G.R. No.

166738 August 14, 2009 appearance and deputized the Provincial Prosecutor of Nueva Vizcaya to
assist in all hearings of the case.9
ROWENA PADILLA-RUMBAUA, Petitioner,
vs. The petitioner presented testimonial and documentary evidence to
EDWARD RUMBAUA, Respondent. substantiate her charges.

DECISION The petitioner related that she and the respondent were childhood
neighbors in Dupax del Norte, Nueva Vizcaya. Sometime in 1987, they
BRION, J.: met again and became sweethearts but the respondent’s family did not
approve of their relationship. After graduation from college in 1991, the
Petitioner Rowena Padilla-Rumbaua (petitioner) challenges, through her respondent promised to marry the petitioner as soon as he found a job.
petition for review on certiorari,1 the decision dated June 25, 20042 and The job came in 1993, when the Philippine Air Lines (PAL) accepted the
the resolution dated January 18, 20053 of the Court of Appeals (CA) in respondent as a computer engineer. The respondent proposed to the
CA-G.R. CV No. 75095. The challenged decision reversed the petitioner that they first have a "secret marriage" in order not to
decision4 of the Regional Trial Court (RTC) declaring the marriage of the antagonize his parents. The petitioner agreed; they were married in
petitioner and respondent Edward Rumbaua (respondent) null and void Manila on February 23, 1993. The petitioner and the respondent,
on the ground of the latter’s psychological incapacity. The assailed however, never lived together; the petitioner stayed with her sister in
resolution, on the other hand, denied the petitioner’s motion for Fairview, Quezon City, while the respondent lived with his parents in
reconsideration. Novaliches.

ANTECEDENT FACTS The petitioner and respondent saw each other every day during the first
six months of their marriage. At that point, the respondent refused to live
with the petitioner for fear that public knowledge of their marriage would
The present petition traces its roots to the petitioner’s complaint for the
affect his application for a PAL scholarship. Seven months into their
declaration of nullity of marriage against the respondent before the RTC,
marriage, the couple’s daily meetings became occasional visits to the
docketed as Civil Case No. 767. The petitioner alleged that the
petitioner’s house in Fairview; they would have sexual trysts in motels.
respondent was psychologically incapacitated to exercise the essential
Later that year, the respondent enrolled at FEATI University after he lost
obligations of marriage as shown by the following circumstances: the
his employment with PAL.10
respondent reneged on his promise to live with her under one roof after
finding work; he failed to extend financial support to her; he blamed her
for his mother’s death; he represented himself as single in his In 1994, the parties’ respective families discovered their secret marriage.
transactions; and he pretended to be working in Davao, although he was The respondent’s mother tried to convince him to go to the United States,
cohabiting with another woman in Novaliches, Quezon City. but he refused. To appease his mother, he continued living separately
from the petitioner. The respondent forgot to greet the petitioner during
her birthday in 1992 and likewise failed to send her greeting cards on
Summons was served on the respondent through substituted service, as
special occasions. The respondent indicated as well in his visa
personal service proved futile.5 The RTC ordered the provincial
application that he was single.
prosecutor to investigate if collusion existed between the parties and to
ensure that no fabrication or suppression of evidence would take
place.6 Prosecutor Melvin P. Tiongson’s report negated the presence of In April 1995, the respondent’s mother died. The respondent blamed the
collusion between the parties.7 petitioner, associating his mother’s death to the pain that the discovery of
his secret marriage brought. Pained by the respondent’s action, the
petitioner severed her relationship with the respondent. They eventually
The Republic of the Philippines (Republic), through the office of the
reconciled through the help of the petitioner’s father, although they still
Solicitor General (OSG), opposed the petition.8 The OSG entered its
lived separately.
In 1997, the respondent informed the petitioner that he had found a job in dominance. He would do actions without any remorse or guilt
Davao. A year later, the petitioner and her mother went to the feelings towards others especially to that of petitioner.
respondent’s house in Novaliches and found him cohabiting with one
Cynthia Villanueva (Cynthia). When she confronted the respondent about REMARKS
it, he denied having an affair with Cynthia.11 The petitioner apparently did
not believe the respondents and moved to to Nueva Vizcaya to recover Love happens to everyone. It is dubbed to be boundless as it goes
from the pain and anguish that her discovery brought. 12 beyond the expectations people tagged with it. In love, "age does matter."
People love in order to be secure that one will share his/her life with
The petitioner disclosed during her cross-examination that another and that he/she will not die alone. Individuals who are in love had
communication between her and respondent had ceased. Aside from her the power to let love grow or let love die – it is a choice one had to face
oral testimony, the petitioner also presented a certified true copy of their when love is not the love he/she expected.
marriage contract;13 and the testimony, curriculum vitae, 14 and
psychological report15 of clinical psychologist Dr. Nedy Lorenzo Tayag In the case presented by petitioner, it is very apparent that love really
(Dr. Tayag). happened for her towards the young respondent – who used "love" as a
disguise or deceptive tactic for exploiting the confidence she extended
Dr. Tayag declared on the witness stand that she administered the towards him. He made her believe that he is responsible, true, caring and
following tests on the petitioner: a Revised Beta Examination; a Bender thoughtful – only to reveal himself contrary to what was mentioned. He
Visual Motor Gestalt Test; a Rorschach Psychodiagnostic Test; a Draw a lacked the commitment, faithfulness, and remorse that he was able to
Person Test; a Sach’s Sentence Completion Test; and MMPI. 16 She engage himself to promiscuous acts that made petitioner look like an
thereafter prepared a psychological report with the following findings: innocent fool. His character traits reveal him to suffer Narcissistic
Personality Disorder - declared to be grave, severe and
TEST RESULTS AND EVALUATION incurable.17 [Emphasis supplied.]

Psychometric tests data reveal petitioner to operate in an average The RTC Ruling
intellectual level. Logic and reasoning remained intact. She is seen to be
the type of woman who adjusts fairly well into most situations especially if The RTC nullified the parties’ marriage in its decision of April 19, 2002.
it is within her interests. She is pictured to be faithful to her commitments The trial court saw merit in the testimonies of the petitioner and Dr.
and had reservations from negative criticisms such that she normally Tayag, and concluded as follows:
adheres to social norms, behavior-wise. Her age speaks of maturity, both
intellectually and emotionally. Her one fault lies in her compliant attitude xxxx
which makes her a subject for manipulation and deception such that of
respondent. In all the years of their relationship, she opted to endure his
Respondent was never solicitous of the welfare and wishes of his wife.
irresponsibility largely because of the mere belief that someday things will
Respondent imposed limited or block [sic] out communication with his
be much better for them. But upon the advent of her husband’s infidelity,
wife, forgetting special occasions, like petitioner’s birthdays and
she gradually lost hope as well as the sense of self-respect, that she has
Valentine’s Day; going out only on occasions despite their living
finally taken her tool to be assertive to the point of being aggressive and
separately and to go to a motel to have sexual intercourse.
very cautious at times – so as to fight with the frustration and insecurity
she had especially regarding her failed marriage.
It would appear that the foregoing narration are the attendant facts in this
case which show the psychological incapacity of respondent, at the time
Respondent in this case, is revealed to operate in a very self-
of the celebration of the marriage of the parties, to enter into lawful
centered manner as he believes that the world revolves around him.
marriage and to discharge his marital responsibilities (See Articles 68 to
His egocentrism made it so easy for him to deceitfully use others for
71, Family Code). This incapacity is "declared grave, severe and
his own advancement with an extreme air of confidence and
incurable."
WHEREFORE, in view of the foregoing, the marriage between petitioner 2. vacating the decision of the courts a quo and remanding the
Rowena Padilla Rumbaua and respondent Edwin Rumbaua is hereby case to the RTC to recall her expert witness and cure the defects
declared annulled. in her testimony, as well as to present additional evidence, would
temper justice with mercy; and
SO ORDERED.18
3. Dr. Tayag’s testimony in court cured the deficiencies in her
The CA Decision psychiatric report.

The Republic, through the OSG, appealed the RTC decision to the The petitioner prays that the RTC’s and the CA’s decisions be reversed
CA.19 The CA decision of June 25, 2004 reversed and set aside the RTC and set aside, and the case be remanded to the RTC for further
decision, and denied the nullification of the parties’ marriage.20 proceedings; in the event we cannot grant this prayer, that the CA’s
decision be set aside and the RTC’s decision be reinstated.
In its ruling, the CA observed that Dr. Tayag’s psychiatric report did not
mention the cause of the respondent’s so-called "narcissistic personality The Republic maintained in its comment that: (a) A.M. No. 02-11-10-SC
disorder;" it did not discuss the respondent’s childhood and thus failed to was applicable although it took effect after the promulgation of Molina; (b)
give the court an insight into the respondent’s developmental years. Dr. invalidating the trial court’s decision and remanding the case for further
Tayag likewise failed to explain why she came to the conclusion that the proceedings were not proper; and (c) the petitioner failed to establish
respondent’s incapacity was "deep-seated" and "incurable." respondent’s psychological incapacity.23

The CA held that Article 36 of the Family Code requires the incapacity to The parties simply reiterated their arguments in the memoranda they
be psychological, although its manifestations may be physical. Moreover, filed.
the evidence presented must show that the incapacitated party was
mentally or physically ill so that he or she could not have known the THE COURT’S RULING
marital obligations assumed, knowing them, could not have assumed
them. In other words, the illness must be shown as downright incapacity We resolve to deny the petition for lack of merit.
or inability, not a refusal, neglect, or difficulty to perform the essential
obligations of marriage. In the present case, the petitioner suffered A.M. No. 02-11-10-SC is applicable
because the respondent adamantly refused to live with her because of
his parents’ objection to their marriage.
In Molina, the Court emphasized the role of the prosecuting attorney or
fiscal and the OSG; they are to appear as counsel for the State in
The petitioner moved to reconsider the decision, but the CA denied her proceedings for annulment and declaration of nullity of marriages:
motion in its resolution of January 18, 2005. 21
(8) The trial court must order the prosecuting attorney or fiscal and the
The Petition and the Issues Solicitor General to appear as counsel for the state. No decision shall be
handed down unless the Solicitor General issues a certification, which
The petitioner argues in the present petition that – will be quoted in the decision, briefly stating therein his reasons for his
agreement or opposition, as the case may be, to the petition. The
1. the OSG certification requirement under Republic v. Solicitor General, along with the prosecuting attorney, shall submit to the
Molina22 (the Molina case) cannot be dispensed with because court such certification within fifteen (15) days from the date the case is
A.M. No. 02-11-10-SC, which relaxed the requirement, took effect deemed submitted for resolution of the court. The Solicitor General shall
only on March 15, 2003; discharge the equivalent function of the defensor vinculi contemplated
under Canon 1095. [Emphasis supplied.]
A.M. No. 02-11-10-SC24 -- which this Court promulgated on March 15, the Molina guideline on the matter of certification, although Article 48
2003 and duly published -- is geared towards the relaxation of the OSG mandates the appearance of the prosecuting attorney or fiscal to ensure
certification that Molina required. Section 18 of this remedial regulation that no collusion between the parties would take place. Thus, what is
provides: important is the presence of the prosecutor in the case, not the remedial
requirement that he be certified to be present. From this perspective, the
SEC. 18. Memoranda. – The court may require the parties and the public petitioner’s objection regarding the Molina guideline on certification lacks
prosecutor, in consultation with the Office of the Solicitor General, to file merit.
their respective memoranda in support of their claims within fifteen days
from the date the trial is terminated. It may require the Office of the
lawphil.net A Remand of the Case to the RTC is Improper
Solicitor General to file its own memorandum if the case is of significant
interest to the State. No other pleadings or papers may be submitted The petitioner maintains that vacating the lower courts’ decisions and the
without leave of court. After the lapse of the period herein provided, the remand of the case to the RTC for further reception of evidence are
case will be considered submitted for decision, with or without the procedurally permissible. She argues that the inadequacy of her
memoranda. evidence during the trial was the fault of her former counsel, Atty. Richard
Tabago, and asserts that remanding the case to the RTC would allow her
The petitioner argues that the RTC decision of April 19, 2002 should be to cure the evidentiary insufficiencies. She posits in this regard that while
vacated for prematurity, as it was rendered despite the absence of the mistakes of counsel bind a party, the rule should be liberally construed in
required OSG certification specified in Molina. According to the petitioner, her favor to serve the ends of justice.
A.M. No. 02-11-10-SC, which took effect only on March 15, 2003, cannot
overturn the requirements of Molina that was promulgated as early as We do not find her arguments convincing.
February 13, 1997.
A remand of the case to the RTC for further proceedings amounts to the
The petitioner’s argument lacks merit. grant of a new trial that is not procedurally proper at this stage. Section 1
of Rule 37 provides that an aggrieved party may move the trial court to
The amendment introduced under A.M. No. 02-11-10-SC is procedural or set aside a judgment or final order already rendered and to grant a new
remedial in character; it does not create or remove any vested right, but trial within the period for taking an appeal. In addition, a motion for new
only operates as a remedy in aid of or confirmation of already existing trial may be filed only on the grounds of (1) fraud, accident, mistake or
rights. The settled rule is that procedural laws may be given retroactive excusable negligence that could not have been guarded against by
effect,25 as we held in De Los Santos v. Vda. de Mangubat: 26 ordinary prudence, and by reason of which the aggrieved party’s rights
have probably been impaired; or (2) newly discovered evidence that, with
Procedural Laws do not come within the legal conception of a retroactive reasonable diligence, the aggrieved party could not have discovered and
law, or the general rule against the retroactive operation of statues - they produced at the trial, and that would probably alter the result if presented.
may be given retroactive effect on actions pending and undetermined at
the time of their passage and this will not violate any right of a person In the present case, the petitioner cites the inadequacy of the evidence
who may feel that he is adversely affected, insomuch as there are no presented by her former counsel as basis for a remand. She did not,
vested rights in rules of procedure. however, specify the inadequacy. That the RTC granted the petition for
declaration of nullity prima facie shows that the petitioner’s counsel had
A.M. No. 02-11-10-SC, as a remedial measure, removed the mandatory not been negligent in handling the case. Granting arguendo that the
nature of an OSG certification and may be applied retroactively to petitioner’s counsel had been negligent, the negligence that would justify
pending matters. In effect, the measure cures in any pending matter any a new trial must be excusable, i.e. one that ordinary diligence and
procedural lapse on the certification prior to its promulgation. Our rulings prudence could not have guarded against. The negligence that the
in Antonio v. Reyes27 and Navales v. Navales28 have since confirmed and petitioner apparently adverts to is that cited in Uy v. First Metro Integrated
clarified that A.M. No. 02-11-10-SC has dispensed with Steel Corporation where we explained:29
Blunders and mistakes in the conduct of the proceedings in the trial court dissolution at the whim of the parties. Both the family and
as a result of the ignorance, inexperience or incompetence of counsel do marriage are to be "protected" by the state.
not qualify as a ground for new trial. If such were to be admitted as valid
reasons for re-opening cases, there would never be an end to litigation The Family Code echoes this constitutional edict on marriage and
so long as a new counsel could be employed to allege and show that the the family and emphasizes their permanence, inviolability and
prior counsel had not been sufficiently diligent, experienced or learned. solidarity.
This will put a premium on the willful and intentional commission of errors
by counsel, with a view to securing new trials in the event of conviction, (2) The root cause of the psychological incapacity must be (a)
or an adverse decision, as in the instant case. medically or clinically identified, (b) alleged in the complaint, (c)
sufficiently proven by experts and (d) clearly explained in the
Thus, we find no justifiable reason to grant the petitioner’s requested decision. Article 36 of the Family Code requires that the
remand. incapacity must be psychological - not physical, although its
manifestations and/or symptoms may be physical. The evidence
Petitioner failed to establish the must convince the court that the parties, or one of them, was
respondent’s psychological incapacity mentally or psychically ill to such an extent that the person could
not have known the obligations he was assuming, or knowing
A petition for declaration of nullity of marriage is anchored on Article 36 of them, could not have given valid assumption thereof. Although no
the Family Code which provides that "a marriage contracted by any party example of such incapacity need be given here so as not to limit
who, at the time of its celebration, was psychologically incapacitated to the application of the provision under the principle of ejusdem
comply with the essential marital obligations of marriage, shall likewise be generis, nevertheless such root cause must be identified as a
void even if such incapacity becomes manifest only after its psychological illness and its incapacitating nature fully explained.
solemnization." In Santos v. Court of Appeals,30 the Court first declared Expert evidence may be given by qualified psychiatrists and
that psychological incapacity must be characterized by (a) gravity; (b) clinical psychologists.
juridical antecedence; and (c) incurability. The defect should refer to "no
less than a mental (not physical) incapacity that causes a party to be truly (3) The incapacity must be proven to be existing at "the time of
incognitive of the basic marital covenants that concomitantly must be the celebration" of the marriage. The evidence must show that
assumed and discharged by the parties to the marriage." It must be the illness was existing when the parties exchanged their "I do's."
confined to "the most serious cases of personality disorders clearly The manifestation of the illness need not be perceivable at such
demonstrative of an utter insensitivity or inability to give meaning and time, but the illness itself must have attached at such moment, or
significance to the marriage." prior thereto.

We laid down more definitive guidelines in the interpretation and (4) Such incapacity must also be shown to be medically or
application of Article 36 of the Family Code in Republic v. Court of clinically permanent or incurable. Such incurability may be
Appeals where we said: absolute or even relative only in regard to the other spouse, not
necessarily absolutely against everyone of the same sex.
(1) The burden of proof to show the nullity of the marriage Furthermore, such incapacity must be relevant to the assumption
belongs to the plaintiff. Any doubt should be resolved in favor of of marriage obligations, not necessarily to those not related to
the existence and continuation of the marriage and against its marriage, like the exercise of a profession or employment in a
dissolution and nullity. This is rooted in the fact that both our job. x x x
Constitution and our laws cherish the validity of marriage and
unity of the family. Thus, our Constitution devotes an entire Article (5) Such illness must be grave enough to bring about the
on the Family, recognizing it "as the foundation of the nation." It disability of the party to assume the essential obligations of
decrees marriage as legally "inviolable," thereby protecting it from marriage. Thus, "mild characteriological peculiarities, mood
 changes, occasional emotional outbursts" cannot be accepted as It was for this reason that we found it necessary to emphasize in Ngo Te
root causes. The illness must be shown as downright incapacity that each case involving the application of Article 36 must be treated
or inability, not a refusal, neglect or difficulty, much less ill will. In distinctly and judged not on the basis of a priori assumptions,
other words, there is a natal or supervening disabling factor in the predilections or generalizations but according to its own attendant facts.
person, an adverse integral element in the personality structure Courts should interpret the provision on a case-to-case basis, guided by
that effectively incapacitates the person from really accepting and experience, the findings of experts and researchers in psychological
thereby complying with the obligations essential to marriage. disciplines, and by decisions of church tribunals.

