent caused the annotation of its adverse claim on the
farmer-beneficiaries’ certificates of title.5
SO ORDERED.
On November 9, 1998, the Department of Agrarian Reform issued an
order converting the properties from agricultural to mixed use.6

In 1999, petitioner and the farmer-beneficiaries executed contracts of

sale of the properties.7 Transfer certificates of title were also issued in
the name of petitioner in the same year.8 The annotations in the
original titles were copied to petitioner's titles.9

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Respondent’s Vice-President, Orlando dela Peña, sent two letters Instead of furnishing respondent with a copy of the petition,
dated March 20, 2000 and April 12, 2000 to petitioner, informing it of petitioner filed on April 16, 2001 a motion for reconsideration of the
respondent’s claim to the properties.10 Petitioner did not respond.11 March 16, 2001 Regional Trial Court order.26 In its motion for
reconsideration, petitioner argued that the case was already
On September 15, 2000,petitioner filed a consolidated petition for submitted for decision after all of petitioner’s evidence had been
cancellation of adverse claims on its transfer certificates of title with admitted, and a memorandum had been filed.27 Therefore, it was too
the Regional Trial Court of Tagaytay City.12 It served a copy of the late for respondent to ask the court that it be furnished with a copy
petition by registered mail to respondent's alleged official address at of the petition.28 Moreover, because respondent was already in
"Barangay Mayapa, Calamba, Laguna."13 The petition was returned to default, a manifestation and motion, without allegations of grounds
sender because respondent could not be found at that address.14 The for a motion to lift order of default, would not give it personality to
postman issued a certification stating that the reason for the return participate in the proceedings.29 Petitioner sent a copy of the motion
was that the "cooperative [was] not existing."15 Petitioner allegedly for reconsideration to respondent by registered mail and set the
attempted to serve the petition upon respondent motion for hearing on April 20, 2001.30 Respondent failed to appear
personally.16 However, this service failed for the same reason.17 atthe hearing on the motion for reconsideration. On April 20, 2001,
the Regional Trial Court submitted the motion for resolution.31
Upon petitioner's motion, the Regional Trial Court issued an order on
December 15, 2000 declaring petitioner’s substituted service, Respondent received a copy of the motion for reconsideration after
apparently by registered mail,18 to have been effected,19 thus: the hearing. On August 13, 2001, respondent filed a motion for leave
to admit attached opposition32 and opposition to petitioner’s motion
Acting on the "Manifestation And Motion For Substituted Service" for reconsideration of the March 16,2001 Regional Trial Court
filed by petitioner Cathay Metal Corporation, thru counsel, and order.33 Respondent argued that since petitioner’s ex parte
finding the reasons therein stated to be meritorious, the same is presentation of evidence was secured through extrinsic fraud, there
hereby GRANTED. should be a new trial to give respondent a fair day in court. 34 This was
opposed by petitioner on September 6, 2001.35 Petitioner emphasized
its alleged compliance with the Cooperative Code rule on notices and
Accordingly, this Court hereby declares that substituted service of the
respondent’s failure to file its comment despite the court’s order that
Consolidated Petition for Cancellation of Adverse Claim on the
approved petitioner’s substituted service.36 Petitioner further pointed
President of Laguna West Multi-Purpose Cooperative, Inc. has been
out that it had always questioned the authority of Mr. dela Peñato act
effected. The latter is hereby given a period of fifteen (15) days from
for respondent.37
the delivery of said pleadings to the Clerk of Court within which to
file their opposition to the Consolidated petition for cancellation of
adverse claim.20 On January 16, 2003, the Regional Trial Court granted petitioner's
motion for reconsideration.38 It found that respondent's alleged
representatives failed to prove their authorities to represent
Petitioner was later allowed to present its evidence ex parte.21
respondent.39 It ruled that service should be made to the address
indicated in its Cooperative Development Authority Certificate of
Upon learning that a case involving its adverse claim was pending, Registration.40 The case was declared submitted for decision.41
respondent, through Mr. Orlando dela Peña, filed a manifestation and
motion, alleging that respondent never received a copy of the
Respondent filed a motion for reconsideration of the January 16,
summons and the petition.22 It moved for the service of the summons
2003 order of the Regional Trial Court.42
and for a copy of the petition to be sent to No. 160, Narra Avenue,
Looc, Calamba, Laguna.23
On March 21, 2003, the Regional Trial Court issued a decision
granting petitioner’s petition for cancellation of annotations.43 The
The Regional Trial Court granted respondent's manifestation and
Register of Deeds of Cavite was ordered to cancel the annotations on
motion on March 16, 2001.24 It ordered that respondent be furnished the certificates of title.44
with a copy of the petition at its new address.25

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On April 3, 2003, the Regional Trial Court issued an order45 rescinding certified by the Register of Deeds to be inexistent in the registry's
its March 21, 2003 decision for having been prematurely rendered, vault. . . . Moreover, the Cooperative Development Authority likewise
thus: certified that Laguna has been inoperative since 1992 and during the
period when the annotations were made in 1996. The Bureau of Posts
This is regard to the Decision dated March 21, 2003 which the Court has also certified that Laguna's office at Barangay Mayapa, Calamba,
has rendered in this particular case. Laguna, its official address as indicated in its Articles of
Incorporation and Confirmation of Registration is "closed".50
A review of the records show that the court for reasons unexplained,
has committed an error in judgment in rendering said decision According to the Regional Trial Court, since respondent was
unmindful of the fact that there is still a pending incident (Oppositor inoperative at the time when its adverse claims were annotated, "there
Laguna’s Motion for Reconsideration) which has first to be resolved. [was] no reason for [it] to believe that the person who caused the
annotations of adverse claim on the titles of the farmer-beneficiaries .
Fully aware that the error if allowed to remain unrectified would . . was authorized to do so."51
cause a grave injustice and deeply prejudiced [sic] the herein
respondent, the Court, faithfully adhering to the principle enunciated The Regional Trial Court ordered the Register of Deeds to cancel the
by the Honorable Supreme Court in the case of Astraquilio vs Javier, annotations on the transfer certificates of title.52 It held that Section
13 CRA 125 which provides that: 70 of Presidential Decree No. 1529 or the Property Registration
Decree declares that "an adverse claim is effective [only]for a period
"It is one of the inherent powers of the court to amend and control its of thirty (30) days and may be cancelled upon filing of a verified
process and orders so as to make them conformable to law and petition after the lapse of this period."53 Since the 30-day period had
justice. This power includes the right to reverse itself, especially when already lapsed, the annotations were already the subject of
in its opinion it has committed an error or mistake in judgment, and cancellation.54
that to adhere to its decision will cause injustice to a party litigant."
Respondent appealed to the Court of Appeals based on two grounds:
do hereby, with deep and sincere apologies to the party-litigants,
more particularly to the herein respondent Laguna West Multi- 1) Petitioner-appellee secured the favorable orders of the lower
Purpose Cooperative, Inc., RECALL and RESCIND its Decision which court in fraud of appellant Laguna West by sending the petition,
was prematurely rendered.46 all other pleadings, and notices to its former address, thus,
denying its day in court; and
In an order dated May 26, 2003, the Regional Trial Court denied
respondent’s motion for reconsideration of the January 16, 2003 2) The trial court erred in applying the rule on substituted service,
order.47 thus, it did not validly acquire jurisdiction over the appellant.55

On June 23, 2003, the Regional Trial Court decided to The Court of Appeals granted respondent's appeal on November 25,
grant48 petitioner's petition for cancellation of annotation on the basis 2005. The dispositive portion of the Court of Appeals' decision reads:
of the following facts:49
WHEREFORE, premises considered, the appeal is hereby granted. The
. . . These annotations were subsequently copied to the Transfer case is ordered remanded for appellant's presentation of evidence
Certificates of Titles over the parcels of land subject of this suit that and thereafter, for the trial court to render judgment, albeit with
were issued in the name of Cathay. . . . Upon verification, Cathay dispatch.56
found that Laguna did not file any claim against the farmer-
beneficiaries or Cathay since the time the annotations were made. . . . The Court of Appeals ruled that there was no valid service of
Moreover, affidavits of adverse claim and supporting documents that summons upon respondent in accordance with Rule 14, Section 11 of
Laguna supposedly submitted to the Register of Deeds of Cavite were

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the Revised Rules of Civil Procedure.57 Hence, the "court acquire[d] no Moreover, Mr. dela Peña and Mr. Dragon could not claim to have been
jurisdiction to pronounce a judgment in the case."58 authorized to represent respondent because it was determined to be
inoperative since 1992.75 In 2002, respondent was dissolved by the
The Court of Appeals denied petitioner's motion for reconsideration Cooperative Development Authority.76
on April 5, 2006.59
Petitioner’s motion for reconsideration of the trial court order
The issue in this case is whether respondent was properly served with allowing respondent to file an answer or opposition to the petition for
summons or notices of the hearing on the petition for cancellation of cancellation of annotation was granted because of Mr. dela Peña’s and
annotations of adverse claim on the properties. Mr. Dragon’s failure to show evidence of authority to act on behalf of
respondent.77
Petitioner emphasized the following points:
Petitioner argued that summons could only be validly served to
Summons was served upon respondent at its official registered respondent’s official address as indicated in its registration with the
address at Barangay Mayapa, Calamba, Laguna.60 Since no one received Cooperative Development Authority.78 This is because respondent as a
the summons, petitioner insisted that the trial court issue an order to registered cooperative is governed by Republic Act No. 6938, a
effect substituted service.61 Respondent still did not file its answer.62 substantive law that requires summons to be served to respondent’s
official address.79
Later, a certain Orlando dela Peña would file a manifestation and
motion dated February 27, 2001 purportedly on behalf of Substantive law takes precedence over procedural rules.80
respondent.63 Mr. dela Peña claimed that he was an authorized
representative of respondent and that respondent was already Petitioner cites Article 52 of Republic Act No. 6938:
holding office at No. 160, Narra Avenue, Looc, Calamba, Laguna,
which was not the official address of respondent.64 Mr. dela Peña Article 52. Address. – Every cooperative shall have an official postal
never submitted proof of his authority to represent respondent. He address to which all notice and communications shall be sent. Such
was also never a member of respondent cooperative.65 address and every change thereof shall be registered with the
Cooperative Development Authority.
However, Mr. dela Peña was still allowed to file an answer or
opposition.66 Petitioner filed a motion for reconsideration opposing Further, petitioner argues that there is no law that requires parties to
the order allowing him to file an answer or opposition on behalf of serve summons to "every unsubstantiated address alleged by [a]
respondent.67 Respondent failed to oppose this. He did not participate party."81
further.68 Later, a certain Mr. Geriberto Dragon would claim to be an
officer of respondent. He would file an opposition on its behalf after Petitioner also argued that the Court of Appeals erred when it
the period to file an opposition had lapsed.69 Mr. Dragon alleged that remanded the case for trial because respondent already admitted that
respondent’s address was at No. 167, Barangay Looc, Calamba, its adverse claims were based not on a right over the property but on
Laguna.70 Like Mr. dela Peña, Mr. Dragon had never been a member or the "alarm[ing] . . . possibility of losing the deal"82 with the owners of
officer of respondent.71 the property. There was no agreement yet vesting in respondent any
right over the properties.83 Moreover, the annotations on the title were
Petitioner argued that Mr. dela Peña and Mr. Dragon never submitted made in 1996 when respondent was already inoperative.84
proof of their authority to represent respondent.72 They were never
officers or members of respondent cooperative.73 Therefore, Meanwhile, respondent emphasized that it entered into a joint
petitioner cannot be blamed for being skeptical about Mr. dela Peña’s venture agreement with the farmer-beneficiaries.85 While in the
and Mr. Dragon’s claims of authority.74 process of negotiations, petitioner suddenly entered into the picture
by offering the farmer-beneficiaries an Irrevocable Exclusive Right to

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Buy (IERB) contracts.86 It was then that respondent caused the Respondent appealed to the Court of Appeals. The appellate court
annotation of an adverse claim on the titles.87 remanded the case to the lower court so that respondent could be
allowed to present evidence.98
Respondent, through its Vice President, Mr. dela Peña, wrote two
letters between March and April 2000 relative to its adverse claims in Respondent argued that petitioner was not being fair when it served
an attempt to amicably settle what seemed then as a brewing summons to respondent’s old address despite knowledge of its actual
dispute.88 These letters were written on respondent’s letterheads address.99
indicating the address, No. 167, Barangay Looc, Calamba, Laguna.89
Moreover, respondent argued that its rights over the property should
Petitioner deliberately served summons upon respondent to its old be best determined after trial.100
address.90 Later, petitioner would be allowed to present evidence ex
parte.91 According to respondent, had there been a trial, it would have:

Moreover, respondent was unable to appear at the hearing on the 4.2.1 Presented documentary evidence that its negotiation with
motion for reconsideration of the court order allowing respondent to the former landowners had earned for it part-ownership of the
file its answer or opposition. Based on the records, respondent’s properties, or at the very least, the exclusive authority to deal with
failure to appear was due to petitioner setting the hearing on April potential buyers or developers of the properties such as
20, 2001 and mailing respondent’s a copy of the motion on April 16, petitioner.
2001 or just four (4) days before the hearing.92
4.2.2 Offered in evidence the actual Joint Venture Agreements
Respondent filed a motion for leave to admit attached opposition to ("JVA") between the former landowners and Laguna West whereby
petitioner’s motion for reconsideration. This was opposed by Laguna West had made partial payment of the former landowners’
petitioner. Pending respondent’s motion for leave to admit attached 40% share in the joint venture. Laguna West had thus acquired
opposition, the trial court already issued its order dated January 16, interest over the properties, or had the same or better right than
2013, granting petitioner’s motion for reconsideration of the order the registered owner thereof.
allowing respondent to file its answer or opposition to the petition
for cancellation of adverse claims.93 4.2.3 Proved by competent evidence that the annotation sought to
be cancelled was not a simple adverse claim but qualifies as a
Respondent filed a motion for reconsideration of the order dated registration of an interest over the subject properties;
January 16, 2003. While the said incidents were pending, the trial
court rendered its decision dated March 21, 2003, granting 4.2.4 Presented Laguna West’s authorized representatives,
petitioner’s petition to cancel the annotations of adverse Orlando dela Peña, Geriberto Dragon and Ediza Saliva, and one or
claims.94 This, according to respondent, was a premature decision.95 two of the original landowners to testify on their dealings with
Laguna West.
The trial court rescinded the March 21, 2003 decision. On May 26,
2003, the trial court denied respondent’s motion for 4.2.5 Called on the officers of the CD on questions about a
reconsideration.96 cooperative’s address of record vis-à-vis its actual address as
known to the party that the cooperative had previously been
Within the period allowed for respondent to file its petition for communicating with, in this case, petitioner.101
certiorari, the trial court rendered judgment granting petitioner’s
petition to cancel the annotations of adverse claims on the title.97 We rule that respondent was not validly served with summons or
notice of the hearing. However, its annotations of adverse claims
should be cancelled for being based on a future claim.

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I . Respondent was not validly served with summons cases, shall be uniform for all courts of the same grade, and shall not
diminish, increase, or modify substantive rights. Rules of procedure
Republic Act No. 6938 of 1990 or the Cooperative Code of the of special courts and quasi-judicial bodies shall remain effective
Philippines provides that cooperatives are mandated to have an unless disapproved by the Supreme Court.
official postal address to which notices shall be sent, thus:
This means that on matters relating to procedures in court, it shall be
Art. 52. Address. – Every cooperative shall have an official postal the Rules of Procedure that will govern. Proper court procedures shall
address to which all notices and communications shall be sent. Such be determined by the Rules as promulgated by this court.
address and every change thereof shall be registered with the
Cooperative Development Authority. Service of notices and summons on interested parties in a civil,
criminal, or special proceeding is court procedure. Hence, it shall be
This provision was retained in Article 51 of Republic Act No. 9520 or governed by the Rules of Procedure.
the Philippine Cooperative Code of 2008. Article 51 provides:
The Cooperative Code provisions may govern matters relating to
Art. 51. Address. Every cooperative shall have an official postal cooperatives’ activities as administered by the Cooperative
address to which all notices and communications shall be sent. Such Development Authority. However, they are not procedural rules that
address and every change thereof shall be registered with the will govern court processes. A Cooperative Code provision requiring
Authority. cooperatives to have an official address to which all notices and
communications shall be sent cannot take the place of the rules on
Relying on the above provision, petitioner argued that respondent summons under the Rules of Court concerning a court proceeding.
was sufficiently served with summons and a copy of its petition for
cancellation of annotations because it allegedly sent these documents This is not to say that the notices cannot be sent to cooperatives in
to respondent’s official address as registered with the Cooperative accordance with the Cooperative Code. Notices may be sent to a
Development Authority. Petitioner further argued that the Rules of cooperative’s official address. However, service of notices sent to the
Procedure cannot trump the Cooperative Code with respect to official address in accordance with the Cooperative Code may not be
notices. This is because the Cooperative Code is substantive law, as used as a defense for violations of procedures, specially when such
opposed to the Rules of Procedure, which pertains only to matters of violation affects another party’s rights.
procedure.
Section 11, Rule 14 of the Rules of Court provides the rule on service
Petitioner is mistaken. of summons upon a juridical entity. It provides that summons may be
served upon a juridical entity only through its officers. Thus:
The promulgation of the Rules of Procedure is among the powers
vested only in this court. Article VIII, Section 5(5) provides: Sec. 11. Service upon domestic private juridical entity. – When the
defendant is a corporation, partnership or association organized
Sec. 5. The Supreme Court shall have the following powers: under the laws of the Philippines with a juridical personality, service
may be made on the president, managing partner, general manager,
corporate secretary, treasurer, or in-house counsel.
....
We have already established that the enumeration in Section 11 of
(5) Promulgate rules concerning the protection and enforcement of
Rule 14 is exclusive.102 Service of summons upon persons other than
constitutional rights, pleading, practice, and procedure in all courts,
those officers enumerated in Section 11 is invalid.103 Even substantial
the admission to the practice of law, the integrated bar, and legal
compliance is not sufficient service of summons.104
assistance to the underprivileged. Such rules shall provide a
simplified and inexpensive procedure for the speedy disposition of

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This provision of the rule does not limit service to the officers’ places Respondent was, therefore, not validly served with summons.
of residence or offices. If summons may not be served upon these
persons personally at their residences or offices, summons may be II - Respondent’s alleged non-operation does not bar it from
served upon any of the officers wherever they may be found. authorizing a person to act on its behalf in court proceedings

Hence, petitioner cannot use respondent's failure to amend its Petitioner argues that failure to serve the summons upon respondent
Articles of Incorporation to reflect its new address as an excuse from was due to respondent's non-operation and failure to amend its
sending or attempting to send to respondent copies of the petition Articles of Incorporation to reflect its new address. Petitioner's
and the summons. The Rules of Court provides that notices should be conclusion that respondent was no longer operating was based only
sent to the enumerated officers. Petitioner failed to do this. No notice on the postmaster's certification. According to the postmaster’s
was ever sent to any of the enumerated officers. certification, it failed to serve the petition for cancellation of
annotation to respondent’s official address because of respondent’s
Petitioner insists that it should not be made to inquire further as to nonexistence or closure. Petitioner failed to consider that the
the whereabouts of respondent after the attempt to serve the postmaster was not in the position to make a reliable statement as to
summons by registered mail to respondent’s address as allegedly the existence or closure of an entity.
indicated in its Articles of Incorporation. The Rules does not provide
that it needs to do so. However, it provides for service by publication. Moreover, the Cooperative Development Authority's certification
Service by publication is available when the whereabouts of the stating that respondent was not submitting any financial report since
defendant is unknown. Section 14, Rule 14 of the Rules of Court 1992, which was proof of its non-operation, was a mere statement of
provides: what was indicative of non-operation. It was not yet a conclusive
statement that respondent was not in operation.
Sec. 14. Service upon defendant whose identity or whereabouts are
unknown. – In any action where the defendant is designated as an In any case, even assuming that respondent was not operating, it
unknown owner, or the like, or whenever his whereabouts are might still exercise its powers as a cooperative until it would get
unknown and cannot be ascertained by diligent inquiry, service may, dissolved. Section 9 of Republic Act No. 6938 provides the powers
by leave of court, be effected upon him by publication in a newspaper and capacities of registered cooperatives.
of general circulation and in such places and for such time as the
court may order. (Emphasis supplied) Section 9. Cooperative Powers and Capacities.- A cooperative
registered under this Code shall have the following powers and
This is not a matter of acquiring jurisdiction over the person of capacities:
respondent since this is an action in rem. In an action in rem,
jurisdiction over the person is not required as long as there is (1) To sue and be sued in its cooperative name;
jurisdiction over the res. This case involves the issue of fair play and
ensuring that parties are accorded due process.
(2) Of succession;
In this case, petitioner served summons upon respondent by
(3) To amend its articles of cooperation in accordance with the
registered mail and, allegedly, by personal service at the office
provisions of this code;
address indicated in respondent’s Certificate of Registration.
Summons was not served upon respondent’s officers. It was also not
published in accordance with the Rules of Court. As a result, (4) To adopt by-laws not contrary to law, morals or public policy,
respondent was not given an opportunity to present evidence, and and to amend and repeal the same in accordance with this Code;
petitioner was able to obtain from the Regional Trial Court an order
cancelling respondent’s annotations of adverse claims. (5) To purchase, receive, take or grant, hold, convey, sell, lease,
pledge, mortgage, and otherwise deal with such real and personal

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 property as the transaction of the lawful affairs of the cooperative Moreover, there had been at least two motions for reconsideration
may reasonably and necessarily require, subject to the limitations filed before the trial court finally decided the petitioner’s petition for
prescribed by law and the Constitution; cancellation of annotation.

(6) To enter into division, merger or consolidation, as provided in The first was filed by petitioner when the trial court granted
this Code; respondent’s manifestation and motion on March 16, 2001. The trial
court could have heard the parties on the issue of representation at
(7) To join federations or unions, as provided in this Code; this instance had it noted petitioner’s non-compliance with the rule
that the notice of hearing must "be served in such a manner as to
(8) To accept and receive grants, donations and assistance from ensure its receipt by the other party at least three (3) days before the
foreign and domestic sources; and date of the hearing."105 Section 4, Rule 15 provides:

(9) To exercise such other powers granted in this Code or Sec. 4. Hearing of motion. – Except for motions which the court may
necessary to carry out its purpose or purposes as stated in its act upon without prejudicing the rights of the adverse party, every
articles of cooperation. written motion shall be set for hearing by the applicant. Every written
motion required to be heard and the notice of the hearing thereof
shall be served in such a manner as to ensure its receipt by the other
Prior to dissolution, a cooperative is entitled to the exercise of these
party at least three (3) days before the date of hearing, unless the
powers. It may engage in deals involving its properties or rights. It
court for good cause sets the hearing on shorter notice.
may cause the annotation of claims it deems to have in order to
protect such claim. Contrary to petitioner’s claim, respondent is not
prevented from authorizing persons to act on its behalf. In this case, petitioner set the case for hearing on April 20, 2001. It
served a copy upon respondent by registered mail only on April 16,
2001 or four (4) days before the set date for hearing. To be covered by
In any case, even if petitioner alleged that respondent was already
the three-day rule under Rule 15, Section 4, petitioner should ensure
dissolved by virtue of a November7, 2002 resolution of Cooperative
respondent’s receipt of the notice by April 17, 2001. We take judicial
Development Authority, the relevant acts of respondent had occurred
notice that service by registered mail in our jurisdiction does not take
before such resolution.
place in one day. Service of notice by registered mail only four (4)
days before the date of hearing, therefore, does not amount to
The resolution of the issue of representation could have facilitated ensuring the other party’s receipt at least three (3) days before the
the resolution of the case on the merits. hearing.

III - The trial court could have resolved the issue of representation; The second motion for reconsideration was filed by respondent when
premature decisions elicit suspicion the Regional Trial Court granted petitioner’s motion for
reconsideration of its order of March 16, 2001.Hence, for the second
The court must not trifle with jurisdictional issues. It is inexcusable time, the trial court had an opportunity to hear whether Mr. dela Peña
that a case involving issues that the trial court had full control of had or Mr. Dragon was properly authorized to act on behalf of
to be elevated to this court for determination. respondent.

The trial court had every opportunity to resolve the validity of Mr. On one hand, nobody’s rights would have been prejudiced had
dela Peña’s and Mr. Dragon’s alleged authority to act on behalf of respondent been allowed to prove the alleged representatives’
respondent. The trial court had, in fact, already allowed respondent to authorities. On the other hand, there is a likelihood of prejudice, in
file its answer and oppose petitioner’s petition for cancellation of this case, if the court relied purely on technicalities.
annotation. It could have easily ordered Mr. dela Peña or Mr. Dragon
to produce evidence of their authority to represent respondent. Thus, we reiterate this court’s ruling in Alonso v. Villamor:106

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. . . In other words, [processes] are a means to an end. When they lose pending in this court for about eight (8) years. In the interest of
the character of the one and become the other, the administration of judicial economy and efficiency, and given that the court records are
justice is at fault and courts are correspondingly remiss in the sufficient to make a determination on the validity of respondent’s
performance of their obvious duty. adverse claim, we shall rule on the issue. Respondent had been
assailing the lack of service of summons upon it and the resulting
. . . To take advantage of [a purely technical error] for other purposes cancellation of its alleged adverse claim on the titles. Its claim is
than to cure it, does not appeal to a fair sense of justice. Its anchored on its disrupted negotiations with the farmer-beneficiaries
presentation as fatal to [a party]’s case smacks of skill rather than involving the properties. In its memorandum filed on March 1, 2007,
right. A litigation is not a game of technicalities in which one, more respondent stated:
deeply schooled and skilled in the subtle art of movement and
position, entraps and destroys the other. It is, rather, a contest in 1.2 Some ten (10) years ago, Laguna West entered into [sic] Joint
which each contending party fully and fairly lays before the court the Venture Agreement ("JVA") with various farmer-CLOA beneficiaries in
facts in issue and then, brushing aside as wholly trivial and indecisive the Kaong-Kalayugan area of Silang, Cavite for a total lot area of Eight
all imperfections of form and technicalities of procedure, asks that Hundred Fifty Five Thousand and Nine Hundred Fourteen (855,914)
justice be done upon the merits. Lawsuits, unlike duels, are not to be square meters.
won by a rapier’s thrust. Technicality, when it deserts its proper
office as an aid to justice and becomes its great hindrance and chief 1.3 To hold the CLOA beneficiaries to their commitment to submit
enemy, deserves scant consideration from courts. There should be no their respective lots to the JVA, Laguna West promised them a
vested rights in technicalities. No litigant should be permitted to guaranteed share of 40% in the proceeds of the project.
challenge a record of a court of these Islands for defect of form when
his substantial rights have not been prejudiced thereby. 1.4 But, while Laguna West was still in the process of finalizing the
negotiations with these farmer-beneficiaries, petitioner entered the
Both motions for reconsideration filed in the trial court were picture by offering an alleged "Irrevocable Exclusive Right to Buy
opportunities to hear the parties on the issue of representation and to (IERB)" contracts with the same farmer-landowners for the purpose of
ensure that all parties were given their fair opportunity to be heard. converting the subject vast track [sic] of land into an industrial,
The trial court ignored both opportunities and chose to rule based on commercial and residential area.
technicalities to the prejudice of respondent.
1.5 Alarmed with the possibility that it could lose the deal to a big
The rules cannot be interpreted as a means to violate due process and moneyed corporation, Laguna West caused the annotation of
rights. Courts should, as much as possible, give parties the adverse claims on the thirty-nine (39) TCTs in 1996.107 Respondent’s
opportunity to present evidence as to their claims so that decisions annotations on petitioner’s certificates of title are similarly worded,
will be made based on the merits of the case. thus:

The trial court issued a decision pending incidents yet to be resolved. Entry No. . . . -AFFIDAVIT OF ADVERSE CLAIM- Covering the parcel of
We take this opportunity to remind courts that the issuance of fair land described in this title as per Affidavit of Adverse Claim executed
decisions is the heart of our functions. The judiciary is expected to by Calisto M. Dela Pena [sic] of Laguna West Multi-Purpose
take seriously its task of crafting decisions with utmost Cooperative Inc., wherein the registered owner entered into a Joint
judiciousness. Premature decisions only elicit suspicion of the courts Venture Agreement, as per Affidavit of Adverse Claim, subs. and
and diminish our role as administrator of justice. sworn to before the Not. Public for . . ., a copy is on file in this
registry.
IV - Rights still under negotiations are not adverse claims
Date of inst.- . . . .
Ordinarily, this case would be remanded to the trial court for the
presentation of respondent’s evidence. However, this case has been Date of inscription- . . . .