(6) The essential marital obligations must be those embraced by In the present case and using the above standards and approach, we
Articles 68 up to 71 of the Family Code as regards the husband find the totality of the petitioner’s evidence insufficient to prove that the
and wife as well as Articles 220, 221 and 225 of the same Code respondent is psychologically unfit to discharge the duties expected of
in regard to parents and their children. Such non-complied marital him as a husband.
obligation(s) must also be stated in the petition, proven by
evidence and included in the text of the decision. a. Petitioner’s testimony did not prove the root cause, gravity and
incurability of respondent’s condition
(7) Interpretations given by the National Appellate Matrimonial
Tribunal of the Catholic Church in the Philippines, while not The petitioner’s evidence merely showed that the respondent: (a)
controlling or decisive, should be given great respect by our reneged on his promise to cohabit with her; (b) visited her occasionally
courts… from 1993 to 1997; (c) forgot her birthday in 1992, and did not send her
greeting cards during special occasions; (d) represented himself as
(8) The trial court must order the prosecuting attorney or fiscal single in his visa application; (e) blamed her for the death of his mother;
and the Solicitor General to appear as counsel for the state. No and (f) told her he was working in Davao when in fact he was cohabiting
decision shall be handed down unless the Solicitor General with another woman in 1997.
issues a certification, which will be quoted in the decision, briefly
stating therein his reasons for his agreement or opposition, as the These acts, in our view, do not rise to the level of the "psychological
case may be, to the petition. The Solicitor General, along with the incapacity" that the law requires, and should be distinguished from the
prosecuting attorney, shall submit to the court such certification "difficulty," if not outright "refusal" or "neglect" in the performance of some
within fifteen (15) days from the date the case is deemed marital obligations that characterize some marriages. In Bier v. Bier, 34 we
submitted for resolution of the court. The Solicitor General shall ruled that it was not enough that respondent, alleged to be
discharge the equivalent function of the defensor psychologically incapacitated, had difficulty in complying with his marital
vinculi contemplated under Canon 1095. obligations, or was unwilling to perform these obligations. Proof of a natal
or supervening disabling factor – an adverse integral element in the
These Guidelines incorporate the basic requirements we established in respondent's personality structure that effectively incapacitated him from
Santos. To reiterate, psychological incapacity must be characterized by: complying with his essential marital obligations – had to be shown and
(a) gravity; (b) juridical antecedence; and (c) incurability. 31 These was not shown in this cited case.
requisites must be strictly complied with, as the grant of a petition for
nullity of marriage based on psychological incapacity must be confined In the present case, the respondent’s stubborn refusal to cohabit with the
only to the most serious cases of personality disorders clearly petitioner was doubtlessly irresponsible, but it was never proven to be
demonstrative of an utter insensitivity or inability to give meaning and rooted in some psychological illness. As the petitioner’s testimony
significance to the marriage. Furthermore, since the Family Code does reveals, respondent merely refused to cohabit with her for fear of
not define "psychological incapacity," fleshing out its terms is left to us to jeopardizing his application for a scholarship, and later due to his fear of
do so on a case-to-case basis through jurisprudence. 32 We emphasized antagonizing his family. The respondent’s failure to greet the petitioner on
this approach in the recent case of Ting v. Velez-Ting33 when we her birthday and to send her cards during special occasions, as well as
explained:
his acts of blaming petitioner for his mother’s death and of representing Dr. Tayag, in her report, merely summarized the petitioner’s narrations,
himself as single in his visa application, could only at best amount to and on this basis characterized the respondent to be a self-centered,
forgetfulness, insensitivity or emotional immaturity, not necessarily egocentric, and unremorseful person who "believes that the world
psychological incapacity. Likewise, the respondent’s act of living with revolves around him"; and who "used love as a…deceptive tactic for
another woman four years into the marriage cannot automatically be exploiting the confidence [petitioner] extended towards him." Dr. Tayag
equated with a psychological disorder, especially when no specific then incorporated her own idea of "love"; made a generalization that
evidence was shown that promiscuity was a trait already existing at the respondent was a person who "lacked commitment, faithfulness, and
inception of marriage. In fact, petitioner herself admitted that respondent remorse," and who engaged "in promiscuous acts that made the
was caring and faithful when they were going steady and for a time after petitioner look like a fool"; and finally concluded that the respondent’s
their marriage; their problems only came in later. character traits reveal "him to suffer Narcissistic Personality Disorder with
traces of Antisocial Personality Disorder declared to be grave and
To be sure, the respondent was far from perfect and had some character incurable."
flaws. The presence of these imperfections, however, does not
necessarily warrant a conclusion that he had a psychological malady at We find these observations and conclusions insufficiently in-depth and
the time of the marriage that rendered him incapable of fulfilling his duties comprehensive to warrant the conclusion that a psychological incapacity
and obligations. To use the words of Navales v. Navales:35 existed that prevented the respondent from complying with the essential
obligations of marriage. It failed to identify the root cause of the
Article 36 contemplates downright incapacity or inability to take respondent's narcissistic personality disorder and to prove that it existed
cognizance of and to assume basic marital obligations. Mere "difficulty," at the inception of the marriage. Neither did it explain the incapacitating
"refusal" or "neglect" in the performance of marital obligations or "ill will" nature of the alleged disorder, nor show that the respondent was really
on the part of the spouse is different from "incapacity" rooted on some incapable of fulfilling his duties due to some incapacity of a psychological,
debilitating psychological condition or illness. Indeed, irreconcilable not physical, nature. Thus, we cannot avoid but conclude that Dr. Tayag’s
differences, sexual infidelity or perversion, emotional immaturity and conclusion in her Report – i.e., that the respondent suffered "Narcissistic
irresponsibility, and the like, do not by themselves warrant a finding of Personality Disorder with traces of Antisocial Personality Disorder
psychological incapacity under Article 36, as the same may only be due declared to be grave and incurable" – is an unfounded statement, not a
to a person's refusal or unwillingness to assume the essential obligations necessary inference from her previous characterization and portrayal of
of marriage and not due to some psychological illness that is the respondent. While the various tests administered on the petitioner
contemplated by said rule. could have been used as a fair gauge to assess her own psychological
condition, this same statement cannot be made with respect to the
b. Dr. Tayag’s psychological report and court testimony respondent’s condition. To make conclusions and generalizations on the
respondent’s psychological condition based on the information fed by
only one side is, to our mind, not different from admitting hearsay
We cannot help but note that Dr. Tayag’s conclusions about the
evidence as proof of the truthfulness of the content of such evidence.
respondent’s psychological incapacity were based on the information fed
to her by only one side – the petitioner – whose bias in favor of her cause
cannot be doubted. While this circumstance alone does not disqualify the Petitioner nonetheless contends that Dr. Tayag’s subsequent testimony
psychologist for reasons of bias, her report, testimony and conclusions in court cured whatever deficiencies attended her psychological report.
deserve the application of a more rigid and stringent set of standards in
the manner we discussed above.36 For, effectively, Dr. Tayag only We do not share this view.
diagnosed the respondent from the prism of a third party account; she did
not actually hear, see and evaluate the respondent and how he would A careful reading of Dr. Tayag’s testimony reveals that she failed to
have reacted and responded to the doctor’s probes. establish the fact that at the time the parties were married, respondent
was already suffering from a psychological defect that deprived him of
the ability to assume the essential duties and responsibilities of marriage.
Neither did she adequately explain how she came to the conclusion that
respondent’s condition was grave and incurable. To directly quote from Q: So in the representation of the petitioner that the respondent is now
the records: lying [sic] with somebody else, how will you describe the character of this
respondent who is living with somebody else?
ATTY. RICHARD TABAGO:
A: This is where the antisocial personality trait of the respondent [sic]
Q: I would like to call your attention to the Report already marked as Exh. because an antisocial person is one who indulge in philandering
"E-7", there is a statement to the effect that his character traits begin to activities, who do not have any feeling of guilt at the expense of another
suffer narcissistic personality disorder with traces of antisocial personality person, and this [is] again a buy-product of deep seated psychological
disorder. What do you mean? Can you please explain in layman’s word, incapacity.
Madam Witness?
Q: And this psychological incapacity based on this particular deep seated
DR. NEDY LORENZO TAYAG: [sic], how would you describe the psychological incapacity? [sic]

A: Actually, in a layman’s term, narcissistic personality disorder cannot A: As I said there is a deep seated psychological dilemma, so I would say
accept that there is something wrong with his own behavioral incurable in nature and at this time and again [sic] the psychological
manifestation. [sic] They feel that they can rule the world; they are pathology of the respondent. One plays a major factor of not being able
eccentric; they are exemplary, demanding financial and emotional to give meaning to a relationship in terms of sincerity and endurance.
support, and this is clearly manifested by the fact that respondent abused
and used petitioner’s love. Along the line, a narcissistic person cannot Q: And if this psychological disorder exists before the marriage of the
give empathy; cannot give love simply because they love themselves respondent and the petitioner, Madam Witness?
more than anybody else; and thirdly, narcissistic person cannot support
his own personal need and gratification without the help of others and A: Clinically, any disorder are usually rooted from the early formative
this is where the petitioner set in. years and so if it takes enough that such psychological incapacity of
respondent already existed long before he entered marriage, because if
Q: Can you please describe the personal [sic] disorder? you analyze how he was reared by her parents particularly by the mother,
there is already an unhealthy symbiosis developed between the two, and
A: Clinically, considering that label, the respondent behavioral this creates a major emotional havoc when he reached adult age.
manifestation under personality disorder [sic] this is already considered
grave, serious, and treatment will be impossible [sic]. As I say this, a kind Q: How about the gravity?
of developmental disorder wherein it all started during the early formative
years and brought about by one familiar relationship the way he was A: This is already grave simply because from the very start respondent
reared and cared by the family. Environmental exposure is also part and never had an inkling that his behavioral manifestation connotes pathology
parcel of the child disorder. [sic] and second ground [sic], respondent will never admit again that such
behavior of his connotes again pathology simply because the disorder of
Q: You mean to say, from the formative [years] up to the present? the respondent is not detrimental to himself but, more often than not, it is
detrimental to other party involved.
A: Actually, the respondent behavioral manner was [present] long before
he entered marriage. [Un]fortunately, on the part of the petitioner, she xxxx
never realized that such behavioral manifestation of the respondent
connotes pathology. [sic] PROSECUTOR MELVIN TIONGSON:

xxxx Q: You were not able to personally examine the respondent here?
DR. NEDY TAYAG: pampered completely, pampered to the point that respondent failed to
develop his own sense of assertion or responsibility particularly during
A: Efforts were made by the psychologist but unfortunately, the that stage and there is also presence of the simple lying act particularly
respondent never appeared at my clinic. his responsibility in terms of handling emotional imbalance and it is
clearly manifested by the fact that respondent refused to build a home
Q: On the basis of those examinations conducted with the petitioning wife together with the petitioner when in fact they are legally married. Thirdly,
to annul their marriage with her husband in general, what can you say respondent never felt or completely ignored the feelings of the petitioner;
about the respondent? he never felt guilty hurting the petitioner because on the part of the
petitioner, knowing that respondent indulge with another woman it is very,
very traumatic on her part yet respondent never had the guts to feel guilty
A: That from the very start respondent has no emotional intent to give
or to atone said act he committed in their relationship, and clinically this
meaning to their relationship. If you analyze their marital relationship they
falls under antisocial personality. 37
never lived under one room. From the very start of the [marriage], the
respondent to have petitioner to engage in secret marriage until that time
their family knew of their marriage [sic]. Respondent completely refused, In terms of incurability, Dr. Tayag’s answer was very vague and
completely relinquished his marital obligation to the petitioner. inconclusive, thus:

xxxx xxxx

COURT: ATTY. RICHARD TABAGO

Q: Because you have interviewed or you have questioned the petitioner, Q: Can this personally be cured, madam witness?
can you really enumerate the specific traits of the respondent?
DR. NEDY TAYAG
DR. NEDY TAYAG:
A: Clinically, if persons suffering from personality disorder curable, up to
A: One is the happy-go-lucky attitude of the respondent and the this very moment, no scientific could be upheld to alleviate their kind of
dependent attitude of the respondent. personality disorder; Secondly, again respondent or other person
suffering from any kind of disorder particularly narcissistic personality will
never admit that they are suffering from this kind of disorder, and then
Q: Even if he is already eligible for employment?
again curability will always be a question. [sic] 38
A: He remains to be at the mercy of his mother. He is a happy-go-lucky
This testimony shows that while Dr. Tayag initially described the general
simply because he never had a set of responsibility. I think that he
characteristics of a person suffering from a narcissistic personality
finished his education but he never had a stable job because he
disorder, she did not really show how and to what extent the respondent
completely relied on the support of his mother.
exhibited these traits. She mentioned the buzz words that jurisprudence
requires for the nullity of a marriage – namely, gravity, incurability,
Q: You give a more thorough interview so I am asking you something existence at the time of the marriage, psychological incapacity relating to
specific? marriage – and in her own limited way, related these to the medical
condition she generally described. The testimony, together with her
A: The happy-go-lucky attitude; the overly dependent attitude on the part report, however, suffers from very basic flaws.
of the mother merely because respondent happened to be the only son. I
said that there is a unhealthy symbiosis relationship [sic] developed First, what she medically described was not related or linked to
between the son and the mother simply because the mother always the respondent’s exact condition except in a very general way. In
short, her testimony and report were rich in generalities but permanently separated simply because they have "fallen out of
disastrously short on particulars, most notably on how the love," or have outgrown the attraction that drew them together in
respondent can be said to be suffering from narcissistic their younger years.
personality disorder; why and to what extent the disorder is grave
and incurable; how and why it was already present at the time of Thus, on the whole, we do not blame the petitioner for the move to
the marriage; and the effects of the disorder on the respondent’s secure a remand of this case to the trial courts for the introduction of
awareness of and his capability to undertake the duties and additional evidence; the petitioner’s evidence in its present state is
responsibilities of marriage. All these are critical to the success of woefully insufficient to support the conclusion that the petitioner’s
the petitioner’s case. marriage to the respondent should be nullified on the ground of the
respondent’s psychological incapacity.
Second, her testimony was short on factual basis for her
diagnosis because it was wholly based on what the petitioner The Court commiserates with the petitioner’s marital predicament. The
related to her. As the doctor admitted to the prosecutor, she did respondent may indeed be unwilling to discharge his marital obligations,
not at all examine the respondent, only the petitioner. Neither the particularly the obligation to live with one’s spouse. Nonetheless, we
law nor jurisprudence requires, of course, that the person sought cannot presume psychological defect from the mere fact that respondent
to be declared psychologically incapacitated should be personally refuses to comply with his marital duties. As we ruled in Molina, it is not
examined by a physician or psychologist as a condition sine qua enough to prove that a spouse failed to meet his responsibility and duty
non to arrive at such declaration.39 If a psychological disorder can as a married person; it is essential that he must be shown to be
be proven by independent means, no reason exists why such incapable of doing so due to some psychological illness. The
independent proof cannot be admitted and given credit. 40 No such psychological illness that must afflict a party at the inception of the
independent evidence, however, appears on record to have been marriage should be a malady so grave and permanent as to deprive the
gathered in this case, particularly about the respondent’s early life party of his or her awareness of the duties and responsibilities of the
and associations, and about events on or about the time of the matrimonial bond he or she was then about to assume.41
marriage and immediately thereafter. Thus, the testimony and
report appear to us to be no more than a diagnosis that revolves WHEREFORE, in view of these considerations, we DENY the petition
around the one-sided and meager facts that the petitioner related, and AFFIRM the decision and resolution of the Court of Appeals dated
and were all slanted to support the conclusion that a ground June 25, 2004 and January 18, 2005, respectively, in CA-G.R. CV No.
exists to justify the nullification of the marriage. We say this 75095.
because only the baser qualities of the respondent’s life were
examined and given focus; none of these qualities were weighed
SO ORDERED.
and balanced with the better qualities, such as his focus on
having a job, his determination to improve himself through
studies, his care and attention in the first six months of the ARTURO D. BRION
marriage, among others. The evidence fails to mention also what Associate Justice
character and qualities the petitioner brought into her marriage,
for example, why the respondent’s family opposed the marriage
and what events led the respondent to blame the petitioner for the
death of his mother, if this allegation is at all correct. To be sure,
these are important because not a few marriages have failed, not
because of psychological incapacity of either or both of the
spouses, but because of basic incompatibilities and marital
developments that do not amount to psychological incapacity.
The continued separation of the spouses likewise never appeared
to have been factored in. Not a few married couples have likewise
G.R. No. 162518 August 19, 2009 c. the cost of suit.

RODRIGO SUMIRAN, Petitioner, SO ORDERED.4

vs.
SPOUSES GENEROSO DAMASO and EVA DAMASO Respondents. On March 6, 2003, petitioner filed a motion for reconsideration dated
Match 4, 2003, stating that he received a duplicate original copy of the
DECISION decision on February 21, 2003. Respondents opposed said motion. On
May 9, 2003, the RTC issued an Order denying petitioner’s motion for
PERALTA, J.: reconsideration. Thereafter, on May 29, 2003, petitioner filed a Notice of
Appeal dated May 28, 2003, stating instead that he received a copy of
This resolves the Petition for Review on Certiorari under Rule 45 of the the decision dated January 16, 2003 only on March 8, 2003 and of the
Rules of Court, praying that the Decision1 of the Court of Appeals (CA) in Order dated May 9, 2003 denying his motion for reconsideration on May
CA-G.R. SP No. 80267, dated December 22, 2003, and the 19, 2003.
Resolution2 dated February 20, 2004, denying petitioner's motion for
reconsideration, be reversed and set aside. On June 2, 2003, the RTC issued an Order denying due course to the
notice of appeal for having been filed out of time, emphasizing that the
The antecedent facts are as follows. decision was promulgated on February 21, 2003 in the presence of both
parties and their counsels. Considering counsel for petitioner to have
received a copy of the decision on said date of promulgation, the RTC
Petitioner filed a complaint for sum of money and damages with prayer
ruled that since petitioner had filed a motion for reconsideration on the
for preliminary attachment (Civil Case No. 93-2588) against respondents
13th day (March 6, 2003), he had belatedly filed the notice of appeal
before the Regional Trial Court (RTC) of Antipolo City, Branch 73.
when he filed it ten (10) days after allegedly receiving the Order of May 9,
Petitioner is also the private complainant in Criminal Case Nos. 92-8157
2003 on May 19, 2003. A motion for reconsideration was filed by
and 92-8158 for violation of Batas Pambansa Blg. 22 with respondent
petitioner on June 20, 2003, but the same was denied by the RTC on
Generoso Damaso as accused. Upon motion of respondents, said civil
October 1, 2003.
and criminal cases were consolidated and jointly tried.
Petitioner then filed a petition for certiorari with the CA. However, the CA
On February 21, 2003, the RTC promulgated its Decision3 dated January
found the petition unmeritorious and dismissed the same in its Decision
16, 2003, the dispositive portion of which reads as follows:
dated December 22, 2003. Ruling that petitioner was bound by his
judicial admission that he received the Decision of the RTC when it was
WHEREFORE, premises considered, accused GENEROSO DAMASO is promulgated on February 21, 2003, the CA held that petitioner’s period
hereby ACQUITTED in Criminal Case Nos. 92-8157 and 92-8158 on within which to file an appeal had lapsed by the time the Notice of Appeal
grounds of insufficiency of evidence. was filed on May 29, 2003. Petitioner’s motion for reconsideration of the
CA Decision was denied per Resolution dated February 20, 2004.
As for Civil Case No. 93-2588, in the interest justice and equity, judgment
is hereby rendered against the plaintiff Rodrigo Sumiran and in favor of Hence, this petition where it is alleged that the CA erred in ruling that
the defendants Damaso. The plaintiff is further ordered to pay to the petitioner’s period to appeal had lapsed, as such ruling was premised on
defendants the following: misapprehension of facts and contradicted by evidence on record. The
CA also allegedly failed to state in its decision and resolution the
a. ₱50,000.00 as moral damages particular evidence upon which the same was based; and there were
supposedly some facts that, if properly noticed and considered, would
b. ₱20,000.00 as exemplary damages, and justify a different conclusion.
The petition deserves some consideration. The "fresh period rule" finally eradicates the confusion as to when the 15-
day appeal period should be counted – from receipt of notice of judgment
As early as 2005, the Court categorically declared in Neypes v. Court of or from receipt of notice of "final order" appealed from.
Appeals5 that by virtue of the power of the Supreme Court to amend,
repeal and create new procedural rules in all courts, the Court is allowing Taking our bearings from Neypes, in Sumaway v. Urban Bank, Inc., we
a fresh period of 15 days within which to file a notice of appeal in the set aside the denial of a notice of appeal which was purportedly filed five
RTC, counted from receipt of the order dismissing or denying a motion for days late. With the fresh period rule, the 15-day period within which to file
new trial or motion for reconsideration. This would standardize the appeal the notice of appeal was counted from notice of the denial of the therein
periods provided in the Rules and do away with the confusion as to when petitioner’s motion for reconsideration. 1avvphi1

the 15-day appeal period should be counted. Thus, the Court stated:
We followed suit in Elbiña v. Ceniza, wherein we applied the principle
To recapitulate, a party-litigant may either file his notice of appeal within granting a fresh period of 15 days within which to file the notice of appeal,
15 days from receipt of the Regional Trial Court’s decision or file it within counted from receipt of the order dismissing a motion for new trial or
15 days from receipt of the order (the "final order") denying his motion for motion for reconsideration or any final order or resolution.
new trial or motion for reconsideration. Obviously, the new 15-day period
may be availed of only if either motion is filed; otherwise, the decision Thereafter, in First Aqua Sugar Traders, Inc. v. Bank of the Philippine
becomes final and executory after the lapse of the original appeal period Islands, we held that a party-litigant may now file his notice of appeal
provided in Rule 41, Section 3.6 either within fifteen days from receipt of the original decision or within
fifteen days from the receipt of the order denying the motion for
The foregoing ruling of the Court was reiterated in Makati Insurance Co., reconsideration.
Inc. v. Reyes,7 to wit:
In De los Santos v. Vda. de Mangubat, we applied the same principle of
Propitious to petitioner is Neypes v. Court of Appeals, promulgated on 14 "fresh period rule," expostulating that procedural law refers to the
September 2005 while the present Petition was already pending before adjective law which prescribes rules and forms of procedure in order that
us. x x x courts may be able to administer justice. Procedural laws do not come
within the legal conception of a retroactive law, or the general rule
xxxx against the retroactive operation of statutes. The "fresh period rule" is
irrefragably procedural, prescribing the manner in which the appropriate
With the advent of the "fresh period rule," parties who availed themselves period for appeal is to be computed or determined and, therefore, can be
of the remedy of motion for reconsideration are now allowed to file a made applicable to actions pending upon its effectivity, such as the
notice of appeal within fifteen days from the denial of that motion. present case, without danger of violating anyone else’s rights. (Emphasis
supplied)
The "fresh period rule" is not inconsistent with Rule 41, Section 3 of the
Revised Rules of Court which states that the appeal shall be taken The retroactivity of the Neypes rule in cases where the period for appeal
"within fifteen (15) days from notice of judgment or final order appealed had lapsed prior to the date of promulgation of Neypes on September 14,
from." The use of the disjunctive word "or" signifies disassociation and 2005, was clearly explained by the Court in Fil-Estate Properties, Inc. v.
independence of one thing from another. It should, as a rule, be Homena-Valencia,8 stating thus:
construed in the sense which it ordinarily implies. Hence, the use of "or"
in the above provision supposes that the notice of appeal may be filed The determinative issue is whether the "fresh period" rule announced in
within 15 days from the notice of judgment or within 15 days from notice Neypes could retroactively apply in cases where the period for appeal
of the "final order," x x x. had lapsed prior to 14 September 2005 when Neypes was promulgated.
That question may be answered with the guidance of the general rule
xxxx that procedural laws may be given retroactive effect to actions pending
and undetermined at the time of their passage, there being no vested the Order denying his motion for reconsideration, his period to appeal
rights in the rules of procedure. Amendments to procedural rules are had not yet lapsed.
procedural or remedial in character as they do not create new or remove
vested rights, but only operate in furtherance of the remedy or IN VIEW OF THE FOREGOING, the petition is GRANTED. The Decision
confirmation of rights already existing. of the Court of Appeals in CA-G.R. SP No. 80267, dated December 22,
2003, and the Resolution dated February 20, 2004, are hereby
Sps. De los Santos reaffirms these principles and categorically warrants REVERSED and SET ASIDE. The Order of the Regional Trial Court of
that Neypes bears the quested retroactive effect, to wit: Antipolo City, Branch 73, dated June 2, 2003 in Civil Case No. 93-2588,
and its Order dated October 1, 2003, reiterating the June 2, 2003 Order,
Procedural law refers to the adjective law which prescribes rules and are hereby declared NULL and VOID. The Regional Trial Court of
forms of procedure in order that courts may be able to administer Antipolo City, Branch 73, is DIRECTED to give due course to petitioner’s
justice.http://www.supremecourt.gov.ph/jurisprudence/2007/october2007/ Notice of Appeal dated May 28, 2003. No costs.
149508.htm - _ftn Procedural laws do not come within the legal
conception of a retroactive law, or the gener al rule against the retroactive SO ORDERED.
operation of statues ― they may be given retroactive effect on actions pending and
undetermined at the time of their passage and this will not violate any right of a DIOSDADO M. PERALTA
person who may feel that he is adversely affected, insomuch as there are no vested Associate Justice
rights in rules of
procedure.http://www.supremecourt.gov.ph/jurisprudence/2007/october2007/149
508.htm - _ftn

The "fresh period rule" is a procedural law as it prescribes a fresh period

of 15 days within which an appeal may be made in the event that the
motion for reconsideration is denied by the lower court. Following the rule
on retroactivity of procedural laws, the "fresh period rule" should be
applied to pending actions, such as the present case.

Also, to deny herein petitioners the benefit of the "fresh period rule" will
amount to injustice, if not absurdity, since the subject notice of judgment
and final order were issued two years later or in the year 2000, as
compared to the notice of judgment and final order in Neypes which were
issued in 1998. It will be incongruous and illogical that parties receiving
notices of judgment and final orders issued in the year 1998 will enjoy the
benefit of the "fresh period rule" while those later rulings of the lower
courts such as in the instant case, will not. 9

Since this case was already pending in this Court at the time of
promulgation of Neypes, then, ineluctably, the Court must also apply the
foregoing rulings to the present case. Petitioner is entitled to a "fresh
period" of 15 days − counted from May 19, 2003, the date of petitioner’s
receipt of the Order denying his motion for reconsideration of the RTC
Decision − within which to file his notice of appeal. Therefore, when he
filed said notice on May 29, 2003, or only ten (10) days after receipt of
G.R. No. 136368 January 16, 2002 denominated their agreement as deed of absolute sale, their real
intention was to conclude an equitable mortgage.
JAIME TAN, JR., as Judicial Administrator of the Intestate Estate of
Jaime C. Tan, petitioner, Barely hours after the complaint was stamped 'received,' the
vs. Magdangals were able to have Tan's title over the lot in question
HON. COURT OF APPEALS (Ninth Special Div.) and JOSE A. canceled and to secure in their names TCT No. T-134470. This
MAGDANGAL and ESTRELLA MAGDANGAL, respondents. development prompted the heirs of Tan, who were to be later
substituted by Jaime V. Tan, Jr. (Tan, Jr.) as plaintiff, to file a
PUNO, J.: supplemental complaint.

This is a petition for review of the Decision of the Court of Appeals dated The intervening legal tussles are not essential to this narration.
July 15, 19981 and its Resolution dated November 9, 19982 denying What is material is that on June 4, 1991, Branch 11 of the
petitioner's motion for reconsideration in CA-G.R. SP-41738. Regional Trial Court of Davao City rendered judgment finding for
Tan, Jr., as plaintiff therein. The dispositive portion of the decision
The facts are as stated in the impugned Decision, viz: reads:.

"Involved in this case is a parcel of land, designated as Lot No. 'WHEREFORE, judgment is rendered:
645-C, with an area of 34,829 square meters, more or less,
situated in Bunawan, Davao City. The lot was once covered by 1. The Deed of Absolute Sale (Exhibits B, B-1) is, in
TCT No. T-72067 of the Registry of Deeds of Davao City in the accordance with the true intention of the parties, hereby
name of the late Jaime C. Tan (Tan, for short) married to declared and reformed an equitable mortgage;
Praxedes V. Tan.
2. The plaintiff is ordered to pay the defendants within
From the petition, the motion to dismiss petition, their respective 120 days after the finality of this decision P59,200 plus
annexes and other pleadings, we gather the following factual interest at the rate of 12% per annum from May 2, 1988,
antecedents: the date the complaint was filed, until paid;

On January 22, 1981, Tan, for a consideration of P59,200.00, 3. In order to avoid multiplicity of suits and to fully give
executed a deed of absolute sale over the property in question in effect to the true intention of the parties, upon the
favor of spouses Jose Magdangal and Estrella Magdangal. payment of the aforesaid amount, TCT No. T-134470 in
Simultaneous with the execution of this deed, the same the name of defendants Jose Magdangal and Estrella
contracting parties entered into another agreement whereunder Magdangal (Exh. 13) and shall be deemed canceled and
Tan given one (1) year within which to redeem or repurchase the null and void and TCT No. T-72067 in the name of Jaime
property. C. Tan and Praxedes Valles Tan (Exh. A) be reinstated).

Albeit given several opportunities and/or extensions to exercise No pronouncement as to costs.

the option, Tan failed to redeem the property until his death on
January 4, 1988. SO ORDERED. (Annex 'B', Petition; Emphasis added).'

On May 2, 1988, Tan's heirs filed before the Regional Trial Court From the above, the Magdangals appealed to this Court in CA-
at Davao City a suit against the Magdangals for reformation of G.R. CV No. 33657.
instrument. Docketed as CIVIL CASE NO. 19049-88, the
complaint alleged that, while Tan and the Magdangals
In a decision promulgated on September 28, 1995, this Court, Magdangals be ordered to claim the amount thus deposited and
thru its then Special Third Division, affirmed in toto the appealed the Register of Deeds of Davao City, to reinstate the title of Jaime
decision of the lower court. Copy of this affirmatory judgment was Tan and Praxedes Tan.
each received by the Magdangals and Tan, Jr. on October 5,
1995. Jointly acting on the aforementioned MOTON FOR
CONSOLIDATION AND WRIT OF POSSESION of the
On March 13, 1996, the Clerk of this Court entered in the Book of Magdangals (Annex 'C', Petition), MANIFESTATION AND
Entries of Judgment the Decision in CA-G.R. CV No. 33657 and MOTION of Tan, Jr. (Annex 'I', Petition), the court a quo presided
issued the corresponding Entry of Judgment which, on its face, by the respondent judge, came out with the first challenged order
stated that the said Decision 'has on October 21, 1995 become of June 10, 1996 (Annex 'N', Petition) dispositively reading, as
final and executory' (Annex 'L', Petition; Emphasis added). follows:

On March 21, 1996, the Magdangals filed in the lower court a 'WHEREFORE, x x x the Motion for Consolidation and a
MOTION FOR CONSOLIDATION AND WRIT OF POSSESSION, Writ of Possession is hereby DENIED for lack of merit.
therein alleging that they did not appeal from the aforesaid
decision of this Court, adding '[T]hat the appealed judgment of The deposit of the amount of P116,032.00 made by
the Court of Appeals has become final and executory 15 days plaintiff with the Office of Court x x x on April 17, 1996 is
from October 5, 1995 or up to October 20, 1995, which the 120 hereby considered full payment of the redemption price
days redemption period commences. And noting that the and the Clerk of Court is hereby ordered to deliver said
redemption period has expired without Tan, Jr. exercising his amount to herein defendants.
option, the Magdangals thus prayed that the title 'in the name of
Jaime C. Tan and Praxedes Tan be consolidated and confirmed The Register of Deeds of Davao City x x x is hereby
in the name of the (Magdangals) x x x and pending such directed to cancel TCT No. T-134470 in the name of Jose
issuance, a writ of possession be ordered issued (Annex "C", Magdangal and Estrella Magdangal and, thereafter, to
Petition).
1âwphi1.nêt

reinstate TCT No. 72067 in the name of Jaime C. Tan

and Praxedes Valles Tan and to submit her compliance
In opposition to this motion (Annex 'F', Petition), Tan, Jr. alleged, thereto within ten (10) days from receipt of this Order.
among other things, that until an entry of judgment has been
issued by the Court of Appeals and copy thereof furnished the SO ORDERED.'
parties, the appealed decision of the court a quo in this case
cannot be considered final and executory. Pressing the point,
Explaining her action, the respondent judge wrote in the same
Tan, Jr., citing Cueto vs. Collantes, infra., would then assert that
order:
the period of redemption on his part commenced to run from
receipt of entry of judgment in CA-G.R. CV No. 33657.
'Following the ruling of the Supreme Court in Cueto vs.
Collantes, et al., 97 Phil. 325, the 120 days period for
Meanwhile, Tan, Jr. via a motion for execution dated March 27,
plaintiff to pay the amount of P59,200.00 plus interest x x
1996, which he filed directly with this court, prayed this court to
x should be reckoned from the date of Entry of Judgment
direct the court a quo to issue the corresponding writ of execution
x x x which was March 13, 1996. The plaintiff made a
in Civil Case No. 19049-88. In a related move, Tan, Jr. filed on
deposit on April 17, 1996 well within the 120-day period
April 16, 1996, a MANIFESTATION AND MOTION therein
mandated by the decision of this Court.'
advising the court a quo of his intention to redeem the property in
question and of the fact that, on such date, he has deposited with
its clerk of court the repurchase price, plus interest, as required In due time, the Magdangals moved for a reconsideration.
by its original decision. By way of relief, Tan, Jr. prayed that the However, in her next assailed order of July 24, 1996 (Annex 'R',
 Petition), the respondent judge denied the motion for being 5, 1995. On March 13, 1996, the clerk of court of the appellate court
proforma and fatally defective."3 entered in the Book of Entries of Judgement the decision in CA-G.R. CV
No. 33657 and issued the corresponding Entry of Judgment which, on its
Petitioner assails the aforequoted Decision as follows: face, stated that the said decision "has on October 21, 1995 become final
and executory."6
"I. Petitioner's right to due process was violated when the Court of
Appeals rendered a judgment on the merits of private The respondents Magdangal filed in the trial court a Motion for
respondents' petition without granting to petitioner the opportunity Consolidation and Writ of Possession.7 They alleged that the 120-day
to controvert the same. period of redemption of the petitioner has expired. They reckoned that
the said period began 15 days after October 5, 1995, the date when the
II. Appeal not certiorari was the appropriate remedy of private finality of the judgment of the trial court as affirmed by the appellate court
respondents as there was no grave abuse of discretion as to commenced to run.
amount to lack of or excess of jurisdiction on the part of the trial
judge. Neither is delay in resolving the main case a ground for On the other hand, petitioner filed on March 27, 1996 a motion for
giving due course to the petition. execution in the appellate court praying that it "direct the court a quo to
issue the corresponding writ of execution in Civil Case No. 19049-
III. Cueto vs. Collantes, 97 Phil. 325, was disregarded by the 88."8 On April 17, 1996, petitioner deposited with the clerk of court the
Court of Appeals in resolving the petition of private respondents. repurchase price of the lot plus interest as ordered by the decision.
It is still good case law and was in effect made a part of section 2
of Rule 68 of the 1997 Rules of Civil Procedure on Foreclosure of On June 10, 1996, the trial court allowed the petitioner to redeem the lot
Mortgage. in question. It ruled that the 120-day redemption period should be
reckoned from the date of Entry of Judgment in the appellate court or
IV. The St. Dominic vs. Intermediate Appellate Court, 138 SCRA from March 13, 1996.9 The redemption price was deposited on April 17,
242 case is not applicable to the case at bar; on the other hand 1996. As aforestated, the Court of Appeals set aside the ruling of the trial
the ruling in Gutierrez Hermanos vs. de La Riva, 46 Phil. 827, court.
applies.
From 1991-1996, the years relevant to the case at bar, the rule that
V. Equity considerations justify giving due course to this governs finality of judgment is Rule 51 of the Revised Rules of Court. Its
petition."4 (emphasis ours) sections 10 and 11 provide:

We will immediately resolve the key issue of what rule should govern the "SEC. 10. Entry of judgments and final resolutions. - If no appeal
finality of judgment favorably obtained in the trial court by the petitioner. or motion for new trial or reconsideration is filed within the time
provided in these Rules, the judgment or final resolution shall
forthwith be entered by the clerk in the book of entries of
The operative facts show that in its Decision of June 4, 1991, the trial
judgments. The date when the judgment or final resolution
court held that: (1) the contract between the parties is not an absolute
becomes executory shall be deemed as the date of its entry. The
sale but an equitable mortgage; and (2) petitioner Tan should pay to the
record shall contain the dispositive part of the judgment or final
respondents Magdangal "within 120 days after the finality of this decision
resolution and shall be signed by the clerk, with a certificate that
P59,200.00 plus interest at the rate of 12% per annum from May 2, 1988,
such judgment or final resolution has become final and executory.
the date the complaint was filed, until paid." 5
(2a, R36)
On September 28, 1995 in CA-G.R. CV No. 33657, the Special Third
SEC. 11. Execution of judgment. - Except where the judgment or
Division of the Court of Appeals affirmed the decision of the trial court in
final order or resolution, or a portion thereof, is ordered to be
toto. Both parties received the decision of the appellate court on October
 immediately executory, the motion for its execution may only be appeal therefrom by certiorari by filing with the Supreme Court a
filed in the proper court after its entry. petition within 10 days from the date of entry of such decision
(Section 1, Rule 46). The entry of judgment is made after it has
In original actions in the Court of Appeals, its writ of execution become final, i.e., upon the expiration of 15 days after notice
shall be accompanied by a certified true copy of the entry of thereof to the parties (Section 8, Rule 53, as modified by a
judgment or final resolution and addressed to any appropriate resolution of the Supreme Court dated October 1, 1945). But, as
officer for its enforcement. Chief Justice Moran has said, 'such finality *** is subject to the
aggrieved party's right of filing a petition for certiorari under this
In appealed cases, where the motion for execution pending section,' which means that 'the Court of Appeals shall remand the
appeal is filed in the Court of Appeals at a time that it is in case to the lower court for the execution of its judgment, only
possession of the original record or the record on appeal, the after the expiration of ten (10) days from the date of such
resolution granting such motion shall be transmitted to the lower judgment, if no petition for certiorari is filed within that period.' (1
court from which the case originated, together with a certified true Moran, Comments on the Rules of Court, 1952 ed., p. 950) It
copy of the judgment or final order to be executed, with a would therefore appear that the date of entry of judgment of the
directive for such court of origin to issue the proper writ for its Court of Appeals is suspended when a petition for review is filed
enforcement." to await the final entry of the resolution or decision of the
Supreme Court.
This rule has been interpreted by this Court in Cueto vs. Collantes as
follows:10 Since in the present case appellee has filed a petition for review
within the reglementary period, which was dismissed by
resolution of July 6, 1953, and for lack of a motion for
"The only error assigned by appellants refer to the finding of the
reconsideration the entry of final judgment was made on
lower court that plaintiff can still exercise his right of redemption
August 7, 1953, it follows that the 90-day period within which
notwithstanding the expiration of the 90-day period fixed in the
appellee may exercise his right of redemption should be counted
original decision and, therefore, defendants should execute the
from said date, August 7, 1953. And appellee having exercised
deed of reconveyance required in said decision. Appellants
such right on October 17, 1953 by depositing the redemption
contend that, the final judgment of the Court of Appeals having
money with the clerk of court, it is likewise clear that the motion
been entered on July 8, 1953, the 90-day period for the exercise
be filed for the exercise of such right is well taken and is within
of the right of redemption has long expired, it appearing that
the purview of the decision of the lower court." 11
plaintiff deposited the redemption money with the clerk of court
only on October 17, 1953, or, after the expiration of 101 days.
Appellee brands this computation as erroneous, or one not in On April 18, 1994, this Court issued Circular No. 24-94, viz:
accordance with the procedure prescribed by the rules of court.
"TO: COURT OF APPEALS, SANDIGANBAYAN, COURT
Appellee's contention should be sustained. The original decision OF TAX APPEALS, REGIONAL TRIAL COURTS,
provides that appellee may exercise his right of redemption within METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL
the period of 90 days from the date the judgment has become COURTS, MUNICIPAL CIRCUIT TRIAL COURTS, AND
final. It should be noted that appellee had appealed from this ALL MEMBERS OF THE INTEGRATED BAR OF THE
decision. This decision was affirmed by the court of appeals and PHILIPPINES
final judgment was entered on July 8, 1953. Does this mean that
the judgment became final on that date? SUBJECT: RESOLUTION OF THE COURT EN
BANC APPROVING AND PROMULGATING THE
Let us make a little digression for purposes of clarification. Once REVISED PROVISION ON EXECUTION OF
a decision is rendered by the Court of Appeals a party may JUDGMENTS. SPECIFICALLY IN APPEALED CASES,
 AND AMENDING SECTION 1, RULE 39 OF THE RULES The Circular took effect on June 1, 1994.
OF COURT
The 1997 Revised Rules of Civil Procedure, however, amended the rule
It appears that in a number of instances, the execution of on finality of judgment by providing in section 1, Rule 39 as follows:
judgments in appealed cases cannot be promptly enforced
because of undue administrative delay in the remand of the "Section 1. Execution upon judgments or final orders. - Execution
records to the court of origin, aggravated at times by shall issue as a matter of right, on motion, upon a judgment or
misplacement or misdelivery of said records. The Supreme Court order that disposes of the action or proceeding upon the
Committee on the Revision of the Rules of Court has drafted expiration of the period to appeal therefrom if no appeal has been
proposals including a provision which can remedy the procedural duly perfected. (1a)
impasse created by said contingencies.
If the appeal has been duly perfected and finally resolved, the
Accordingly, pending approval by the Court of the revised rules execution may forthwith be applied for in the court of origin, on
on Civil Procedure, and to provide a solution to the aforestated motion of the judgment obligee, submitting therewith certified true
problems, the Court Resolved to approve and promulgate the copies of the judgment or judgments or final order or orders
following section thereof on execution of judgments, amending sought to be enforced and of the entry thereof, with notice to the
Section 1, Rule 39 of the Rules of Court: adverse party.