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NOTE: The foregoing annotations were copied from TCT. . . .108 claim based on the same ground shall be registered by the same
claimant.
Another version of the annotation is worded as follows:
Before the lapse of thirty days aforesaid, any party in interest may file
Entry No. . . . -ADVERSE CLAIM- Signed and executed by Calixto M. a petition in the court of First Instance where the land is situated for
dela Pena [sic], president and Chairman of Cooperative, [alleging] the cancellation of the adverse claim, and the court shall grant a
therein the existence of Joint Venture Agreement with the registered speedy hearing upon the question of the validity of such adverse
owner and that there are about to dispose said lot, exec. before the claim, and shall render judgment as may be just and equitable. If the
Not. Public . . . Copy is on file in this registry. Date of inst.- . . . . Date adverse claim is adjudged to be invalid, the registration thereof shall
of inscription- . . . .109 be ordered cancelled. If, in any case, the court, after notice and
hearing, shall find that the adverse claim thus registered was
NOTE: The foregoing annotations were copied from TCT. . . . frivolous, it may fine the claimant in an amount not less than one
thousand pesos nor more than five thousand pesos, in its discretion.
Before the lapse of thirty days, the claimant may withdraw his
The purpose of annotations of adverse claims on title is to apprise
adverse claim by filing with the Register of Deeds a sworn petition to
the whole world of the controversy involving a property. These
that effect.
annotations protect the adverse claimant's rights before or during the
pendency of a case involving a property. It notifies third persons that
rights that may be acquired with respect to a property are subject to A claim based on a future right does not ripen into an adverse claim
the results of the case involving it. as defined in Section 70 of Presidential Decree No. 1529. A right still
subject to negotiations cannot be enforced against a title holder or
against one that has a legitimate title to the property based on
Section 70 of Presidential Decree No. 1529 or the Property possession, ownership, lien, or any valid deed of transfer.
Registration Decree governs adverse claims. It describes an adverse
claim as a statement in writing setting forth a subsequent right or
interest claimed involving the property, adverse to the registered Respondent’s claim was not based on any of those.1awp++i1 Its claim
owner. Thus: was based on a deal with the CLOA farmer-beneficiaries, which did
not materialize.
Section 70. Adverse claim. – Whoever claims any part or interest in
registered land adverse to the registered owner, arising subsequent to Respondent alleged that had there been a trial, it could have
the date of the original registration, may, if no other provision is "[p]resented documentary evidence that its negotiation with the
made in this Decree for registering the same, make a statement in former landowners had earned for it part-ownership of the
writing setting forth fully his alleged right or interest, and how or properties, or . . . the exclusive authority to deal with potential buyers
under whom acquired, a reference to the number of the certificate of or developers."110 Respondent contradicts itself. For there to be a
title of the registered owner, the name of the registered owner, and a contract, there must be a meeting of the minds between the parties.
description of the land in which the right or interest is claimed. There could not have been any contract earning for respondent part-
ownership or any right since it was still undergoing negotiations with
the farmer-beneficiaries. At that stage, meeting of the minds was
The statement shall be signed and sworn to, and shall state the
absent. The terms were not yet final. Hence, no right or obligation
adverse claimant’s residence, and a place at which all notices may be
could attach to the parties. In essence, parties cannot claim, much
served upon him. This statement shall be entitled to registration as an
less make an adverse claim of any right, from terms that are still
adverse claim on the certificate of title. The adverse claim shall be
under negotiations.
effective for a period of thirty days from the date of registration.
After the lapse of said period, the annotation of adverse claim may be
cancelled upon filing of a verified petition therefor by the party in Respondent also alleged that had it been allowed to offer as evidence
interest: Provided, however, that after cancellation, no second adverse the joint venture agreement it entered with the farmer-beneficiaries, it
would have shown that it "had made partial payment of the former

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landowners’ 40% share in the joint venture,"111 acquiring for itself an SECTION 65. Conversion of Lands. — After the lapse of five (5) years
"interest over the properties, or . . . better right than the registered from its award, when the land ceases to be economically feasible and
owner[s]."112 Respondent was mistaken. sound for agricultural purposes, or the locality has become urbanized
and the land will have a greater economic value for residential,
Republic Act No. 6657 or the Comprehensive Agrarian Reform Law commercial or industrial purposes, the DAR, upon application of the
prohibits its own circumvention. The prohibition on disposition beneficiary or the landowner, with due notice to the affected parties,
includes all rights relating to disposition such as sale, and promise of and subject to existing laws, may authorize the reclassification or
sale of property upon the happening of conditions that remove the conversion of the land and its disposition: provided, that the
restrictions on disposition. beneficiary shall have fully paid his obligation.

Republic Act No. 6657 prohibits the sale, transfer, or conveyance of These provisions imply the following on rules on sale of awarded
awarded lands within ten (10) years, subject only to a few exceptions. lands:
Section 27 of the Act provides:
1) Subject to a few exceptions, lands acquired by beneficiaries
SECTION 27. Transferability of Awarded Lands. —Lands acquired by may be conveyed to non-beneficiaries after ten (10) years.
beneficiaries under this Act may not be sold, transferred or conveyed
except through hereditary succession, or to the government, or the 2) Before the lapse of ten (10) years but after the lapse of five (5)
LBP, or to other qualified beneficiaries for a period of ten (10) years: years, a beneficiary may dispose of the acquired land if it "ceases
provided, however, that the children or the spouse of the transferor to be economically feasible and sound for agricultural purposes,
shall have a right to repurchase the land from the government or LBP or the locality has become urbanized and the land will have a
within a period of two (2) years. Due notice of the availability of the greater economic value"113 with its residential, commercial, or
land shall be given by the LBP to the Barangay Agrarian Reform industrial use.
Committee (BARC) of the barangay where the land is situated. The
Provincial Agrarian Reform Coordinating Committee (PARCCOM) as These implications are easily abused. Hence, Republic Act No. 6657
herein provided, shall, in turn, be given due notice thereof by the included among the prohibitions any act that will circumvent its
BARC. provisions. Thus:

If the land has not yet been fully paid by the beneficiary, the rights to SECTION 73. Prohibited Acts and Omissions. — The following are
the land may be transferred or conveyed, with prior approval of the prohibited: (a) The ownership or possession, for the purpose of
DAR, to any heir of the beneficiary or to any other beneficiary who, as circumventing the provisions of this Act, of agricultural lands in
a condition for such transferor conveyance, shall cultivate the land excess of the total retention limits or award ceilings by any person,
himself. Failing compliance herewith, the land shall be transferred to natural or juridical, except those under collective ownership by
the LBP which shall give due notice of the availability of the land in farmer-beneficiaries. (b) The forcible entry or illegal detainer by
the manner specified in the immediately preceding paragraph. persons who are not qualified beneficiaries under this Act to avail
themselves of the rights and benefits of the Agrarian Reform
In the event of such transfer to the LBP, the latter shall compensate Program. (c) The conversion by any landowner of his agricultural land
the beneficiary in one lump sum for the amounts the latter has into any nonagricultural use with intent to avoid the application of
already paid, together with the value of improvements he has made this Act to his landholdings and to dispossess his tenant farmers of
on the land Republic Act No. 6657 also provides that the awarded the land tilled by them. (d) The willful prevention or obstruction by
lands may be converted to residential, commercial, or industrial use if any person, association or entity of the implementation of the CARP.
these are not economically feasible anymore or because of (e) The sale, transfer, conveyance or change of the nature of lands
urbanization, greater economic value will be derived with their outside of urban centers and city limits either in whole or in part
conversion. Section 65 of the Act provides: after the effectivity of this Act. The date of the registration of the
deed of conveyance in the Register of Deeds with respect to titled

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lands and the date of the issuance of the tax declaration to the committed themselves to selling their properties to petitioner upon
transferee of the property with respect to unregistered lands, as the expiration of the period of prohibition to transfer or upon conversion
case may be, shall be conclusive for the purpose of this Act. (f) The of the properties from agricultural to industrial or commercial use,
sale, transfer or conveyance by a beneficiary of the right to use or any whichever comes first. These contracts were executed between
other usufructuary right over the land he acquired by virtue of being farmer-beneficiaries and petitioner during the period of prohibition
a beneficiary, in order to circumvent the provisions of this Act. and before the properties' conversion from agricultural to mixed use.
(Emphasis supplied) Upon conversion of the properties, these were immediately sold to
petitioner. Intent to circumvent the provisions of Republic Act No.
The prohibition from disposition of the properties encompasses all 6657 is, therefore, apparent. Petitioner's contracts are, therefore, also
rights relating to disposition, including the right to convey ownership illegal and void. Hence, this decision is without prejudice to the right
or to promise the sale and transfer of property from the farmer- of interested parties. to seek the cancellation of petitioner's
beneficiaries to anyone upon the happening of certain conditions that certificates of title obtained in violation of the law.
will remove the conveyance restrictions.
WHEREFORE, the petition is GRANTED. The Register of Deeds of
The conveyance of the property within the prohibited period or Cavite is ORDERED to cancel the annotations of adverse claims on the
before its conversion to non-agricultural use is an outright violation transfer certificates· of title.
of Republic Act No. 6657. Meanwhile, the promise of sale of
properties upon the happening of conditions that will remove SO ORDERED.
restrictions carry with it an intent to circumvent the provisions of
Republic Act No. 6657. This law prohibits its circumvention. G.R. No. 206653 February 25, 2015
Yuk Ling Ong, Petitioner,
In this case, the CLOAs were awarded to the farmer-beneficiaries Vs.
between 1990 and 1992.114 Since the affidavit of adverse claim Benjamin T. Co, Respondent.
annotated on petitioner’s certificates of title was annotated in 1996
and the properties were converted only in 1998, respondent’s joint MENDOZA, J.:
venture agreement with the farmer-beneficiaries could not have
validly transferred rights to respondent. In court proceedings, there is no right more cherished than the right
of every litigant to be given an opportunity to be heard. This right
The 10-year period of prohibition against conveyance had not yet begins at the very moment that summons is served on the defendant.
lapsed at that time. Neither were the properties already converted to The Rules of Court places utmost importance in ensuring that the
non-agricultural use at that time. Respondent's adverse claim, defendant personally grasp the weight of responsibility that will
therefore, based on its alleged payment of the farmer-beneficiaries' befall him. Thus, it is only in exceptional circumstances that
40% could not be valid. constructive notification, or substituted service of summons, is
allowed. If the server falls short of the rigorous requirements for
In sum, whether or not there were provisions on transfer of rights or substituted service of summons, then the Court has no other option
promise to transfer rights in the joint venture agreement, there could but to strike down a void judgment, regardless of the consequences.
be no basis for respondent’s adverse claim. Lack of that provision This is a petition for review on certiorari seeking to reverse and set
means that respondent does not have any valid claim or right over the aside the June 27, 2012 Decision1 and the March 26, 2013
properties at all. Meanwhile, inclusion of such provision is illegal and, Resolution2 of the Court of Appeals (CA)in CA-G.R. SP No. 106271,
therefore, void. which denied the petition for annulment of judgment.

This ruling is also applicable to petitioner, which entered into

irrevocable exclusive right to buy contracts from the farmer-
beneficiaries. These contracts provided that the farmer-beneficiaries

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The Facts concluded that petitioner was psychologically incapacitated to
perform her essential marital obligations.
Petitioner Yuk Ling Ong (petitioner), a British-Hong Kong national,
and respondent Benjamin Co (respondent), a Filipino citizen, were Consequently, petitioner filed a petition for annulment of
married on October 3, 1982 at Ellinwood-Malate Church.3 judgment11 under Rule 47 of the Rules of Court before the CA on
November 24, 2008, claiming that she was never notified of the cases
Sometime in November 2008, petitioner received a subpoena from the filed against her. She prayed that the RTC decision, dated December
Bureau of Immigration and Deportation (BID)directing her to appear 11, 2002, in Civil Case No. 02-0306, be nullified on the grounds of
before the said agency because her permanent residence visa was extrinsic fraud and lack of jurisdiction. Petitioner alleged that first,
being subjected to cancellation proceedings. Reportedly, her marriage respondent committed extrinsic fraud because, as seen in Civil Case
with respondent was nullified by the court. No. CV-01-0177, he deliberately indicated a wrong address to prevent
her from participating in the trial; second, jurisdiction over her
When petitioner appeared before the BID, she was furnished with the person was not acquired in Civil Case No. 02-0306 because of an
copies of the following documents: (1) petition for declaration of invalid substituted service of summons as no sufficient explanation,
nullity of marriage filed as Civil Case No. CV-01-0177; (2) petition for showing impossibility of personal service, was stated before resorting
declaration of nullity of marriage docketed as Civil Case No. 02-0306; to substituted service of summons; third, the alleged substituted
(3) Decision,4 dated December 11, 2002, in Civil Case No. 02-0306 of service was made on a security guard of their townhouse and not on a
the Regional Trial Court, Branch 260 (RTC), Parañaque City, declaring member of her household; and fourth, she was not psychologically
the marriage between petitioner and respondent as void ab initio; and incapacitated to perform her marital obligations.12
(4) their marriage contract5 with the subject decision annotated
thereon. Petitioner was perplexed that her marriage with respondent Ruling of the CA
had been declared void ab initio. The above documents showed that
on April 26, 2001, respondent filed a petition for declaration of On June 27, 2012, the CA rendered the assailed decision finding the
nullity6 on the ground of psychological incapacity before the RTC, petition for annulment of judgment to be devoid of merit. It held that
which was docketed as Civil Case No. CV-01-0177. Respondent stated there was no sufficient proof to establish that respondent employed
that petitioner’s address was 600 Elcano St., Binondo, Manila. There fraud to insure petitioner’s non-participation in the trial of Civil Case
was no showing of its status, whether pending, withdrawn or No. CV-01-0177.
terminated. On July 19, 2002, respondent filed another petition for
declaration of Nullity7 on the ground of psychological incapacity Relying on Robinson v. Miralles,13 the CA further ruled that the
before the RTC, docketed as Civil Case No. 02-0306. Respondent substituted service of summons in Civil Case No. 02-0306 was valid. It
indicated that petitioner’s address was 23 Sta. Rosa Street, Unit B-2 found that there was a customary practice in petitioner’s townhouse
Manresa Garden Homes, Quezon City. On July 29, 2002, the RTC that the security guard would first entertain any visitors and receive
issued summons.8 In his Server’s Return,9 process server Rodolfo any communication in behalf of the homeowners. With this set-up, it
Torres, Jr. stated that, on August 1, 2002, substituted service of was obviously impossible for the process server to personally serve
summons with the copy of the petition was effected after several the summons upon petitioner. It also declared that the process
futile attempts to serve the same personally on petitioner. The said server’s return carries with it the presumption of regularity in the
documents were received by Mr. Roly Espinosa, a security officer. discharge of a public officer’s duties and functions.

On December 11, 2002, the RTC rendered a decision10 in Civil Case Petitioner moved for reconsideration, but her motion was denied by
No. 02-0306 finding respondent’s marriage with petitioner as void ab the CA in its Resolution,14 dated March 26, 2013.
initio on the ground of psychological incapacity under Article 36 of
the Family Code. It stated that summons was served on petitioner on Hence, this petition, anchored on the following
August 1, 2002, but she failed to file her responsive pleading within
the reglementary period. The public prosecutor also stated that there
were no indicative facts to manifest collusion. Thus, the RTC

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ISSUES contention on the existence of extrinsic fraud, however, is too
unsubstantial to warrant consideration. The discussion shall then
1. Whether or not the Trial Court in Civil Case No. 02-0306 validly focus on the ground of lack of jurisdiction.
acquired jurisdiction over the person of the petitioner.
Lack of jurisdiction on the part of the trial court in rendering the
2. Whether or not the facts proven by the petitioner constitute judgment or final order is either lack of jurisdiction over the subject
extrinsic fraud within the purview of Rule 47 of the Rules of matter or nature of the action, or lack of jurisdiction over the person
Court.15 of the petitioner. The former is a matter of substantive law because
statutory law defines the jurisdiction of the courts over the subject
Petitioner argues that there was an invalid substituted service of matter or nature of the action. The latter is a matter of procedural
summons.1âwphi1 The process server’s return only contained a law, for it involves the service of summons or other processes on the
general statement that substituted service was resorted to "after petitioner.21
several futile attempts to serve the same personally,"16 without stating
the dates and reasons of the failed attempts. Petitioner also reiterates In the present case, petitioner contends that there was lack of
her argument that extrinsic fraud was employed. jurisdiction over her person because there was an invalid substituted
service of summons. Jurisdiction over the defendant is acquired
In his Comment,17 filed on July 9, 2014, respondent contended that either upon a valid service of summons or the defendant's voluntary
the server’s return satisfactorily stated the reason for the resort to a appearance in court.22 If the defendant does not voluntarily appear in
substituted service of summons on August 1, 2002; and it was court, jurisdiction can be acquired by personal or substituted service
improbable that petitioner failed to receive the summons because it of summons as laid out under Sections 6 and 7 of Rule 14 of the
was sent to the same address which she declared in this present Rules of Court, which state:
petition.
Sec. 6. Service in person on defendant. - Whenever practicable, the
Petitioner filed her Reply on October 8, 2014 reiterating her previous
18 summons shall be served by handing a copy thereof to the defendant
arguments. in person, or, if he refuses to receive and sign for it, by tendering it to
him.
The Court’s Ruling
Sec. 7. Substituted Service. - If, for justifiable causes, the defendant
cannot be served within a reasonable time as provided in the
The Court finds merit in the petition.
preceding section, service may be effected (a) by leaving copies of the
summons at the defendant's residence with some person of suitable
Annulment of judgment is a recourse equitable in character, allowed age and discretion then residing therein, or (b) by leaving the copies
only in exceptional cases as where there is no available or other at defendant's office or regular place of business with some
adequate remedy. Rule 47 of the 1997 Rules of Civil Procedure, as competent person in charge thereof.
amended, governs actions for annulment of judgments or final orders
and resolutions, and Section 2 thereof explicitly provides only two
The landmark case of Manotoc v. CA (Manotoc)23 thoroughly discussed
grounds for annulment of judgment, that is, extrinsic fraud and lack
the rigorous requirements of a substituted service of summons, to
of jurisdiction.19 Annulment of judgment is an equitable principle not
wit: xxx
because it allows a party-litigant another opportunity to reopen a
judgment that has long lapsed into finality but because it enables him
to be discharged from the burden of being bound to a judgment that (1) Impossibility of Prompt Personal Service
is an absolute nullity to begin with.20
For substituted service of summons to be available, there must be
Petitioner raises two grounds to support her claim for annulment of several attempts by the sheriff to personally serve the summons
judgment: (1) extrinsic fraud and (2) lack of jurisdiction. Her within a reasonable period of one month which eventually resulted in

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failure to prove impossibility of prompt service. "Several attempts" determined, not only based on the sheriff's return, but also on the
means at least three (3) tries, preferably on at least two different process server's notation and case records. In the case of Wong v.
dates. In addition, the sheriff must cite why such efforts were Factor-Koyama,27 on the other hand, even if the sheriff performed an
unsuccessful. It is only then that impossibility of service can be invalid substituted service of summons, jurisdiction over the person
confirmed or accepted. of defendant was obtained because the latter had actively participated
in trial, amounting to a voluntary appearance under Section 20 of
(2) Specific Details in the Return Rule 14.28

The sheriff must describe in the Return of Summons the facts and In the case at bench, the summons in Civil Case No. 02-030629 was
circumstances surrounding the attempted personal service. The issued on July 29, 2002. In his server’s return,30 the process server
efforts made to find the defendant and the reasons behind the failure resorted to substituted service of summons on August 1, 2002.
must be clearly narrated in detail in the Return. The date and time of Surprisingly, the process server immediately opted for substituted
the attempts on personal service, the inquiries made to locate the service of summons after only two (2) days from the issuance of the
defendant, the name/s of the occupants of the alleged residence or summons. The server’s return stated the following:
house of defendant and all other acts done, though futile, to serve the
summons on defendant must be specified in the Return to justify SERVER’S RETURN
substituted service.
THIS IS TO CERTIFY THAT on August 1, 2002, substituted service of
(3) A Person of Suitable Age and Discretion summons with copy of petition, were effected to respondent, Yuk
Ling H. Ong, at the Unit B-2, No. 23 Sta. Rosa St., Manresa Garden
The sheriff must therefore determine if the person found in the Homes, Manresa Garden City, Quezon City, after several futile
alleged dwelling or residence of defendant is of legal age, what the attempts to serve the same personally. The said documents were
recipient's relationship with the defendant is, and whether said received by Mr. Roly Espinosa of sufficient age and discretion, the
person comprehends the significance of the receipt of the summons Security Officer thereat.
and his duty to immediately deliver it to the defendant or at least
notify the defendant of said receipt of summons. These matters must Therefore, respectfully returning to Court, original copy of summons,
be clearly and specifically described in the Return of Summons. Duly Served, this 2nd day of August, 2002.
(Emphases and underscoring supplied)
RODOLFO P. TORRES, JR.
The pronouncements of the Court in Manotoc have been applied to Process Server
several succeeding cases. In Pascual v. Pascual,24 the return of
summons did not show or indicate the actual exertion or positive (Emphasis supplied)
steps taken by the officer or process server in serving the summons
personally to the defendant. Similarly, in Spouses Afdal v. The server’s return utterly lacks sufficient detail of the attempts
Carlos,25 the process server’s indorsements therein failed to state that undertaken by the process server to personally serve the summons on
the personal service on the defendants was rendered impossible and petitioner. The server simply made a general statement that summons
that efforts were made to find them personally. In both those cases, was effected after several futile attempts to serve the same
the Court ruled that the meticulous requirements for substituted personally. The server did not state the specific number of attempts
service of summons were not met. made to perform the personal service of summons; the dates and the
corresponding time the attempts were made; and the underlying
There are cases, however, in which Manotoc was applied, but, reason for each unsuccessful service. He did not explain either if
nevertheless, it was ruled that there was no lack of jurisdiction over there were inquiries made to locate the petitioner, who was the
the person of the defendant. In Sagana v. Francisco,26 the diligent defendant in the case. These important acts to serve the summons on
efforts exerted by the sheriff to locate the respondent were

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petitioner, though futile, must be specified in the return to justify special civil actions of certiorari and appeals to higher courts,
substituted service. resulting in prolonged litigation and wasteful legal expenses." 32

The server’s return did not describe in detail the person who received Although the decision in Civil Case No. 02-0306 was promulgated as
the summons, on behalf of petitioner. It simply stated that the early as December 11, 2002, the Court must strike it down for lack of
summons was received "by Mr. Roly Espinosa of sufficient age and jurisdiction over the person of petitioner. The favorable judgment
discretion, the Security Officer thereat." It did not expound on the enjoyed by respondent cannot be categorized as a genuine victory
competence of the security officer to receive the summons. because it was fought against an adversary, who was ignorant of the
existing dispute. Whatever prize bestowed upon the victor in such a
Also, aside from the server’s return, respondent failed to indicate any void decision must also be undone. Respondent, if he wishes to
portion of the records which would describe the specific attempts to pursue, must start from scratch and institute his action for
personally serve the summons. Respondent did not even claim that declaration of nullity again; this time with petitioner fully aware and
petitioner made any voluntary appearance and actively participated in ready for litigation.
Civil Case No. 02-0306.
WHEREFORE, the petition is GRANTED. The June 27, 2012 Decision
The case of Robinson v. Miralles, cited by the CA, is not applicable. In and the March 26, 2013 Resolution of the Court of Appeals in CAG.R.
that case, the return described in thorough detail how the security SP No. 106271 are hereby REVERSED and SET ASIDE. The December
guard refused the sheriff’s entry despite several attempts. The 11, 2002 Decision of the Regional Trial Court, Branch 260, Parañaque
defendant in the said case specifically instructed the guard to prevent City is hereby declared VOID.
anybody to proceed to her residence. In the present case, the
attempts made by the process server were stated in a broad and SO ORDERED.
ambiguous statement.
G.R. No. 181517 July 6, 2015
The CA likewise erred in ruling that the presumption of regularity in Green Star Express, Inc. And Fruto Sayson, Jr., Petitioners,
the performance of official duty could be applied in the case at bench. Vs.
This p resumption of regularity, however, was never intended to be Nissin-Universal Robina Corporation, Respondent.
applied even in cases where there are no showing of substantial
compliance with the requirements of the rules of procedure. Such PERALTA, J.:
presumption does not apply where it is patent that the sheriff's or
server's return is defective.31 As earlier explained, the server's return For resolution is a Petition for Review under Rule 45 of the Rules of
did not comply with the stringent requirements of substituted service Court which petitioners Green Star Express, Inc. and Fruto Sayson, Jr.
of summons. brought before the Court, assailing the Decision 1 of the Court of
Appeals (CA) dated September 17, 2007 and its Resolution2 dated
Given that the meticulous requirements in Manotoc were not met, the January 22, 2008 in CA-G.R. SP No. 86824. The CA nullified the
Court is not inclined to uphold the CA's denial of the petition for Resolution dated May 5, 2004 of the Regional Trial Court (RTC) of San
annulment of judgment for lack of jurisdiction over the person of Pedro, Laguna, Branch 31, in Civil Case No. SPL-0969, and dismissed
petitioner because there was an invalid substituted service of the complaint for lack of jurisdiction.
summons. Accordingly, the decision in Civil Case No. 02-0306 must
be declared null and void. The following are the antecedents of the case:

The stricter rule in substituted service of summons was meant to On February 25, 2003, a Mitsubishi L-300 van which Universal Robina
address "[t]he numerous claims of irregularities in substituted service Corporation ( URC) owned figured in a vehicular accident with
which have spawned the filing of a great number of unnecessary petitioner Green Star Express, Inc.' s (Green Star) passenger bus,
resulting in the death of the van's driver. Thus, the bus driver,

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petitioner Fruto Sayson, Jr., was charged with the crime of reckless The petition is benefit of merit.
imprudence resulting in homicide.
It is a well-established rule that the rules on service of summons
Thereafter, Green Star sent a demand letter to respondent Nissin upon a domestic private juridical entity must be strictly complied
Universal Robina Corporation (NURC) for the repair of its passenger with. Otherwise, the court cannot be said to have acquired
bus amounting to ₱567, 070.68. NURC denied any liability therefore jurisdiction over the person of the defendant.5
and argued that the criminal case shall determine the ultimate
liabilities of the parties. Thereafter, the criminal case was dismissed NURC maintains that the RTC did not acquire jurisdiction over it as
without prejudice, due to insufficiency of evidence. the summons was received by its cost accountant, Francis Tinio. It
argues that under Section 11, Rule 14 of the 1997 Rules of Court,
Sayson and Green Star then filed a complaint for damages against which provides the rule on service of summons upon a juridical
NURC before the R TC of San Pedro, Laguna. Francis Tinio, one of entity, in cases where the defendant is a domestic corporation like
NURC's employees, was the one who received the summons. On NURC, summons may be served only through its officers.6 Thus:
February 6, 2004, NURC filed a Motion to Dismiss claiming lack of
jurisdiction due to improper service. Section 11. Service upon domestic private juridical entity. – When the
defendant is a corporation, partnership or association organized
On May 5, 2004, the RTC issued a Resolution denying NURC's motion under the laws of the Philippines with a juridical personality, service
to dismiss. It ruled that there was substantial compliance because may be made on the president, managing partner, general manager,
there was actual receipt of the summons by NURC. The dispositive corporate secretary, treasurer, or in-house counsel.7
portion of said Resolution thus reads:
This provision replaced the former Section 13, Rule 14 of the 1964
WHEREFORE, in view of the foregoing, defendant's "Motion to Rules of Court which read:
Dismiss" is hereby DENIED.3
Section 13. Service upon private domestic corporation or partnership.
Since its Motion for Reconsideration was denied, NURC elevated the - If the defendant is a corporation organized under the laws of the
case to the CA via a Petition for Certiorari. On September 17, 2007, Philippines or a partnership duly registered, service may be made on
the CA reversed the RTC ruling, hence: the president, manager, secretary, cashier, agent, or any of its
directors.8
WHEREFORE, the instant Petition for Certiorari is GRANTED. The
assailed Resolutions, dated May 5, 2004 and dated July 26, 2004, of In the past, the Court upheld service of summons upon a
the Regional Trial Court of San Pedro, Laguna, Branch 31, in Civil Case construction project manager, a corporation’s assistant manager, and
No. SPL-0969, are hereby NULLIFIED and a new one rendered granting ordinary clerk of a corporation, private secretary of corporate
Petitioner's Motion to Dismiss, dated February 3, 2004. Private executives, retained counsel, and officials who had control over the
Respondents' Amended Complaint for Damages filed against operations of the corporation like the assistant general manager or
Petitioner Nissin-Universal Robina Corporation is accordingly the corporation’s Chief Finance and Administrative Officer. The Court
dismissed for lack of jurisdiction. then considered said persons as "agent" within the contemplation of
the old rule. Notably, under the new Rules, service of summons upon
SO ORDERED.4 an agent of the corporation is no longer authorized,9 The rule now
likewise states "general manager" instead of "manager"; "corporate
Aggrieved, Green Star and Sayson moved for reconsideration, but the secretary" instead of merely "secretary"; and "treasure" instead of
same was denied. Hence, this petition. "cashier."10 It has now become restricted, limited, and exclusive only
to the persons enumerated in the aforementioned provision,
following the rule in statutory construction that the express mention
The lone issue is whether or not the summons was properly served on
of one person excludes all others, or expression unions est exclusion
NURC, vesting the trial court with jurisdiction.