Section 1. Execution upon judgments or final orders. - Execution The appellate court may, on motion in the same case, when the
shall issue as a matter of right, on motion, upon a judgment or interest of justice so requires, direct the court of origin to issue the
order that disposes of the action or proceeding upon expiration of writ of execution."
the period to appeal therefrom if no appeal has been duly
perfected. The rationale of the new rule is explained by retired Justice F.D.
Regalado as follows:12
If the appeal has been duly perfected and finally resolved, such
execution may forthwith be applied for in the lower court from "1. The term 'final order' is used in two senses depending on
which the action originated, on motion of the judgment obligee, whether it is used on the issue of appealability or on the issue of
submitting therewith certified true copies of the judgment or binding effect. For purposes of appeal, an order is "final" if it
judgments or the final order or orders sought to be enforced and disposes of the action, as distinguished from an interlocutory
of the entry thereof, with notice to the adverse party. order which leaves something to be done in the trial court with
respect to the merits of the case (De la Cruz, et al. vs. Paras, et
The appellate court may, on motion in the same case, when the al., L-41053, Feb. 27, 1976). For purposes of binding effect or
interest of justice so requires, direct the court of origin to issue the whether it can be subject of execution, an order is 'final' or
writ of execution. executory after the lapse of the reglementary period to appeal
and no appeal has been perfected (see Perez, et al. vs. Zulueta,
This resolution shall be published in two (2) newspapers of L-10374, Sept. 30, 1959; cf. Denso [Phil.], Inc. vs. IAC, et al.,
general circulation and shall take effect on June 1, 1994. G.R. No. 75000, Feb. 27, 1987; Montilla vs. CA, et al., L-47968,
May 9, 1988).
April 18, 1994.
2. On the aspect of appealability, these revised Rules use the
adjective 'final' with respect to orders and resolutions, since to
"(Sgd.) ANDRES R. NARVASA
terminate a case the trial courts issue orders while the appellate
Chief Justice"
courts and most of the quasi-judicial agencies issue resolutions.
Judgment are not so qualified since the use of the so-called The third paragraph of this section, likewise a new provision, is
interlocutory judgments is not favored in this jurisdiction, while the due to the experience of the appellate courts wherein the trial
categorization of an order or a resolution for purposes of denoting court, for reasons of its own or other unjustifiable circumstances,
that it is appealable is to distinguish them from interlocutory unduly delays or unreasonably refuses to act on the motion for
orders or resolutions. However, by force of extended usage the execution or issue the writ therefor. On motion in the same case
phrase 'final and executory judgment' is sometimes used and while the records are still with the appellate court, or even after
tolerated, although the use of 'executory' alone would suffice. the same have been remanded to the lower court, the appellate
These observations also apply to the several and separate court can direct the issuance of the writ of execution since such
judgments contemplated in Rule 36, or partial judgments which act is merely in the enforcement of its judgment and which it has
totally dispose of a particular claim or severable part of the case, the power to require."
subject to the power of the court to suspend or defer action on an
appeal from or further proceedings in such special judgment, or It is evident that if we apply the old rule on finality of judgment, petitioner
as provided by Rule 35 on the matter of partial summary redeemed the subject property within the 120-day period of redemption
judgments which are not considered as appealable (see Sec. 4, reckoned from the appellate court's entry of judgment. The appellate
Rule 35 and the explanation therein). court, however, did not apply the old rule but the 1997 Revised Rules of
Civil Procedure. In fine, it applied the new rule retroactively and we hold
The second paragraph of this section is an innovation in response that given the facts of the case at bar this is an error.
to complaints over the delay caused by the former procedure in
obtaining a writ of execution of a judgment, which has already There is no dispute that rules of procedure can be given retroactive
been affirmed on appeal, with notice to the parties. As things then effect. This general rule, however, has well-delineated exceptions. We
stood, after the entry of judgment in the appellate court, the quote author Agpalo:13
prevailing party had to wait for the records of the case to be
remanded to the court of origin when and where he could then "9.17. Procedural laws.
move for the issuance of a writ of execution. The intervening time
could sometimes be substantial, especially if the court a quo is in
Procedural laws are adjective laws which prescribe rules and
a remote province, and could also be availed of by the losing
forms of procedure of enforcing rights or obtaining redress for
party to delay or thwart actual execution.
their invasion; they refer to rules of procedure by which courts
applying laws of all kinds can properly administer justice. They
On these considerations, the Supreme Court issued Circular No. include rules of pleadings, practice and evidence. As applied to
24-94, dated April 18, 1994, approving and promulgating in criminal law, they provide or regulate the steps by which one who
advance this amended Section 1 of Rule 39 and declaring the commits a crime is to be punished.
same effective as of June 1, 1994.
The general rule that statutes are prospective and not retroactive
Under the present procedure, the prevailing party can secure does not ordinarily apply to procedural laws. It has been held that
certified true copies of the judgment or final order of the appellate "a retroactive law, in a legal sense, is one which takes away or
court and the entry thereof, and submit the same to the court of impairs vested rights acquired under laws, or creates a new
origin with and to justify his motion for a writ of execution, without obligation and imposes a new duty, or attaches a new disability,
waiting for its receipt of the records from the appellate court. That in respect of transactions or considerations already past. Hence,
motion must be with notice to the adverse party, with a hearing remedial statutes or statutes relating to remedies or modes of
when the circumstances so require, to enable him to file any procedure, which do not create new or take away vested rights,
objection thereto or bring to the attention of said court matters but only operate in furtherance of the remedy or confirmation of
which may have transpired during the pendency of the appeal rights already existing, do not come within the legal conception of
and which may have a bearing on the execution sought to a retroactive law, or the general rule against the retroactive
enforce the judgment.
operation of statutes." The general rule against giving statutes validly taken away and transferred to another and no litigant can
retroactive operation whose effect is to impair the obligations of acquire a vested right to be heard by one particular court.
contract or to disturb vested rights does not prevent the
application of statutes to proceedings pending at the time of their 9.18. Exceptions to the rule.
enactment where they neither create new nor take away vested
rights. A new statute which deals with procedure only is The rule that procedural laws are applicable to pending actions or
presumptively applicable to all actions - those which have proceedings admits certain exceptions. The rule does not apply
accrued or are pending. where the statute itself expressly or by necessary implication
provides that pending actions are excepted from its operation, or
Statutes regulating the procedure of the courts will be construed where to apply it to pending proceedings would impair vested
as applicable to actions pending and undetermined at the time of rights. Under appropriate circumstances, courts may deny the
their passage. Procedural laws are retroactive in that sense and retroactive application of procedural laws in the event that to do
to that extent. The fact that procedural statutes may somehow so would not be feasible or would work injustice. Nor may
affect the litigants' rights may not preclude their retroactive procedural laws be applied retroactively to pending actions if to
application to pending actions. The retroactive application of do so would involve intricate problems of due process or impair
procedural laws is not violative of any right of a person who may the independence of the courts."
feel that he is adversely affected. Nor is the retroactive
application of procedural statutes constitutionally objectionable. We hold that section 1, Rule 39 of the 1997 Revised Rules of Procedure
The reason is that as a general rule no vested right may attach to, should not be given retroactive effect in this case as it would result in
nor arise from, procedural laws. It has been held that "a person great injustice to the petitioner. Undoubtedly, petitioner has the right to
has no vested right in any particular remedy, and a litigant cannot redeem the subject lot and this right is a substantive right. Petitioner
insist on the application to the trial of his case, whether civil or followed the procedural rule then existing as well as the decisions of this
criminal, of any other than the existing rules of procedure." Court governing the reckoning date of the period of redemption when he
redeemed the subject lot. Unfortunately for petitioner, the rule was
Thus, the provision of Batas Bilang 129 in Section 39 thereof changed by the 1997 Revised Rules of Procedure which if applied
prescribing that "no record on appeal shall be required to take an retroactively would result in his losing the right to redeem the subject lot.
appeal" is procedural in nature and should therefore be applied It is difficult to reconcile the retroactive application of this procedural rule
retroactively to pending actions. Hence, the question as to with the rule of fairness. Petitioner cannot be penalized with the loss of
whether an appeal from an adverse judgment should be the subject lot when he faithfully followed the laws and the rule on the
dismissed for failure of appellant to file a record on appeal within period of redemption when he made the redemption. The subject lot may
thirty days as required under the old rules, which question is only be 34,829 square meters but as petitioner claims, "it is the only
pending resolution at the time Batas Bilang 129 took effect, property left behind by their father, a private law practitioner who was
became academic upon the effectivity of said law because the felled by an assassin's bullet."14
law no longer requires the filing of a record on appeal and its
retroactive application removed the legal obstacle to giving due Petitioner fought to recover this lot from 1988. To lose it because of a
course to the appeal. A statute which transfers the jurisdiction to change of procedure on the date of reckoning of the period of redemption
try certain cases from a court to a quasi-judicial tribunal is a is inequitous. The manner of exercising the right cannot be changed and
remedial statute that is applicable to claims that accrued before the change applied retroactively if to do so will defeat the right of
its enactment but formulated and filed after it took effect, for it redemption of the petitioner which is already vested.
does not create new nor take away vested rights. The court that
has jurisdiction over a claim at the time it accrued cannot validly
IN VIEW WHEREOF, the decision of the Court of Appeals dated July 15,
try the claim where at the time the claim is formulated and filed
1998 and its Resolution dated November 9, 1998 in CA-G.R. SP-41738
the jurisdiction to try it has been transferred by law to a quasi-
are annulled and set aside. The Orders dated June 10, 1996 and July 24,
judicial tribunal, for even actions pending in one court may be
1996 of the RTC of Davao City, 11th Judicial Region, Branch 11, in Civil mortgage. At the public auction sale held on December 4, 2006, AUB
Case No. 19049-88 are reinstated. No costs. was declared the highest bidder. On the same date, a Certificate of Sale
was issued in its name and registered with the Registry of Deeds of
SO ORDERED. Makati City.

With the expiration of the redemption period, AUB proceeded to execute

an Affidavit of Consolidation of Ownership, through its First Vice-
President, Florante del Mundo. AUB thereafter secured a Certificate
Authorizing Registration from the Bureau of Internal Revenue to facilitate
G.R. No. 188051 November 22, 2010 the transfer of the title.

ASIA UNITED BANK, Petitioner, On December 8, 2006, TCT No. 192674 (114645) was cancelled and, in
vs. lieu thereof, TCT No. 223120 was issued in the name of AUB.
GOODLAND COMPANY, INC., Respondent.
GOODLAND, through its counsel, Atty. Antonio Bautista (Atty. Bautista),
DECISION opposed the petition, denying that it executed the real estate mortgage.
GOODLAND further averred that the signature of the notary public
appearing on the deed was a forgery, and that no technical description of
NACHURA, J.:
the property supposedly mortgaged was indicated therein. Concluding
that AUB’s title was derived from the foreclosure of a fake mortgage,
Petitioner assails the February 16, 2009 Decision1 and the May 18, 2009 GOODLAND prayed for the petition’s denial.6
Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 103304,
annulling the August 23, 20073 and February 15, 20084 Orders of the
On March 1, 2007, the RTC issued the writ of possession sought by AUB.
Regional Trial Court (RTC) of Makati City, Branch 150, which in turn
It ratiocinated that, as the purchaser of the property at the foreclosure
denied due course to respondent Goodland Company, Inc.’s
sale and as the new title holder thereof, AUB’s right of possession and
(GOODLAND) notice of appeal for invalid substitution of counsel.
enjoyment of the same had become absolute. 7
The antecedents:
GOODLAND, through its counsel on record, Atty. Bautista, filed a motion
for reconsideration8 and a supplemental motion for reconsideration, 9 but
An Ex-Parte Application/Petition for the Issuance of Writ of both were denied in the Order10 dated April 25, 2007, which was received
Possession5 was filed by Asia United Bank (AUB) over a 5,801-square- by Atty. Bautista on June 15, 2007.11
meter lot located in Makati City and covered by Transfer Certificate of
Title (TCT) No. 223120 of the Registry of Deeds of Makati in AUB’s
Relentless, GOODLAND sought recourse with the CA by initially filing a
name. The property was previously registered in the name of
Notice of Appeal12 with the RTC, through a certain Atty. Lito Mondragon
GOODLAND under TCT No. 192674 (114645).
(Atty. Mondragon) of the Mondragon & Montoya Law Offices. On August
23, 2007, the RTC issued an Order13 denying due course to
The petition alleged that, on February 20, 2000, GOODLAND executed a GOODLAND’s notice of appeal for being legally inutile due to Atty.
Third Party Real Estate Mortgage on the property in favor of AUB to Mondragon’s failure to properly effect the substitution of former counsel
secure the ₱202 million credit accommodation extended by the latter to on record, Atty. Bautista. GOODLAND moved for reconsideration, but the
Radiomarine Network (Smartnet) Inc. (Radiomarine). same was denied in the Order dated February 15, 2008. 14

When Radiomarine defaulted in the payment of its obligation, AUB GOODLAND elevated the incident to the CA by way of a special civil
instituted extrajudicial foreclosure proceedings against the real estate acton for certiorari. In its February 16, 2009 Decision, the CA granted the
petition and directed the RTC to give due course to the notice of appeal, speedy disposal of cases while actually resulting in more delay, if not a
thus: miscarriage of justice. Thus, substantial justice would be better served by
giving due course to petitioner’s notice of appeal. 19
WHEREFORE, the petition is hereby GRANTED. The assailed Orders
dated August 23, 2007 and February 15, 2008 of the Regional Trial AUB argues that the liberality applied by the Court in Land Bank is
Court, Branch 150, Makati City are ANNULLED and SET ASIDE. The trial incompatible with the herein controversy, and that Pioneer Insurance and
court is DIRECTED to give due course to petitioner’s Notice of Appeal. Surety Corporation v. De Dios Transportation Co., Inc., 20 which espouses
the same view adopted by the RTC, is more appropriate.
SO ORDERED.15
GOODLAND, on the other hand, insists that the CA committed no
Aggrieved, AUB moved for reconsideration, but the CA denied the motion reversible error in ordering that the notice of appeal be allowed in order
in its Resolution dated May 18, 2009. Hence, the present petition for not to frustrate the ends of substantial justice.
review on certiorari,16 praying for the reinstatement of the RTC Order.
We agree with AUB. A revisit of our pronouncements in Land Bank and
The petition is meritorious. Pioneer is in order.

Under Rule 138, Section 26 of the Rules of Court, for a substitution of In Land Bank, we held that the Department of Agrarian Reform
attorney to be effectual, the following essential requisites must concur: Adjudication Board gravely abused its discretion when it denied due
(1) there must be a written application for substitution; (2) it must be filed course to the Notice of Appeal and Notice of Entry of Appearance filed by
with the written consent of the client; (3) it must be with the written petitioner’s new counsel for failure to effect a valid substitution of the
consent of the attorney substituted; and (4) in case the consent of the former counsel on record.
attorney to be substituted cannot be obtained, there must at least be
proof of notice that the motion for substitution was served on him in the We clarified that the new counsel never intended to replace the counsel
manner prescribed by the Rules of Court. 17 of record because, although not so specified in the notice, they entered
their appearance as collaborating counsel. Absent a formal notice of
The courts a quo were uniform and correct in finding that Atty. substitution, all lawyers who appear before the court or file pleadings in
Mondragon failed to observe the prescribed procedure and, thus, no valid behalf of a client are considered counsel of the latter. We pursued a
substitution of counsel was actualized. However, they took divergent liberal application of the rule in order not to frustrate the just, speedy, and
postures as to the repercussion of such non-compliance, thereby igniting inexpensive determination of the controversy.
the herein controversy.
In Pioneer, we adopted a strict posture and declared the notice of
The RTC strictly imposed the rule on substitution of counsel and held that withdrawal of appeal filed by appellant’s new counsel as a mere scrap of
the notice of appeal filed by Atty. Mondragon was a mere scrap of paper. lawphi1
paper for his failure to file beforehand a motion for the substitution of the
counsel on record.
However, relying on our pronouncement in Land Bank of the Philippines
v. Pamintuan Development Co.,18 the CA brushed aside the procedural Provoking such deportment was the absence of a special power of
lapse and took a liberal stance on considerations of substantial justice, attorney authorizing the withdrawal of the appeal in addition to the lack of
viz.: a proper substitution of counsel. More importantly, we found that the
withdrawal of the appeal was calculated to frustrate the satisfaction of the
It is a far better and more prudent course of action for the court to excuse judgment debt rendered against appellant, thereby necessitating a rigid
a technical lapse and afford the parties a review of the case on appeal to application of the rules in order to deter appellant from benefiting from its
attain the ends of justice rather than dispose of the case on technicality own deleterious manipulation thereof.
and cause a grave injustice to the parties, giving a false impression of
The emerging trend of jurisprudence is more inclined to the liberal and disputes. Hence, it is a mistake to suppose that substantive law and
flexible application of the Rules of Court. However, we have not been procedural law are contradictory to each other, or as often suggested,
remiss in reminding the bench and the bar that zealous compliance with that enforcement of procedural rules should never be permitted if it would
the rules is still the general course of action. Rules of procedure are in result in prejudice to the substantive rights of the litigants.
place to ensure the orderly, just, and speedy dispensation of cases; 21 to
this end, inflexibility or liberality must be weighed. The relaxation or x x x. Hence, rules of procedure must be faithfully followed except only
suspension of procedural rules or the exemption of a case from their when for persuasive reasons, they may be relaxed to relieve a litigant of
operation is warranted only by compelling reasons or when the purpose an injustice not commensurate with his failure to comply with the
of justice requires it.22 prescribed procedure. x x x.

As early as 1998, in Hon. Fortich v. Hon. Corona, 23 we expounded on Indeed, the primordial policy is a faithful observance of the Rules of
these guiding principles: Court, and their relaxation or suspension should only be for persuasive
reasons and only in meritorious cases, to relieve a litigant of an injustice
Procedural rules, we must stress, should be treated with utmost respect not commensurate with the degree of his thoughtlessness in not
and due regard since they are designed to facilitate the adjudication of complying with the procedure prescribed.25 Further, a bare invocation of
cases to remedy the worsening problem of delay in the resolution of rival "the interest of substantial justice" will not suffice to override a stringent
claims and in the administration of justice. The requirement is in implementation of the rules.26
pursuance to the bill of rights inscribed in the Constitution which
guarantees that "all persons shall have a right to the speedy disposition A reading of the CA’s Decision readily shows that the leniency it granted
of their cases before all judicial, quasi-judicial and administrative bodies." GOODLAND was merely anchored on substantial justice. The CA
The adjudicatory bodies and the parties to a case are thus enjoined to overlooked GOODLAND’s failure to advance meritorious reasons to
abide strictly by the rules. While it is true that a litigation is not a game of support its plea for the relaxation of Rule 138, Section 26. The fact that
technicalities, it is equally true that every case must be prosecuted in GOODLAND stands to lose a valuable property is inadequate to
accordance with the prescribed procedure to ensure an orderly and dispense with the exacting imposition of a rather basic rule.
speedy administration of justice. There have been some instances
wherein this Court allowed a relaxation in the application of the rules, but More importantly, the CA failed to realize that the ultimate consequences
this flexibility was "never intended to forge a bastion for erring litigants to that will come about should GOODLAND’s appeal proceed would in fact
violate the rules with impunity." A liberal interpretation and application of contravene substantial justice. The CA and, eventually, this Court will just
the rules of procedure can be resorted to only in proper cases and under re-litigate an otherwise non-litigious matter and thereby compound the
justifiable causes and circumstances. delay GOODLAND attempts to perpetrate in order to prevent AUB from
rightfully taking possession of the property.
In Sebastian v. Hon. Morales,24 we straightened out the misconception
that the enforcement of procedural rules should never be permitted if it It is a time-honored legal precept that after the consolidation of titles in
would prejudice the substantive rights of litigants: the buyer's name, for failure of the mortgagor to redeem, entitlement to a
writ of possession becomes a matter of right.27 As the confirmed owner,
Under Rule 1, Section 6 of the 1997 Rules of Civil Procedure, liberal the purchaser’s right to possession becomes absolute. 28 There is even no
construction of the rules is the controlling principle to effect substantial need for him to post a bond,29 and it is the ministerial duty of the courts to
justice. Thus, litigations should, as much as possible, be decided on their issue the same upon proper application and proof of title. 30 To accentuate
merits and not on technicalities. This does not mean, however, that the writ’s ministerial character, the Court has consistently disallowed
procedural rules are to be ignored or disdained at will to suit the injunction to prohibit its issuance despite a pending action for annulment
convenience of a party. Procedural law has its own rationale in the of mortgage or the foreclosure itself. 31
orderly administration of justice, namely, to ensure the effective
enforcement of substantive rights by providing for a system that obviates
arbitrariness, caprice, despotism, or whimsicality in the settlement of
The nature of an ex parte petition for issuance of the possessory writ WHEREFORE, premises considered, the petition is GRANTED. The
under Act No. 3135 has been described as a non-litigious proceeding February 16, 2009 Decision and the May 18, 2009 Resolution of the
and summary in nature.32 As an ex parte proceeding, it is brought for the Court of Appeals are hereby ANNULLED and SET ASIDE; and the
benefit of one party only, and without notice to or consent by any person August 23, 2007 and February 15, 2008 Orders of the Regional Trial
adversely interested.33 Court of Makati City, Branch 150, are REINSTATED.

Subsequent proceedings in the appellate courts would merely involve a SO ORDERED.

reiteration of the foregoing settled doctrines. The issue involved in the
assailed RTC issuances is conclusively determined by the above cited ANTONIO EDUARDO B. NACHURA
legal dictum, and it would be unnecessarily vexatious and unjust to allow Associate Justice
the present controversy to undergo protracted litigation. Acting Chairperson

AUB’s right of possession is founded on its right of ownership over the

property which it purchased at the auction sale. Upon expiration of the
redemption period and consolidation of the title to the property, its
possessory rights over the same became absolute. We quote with
approval the pronouncement of the RTC, viz.: G.R. No. 140954. April 12, 2005

As the purchaser of the property in the foreclosure sale to which new title HEIRS OF BERTULDO1 HINOG: Bertuldo Hinog II, Bertuldo Hinog III,
has already been issued, petitioner’s right over the property has become Bertuldo Hinog, Jr., Jocelyn Hinog, Bertoldo Hinog IV, Bertoldo
absolute, vesting upon it the right of possession and enjoyment of the Hinog V, Edgardo Hinog, Milagros H. Pabatao, Lilian H. King,
property which this Court must aid in effecting its delivery. Under the Victoria H. Engracia, Terisita C. Hinog, Paz H. Besana, Roberto C.
circumstances, and following established doctrine, the issuance of a writ Hinog, Vicente C. Hinog, Roel C. Hinog, Marilyn C. Hinog, Bebot C.
of possession is a ministerial function whereby the court exercises neither Hinog, lordes C. Hinog, Pablo Chiong, Arlene Lanasang (All
discretion nor judgment x x x. Said writ of possession must be enforced respresented by Bertuldo Hinog III), Petitioners,
without delay x x x.34 vs.
HON. ACHILLES MELICOR, in his capacity as Presiding Judge, RTC,
The law does not require that a petition for a writ of possession be Branch 4, 7th Judicial Region, Tagbiliran City, Bohol, and
granted only after documentary and testimonial evidence shall have been CUSTODIO BALANE, RUFO BALANE, HONORIO BALANE, and
offered to and admitted by the court.35 As long as a verified petition states TOMAS BALANE, Respondents.
the facts sufficient to entitle petitioner to the relief requested, the court
shall issue the writ prayed for.36 DECISION

Given the foregoing, we are bound to deny a liberal application of the AUSTRIA-MARTINEZ, J.:
rules on substitution of counsel and resolve definitively that
GOODLAND’s notice of appeal merits a denial, for the failure of Atty.
Before us is a petition for certiorari and prohibition under Rule 65 of the
Mondragon to effect a valid substitution of the counsel on record.
Rules of Court which assails the Orders dated March 22, 1999, August
Substantial justice would be better served if the notice of appeal is
13, 1999 and October 15, 1999 of the Regional Trial Court, Branch 4, of
disallowed. In the same way that the appellant in Pioneer was not
Tagbilaran City, Bohol in Civil Case No. 4923.
permitted to profit from its own manipulation of the rules on substitution of
counsel, so too can GOODLAND be not tolerated to foster vexatious
delay by allowing its notice of appeal to carry on. The factual background of the case is as follows:
On May 21, 1991, private respondents Custodio, Rufo, Tomas and In an amended motion, filed on October 2, 1998, Atty. Petalcorin further
Honorio, all surnamed Balane, filed a complaint for "Recovery of alleged that the private respondents failed to pay the correct docket fee
Ownership and Possession, Removal of Construction and Damages" since the main subject matter of the case cannot be estimated as it is for
against Bertuldo Hinog (Bertuldo for brevity). They alleged that: they own recovery of ownership, possession and removal of construction. 7
a 1,399- square meter parcel of land situated in Malayo Norte, Cortes,
Bohol, designated as Lot No. 1714; sometime in March 1980, they Private respondents opposed the motion to expunge on the following
allowed Bertuldo to use a portion of the said property for a period of ten grounds: (a) said motion was filed more than seven years from the
years and construct thereon a small house of light materials at a nominal institution of the case; (b) Atty. Petalcorin has not complied with Section
annual rental of ₱100.00 only, considering the close relations of the 16, Rule 3 of the Rules of Court which provides that the death of the
parties; after the expiration of the ten-year period, they demanded the original defendant requires a substitution of parties before a lawyer can
return of the occupied portion and removal of the house constructed have legal personality to represent a litigant and the motion to expunge
thereon but Bertuldo refused and instead claimed ownership of the entire does not mention of any specific party whom he is representing; (c)
property. collectible fees due the court can be charged as lien on the judgment;
and (d) considering the lapse of time, the motion is merely a dilatory
Accordingly, private respondents sought to oust Bertuldo from the scheme employed by petitioners.8
premises of the subject property and restore upon themselves the
ownership and possession thereof, as well as the payment of moral and In their Rejoinder, petitioners manifested that the lapse of time does not
exemplary damages, attorney’s fees and litigation expenses "in amounts vest the court with jurisdiction over the case due to failure to pay the
justified by the evidence." 2 correct docket fees. As to the contention that deficiency in payment of
docket fees can be made as a lien on the judgment, petitioners argued
On July 2, 1991, Bertuldo filed his Answer. He alleged ownership of the that the payment of filing fees cannot be made dependent on the result of
disputed property by virtue of a Deed of Absolute Sale dated July 2, the action taken.9
1980, executed by one Tomas Pahac with the knowledge and conformity
of private respondents.3 On January 21, 1999, the trial court, while ordering the complaint to be
expunged from the records and the nullification of all court proceedings
After the pre-trial, trial on the merits ensued. On November 18, 1997, taken for failure to pay the correct docket fees, nonetheless, held:
private respondents rested their case. Thereupon, Bertuldo started his
direct examination. However, on June 24, 1998, Bertuldo died without The Court can acquire jurisdiction over this case only upon the payment
completing his evidence. of the exact prescribed docket/filing fees for the main cause of action,
plus additional docket fee for the amount of damages being prayed for in
On August 4, 1998, Atty. Sulpicio A. Tinampay withdrew as counsel for the complaint, which amount should be specified so that the same can be
Bertuldo as his services were terminated by petitioner Bertuldo Hinog III. considered in assessing the amount of the filing fees. Upon the complete
Atty. Veronico G. Petalcorin then entered his appearance as new payment of such fees, the Court may take appropriate action in the light
counsel for Bertuldo.4 of the ruling in the case of Manchester Development Corporation vs.
Court of Appeals, supra.10
On September 22, 1998, Atty. Petalcorin filed a motion to expunge the
complaint from the record and nullify all court proceedings on the ground Accordingly, on January 28, 1999, upon payment of deficiency docket
that private respondents failed to specify in the complaint the amount of fee, private respondents filed a manifestation with prayer to reinstate the
damages claimed so as to pay the correct docket fees; and that case.11 Petitioners opposed the reinstatement12 but on March 22, 1999, the
under Manchester Development Corporation vs. Court of Appeals,5 non- trial court issued the first assailed Order reinstating the case.13
payment of the correct docket fee is jurisdictional.6
On May 24, 1999, petitioners, upon prior leave of court,14 filed their
supplemental pleading, appending therein a Deed of Sale dated
November 15, 1982.15 Following the submission of private respondents’ On November 24, 1999, petitioners filed before us the present petition
opposition thereto,16 the trial court, in its Order dated July 7, 1999, denied for certiorari and prohibition.27 They allege that the public respondent
the supplemental pleading on the ground that the Deed of Absolute Sale committed grave abuse of discretion in allowing the case to be reinstated
is a new matter which was never mentioned in the original answer dated after private respondents paid the docket fee deficiency since the trial
July 2, 1991, prepared by Bertuldo’s original counsel and which Bertuldo court had earlier expunged the complaint from the record and nullified all
verified; and that such new document is deemed waived in the light of proceedings of the case and such ruling was not contested by the private
Section 1, Rule 917 of the Rules of Court. The trial court also noted that no respondents. Moreover, they argue that the public respondent committed
formal substitution of the parties was made because of the failure of grave abuse of discretion in allowing the case to be filed and denying the
defendant’s counsel to give the names and addresses of the legal manifestation with motion to dismiss, despite the defect in the complaint
representatives of Bertuldo, so much so that the supposed heirs of which prayed for damages without specifying the amounts, in violation of
Bertuldo are not specified in any pleading in the case. 18 SC Circular No. 7, dated March 24, 1988.

On July 14, 1999, petitioners manifested that the trial court having In their Comment, private respondents aver that no grave abuse of
expunged the complaint and nullified all court proceedings, there is no discretion was committed by the trial court in reinstating the complaint
valid case and the complaint should not be admitted for failure to pay the upon the payment of deficiency docket fees because petitioners did not
correct docket fees; that there should be no case to be reinstated and no object thereto within the reglementary period. Besides, Atty. Petalcorin
case to proceed as there is no complaint filed. 19 possessed no legal personality to appear as counsel for the heirs of
Bertuldo until he complies with Section 16, Rule 3 of the Rules of Court. 28
After the submission of private respondents’ opposition20 and petitioners’
rejoinder,21 the trial court issued the second assailed Order on August 13, At the outset, we note the procedural error committed by petitioners in
1999, essentially denying petitioners’ manifestation/rejoinder. The trial directly filing the instant petition before this Court for it violates the
court held that the issues raised in such manifestation/rejoinder are established policy of strict observance of the judicial hierarchy of courts.
practically the same as those raised in the amended motion to expunge
which had already been passed upon in the Order dated January 21, Although the Supreme Court, Court of Appeals and the Regional Trial
1999. Moreover, the trial court observed that the Order dated March 22, Courts have concurrent jurisdiction to issue writs of certiorari,
1999 which reinstated the case was not objected to by petitioners within prohibition, mandamus, quo warranto, habeas corpus and injunction,
the reglementary period or even thereafter via a motion for such concurrence does not give the petitioner unrestricted freedom of
reconsideration despite receipt thereof on March 26, 1999. 22 choice of court forum.29 As we stated in People vs. Cuaresma:30