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alterius. Service must, therefore, be made only on the person REMREV WEEK 5 - MIDTERMS
expressly listed in the rules.11 If the revision committee intended to
liberalize the rule on service of summons, it could have easily done so
by clear and concise language.12 G.R. No. 193158
Philippine Health Insurance Corporation, Petitioners,
Vs.
Here, Tinio, a, member of NURC’s accounting staff, received the Our Lady of Lourdes Hospital, Respondent.
summons on January 22, 2004. Green star claims that it was received
upon instruction of Junadette Avedillo. The general manager of the
corporation. Such fact, however, does not appear in the Sheriff’s PERALTA, J.:
Return.13 The Return did not even state whether Avedillo was present
at the time the summons was received by Tinio, the supposed This petition for review on certiorari under Rule 45 of the Rules of
assistant manager. Green Star further avers that the sheriff tendered Court (Rules) seeks to reverse the July 27, 2010 Decision1 of the Court
the summons, but Avedillo simply refused to sign and receive the of Appeals (CA) in CA-G.R. SP No. 110444, which annulled and set
same. She then allegedly instructed Tinio to just receive it in her aside the August 11, 2009 Resolution2 and September 4, 2009
behalf. However, Green Star never presented said sheriff as witness Order3 of the petitioner's Arbitration Department denying
during the hearing of NURC’s motion to dismiss to attest to said respondent's resort to modes of discovery.
claim. And while the sheriff executed an affidavit which appears to
support such allegation, the same was likewise not presented as Petitioner Philippine Health Insurance Corporation (PHIC) is a
evidence. It was only when the case was already before the CA that government corporation created under Republic Act (R.A.) No.
said affidavit first surfaced. Since the service of summons was made 7875,4 as amended,5 to administer and implement the country's
on a cost accountant, which is not one of the designated persons National Health Insurance Program, while respondent Our Lady of
under Section 11 of Rule 14, the trial court did not validly acquire Lourdes Hospital ( OLLH) is an institutional health care provider duly
jurisdiction over NURC,14 although the corporation may have actually accredited with the PHIC.
received the summons.15 To rule otherwise will be an outright
circumvention of the rules, aggravating further the delay in the On May 14, 2009, PHIC filed a Complaint 6 with its Legal Sector -
administration of justice.16 Prosecution Department against OLLH for the administrative offense
of filing multiple claims, which is penalized under Section 145, Rule
At this juncture, it is worth emphasizing that notice to enable the XXVIII of the Implementing Rules and Regulations (!RR) of R.A. No.
other party to be heard and to present evidence is not a mere 7875. Allegedly, OLLH filed two claims of the same amount of
technicality or a trivial matter in any administrative or judicial PhilHealth benefits involving the same patient for the same diagnosis
proceedings. The service of summons is a vital and indispensable and covering the same period of confinement.
ingredient of due process. Corporations would be easily deprived of
their right to present their defense in a multi-million peso suit, if the The case, which was docketed as HCP-NCR-09-082, was assigned to
Court would disregard the mandate of the Rules on the service of Senior Arbiter Atty. Darwin G. De Leon (De Leon) and Summons was
summons.17 duly served upon OLLH.7 On June 23, 2009, OLLH filed a Verified
Answer.8
WHEREFORE, the petition is DENIED. The Court of Appeals Decision
dated September 17, 2007 and Resolution dated January 22, 2008 in After which, the parties were directed to file their respective Position
CA-G.R. SP No. 86824 are hereby AFFIRMED. Papers.9 PHIC complied with the order.10

SO ORDERED. On its part, OLLH moved to defer the submission of its position paper
pending the answer of the PHIC President and CEO to the written
interrogatories as well as the inspection and copying of the original
transmittal letter and all other claims that accompanied Annex B11 of

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the Complaint.12 According to OLLH, these modes of discovery were plausible if respondent presented the same citation or ruling
availed of because its representatives were denied and/or not given concerning mode of discovery which was indispensably applied in
access to documents and were not allowed to talk to PHIC personnel administrative case.
with regard to the charge.13
Further, it bears stressing that as early as in the case of Angara v.
PHIC filed its Comment14 on OLLH's motion. Thereafter, the PHIC Electoral Commission, 63 Phil. 139, it was ruled by the Supreme Court
Arbitration Department, through Arbiter De Leon, denied OLLH' s that "where an administrative body is expressly granted the power of
motion. The August 11, 2009 Resolution opined: adjudication, it is deemed also vested with the implied power to
prescribe the rules to be observed in the conduct of its proceedings.
In the light of being summary in nature of the rules that govern the
administrative proceedings as in this case, the interrogatories and "Hence, it is beyond cavil that the Corporation is vested a quasi-
motion for production and inspection of documents filed by [OLLH] judicial power by virtue of Section 17 of Rep. Act No. 7875, therefore,
[cannot] be given due course by this Office. Relevantly, for an obvious it is empowered to provide its own rules. Thus, [OLLH] should be wary
reason as can be inferred from the purpose of the said pleadings, the of the following provisions in the IRR: (1) Section 96 of its 2004 IRR
allowance of the same would not practically hasten the early expressly gives the Arbiter original and exclusive jurisdiction over all
disposition of the instant case, instead undermine the objective of the complaints filed with the Corporation in accordance with the Act; and
above-cited provisions [Sections 91 and 92 of the 2004 IRR of R.A. No. (2) Section 112 of the same Rules grants said Arbiter the discretion to
7875, as amended by R.A. No. 9241] which clearly and explicitly resolve the case after the submission of respective position papers of
demand or call for an immediate resolution of the subject case. The the parties including any other evidence in support of their claims
bare and unsubstantiated allegations of [OLLH] that its and defenses or conduct a hearing when it is deemed necessary. In
representatives were denied access to the documents pertaining to other words, it is wise and proper for the Arbiter to follow and adhere
the PhilHealth claim subject of this controversy and.at the same time to the rules of procedure set forth in this Act which may expedite the
were not allowed to talk to any of the PhilHealth personnel which resolution of any case brought to its attention and discard any
prompted the respondent to resort to the modes of discovery herein pleading that may tend to delay the early disposition of the case for
above-mentioned, deserve scant consideration for being self-serving. being summary in nature.
[On] the contrary, this Office perceives the [OLLH's] filing of the
aforesaid pleadings [was] designed for no other conceivable end or Lastly, [OLLH] should be reminded also that the President of this
purpose but to delay the proceedings.15 Corporation, who incidentally is the person to whom the
interrogatories are addressed to, albeit being the top official of the
The Motion for Reconsideration16 filed by OLLH suffered the same fate corporation is not the most competent to answer the interrogatories.
as the September 4, 2009 Order held: The type of questions in the interrogatories point toward issues
arising from and related to the filing and processing of claims,
Evidently, the main argument of [OLLH] as can be perused in its naturally and logically, the one who is entrusted and tasked to
Motion is predicated on the Supreme Court ruling, specifically in Koh process said claim is the competent person. The resort to modes of
v. Intermediate Appellate Court, 144 SCRA 259 [1986], which discovery shall be defeated if it is not addressed to the proper
recognizes the importance of rules on discovery in expediting the competent party. Indisputably, [OLLH] has already been accredited by
trial of the case. However, in the same cited case, it was also declared the Corporation for quite some time already that it made this Office
that "the recourse to discovery procedure is not mandatory. If the wonder why until now respondent is not yet aware on how a certain
parties do not choose to resort to such procedures, the pre-trial filed claim is being processed and what department of this
conference should be set x x x x. " Corporation is tasked to do the job in order for it to have an idea to
whom it shall address its interrogatories. Be that as it may, this Office
Likewise, it is worth emphasizing that the above-cited decision of the believes that all the issues and queries raised by [OLLH] in its motion
Supreme Court relied upon by [OLLH] pertains to a civil case filed in may be addressed in the hearing to be held AFTER submission of its
the regular court of justice. It would have been convincing if not position paper.17

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Aggrieved, OLLH elevated the issue to the Court of apart from being publicly accessible and already known to OLLH, is
Appeals via petition for certiorari. As stated, the CA reversed the immaterial to· the case given OLLH' s sole defense that it
Resolution and Order of the PHIC Arbitration Department. In ruling inadvertently attached the wrong document that led to the processing
that grave abuse of discretion was committed when OLLH' s resort to of two separate claims. Thus, the Arbiter rightly found no further
modes of discovery was denied, the appellate court said: need to grant such application for being superfluous or redundant.

In the case at bench, petitioner OLLH has shown good cause for its Before proceeding to the merits of the case, We shall deal with OLLH'
resort to the modes of discovery as the same was anchored on its s proposition that the petition should be dismissed outright for PHI
being able to intelligently prepare a position paper considering that it C's non-compliance with Section 5, Rule 7 of the Rules on certification
was not allowed access to some pertinent documents or talk to PHIC against non-forum shopping.20 According to OLLH, PHIC Board
personnel with regard the charge of filing multiple claims. Petitioner Resolution No. 695, S. 2004,21 does not indicate that Alex B. Canaveral,
OLLH also seeks the fullest possible information that are material and who is the Officer-in-Charge of the Office of the Senior Vice-
relevant to the case. The subject of the Interrogatories appears to be President (SVP) for Legal Services Sector (LSS) of PHIC, is duly
relevant and not privileged as they pertain to the procedure being authorized to sign the verification and certification against forum
followed by PHIC in processing and evaluating claims. Petitioner OLLH shopping at the time of the filing of the petition on September 20,
has also shown the materiality and relevancy of the document sought 2010.22 Having been signed without proper authorization from the
lo be produced or inspected - the transmittal letter and other claims PHIC Board of Directors, the certification is defective and, therefore,
that accompanied the alleged second claim dated June 19, 2007 - constitutes a valid cause for the dismissal of the petition.
which was PHIC's basis for the charge of filing multiple claims against
petitioner OLLH. Verily, petitioner OLLH's resort to modes of While Resolution No. 695 does not expressly provide for the authority
discovery was necessary for the preparation of its defense and the of Canaveral to sign the verification and certification against forum
full determination of petitioner the issue raised in the administrative shopping, the Court notes that PHIC subsequently submitted as
case.18 attachments in its Reply PHIC Board Resolution No. 694, S. 2004, and
PHIC Board Resolution No. 1105, S. 2008. Resolution No. 694
Before Us, PHIC contends that Arbiter De Leon did not gravely abuse designates, among others, the Vice-President for Legal Services Group
his discretion since he merely complied with the rules of procedure "to sign on all verifications and certificates of non-forum shopping of
governing the exercise of PHI C's quasi-judicial function. In particular, all cases involving the Corporation, whether to be filed in court,
under Sections 109, 111 and 112 of the 2004 IRR of R.A. No. 7875, an administrative agency or quasi-judicial body," while Resolution No.
Answer and Position Paper are the only pleadings recognized and 1105 states that the SVP for LSS is one of those officers authorized
required in the proceedings before the Arbiter. PHIC holds that "to represent the Corporation in any and all legal proceedings before
OLLH's resort to modes of discovery is not a matter of right as it is any judicial and/or quasi-judicial bodies that may involve the
provided neither in the PHIC Charter nor in the IRR, and that even if Corporation, including the signing of initiatory and/or responsive
the Rules may be applied in suppletory character, the Arbiter may pleadings including all the necessary and/or incidental legal
exercise his sound discretion on whether to resort to modes of documents relative to the legal proceedings."23
discovery consistent with Our ruling in Limos, et al. v. Spouses
Odones. 19 Following Shipside, Inc. v. Court of Appeals,24which, in tum, was relied
upon in the subsequent cases of Novelty Philippines, Inc. v. Court
PHIC asserts that OLLH' s overt acts clearly reveal its intent to delay of Appeals,25 Vicar Int'! Construction, Inc. v. FEB Leasing & Finance
the administrative proceedings. It stresses that the material points Corp.,26
which OLLH seeks to establish in its resort to modes of discovery
were already presented in the pleadings and documents it submitted Alternative Center for Organizational Reforms and Dev 't, Inc. v. Hon.
for consideration of the Arbiter. Specifically, the subject information Zamora,27 Abaya Investments Corp. v. Merit Phils., et al. 28 and BPI v.
and documents sought to be examined are the same information and Court of Appeals, et al.,29 We, therefore, rule that there is substantial
documents which OLLH itself prepared, produced, and submitted to compliance on the part of PHIC. Aside from the submission, albeit
the PHIC. Likewise, the PHIC procedure subject of the interrogatories, belatedly, of Resolution Nos. 694 and 1105, Canaveral, by virtue of his

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office, is definitely in a position to verify the truthfulness and documentary or testimonial, was submitted to substantiate this
correctness of the allegations in the petition.30 convenient excuse.

Now, on the issue of whether the CA erred in annulling and setting As the PHIC Arbitration Department held, all the issues and queries
aside the August 11, 2009 Resolution and September 4, 2009 Order of raised by OLLH in its written interrogatories and motion for
the PHIC Arbitration Department, which denied OLLH's resort to production/inspection may be addressed in a hearing to be held after
modes of discovery, this Court resolves in the affirmative. submission of the position paper of the parties. If the Arbiter deemed
it necessary, based on the required pleadings already submitted g
Through written interrogatories, a party may elicit from the adverse may be conducted wherein witnesses who testify may be subjected to
party or parties any facts or matter that are not privileged and are clarificatory questions. In such hearing, the Arbiter has the power to
material and relevant to the subject of the pending action.31 Like other issue subpoena ad testificandum and duces tecum; he may
modes of discovery authorized by the Rules, the purpose of written issue subpoenas requiring attendance and testimony of witnesses or
interrogatories is to assist the parties in clarifying the issues and in the production of documents and other material/s necessary. In
ascertaining the facts involved in a case.32 On the other hand, the effect, these serve the same purposes of the modes of discovery.
provision on production and inspection of documents is to enable not
only the parties but also the court (in this case, the PHIC Arbitration The foregoing considered, Arbiter De Leon did not commit grave
Department) to discover all the relevant and material facts in abuse of discretion in denying OLLH's plea for written interrogatories
connection with the case pending before it.33 It must be shown, and production/inspection of documents. His resolutions were
therefore, that the documents sought to be produced, inspected consistent with the summary nature of the administrative
and/or copied/photographed are material or contain evidence proceedings, expeditiously resolving the case from the perspectives of
relevant to an issue involved in the action.34 time dimension and efficiency dimension.

In this case, the questions contained in the written interrogatories WHEREFORE, premises considered, the petition is GRANTED. The
filed and received on July 28, 2009 sought to elicit facts that could July 27, 2010 Decision of the Court of Appeals in CA-G.R. SP No.
already be seen from the allegations as well as attachments of the 110444, which reversed the August 11, 2009 Resolution and
Complaint and the Verified Answer. Specifically, the entries in the September 4, 2009 Order of the Arbitration Department of the
three (3) Validation Report that OLLH sought to be identified and/or Philippine Health Insurance Corporation that denied Our Lady of
explained by PHIC are either immaterial or irrelevant (to the issue of Lourdes Hospital's resort to modes of discovery, is ANNULLED AND
whether OLLH is guilty of filing multiple claims and OLLH's defense SET ASIDE.
that it inadvertently attached a second copy of the subject PhilHealth
Claim Form 2 to the Transmittal Letter filed on June 19, 2007) or, SO ORDERED.
even if material or relevant, are self-explanatory and need no further
elaboration from PHIC. Thus, the interrogatories were frivolous and G.R. No. 226130, February 19, 2018
need not be answered. Aside from this, the PHIC Arbitration Lilia S. Duque And Heirs Of Mateo Duque, Namely: Lilia S. Duque,
Department correctly observed that the written interrogatories were Alma D. Balbona, Perpetua D. Hata, Maria Nenita D. Diener, Gina D.
mistakenly addressed to the President and CEO of PHIC, who could Ybañez, and Gervacio S. Duque, Petitioners,
not competently answer, either based on his job description or first- V.
hand experience, issues that arose from and related to the filing and Spouses Bartolome D. Yu, Jr. and Juliet O. Yu and Delia Duque
processing of claims. Capacio, Respondents.

We likewise find as self-serving the allegation of OLLH that its VELASCO JR., J.:
representatives were denied access to the documents pertaining to
the subject PhilHealth claim and, at the same time, were not allowed
to talk to any of the PhilHealth personnel. No iota of evidence, This Petition for Review on Certiorari under Rule 45 of the Rules of
Court assails the Decision1 and the Resolution2 dated September 30,

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2014 and July 14, 2016, respectively, of the Court of Appeals (CA) in Thus, during trial, instead of presenting their evidence, respondents
CA-G.R. CV No. 04197. Spouses Yu moved for demurrer of evidence in view of the aforesaid
pronouncement. Spouses Duque vehemently opposed such motion. In
The facts are undisputed. an Order dated January 5, 2011,9 the trial court granted the demurrer
to evidence and, thereby, dismissed the Complaint. Spouses Duque
The herein petitioner Lilia S. Duque and her late husband, Mateo sought reconsideration, which was denied in an Order dated
Duque (Spouses Duque), were the lawful owners of a 7,000-square September 21, 2011.10
meter lot in Lambug, Badian, Cebu, covered by Tax Declaration (TD)
No. 05616 (subject property). On August 28, 1995, Spouses Duque On appeal, the CA, in its now assailed Decision dated September 30,
allegedly executed a Deed of Donation over the subject property in 2014, affirmed in toto the aforesaid Orders. It agreed with the trial
favor of their daughter, herein respondent Delia D. Capacio (Capacio), court that Spouses Duque's non-compliance with the October 3, 2008
who, in turn, sold a portion thereof, i.e., 2,745 square meters, to her Order resulted in the implied admission of the Deed of Donation's
herein co-respondents Spouses Bartolome D. Yu, Jr. and Juliet O. Yu authenticity, among other documents. Notably, Spouses Duque did
(Spouses Yu).3 not even seek reconsideration thereof. With such admission, the trial
court ruled that Spouses Duque have nothing more to prove or
With that, Spouses Duque lodged a Verified Complaint for disprove and their entire evidence has been rendered
Declaration of Non-Existence and Nullity of a Deed of Donation and worthless.11 Spouses Duque moved for reconsideration but was
Deed of Absolute Sale and Cancellation of TD (Complaint) against denied for lack of merit in the questioned CA Resolution dated July
the respondents before the Regional Trial Court (RTC) of Barili, Cebu, 14, 2016. Meanwhile, in view of Mateo Duque's demise, his heirs
docketed as Civil Case No. CEB-BAR-469, claiming that the signature substituted for him as petitioners in this case.
in the Deed of Donation was forged. Spouses Duque then prayed (1)
to declare the Deeds of Donation and of Absolute Sale null and void; Hence, this petition imputing errors on the part of the CA (1) in
(2) to cancel TD No. 01-07-05886 in the name of respondent Juliet Yu holding that petitioners' failure to reply to the request for admission
(married to respondent Bartolome Yu); and (3) to revive TD No. 05616 is tantamount to an implied admission of the authenticity and
in the name Mateo Duque (married to petitioner Lilia Duque).4 genuineness of the documents subject thereof; and (2) in not ruling
that the dismissal of the petitioners' Complaint based on an improper
In her Answer, respondent Capacio admitted that the signature in the application of the rule on implied admission will result in unjust
Deed of Donation was, indeed, falsified but she did not know the enrichment at the latter's expense.12
author thereof. Respondents Spouses Yu, for their part, refuted
Spouses Duque's personality to question the genuineness of the Deed The petition is impressed with merit.
of Absolute Sale for it was their daughter who forged the Deed of
Donation. They even averred that Spouses Duque's action was already The scope of a request for admission under Rule 26 of the Rules of
barred by prescription.5 Court and a party's failure to comply thereto are respectively detailed
in Sections 1 and 2 thereof, which read:
On September 26, 2008, a Motion for Admission by Adverse Party
under Rule 26 of the Rules of Court (Motion for Admission) was filed SEC. 1. Request for admission. - At any time after issues have been
by respondents Spouses Yu requesting the admission of these joined, a party may file and serve upon any other party a written
documents: (1) Real Estate Mortgage (REM); (2) Deed of Donation; (3) request for the admission by the latter of the genuineness of any
Contract of Lease; (4) TD No. 07-05616; (5) TD No. 14002-A; (6) Deed material and relevant document described in and exhibited with the
of Absolute Sale; and (7) TD No. 01-07-05886. In an Order dated request or of the truth of any material and relevant matter of fact set
October 3, 2008,6 Spouses Duque were directed to comment thereon forth in the request. Copies of the documents shall be delivered with
but they failed to do so. By their silence, the trial court, in an Order the request unless copies have already been furnished.
dated November 24, 2008,7 pronounced that they were deemed to
have admitted the same.8

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SEC. 2. Implied admission. - Each of the matters of which an admission a Deed of Donation and Deed of Absolute Sale and Cancellation of TD.
is requested shall be deemed admitted unless, within a period In fact, the forgery committed in the Deed of Donation was the very
designated in the request, which shall not be less than fifteen (15) essence of that Complaint, where it was alleged that being a forged
days after service thereof, or within such further time as the court document, the same is invalid and without force and legal effect.
may allow on motion, the party to whom the request is directed Petitioners, therefore, need not reply to the request for admission.
files and serves upon the party requesting the admission a sworn Consequently, they cannot be deemed to have admitted the Deed of
statement either denying specifically the matters of which an Donation's genuineness and authenticity for their failure to respond
admission is requested or setting forth in detail the reasons why he thereto.
cannot truthfully either admit or deny those matters.
Moreover, in respondents Spouses Yu's criminal case for
Objections to any request for admission shall be submitted to the estafa15 against respondent Capacio, which they filed immediately
court by the party requested within the period for and prior to the upon receipt of a summon in relation to the Complaint of Spouses
filing of his sworn statement as contemplated in the preceding Duque, one of the allegations therein was the forgery committed in
paragraph and his compliance therewith shall be deferred until such the very same Deed of Donation, which authenticity and genuineness
objections are resolved, which resolution shall be made as early as they want petitioners to admit in their request for admission. In
practicable. (Emphases supplied.) support thereof, respondents Spouses Yu even utilized the
questioned document report of the Philippine National Police (PNP)
Clearly, once a party serves a request for admission as to the truth of Regional Crime Laboratory Office certifying that the signature in the
any material and relevant matter of fact, the party to whom such Deed of Donation is a forgery. Thus, it is then safe to conclude that
request is served has 15 days within which to file a sworn statement their request for admission is a sham.
answering it. In case of failure to do so, each of the matters of
which admission is requested shall be deemed admitted. This rule, Having said that there was no implied admission of the genuineness
however, admits of an exception, that is, when the party to whom and authenticity of the Deed of Donation, this Court, thus, holds that
such request for admission is served had already controverted the it was also an error for the trial court to grant the demurrer to
matters subject of such request in an earlier pleading. Otherwise evidence.
stated, if the matters in a request for admission have already been
admitted or denied in previous pleadings by the requested party, the To recapitulate, the demurrer to evidence was anchored on the
latter cannot be compelled to admit or deny them anew. In turn, the alleged implied admission of the Deed of Donation's genuineness and
requesting party cannot reasonably expect a response to the authenticity. The trial court granted the demurrer holding that with
request and, thereafter, assume or even demand the application of the said implied admission, respondents Spouses Yu's claim became
the implied admission rule in Section 2, Rule 26.13 The rationale is undisputed and Spouses Duque have nothing more to prove or
that "admissions by an adverse party as a mode of discovery disprove. This is despite its own fmdings that the opinion of the
contemplates of interrogatories that would clarify and tend to shed handwriting expert and the Answer of respondent Capacio, both
light on the truth or falsity of the allegations in a pleading, and does confirmed the fact of forgery. The trial court easily disregarded this
not refer to a mere reiteration of what has already been alleged in the on account of the said implied admission. The CA, on appeal,
pleadings; or else, it constitutes an utter redundancy and will be a affirmed the trial court.
useless, pointless process which petitioner should not be subjected
to."14 But in view of this Court's findings that there was no implied
admission to speak of, the demurrer to evidence must, therefore, be
Here, the respondents served the request for admission on the denied and the Orders granting it shall be considered void.
petitioners to admit the genuineness and authenticity of the Deed of
Donation, among other documents. But as pointed out by petitioners, Section 1, Rule 33 of the Rules of Court provides for the
the matters and documents being requested to be admitted have consequences of a reversal on appeal of a demurrer to evidence, thus:
already been denied and controverted in the previous pleading, that
is, Verified Complaint for Declaration of Non-Existence and Nullity of

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SECTION 1. Demurrer to evidence. After the plaintiff has completed appellate court disagrees and reverses the dismissal order, the
the presentation of his evidence, the defendant may move for defendants lose the right to present their own evidence. The appellate
dismissal on the ground that upon the facts and the law the plaintiff court shall, in addition, resolve the case and render judgment on the
has shown no right to relief If his motion is denied, he shall have the merits, inasmuch as a demurrer aims to discourage prolonged
right to present evidence. If the motion is granted but on appeal the litigations.18
order of dismissal is reversed he shall be deemed to have waived the
right to present evidence. With this Court's denial of the demurrer to evidence, it will now
proceed to rule on the merits of the Complaint solely on the basis of
Citing Generoso Villanueva Transit Co., Inc. v. Javellana,16 this Court the petitioners' evidence on record.
in Radiowealth Finance Company v. Spouses Del Rosario17 explained
the consequences of a demurrer to evidence in this wise: Here, it would appear from the trial court's January 5, 2011 Order
that the evidence for the petitioners consists mainly of the testimony
The rationale behind the rule and doctrine is simple and logical. The of the handwriting expert witness and the Answer of respondent
defendant is permitted, without waiving his right to offer evidence in Capacio, which both confirmed that the signature in the Deed of
the event that his motion is not granted, to move for a dismissal (i.e., Donation was, indeed, falsified. With these pieces of evidence and
demur to the plaintiffs evidence) on the ground that upon the facts as nothing more, this Court is inclined to grant the petitioners'
thus established and the applicable law, the plaintiff has shown no Complaint. Being a falsified document, the Deed of Donation is void
right to relief. If the trial court denies the dismissal motion, i.e., finds and inexistent. As such, it cannot be the source of respondent
that plaintiffs evidence is sufficient for an award of judgment in the Capacio's transferable right over a portion of the subject property.
absence of contrary evidence, the case still remains before the trial Being a patent nullity, respondent Capacio could not validly transfer a
court which should then proceed to hear and receive the defendants portion of the subject property in favor of respondents Spouses Yu
evidence so that all the facts and evidence of the contending parties under the principle of "Nemo dat quod non habet," which means "one
may be properly placed before it for adjudication as well as before cannot give what one does not have."19 As a consequence, the
the appellate courts, in case of appeal. Nothing is lost. The doctrine is subsequent Deed of Absolute Sale executed by respondent Capacio in
but in line with the established procedural precepts in the conduct of favor of respondents Spouses Yu has no force and effect as the
trials that the trial court liberally receive all proffered evidence at the former is not the owner of the property subject of the sale contract.
trial to enable it to render its decision with all possibly relevant In effect, the tax declarations in the respective names of respondents
proofs in the record, thus assuring that the appellate courts upon Capacio and Juliet O. Yu are hereby ordered cancelled and the tax
appeal have all the material before them necessary to make a correct declaration in the name of Mateo Duque, et al. is ordered restored.
judgment, and avoiding the need of remanding the case for retrial or
reception of improperly excluded evidence, with the possibility WHEREFORE, premises considered, the petition is GRANTED.
thereafter of still another appeal, with all the concomitant delays. The
rule, however, imposes the condition by the same token that if his The CA Decision and Resolution dated September 30, 2014 and July
demurrer is granted by the trial court, and the order of dismissal 14, 2016, respectively, in CA-G.R. CV No. 04197 are
is reversed on appeal, the movant loses his right to present evidence hereby REVERSED and SET ASIDE and a new judgment is hereby
in his behalf and he shall have been deemed to have elected to stand rendered as follows: (1) the petitioners' Complaint is
on the insufficiency of plaintiffs case and evidence. In such event, the hereby GRANTED; (2) both the Deeds of Donation and of Absolute
appellate court which reverses the order of dismissal shall proceed to Sale are declared VOID; (3) Tax Declaration Nos. 14002-A and 01-07-
render judgment on the merits on the basis of plaintiffs 05886 in the names of respondents Capacio and Juliet O. Yu,
evidence. (Underscoring in the original, italics partly in the original respectively, are hereby CANCELLED; and (4) Tax Declaration No.
and partly supplied.) 05616 in the name of Mateo Duque, et al. is hereby RESTORED.

In short, defendants who present a demurrer to the plaintiffs' SO ORDERED.

evidence retain the right to present their own evidence, if the trial
court disagrees with them; if it agrees with them, but on appeal, the

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G.R. No. 176570 July 18, 2012 (1) P259,809.50 as principal obligation due plaintiff, plus interest
Spouses Ramon Villuga And Mercedita Villuga, Petitioners, due thereon at 14% interest per annum, until all sums due are
Vs. paid in full.
Kelly Hardware And Construction Supply Inc., represented by
Ernesto V. Yu, Executive Vice-President and General (2) P64,952.38 by way of reimbursements of attorney's fees plus
Manager, Respondent. P500.00 appearance fee in court.

PERALTA, J.: (3) P26,000.00 for litigation and other related expenses.

Before the Court is a petition for review on certiorari under Rule 45 of And to pay the cost of suit.3
the Rules of Court seeking to reverse and set aside the Decision1 and
Resolution2 dated November 30, 2006 and February 8, 2007 of the In their Answer to Complaint,4 petitioners admitted having made
Court of Appeals (CA) in CA-G.R. CV No. 69001. The CA Decision purchases from respondent, but alleged that they do not remember
affirmed the Orders of the Regional Trial Court (RTC) of Bacoor, the exact amount thereof as no copy of the documents evidencing the
Cavite, Branch 89, dated September 28, 1998 and May 6, 1999, while purchases were attached to the complaint. Petitioners, nonetheless,
the CA Resolution denied petitioners' Motion for Reconsideration. claimed that they have made payments to the respondent on March 4,
1994 and August 9, 1994 in the amounts of P110,301.80 and
The factual and procedural antecedents of the case are as follows: P20,000.00, respectively, and they are willing to pay the balance of
their indebtedness after deducting the payments made and after
On March 3, 1995, herein respondent filed with the RTC of Bacoor, verification of their account.
Cavite a Complaint for a Sum of Money and Damages against herein
petitioners alleging as follows: In a Manifestation5 dated July 18, 1995, petitioners stated that in
order to buy peace, they were willing to pay respondent the principal
xxxx sum of P259,809.50, but without interests and costs, and on
installment basis.
(3) During the period of November 19, 1992 to January 5, 1993,
defendants [herein petitioners] made purchases of various In its Counter Manifestation,6 respondent signified that it was
construction materials from plaintiff corporation [herein amenable to petitioners' offer to pay the principal amount of
respondent] in the sum of P259,809.50, which has not been paid P259,809.50. However, respondent insisted that petitioners should
up to the present time, both principal and stipulated interests due also pay interests, as well as litigation expenses and attorney's fees,
thereon. and all incidental expenses.