On August 25, 1999, petitioners filed a motion for reconsideration23 but the This Court's original jurisdiction to issue writs of certiorari is not exclusive.
same was denied by the trial court in its third assailed Order dated It is shared by this Court with Regional Trial Courts and with the Court of
October 15, 1999. The trial court held that the Manchester rule was Appeals. This concurrence of jurisdiction is not, however, to be taken as
relaxed in Sun Insurance Office, Ltd. vs. Asuncion.24 Noting that there has according to parties seeking any of the writs an absolute, unrestrained
been no substitution of parties following the death of Bertuldo, the trial freedom of choice of the court to which application therefor will be
court directed Atty. Petalcorin to comply with the provisions of Section 16, directed. There is after all a hierarchy of courts. That hierarchy is
Rule 3 of the Rules of Court. The trial court also reiterated that the Order determinative of the venue of appeals, and also serves as a general
dated March 22, 1999 reinstating the case was not assailed by determinant of the appropriate forum for petitions for the extraordinary
petitioners within the reglementary period, despite receipt thereof on writs. A becoming regard for that judicial hierarchy most certainly
March 26, 1999.25 indicates that petitions for the issuance of extraordinary writs against first
level ("inferior") courts should be filed with the Regional Trial Court, and
On November 19, 1999, Atty. Petalcorin complied with the directive of the those against the latter, with the Court of Appeals. A direct invocation of
trial court to submit the names and addresses of the heirs of Bertuldo. 26 the Supreme Court’s original jurisdiction to issue these writs should be
allowed only when there are special and important reasons therefor,
clearly and specifically set out in the petition. This is [an] established
policy. It is a policy necessary to prevent inordinate demands upon the through the motion of filing a supplemental pleading and only when the
Court’s time and attention which are better devoted to those matters latter was denied, or after more than three months have passed, did they
within its exclusive jurisdiction, and to prevent further over-crowding of raise the issue that the complaint should not have been reinstated in the
the Court’s docket.31 first place because the trial court had no jurisdiction to do so, having
already ruled that the complaint shall be expunged.
The rationale for this rule is two-fold: (a) it would be an imposition upon
the precious time of this Court; and (b) it would cause an inevitable and After recognizing the jurisdiction of the trial court by seeking affirmative
resultant delay, intended or otherwise, in the adjudication of cases, which relief in their motion to serve supplemental pleading upon private
in some instances had to be remanded or referred to the lower court as respondents, petitioners are effectively barred by estoppel from
the proper forum under the rules of procedure, or as better equipped to challenging the trial court’s jurisdiction. 38 If a party invokes the jurisdiction
resolve the issues because this Court is not a trier of facts. 32 of a court, he cannot thereafter challenge the court’s jurisdiction in the
same case.39 To rule otherwise would amount to speculating on the
Thus, this Court will not entertain direct resort to it unless the redress fortune of litigation, which is against the policy of the Court. 40
desired cannot be obtained in the appropriate courts, and exceptional
and compelling circumstances, such as cases of national interest and of Nevertheless, there is a need to correct the erroneous impression of the
serious implications, justify the availment of the extraordinary remedy of trial court as well as the private respondents that petitioners are barred
writ of certiorari, calling for the exercise of its primary jurisdiction. from assailing the Order dated March 22, 1999 which reinstated the case
Exceptional and compelling circumstances were held present in the because it was not objected to within the reglementary period or even
following cases: (a) Chavez vs. Romulo33 on citizens’ right to bear arms; thereafter via a motion for reconsideration despite receipt thereof on
(b) Government of the United States of America vs. Purganan34 on bail in March 26, 1999.
extradition proceedings; (c) Commission on Elections vs. Quijano-
Padilla35 on government contract involving modernization and It must be clarified that the said order is but a resolution on an incidental
computerization of voters’ registration list; (d) Buklod ng Kawaning EIIB matter which does not touch on the merits of the case or put an end to
vs. Zamora36 on status and existence of a public office; and (e) Fortich vs. the proceedings.41 It is an interlocutory order since there leaves something
Corona37 on the so-called "Win-Win Resolution" of the Office of the else to be done by the trial court with respect to the merits of the
President which modified the approval of the conversion to agro-industrial case.42 As such, it is not subject to a reglementary period. Reglementary
area. period refers to the period set by the rules for appeal or further review of
a final judgment or order, i.e., one that ends the litigation in the trial court.
In this case, no special and important reason or exceptional and
compelling circumstance analogous to any of the above cases has been Moreover, the remedy against an interlocutory order is generally not to
adduced by the petitioners so as to justify direct recourse to this Court. resort forthwith to certiorari, but to continue with the case in due course
The present petition should have been initially filed in the Court of and, when an unfavorable verdict is handed down, to take an appeal in
Appeals in strict observance of the doctrine on the hierarchy of courts. the manner authorized by law.43 Only when the court issued such order
Failure to do so is sufficient cause for the dismissal of the petition at bar. without or in excess of jurisdiction or with grave abuse of discretion and
when the assailed interlocutory order is patently erroneous and the
In any event, even if the Court disregards such procedural flaw, the remedy of appeal would not afford adequate and expeditious relief
petitioners’ contentions on the substantive aspect of the case fail to invite will certiorari be considered an appropriate remedy to assail an
judgment in their favor. interlocutory order.44 Such special circumstances are absolutely wanting in
the present case.
The unavailability of the writ of certiorari and prohibition in this case is
borne out of the fact that petitioners principally assail the Order dated Time and again, the Court has held that the Manchester rule has been
March 22, 1999 which they never sought reconsideration of, in due time, modified in Sun Insurance Office, Ltd. (SIOL) vs. Asuncion45 which defined
despite receipt thereof on March 26, 1999. Instead, petitioners went the following guidelines involving the payment of docket fees:
1. It is not simply the filing of the complaint or appropriate initiatory 24, 1988 which required that all complaints must specify the amount of
pleading, but the payment of the prescribed docket fee, that vests a trial damages sought not only in the body of the pleadings but also in the
court with jurisdiction over the subject-matter or nature of the action. prayer in order to be accepted and admitted for filing. Sun
Where the filing of the initiatory pleading is not accompanied by payment Insurance effectively modified SC Circular No. 7 by providing that filing
of the docket fee, the court may allow payment of the fees within a fees for damages and awards that cannot be estimated constitute liens
reasonable time but in no case beyond the applicable prescriptive or on the awards finally granted by the trial court. 50
reglementary period.
Thus, while the docket fees were based only on the real property
2. The same rule applies to permissive counterclaims, third-party claims valuation, the trial court acquired jurisdiction over the action, and
and similar pleadings, which shall not be considered filed until and unless judgment awards which were left for determination by the court or as may
the filing fee prescribed therefor is paid. The court may also allow be proven during trial would still be subject to additional filing fees which
payment of said fee within a reasonable time but also in no case beyond shall constitute a lien on the judgment. It would then be the responsibility
its applicable prescriptive or reglementary period. of the Clerk of Court of the trial court or his duly authorized deputy to
enforce said lien and assess and collect the additional fees. 51
3. Where the trial court acquires jurisdiction over a claim by the filing of
the appropriate pleading and payment of the prescribed filing fee but, It is worth noting that when Bertuldo filed his Answer on July 2, 1991, he
subsequently, the judgment awards a claim not specified in the pleading, did not raise the issue of lack of jurisdiction for non-payment of correct
or if specified the same has been left for determination by the court, the docket fees. Instead, he based his defense on a claim of ownership and
additional filing fee therefor shall constitute a lien on the judgment. It shall participated in the proceedings before the trial court. It was only in
be the responsibility of the Clerk of Court or his duly authorized deputy to September 22, 1998 or more than seven years after filing the answer,
enforce said lien and assess and collect the additional fee. and under the auspices of a new counsel, that the issue of jurisdiction
was raised for the first time in the motion to expunge by Bertuldo’s heirs.
Plainly, while the payment of the prescribed docket fee is a jurisdictional
requirement, even its non-payment at the time of filing does not After Bertuldo vigorously participated in all stages of the case before the
automatically cause the dismissal of the case, as long as the fee is paid trial court and even invoked the trial court’s authority in order to ask for
within the applicable prescriptive or reglementary period, more so when affirmative relief, petitioners, considering that they merely stepped into
the party involved demonstrates a willingness to abide by the rules the shoes of their predecessor, are effectively barred by estoppel from
prescribing such payment.46 Thus, when insufficient filing fees were challenging the trial court’s jurisdiction. Although the issue of jurisdiction
initially paid by the plaintiffs and there was no intention to defraud the may be raised at any stage of the proceedings as the same is conferred
government, the Manchester rule does not apply.47 by law, it is nonetheless settled that a party may be barred from raising it
on ground of laches or estoppel.52
Under the peculiar circumstances of this case, the reinstatement of the
complaint was just and proper considering that the cause of action of Moreover, no formal substitution of the parties was effected within thirty
private respondents, being a real action, prescribes in thirty years,48 and days from date of death of Bertuldo, as required by Section 16, Rule 3 53 of
private respondents did not really intend to evade the payment of the the Rules of Court. Needless to stress, the purpose behind the rule on
prescribed docket fee but simply contend that they could not be faulted substitution is the protection of the right of every party to due process. It
for inadequate assessment because the clerk of court made no notice of is to ensure that the deceased party would continue to be properly
demand or reassessment.49 They were in good faith and simply relied on represented in the suit through the duly appointed legal representative of
the assessment of the clerk of court. his estate.54 Non-compliance with the rule on substitution would render the
proceedings and judgment of the trial court infirm because the court
Furthermore, the fact that private respondents prayed for payment of acquires no jurisdiction over the persons of the legal representatives or of
damages "in amounts justified by the evidence" does not call for the the heirs on whom the trial and the judgment would be binding. 55 Thus,
dismissal of the complaint for violation of SC Circular No. 7, dated March proper substitution of heirs must be effected for the trial court to acquire
jurisdiction over their persons and to obviate any future claim by any heir
that he was not apprised of the litigation against Bertuldo or that he did G.R. No. 117970 July 28, 1998
not authorize Atty. Petalcorin to represent him.
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
The list of names and addresses of the heirs was submitted sixteen
months after the death of Bertuldo and only when the trial court directed vs.
Atty. Petalcorin to comply with the provisions of Section 16, Rule 3 of the
Rules of Court. Strictly speaking therefore, before said compliance, Atty. ULYSSES M. CAWALING, ERNESTO TUMBAGAHAN, RICARDO DE
Petalcorin had no standing in the court a quo when he filed his pleadings. LOS SANTOS, and HILARIO CAJILO, accused-appellants.
Be that as it may, the matter has been duly corrected by the Order of the
trial court dated October 15, 1999.

To be sure, certiorari under Rule 6556 is a remedy narrow in scope and

PANGANIBAN, J.:
inflexible in character. It is not a general utility tool in the legal
workshop.57 It offers only a limited form of review. Its principal function is
to keep an inferior tribunal within its jurisdiction. 58 It can be invoked only It is axiomatic that once an accused-appellant admits killing the victim, he
for an error of jurisdiction, that is, one where the act complained of was bears the burden of establishing the presence of any circumstance like
issued by the court, officer or a quasi-judicial body without or in excess of self-defense, performance of a lawful duty or, for that matter, double
jurisdiction, or with grave abuse of discretion which is tantamount to lack jeopardy, which may relieve him of responsibility, or which may mitigate
or in excess of jurisdiction,59 not to be used for any other purpose,60 such his criminal liability.1 If he fails to discharge this burden, his
as to cure errors in proceedings or to correct erroneous conclusions of conviction becomes inevitable. In this Decision, we also reiterate
law or fact.61 A contrary rule would lead to confusion, and seriously the following doctrines: (1) the regional trial court, not the
hamper the administration of justice. Sandiganbayan, has jurisdiction over informations for murder
committed by public officers, including a town mayor; (2) the
assessment of trial courts on the credibility of witnesses and their
Petitioners utterly failed to show that the trial court gravely abused its
testimonies deserve great respect; (3) the equipoise rule cannot be
discretion in issuing the assailed resolutions. On the contrary, it acted
invoked where the evidence of the prosecution is overwhelming; (4)
prudently, in accordance with law and jurisprudence.
alibi cannot be believed in the face of credible testimony identifying
the appellants; and (5) conspiracy may be proven by circumstantial
WHEREFORE, the instant petition for certiorari is DISMISSED for lack of evidence.
merit.
The Case
No costs.
Before us is an appeal from the 34-page Decision 2 dated October
SO ORDERED. 21, 1994, promulgated by the Regional Trial Court of Romblon in
Criminal Case No. OD-269. Convicted of murder were former Mayor
Ulysses M. Cawaling and Policemen Ernesto Tumbagahan, 3 Ricardo
De los Santos and Hilario Cajilo.

Prior to the institution of the criminal case against all the appellants,
an administrative case 4 had been filed before the National Police
Commission, in which Policemen Ernesto Tumbagahan, Ricardo De
los Santos, Hilario Cajilo (three of herein appellants) and Andres
Fontamillas were charged by Nelson Ilisan 5 with the killing of his
brother Ronie 6 Ilisan. On April 6, 1986, Adjudication Board No.
14 7 rendered its Decision which found Tumbagahan, De los Santos, of reclusion perpetua, with the accessory penalties of
Cajilo and Fontamillas guilty of grave misconduct and ordered their the law.
dismissal from the service with prejudice. 8 On June 26, 1986, the
Board issued a resolution, 9 dismissing the respondents' motion for The accused, jointly and severally, are ORDERED to
reconsideration for lack of merit. pay Nelson Elisan the sum of P6,000.00 as actual
damages and the heirs of the deceased Ronie Elisan
Subsequently, on June 4, 1987, Second Assistant Provincial Fiscal the sums of P116,666.66 by way of lost earnings and
Alexander Mortel filed, before the Regional Trial Court (RTC) of P50,000.00 as indemnity for death, without subsidiary
Odiongan, Romblon, 10 an Information for murder 11 against the imprisonment in case of insolvency, and to pay the
appellants and Andres Fontamillas. The accusatory portion reads: costs.

That on or about the 4th day of December 1982, at The bail bonds of all the accused are ORDERED
around 9:00 o'clock in the evening, in the Poblacion, CANCELLED and all said accused ORDERED
[M]unicipality of San Jose, [P]rovince of Romblon, immediately confined in jail.
Philippines, and within the jurisdiction of this
Honorable Court, the said accused, with intent to kill, The slug (Exh. A); the .38 caliber revolver (with 3
conspiring, confederating and mutually helping one empty shells and 3 live bullets) (Exh. G); and the slug
another, did then and there, by means of treachery of bullet (Exh. H) are confiscated in favor of the
and with evident premeditation and taking advantage government.
of their superior strenght [sic] willfully, unlawfully
and feloniously attack, assault and shoot RONIE After the judgment has become final, the Officer-in-
ILISAN, with the use of firearms, inflicting upon the Charge, Office of the Clerk of Court, this Court, is
latter multiple mortal injuries in different parts of his ordered to deliver and deposit the foregoing Exhibits
body which were the direct and immediate cause of A, F, G and H, inclusive, to the Provincial Director,
his death. PNP, of the Province of Romblon properly receipted.
Thereafter, the receipt must be attached to the record
Accused Tumbagahan, De los Santos, Cajilo and Fontamillas, with of the case and shall form part of the record.
the assistance of their lawyers Atty. Abelardo V. Calsado and
Juanito Dimaano, pleaded not guilty when arraigned on February 15, The period of preventive imprisonment the accused
1988; 12 while Accused Cawaling, assisted by Counsel Jovencio Q. had undergone shall be credited in their favor to its
Mayor, entered a plea of not guilty on March 16, 1988. 13 full extent pursuant to Article 29 of the Revised Penal
Code, as amended.
After due trial, 14 the court a quo 15 rendered its Decision dated
October 21, 1994, 16 the decretal portion of which reads: The case against co-accused ALEX BATUIGAS who is
at large is ORDERED ARCHIVED pending his arrest. 17
WHEREFORE, this Court finds the accused (1)
ULYSSES M. CAWALING, (2) ERNESTO Hence, this appeal. 18
TUMBAGAHAN, (3) RICARDO DELOS SANTOS, (4)
HILARIO CAJILO, AND (5) ANDRES FONTAMILLAS
The Facts
GUILTY beyond reasonable doubt of the crime of
MURDER under the Information, dated June 4, 1987,
and sentences each of them to suffer the penalty Version of the Prosecution
The trial court gives this summary of the facts as viewed by the caliber, policemen Andres Fontamillas and Hilario
prosecution witnesses: Cajilo were both with armalites, Ernesto Tumbagahan
and Ricardo delos Santos were both with .38 caliber
The killing occurred on December 4, 1982 at around and so with civilian Alex Batuigas. They left towards
9:00 o'clock in the evening at the ricefield of the house of Mayor Cawaling. After they were gone,
Poblacion, San Jose, Romblon when the bright moon Vicente Elisan ran towards the house of his older
was already above the sea at an angle of about 45 brother Nelson Elisan. Upon seeing him, Vicente told
degrees, or if it was daytime, it was about 9:00 o'clock Nelson that Ronie was already dead. Nelson said
in the morning (Imelda Elisan Tumbagahon, on direct nothing. While they were there, elder sister Imelda
examination, tsn, Jan. 17, 1989, p. 5, and on cross Elisan Tumbagahon, who was crying came. She said:
examination, tsn, April 18, 1989, p. 22). "Manong, patay ron si Ronie." (Brother, Ronie is
already dead). Nelson said ["]do not be noisy; they
On December 4, 1982, about 8:00 o'clock or 8:30 might come back and kill all of us.["] Imelda stopped
o'clock in the evening, Vicente Elisan and his elder crying.
brother Ronie Elisan, the victim, were drinking tuba at
C & J-4 Kitchenette of co-accused Andres After a while, brothers Nelson and Vicente Elisan
Fontamillas in Poblacion, San Jose, Romblon. When went to the house of barangay captain Aldolfo
they stood up to go home, Luz Venus, the wife of Tumbagahon. The three (3) went to the townhall and
Diosdado Venus, told them not to go out because the called the police but there was none there. Going to
accused were watching them outside about three (3) the house of the Chief of Police Oscar Montero, they
meters from the restaurant. Diosdado Venus were told by his wife that Commander Montero was in
accompanied them upon their request and they went the house of Mayor Cawaling. They proceeded to the
out and walked towards home. About a hundred place where Ronie Elisan was shot. The cadaver was
meters from the restaurant, the six (6) accused, that brought to the house of Nelson Elisan. Vicente Elisan
is, Mayor Cawaling, the four (4) policemen, namely, found an empty shell of a .45 caliber about three (3)
Hilario Cajilo, Andres Fontamillas, Ernesto arm's length from the body of the victim. They
Tumbagahan and Ricardo delos Santos, and civilian surrendered it to the Napolcom. 19
Alex Batuigas, the mayor's brother-in-law,
flashlighted them and Diosdado Venus ran going Dr. Blandino C. Flores described the gunshot wounds of the victim
back. The two (2) brothers also ran towards home to as follows:
the house of their elder sister Imelda Elisan
Tumbagahon. Co-accused Andres Fontamillas and Gunshot Wounds:
Hilario Cajilo blocked them on the gate of the fence of
their sister's house. Ronie Elisan ran towards the 1. Shoulder:
ricefield. The accused were chasing them. Vicente
Elisan saw his brother Ronie f[a]ll down on the
Gun shot wound 1/2 x
ricefield while he ran towards the bushes and la[y] on
1/2 inch in diameter
the ground. Ronie Elisan rose up by kneeling and
shoulder right 2 inches
raising his two (2) hands. All the six (6) accused
from the neck with
approached him with their flashlights and shot him.
contussion [sic] collar
Ronie fell down about twenty (20) meters from the
s[u]rrounding the
bushes where Vicente Elisan hid behind the coconut
wound.
tree. Co-accused Cawaling said ["]you left him, he is
already dead.["] Mayor Cawaling was armed with .45
 2. Right Axilla: Appellant Cawaling, in his 47-page Brief, 22 presented his own
narration of the incident as follows:
Gun shot wound 1/4 x
1/4 inch in diameter, 2 At around 7:00 in the evening of December 4, 1982,
inches below the right Ulysses Cawaling, then the mayor of the
nipple with contussion [M]unicipality of San Jose in the [P]rovince of
[sic] collar s[u]rrounding Romblon, arrived aboard a hired motorized boat from
the wound. Manila in the seashore of San Jose. From the
seashore, he immediately proceeded to his home. At
3. Left Axilla: around 7:30 in the evening, Cawaling went to the
municipal hall to check on administrative matters that
Exit of the gun shot piled up in the course of his trip to Manila. He also
wound from the right went inside the police station (located inside the
axilla, measuring 1/2 x municipal building) to be apprised of any
1/2 inch with edges developments, after which he went out and joined
everted, one inch below Pfc. Tumbagahan and Pfc. Cajilo who were standing
the axilla and one inch near the flagpole in front of the municipal building.
below the level of the The three engaged in a conversation. Cawaling
nipple. learned that the two police officers were the ones
assigned for patrol/alert for that night. The three of
them went inside the INP office and there Cawaling
4. Back:
informed the two policemen that he received
information from reliable persons that certain
Gun shot wound persons were plotting to kill him and a member of the
measuring 1/4 x 1/4 inch, town's police force. It is to be noted that this occurred
along the vertebral at the height of the communist insurgency and
column, right at the level political violence in the countryside in the early 80's.
of the 10th ribs with Hence, such information was taken very seriously,
contussion [sic] collar. having been relayed by sources independent of each
other.
5. Leg, Left:
Cawaling, as town chief then empowered with
Gun shot wound supervisory authority over the local police,
measuring 1/4 x 1/4 accompanied Pfc. Tumbagahan and Pfc. Cajilo in
anterior aspect upper conducting patrol and surveillance operations around
third leg with contussion the small municipality. He usually did this as routine
[sic] collar, with the exit since Romblon was then plagued with political
1/2 x 1/2 posterior aspect assassinations and armed conflict. On their way to
upper third leg, left. 20 the seashore, they passed by C & J-4 Kitchenette,
and chanced upon Ronnie Ilisan and his brother
Based on the death certificate (Exhibit E) issued by Dr. Flores, Vicente Ilisan drinking liquor and discussing in very
Ronie Ilisan died of "severe hemorrhage and gun shot wo[unds]." 21 loud voices. They stopped right in the front of the
restaurant and there they heard Ronnie Ilisan state in
Version of the Defense a every loud voice that he will kill a person that night.
Inside the restaurant, without the knowledge then of initially left behind but followed shortly. When Ronnie
Cawaling and the two police officers, witness Gil Ilisan reached the church, he turned around and
Palacio, who was buying cigarettes and Luz Venus, again fired at the pursuing Pfc. Cajilo. Fortunately,
the cook/server of the restaurant, saw Ronnie Ilisan, the gun misfired. When they finally reached the
very drunk, brandishing in the air a .38 caliber Smith ricefield, Pfc. Cajilo fired two (2) warning shots in the
and Wesson revolver with a protruding screw. air for Ronnie to surrender. Ronnie responded by
firing once again at Pfc. Tumbagahan but failed to hit
Initially dismissing Ronnie Ilisan's statement as just the latter. At that instance, Pfc. Cajilo counter-fired at
another hollow swagger of an intoxicated person Ronnie Ilisan hitting him. Pfc. Tumbagahan also fired
("salitang lasing"), Cawaling and the two policemen his weapon in the heat of exchange and also hit
proceeded on their way. After the patrol, they Ronnie Ilisan. As a result of the gunshot wounds,
returned to the municipal building and stationed Ronnie Ilisan later on succumbed.
themselves in front. At around 8:30 in the evening,
Ronnie Elisan passed by the municipal hall walking Pfc. Tumbagahan picked up the gun still in the hand
towards the direction of the house of Nelson Ilisan, of the dead Ronnie Ilisan and gave it to Pfc. Cajilo.
another brother, and shouted the challenge, "gawas The three, Cawaling, who subsequently caught up
ang maisog", meaning THOSE WHO ARE BRAVE, with them after the incident, and the two police
COME OUT. Cawaling and the two police officers officers, then proceeded to the police station located
again brushed aside [the] challenge as just another in the municipal building to formally report the
foolish drunken revelry [o]n the part of Ronnie Ilisan, incident in their station blotter. 23
a well-known troublemaker in the small municipality.
The "Brief for All of the Accused-Appellants" filed by Atty. Napoleon
A few moments later, after Ronie Ilisan had passed U. Galit and the "Brief for Appellants Ernesto Tumbagahan and
by, they distinctly heard a gunshot and hysterical Hilario Cajilo" submitted by Atty. Joselito R. Enriquez merely
female voices shouting, "pulis, tabang" meaning repeated the facts as narrated by the trial court.
POLICE! HELP! four times. Impelled by the call of
duty, Cawaling and the two policemen immediately Ruling of the Trial Court
ran in the direction of the gunshot and the desperate
female voices until they reached the house of Nelson Finding the prosecution witnesses and their testimonies credible,
Ilisan in San Jose Street. At this point, they saw the court a quo convicted the appellants. The killing was qualified to
Ronnie Ilisan holding a .38 caliber revolver. They also murder because of the aggravating circumstances of abuse of
saw Vicente Ilisan, Francisco Tesnado, Fe Ilisan, the superior strength and treachery. The trial court ruled that there was
wife of Nelson and Delma Ilisan, the wife of Vicente, a notorious inequality of forces between the victim and his
the latter two being the same persons who cried assailants, as the latter were greater in number and armed with
"pulis, tabang" four times. Cawaling then told Ronnie guns. It further ruled that abuse of superior strength absorbed
to surrender his gun but the latter responded by treachery, as it ratiocinated:
pointing the gun at Cawaling and pulling the trigger.
"Certain cases," an authority wrote, "involving the
At the precise moment that the gun fired, Cawaling killing of helpless victim by assailants superior to
warned the two policemen to drop to the ground by them in arms or numbers, or victims who were
shouting "dapa". Fortunately, Cawaling was not hit. overpowered before being killed, were decided on the
Ronnie Ilisan then turned around and ran towards the theory that the killing was treacherous, when perhaps
church. The two policemen gave chase. Cawaling, the correct qualifying circumstance would be abuse
still shaken and trembling after the mischance was
 of superiority. In these cases the attack was not 5. The .38 caliber revolver, allegedly owned by the
sudden nor unexpected and the element of surprise victim, was in fact owned and used by Alex Batuigas.
was lacking." (Id., I Aquino, pp. 423-424). In the
instant case, we earlier ruled that the qualifying 6. The defense presented a photo and a sketch to
treachery should be considered as an exception to prove that Imelda Ilisan Tumabagahan had an
the general rule on treachery because it was not obstructed view of the killing. The trial court ruled
present at the inception of the attack. The killing was that such evidence was misleading, because the
not sudden nor unexpected and the element of window, from where said witness allegedly saw the
surprise was lacking. It is for this reason that we hold incident, was at the eastern side of her house, and
that alevosia should be deemed absorbed or included thus afforded a clear view of the incident, while the
in abuse of superiority. Even assuming ex-gratia window referred to by the defense was at the
argumenti that it should be the other way around, the southern portion.
situation will not be of help, penaltywise, to the
accused. 24 7. The questioned testimonies of Dr. Flores, Nelson
Ilisan and Provincial Prosecutor Pedro Victoriano, Jr.,
The defenses raised by the appellants were dismissed and their though not formally offered as evidence, may be
witnesses declared unworthy of belief for the following reasons: admitted because of the failure of the defense to
object thereto at the time they were called to testify.
1. It was highly improbable that Defense Witness
Tesnado would not tell his wife (Dory) and Bebelinia 8. The defense failed to prove that the prosecution
Ilisan Sacapaño about the incident he had allegedly witnesses had any ill motive to testify falsely against
witnessed, more so when Sacapaño was the victim's the appellant.
first cousin.
9. Appellants had a motive to kill the victim. Nelson
2. The spot report prepared by Station Commander Ilisan testified that his brother Ronie (the victim) had
Oscar M. Montero, the testimonies of Cajilo and witnessed Bonifacio Buenaventura (a former chief
Tumbagahan and the medical findings of Dr. Flores commander of the San Jose Police Force) kill a
contradicted one another on the following details: the certain Ruben Ventura. Cawaling, who was
caliber of the gun used in shooting the victim, the Buenaventura's first cousin, wanted Ronie dead,
wounds inflicted and the whereabouts of Cawaling because the latter had not followed his instruction to
during the shoot-out. leave town to prevent him from testifying in said
case.
3. Cawaling and his men, armed with guns, could
have immediately disarmed the victim at the initial Assignment of Errors
encounter. The court could not understand why the
victim was able to fire his gun, run, then stop and The appellants, through their common counsel, Atty. Napoleon
again fire his gun, without being caught. Galit, assign the following errors to the lower court:

4. The positive identification made by the prosecution 1. The trial court gravely erred in sustaining
witnesses prevails over the alibi posed by De los prosecutor's theory of conspiracy and thus renders
Santos and Fontamillas, a defense that was not nugatory or has totally forgotten that policemen when
corroborated by any other witness. in actual call of duty normally operate in group but
not necessarily in conspiracy.
 2. The trial court gravely erred in believing the theory appreciating the qualifying circumstance of treachery
of the prosecution that accused-appellant Ulysses (alevosia).
Cawaling was one of the alleged co-conspirators in
the killing of the deceased Ronnie Elisan. 5. The lower court committed grave, serious and
reversible error in convicting both accused-
3. The trial court gravely erred in not believing the appellants of murder, instead merely of homicide,
defense of accused-appellant Ulysses Cawaling that defined and penalized under the Revised Penal Code.
he has nothing to do with the shooting incident
except to shout to arrest the accused[,] which 6. The lower court committed grave, serious and
prompted his co-accused policemen to chase the reversible error in appreciating the qualifying
accused and sho[o]t him when he resisted, after he circumstance of taking advantage of superior
fired at Mayor Cawaling. strength.

4. The trial court gravely erred in not giving weight to 7. The consummated crime being merely homicide,
accused-appellant policemen['s] testimonies which the mitigating circumstance of voluntary surrender
carry the presumption of regularity. should be considered to lower the penalty of
homicide.
5. The trial court gravely erred in not acquitting all the
accused-appellants by applying "the equipoise rule" 8. The lower court committed error in not considering
thereby resulting [i]n reasonable doubts on the double jeopardy.
guilt. 25
9 The lower court committed error in not dismissing
In their joint brief, 26 Appellants Tumbagahan and Cajilo cite these the case for want of jurisdiction. 27
other errors:
Appellant Cawaling imputes these additional errors to the court a
1. The trial court gravely erred in relying on the theory quo:
of the prosecution that accused-appellants Ernesto
Tumbagahan and Hilario Cajilo were alleged co- 1. The trial court gravely erred in not acquitting herein
conspirators in the killing of the victim, Ronie Ilisan. accused-appellant, Ulysses M. Cawaling, considering
that he had no part in the killing and the prosecution
2. The trial court gravely erred in not believing the failed to prove his guilt beyond reasonable doubt;
defense that herein accused-appellants merely did a
lawful duty when the shooting incident happened 2. The trial court gravely erred in not finding the
which led to the death of Ronnie Ilisan. shooting incident a result of hot pursuit and shoot-
out between the deceased Ronnie Ilisan and the
3. The trial court gravely erred in not acquitting herein police officers in the performance of their duty and
accused-appellants by applying the equipoise rule, self-defense, and in sustaining the prosecution's
thereby resulting in reasonable doubt on their guilt. conspiracy theory;

4. Prescinding from the foregoing, herein accused- 3. The trial court gravely erred in not acquitting
appellants do press and hold, that the lower court Accused-Appellant Ulysses M. Cawaling considering
committed grave, serious and reversible error in that there was blatant absence of due process in the
proceedings tantamount to mistrial. 28
 This Court's Ruling Sec. 4. Jurisdiction. — The Sandiganbayan shall
exercise:
We affirm the conviction of the appellants. In so ruling, we will
resolve the following issues: (1) jurisdiction of the trial court, (2) (a) Exclusive original jurisdiction in all cases
double jeopardy, (3) credibility of prosecution witnesses and their involving:
testimonies, (4) self-defense, (5) performance of lawful duty, (6)
alibi, (7) conspiracy, (8) rule on equipoise, (9) qualifying xxx xxx xxx
circumstances, (10) damages and (11) attending circumstances as
they affect the penalty. (2) Other offenses or
felonies committed by
We shall address the first two issues as important preliminary public officers and
questions and discuss the merits of the remaining ones, which we employees in relation to
have culled from the errors cited by the appellants in their their office, including
aforementioned briefs. those employed in
government-owned or
First Issue: controlled corporations,
whether simple or
Jurisdiction of the Trial Court complexed with other
crimes, where the
Appellants Tumbagahan and Cajilo argue that the trial court erred penalty prescribed by
when it assumed jurisdiction over the criminal case. They insist that law is higher
the Sandiganbayan, not the regular courts, had jurisdiction to try than prision
and hear the case against the appellants, as they were public correccional or
officers at the time of the killing which was allegedly committed by imprisonment for six (6)
reason of or in relation to their office. years, or a fine of
P6,000.00: PROVIDED,
HOWEVER, that offenses
We do not agree.
or felonies mentioned in
this paragraph where the
The jurisdiction of a court to try a criminal case is determined by the penalty prescribed by
law in force at the time of the institution of the action. Once the law does not
court acquires jurisdiction, it may not be ousted from the case by exceed prision
any subsequent events, such as a new legislation placing such correccional or
proceedings under the jurisdiction of another tribunal. The only imprisonment for six (6)
recognized exceptions to the rule, which find no application in the years or a fine of
case at bar, arise when: (1) there is an express provision in the P6,000.00 shall be tried
statute, or (2) the statute is clearly intended to apply to actions by the proper Regional
pending before its enactment. 29 Trial Court, Metropolitan
Trial Court, Municipal
The statutes pertinent to the issue are PD 1606, as amended; 30 and Trial Court and
PD 1850, as amended by PD 1952 and BP 129. Municipal Circuit Trial
Court.
Sec. 4 of PD 1606 31 reads:
xxx xxx xxx
However, former President Ferdinand Marcos issued two Sec. 20. Jurisdiction in Criminal Cases. — Trial
presidential decrees placing the members of the Integrated National Courts shall exercise exclusive original jurisdiction in
Police under the jurisdiction of courts-martial. Section 1 of PD all criminal cases not within the exclusive jurisdiction
1952, 32 amending Section 1 of PD 1850, reads: of any court, tribunal or body, except those now
falling under the exclusive and concurrent
Sec. 1. Court Martial Jurisdiction over Integrated jurisdiction of the Sandiganbayan which shall
National Police and Members of the Armed Forces. hereafter be exclusively taken cognizance of by the
Any provision of law to the contrary notwithstanding latter. 33
— (a) uniformed members of the Integrated National
Police who commit any crime or offense cognizable In relation to the above, Section 4-a-2 of PD 1606, as amended by PD
by the civil courts shall henceforth be exclusively 1861, quoted earlier, lists two requisites that must concur before the
tried by courts-martial pursuant to and in accordance Sandiganbayan may exercise exclusive and original jurisdiction
with Commonwealth Act No. 408, as amended, over a case: (a) the offense was committed by the accused public
otherwise known as the Articles of War; (b) all officer in relation to his office; and (b) the penalty prescribed by law
persons subjects to military law under Article 2 of the is higher than prision correccional or imprisonment for six (6) years,
aforecited Articles of War who commit any crime or or higher than a fine of six thousand pesos (P6,000). 34 Sanchez vs.
offense shall be exclusively tried by courts-martial or Demetriou 35 clarified that murder or homicide may be committed
their case disposed of under the said Articles of both by public officers and by private citizens, and that public office
War; Provided, that, in either of the aforementioned is not a constitutive element of said crime, viz.:
situations, the case shall be disposed of or tried by
the proper civil or judicial authorities when court- The relation between the crime and the office
martial jurisdiction over the offense has prescribed contemplated by the Constitution is, in our opinion,
under Article 38 of Commonwealth Act Numbered direct and not accidental. To fall into the intent of the
408, as amended, or court-martial jurisdiction over Constitution, the relation has to be such that, in the
the person of the accused military or Integrated legal sense, the offense cannot exist without the
National Police personnel can no longer be exercised office. In other words, the office must be a
by virtue of their separation from the active service constituent element of the crime as defined in the
without jurisdiction having duly attached beforehand statute, such as, for instance, the crimes defined and
unless otherwise provided by law: punished in Chapter Two to Six, Title Seven, of the
Revised Penal Code.
PROVIDED FURTHER, THAT THE PRESIDENT MAY,
IN THE INTEREST OF JUSTICE, ORDER OR DIRECT, Public office is not the essence of murder. The taking
AT ANY TIME BEFORE ARRAIGNMENT, THAT A of human life is either murder or homicide whether
PARTICULAR CASE BE TRIED BY THE done by a private citizen or public servant, and the
APPROPRIATE CIVIL COURT. penalty is the same except when the perpetrator,
being a public functionary, took advantage of his
As used herein, the term uniformed members of the office, as alleged in this case, in which event the
Integrated National Police shall refer to police penalty is increased.
officers, policemen, firemen, and jail guards.
But the use or abuse of office does not adhere to the
On the other hand, the jurisdiction of regular courts over civil and crime as an element; and even as an aggravating
criminal cases was laid down in BP 129, the relevant portion of circumstance, its materiality arises, not from the
which is quoted hereunder: allegations but on the proof, not from the fact that the
 criminals are public officials but from the manner of was dismissed or otherwise terminated without his express
the commission of the crime. consent. 40

Furthermore, the Information filed against the appellants contains For a better appreciation of appellants' argument, we must consider
no allegation that appellants were public officers who committed the PD 39 41 and its implementing rules, 42 which prescribe the procedure
crime in relation to their office. The charge was for murder, a felony before a military commission. A summary preliminary investigation
punishable under Article 248 of the Revised Penal Code. As clarified shall be conducted before trial for the purpose of determining
in Aguinaldo, et al. vs. Domagas, et al., 36 "[I]n the absence of such whether there is prima facie evidence to pursue trial before a
essential allegation, and since the present case does not involve military commission. The investigation report shall contain a
charges of violation of R.A. No. 3019 (the Anti-Graft etc. Act), the summary of the evidence, the acts constituting the offense or
Sandiganbayan does not have jurisdiction over the present case. offenses committed, and the findings and recommendations of the
(Bartolome vs. People, 142 SCRA 459 [1986]) Even before investigating officer. Thereafter, the report shall be forwarded to the
considering the penalty prescribed by law for the offense charged, it judge advocate general, who shall determine for either the defense
is thus essential to determine whether that offense was committed secretary or for the AFP chief of staff whether the case shall be
or alleged to have been committed by the public officers and referred for trial to a military commission. 43 Where a prima
employees in relation to their offices." facie case is found against the accused, formal charges shall be
signed by a commissioned officer designated by the judge advocate
Jurisdiction is determined by the allegations in the complaint or general. 44 The accused shall then be arraigned, during which the
information. 37 In the absence of any allegation that the offense was charge and specification shall be read and the accused shall enter
committed in relation to the office of appellants or was necessarily his plea. 45 After hearings, a record of the trial shall be forwarded to
connected with the discharge of their functions, the regional trial the AFP chief of staff for proper action. 46
court, not the Sandiganbayan, has jurisdiction to hear and decide
the case. 38 In the present case, the appellants have presented no sufficient and
conclusive evidence to show that they were charged, arraigned and
Second Issue: acquitted in a military commission, or that the case was dismissed
therein without their consent. The defense merely offered as
Double Jeopardy evidence certain disposition forms 47 and a
letter, 48 dated March 8, 1983, recommending that the case against
Appellants Tumbagahan, Cajilo and De los Santos be dropped and
In seeking their acquittal, Appellants Tumbagahan and Cajilo also
considered closed. 49 No charge sheet and record of arraignment
invoke their right against double jeopardy. They argue that the first
and trial were presented to establish the first jeopardy.
jeopardy attached when a criminal case for murder was filed before
the Judge Advocate General's Office (JAGO), which was allegedly
dismissed after several hearings had been conducted. 39 We are not As pointed out by the solicitor general, "appellants were never
persuaded. arraigned, they never pleaded before the Judge Advocate General's
Office, there was no trial, and no judgment on the merits had been
rendered." 50
There is double jeopardy when the following requisites are present:
(1) a first jeopardy has attached prior to the second; (2) the first
jeopardy has been validly terminated; and (3) a second jeopardy is Third Issue:
for the same offense as that in the first. And the first jeopardy
attaches only (a) after a valid indictment; (b) before a competent Credibility of Witnesses
court; (c) after arraignment; (d) when a valid plea has been entered;
and (e) when the accused was acquitted or convicted, or the case As a general rule, the factual findings of trial courts deserve respect
and are not disturbed on appeal, unless some facts or
circumstances of weight and substance have been overlooked, A. Yes, sir.
misapprehended or misinterpreted, and would otherwise materially
affect the disposition of the case. 51 This rule, however, does not Q. Why?
apply when the judge who penned the decision was not the same
one who had heard the prosecution witnesses testify, 52 as in the A. Because we were being watched by
present case. Nonetheless, we have carefully perused and Mayor Cawaling, Andres Fontamillas,
considered the voluminous records of this case, and we find no Hilario Cajilo and Alex Bat[ui]gas.
reason to alter the findings of the court a quo in regard to the
credibility of the prosecution witnesses and their testimonies.
xxx xxx xxx
Vicente Ilisan, the victim's brother, narrated before the trial court the
Q. When you were informed by Luz
circumstances relevant to the crime:
Venus that you should not go out
because Mayor Cawaling and the
Q. In the evening of December 4, 1982, persons you mentioned were outside
at about 8:00 or 8:30, where were you? watching for you, what did you do?

A. I was inside the restaurant of Andres A. We did not go out.

Fontamillas.
Q. Since you remained inside, what did
xxx xxx xxx you do?

Q. What were you doing there? A. I also viewed thru the window.

A. I was drinking tuba. Q. Did you see them?

Q. When you were about to finish A. Yes, sir.

drinking tuba, what did you do?
Q. How far were they from the
A. I stood up preparing to go home. restaurant?

Q. Were you able to leave that A. About three meters.

restaurant actually?
Q. What were they doing outside the
A. No, sir. restaurant?

Q. Why? A. They were also viewing us.

A. Luz Venus told us not to go out Q. For how long did they remain there
when [I] stood up to go home. viewing you?

Q. Do you know why you were A. Just a short time.

advise[d] not to go out?
Q. And later on, do you know where did A. Yes, sir.
they go? [sic]
Q. Who were they?
A. No, sir. I went out from the
restaurant and when I went out, I did A. Mayor Cawaling, Andres
not see them anymore. Fontamillas, Hilario Cajilo, Ernesto
Tumbagahan, Ricardo delos Santos
Q. Before you went out of the and Alex Batuigas.
restaurant, what did you do?
Q. How were you able to recognize
A. Diosdado Venus accompanied us. them when that was night time?

Q. Why did you ask Diosdado Venus to A. Because the flashlight[s] were
accompany you? bright.

A. Yes, sir. Because we were aware Q. When Diosdado Venus ran back to
that we were being watched from his restaurant, what did your brother
outside so we asked to be Ronie Elisan and you do?
accompanied by Diosdado Venus.
A. We also ran towards home.
Q. From the restaurant accompanied
by Diosdado Venus, what did you do? Q. To whose house?

A. Towards home. A. That of my older sister Imelda

[E]lisan.
Q. Were you able to reach home?
Q. Were you able to reach that house?
A. No, sir.
A. No, sir.
Q. Why, what happened on the way?
Q. Why, what happened when you ran
A. Diosdado Venus ran going back away?
because we were lighted by a
flashlight. A. Andres Fontamillas and Hilario
Cajilo were blocking us on the gate of
Q. How many flashlight[s] were trimed the fence of my sister's house.
[sic] to you?
Q. Since your way was blocked, where
A. Six. did Ronie Elisan go?

Q. Did you come to know who trimed A. We ran towards the ricefield.
[sic] the flashlight towards you?
Q. When you ran, what did Mayor Q. What did you do upon reaching the
Cawaling do? bushes?