(4) Plaintiff made several demands, oral and written, for the same Subsequently, on August 11, 1995, respondent filed a Motion for
defendants to pay all their obligations due plaintiff herein, but Partial Judgment on the Pleadings7 contending that petitioners were
defendants fail and refuse to comply with, despite demands made deemed to have admitted in their Answer that they owed respondent
upon them, to the damage and prejudice of plaintiff. the amount of P259,809.50 when they claimed that they made partial
payments amounting to P130,301.80. Based on this premise,
xxxx respondent prayed that it be awarded the remaining balance of
P129,507.70. Petitioners filed their Opposition8 to the said Motion.
WHEREFORE, premises considered, it is most respectfully prayed of
this Honorable Court that judgment be rendered in favor of plaintiff On September 11, 1995, the RTC issued an Order 9 deferring resolution
and against defendants by ordering defendants to pay the sum of: of respondent's Motion for Partial Judgment on the ground that there
is no clear and specific admission on the part of petitioners as to the
actual amount that they owe respondent.

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On January 30, 1996, respondent filed an Amended Complaint,10 with On September 4, 1997, respondent filed a Motion to Expunge with
leave of court, alleging that between October 1992 until January 5, Motion for Summary Judgment17 claiming that petitioners' Comments
1993, petitioners purchased from it (respondent) various construction on respondent's Request for Admission is a mere scrap of paper as it
materials and supplies, the aggregate value of which is P279,809.50; was signed by petitioners' counsel and not by petitioners themselves
that only P20,000.00 had been paid leaving a balance of P259,809.50. and that it was filed beyond the period allowed by the Rules of Court.
Respondent goes on to assert that petitioners, in effect, were deemed
In their Answer to Amended Complaint,11 petitioners reiterated their to have impliedly admitted the matters subject of the said request.
allegations in their Answer to Complaint. Respondent also contended that it is already entitled to the issuance
of a summary judgment in its favor as petitioners not only failed to
On March 8, 1996, respondent filed a Request for Admission12 asking tender a genuine issue as to any material fact but also did not raise
that petitioners admit the genuineness of various documents, such as any special defenses, which could possibly relate to any factual issue.
statements of accounts, delivery receipts, invoices and demand letter
attached thereto as well as the truth of the allegations set forth In their Opposition to Motion to Expunge with Motion for Summary
therein. Judgment,18 petitioners argued that respondent's request for
admission is fatally defective, because it did not indicate or specify a
Respondent basically asked petitioners to admit that the latter's period within which to answer; that verification by petitioners'
principal obligation is P279,809.50 and that only P20,000.00 was paid. counsel is sufficient compliance with the Rules of Court; that
petitioners' request for admission should be deemed dispensed with
and no longer taken into account as it only relates to the Amended
On June 3, 1996, respondent filed a Manifestation and Motion 13 before
Complaint, which was already abandoned when the Second Amended
the RTC praying that since petitioners failed to timely file their
Complaint was filed; and that summary judgment is improper and
comment to the Request for Admission, they be considered to have
without legal basis, as there exists a genuine controversy brought
admitted the genuineness of the documents described in and
about by petitioners' specific denials and defenses.
exhibited with the said Request as well as the truth of the matters of
fact set forth therein, in accordance with the Rules of Court.
On September 28, 1998, the RTC issued an Order, the dispositive
portion of which reads as follows:
On June 6, 1996, petitioners filed their Comments on the Request for
Admission14 stating their objections to the admission of the
documents attached to the Request. ACCORDINGLY, plaintiff's [herein respondent's] Motion to Expunge
with Motion for Summary Judgment is hereby GRANTED.
On January 24, 1997, respondent filed its Second Amended
Complaint,15 again with leave of court. The amendment modified the Defendants' Petitioners’ "Comments on the Request for Admission"
period covered by the complaint. Instead of October 1992 to January dated 04 June 1996 is hereby expunged from the record for being
5, 1993, it was changed to July 29, 1992 until August 10, 1994. The contrary to the Rules of Court. Judgment is hereby rendered in favor
amendment also confirmed petitioners' partial payment in the sum of of the plaintiff and against the defendants as follows:
P110,301.80 but alleged that this payment was applied to other
obligations which petitioners owe respondent. Respondent reiterated Defendants are hereby ordered to pay, jointly and severally, plaintiff
its allegation that, despite petitioners' partial payment, the principal the sum of TWO HUNDRED FIFTY-NINE [THOUSAND] EIGHT
amount which petitioners owe remains P259,809.50. HUNDRED NINE PESOS and 50/100 (P259,809.50), with legal interest
due thereon until the whole amount is paid.
Petitioners filed their Answer to the Second Amended
Complaint16 denying the allegations therein and insisting that they SO ORDERED.19
have made partial payments.
Petitioners filed a Motion for Reconsideration, but it was denied by
the RTC in its Order dated May 6, 1999.

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Unyielding, petitioners filed an appeal with the CA. pleadings may be received in evidence against the pleader; and claims
or defenses alleged therein not incorporated in the amended pleading
On November 30, 2006, the CA rendered its presently assailed shall be deemed waived.
Decision, affirming the September 28, 1998 and May 6, 1999 Orders
of the RTC. From the foregoing, it is clear that respondent's Request for
Admission is not deemed abandoned or withdrawn by the filing of the
Petitioners' Motion for Reconsideration was subsequently denied by Second Amended Complaint.
the CA via its Resolution dated February 8, 2007.
The Court also finds no error when the CA ruled that petitioners'
Hence, the instant petition for review on certiorari raising the Comments on the Request for Admission was filed out of time, and
following issues: quotes with approval the disquisition of the appellate court on this
matter, to wit:
THE HONORABLE COURT SHOULD NOT HAVE DENIED DEFENDANTS-
APPELLANTS' (PETITIONERS) COMMENT AND RULED THAT THERE x x x Pursuant to the above-quoted Section 2 of Rule 26 of the Rules
WAS IMPLIED ADMISSION CONTAINED IN THE REQUEST. of Court, the party to whom the request is directed must respond to
the request within a period of not less than ten (10) days after the
THERE SHOULD NOT HAVE BEEN A SUMMARY JUDGMENT AGAINST service thereof, or upon such further time the Court may allow on
DEFENDANTSAPPELLANTS (PETITIONERS).20 motion. In the instant case, the plaintiff-appellee's herein
respondent's "Request" failed to designate any period for the filing of
the defendants-appellants' herein petitioners' response. Neither did
In their first assigned error, petitioners insist in arguing that
the trial court fix the period for the same upon motion of the parties.
respondent waived its Request for Admission when it filed its Second
However, such failure to designate does not automatically mean that
Amended Complaint; that all motions or requests based on the
the filing or the service of an answer or comment to the "Request"
complaint, which was amended, should no longer be considered.
would be left to the whims and caprices of defendants-appellants. It
Petitioners also contend that the Request for Admission was not in
must be reiterated that one of the main objectives of Rule 26 is to
the form specified by the Rules of Court as it did not specify a period expedite the trial of the case (Duque vs. Court of Appeals, 383,
within which to reply as required by Section 1, Rule 26 of the same
Rules.
SCRA 520, 527 2002 ). Thus, it is also provided in the second paragraph
of Section 2 of Rule 26 of the Rules of Court that "[o]bjections on the
As to the second assignment of error, petitioners aver that the
ground of irrelevancy or impropriety of the matter requested shall be
summary judgment issued by the RTC is improper and without legal promptly submitted to the court for resolution."21
bases, considering that genuine issues were raised in the pleadings
filed by petitioners.
Nonetheless, the Court takes exception to the ruling of the CA that by
reason of the belated filing of petitioners' Comments on the Request
The petition lacks merit.
for Admission, they are deemed to have impliedly admitted that they
are indebted to respondent in the amount of P259,809.50.
The Court agrees with the CA in holding that respondent's Second
Amended Complaint supersedes only its Amended Complaint and
A careful examination of the said Request for Admission shows that
nothing more.
the matters of fact set forth therein are simply a reiteration of
respondent's main allegation in its Amended Complaint and that
Section 8, Rule 10 of the Rules of Court provides: petitioners had already set up the affirmative defense of partial
payment with respect to the above allegation in their previous
Sec. 8. Effect of amended pleading. – An amended pleading supersedes pleadings.
the pleading that it amends. However, admissions in superseded

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This Court has ruled that if the factual allegations in the complaint In this respect, the Court's ruling in Nocom v. Camerino,27 is
are the very same allegations set forth in the request for admission instructive, to wit:
and have already been specifically denied, the required party cannot
be compelled to deny them anew.22 A request for admission that x x x When the pleadings on file show that there are no genuine
merely reiterates the allegations in an earlier pleading is issues of fact to be tried, the Rules of Court allow a party to obtain
inappropriate under Rule 26 of the Rules of Court, which as a mode immediate relief by way of summary judgment, that is, when the facts
of discovery, contemplates of interrogatories that would clarify and are not in dispute, the court is allowed to decide the case summarily
tend to shed light on the truth or falsity of the allegations in the by applying the law to the material facts. Conversely, where the
pleading.23 Rule 26 does not refer to a mere reiteration of what has pleadings tender a genuine issue, summary judgment is not proper. A
already been alleged in the pleadings.24 Nonetheless, consistent with "genuine issue" is such issue of fact which requires the presentation
the abovementioned Rule, the party being requested should file an of evidence as distinguished from a sham, fictitious, contrived or
objection to the effect that the request for admission is improper and false claim. Section 3 of [Rule 35 of the Rules of Court] provides two
that there is no longer any need to deny anew the allegations (2) requisites for summary judgment to be proper: (1) there must be
contained therein considering that these matters have already been no genuine issue as to any material fact, except for the amount of
previously denied. damages; and (2) the party presenting the motion for summary
judgment must be entitled to a judgment as a matter of law. A
The foregoing notwithstanding, the Court finds that the CA was summary judgment is permitted only if there is no genuine issue as
correct in sustaining the summary judgment rendered by the RTC. to any material fact and a moving party is entitled to a judgment as a
matter of law. A summary judgment is proper if, while the pleadings
Sections 1 and 3, Rule 35 of the Rules of Court provide as follows: on their face appear to raise issues, the affidavits, depositions, and
admissions presented by the moving party show that such issues are
Section 1. Summary judgment for claimant. – A party seeking to not genuine.28
recover upon a claim, counterclaim, or cross-claim or to obtain a
declaratory relief may, at any time after the pleading in answer In the present case, it bears to note that in its original Complaint, as
thereto has been served, move with supporting affidavits, depositions well as in its Amended Complaint, respondent did not allege as to
or admissions for a summary judgment in his favor upon all or any how petitioners' partial payments of P110,301.80 and P20,000.00
part thereof. were applied to the latter's obligations. In fact, there is no allegation
or admission whatsoever in the said Complaint and Amended
Section 3. Motion and proceedings thereon. – The motion shall be Complaint that such partial payments were made. Petitioners, on the
served at least ten (10) days before the time specified for the hearing. other hand, were consistent in raising their affirmative defense of
The adverse party may serve opposing affidavits, depositions, or partial payment in their Answer to the Complaint and Answer to
admissions at least three (3) days before the hearing. After the Amended Complaint. Having pleaded a valid defense, petitioners, at
hearing, the judgment sought shall be rendered forthwith if the this point, were deemed to have raised genuine issues of fact.
pleadings, supporting affidavits, depositions, and admissions on file,
show that, except as to the amount of damages, there is no genuine The situation became different, however, when respondent
issue as to any material fact and that the moving party is entitled to a subsequently filed its Second Amended Complaint admitting therein
judgment as a matter of law. that petitioners, indeed, made partial payments of P110,301.80 and
P20,000.00. Nonetheless, respondent accounted for such payments by
Summary judgment is a procedural device resorted to in order to alleging that these were applied to petitioners' obligations which are
avoid long drawn out litigations and useless delays.25 Such judgment separate and distinct from the sum of P259,809.50 being sought in
is generally based on the facts proven summarily by affidavits, the complaint. This allegation was not refuted by petitioners in their
depositions, pleadings, or admissions of the parties.26 Answer to Second Amended Complaint. Rather, they simply insisted
on their defense of partial payment while claiming lack of knowledge
or information to form a belief as to the truth of respondent's
allegation that they still owe the amount of P259,809.50 despite their

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payments of P110,301.80 and P20,000.00. It is settled that the rule Star Life Insurance Corporation and Primitive E. Domingo to pay
authorizing an answer to the effect that the defendant has no solidarily Lo the Continental Bank the sum of forty-six thousand three
knowledge or information sufficient to form a belief as to the truth of hundred pesos and eighty-one centavos (P46,300.81), with twelve
an averment and giving such answer the effect of a denial, does not percent interest per annum from June 1, 1967 until the principal has
apply where the fact as to which want of knowledge is asserted, is so been fully paid, plus attorney's fees of three thousand pesos and the
plainly and necessarily within the defendant’s knowledge that his costs (Civil Case No. 69703).
averment of ignorance must be palpably untrue.29 In the instant case,
it is difficult to believe that petitioners do not know how their That judgment was rendered on the basis of the evidence which was
payment was applied. Instead of denying knowledge, petitioners presented before the deputy clerk of court who was commissioned Lo
could have easily asserted that their payments of P110,301.80 and receive the same after the defendants were declared in default for
P20,000.00 were applied to, and should have been deducted from, the nonappearance at the pre-trial. As no appeal was interposed from the
sum sought to be recovered by respondent, but they did not, leading said judgment, it became final and executory. It was not satisfied.
the court to no other conclusion than that these payments were
indeed applied to their other debts to respondent leaving an The sheriff in his return dated August 30, 1968 stated that he served
outstanding obligation of P259,809.50. the writ of execution upon the judgment debtor, P.E. Domingo, who
manifested that he would settle the case with the bank. After the
On the basis of the foregoing, petitioners' defense of partial payment expiration of the sixty-day period, without the judgment having been
in their Answer to Second Amended Complaint, in effect, no longer satisfied, the sheriff returned the writ to the court.
raised genuine issues of fact that require presentation of evidence in
a full-blown trial. Hence, the summary judgment of the RTC in favor On March 17, 1977, the bank, "through the Statutory Receiver", filed a
of respondent is proper. complaint also in the Court of First Instance of Manila for the revival
of the said judgment (Civil Case No. 107556). lt was alleged therein
WHEREFORE, the instant petition is DENIED. The assailed Decision that the judgment debtors (now the private respondents) had made
and Resolution of the Court of Appeals are AFFIRMED. partial payments and that the amount due as of March 15, 1977 was
thirty-four thousand six hundred twenty-two pesos and nineteen
SO ORDERED. centavos (P34,622.19) with twelve percent interest a year from March
16, 1977. The bank prayed that the judgment be revived.

The defendants answered the complaint. Then, they filed a motion to

dismiss on the grounds that the action for revival of judgment had
REMREV WEEK 6 - MIDTERMS prescribed and that the plaintiff bank had no cause of action because
the judgment sought to be revived is void since it was based on the
G.R. No. 50480 December 14, 1979 evidence received by the deputy clerk of court as commissioner.
Continental Bank, Petitioner-Appellant
Vs. The motion to dismiss was opposed by the bank. The trial court
Hon. Joel P. Tiangco, Presiding Judge Of Branch Xxviii, Court Of granted the motion in a minute order which reads: "Considering the
First Instance Of Manila, Income And Acceptance Corporation, Star allegations contained, the arguments advanced and the doctrine cited
Life Insurance Corporation And Primitivo E. Domingo, Respondents in defendants' motion to dismiss as well as those of the opposition
Appellees. filed thereto by the plaintiff, the Court resolves to grant the motion."
The plaintiff appealed under Republic Act 5440.
AQUINO, J.:
We have admonished the trial courts not to issue a minute order lie
The Court of First Instance of Manila rendered a decision dated the one under appeal. A trial court should specify in its order the
September 26, 1967, ordering Income and Acceptance Corporation, reasons for the dismissal of the complaint so that when the order is

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appealed, this Court can readily determine from a casual perusal 23683, July 30, 1969, 28 SCRA 1054: Province of Pangasinan and
thereof whether there is a prima facie justification for the dismissal. Soriano vs. Palisoc, 116 Phil. 609, 614. Cf. Lim Tanhu vs. Ramolete, L-
40098, August 29, 1975, 66 SCRA 425, 453-4.)
The contention that the action for revival of the judgment had
prescribed is manifestly devoid of merit. "A judgment may be WHEREFORE, the trial court's order of dismissal is REVERSED and
executed on motion within five (5 years from the date of its entry or SET ASIDE. Costs against the private respondents.
from the date it becomes final and executory. After the lapse of such
time, and before it is barred by the statute of limitations, a judgment SO ORDERED.
may be enforced by action." (Sec. 6, Rule 39, Rules of Court.) The
prescriptive period for enforcing a judgment is ten years (Art.
1144[3], Civil Code).

In this case, the ten-year period for enforcing the judgment had not REMREV WEEK 7 - MIDTERMS
yet expired when the action for its revival was filed on March 17,
1977 because, as already stated, the judgment was rendered on G.R. No. 170632 July 10, 2007
September 26, 1967. Respondents' contention that between Eugenia D. Polido, Petitioner,
September 26, 1967 and March 17, 1977 a period of ten years, five Vs.
months and twenty-one days had elapsed is a palpable error. Hon. Court of Appeals and Mariano P. Gasat, Respondents.

There can be no doubt that the action herein was filed within ten CARPIO MORALES, J.:
years from the rendition of the judgment, not to mention the date of
the entry thereof, which, although not shown in the record, can be After the death of her husband Jacinto Polido (Polido), Eugenia Duque
assumed to be much later. Polido, petitioner, tried to withdraw the joint savings deposit they
maintained at the Philippine National Bank, Camiling, Tarlac Branch,
Also erroneous and unmeritorious is respondents' contention that the but failed because one Mariano Gasat (Gasat), herein respondent who
judgment in question is void and unenforceable because it was based claimed to be the couple’s adopted child, objected thereto.
on evidence which was heard by the deputy clerk of court as
commissioner. That judgment is valid and enforceable because it was Petitioner thus filed on January 21, 2004 a complaint before the
rendered by a court of competent jurisdiction and it was not impaired Regional Trial Court of Tarlac, with Motion for the Issuance of a Writ
by extrinsic fraud nor by lack of due process. The trial court acquired of Preliminary Injunction, against Gasat.
jurisdiction over the person of the judgment debtors. They
acquiesced in the validity of the judgment when they made partial In her complaint, petitioner prayed for the following reliefs:
payments to satisfy it.
1. An Order granting the issuance of [a] writ of preliminary
The defendants or private respondents did not question in the lower injunction enjoining and restraining the defendant and all
court its delegation to the deputy clerk of court of the duty to receive persons acting under him from preventing the officers or
plaintiff's evidence. 'There is no showing that they were prejudiced by employee[s] of the Philippine National Bank, Camiling, Tarlac
such a procedure, that the commissioner committed any mistake or Branch from releasing in favor of the plaintiff the money
abuse of discretion, or that the proceedings were vitiated by collusion deposited with the said bank upon posting of a bond by the
and collateral fraud. It is too late at this hour for them to question the plaintiff in an amount to be fixed by the Court;
reception of plantiff's evidence by the deputy clerk of court acting as
commissioner. (See CCC Insurance Corporation vs. Court of Appeals,
2. After trial, to declare the defendant not the adopted child of the
L-25920, January 30, 1970, 31 SCRA 264; 2 Moran's Comments on the
plaintiff and her husband Jacinto Polido;
Rules of Court, 1970, Ed., pp. 159-160 citing Apurillo vs. Garciano L-

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 3. Directing the defendant to pay plaintiff attorney’s fees and "ART. 1001. Should brothers and sisters or their children survive with
litigation expenses in the amount of P100,000.00 and moral the widow or widower, the latter shall be entitled to one-half of the
damages in the amount of P50,000.00. inheritance and the brothers and sisters or their children to the other
half."
Other reliefs which are just and equitable under the premises are
likewise prayed for.1 (Underscoring supplied) [T]he heirs of the late Jacinto Polido are his WIFE (plaintiff) [who is
entitled to] one-half (1/2) and Petra P. Gasat’s SEVEN (7) CHILDREN
In his Answer with Compulsory Counterclaim, 2 Gasat alleged that which would include the defendant[, who are entitled to] one-half
petitioner and her late husband had adopted him as their child, (1/2).
annexing as proof thereof a photocopy of an Order dated September
23, 1970 of the Municipal Trial Court (MTC) of Camiling in Civil Case HENCE, THERE IS NO WAY WHATSOEVER TO JUSTIFY THE ISSUANCE
No. 2497, "In the Matter of the Adoption of the Minors, Lea D. Tomas OF PRELIMINARY INJUNCTION AGAINST THE DEFENDANT EVEN IF
and Mariano Gasat, JACINTO POLIDO AND EUGENIA POLIDO, HIS ADOPTION WOULD BE NULLIFIED OR OF NO EFFECT
Petitioners,"3 and a copy of a Certification4 from the MTC Clerk of WHATSOEVER.7 (Emphasis in the original; underscoring supplied)
Court that a "[c]opy of the decree of adoption dated September 23,
1970 was furnished to the Office of the Local Civil Registrar" and said Gasat subsequently filed an Omnibus Motion8 withdrawing 1) the
decree had become final and executory; and that petitioner cannot allegation he had made in various pleadings that he is an adopted son
withdraw any amount from the bank account because she should of the couple and 2) his Motion to Set the Affirmative Defenses for
follow legal procedures governing settlement of the estate of a Preliminary Hearing. And he moved to convert the case to an action
deceased, unless a competent court issues an order allowing her to for partition, at his instance, of the estate of his grandfather Narciso
withdraw from said account.5 Polido,9 father of petitioner’s husband and Gasat’s mother, and to
require petitioner to file income tax returns and pay the estate tax
In his Opposition to the Issuance of Preliminary Injunction and due.
Motion to Set the Affirmative Defenses for Preliminary Hearing, 6 Gasat
argued that: To Gasat’s prayer to convert the action to one for partition and to
require her to file Estate Tax Returns, petitioner filed an
xxxx Opposition.10 And she moved for Judgment on the Pleadings.11

3. Even assuming but without admitting that the defendant’s To justify her motion for judgment on the pleadings, petitioner
adoption paper is ineffective, still he cannot be deprived of his argued that Gasat, in withdrawing his claim and allegation that he is
inheritance from the Estate of Jacinto Polido because an adopted child, "practically admitted [her] material allegations [in
said deceased and the plaintiff are childless and all the properties the Complaint] that [he] is not an adopted child."12
subject of inheritance are exclusive properties of the late Jacinto
Polido, the same being inherited from his late father, NARCISO By Order13 dated December 7, 2004, the trial court denied Gasat’s
POLIDO[,] who died in Hawaii, USA. motion to convert the case to an action for partition and granted
petitioner’s motion for judgment on the pleadings in this wise:
4. The Estate of Narciso Polido was inherited by his two children,
namely, said JACINTO POLIDO and PETRA P. GASAT, also On November 30, 2004, the plaintiff filed a Motion for Judgment on
deceased and the latter was survived by her husband and SEVEN the ground that by withdrawing all his allegations that he is [an]
(7) children of which the defendant (MARIANO D. POLIDO) is one . adopted child of the plaintiff, defendant practically admitted all the
. .; material allegations in the complaint and prayed that judgment be
rendered as the complaint may warrant.
5. Thus, by virtue of the provision of Art. 1001 of the Civil Code
of the Philippines, which reads as follows:

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This Court resolves to grant the motion for judgment on the ground jurisdictional requirement, its non-payment at the time of filing does
that the defense that he is an adopted child of the plaintiff is not automatically cause the dismissal of the case, as long as the fee is
withdrawn by the defendant himself. By withdrawing his defense, he paid within the applicable prescriptive or reglementary period, more
is deemed to have admitted the main allegation of the plaintiff that so, when the party involved demonstrates a willingness to abide by
he is not an adopted child. On the motion of the defendant that the the rules prescribing such payment. On this score is the case of
instant action be converted into a partition and that the plaintiff be Spouses Gregorio Go and Juan Tan Go v. Johnson Y. Tong, et. al.,
ordered to file her real estate tax return, the same is denied for lack where the Supreme Court ruled that:
of merit.14 (Underscoring supplied)
While the cause of action of the private respondent was supposed to
Accordingly, the trial court disposed as follows: prescribe in four (4) years, he was allowed to pay; and he in fact paid
the docket fee in a year’s time. We do not see how this period can be
WHEREFORE, judgment is hereby rendered: deemed unreasonable. Moreover, on his part there is no showing of
any pattern or intent to defraud the government of the required
1. Declaring the defendant not the adopted child of the docket fee.
plaintiff,
In the instant case, the period between the filing of the notice of
2. Ordering the Manager of the Philippine National Bank, appeal on February 28, 2005 and the payment of docket fee on May
Camiling Branch or any other branch to release to plaintiff 26, 2005 is deemed reasonable. Moreover, justice will be better served
upon her request the money she deposited or her deceased with the admission of such belated payment.21 (Underscoring
husband Jacinto Polido; supplied)

3. Directing the defendant to pay the plaintiff moral Hence, the present Petition for Certiorari and Prohibition with Urgent
damages in the amount of P25,000.00 and attorney’s fee[s] in Motion for Injunction and Temporary Restraining Order,22 petitioner
the amount of P25,000.00. faulting the Court of Appeals for committing grave abuse of
discretion in relaxing the rule on the payment of docket fees on the
ground of substantial justice.23
SO ORDERED.15 (Underscoring supplied)
The petition fails.
Gasat filed a Notice of Appeal.16 On May 26, 2005, before the Court of
Appeals, he filed an Ex-Parte Motion to Admit Payment of Docket
Fee,17 explaining that being jobless, it took some time for him to raise Indeed, jurisprudence allows the relaxation of the Rule on non-
the docket fee. He added that he had to borrow at an exorbitant payment of appellate docket fees.
interest rate. Finally, he explained that when he went to the trial court
to pay the docket fee, he was advised to pay the same at the Court of Notwithstanding the mandatory nature of the requirement of
Appeals, the records having already been forwarded to it. payment of appellate docket fees, we also recognize that its strict
application is qualified by the following: first, failure to pay those
The Court of Appeals denied his motion and dismissed his fees within the reglementary period allows only discretionary, not
appeal.18 On Motion for Reconsideration, however, the Court of automatic, dismissal; second, such power should be used by the court
Appeals, by Resolution dated July 19, 2005, admitted Gasat’s docket in conjunction with its exercise of sound discretion in accordance
fee.19 Petitioner filed a Motion for Reconsideration, which the Court of with the tenets of justice and fair play, as well as with a great deal of
Appeals denied in this wise: 20 circumspection in consideration of all attendant circumstances.24

It is settled that "delay in the payment of the docket fees confers a The relaxation by the appellate court of the rule on non-payment of
discretionary, and not mandatory, power to dismiss the proposed the appellate docket fee appears justified as a perusal of the records
appeal." While the payment of the prescribed docket fee is a

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of the case shows persuasive and weighty reasons to give due course to enjoin Gasat "and all persons acting under him from preventing the
to the appeal.25 officers or employees of the [PNB] from releasing" the deposit to her.

Instead of remanding the case to the appellate court, however, this 11. . . Further, defendant has all the rights to prohibit the plaintiff
Court, in the interest of speedy dispensation of justice,26 especially from personally withdrawing [from] the said bank account because, it
given that the main issue is a question of law, now passes on the is mandated by law that after the death of the owner of the said
merits of the appeal of Gasat. account, any withdrawal is prohibited except by order of the Court or
upon presentation of an Extrajudicial Settlement executed by the legal
Section 1 of Rule 34 of the Rules of Court provides: heirs and after compliance with all the requirements of the law.
Likewise the bank is prohibited to allow any withdrawal without
SECTION 1. Judgment on the Pleadings. – Where an answer fails to submitting to it said requirements.
tender an issue, or otherwise admits the material allegations of the
adverse party’s pleading, the court may, on motion of that party, xxxx
direct judgment on such pleading. However, in actions for declaration
of nullity or annulment of marriage or for legal separation, the 13. With respect to the allegations of said paragraph 14, to wit –
material facts alleged in the complaint shall always be proved.
(Emphasis and underscoring supplied) Unless an injunction be issued against the defendant restraining him
from claiming in the bank account, the plaintiff would suffer
Passing on this rule, the Court declared: irreparable damage. The plaintiff is willing to post a bond in an
amount to be fixed by the Honorable Court.
x x x The answer would fail to tender an issue x x x if it does not
comply with the requirements for a specific denial set out in Section This allegation is UNFOUNDED AND BASELESS and the court cannot
10 (or Section 8) of Rule 8; and it would admit the material allegations use [it] as a ground for the issuance of any restraining order. Even
of the adverse party’s pleadings not only where it expressly confesses assuming that the court will issue an Order restraining defendant
the truthfulness thereof but also if it omits to deal with them at all. from claiming the bank account, the plaintiff still cannot withdraw
any amount thereof, because it is a part of the ESTATE of Jacinto
Now, if an answer does in fact specifically deny the material Polido, and as provided for by laws before the bank allows any
averments of the complaint in the manner indicated by said Section withdrawal, the plaintiff has to follow certain procedures required by
10 of Rule 8, and/or asserts affirmative defenses (allegations of new other laws governing estate settlement, that is, - (a) Payment of Estate
matter which, while admitting the material allegations of the Tax, if any; (b) BIR Tax Clearance; (c) Present a duly published
complaint expressly or impliedly, would nevertheless bar recovery by Extrajudicial Partition executed by the heirs adjudicating said amount
the plaintiff) x x x, a judgment on the pleadings would naturally not to such heir, unless a competent Court issues an Order allowing the
be proper.27 plaintiff to withdraw [from] said account. 28 (Underscoring supplied)

In the case at bar, the trial court granted petitioner’s motion for It bears noting that petitioner and her deceased husband Polido were
judgment on the pleadings on petitioner’s argument that in childless; hence, Gasat, who is a son of Polido’s sister Petra P. Gasat,
withdrawing Gasat’s allegation of her having adopted him, he could inherit from Polido.
"practically admitted her material allegations [in her Complaint] that
[he] is not an adopted child." Parenthetically, Section 97 of the National Internal Revenue Code
states:
Gasat’s Answer with Compulsory Counterclaim raised other issues,
however, which are independent of his claim of adoptive filiation and If a bank has knowledge of the death of a person, who maintained a
which would defeat petitioner’s main cause of action – for the court bank deposit account alone, or jointly with another, it shall not allow
any withdrawal from the said deposit account unless the

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Commissioner had certified that the taxes imposed thereon by this This case stemmed from a Complaint3 for Sum of Money filed by
Title have been paid; Provided, however, That the administrator of the respondent against petitioner. The complaint alleged that petitioner
estate or any one (1) of the heirs of the decedent may, upon and respondent executed a Memorandum of Agreement wherein
authorization by the Commissioner, withdraw an amount not respondent was engaged to supply and erect insulated panel systems
exceeding Twenty thousand pesos (₱20,000) without the said at various pavilions at the Philippine Centennial Exposition Theme
certification. For this purpose, all withdrawal slips shall contain a Park, specifically for the Phase I Project, for an agreed amount of
statement to the effect that all of the joint depositors are still living at US$3,745,287.94.
the time of withdrawal by any one of the joint depositors and such
statement shall be under oath by the said depositors. Pursuant to the Memorandum of Agreement, petitioner made various
payments amounting to US$3,129,667.32 leaving a balance of
There being no ground to merit petitioner’s Motion for Judgment on US$615,620.33. Respondent claims that it made several written
the Pleadings, the trial court erred in granting the same. demands for petitioner to pay the said balance, but the latter
continuously refused to heed its plea.
WHEREFORE, the assailed petition is DENIED. The Court of Appeals
Resolution admitting respondent’s payment of docket fee is upheld. Thereafter, petitioner filed its Answer with Counterclaim.4

The Order of the Regional Trial Court of Camiling, Tarlac, Branch 68 Respondent then moved for judgment on the pleadings on the ground
dated December 7, 2004 granting petitioner’s Motion for Judgment on that the Answer admitted all material allegations of the Complaint
the Pleadings is REVERSED and SET ASIDE. and, therefore, failed to tender an issue. Thus, respondent deems that
petitioner’s Answer, in effect, admitted the existence of the
Let the case be REMANDED to the trial court which is directed to Memorandum of Agreement and its failure to pay the balance despite
continue with dispatch its proceedings on and/or resolve the case in repeated demands.
light of the foregoing discussions.
In a Judgment5 dated October 6, 2000, the Regional Trial Court (RTC)
Costs against petitioner. of Makati City rendered judgment in favor of respondent. Pertinent
portions of said decision read:
SO ORDERED.
In claiming that the Answer of the [petitioner] failed to tender an
G.R. No. 181676 June 11, 2014 issue, [respondent] argued that the present action is for collection of
Asian Construction and Development Corporation, Petitioner, the amount of US$615,620.33 with interest at the rate of 12% per
Vs. annum, which amount represents the balance of the payment under
Sannaedle Co., Ltd., Respondent. the Memorandum of Agreement, Annex B of the Complaint entered
into between [respondent] and [petitioner] which was not denied in
the Answer. [Respondent] further claimed that in a letter dated
PERALTA, J.: February 2, 2000, Annex C of the Complaint, it demanded payment of
the said amount of US$615,620.33 and in reply thereto, [petitioner]
Before the Court is a Petition for Review on Certiorari under Rule 45 stated in part –
of the Rules of Court seeking the reversal of the Decision1 and
Resolution,2 dated April 25, 2006 and February 6, 2008, respectively, "We refer to your letter dated February 2, 2000 regarding the
of the Court of Appeals (CA) in CA-G.R. CV No. 71916. US$2,635,333.00 balance unpaid claim of SANNAEDLE.

The facts follow. xxx xxx xxx

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2. Phase I Contract Costs against the [petitioner].

While we recognize being obligated to this amount, we do not have at SO ORDERED.9

the moment the capability to pay it. This is because our financial
position has been severely affected by the freezing of the government Petitioner filed a motion for reconsideration, but the CA denied it in a
of all our collectibles on EXPO projects including the ₱80M (approx. Resolution dated February 6, 2008.
US$2.0M) from DPWH intended to pay the cost increment of reverting
back the use of Sannaedle in Phase I. Hence, the present petition wherein petitioner raises this sole issue
for our resolution: whether or not judgment on the pleadings is
xxx xxx xxx proper.

The partial amount of about US$1.4M paid by ASIAKONSTRUKT to Petitioner contends that the judgment on the pleadings is not proper,
Sannaedle in excess of its allocated budget of US$1.745M actually because it raised special and affirmative defenses in its Answer. It
came from its own source and initiatives. This effort made by asserts that with this specific denial, a genuine issue of fact had been
ASIAKONSTRUKT significantly reduced the balance due Sannaedle to joined to the extent that a judgment on the pleadings could not be
only US$615,620.33. made.

The Court notes that in the Answer with Counterclaim of the For its part, respondent counters that petitioner’s Answer admitted
[petitioner], the execution of the Memorandum of Agreement, Annex the material allegations of its complaint regarding the cause of action,
B of the Complaint was admitted (paragraph 13, Answer). Further, it which is collection of sum of money. Respondent emphasizes that
did not deny specifically the claim of the [respondent] of being assuming petitioner’s defense of respondent’s lack of capacity to sue
entitled to collect the said amount of US$615,620.33.6 has a leg to stand on, still, the same cannot prevent respondent from
seeking the collection of petitioner’s unpaid balance.
WHEREFORE, judgment is rendered in favor [of] the [respondent] and
[petitioner] is ordered to pay [respondent] the amount of US The Court finds the petition bereft of merit.
$615,620.33 with interest thereon at the rate of 12% per annum from
February 2, 2000 until fully paid. Judgment on the pleadings is governed by Section 1, Rule 34 of the
1997 Rules of Civil Procedure which reads:
No pronouncement as to costs.
Sec. 1. Judgment on the pleadings. – Where an answer fails to tender
SO ORDERED.7 an issue, or otherwise admits the material allegations of the adverse
party’s pleading, the court may, on motion of that party, direct
Petitioner filed a motion for reconsideration against said decision. judgment on such pleading. However, in actions for declaration of
However, the same was denied in an Order8 dated December 13, 2000. nullity or annulment of marriage or for legal separation, the material
facts alleged in the complaint shall always be proved.10
Thus, petitioner filed an appeal before the CA.
Judgment on the pleadings is proper when an answer fails to tender
On April 25, 2006, the CA rendered its assailed Decision which an issue, or otherwise admits the material allegations of the adverse
disposed as follows: party’s pleading. An answer fails to tender an issue if it does not
comply with the requirements of a specific denial as set out in
WHEREFORE, the instant appeal is DISMISSED. The judgment of the Sections 811 and 10,12 Rule 8 of the 1997 Rules of Civil Procedure,
Regional Trial Court of Makati City, Branch 138, dated October 6, resulting in the admission of the material allegations of the adverse
2000, is hereby AFFIRMED. party’s pleadings.13

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This rule is supported by the Court’s ruling in Mongao v. Pryce 4. That the [respondent] and the [petitioner] entered into a
Properties Corporation14 wherein it was held that "judgment on the Memorandum of Agreement in Makati City, within the jurisdiction
pleadings is governed by Section 1,Rule 34 of the 1997 Rules of Civil of this Honorable Court, dated February 17, 1998, wherein the
Procedure, essentially a restatement of Section 1, Rule 19 of the 1964 [Petitioner] corporation agreed with and ordered the herein
Rules of Court then applicable to the proceedings before the trial [Respondent], as Contractor, to design and install INSUPANEL
court. Section 1, Rule 19 of the Rules of Court provides that where an SYSTEMS at various pavilions, etc. at expo projects site; and
answer fails to tender an issue, or otherwise admits the material specifically for the Phase I project at an agreed amount of
allegations of the adverse party’s pleading, the court may, on motion US$3,745,287.94(Par. 2.1). A xerox copy of this Memorandum of
of that party, direct judgment on such pleading. The answer would Agreement dated February 17, 1998 between [Respondent] and
fail to tender an issue, of course, if it does not comply with the [Petitioner] consisting of six (6) pages, is attached hereto as Annex
requirements for a specific denial set out in Section 10 (or Section 8) B and made an integral part hereof.
of Rule 8; and it would admit the material allegations of the adverse
party’s pleadings not only where it expressly confesses the 5. That pursuant to this Memorandum of Agreement (Exhibit
truthfulness thereof but also if it omits to deal with them at all."15 B)and contract price of US$3,745,287.94, various payments have
been made by [Petitioner] Corporation on this Phase I project
Further, in First Leverage and Services Group, Inc. v. Solid Builders, totaling US$3,129,667.32, thus leaving a balance of
Inc.,16 this Court held that where a motion for judgment on the US$615,620.33.18
pleadings is filed, the essential question is whether there are issues
generated by the pleadings. In a proper case for judgment on the While petitioner allegedly raised affirmative defenses, i.e., defect in
pleadings, there is no ostensible issue at all because of the failure of the certification of non-forum shopping, no legal capacity to sue and
the defending party’s answer to raise an issue. The answer would fail fortuitous event, the same cannot still bar respondent from seeking
to tender an issue, of course, if it does not deny the material the collection of the unpaid balance. Other than these affirmative
allegations in the complaint or admits said material allegations of the defenses, petitioner’s denial neither made a specific denial that a
adverse party’s pleadings by confessing the truthfulness thereof Memorandum of Agreement was perfected nor did it contest the
and/or omitting to deal with them at all.17 genuineness and due execution of said agreement.

Here, it is irrefutable that petitioner acknowledged having entered We, therefore, sustain the CA and quote with approval the well-
into a Memorandum of Agreement with respondent and that it still reasoned findings and conclusions of the appellate court contained in
has an unpaid balance of US$615,620.33. its Decision, to wit:

We note that respondent’s complaint for a sum of money is based The [respondent’s] cause of action for collection of Sum of Money is
mainly on the alleged failure of petitioner to pay the balance of founded mainly on the Memorandum of Agreement validly executed
US$615,620.33 under the Memorandum of Agreement. Quoting by both parties.
petitioner’s Answer, it is obvious that it admitted the foregoing
material allegations in paragraphs 3, 4 and 5 of the complaint, which First, the allegations in the [petitioner’s] Answer do not make out a
states as follows: specific denial that a Memorandum of Agreement was perfected
between the parties. Second, the [respondent] does not contest the
3. The [Petitioner] ASIAN CONSTRUCTION AND DEVELOPMENT due execution and/or genuineness of said Memorandum of
CORPORATION ("ASIAKONSTRUKT" for brevity), is a corporation Agreement. In fact, paragraph 13 of the Answer categorically admits
duly incorporated under the laws of the Philippines, with capacity paragraphs 4 and 5 of the Complaint.
to sue and be sued, and with business address at the Second
Floor, Union Ajinomoto Building, Sen. Gil Puyat Avenue, Makati In its Answer, the [petitioner] offered the following defenses, to wit:
City, and within the jurisdiction of this Honorable Court; and
where it may be served with summons and other court processes
of this Honorable Court,

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 19. The complaint should be dismissed on the ground that Vs.
[respondent's J certification of non-forum shopping is defective. Prudential Guarantee And Assurance, Inc., Respondent.
Rule 7, Section 5 of the 1997 Revised Rules of Civil Procedure ...
xxx xxx xxx PERLAS-BERNABE, J.:

22. [Respondent] has no legal capacity to sue, as it is a foreign Assailed in these consolidated petitions for review on Certiorari1 are
corporation doing business in the Philippines without a valid separate issuances of the Court of Appeals (CA) in relation to the
license. xxx xxx xxx complaint for sum of money filed by Prudential Guarantee and
Assurance, Inc. (PGAI) against the Government Service Insurance
27. The unexpected default of FCCC on its obligations to System (GSIS) before the Regional Trial Court of Makati City, Branch
[petitioner} on account of the Senate Blue Ribbon Committee 149 (RTC), docketed as Civil Case No. 01-1634.
investigation was a fortuitous event which suspended, if not
extinguished [petitioner's} obligation to FCCC. In particular, the petition in G.R. No. 165585 assails the
Decision2 dated May 26, 2004 and Resolution3 dated October 6, 2004
In essence, the [petitioner] justifies its refusal to tender payment of of the CA in CA-G.R. SP No. 69289 which affirmed the Order4 dated
the balance of US$615,620.33 to the [respondent], to the failure of the February 14, 2002, as well as the Order,5 Notices of Garnishment,6 and
First Centennial Clark Corporation (FCCC) to comply with its Writ of Execution,7 all dated February 19, 2002, issued by the RTC
obligations to ASIAKONSTRUKT which [it] characterizes as a authorizing execution pending appeal.
fortuitous event.
On the other hand, the petition in G.R. No. 176982 assails the
The defenses raised by [petitioner] cannot prevent the [respondent] Decision8 dated October 30, 2006 and Resolution9 dated March 12,
from seeking the collection of the amount of US$615,620.33. The 2007 of the CA in CA-G.R. CV No. 73965 which dismissed the appeal
express terms of the Memorandum of Agreement, the genuineness filed by GSIS, affirming with modification the Order10 dated January
and due execution of which are not denied by the [petitioner]. It 11, 2002 of the RTC rendering judgment on the pleadings.
cannot assert the said defenses in order to resist the [respondent's]
claim for the aforesaid sum of money, especially where it has been The Facts
sufficiently shown by the allegations of the Complaint and the
Answer that the [petitioner] is clearly liable for the payment thereof. 19 Sometime in March 1999, the National Electrification Administration
(NEA) entered into a Memorandum of Agreement11 (MOA) with GSIS
WHEREFORE, the instant petition is DENIED. The Decision dated insuring all real and personal properties mortgaged to it by electrical
April 25, 2006 and Resolution dated February 6, 2008 of the Court of cooperatives under an Industrial All Risks Policy (IAR policy). 12 The
Appeals are hereby AFFIRMED. total sum insured under the IAR policy was ₱16,731,141,166.80, out
of which, 95% or ₱15,894,584,108.40 was reinsured by GSIS with PGAI
SO ORDERED. for a period of one year or from March 5, 1999 to March 5, 2000. 13 As
reflected in Reinsurance Request Note No. 99-15014 (reinsurance
G.R. No. 165585 November 20, 2013 cover) and the Reinsurance Binder15 dated April 21, 1999 (reinsurance
Government Service Insurance System, Petitioner, binder), GSIS agreed to pay PGAI reinsurance premiums in the amount
Vs. of ₱32,885,894.52 per quarter or a total of ₱131,543,578.08.16 While
Prudential Guarantee and Assurance, Inc., Development Bank of the GSIS remitted to PGAI the reinsurance premiums for the first three
Philippines and Land Bank of the Philippines, Respondents. quarters, it, however, failed to pay the fourth and last reinsurance
premium due on December 5, 1999 despite demands. This prompted
G.R. No. 176982 PGAI to file, on November 15, 2001, a Complaint 17 for sum of money
Government Service Insurance System, Petitioner, (complaint) against GSIS before the RTC, docketed as Civil Case No.
01-1634.

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In its complaint, PGAI alleged, among others, that: (a) after it had foregoing motion by reiterating the allegations and defenses in its
issued the IAR policy, it further reinsured the risks covered under the Answer.
said reinsurance with reputable reinsurers worldwide such as Lloyds
of London, Copenhagen Re, Cigna Singapore, CCR, Generali, and On January 11, 2002, the RTC issued an Order37 (January 11, 2002
Arig;18 (b) the first three reinsurance premiums were paid to PGAI by Order) granting PGAI’s Motion for Judgment on the Pleadings. It
GSIS and, in the same vein, NEA paid the first three reinsurance observed that the admissions of GSIS that it paid the first three
premiums due to GSIS;19 (c) GSIS failed to pay PGAI the fourth and last quarterly reinsurance premiums to PGAI affirmed the validity of the
reinsurance premium due on December 5, 1999;20 (d) the IAR policy contract of reinsurance between them. As such, GSIS cannot now
remained in full force and effect for the entire insurable period and, renege on its obligation to remit the last and remaining quarterly
in fact, the losses/damages on various risks reinsured by PGAI were reinsurance premium.38 It further pointed out that while it is true that
paid and accordingly settled by it;21 (e) PGAI is under continuous the payment of the premium is a requisite for the validity of an
pressure from its reinsurers in the international market to settle the insurance contract as provided under Section 77 of Presidential
matter;22 and (f) GSIS acknowledged its obligation to pay the last Decree No. (PD) 612,39 otherwise known as "The Insurance Code," it
reinsurance premium as it, in turn, demanded from NEA the fourth was held in Makati Tuscany Condominium Corp. v. CA40 (Makati
and last reinsurance premium.23 Tuscany) that insurance policies are valid even if the premiums were
paid in installments, as in this case.41 Thus, in view of the foregoing,
In its Answer,24 GSIS admitted, among others, that: (a) its request for the RTC ordered GSIS to pay PGAI the last quarter reinsurance
reinsurance cover was accepted by PGAI in a reinsurance binder;25 (b) premium in the sum of ₱32,885,894.52, including interests amounting
it remitted to PGAI the first three reinsurance premiums which were to ₱6,519,515.91 as of July 31, 2000 until full payment, attorney’s
paid by NEA;26 and (c) it failed to remit the fourth and last reinsurance fees, and costs of suit.42 Dissatisfied, GSIS filed a notice of appeal.43
premium to PGAI.27 It, however, denied, inter alia, that: (a) it had
acknowledged its obligation to pay the last quarter’s reinsurance Meanwhile, PGAI filed a Motion for Execution Pending Appeal44 based
premium to PGAI;28 and (b) the IAR policy remained in full force and on the following reasons: (a) GSIS’ appeal was patently dilatory since
effect for the entire insurable period of March 5, 1999 to March 5, it already acknowledged the validity of PGAI’s claim; 45 (b) GSIS posted
2000.29 GSIS also proffered the following affirmative defenses: (a) the no valid defense as its Answer raised no genuine issues;46 and (c) PGAI
complaint states no cause of action against GSIS because the non- would suffer serious and irreparable injury as it may be blacklisted as
payment of the last reinsurance premium only renders the a consequence of the non-payment of premiums due.47 PGAI also
reinsurance contract ineffective, and does not give PGAI a right of manifested its willingness to post a sufficient surety bond to answer
action to collect;30 (b) pursuant to the regulations issued by the for any resulting damage to GSIS.48 The latter opposed49 the motion
Commission on Audit, GSIS is prohibited from advancing payments to asserting that there lies no sufficient ground or urgency to justify
PGAI occasioned by the failure of the principal insured, NEA, to pay execution pending appeal. It also claimed that all its funds and
the insurance premium;31 and (c) PGAI’s cause of action lies against properties are exempted from execution citing Section 39 of Republic
NEA since GSIS merely acted as a conduit.32 By way of counterclaim, Act No. (RA) 8291,50 otherwise known as "The Government Service
GSIS prayed that PGAI be ordered to pay exemplary damages, Insurance System Act of 1997."51
including litigation expenses, and costs of suit.33
On February 14, 2002, the RTC issued an Order 52 (February 14, 2002
On December 18, 2001, PGAI filed a Motion for Judgment on the Order) granting PGAI’s Motion for Execution Pending Appeal,
Pleadings34 averring that GSIS essentially admitted the material conditioned on the posting of a bond. It further held that only the
allegations of the complaint, such as: (a) the existence of the MOA GSIS Social Insurance Fund is exempt from execution. Accordingly,
between NEA and GSIS; (b) the existence of the reinsurance binder PGAI duly posted a surety bond which the RTC approved through an
between GSIS and PGAI; (c) the remittance by GSIS to PGAI of the first Order53 dated February 19, 2002, resulting to the issuance of a writ of
three quarterly reinsurance premiums; and (d) the failure/refusal of execution54 and notices of garnishment55 (February 19, 2002
GSIS to remit the fourth and last reinsurance premium.35 Hence, PGAI issuances), all of even date, against GSIS.
prayed that the RTC render a judgment on the pleadings pursuant to
Section 1, Rule 34 of the Rules of Court (Rules). GSIS opposed36 the The CA Proceedings Antecedent to G.R. No. 165585

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Aggrieved by the RTC’s February 14, 2002 Order, as well as the The CA Proceedings Antecedent to G.R. No. 176982
February 19, 2002 issuances, GSIS – without first filing a motion for
reconsideration (from the said order of execution) or a sufficient Separately, GSIS also assailed the RTC’s January 11, 2002 Order which
supersedeas bond56 – filed on February 26, 2002 a petition for granted PGAI’s Motion for Judgment on the Pleadings through an
certiorari57 before the CA, docketed as CA-G.R. SP No. 69289, against appeal68 filed on October 7, 2002, docketed as CA G.R. CV No. 73965.
the RTC and PGAI. It also impleaded in the said petition the Land
Bank of the Philippines (LBP) and the Development Bank of the GSIS averred that the RTC gravely erred in: (a) rendering judgment on
Philippines (DBP) as nominal parties so as to render them subject to the pleadings since it specifically denied the material allegations in
the writs and processes of the CA.58 PGAI’s complaint; (b) ordering execution pending appeal since there
are no justifiable reasons for the same; and (c) effecting execution
In its petition, GSIS argued that: (a) none of the grounds proffered by against funds and assets of GSIS given that RA 8291 exempts the
PGAI justifies the issuance of a writ of execution pending same from levy, execution and garnishment.69
appeal;59 and (b) all funds and assets of GSIS are exempt from
execution and levy in accordance with RA 8291.60 For its part, PGAI maintained that: (a) the judgment on the pleadings
was in order given that GSIS never disputed the facts as alleged in its
On April 4, 2002, the CA issued a temporary restraining order complaint; (b) the discretionary execution was proper in view of the
(TRO)61 enjoining the garnishment of GSIS’ funds with LBP and DBP. dilatory methods employed by GSIS in order to evade the payment of
Nevertheless, since the TRO’s effectivity lapsed, GSIS’ funds with the a valid obligation; and (c) the general insurance fund of GSIS, which
LBP were eventually garnished.62 was attached and garnished by the RTC, is not exempt from
execution.70
On May 26, 2004, the CA rendered a Decision63 dismissing GSIS’
petition, upholding, among others, the validity of the execution In a Decision71 dated October 30, 2006, the CA sustained the RTC’s
pending appeal pursuant to the RTC’s February 14, 2002 Order as January 11, 2002 Order but deleted the awards of interest and
well as the February 19, 2002 issuances. It found that the impending attorney’s fees for lack of factual and legal basis.72
blacklisting of PGAI constitutes a good reason for allowing the
execution pending appeal (also known as "discretionary execution") The CA ruled that judgment on the pleadings was proper since GSIS
considering that the imposition of international sanctions on any did not specifically deny the genuineness, due execution, and
single local insurance company puts in grave and immediate jeopardy perfection of its reinsurance contract with PGAI.73 In fact, PGAI even
not only the viability of that company but also the integrity of the settled reinsurance claims during the covering period rendering the
entire local insurance system including that of the state insurance reinsurance contract not only perfected but partially executed as
agency. It pointed out that the insurance business thrives on well.74
credibility which is maintained by honoring financial commitments.
Passing on the issue of the exemption from execution of GSIS funds,
On the claimed exemption of GSIS funds from execution, the CA held the CA, citing Rubia v. GSIS75 (Rubia), held that the exemption
that such exemption only covers funds under the Social Insurance provided for by RA 8291 is not absolute since it only pertains to the
Fund which remains liable for the payment of benefits like retirement, social security benefits of its members; thus, funds used by the GSIS
disability and death compensation and not those covered under the for business investments and commercial ventures, as in this case,
General Insurance Fund, as in this case, which are meant for may be attached and garnished.76
investment in the business of insurance and reinsurance.64
GSIS’ motion for reconsideration77 was denied by the CA in a
GSIS’ motion for reconsideration65 was denied by the CA in a Resolution78 dated March 12, 2007. Hence, the present petition for
Resolution66 dated October 6, 2004. Hence, the petition for review on review on certiorari in G.R. No. 176982.79
certiorari in G.R. No. 165585.67

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The Issues Before the Court Belo,85 "it is basic in the rule of evidence that bare allegations,
unsubstantiated by evidence, are not equivalent to proof. In short,
In these consolidated petitions, the essential issues are the following: mere allegations are not evidence."86 Hence, without any sufficient
(a) in G.R. No. 165585, whether the CA erred in (1) upholding the basis to support the existence of its alleged "good reasons," it cannot
RTC’s February 14, 2002 Order authorizing execution pending appeal, be said that the second requisite to allow an execution pending
and (2) ruling that only the Social Insurance Fund and not the General appeal exists. To reiterate, the requirement of "good reasons" must be
Fund of the GSIS is exempt from garnishment; and (b) in G.R. No. premised on solid footing so as to ensure that the "superior
176982, whether the CA erred in sustaining the RTC’s January 11, circumstance" which would impel immediate execution is not merely
2002 Order rendering judgment on the pleadings. contrived or based on speculation. This, however, PGAI failed to
demonstrate in the present case. In fine, the Court therefore holds
The Court’s Ruling that the CA’s affirmance of the RTC’s February 14, 2002 Order
authorizing execution pending appeal, as well as the February 19,
2002 issuances related thereto, was improper.
The petitions are partly meritorious.
Nevertheless, while an execution pending appeal should not lie in
A. Good reasons to allow execution pending appeal and the nature of
view of the above-discussed reasons, it must be noted that the funds
the exemption under Section 39 of RA 8291.
and assets of GSIS may – after the resolution of the appeal and
barring any provisional injunction thereto – be subject to execution,
The execution of a judgment pending appeal is an exception to the attachment, garnishment or levy since the exemption under Section
general rule that only a final judgment may be executed. 80 In order to 39 of RA 829187 does not operate to deny private entities from
grant the same pursuant to Section 2,81 Rule 39 of the Rules, the properly enforcing their contractual claims against GSIS. 88 This has
following requisites must concur: (a) there must be a motion by the been established in the case of Rubia wherein the Court held as
prevailing party with notice to the adverse party; (b) there must be a follows:
good reason for execution pending appeal; and (c) the good reason
must be stated in a special order.82
The declared policy of the State in Section 39 of the GSIS Charter
granting GSIS an exemption from tax, lien, attachment, levy,
Good reasons call for the attendance of compelling circumstances execution, and other legal processes should be read together with the
warranting immediate execution for fear that favorable judgment may grant of power to the GSIS to invest its "excess funds" under Section
yield to an empty victory. In this regard, the Rules do not 36 of the same Act. Under Section 36, the GSIS is granted the ancillary
categorically and strictly define what constitutes "good reason," and power to invest in business and other ventures for the benefit of the
hence, its presence or absence must be determined in view of the employees, by using its excess funds for investment purposes. In the
peculiar circumstances of each case. As a guide, jurisprudence exercise of such function and power, the GSIS is allowed to assume a
dictates that the "good reason" yardstick imports a superior character similar to a private corporation. Thus, it may sue and be
circumstance that will outweigh injury or damage to the adverse sued, as also explicitly granted by its charter.
party.83 Corollarily, the requirement of "good reason" does not
necessarily entail unassailable and flawless basis but at the very least,
Needless to say, where proper, under Section 36, the GSIS may be held
an invocation thereof must be premised on solid footing.84
liable for the contracts it has entered into in the course of its
business investments. For GSIS cannot claim a special immunity from
In the case at bar, the RTC, as affirmed by the CA, granted PGAI’s liability in regard to its business ventures under said Section.
motion for execution pending appeal on the ground that the
impending sanctions against it by foreign underwriters/reinsurers
Nor can it deny contracting parties, in our view, the right of redress
constitute good reasons therefor. It must, however, be observed that
and the enforcement of a claim, particularly as it arises from a purely
PGAI has not proffered any evidence to substantiate its claim, as it
contractual relationship of a private character between an individual
merely presented bare allegations thereon. It is hornbook doctrine and the GSIS.89 (Emphases supplied and citations omitted)
that mere allegations do not constitute proof. As held in Real v.

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Thus, the petition in G.R. No. 165585 is partly granted. insurance contract valid and binding is evinced from the fact that the
insured paid – and the insurer received – several reinsurance
B. Propriety of judgment on the pleadings. premiums due thereon, although the former refused to pay the
remaining balance, viz:
Judgment on the pleadings is appropriate when an answer fails to
tender an issue, or otherwise admits the material allegations of the We hold that the subject policies are valid even if the premiums were
adverse party’s pleading. The rule is stated in Section 1, Rule 34 of paid on installments. The records clearly show that petitioner and
the Rules which reads as follows: private respondent intended subject insurance policies to be binding
and effective notwithstanding the staggered payment of the
Sec. 1. Judgment on the pleadings. – Where an answer fails to tender premiums. The initial insurance contract entered into in 1982 was
an issue, or otherwise admits the material allegations of the adverse renewed in 1983, then in 1984. In those three (3) years, the insurer
party’s pleading, the court may, on motion of that party, direct accepted all the installment payments. Such acceptance of payments
judgment on such pleading. x x x. speaks loudly of the insurer’s intention to honor the policies it issued
to petitioner. Certainly, basic principles of equity and fairness would
not allow the insurer to continue collecting and accepting the
In this relation, jurisprudence dictates that an answer fails to tender
premiums, although paid on installments, and later deny liability on
an issue if it does not comply with the requirements of a specific
the lame excuse that the premiums were not prepaid in full.
denial as set out in Sections 890 and 10,91 Rule 8 of the Rules, resulting
in the admission of the material allegations of the adverse party’s
pleadings.92 We therefore sustain the Court of Appeals. We quote with approval
the well-reasoned findings and conclusion of the appellate court
contained in its Resolution denying the motion to reconsider its
As such, it is a form of judgment that is exclusively based on the Decision —
submitted pleadings without the introduction of evidence as the
factual issues remain uncontroverted.93
While the import of Section 77 is that prepayment of premiums is
strictly required as a condition to the validity of the contract, We are
In this case, records disclose that in its Answer, GSIS admitted the
not prepared to rule that the request to make installment payments
material allegations of PGAI’s complaint warranting the grant of the
duly approved by the insurer, would prevent the entire contract of
relief prayed for. In particular, GSIS admitted that: (a) it made a
insurance from going into effect despite payment and acceptance of
request for reinsurance cover which PGAI accepted in a reinsurance
the initial premium or first installment . Section 78 of the Insurance
binder effective for one year;94 (b) it remitted only the first three
Code in effect allows waiver by the insurer of the condition of
reinsurance premium payments to PGAI;95 (c) it failed to pay PGAI the
prepayment by making an acknowledgment in the insurance policy of
fourth and final reinsurance premium installment;96 and (d) it received
receipt of premium as conclusive evidence of payment so far as to
demand letters from PGAI.97 It also did not refute the allegation of
make the policy binding despite the fact that premium is actually
PGAI that it settled reinsurance claims during the reinsured period.
unpaid. Section 77 merely precludes the parties from stipulating that
On the basis of these admissions, the Court finds that the CA did not
the policy is valid even if premiums are not paid, but does not
err in affirming the propriety of a judgment on the pleadings.
expressly prohibit an agreement granting credit extension, and such
an agreement is not contrary to morals, good customs, public order
GSIS’ affirmative defense that the non-payment of the last reinsurance or public policy (De Leon, the Insurance Code, at p. 175). So is an
premium merely rendered the contract ineffective pursuant to Section understanding to allow insured to pay premiums in installments not
7798 of PD 612 no longer involves any factual issue, but stands solely so proscribed. At the very least, both parties should be deemed in
as a mere question of law in the light of the foregoing admissions estoppel to question the arrangement they have voluntarily accepted.
hence allowing for a judgment on the pleadings. Besides, in the case
of Makati Tuscany, the Court already ruled that the non-payment of
[I]n the case before Us, petitioner paid the initial installment and
subsequent installment premiums would not prevent the insurance
thereafter made staggered payments resulting in full payment of the
contract from taking effect; that the parties intended to make the 1982 and 1983 insurance policies.1âwphi1 For the 1984 policy,

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petitioner paid two (2) installments although it refused to pay the G.R. No. 172660 August 24, 2011
balance. Eugenio Basbas, Teofilo Aras, Rufino Aras, Gervacio Basbas, Ismael
Aras, Eugenio Aras, Simfronio Aras, Feliciano Aras, Rosita Aras,
It appearing from the peculiar circumstances that the parties actually Eugenio Basbas, Jr. and spouses Pablito Basarte and Marcelina
intended to make three (3) insurance contracts valid, effective and Basbas Basarte,
binding, petitioner may not be allowed to renege on its obligation to Vs.
pay the balance of the premium after the expiration of the whole term Beata Sayson and Roberto Sayson, Jr., Respondents.
of the third policy (No. AH-CPP-9210651) in March 1985. Moreover, as
correctly observed by the appellate court, where the risk is entire and DEL CASTILLO, J.:
the contract is indivisible, the insured is not entitled to a refund of
the premiums paid if the insurer was exposed to the risk insured for Petitioners seek to prevent the revival of a judgment rendered in
any period, however brief or momentary.99 (Emphases supplied and favor of the respondents more than two decades back.
citation omitted)
This Petition for Review on Certiorari assails the February 17, 2004
Thus, owing to the identical complexion of Makati Tuscany with the Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 72385 which
present case, the Court upholds PGAI’s right to be paid by GSIS the denied the appeal filed before it and affirmed in toto the May 21,
amount of the fourth and last reinsurance premium pursuant to the 2001 Order2 of the Regional Trial Court of Ormoc City, Branch 35.
reinsurance contract between them. All told, the petition in G.R. No. Also assailed is the April 19, 2006 Resolution3 denying the Motion for
176982 is denied. Reconsideration thereto.

WHEREFORE, the petition in G.R. No. 165585 is PARTLY GRANTED. Factual Antecedents
The Decision dated May 26, 2004 and Resolution dated October 6,
2004 of the Court of Appeals in CA-G.R. SP No. 69289 are MODIFIED On September 2, 1976, respondent Beata Sayson (Beata) and her
only insofar as it upheld the validity of Prudential Guarantee and husband Roberto Sayson, Sr. (Roberto Sr.) filed a Petition for
Assurance, Inc.’s execution pending appeal. In this respect, the Order Registration of an agricultural land located in Cagbatang, Balagtas,
dated February 14, 2002 of the Regional Trial Court of Makati, Branch Matag-ob, Leyte docketed as Land Registration Case No. 0-177. The
149 as well as all other issuances related thereto are set aside. said application was opposed by the Republic of the Philippines and
herein petitioners Eugenio Basbas (Eugenio Sr.), Teofilo Aras (Teofilo)
On the other hand, the petition in G.R. No. 176982 is DENIED. The and Rufino Aras (Rufino). On March 22, 1979, the Court of First
Decision dated October 30, 2006 and Resolution dated March 12, Instance (CFI) of Leyte, Branch V (Ormoc City) rendered a Decision
2007 in CA-G.R. CV No. 73965 are hereby AFFIRMED. adjudicating to the spouses Sayson said agricultural land and
approving its registration under their names.4
SO ORDERED.
The oppositors filed their appeal to the CA docketed as CA-G.R. No.
66541. In a Decision5 dated July 24, 1985, the appellate court
affirmed in toto the Decision of the CFI. This CA Decision became
final and executory on August 21, 19856 and, accordingly, a Writ of
Possession was issued on November 21, 1985, which was never
implemented.

The following year or on September 17, 1986, Original Certificate of

Title (OCT) No. 24967 was issued to the spouses Sayson pursuant to
the March 22, 1979 CFI Decision. An Alias Writ of Possession was
issued on April 6, 1989 but this could also not be implemented in

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view of the refusal of Eugenio Sr. and his son Eugenio Basbas, Jr. a Complaint for Revival of Judgment15 before the RTC of Ormoc City,
(Eugenio Jr.). Claiming that the land they occupied is not the same Branch 12,16 docketed as Civil Case No. 3312-0. Impleaded as
land subject of the CFI Decision,8 they demanded that a relocation defendants were Eugenio Sr., Teofilo, Rufino, Gervacio, Ismael,
survey be conducted. Hence, a relocation survey was conducted by Eugenio, Simfronio, Feliciano, Rosita, and Eugenio Jr. Petitioner-
order of the Regional Trial Court (RTC), Branch 12, Ormoc City.9 spouses Pablito Basarte and Marcelina Basbas-Sabarte17 (spouses
Basarte), who, although not identified in the September 13, 1989
In an Order10 dated September 13, 1989, the RTC approved the Order as principal oppositors in the land registration case, were
Commissioner’s Report11 on the relocation survey and ordered the likewise impleaded as defendants since they also allegedly harvested,
original oppositors, petitioners Eugenio Sr., Teofilo and Rufino, as processed, and sold the coconuts found in the subject property.
well as their co-petitioners herein Gervacio Basbas (Gervacio), Ismael
Aras (Ismael), Eugenio Aras (Eugenio), Simfronio Aras (Simfronio), Upon receipt of summons, Gervacio, Rufino, Ismael, Eugenio,
Feliciano Aras (Feliciano), Rosita Aras (Rosita) and Eugenio Jr. to Feliciano, Rosita and Eugenio Jr. filed a Motion to Dismiss 18 on the
vacate the subject property, viz: ground that the Complaint states no cause of action. This was,
however, denied19 so the same set of petitioners, except for Feliciano,
[R]espondents are directed to vacate the portion of Lot No. 1, Psu-08- filed an Answer with Counterclaim.20
000235 covered by OCT No. 2496 and subject of the final decree of
registration which, [up to the] present, said respondents are still In their Answer with counterclaim, said petitioners admitted the
possessing pursuant to the final and executory judgment of the Court allegations in paragraphs 4, 5, 6, 7, 8, 9, 10, 11 and 12 of
of Appeals and as particularly defined in the Commissioner’s report respondents’ Complaint which state that:
submitted on August 3, 1989 x x x.
xxxx
Respondents are reminded that under Rule 71 of the New Rules of
Court, failure on their part to so obey this order may make them 4. On March 22, 1979, the Honorable Judge Numeriano Estenzo
liable for contempt of this Court. rendered a decision in the above-mentioned Land Registration
[c]ase in favor of the petitioners x x x and against the oppositors,
SO ORDERED.12 the dispositive portion of said decision reads:

Gervacio, Ismael, Eugenio, Simfronio, Feliciano, Rosita and Eugenio Jr., ‘WHEREFORE, decision is hereby rendered x x x [and] the land
although not oppositors in CA-G.R. No. 66541, were likewise ordered described under Plan PSU-08-000235 dated September 10, 1973 of
to vacate the property in view of the following pronouncement in the Geodetic Engineer Nestorio Encenzo already APPROVED by the
RTC’s September 13, 1989 Order: Acting Regional Director on June 27, 1974 is hereby adjudicated
and registered in the names of the Spouses ROBERTO SAYSON
It appearing from the records that respondents Eugenio Basbas, and BEATA O. SAYSON, of legal ages, Filipinos, spouses and
Teofilo Aras, Gervacio Basbas, Rufino Aras, Ismael Aras, Eugenio residents of Campokpok, Tabango, Leyte, Philippines and as soon
Aras, Simfronio Aras, Feliciano Aras, Rosita Aras and Eugenio as this decision becomes final, let a decree of registration be
Basbas[,] Jr. are parties to the present case, they having been the issued by the Land Registration Commission.
principal oppositors to the petition filed by the applicants as
shown in the records, pages 34, 35 and 36, Vol. 1 x x x13 (Emphasis SO ORDERED.’ (x x x)
supplied.)
5. From the above decision the oppositors (defendants herein)
This September 13, 1989 Order was, however, not implemented appealed;
within the five-year period from the time it became final.14 Hence,
respondent Beata and her son Roberto Sayson, Jr. (Roberto Jr.), as 6. On July 24, 1985, the Honorable Court of Appeals rendered its
successor-in-interest of the late Roberto Sr., filed on August 18, 1995 decision, the dispositive portion [of which] reads:

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‘WHEREFORE, PREMISES CONSIDERED, finding no merit in this [show] that all points are existing and intact on the field except x
appeal the decision appealed from is hereby AFFIRMED in toto. x x corner 3 of said lot x x x which at present [is] already defined
and indicated on the ground.’ The commissioner also attached a
SO ORDERED.’ Sketch Plan of the land to his report. x x x

and the said decision has become final and executory on August 12. That, finally, the Honorable Court, on September 13, 1989
21, 1985 per Entry of Judgment issued by the Court of Appeals x issued an Order approving the Commissioner’s Report and further
x x. stated:

7. That consequently, on September 17, 1986 an Original [R]espondents (defendants herein) are directed to vacate the portion
Certificate of Title No. N-2496 was issued in the names of Roberto of Lot No. 1, Psu-08-000235 covered by OCT No. 2496 and subject of
Sayson and Beata O. Sayson, pursuant to Decree No. N-191615, by final decree of registration which, until [the] present, said
the Register of Deeds for the Province of Leyte; respondents are still possessing, pursuant to the final and executory
judgment of the Court of Appeals and as particularly [defined] in the
8. That on motion, the Honorable Court, on November 21, 1985, Commissioner’s Report submitted on August 3, 1989 x x x
issued a Writ of Possession which for some reason or [another]
was not satisfied, so that the Honorable Court, on April 7, 1989 – Respondents are reminded that under Rule 71 of the New Rules of
acting on an ex-parte motion dated April 6, 1989 – directed the Court, failure on their part to so obey this Order may make them
issuance of an Alias Writ of Possession; liable for contempt of this Court.21

9. That the Deputy Sheriff of this Court, Mr. Placid[o] Cayco However, petitioners admitted but denied in part:
tendered the Alias Writ of Possession to the oppositors,
particularly to Mr. Eugenio Basbas, Sr. and Eugenio Basbas, Jr. 1) paragraphs 2 and 3, insofar as they alleged that they were all
who, as the Deputy Sheriff stated in his Progress Report dated oppositors to the land registration case when only Eugenio Sr.,
May 18, 1989 ‘did not believe and obey the CFI Decision and the Teofilo and Rufino were the oppositors therein; and
decision of the Court of Appeals’ and ‘x x x [t]hey demanded a
relocation survey to determine the exact location of applicants’ 2) paragraph 14, with respect to the allegation on the retirement
(complainant[s] herein) property described in the alias writ of of the Deputy Sheriff and the heart condition of the Clerk of
possession.’ x x x; Court, for lack of sufficient knowledge and information sufficient
to form a belief thereon.
10. That on June 16, 1989, the Honorable Court, acting on the
Progress Report of Deputy Sheriff Placido Cayco, issued an Order On the other hand, they specifically denied:
on even date appointing Geodetic Engineer Jose A. Tahil as Court
Commissioner specifically ‘to relocate Lot No. 1, Plan Psu-08- 1) paragraph 13, on the ground that they have the right of
000235, LRC No. 0-177, Land Reg. Record No. N51830 x x x’ This ownership and/or possession over the subject property; and
Order was dictated in open court in the presence of Mr. Eugenio
Basbas, Sr. and Eugenio Basbas, Jr. who had both objected to the
2) paragraph 15, on the ground that the property they are
Writ of Possession, and their counsel Atty. Evargisto Escalon, and
cultivating is owned by them, hence, respondents cannot suffer
Attorney Demetrio D. Sarit, counsel for the applicants. x x x
losses and damages.
11. That pursuant to the [O]rder dated June 16, 1989 x x x the
Paragraphs 2, 3, 13, 14 and 15 alluded to in the foregoing are as
Court assigned Commissioner, Engr. Jose A. Tahil, submitted his
follows:
report stating that ‘the job assigned to the commissioner was
already fully and peacefully accomplished; that his ‘findings

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2. All the defendants named above are x x x of legal age and are and for more than five (5) years since this Order for them to
residents of Balagtas, Matag-ob, Leyte where they may be served vacate the land in question was issued, they had harvested the
summons and other court processes; while defendant-spouses coconuts growing thereon and such other produce of the land
Pablito Basarte and Marcelina Basbas Basarte were not named as herein involved. And until the decision of the Court of Appeals is
among the oppositors in the land registration case whose decision executed, plaintiff will continue to suffer losses and damages by
is herein sought to be revived, said spouses are nonetheless reason of defendants’ unlawful occupation and possession and
participating in the harvest, processing and sale of the coconuts their continued harvesting of the produce of this land of the
with the other defendants named above; herein plaintiffs.23

3. Plaintiffs Beata Sayson and her late husband, Roberto Sayson By way of special and affirmative defenses, said petitioners
are petitioners in Land Registration Case No. 0-177 for the contended that the Order sought to be revived is not the "judgment"
registration of a parcel of agricultural land situated in Barrio contemplated under Section 6, Rule 39 of the Rules of Court, hence
Balagtas, Matag-ob, Leyte, filed on September 2, 1976 with the the action for revival of judgment is improper. Also, except for
then Court of First Instance of Leyte, Branch V, Ormoc City. The Rufino, petitioners averred that they cannot be made parties to the
above-named defendants, namely: Eugenio Basbas, Teofilo Aras, complaint for revival of judgment as they were not parties to the land
Gervacio Basbas, Rufino Aras, Ismael Aras, Eugenio Aras, registration case. They thus believed that the September 13, 1989
Simfronio Aras, Feliciano Aras, Rosita Aras and Eugenio Basbas, Jr. Order sought to be revived is not binding upon them and hence, the
were oppositors to the application;22 complaint states no cause of action with respect to them. As to the
counterclaim, petitioners prayed that respondents pay them moral
xxxx and exemplary damages, attorney’s fees and litigation expenses.

13. That despite this admonition in the [September 13, 1989] Pre-trial conference was thereafter set24 but since not all petitioners
[O]rder that they could be cited for contempt of Court, the were served with summons, this was reset and alias summons was
respondents, defendants herein, had continuously defied the issued and served upon Simfronio and the spouses Basarte.25 Upon
same and this notwithstanding the fact that it was upon their own receipt of summons, Simfronio adopted the Answer with
demands and insistence that a relocation survey be made on the Counterclaim of Gervacio, Rufino, Ismael, Eugenio, Feliciano, Rosita
premises subject of this case before they would obey the alias writ and Eugenio Jr.26 while the spouses Basarte filed a Motion to
of possession x x x and that the finding[s] of the Court[- Dismiss27 on the ground of lack of cause of action. As said motion
]appointed Commissioner Engr. Jose A. Tahil show that the was also denied,28 the spouses Basarte later filed a Manifestation29 that
oppositors-respondents did [encroach] on the land of plaintiffs they were also adopting the Answer with Counterclaim filed by
herein; Gervacio and the others.

14. That this [September 13, 1989] Order however was not During the pre-trial conference on July 14, 1999, the RTC issued an
implemented thru a Writ of Execution within the five-year period Order30 which provides in part, viz:
from the time the Order became final because of the retirement of
Deputy Sheriff Placido Cayco and by reason also of the fact that In today’s pre-trial conference, manifestations and counter-
the then Clerk of Court, Atty. Constantino A. Trias, Jr. who was manifestations were exchanged. All the parties and their counsels are
also the ex-officio Provincial Sheriff was not physically fit to hike present. x x x [P]laintiffs’ counsel presented a Special Power of
thru the mountains and hills of Brgy. Balagtas where the property Attorney by Beata Sayson but the Court observed that same was not
and the defendants therein reside due to his heart condition; duly acknowledged before the Philippine Consulate or Embassy in
Canada. However, this matter is not so important[.] [W]hen the Court
15. That despite their knowledge of the Court[‘s] [September 13, tried to dig and discuss with the parties on their real positions, it
1989] Order, the same [having been] dictated in open court, the turned out that the plaintiffs are seeking revival of the previous
respondents had continued to occupy the land of the plaintiffs final judgment, the original parties of which were Eugenio Basbas,
Teofilo Aras and Rufino Aras. Eugenio and Teofilo are all dead,

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leaving Rufino Aras alive. It is quite complicated considering that The Manifestation of plaintiffs and the Counter-Manifestation of
in this action, the plaintiffs relied on the Order of this Court defendants having already been submitted and duly noted, the Court
penned by the previous judge dated September 13, 1989 which was hereby directs that henceforth in the denomination of this case, the
made after or consequent to the final judgment aforementioned, names of the original parties, Eugenio Basbas and Teofilo Aras (in
wherein the names of the other defendants were mentioned in the Land Registration Case No. 0-177) shall still remain to be so stated as
body thereof. After considering the merits of the various defendants for purposes of the present case but with additional
contentions, the Court is of the view that the complaint had to limit names of their respective heirs to be included and stated immediately
itself to the names of the original parties appearing in the original after each name as heirs in substitution, namely: for Eugenio Basbas –
judgment now being sought for revival. The interest of the plaintiffs 1) Gervacio Basbas, 2) Marcelina Basbas Basarte, and 3) Eugenio
in seeking implementation or execution of the judgment sought to be Basbas, Jr.; and for Teofilo Aras – 1) Ismael Aras, 2) Vicente Aras, 3)
revived which would involve the other defendants can be taken when Ligaya Aras, 4) Rosendo Aras, and 5) Daina Aras.
the judgment shall have been revived.
Since from the records, only Gervacio Basbas, Eugenio Basbas, Jr. and
In this connection therefore and as part of the matters to be made Ismael Aras were duly served with summons, the Branch Clerk of
part in the pre-trial conference, in the exercise of the authority Court is hereby directed to serve summons on the other heirs,
granted to it by law, this Court directs the plaintiffs to make the namely: Marcelina Basbas Basarte, Vicente Aras, Ligaya Aras, Rosendo
necessary amendment and/or to submit a manifestation first to Aras, and Daina Aras.
this Court on the point above raised regarding amendment of the
designation of the parties having in mind the objection of the After summons were served, Vicente, Rosendo, Ligaya and Daina
defendants who manifested that should there be an amendment, this were, however, declared in default for not filing any responsive
counter-claim shall be disregarded since they were brought in pleading.37 On February 2, 2001, the RTC issued a Pre-Trial
unnecessarily in this kind of action. Order38 where the controverted stipulations and issues to be tried,
among others, were enumerated as follows:
Plaintiffs therefore are given a period of ten (10) days from today
within which to submit the requisite manifestation furnishing copy Controverted Stipulations:
thereof to the defendant who upon receipt shall also be given a
period of ten (10) days within which this Court will make the 1. That defendants are not enjoying the produce of the land
necessary resolution before allowing any amendment. because there are period[s] wherein the fruits were subject of
theft and the same is now pending at the Municipal Trial Court of
Hold the pre-trial conference in abeyance. Matag-ob;

SO ORDERED. 31
(Emphasis supplied.) 2. That [even] before the start of the original case, the original
defendants referring to the late Eugenio Basbas, Sr. and Teofilo
In their Manifestation with Prayer,32 respondents informed the RTC Aras, [and] Rufino Aras were occupying the property and they
about the death of Eugenio Sr. and Teofilo who were oppositors in the were succeeded by the respective heirs of the deceased Eugenio
land registration case and the substitution by their heirs, namely, Basbas, Sr. and Teofilo Aras [sic];
Gervacio, Marcelina Basbas Basarte,33 and Eugenio Jr. for Eugenio Sr.
and Ismael, Vicente, Ligaya Aras (Ligaya), Rosendo Aras (Rosendo) and 3. That plaintiff Teofilo Aras, Sr. has a daughter named Fedeliza
Daina Aras (Daina) for Teofilo. Respondents prayed that their Aras;
manifestation be considered for the purpose of determining the
proper parties to the case. Despite petitioners’ Counter- Issues
Manifestation,34 the RTC issued the following Order35 on May 15, 1999:
1. Whether x x x the plaintiffs are entitled to revival of judgment
in the earlier [land registration] case;

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 2. Whether x x x the defendants except for defendant Rufino Aras this Court in the decision of the Land Registration Case No. 0-177
are the proper parties in the present action; dated March 22, 1979, and of the final Order of this Court dated
September 13, 1989 and upon finality of this Order, ordering the
3. Whether x x x the complaint states a cause of action; issuance of Writ of Possession for the lot made subject of the
decision. Without pronouncement as to costs.
4. Whether x x x defendants are entitled to their counterclaim,
and; SO ORDERED.43

5. Whether judgment on the pleadings is allowed or is tenable.39 Petitioners thus filed a Notice of Appeal44 which was approved in an
Order dated June 06, 2001.45
Respondents subsequently filed an Omnibus Motion for Judgment on
the Pleadings and/or Summary Judgment.40 They contended that since Ruling of the CA
petitioners’ Answer failed to tender an issue, they having expressly
admitted the material allegations in the complaint, particularly Finding no merit in the appeal, the CA denied the same in a
paragraphs 4 to 12, a judgment on the pleadings or summary Decision46 dated February 17, 2004. It noted that petitioners’ Answer
judgment is proper. admitted almost all of the allegations in respondents’ complaint.
Hence, the RTC committed no reversible error when it granted
Petitioners filed an Opposition Re: Omnibus Motion for Judgment on respondents’ Motion for Judgment on the Pleadings and/or Summary
the Pleadings and/or Summary Judgment and Memorandum Re: Judgment. The appellate court likewise found untenable the issue as
Failure of Plaintiff Beata Sayson to Appear in the Pre-trial regards the failure of the complaint to state a cause of action. To the
Conference.41 They argued that the case cannot be decided based on appellate court, petitioners’ refusal to vacate the subject property
the pleadings nor through summary judgment considering that the despite the final and executory Decision of the CA in the land
controverted stipulations and issues defined in the Pre-Trial Order registration case and the September 13, 1989 Order of the RTC for
must be proven by evidence. In addition, they questioned the Special them to vacate the same, clearly support respondents’ cause of action
Power of Attorney (SPA) executed by Beata in Canada empowering her against them. Also contrary to petitioners’ posture, the September 13,
son Roberto Jr. to appear on her behalf in the pre-trial conference. 1989 Order is a final order as it finally disposed of the controversy
They argued that since said SPA has not been authenticated by a between the parties in the land registration case. The CA likewise
Philippine Consulate official, it is not sufficient authorization and found the SPA executed by Beata in favor of Roberto Jr. as valid,
hence, Beata cannot be considered to have attended the pre-trial hence, she was duly represented during the pre-trial conference. The
conference. The case must, therefore, be dismissed insofar as she is dispositive portion of said CA Decision reads:
concerned.
WHEREFORE, premises considered, the present appeal is DENIED. The
Ruling of the RTC May 21, 2001 Decision of the Regional Trial Court of Ormoc City,
Branch 35 is AFFIRMED.
In resolving respondents’ Omnibus Motion for Judgment on the
Pleadings and/or Summary Judgment, the RTC found that petitioners’ SO ORDERED.47
Answer does not essentially tender an issue since the material
allegations of the Complaint were admitted. Hence, said court issued Their Motion for Reconsideration48 having been denied in a
an Order42 dated May 21, 2001, the dispositive portion of which reads: Resolution49 dated April 19, 2006, petitioners are now before this
Court through the present Petition for Review on Certiorari.
WHEREFORE, finding merit in the motion, judgment is hereby
rendered for and in favor of the plaintiffs and against the defendants Issues
ordering the revival of the decision of the Court of Appeals
promulgated on July 24, 1985 affirming the decree of registration of Petitioners impute upon the CA the following errors:

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 1. The Honorable Court of Appeals clearly committed serious Moreover, they argue that the CA Decision in the land registration
errors of law in its decision and Resolution dated February 17, case should not have been revived as same was not prayed for in the
2004 and April 19, 2006 when it affirmed the Order of the Complaint for Revival of Judgment. Lastly, petitioners assail the SPA
Regional Trial Court dated May 21, 2001 and declared that no which authorized Roberto Jr. to represent his mother, Beata, during
reversible error was committed by the Regional Trial Court of the pre-trial conference, it not having been authenticated by a
Ormoc City in granting respondents’ motion for judgment on the Philippine consulate officer in Canada where it was executed.
pleadings and/or summary judgment; Citing Lopez v. Court of Appeals,51 they contend that said document
cannot be admitted in evidence and hence, Beata was not duly
2. The Honorable Court of Appeals clearly committed serious represented during said pre-trial conference. The case, therefore,
errors of law in its Decision and Resolution dated February 17, should have been dismissed insofar as she is concerned.
2004 and April 19, 2006 when it affirmed the Order of the
Regional Trial Court of Ormoc City dated May 21, 2001 and For their part, respondents point out that the RTC’s basis in granting
declared that petitioners’ argument that respondents’ complaint the Motion for Judgment on the Pleadings and/or Summary Judgment
failed to state a cause of action has no merit. was petitioners’ admission of practically all the material allegations in
the complaint. They aver that Section 1, Rule 34 of the Rules of Court
3. The Honorable Court of Appeals clearly committed serious clearly provides that where an answer fails to tender an issue or
errors of law when it affirmed the Order of the Regional Trial otherwise admits the material allegations of the adverse party’s
Court of Ormoc City which ordered the revival of the Judgment of pleading, the court may, on motion of that party, direct judgment on
this Court of Appeals in CA-G.R. No. 66541 entitled Beata Sayson the pleadings. Also, the test for a motion for summary judgment is
and Roberto Sayson vs. Eugenio Basbas, et al., despite the fact that whether the pleadings, affidavits or exhibits in support of the motion
this was not the judgment sought to be revived in Civil Case No. are sufficient to overcome the opposing papers and to justify a
3312-0; finding as a matter of law that there is no defense to the action or the
claim is clearly meritorious. And since, as found by the CA,
4. The Honorable Court of Appeals clearly committed serious petitioners’ Answer did not tender an issue and that there is no
errors of law in ruling that the duly notarized Special Power of defense to the action, the grant of the Motion for Judgment on the
Attorney in favor of Roberto Sayson[,] Jr. is valid and the latter is Pleadings and/or Summary Judgment was appropriate. Respondents
authorized to represent his mother, Beata Sayson[,] which is likewise contend that if their prayer in the Complaint is taken in its
contrary to the ruling in the case of ANGELITA LOPEZ, proper context, it can be deduced that what they were really seeking
represented by PRISCILLA L. TY vs. COURT OF APPEALS, is the implementation of the CA Decision dated July 24, 1985 and the
REGIONAL TRIAL COURT OF QUEZON CITY x x x (G.R. No. 77008, orders ancillary thereto. With respect to the SPA, they submit that the
December 29, 1987).50 law does not require that a power of attorney be notarized. Moreover,
Section 4, Rule 18 of the Rules of Court simply requires that a
representative appear fully authorized "in writing". It does not specify
The Parties’ Arguments
a particular form of authority.

Petitioners insist that a judgment on the pleadings or a summary Our Ruling

judgment
There is no merit in the petition.
is not proper in this case since the controverted stipulations and the
first three issues enumerated in the pre-trial order involve facts which
must be threshed out during trial. They also claim that the Complaint I. The instant case is proper for the rendition of a summary judgment.
for Revival of Judgment states no cause of action because the
September 13, 1989 Order which it sought to revive is not the Petitioners principally assail the CA’s affirmance of the RTC’s Order
"judgment" contemplated under Section 6, Rule 39 of the Rules of granting respondents’ Motion for Judgment on the Pleadings and/or
Court and, therefore, cannot be the subject of such an action. Summary Judgment.

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In Tan v. De la Vega,52 citing Narra Integrated Corporation v. Court of However, before we consider this case appropriate for the rendition
Appeals,53 the court distinguished summary judgment from judgment of summary judgment, an examination of the issues raised, that is,
on the pleadings, viz: whether they are genuine issues or not, should first be made.

The existence or appearance of ostensible issues in the pleadings, on b) The issues raised are not genuine issues, hence rendition of
the one hand, and their sham or fictitious character, on the other, are summary judgment is proper.
what distinguish a proper case for summary judgment from one for a
judgment on the pleadings. In a proper case for judgment on the To resolve the issues of whether a revival of judgment is the proper
pleadings, there is no ostensible issue at all because of the failure of action and whether respondents are the proper parties thereto, the
the defending party’s answer to raise an issue. On the other hand, in RTC merely needed to examine the following: 1) the RTC Order dated
the case of a summary judgment, issues apparently exist – i.e. facts September 13, 1989, to determine whether same is a judgment or
are asserted in the complaint regarding which there is as yet no final order contemplated under Section 6, Rule 39 of the Rules of
admission, disavowal or qualification; or specific denials or Court; and, 2) the pleadings of the parties and pertinent portions of
affirmative defenses are in truth set out in the answer – but the issues the records56 showing, among others, who among the respondents
thus arising from the pleadings are sham, fictitious or not genuine, as were oppositors to the land registration case, the heirs of such
shown by affidavits, depositions, or admissions. x x x. oppositors and the present occupants of the property. Plainly, these
issues could be readily resolved based on the facts established by the
Simply stated, what distinguishes a judgment on the pleadings from a pleadings. A full-blown trial on these issues will only entail waste of
summary judgment is the presence of issues in the Answer to the time and resources as they are clearly not genuine issues requiring
Complaint. When the Answer fails to tender any issue, that is, if it presentation of evidence.
does not deny the material allegations in the complaint or admits said
material allegations of the adverse party’s pleadings by admitting the Petitioners aver that the RTC should not have granted respondents’
truthfulness thereof and/or omitting to deal with them at all, a Motion for Judgment on the Pleadings and/or Summary Judgment
judgment on the pleadings is appropriate.54 On the other hand, when because of the controverted stipulations and the first three issues
the Answer specifically denies the material averments of the enumerated in the Pre-trial Order, which, according to them, require
complaint or asserts affirmative defenses, or in other words raises an the presentation of evidence. These stipulations and issues, however,
issue, a summary judgment is proper provided that the issue raised is when examined, basically boil down to questions relating to the
not genuine. "A ‘genuine issue’ means an issue of fact which calls for propriety of the action resorted to by respondents, which is revival of
the presentation of evidence, as distinguished from an issue which is judgment, and to the proper parties thereto – the same questions
fictitious or contrived or which does not constitute a genuine issue which we have earlier declared as not constituting genuine issues.
for trial."55
In sum, this Court holds that the instant case is proper for the
a) Judgment on the pleadings is not proper because petitioners’ rendition of a summary judgment, hence, the CA committed no error
Answer tendered issues. in affirming the May 21, 2001 Order of the RTC granting respondents’
Motion for Judgment on the Pleadings and/or Summary Judgment.
In this case, we note that while petitioners’ Answer to respondents’
Complaint practically admitted all the material allegations therein, it II. The Complaint states a cause of action.
nevertheless asserts the affirmative defenses that the action for
revival of judgment is not the proper action and that petitioners are Petitioners contend that the complaint states no cause of action since
not the proper parties. As issues obviously arise from these the
affirmative defenses, a judgment on the pleadings is clearly improper
in this case.
September 13, 1989 Order sought to be revived is not the judgment
contemplated under Section 6, Rule 39 of the Rules of Court. They
also aver that the RTC erred when it ordered the revival not only of

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the September 13, 1989 Order but also of the July 24, 1985 CA CA affirming the CFI’s adjudication of the same in favor of
Decision, when what was prayed for in the complaint was only the respondents. This Order was issued after the failure to enforce the
revival of the former. writ of execution and alias writ of execution due to petitioners’
refusal to vacate the property. To this Court’s mind, respondents’
This Court, however, agrees with respondents that these matters have purpose in instituting the present action is not only to have the CA
already been sufficiently addressed by the RTC in its Order of May 9, Decision in the land registration case finally implemented but
199757 and we quote with approval, viz: ultimately, to recover possession thereof from petitioners. This action
is therefore one which Roberto Jr., as co-owner, can bring and
The body of the Complaint as well as the prayer mentioned about the prosecute alone, on his own behalf and on behalf of his co-owner,
executory decision of the Court of Appeals promulgated on July 24, Beata. Hence, a dismissal of the case with respect to Beata pursuant to
1985 that had to be finally implemented. So it appears to this Court Sec. 5,60 Rule 18 of the Rules of Court will be futile as the case could
that the Complaint does not alone invoke or use as subject thereof nevertheless be continued by Roberto Jr. in behalf of the two of them.
the Order of this Court which would implement the decision or
judgment regarding the land in question. The Rules of Court referring WHEREFORE, the Petition for Review on Certiorari is DENIED and the
to the execution of judgment, particularly Rule 39, Sec. 6, provides a assailed Decision of the Court of Appeals dated February 17, 2004
mechanism by which the judgment that had not been enforced within and Resolution dated April 19, 2006 in CA-G.R. CV No. 72385 are
five (5) years from the date of its entry or from the date the said AFFIRMED.
judgment has become final and executory could be enforced. In fact,
the rule states: "…judgment may be enforced by action." SO ORDERED.

So in this Complaint, what is sought is the enforcement of a judgment G.R. No. 75315 May 7, 1990
and the Order of this Court dated September 13, 1989 is part of the Bell Carpets International Trading Corporation, Petitioner,
process to enforce that judgment. To the mind of the Court, Vs.
therefore, the Complaint sufficiently states a cause of action.58 Hon. Court Of Appeals, Hon. Milagros Caguioa, Victor R. Sta. Ana
and Manila Bay Spinning Mills, Inc., Respondents.
III. Any perceived defect in the SPA would not serve to bar the case
from proceeding. NARVASA, J.:

Anent the SPA, we find that given the particular circumstances in the In the Regional Trial Court at Pasig, 1 Manila Bay Spinning Mills, Inc.
case at bar, an SPA is not even necessary such that its efficacy or the (hereafter, simply MBSMI) sued Carpets International (Phils.), Inc.
lack of it would not in any way preclude the case from proceeding. (hereafter, simply Carpets International) for the recovery of
This is because upon Roberto Sr.’s death, Roberto Jr., in succession of P771,700.23 representing the unpaid balance of the purchase price of
his father, became a co-owner of the subject property together with yarn ordered by and delivered to the latter during the period from
his mother, Beata. As a co-owner, he may, by himself alone, bring an June 30, 1983 to October 22, 1983. 2 Copies of (a) the corresponding
action for the recovery of the co-owned property pursuant to the well- sales invoices, (b) the post-dated checks issued by Carpets
settled principle that "in a co-ownership, co-owners may bring actions International but dishonored on presentment for payment, (c) the
for the recovery of co-owned property without the necessity of itemized statement of account, and (Id) the letters demanding
joining all the other co-owners as co-plaintiffs because the suit is payment sent to and received by Carpets International, were attached
presumed to have been filed for the benefit of his co-owners."59 to the verified complaint. The complaint contained an application for
preliminary attachment grounded on Carpets' alleged "fraud in
While we note that the present action for revival of judgment is not contracting its obligation with the plaintiffs as demonstrated by its
an action for recovery, the September 13, 1989 Order sought to be bouncing checks," and its having removed or disposed of its
revived herein ordered the petitioners, among others, to vacate the properties or . . . (being) about to do so with intent to defraud the . . .
subject property pursuant to the final and executory judgment of the plaintiff." 3

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Carpets International filed an answer dated November 27, 1984 and severally to pay it the amounts claimed in its original
denying the allegations of paragraphs 2 to 13 inclusive, of the complaint.
complaint, the "truth of the matter," according to it, being that (a) the
yarn had been sold to it "on consignment basis . . . to be On 1 February 1985, the Honorable respondent Judge granted
manufactured to carpets to be paid from the proceeds of the sale of private respondent's motion to implead petitioner as party
the manufactured carpets;" (b) 21 sales invoices were not signed by it, defendant. On this day also Carpets International filed a
hence the yarn therein described was not received; (c) the post-dated manifestation stating that none of the items attached by
checks were given as security for the consigned yarn; (d) the yarn respondent sheriff on 4 December 1984 belonged to it.
could not have been received during the indicated period because
there was a strike in the company at the time; (e) some of the yarn Petitioner filed its answer dated 25 February 1985 claiming that it
delivered was made out of waste cotton and was hence withdrawn is a separate and distinct corporation duly organized under the
by MBSMI and never replaced; (f) Carpets International had not laws of the Philippines and that it had no participation in the
refused to pay its debt, indeed there were on-going negotiations alleged transactions between Carpet International and private
between it and MBSMI; (g) it had not removed or disposed of its respondent. It set up a counterclaim against private respondent
properties, in fact the same were already encumbered in favor of praying that the attachment on its properties consisting of
banking institutions, nor had it misappropriated or converted the finished goods, inventory and hand-tools valued at P867,000.00
yarn. On these premises, Carpets International also sought the be lifted and the articles returned to it; the amended complaint be
dissolution of the attachment. dismissed as against it; and, private respondent be ordered to pay
it actual damages of P867,000.00, damages of P200,000.00,
As narrated by the Intermediate Appellate Court, the writ of exemplary damages of P50,000.00, and attorney's fees of
preliminary attachment prayed for in the complaint issued ex P50,000.00.
parte 4 and pursuant thereto, the sheriff seized on December 4, 1984
machinery, equipment, raw materials and finished products Private respondent filed a motion for summary judgment dated
ostensibly belonging to Carpets International found at its factory at 20 August 1985 for the reason that the indebtedness, the amount
Bagumbayan, Taguig, Metro Manila. On December 6, 1984, an affidavit thereof, and the ownership of the attached properties were all
of third-party claim was presented at the office of the sheriff at Pasig admitted by Carpets International and its responsible officers
by Bell Carpets International Trading Corporation (hereafter, and, therefore, there are no disputed facts. Despite opposition by
simply BCITC). In that affidavit, BCITC laid claim to some of the petitioner and Carpets International, the Honorable respondent
attached property, i.e., the inventory, finished products and hand Judge rendered a Summary Judgment on 18 September 1985
tools valued at P867,000.00. ordering Carpets International to pay private respondent the sum
of P771,700.23, with legal rate of interest thereon from 23 October
The Appellate Court's account 5 continues as follows: 1983 until fully paid to pay private respondent the equivalent of
15% of the total unpaid claim as attorney's fees; and to pay the
On 7 December 1984, Carpets International filed a counterbond of costs of suit.
P771,700.23 to secure the dissolution of the attachment, which
dissolution Was granted but consequently restored on motion of In a motion dated 23 September 1985, private respondent moved
private respondent (MBSMI) and the filing of a bond of P1 million. for execution pending appeal because: (1) the finished goods that
were attached easily deteriorate and go out of fashion insofar as
In a motion dated 29 December 1984, private respondent moved the shades and colors are concerned, thus making them
for leave to implead petitioner (Bell Carpets International Trading unsaleable, and their continued storage will only make them dirty
Corporation, BCITC for brevity) as patty defendant for the reason and further depreciate their value; (2) the judgment may become
that it and Carpets International are one and the same entity, the ineffective as Carpets International is in imminent danger of
latter having been merged into the former. Private respondent insolvency as it has not been in operation since the inception of
filed its amended complaint dated 2 January 1985, praying that the strike of its employees; (3) the indebtedness and the amount
petitioner (BCITC) and Carpets International be ordered jointly thereof are not denied by Carpets International and therefore, any

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 appeal would be purely dilatory. Aside from opposing the to be done by the Trial Court. 8 The remedy against such a judgment
aforesaid motion, Carpets International and petitioner moved for is an appeal, regardless of the questions sought to be raised on
the reconsideration of the summary judgment. appeal, whether of fact, or of law, whether involving jurisdiction or
grave abuse of discretion of the Trial Court. No appeal was taken
On 19 November 1985, the Honorable respondent Judge denied from the summary judgment. 9 Instead a petition for certiorari under
the motions for reconsideration of petitioner and Carpets Rule 65 of the Rules of Court was filed with the Intermediate
International and granted private respondent's motion for Appellate Court praying for the annulment of the judgment. But it is
execution. On 22 November 1985 a writ of execution was issued obvious that the party aggrieved thereby did not have the option to
and on 28 November 1985, respondent sheriff scheduled the sale substitute the special civil action of certiorari under Rule 65 for the
of the attached properties for 1 0 December 1985 at 2:00 p.m. . . . remedy of appeal provided for in Rule 41. Indeed, the existence and
availability of the right of appeal are antithetical to the availment of
BCITC filed a special civil action of certiorari with the Intermediate the special civil action of certiorari. 10 The summary judgment having
Appellate Court, praying that the summary judgment be annulled and thus become final and executory, the proceedings at bar for its
a trial on the merits had. But by decision dated June 11, 1986, the annulment are futile and inefficacious.
Intermediate Appellate Court 6 affirmed the summary judgment, 7 and
denied oil July 9, 1986 BCITC's motion for reconsideration thereafter In any event, the facts, as found by the Intermediate Appellate Court
filed. BCITC has appealed to this Court on certiorari. to have been duly established from the pleadings, affidavits and other
papers on record, show that the summary judgment was correctly
In this Court, BCITC theorizes that it was error for the Intermediate and properly rendered by the Trial Court. The issues raised
Appellate Court not to have nullified the acts of the Trial Court by Carpets International and BCITC in their answers (to the complaint
complained of, it appearing that — of MBSMI) are demonstrably sham, fictitious, contrived.

1) the summary judgment was rendered with grave abuse of As regards Carpets International, the record shows that to the
discretion because — complaint were appended copies of the documents upon which the
cause of action of plaintiff MBSMI was based, and that Carpets
International failed to deny the genuineness and due execution of
(a) the pleadings raised issues of fact as regards (1) the
those documents specifically and under oath. That failure of Carpets
ownership of the items attached; and (2) the indebtedness of
International gave rise to a judicial admission on its part of the
P771,700.23; and
genuineness and due execution of said instruments, in accordance
with Section 8, Rule 8 of the Rules of Court. 11 Judicial admissions of
(b) BCITC's counterclaim was dismissed without hearing; and this sort "do not require proof and can not be contradicted unless
previously shown to have been made through palpable
2) the order authorizing levy on execution on property of BCITC mistake." 12 Thus, any evidence presented by the admitter, even
and the sale thereof at public auction was a despotic exercise of without objection by the adverse party, tending to contradict or
judicial authority. otherwise negate or modify the judicial admission, will be disregarded
in the absence of a prior showing that the admission had been "made
The petition must be denied for lack of merit. through palpable mistake." 13

In the first place, the judgment of the Trial Court sought to be Apart from this, the record also shows, as found by the Intermediate
annulled has become final and executory by reason of BCITC's failure Appellate Court, 14 that (a) responsible officials of Carpets
to appeal therefrom within the time appointed, i.e., 15 days from International, 15 who were charged with estafa for having issued
notice of the judgment. The summary judgment was unquestionably a bouncing cheeks in payment of the purchased yarn, declared in their
final one. It disposed of the case on the merits. It definitively declared affidavits at the preliminary investigation, 16 that the company had
which party was in the right and the nature and extent of the indeed bought yarn from MBSMI between 29 June 1983 and 21
obligations of one party in relation to the other, and left nothing more October 1983 with a total value of P705,445.47, that (b) this was in

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fact the conclusion of the Investigating Fiscal, except that the value of the affidavits show that . . . there is no genuine issue as to any
the yarn was determined to be P771,700.22; 17 and (c) Carpets material fact and that the moving party is entitled to a judgment as a
International had posted a bond in the amount of P771,700.22 on matter of law." 20
December 7, 1984 in an attempt to secure the discharge of the
attachment levied on property found in its factory. It is therefore WHEREFORE, the petition for review on certiorari is DENIED and the
clear from all these that Carpets International is in truth indebted to judgment of the Intermediate Appellate Court subject thereof,
MBSMI in the sum of P771,700.22, the property seized from it belongs sustaining that of the Regional Trial Court, is AFFIRMED. Costs
to it, and its denials of the plaintiff MBSMI's formal averments are not against petitioner.
genuine, but sham and fictitious.
SO ORDERED.
So, too, petitioner BCITC's claim of title to the property seized
from Carpets International under the writ of preliminary attachment G.R. No. 212493, June 01, 2016
of the Trial Court, is not genuine, but sham and fictitious. This is Gabriel Yap, Sr. Duly Represented By Gilbert Yap And Also In His
amply proven by the factual findings of the Intermediate Appellate Personal Capacity, Gabriel Yap, Jr., And Hyman Yap, Petitioners,
Court on this point, 18 by which this Court is normally bound, 19 viz: V.
Letecia Siao, Lynel Siao, Janelyn Siao, Eleanor Faye Siao, Shelett Siao
As to the ownership of the attached properties the following clearly And Honeylet Siao, Respondents.
demonstrate that the same was vested in Carpets International and
that none of them was owned by petitioner (BCITC): G.R. No. 212504
Cebu South Memorial Garden, Inc., Petitioner,
(1) The attached goods were found and were stored in the factory V.
compounds of Carpets International at 1st Street, Sta. Maria Real Letecia Siao, Lynel Siao, Janelyn Siao, Eleanor Faye Siao, Shelett Siao
Estate Subdivision, Bo. Bagumbayan Taguig, Metro Manila, the And Honeylet Siao, Respondents.
same address where private respondent (MBSMI) delivered the
yarns purchased by Carpets International from it. (No acceptable PEREZ, J.:
explanation is given by petitioner as to how these goods which it
claims it owns found their way to the factory of Carpets
International). Before this court are two consolidated cases involving two petitions
for Review on Certiorari. These petitions assail the Decision1 dated 9
October 2013 and Resolution2 dated 26 March 2014 of the Court of
(2) Carpets International filed a bond to have the attachment Appeals in CA-G.R. CV No. 02037.
discharged, which attachment covered the goods claimed by
petitioner as well. (If Carpets International was not the owner of
the goods, it would not have bothered to file a bond for the Petitioners in G.R. No. 212493 are deceased Gabriel Yap, Sr.,
discharge of the attachment). represented by his son and the President of Cebu South Memorial
Garden, Inc., Gilbert Yap; Gabriel Yap, Jr., in his capacity as Treasurer;
and Hyman Yap, as one of the directors, while petitioner in G.R. No.
(3) On the other hand, petitioner, aside from its bare claim, had 212504 is Cebu South Memorial Garden, Inc. Respondents in both
presented no evidence to show how it came to be the owner of the cases are Letecia Siao and her children, Lynel, Janelyn, Eleonor,
attached goods. Shellett and Honeylet.

There can therefore be no gainsaying the correctness of the rendition These consolidated cases arose from a Complaint for Specific
of the summary judgment in question, or of its affirmance by the Performance filed by petitioners Cebu South Memorial Gardens, Inc.
Intermediate Appellate Court. That judgment was rendered entirely in and Gabriel Yap, Sr., both represented by Gilbert Yap against
accordance with the Rules of Court and applicable jurisprudence, respondents Honeylet Siao and Letecia Siao on 27 April 1999. Gilbert
considering that "the pleadings and admissions on file together with Yap, in his own behalf, Gabriel Yap, Jr. and Hyman Yap joined the

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plaintiffs in their Supplemental Complaint. In their Second Amended respondents had abandoned their defense of the nullity of the
Complaint, the petitioners alleged that Gabriel Yap, Sr. and Letecia Certificate of Agreement when they agreed to implement its
Siao entered into a Certificate of Agreement where the parties agreed provisions. Petitioners submitted that the trial court may render a
on the following terms: summary judgment or judgment on the pleadings based on the
admitted facts.
1. To convert the parcels of land covered by TCT Nos. 66716,
66714 and 66713, registered in the names of Spouses Sergio On 1 August 2002, Judge Generosa G. Labra of Branch 23 of the
and Letecia Siao, into memorial lots; Regional Trial Court (RTC) of Cebu City issued an Order denying the
2. To organize themselves into a corporation; motion and holding that there were no existing admissions or
3. To transfer ownership of the parcels of land to Gabriel Yap admitted facts by respondents to be considered. Petitioners filed a
who will transfer ownership thereof to the corporation; Motion for Reconsideration but it was denied on 11 September 2002.
4. To give advance payment to Letecia Siao in the amount of Petitioners elevated the matter to the Court of Appeals.
P100,000.00 per month until Letecia Siao is financially stable
to support herself and her family.3 On 10 October 2003, the Court of Appeals in CA-G.R. SP No.
73850,8 through Associate Justice Eugenio S. Labitoria, reversed the
As a backgrounder, respondent Letecia Siao's husband Sergio Siao was trial court's decision and ordered its judge to render summary
indebted to petitioner Gabriel Yap, Sr. Petitioners claim that the titles judgment in favor of petitioners. The appellate court ruled that by
to the subject parcels of land were in the possession of Gabriel Yap, claiming benefits arising from the Certificate of Agreement,
Sr. as collateral for the loan. In consideration of condoning the loan, respondents had invoked the validity and effectiveness of the
Gabriel Yap, Sr. returned the titles to Letecia Siao on the condition Agreement.
that the parcels of land covered by the titles would be developed into
memorial lots.4 Respondents sought for reconsideration but it was denied by the
appellate court. Respondents did not file an appeal before the
Petitioners claimed that respondents refused to transfer the Supreme Court within the reglementary period. Thus, the Decision
ownership of the three parcels of land to Cebu South Memorial became final and executory on 7 June 2004 and the same had been
Garden, Inc., causing them to be exposed to numerous lawsuits from recorded in the Book of Entries of Judgment.9
the buyers of the burial plots.
In compliance with the Order that had become final, on 7 February
Respondents argued that Letecia Siao was coerced to sign the 2006, RTC Branch 13 of Cebu City Judge Meinrado P. Paredes
Certificate of Agreement, rendering it null and void. rendered a Summary Judgment, the dispositive portion of which
reads:
A panel of commissioners was appointment to determine the
financial standing of petitioner corporation and the actual money WHEREFORE, judgment is hereby rendered directing defendants to
received by Letecia Siao. transfer to the plaintiff-movant the three (3) parcels of land
covered by TCT Nos. 66714, 66713 and 66716 after this judgment
On 31 January 2000 and during the pendency of the case before the shall have become final and executory.
commissioners, respondents filed a Motion for Payment of Monthly
Support5 for Leticia Siao's family and herself. Respondents relied on Should defendants fail to do so, the Branch Clerk of Court is
the agreement made by the parties during the preliminary conference directed to prepare a deed of conveyance or transfer of the said
to abide by the terms of the Certificate of Agreement. In a titles to the plaintiff CSMG, Inc. at the expense of defendants.10
Resolution6 dated 5 April 2000, the RTC granted the motion for
monthly support and ordered Gabriel Yap, Sr. to pay immediately The motion for reconsideration filed by respondents was denied.
Letecia Siao the amount of P1,300,000.00. Resultantly, petitioners Once again, respondents filed an appeal under Rule 41 of the Rules of
filed a Motion for Summary Judgment7 on 24 May 2002 alleging that

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Court seeking to reverse and set aside the Summary Judgment 3.3. The execution of a verification and certification of non-
rendered by the RTC. forum [shopping] is a formal, not a [jurisdictional]
issue. It may be waived if not raised on time. In the
On 9 October 2013, the Court of Appeals set aside the Summary instant case, respondents waived the alleged [defect]
Judgment on a technicality. The appellate court found that the when they failed to raise it in a motion to dismiss or
certification against forum-shopping appended to the complaint is answer.
defective because there was no board resolution and special power of 3.4. The assailed decision resolved an issue beyond its
attorney vesting upon Gilbert Yap the authority to sign the jurisdiction. Thus, it is void under the principle of
certification on behalf of petitioner corporation and individual coram non judice.
petitioners. The appellate court added that the procedural defects 3.5. The validity of the complaints have been settled with
affected the jurisdiction of the court in that the court never acquired finality. In its decision dated 10 October 2013, the
jurisdiction over the case because the complaints are considered not Court of Appeals thru the another division (nineteenth
filed and are ineffectual. Petitioners filed their separate motions for division) directed RTC Cebu to render summary
reconsideration but they were denied by the appellate court. judgment there being no genuine issues to be tried. The
Court of Appeals (Fifth Division) in the present case
The following errors are grounds for the allowance of these petitions: violated the doctrine of immutability of judgment when
it dismissed the complaints, thereby effectively
1. The Honorable Court of Appeals made an error in applying the directing the trial court not to render any summary
law when the same resolved to reverse the decision the [c]ourt judgment.
a quo on the ground that even if Gilbert Yap is the president 4. The Court of Appeals gravely erred in reversing the summary
of petitioner corporation the same had no authority to judgment despite the fact the same is consistent with the
institute the complaint unless he can produce a board Certificate of Agreement.12
resolution showing his authority.
2. The Honorable Court of Appeals also erred when it Petitioner Yaps, in G.R. No. 212493 maintain that the signature of the
entertained the issue on lack of Certificate of Non-forum President of the corporation is sufficient to vest authority on him to
shopping when the raising of said grounds is already barred represent the corporation sans a board resolution. Petitioners stress
by the Rules on Pleading and Omnibus Motion Rule.11 that the Special Power of Attorney categorically granted Gilbert Yap
3. The Court of Appeals gravely erred and acted contrary to law the full authority to appear and represent Gabriel Yap, Sr. With
in reversing the summary judgment and dismissing the respect to the failure of Gabriel Yap, Jr. and Hyman Yap to sign the
complaints filed by petitioner on ground that the RTC Cebu certificate of non-forum shopping, petitioners assert that while the
had no jurisdiction over the complaint and plaintiff because two men share a common interest with petitioner corporation and
the verification and certification of non-forum shopping Gabriel Yap, Sr., these are not indispensable parties, thus their
signed by the president of the corporation was not signatures are not necessary. Petitioners also submit that the issue of
accompanied by a board resolution considering that: a defective certification of non-forum shopping was belatedly raised,
3.1. Gilbert Yap, as President of petitioner, can sign the thus should not have been considered.13
verification and certification even without a board
resolution. Hence, his verification and certification is Petitioner in G.R. No. 212504 adds that the appellate court should
valid. Consequently, the complaint and second amended have considered the subsequent submission of the board resolution
complaint are likewise valid. as substantial compliance with the Rules. Petitioner also argues that
3.2. The Court of Appeals gravely erred and acted contrary the appellate court violated the doctrine of immutability of judgment
to law in ruling that the subsequent submission of when it dismissed the complaints thereby effectively directing the
petitioner's board resolution cannot be deemed as trial court not to render any summary judgment.14
substantial compliance to the rule on verification and
certificate of non-forum shopping. Respondents filed one Comment on both petitions. They argue that
petitioners, except for Gabriel Yap, Sr. are not parties to the

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Certificate of Agreement, thus the petitions should be dismissed In Ateneo de Naga University v. Manalo, we held that the lone
because as against them no rights were violated. Respondents insist signature of the University President was sufficient to fulfill the
that the Certificate of Agreement is void because it involved verification requirement, because such officer had sufficient
unliquidated community properties. Respondents further claim that knowledge to swear to the truth of the allegations in the petition.
petitioners, other than Cebu South Memorial Garden, did not appeal
the Summary Judgment before the Court of Appeals, hence, they are In People's Aircargo and Warehousing Co., Inc. v. CA, we held that
all bound by the denial of their Motion for Summary Judgment by the in the absence of a charter or by-law provision to the contrary, the
RTC. With respect to the alleged defect in the Certification of Non- president of a corporation is presumed to have the authority to
forum shopping, respondents echoed the ruling of the Court of act within the domain of the general objectives of its business and
Appeals.15 within the scope of his or her usual duties. Moreover, even if a
certain contract or undertaking is outside the usual powers of the
We will first discuss the procedural aspect of this case where the president, the corporation's ratilication of the contract or
Court of Appeals wholly based its decision. The appellate court ruled undertaking and the acceptance of benefits therefrom make the
that the certification against forum-shopping is defective because it corporate president's actions binding on the corporation.20
was signed by Gilbert Yap without a valid board resolution. In the
leading case of Cagayan Valley Drug Corporation v. Commission on Bolstering our conclusion that the certification of non-forum
Internal Revenue,16 the Court, in summarizing numerous shopping is valid is the subsequent appending of the board resolution
jurisprudence, rendered a definitive rule that the following officials or to petitioners' motion for reconsideration. The Board Resolution
employees of the company can sign the verification and certification reads:
without need of a board resolution: (1) the Chairperson of the Board
of Directors, (2) the President of a corporation, (3) the General BOARD RESOLUTION NO. 01
Manager or Acting General Manager, (4) Personnel Officer, and (5) an Series of 2013
Employment Specialist in a labor case. The rationale behind the rule is
that these officers are "in a position to verify the truthfulness and
correctness of the allegations in the petition."17 WHEREAS, the corporation is presently facing a Civil Case entitled
Cebu South Memorial Garden, Inc. versus Letecia Siao, Lynel Siao,
Janelyn Siao, Eleanor Faye Siao, Shelett Siao and Honeylet Siao, and
In Cebu Metro Pharmacy, Inc v. Euro-Med Laboratories, Pharmacy, docketed as Civil Case No. CEB-23707 before the Regional Trial Court
Inc.,18 the President and Manager of Cebu Metro was held by the Court of Ccbu City, Branch 13, and is mostly like to [raise] to the Court of
as having the authority to sign the verification and certification of Appeals and the Supreme Court by our corporation or by the
non-forum shopping even without the submission of a written opposing party depending on the outcome of the said case.
authority from the board. The Court went on to say:
WHEREAS, the corporation needs to appoint its authorized
As the corporation's President and Manager, she is in a position to representative who will be vested with the authority to sign the
verify the truthfulness and correctness of the allegations in the Verification and Certificate of Forum Shopping for any and all
petition. In addition, such an act is presumed to be included in the pleadings to be filed before the Court of Appeals and the Supreme
scope of her authority to act within the domain of the general Court as the need of the case requires.
objectives of the corporation's business and her usual duties in
the absence of any contrary provision in the corporation's charter WHEREAS, the corporation also needs to ratify the action taken by the
or by-laws.19 president of the corporation in the person of Gilbert Yap who signed
the Verification and the Certificate of Non-Forum Shopping in the
Cebu Metro also cited cases wherein the Court allowed officers of a Complaint filed by this corporation before the Regional Trial Court of
corporation to sign the verification and certification of non-forum Cebu City last April 27, 1999 and docketed as [Civil Case No. CEB-
shopping even without a board resolution, to wit: 23707].

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WHEREFORE, it is hereby resolved that: board resolution which was subsequently attached recognized the
pre-existing status of the bank manager as an authorized signatory.
1. The action of the president Gilbert Yap in signing the
Verification and Certificate of Non-forum Shopping in [Civil Case No. In Abaya Investments Corporation v. Merit Philippines, where the
CEB-23707] filed before the Regional Trial Court of Cebu City on April complaint before the Metropolitan Trial Court of Manila was
27, 1999 is hereby ratified/affirmed by this Board with all legal instituted by petitioner's Chairman and President, Ofelia Abaya, who
effects and consequences. signed the verification and certification against non-forum shopping
without proof of authority to sign for the corporation, we also relaxed
2. The corporate president Gilbert Yap is given full authority to the rule. We did so taking into consideration the merits of the case
sign the Verification and Certificate on Non-forum Shopping for all and to avoid a re-litigation of the issues and further delay the
pleadings to be filed with the Court of Appeals and after with the administration of justice, since the case had already been decided by
Supreme Court of the Philippines.21 the lower courts on the merits. Moreover, Abaya's authority to sign
the certification was ratified by the Board.25
The Board of Directors of Cebu South Memorial Garden, through a
Board Resolution, not only authorized the President of the In Lim v. Court of Appeals, Mindanao Station26 it was ruled that the
corporation to sign the Certificate of Forum-Shopping but it ratified Assistant Vice-President for BPI Northern Mindanao, who was then the
the action taken by Gilbert Yap in signing the forum-shopping highest official representing the bank in the Northern Mindanao area,
certificate. is in a position to verify the truthfulness and correctness of the
allegations in the subject complaint, signifying his authority in filing
In Swedish Match Philippines, Inc. v. The Treasurer of the City of the complaint and to sign the verification and certification against
Manila,22 we held that the belated submission of a Secretary's forum shopping.
certification constitutes substantial compliance with the rules, thus:
In Fuji Television Network v. Espiritu,27 we highlighted two rules
Clearly, this is not an ordinary case of belated submission of proof of relative to certification against forum-shopping:
authority from the board of directors. Petitioner-corporation ratified
the authority of Ms. Beleno to represent it in the Petition filed before 4) As to certification against forum shopping, non-compliance
the RTC, particularly in Civil Case No. 03-108163, and consequently therewith or a defect therein, unlike in verification, is generally not
to sign the verification and certification of non-forum shopping on curable by its subsequent submission or correction thereof, unless
behalf of the corporation. This fact confirms and affirms her there is a need to relax the Rule on the ground of "substantial
authority and gives this Court all the more reason to uphold that compliance" or presence of "special circumstances or compelling
authority.23 reasons."

In Cosco Philippine Shipping, Inc. v. Kemper Insurance,24 we cited 5) The certification against forum shopping must be signed by all the
instances wherein the lack of authority of the person making the plaintiffs or petitioners in a case; otherwise, those who did not sign
certification of non-forum shopping was remedied through will be dropped as parties to the case. Under reasonable or justifiable
subsequent compliance by the parties therein: circumstances, however, as when all the plaintiffs or petitioners share
a common interest and invoke a common cause of action or defense,
In China Banking Corporation v. Mondragon International Philippines, the signature of only one of them in the certification against forum
Inc., the CA dismissed the petition filed by China Bank, since the shopping substantially complies with the Rule.
latter failed to show that its bank manager who signed the
certification against non-forum shopping was authorized to do so. We Clearly, a defect in the certification is allowed on the ground of
reversed the CA and said that the case be decided on the merits substantial compliance as in this case.
despite the failure to attach the required proof of authority, since the

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Applying the above-mentioned rule, the signatures of petitioners is irrevocably established as the controlling legal rule or decision
Gabriel Yap, Jr. and Hyman Yap are not indispensable for the validity between the same parties in the same case continues to be the law of
of the certification. These petitioners indeed share a common cause the case, whether correct on general principles or not, so long as the
of action with Gilbert Yap in that they are impleaded as officers and facts on which the legal rule or decision was predicated continue to
directors of Cebu South Memorial Garden, the very same corporation be the facts of the case before the court.32
represented by Gilbert Yap.
The rationale behind this rule is to enable an appellate court to
At any rate, any objection as to compliance with the requirement of perform its duties satisfactorily and efficiently, which would be
verification in the complaint should have been raised in the impossible if a question, once considered and decided by it, were to
proceedings below, and not in the appellate court for the first time.28 be litigated anew in the same case upon any and every subsequent
appeal. Without it, there would be endless litigation. Litigants would
In Young v. John Keng Seng,29 it was also held that the question of be free to speculate on changes in the personnel of a court, or on the
forum shopping cannot be raised in the Court of Appeals and in the chance of having propositions rewritten once gravely ruled on solemn
Supreme Court, since such an issue must be raised at the earliest argument and handed down as the law of a given case.33
opportunity in a motion to dismiss or a similar pleading.
In the Labitoria decision, the Court of Appeals directed the trial court
The Court of Appeals relied on procedural rules rather than on the to render a summary judgment on the ground that there was no
merits of the case. On this score, we can remand the case to the Court longer any legal controversy regarding the Certificate of Agreement
of Appeals for an opportunity to rule on the substance of the case. when respondents relied on the same agreement to ask for support.
The Court, in the public interest and expeditious administration of This ruling became the law of the case between the parties which
justice, has resolved action on the merits, instead of remanding them cannot be disturbed. Respondents cannot raise this same issue in
for further proceedings, as where the ends of justice would not be another petition.
sub-served by the remand of the case or where the trial court had
already received all the evidence of the parties. Briefly stated, a In any case, we affirm the summary judgment rendered by the trial
remand of the instant case to the Court of Appeals would serve no court, as directed by the Court of Appeals. A summary judgment is
purpose save to further delay its disposition contrary to the spirit of permitted only if there is no genuine issue as to any material fact and
fair play.30 a moving party is entitled to a judgment as a matter of law. A
summary judgment is proper if, while the pleadings on their face
Considering that this case has dragged on for 15 years with no appear to raise issues, the affidavits, depositions, and admissions
concrete solution in sight, we shall proceed to discuss the merits. presented by the moving party show that such issues are not
genuine.34
We reiterate the ruling penned by Justice Labitoria of the Court of
Appeals in CA-G.R. SP No. 7385031 directing the trial court to render a A "genuine issue" is an issue of fact which requires the presentation
summary judgment. The issues and arguments posed by respondents of evidence as distinguished from a sham, fictitious, contrived or
have already been passed upon and resolved by the Court of Appeals. false claim. When the facts as pleaded appear uncontested or
By appealing the summary judgment, respondents are in effect asking undisputed, then there is no real or genuine issue or question as to
the Court of Appeals to revisit the same issues. We cannot allow this the facts, and summary judgment is called for. The party who moves
under the principle of the "law of the case." for summary judgment has the burden of demonstrating clearly the
absence of any genuine issue of fact, or that the issue posed in the
complaint is patently unsubstantial so as not to constitute a genuine
The "law of the case" doctrine applies in a situation where an
issue for trial. Trial courts have limited authority to render summary
appellate court has made a ruling on a question on appeal and
judgments and may do so only when there is clearly no genuine issue
thereafter remands the case to the lower court to effect the ruling; the
as to any material fact. When the facts as pleaded by the parties are
question settled by the appellate court becomes the law of the case at
disputed or contested, proceedings for summary judgment cannot
the lower court and in any subsequent appeal. It means that whatever
take the place of trial.35

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Petitioners' complaint seeks for specific performance from WHEREFORE, the petition is GRANTED. The Court of Appeals'
respondents, i.e. to transfer ownership of the subject properties to Decision dated 9 October 2013 and Resolution dated 26 March 2014
petitioner corporation based on the Certificate of Agreement. As their in CA-G.R. CV No. 02037 are REVERSED and SET ASIDE. The
defense, respondents challenge the validity of the Agreement. Summary Judgment in Civil Case No. CEB-23707 rendered by the
However, respondents filed a motion for support relying on the same Regional Trial Court, Branch 13, Cebu City is AFFIRMED.
Agreement that they are impugning. In view of this admission,
respondents are effectively banking on the validity of the Agreement. SO ORDERED.
Thus, there are no more issues that need to be threshed out. As aptly
explained by the appellate court:

Clearly, there is no longer any legal controversy in this case which G.R. No. 199283 June 9, 2014
would justify trial. By claiming benefits arising from the Certificate of Juliet Vitug Madarang and Romeo Bartolome, represented by his
Agreement, private respondents had invoked the validity and attorneysiIn-fact and acting in their personal capacities, Rodolfo
effectiveness of the Certificate of Agreement which according to them and Ruby Bartolome, Petitioners,
is the law between the parties. Vs.
Spouses Jesus D. Morales and Carolina N. Morales, Respondents.
After invoking the validity and effectiveness of the Certificate of
Agreement, private respondents cannot now be heard claiming that LEONEN, J.:
they could not be required to perform their obligations under the
Certificate of Agreement because the said contract is void or that
because private respondent Leticia Siao had no authority to bind the A petition for relief from judgment is an equitable relief granted only
other private respondents. under exceptional circumstances.1 To set aside a judgment through a
petition for relief, parties must file the petition within 60 days from
notice of the judgment and within six (6) months after the judgment
The application of the principle of estoppel is proper and timely in or final order was entered; otherwise, the petition shall be dismissed
heading off private respondents efforts at renouncing their previous outright.
acts to the prejudice of petitioner. The principle of equity and natural
justice, as expressly adopted in Article 1431 of the Civil Code, and
pronounced as one of the CONCLUSIVE presumption under rule 131, If the petition for relief is filed on the ground of excusable negligence
Section 3 (a) of the Rules of Court, as follows: "Whenever a party has, of counsel, parties must show that their counsel’s negligence could
by his own declaration, act or omission, intentionally and deliberately not have been prevented using ordinary diligence and prudence.2 The
led another to believe a particular thing to be true, and to act upon mere allegation that there is excusable negligence simply because
such a belief, he cannot, in any litigation arising out of such counsel was 80 years old is a prejudicial slur to senior citizens. It is
declaration, act or omission, be permitted to falsify it." based on an unwarranted stereotype of people in their advanced
years. It is as empty as the bigotry that supports it.
Private respondents, having performed affirmative acts upon which
the petitioner and public respondent based their subsequent actions, This is a petition3 for review on certiorari of the Court of Appeals’
cannot thereafter refute their acts or renege on the effects of the resolutions dated July 27, 20114 and November 10, 20115 in CA-G.R.
same, to the prejudice of the latter. To allow private respondents to SP No. 120251. The Court of Appeals dismissed petitioners Juliet
do so would be tantamount to conferring upon them the liberty to Vitug Madarang, Romeo Bartolome, Rodolfo Bartolome, and Ruby
limit their liability at their whims and caprices, which is against the Anne Bartolome’s6 petition for certiorari for failure to file a motion
very principles of equity and natural justice.36 (Emphasis Supplied) for reconsideration of the order7 denying their petition for relief from
judgment.
Considering the foregoing, we grant the petition.

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The facts as established by the pleadings of the parties are as Defendants received a copy of the trial court’s decision on January 29,
follows: 2010.

On January 9, 2001, Spouses Jesus D. Morales and Carolina N. Morales On February 8, 2010, defendants filed their motion for
filed with the Regional Trial Court of Quezon City a complaint 8 for reconsideration of the trial court’s decision. They amended their
judicial foreclosure of a house and lot located in Bago Bantay, Quezon motion for reconsideration and filed a request for a Philippine
City. National Police handwriting expert to examine the authenticity of the
Spouses Bartolome’s alleged signatures on the deed of real estate
The Spouses Morales alleged that on March 23, 1993, Spouses Nicanor mortgage.
and Luciana Bartolome loaned ₱500,000.00 from them. The Spouses
Bartolome agreed to pay within two months with interest of five According to the trial court, the motion for reconsideration and its
percent (5%) per month. To secure their loan, the Spouses Bartolome amendment were pro forma as defendants failed to specify the
mortgaged9 the Bago Bantay property to the Spouses Morales. findings and conclusions in the decision that were not supported by
the evidence or contrary to law.
The period to pay lapsed without the Spouses Bartolome having paid
their loan. After demand, the Spouses Bartolome only paid part of the As to the request for a handwriting expert, the trial court ruled that
loaned amount. the "reasons given therein [were] not well taken."13

In the meantime, the Spouses Bartolome died. The Spouses Morales, Thus, in its order14 dated May 25, 2010, the trial court denied the
thus, filed a complaint for judicial foreclosure of the Bago Bantay motion for reconsideration, its amendment, and the request for a
property against Juliet Vitug Madarang, Romeo Bartolome, and the handwriting expert.
Spouses Rodolfo and Ruby Anne Bartolome.
Defendants received a copy of the May 25, 2010 order on June 24,
The Spouses Morales sued Madarang as the latter allegedly 2010.
represented herself as Lita Bartolome and convinced the Spouses
Morales to lend money to the Spouses Bartolome. 10 On August 11, 2010, defendants filed a notice of appeal. In its
order15 dated August 13, 2010, the trial court denied due course the
Romeo and Rodolfo Bartolome were sued in their capacities as notice of appeal for having been filed out of time. According to the
legitimate heirs of the Spouses Bartolome. Ruby Anne Bartolome is trial court, defendants, through their counsel, Atty. Arturo F.
Rodolfo Bartolome’s wife. Tugonon, received a copy of the order denying the motion for
reconsideration on June 24, 2010. This is evidenced by the registry
In their answer,11 defendants assailed the authenticity of the deed of return receipt on file with the court. Consequently, they had 15 days
real estate mortgage covering the Bago Bantay property, specifically, from June 24, 2010, or until July 9, 2010, to appeal the trial court’s
the Spouses Bartolome’s signatures on the instrument. They added decision. However, they filed their notice of appeal only on August 11,
that the complaint was already barred since it had been dismissed in 2010, which was beyond the 15-day period to appeal.
another branch of the Regional Trial Court of Quezon City for failure
to comply with an order of the trial court. On September 24, 2010,defendants filed a petition for relief from
judgment,16 blaming their 80-year-old lawyer who failed to file the
In its decision12 dated December 22, 2009, the trial court ordered notice of appeal within the reglementary period. They argued that
defendants to pay the Spouses Morales ₱500,000.00 plus 7% interest Atty. Tugonon’s failure to appeal within the reglementary period was
per month and costs of suit within 90 days but not more than 120 a mistake and an excusable negligence due to their former lawyer’s
days from entry of judgment. Should defendants fail to pay, the Bago old age:
Bantay property shall be sold at public auction to satisfy the
judgment.

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15. Undersigned Petitioner’s counsel is already eighty (80) years of The issues for our resolution are the following:
age and the lapses and failure of their counsel to take appropriate
steps immediately for the protection of his client is a mistake and an I. Whether the failure of petitioners’ former counsel to file the
excusable negligence due to the latter’s age and should not be notice of appeal within the reglementary period is excusable
attributable to undersigned defendants.17 negligence; and

In its order18 dated April 27, 2011, the trial court denied the petition II. Whether the Court of Appeals erred in dismissing outright
for relief from judgment. The trial court held that the petition for petitioners’ petition for certiorari for failure to file a motion for
relief was filed beyond 60 days from the finality of the trial court’s reconsideration of the order denying the petition for relief from
decision, contrary to Section 3, Rule 38 of the 1997 Rules of Civil judgment.
Procedure.
The petition lacks merit.
On July 13, 2011, Madarang, Romeo, and Rodolfo and Ruby Anne
Bartolome filed the petition for certiorari19 with the Court of Appeals. I - A petition for relief from judgment must be filed within 60 days
In its resolution20 dated July 27, 2011, the appellate court denied after petitioner learns of the judgment, final order, or
outright the petition for certiorari. The Court of Appeals found that proceeding and within six (6) months from entry of judgment or final
petitioners did not file a motion for reconsideration of the order order
denying the petition for relief from judgment, a prerequisite for filing
a petition for certiorari.
This court agrees that the petition for relief from judgment was filed
out of time. However, the trial court erred in counting the 60-day
Petitioners filed a motion for reconsideration that the Court of period to file a petition for relief from the date of finality of the trial
Appeals denied in its resolution21 dated November 10, 2011. court’s decision. Rule 38, Section 3 of the 1997 Rules of Civil
Petitioners filed the petition22 for review on certiorari with this court. Procedure is clear that the 60-day period must be counted after
They argue that they need not file a motion for reconsideration of the petitioner learns of the judgment or final order. The period counted
order denying their petition for relief from judgment because the from the finality of judgment or final order is the six-month period.
questions they raised in the petition for relief were pure questions of Section 3, Rule 38 of the 1997 Rules of Civil Procedure states:
law. They cite Progressive Development Corporation, Inc. v. Court of
Appeals23 as authority.
Sec. 3. Time for filing petition; contents and verification.– A petition
provided for in either of the preceding sections of this Rule must be
Petitioners add that the trial court erred in denying their notice of verified, filed within sixty (60) days after petitioner learns of the
appeal. They personally received a copy of the decision only on judgment, final order, or other proceeding to be set aside, and not
August 11, 2011. They argue that the period to file on appeal must be more than six (6) months after such judgment or final order was
counted from August 11, 2011, not on the day their "ailing entered, or such proceeding was taken; and must be accompanied
counsel"24 received a copy of the decision. with affidavits, showing the fraud, accident, mistake or excusable
negligence relied upon and the facts constituting the petitioner’s
A comment25 was filed on the petition for review on certiorari by good and substantial cause of action or defense, as the case may be.
respondents Spouses Morales. They argue that the trial court did not (Emphasis supplied)
err in declaring pro forma petitioners’ motion for reconsideration of
the trial court’s decision. The double period required under Section 3, Rule 38 is jurisdictional
and should be strictly complied with.26 A petition for relief from
Respondents contend that the Court of Appeals did not err in denying judgment filed beyond the reglementary period is dismissed outright.
the petition for certiorari since petitioners failed to file a motion for This is because a petition for relief from judgment is an exception to
reconsideration of the order denying their petition for relief from the public policy of immutability of final judgments.27
judgment.

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In Gesulgon v. National Labor Relations Commission,28 the Labor period fixed by the statute or Rules of Court is fatal . . . . 29 (Emphasis
Arbiter ordered Mariscor Corporation to reinstate Edwin Gesulgon as in the original)
chief cook on board one of its vessels. Mariscor Corporation had
notice of the decision on March 27, 1987, but it did not appeal the In Spouses Reyes v. Court of Appeals and Voluntad,30 the Regional
Labor Arbiter’s decision. Since decisions of Labor Arbiters become Trial Court of Bulacan rendered a decision against the Spouses Reyes’
final 10 calendar days from receipt of the decision, the decision predecessors-in-interest. The decision became final on December 8,
became final on April 6, 1987. 1995. The Spouses Reyes had notice of the decision on May 30, 1997
when they received a Court of Appeals order directing them to
On February 28, 1989, Mariscor Corporation filed a motion to set comment on the petition for certiorari filed by respondents heirs of
aside judgment with the National Labor Relations Commission. The Voluntad. Attached to the Court of Appeals’ order was a copy of the
Commission treated the motion as a petition for relief from judgment trial court’s decision.
and granted the petition for relief from judgment. It remanded the
case to the Labor Arbiter for further proceedings. On June 21, 2000, the Spouses Reyes filed a petition for relief from
judgment against the Regional Trial Court of Bulacan’s decision. This
This court set aside the order granting the petition for relief from court affirmed the dismissal of the petition for relief from judgment
judgment for having been filed beyond the double period required for having been filed out of time and said:
under Section 3, Rule 38 of the 1997 Rules of Civil Procedure. This
court explained: It should be noted that the 60-day period from knowledge of the
decision, and the 6-month period from entry of judgment, are both
A party filing a petition for relief from judgment must strictly comply inextendible and uninterruptible. We have also time and again held
with two (2) reglementary periods: (a) the petition must be filed that because relief from a final and executory judgment is really more
within sixty (60) days from knowledge of the judgment, order or other of an exception than a rule due to its equitable character and nature,
proceeding to be set aside; and (b) within a fixed period of six (6) strict compliance with these periods, which are definitely
months from entry of such judgment, order or other proceeding. jurisdictional, must always be observed.31 (Emphasis in the original)
Strict compliance with these periods is required because provision for
a petition for relief from judgment is a final act of liberality on the In this case, petitioners, through counsel, received a copy of the trial
part of the State, which remedy cannot be allowed to erode any court’s decision on January 29, 2010. They filed a motion for
further the fundamental principle that a judgment, order or reconsideration and an amended motion for reconsideration, which
proceeding must, at some definite time, attain finality in order at last similarly alleged the following:
to put an end to litigation. In Turqueza v. Hernando, this Court
stressed once more that: The defendants, by the undersigned counsel, to this Honorable Court,
respectfully allege:
. . . the doctrine of finality of judgments is grounded on fundamental
considerations of public policy and sound practice that at the risk of 1. That on January 29, 2010, they received the decision in the above
occasional error, the judgments of courts must become final at some entitled case rendered by this Honorable Court, dated December 22,
definite date fixed by law. The law gives an exception or ‘last chance’ 2009;
of a timely petition for relief from judgment within the reglementary
period (within 60 days from knowledge and 6 months from entry of
2. That with due respect to the Honorable Court, the decision is
judgment) under Rule 38, supra, but such grave period must be taken
contrary to law & to the defendants[’] evidence presented in court.
as ‘absolutely fixed, in extendible, never interruptedand cannot be
Hence, this urgent motion.
subjected to any condition or contingency. Because the period fixed is
itself devised to meet a condition or contingency (fraud, accident,
mistake or excusable neglect), the equitable remedy is an act of grace, WHEREFORE, it is most respectfully prayed of this Honorable Court,
as it were, designed to give the aggrieved party another and last that the decision sought to be reversed be reconsidered and another
chance’ and failure to avail of such last chance within the grace one be rendered in favor of the defendants.32

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Although petitioners filed a motion for reconsideration and amended A petition for relief from judgment is an equitable remedy and is
motion for reconsideration, these motions were pro forma for not allowed only in exceptional cases.36 It is not available if other
specifying the findings or conclusions in the decision that were not remedies exist, such as a motion for new trial or appeal.37
supported by the evidence or contrary to law.33 Their motion for
reconsideration did not toll the 15-day period to appeal.34 To set aside a judgment through a petition for relief, the negligence
must be so gross "that ordinary diligence and prudence could not
Petitioners cannot argue that the period to appeal should be counted have guarded against."38 This is to prevent parties from "reviv[ing] the
from August 11, 2011, the day petitioners personally received a copy right to appeal [already] lost through inexcusable negligence."39
of the trial court’s decision. Notice of judgment on the counsel of
record is notice to the client.35 Since petitioners’ counsel received a Petitioners argue that their former counsel’s failure to file a notice of
copy of the decision on January 29, 2010, the period to appeal shall appeal within the reglementary period was "a mistake and an
be counted from that date. excusable negligence due to [their former counsel’s] age."40 This
argument stereotypes and demeans senior citizens. It asks this court
Thus, the decision became final 15 days after January 29, 2010, or on to assume that a person with advanced age is prone to incompetence.
February 13, 2010. Petitioners had six (6) months from February 13, This cannot be done.
2010, or until August 12, 2010, to file a petition for relief from
judgment. There is also no showing that the negligence could have been
prevented through ordinary diligence and prudence. As such,
Since petitioners filed their petition for relief from judgment on petitioners are bound by their counsel’s negligence.41
September 24, 2010, the petition for relief from judgment was filed
beyond six (6) months from finality of judgment. The trial court Petitioners had until July 9, 2010 to file a notice of appeal,
should have denied the petition for relief from judgment on this considering that their former counsel received a copy of the order
ground. denying their motion for reconsideration of the trial court’s decision
on June 24, 2010.42 Since petitioners filed their notice of appeal only
II - Failure of petitioners’ former counsel to file the notice of appeal on August 11, 2010,43 the trial court correctly denied the notice of
within the reglementary period is not excusable negligence appeal for having been filed out of time.

Even if we assume that petitioners filed their petition for relief from III - The Court of Appeals correctly denied the petition for certiorari
judgment within the reglementary period, petitioners failed to prove for petitioners’ failure to file a motion for reconsideration of the
that their former counsel’s failure to file a timely notice of appeal was order denying the petition for relief from judgment
due to a mistake or excusable negligence.
In its resolution dated July 27, 2011, the Court of Appeals denied
Under Section 1, Rule 38 of the 1997 Rules of Civil Procedure, a petitioners’ petition for certiorari for failure to file a motion for
petition for relief from judgment may be filed on the ground of fraud, reconsideration of the order denying the petition for relief from
accident, mistake, or excusable negligence: judgment. We agree with the appellate court.

Section 1. Petition for relief from judgment, order, or other Section 1, Rule 65 of the 1997 Rules of Civil Procedure requires that
proceedings. no appeal or any plain, speedy, and adequate remedy in the ordinary
course of law is available to a party before a petition for certiorari is
When a judgment or final order is entered, or any other proceeding is filed. This section provides:
thereafter taken against a party in any court through fraud, accident,
mistake, or excusable negligence, he may file a petition in such court Section 1. Petition for certiorari.
and in the same case praying that the judgment, order or proceeding
be set aside.

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When any tribunal, board or officer exercising judicial or quasi WHEREFORE, the petition for review on certiorari is DENIED. The
judicial functions has acted without or in excess of its or his Court of Appeals’ resolutions dated July 27, 2011 and November 10,
jurisdiction, or with grave abuse of discretion amounting to lack or 2011 in CA-G.R. SP No. 120251 are AFFIRMED.
excess of jurisdiction, and there is no appeal, or any plain, speedy,
and adequate remedy in the ordinary course of law, a person SO ORDERED.
aggrieved thereby may file a verified petition in the proper court,
alleging the facts with certainty and praying that judgment be
rendered annulling or modifying the proceedings of such tribunal,
board or officer, and granting such incidental reliefs as law and
justice may require. (Emphasis supplied) In Metro Transit
Organization, Inc. v. PIGLAS NFWU-KMU,44 this court ruled that a
motion for reconsideration is the plain, speedy, and adequate remedy
in the ordinary course of law alluded to in Section 1, Rule 65 of the
1997 Rules of Civil Procedure.45 A motion for reconsideration is
required before a petition for certiorari is filed "to grant [the court
which rendered the assailed judgment or order]an opportunity . . . to
correct any actual or perceived error attributed to it by the re-
examination of the legal and factual circumstances of the case."46

In this case, a motion for reconsideration of the order denying the

petition for relief from judgment is the plain, speedy, and adequate
remedy in the ordinary course of law. Petitioners failed to avail
themselves of this remedy. Thus, the Court of Appeals correctly
dismissed petitioners’ petition for certiorari.

Contrary to petitioners’ claim, the questions they raised in their

petition for relief from judgment were not pure questions of law.
They raise the authenticity of the Spouses Bartolome’s signatures on
the deed of real estate mortgage and the allegedly excusable
negligence of their counsel.

These are questions of fact which put at issue the truth of the facts
alleged in the petition for relief from judgment.47 Petitioners cannot
cite Progressive Development Corporation, Inc. v. Court of
Appeals48 where this court held that "[t]he filing of the motion for
reconsideration before availing of the remedy of certiorari is not sine
qua non when the issues raised is one purely of law."49

All told, the Court of Appeals committed no reversible error in

denying petitioners’ petition for certiorari. The Regional Trial Court’s
decision dated December 22, 2009 is final and executory.

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