A. They were chasing us. A. I la[y] on the ground with my belly

touch[ing] on the ground behind the
Q. What about Alex Batuigas, what did coconut tree.
he do?
Q. When your brother according to you
A. He also followed helping chasing us. had fallen on the ricefield, what did he
[sic] do thereafter?

Q. What about the four policemen, what A. He rose up, [raised] his hands and
did they do? surrender[ed] to them.

A. The same. They were also chasing Q. In rising, what was his position?
us.
A. He was rising like this. (Witness
Q. About how far is that restaurant demonstrating by kneeling [and]
[from] the spot where you were first raising his two hands).
lighted by the flashlight of the
accused? Q. While Ronie Elisan was kneeling and
raising both of his hands, what
A. About one hundred meters. happened?

Q. Now, according to you, you ran A. Mayor Cawaling approached him

towards the ricefield, what happened together with the four policemen and
while you were running towards the his brother-in-law and they shot him.
ricefield?
Q. Do you know what weapon[s] were
A. I saw my brother fell [sic] down. used in shooting your brother?

Q. Fell down where? A. Yes, sir.

A. On the ricefield. Q. What weapon were used?

Q. What about you, where were you A. The weapon of Mayor Cawaling is
when your brother fell down in the .45 caliber and that of Andres
ricefield? Fontamillas and Hilario Cajilo were
both armalite and that of Ernesto
A. I ran towards the bushes. Tumbagahan, Alex Batuigas and
Ricardo delos Santos were .38 caliber.
 Q. How were you able to identify their Fontamillas blocked Ronie from entering the gate of Imelda's house,
weapons? the victim ran towards a rice field. Nelson stopped Cawaling and
asked, "Nong, basi guinalagas ninyo and acon hali? (Nong, why do
A. Because the flashlight[s] were you chase my brother?)" But the mayor merely continued chasing
bright. Ronie. Thereafter, Nelson saw his brother, on his knees with both
hands raised, shot by appellants. 55
Q. Now, what happened to your brother
when he was fired upon by the accused The three aforementioned witnesses narrated in detail the assault
in this case? against their brother Ronie and positively identified the appellants
as the perpetrators. The trial court cannot be faulted for relying on
A. He fell down. their testimonies and accepting them as true, 56 especially when the
defense failed, to prove any ill motive on their part. 57 In addition,
family members who have witnessed the killing of their loved one
Q. And how far is that spot where your
usually strive to remember the faces of the assailants. 58 Thus, the
elder brother had fallen down to the
relationship per se of witnesses with the victim does not necessarily
spot where Diosdado Venus left you
mean that the former are biased. On the contrary, it is precisely
when he returned to the restaurant?
such relationship that would impel them to seek justice and put the
real culprit behind bars, rather than impute the offense to the
A. To my estimate it is about 300 innocent. 59
meters.
Appellant Cawaling submits that the prosecution witnesses
Q. After your brother had fallen down, tampered with the evidence by cleaning the cadaver before an
what did the accused do? autopsy could be done. "Such irregular washing of the cadaver by a
close relative of the deceased, who is educated and who
A. Mayor Cawaling said, ["]you left him, presumably knew perfectly well the need to preserve it in its original
he is already dead.["] state for the medico-legal examination[,] is highly suspicious. It
points to the fact that the relatives of the deceased wanted to hide,
Q. Where did they go? or erase something that would bolster and assist the defense (that
is, state of drunkenness, powder burns or lack thereof, indicating
A. They went towards the house of the firing of a weapon or the proximity of the weapon used on the
Mayor Cawaling. 53 deceased, etc.)." 60

Imelda Tumbagahan was at home feeding her child when she heard Such contention is unavailing. First, Bebelinia Sacapaño merely
her brother Ronie shouting for help. After getting a flashlight and cleaned the cadaver and made no further examination. Second,
looking through the window of her house, she saw Cawaling and appellants had an opportunity to have the body examined again to
Alex Batuigas chasing Ronie who was running towards her house. determine or prove important matters, such as whether Ronie was
Tumbagahan and De los Santos prevented Ronie from entering the drunk, if he fired a gun, how many and what caliber of guns were
fence of her house, as a result of which, her brother ran towards a used in shooting him; they did not, however, avail themselves of
rice field nearby. There, on bended knees and with hands raised, this opportunity. As public officers, appellants knew that it was
Ronie was shot by Cawaling and his men. 54 within their power to request or secure from the court, or any other
competent authority, an order for another autopsy 61 or any such
Nelson Ilisan also heard his younger brother Ronie shouting for evidence as may affirm their innocence. Third, their conviction lies
help while being chased by the group of Cawaling. As Cajilo and in the strong and convincing testimonial evidence of the
prosecution, not in the corroborative testimony of Bebelinia presentation. The Court explained: "Section 36 of [Rule 132]
Sacapaño. requires that an objection in the course of the oral examination of a
witness should be made as soon as the grounds therefor shall
Relying on the testimonies of Luz Venus and Gil Palacio, Appellant become reasonably apparent. Since no objection to the
Cawaling also pointed out that "[t]he power of observation of admissibility of evidence was made in the court below, an objection
alleged eyewitness Vicente was severely affected by his raised for the first time on appeal will not be considered." In the
intoxication. It may be inferred that an intoxicated person's sense[s] present case, a cursory reading of the stenographic notes reveals
of sight and hearing and of touch are less acute than those of a that the counsel for the appellants did not raise any objection when
sober person and that his observation are inexact as to what said witnesses testified on the matters now being impugned.
actually occurred." 62 Moreover, they repeatedly cross-examined the witnesses, which
shows that they had waived their objections to the said testimonies
This argument is not persuasive. The evidence presented fails to of such witnesses.
show that Vicente was so intoxicated that night as to affect his
powers of observation and retrospection. Defense Witness Palacio Lastly, Appellant Mayor Cawaling questions the motive of
merely saw the witness drinking tuba on the night of the Prosecutor Pedro Victoriano Jr. This contention is likewise bereft of
killing. 63 Meanwhile the whole testimony of Luz on the matter mainly merit. Unlike judges who are mandated to display cold neutrality in
reveals that Ronie was the person she was referring to as drunk, as hearing cases, 69 prosecutors are not required to divest themselves
shown by this portion: 64 of their personal convictions and refrain from exhibiting partiality. In
this case, there is reasonable ground for Prosecutor Victoriano to
Q When Ronie and Vicente both believe that an offense has been committed and that the accused
surnamed Ilisan entered the C & J-4 was probably guilty thereof. 70 Under the circumstance, it is his
kitchenette what if any did you sworn duty to see that justice is served. 71 Thus, "[h]e may prosecute
observe? with earnestness and vigor — indeed, he should do so. But, while
he may strike hard blows, he is not at liberty to strike foul ones. It is
as much his duty to refrain from improper methods calculated to
A I saw them so dr[u]nk (Nakita ko sila
produce a wrongful conviction as it is to use every legitimate means
lasing na lasing).
to bring about a just one." 72 Further,
Q Who was lasing na lasing or so
Under the prevailing criminal procedure, the fiscal's
dr[u]nk?
sphere of action is quite extensive, for he has very
direct and active intervention in the trial, assuming as
A Ronie Ilisan sir. the Government's representative the defense of
society, which has been disturbed by the crime, and
Granting that Vicente was drunk, the conviction of the appellants is taking public action as though he were the injured
still inevitable in view of the positive declarations of Witnesses party, for the purpose of securing the offender's
Nelson and Imelda, who unequivocally identified appellants as punishment, whenever the crime has been proved
perpetrators of the senseless killing of their brother Ronie. and the guilt of the accused as the undoubted
perpetrator thereof established. 73
Appellant Cawaling also questions the trial court's reliance on the
testimonies of Dr. Blandino Flores, 65 Nelson Ilisan 66 and Prosecutor Fourth Issue:
Pedro Victoriano, Jr., 67 for failure of the prosecution to offer them as
evidence. In People vs. Java, 68 this Court ruled that the testimony of Self-Defense
a witness, although not formally offered in evidence, may still be
admitted by the courts, if the other party does not object to its
To escape criminal liability, the appellants also invoke the justifying evidence were weak, it could not be disbelieved after the accused
circumstances of self-defense and lawful performance of has admitted the
duty. 74 Allegedly, Ronie was firing his gun and shouting. "Guwa ang killing. 78 Thus, appellants must establish with clear and convincing
maisog! (Come out who is brave!)." Then the mayor and the evidence that the killing was justified, and that they incurred no
policemen arrived at the scene to pacify him. Ronie fired at them, criminal liability therefor. 79 They failed to do so, and their conviction
which forced them to chase him and return fire. thus becomes inevitable. 80

We find this scenario bereft of plausibility. Fifth Issue:

Unlawful aggression on the part of the victim is a condition sine qua Lawful Performance of Duties
non for the successful invocation of self-defense. 75 As factually
found by the trial court, unlawful aggression did not start with the Appellants contend that the killing of Ronie resulted from the lawful
victim, but rather with the appellants. Cawaling and his men performance of their duties as police officers. However, such
proceeded to the C & J-4 Kitchenette and waited for Ronie to come justifying circumstance may be invoked only after the defense
out. When the victim did, they chased and shot him without giving successfully proves that (1) the accused acted in the performance
him any opportunity to defend himself. of a duty, and (2) the injury or offense committed is the necessary
consequence of the due performance or lawful exercise of such
Granting arguendo the veracity of the defense's factual version, it is duty. 81 These two requisites are wanting in this case.
important to note that appellants admitted that Ronie was running
away from them when they chased and shot him. Thus, unlawful The appellants, except Mayor Cawaling, were men in uniform who
aggression — assuming it was initially present — had ceased, and happened to be on duty when they killed Ronie. The victim was nor
the appellants no longer had any right to pursue the offender. Basic committing any offense at the time. Killing the victim under the
is the rule that when unlawful aggression ceases, the defender no circumstances of this case cannot in any wise be considered a valid
longer has the right to kill or even wound the former aggressor. performance of a lawful duty by men who had sworn to maintain
Upon the cessation of the unlawful aggression and the danger or peace and order and to protect the lives of the people. As aptly held
risk to life and limb, there should be a corresponding cessation of in People vs. De la Cruz, 82 "Performance of duties does not include
hostilities on the part of the person defending himself. 76 murder." That Ronie was a troublemaker in their town is not an excuse;
as the Court declared in the same case of People vs. De la Cruz,
"Murder is never justified, regardless of the victim."

Furthermore, the means employed to ward off the attack was Sixth Issue:
unreasonably excessive. Being armed, the appellants could have
easily ordered the victim to surrender. Even the first shot at his Alibi
shoulder would have been sufficient to immobilize him, yet they
fired a succession of shots at him while he was in no position to put We likewise brush aside the defenses of alibi and denial raised by
up a defense. Appellant De los Santos. Prosecution witnesses positively identified
him and Fontamillas as part of the group which chased and shot
Jurisprudence teaches that when an accused admits having Ronie Ilisan. It is elementary that alibi and denial are outweighed by
committed the crime but invokes self-defense to escape criminal positive identification that is categorical, consistent and untainted
liability, the burden of proof is reversed and shifted to him. He must by any ill motive on the part of the eyewitness testifying on the
then prove the elements of self-defense. 77 It necessarily follows that matter. Alibi and denial, if not substantiated by clear and convincing
he must now rely on the strength of his own evidence and not on evidence, are negative and self-serving evidence undeserving of
the weakness of that of the prosecution; for even if the latter weight in law. 83
In fact, De los Santos failed to establish with clear and convincing Eighth Issue:
evidence that it was physically impossible for him to have been at
the scene of the crime during its commission. 84 The evidence he had Equipoise Rule
presented demonstrated only that, at the time, he was sleeping in his
house, which was near the locus criminis. We reject appellants' position that the equipoise rule should apply
to this case. 90 In People vs. Lagnas, 91 the Court, through Mr. Justice
Alibi is always considered with suspicion and received with caution, Florenz D. Regalado, described this rule as follows:
not only because it is inherently weak and unreliable, but also
because it is easily fabricated and concocted. 85 It is therefore Once again, albeit in effect a supportive and
incumbent upon the appellant to prove that he was at another place cumulative consideration in view of the preceding
when the felony was committed, and that it was physically impossibie
disquisition, the equipoise rule finds application in
for him to have been at the scene of the crime at the time it was
this case, that is, if the inculpatory facts and
committed. 86 This he failed to prove.
circumstances are capable of two or more
explanations, one of which is consistent with the
Seventh Issue: innocence of the accused and the other consistent
with his guilt, then the evidence does not fulfill the
Conspiracy test of moral certainty, and is not sufficient to support
a conviction.
The trial court correctly appreciated the presence of conspiracy.
Conspiracy exists when two or more persons come to an agreement In this case, the inculpatory facts point to only one conclusion:
concerning the commission of a felony and decide to commit it. appellants are guilty. As amplified in the discussion above, the
Direct proof of conspiracy is rarely found, for criminals do not write Court agrees with the trial court that the guilt of the appellants was
down their lawless plans and plots. The agreement to commit a proven beyond reasonable doubt.
crime, however, may be deduced from the mode and manner of the
commission of the offense or inferred from acts that point to a joint Ninth Issue:
purpose and design, concerted action, and community of intent. 87 It
does not matter who inflicted the mortal wound, as the act of one is the
act of all, and each incurs the same criminal liability. 88 We concur with Murder or Homicide?
the trial court's elucidation:
The Information alleges three qualifying circumstances: treachery,
All of the accused chased the victim and his brother; evident premeditation and taking advantage of superior strength. If
four (4) of whom blocked their ways, first, to their appreciated, any one of these will qualify the killing to murder.
elder brother Nelson Elisan's house and, second, to However, Appellants Tumbagahan and Cajilo posit that there was no
their elder sister Imelda Elisan Tumbagahon's house. treachery, reasoning that Ronie was not an unsuspecting victim, as
Having changed course by proceeding to the ricefield he had been forewarned by Diosdado Venus of the presence of the
in their desperate attempt to evade the accused, all appellants inside the restaurant, and there had been a chase prior to
the six (6) armed accused continued their pursuit. the killing. Further, they contend that abuse of superior strength is
Their victim, having fallen on the rice paddy, and deemed absorbed in treachery, and that "the addition of abuse of
rising and kneeling on it with raised hands, all the superior strength to qualify the case to murder is nothing more than
said accused with their flashlights beamed on their mere repetition — a legal chicanery, so to say. Similarly, where
victim, in a united and concerted manner, shot him. treachery is not proved, there can be no abuse of superior strength,
After Ronie Elisan had fallen down, co-accused vice-versa." 92
Mayor Cawaling was even heard as saying "(Y)ou left
[sic] him, he is already dead." . . . . 89 We partly agree.
Treachery exists when the malefactors employ means and methods for lost earnings. In computing the latter, the trial court used the
that tend directly and especially to insure their execution without following formula:
risk to themselves arising from the defense which the victims might
make. The essence of treachery is the sudden and unexpected Total annual net income = 10% x total annual gross
attack without the slightest provocation on the part of the person income
attacked. 93 While we do not disregard the fact that the victim, together
with his brother Vicente, was able to run towards a rice field, we still = .10 x P25,000.00
believe that treachery attended the killing.
= P2,500.00.
In People vs. Landicho, 94 we ruled that treachery might still be
appreciated even when the victim was warned of danger to his person,
for "what is decisive is that the execution of the attack made it xxx xxx xxx
impossible for the victim to defend himself or to retaliate."
Loss of earning capacity of Ronie Elisan = 2/3 (90-20)
The appellants waited for Ronie to come out of the restaurant. All of x P2,500.00 = P116,666.66. 97
them chased the victim and prevented him from seeking refuge
either in the house of his sister Imelda or that of his brother Nelson. Consistent with jurisprudence, we affirm the ruling of the trial court
All of them carried firearms and flashlights. They fired their guns at awarding the amount of P50,000 as civil indemnity to the heirs of the
the victim while he was on his knees with arms raised, manifesting victim. 98
his intention not to fight back.
We cannot do the same to the award of actual damages and lost
We cannot appreciate the aggravating circumstance of abuse of earnings, however. The award of actual damages has no basis, as
superior strength, however, as we have consistently ruled that it is no receipts were presented to substantiate the expenses allegedly
deemed absorbed in treachery. 95 incurred. An alleged pecuniary loss must be established by credible
evidence before actual damages may be awarded. 99 Similarly
erroneous is the award for loss of earning capacity, which should be
We also affirm the finding of the trial court that the prosecution
computed as follows: 100
failed to prove the attending circumstance of evident premeditation.
To prove this aggravating circumstance, the prosecution must show
the following: (1) the time when the offender determined to commit 2/3 x [80 — age of victim at the time of death] x
the crime; (2) an act manifestly indicating that the offender clung to [reasonable portion of the annual net income which
his determination; and (3) a lapse of time, between the would have been received as support by heirs]
determination to commit the crime and the execution thereof,
sufficient to allow the offender to reflect upon the consequences of As testified to by Nelson Ilisan, the deceased had been earning an
his act. 96 Nothing in the records shows how and when the plan to kill average of P100 daily or P3,000 monthly. 101 From this monthly
was hatched, or how much time had elapsed before it was carried out. income must be deducted the reasonable amount of P1,000
representing the living and other necessary expenses of the deceased.
Hence, the lost earnings of the deceased should be computed as
Tenth Issue:
follows:

Damages
= 2/3 x [80 - 22] x [P24,000]
The trial court awarded the following: (a) P50,000.00, as civil
= 2/3 x [58] x [P24,000]
indemnity; (b) P6,000.00, as actual damages; and (c) P116,666.66,
= 2[P1,392,000]
 3 G.R. No. 97381 November 5, 1992

= P2,784,000 BENIGNO V. MAGPALE, JR., petitioner,

vs.
3 CIVIL SERVICE COMMISSION and ROGELIO A. DAYAN, in his
capacity as the General Manager of the Philippine Ports
= P928,000. Authority, respondents.

Eleventh Issue:

Aggravating and Mitigating Circumstances MELO, J.:

Prior to the amendment of Section 248 of the Revised Penal Before Us is a petition for review on certiorari assailing Resolution No.
Code, 102 the imposable penalty for murder was reclusion temporal in 90-962 dated October 19, 1990 of respondent Civil Service Commission
its maximum period to death. In their Brief, Appellants Cajilo and (CSC). Said CSC resolution set aside and modified the decision dated
Tumbagahan argue for the imposition of the lower penalty of reclusion February 5, 1990 of the Merit System Protection Board in MSPB Case
temporal, contending that their filing of bail bonds/property bonds, No. 449, which ordered the immediate reinstatement in the service of
before the order for their arrest was issued, should be treated as herein petitioner Benigno V. Magpale, Jr., without loss of seniority rights
voluntary surrender. 103 and with payment of back salaries and other emoluments to which he is
entitled under the law.
We cannot accept this contention. In the first place, it has no factual
basis. The warrant for the arrest of herein appellants was issued on The record shows that petitioner started his career in government as an
August 18, 1987, 104 but appellants' counsel filed the Urgent Motion for employee in the Presidential Assistance on Community Development in
Bail only thereafter, on September 2, 1987. 105 In the second place, 1960. Fifteen years later, or in 1975, he transferred to the Philippine
appellants failed to prove the requisites for voluntary surrender, which Ports Authority (PPA) as Arrastre Superintendent. He was promoted to
are: (1) the offender has not been actually arrested; (2) the offender the position of Port Manager in 1977 of the Port Management Unit
surrenders himself to a person in authority or to the latter's agent; and (PMU), General Santos City. Then he was reassigned, in the same year
(3) the surrender is voluntary. 106 The records reveal that a warrant of to PPA-PMU, Tacloban City where he likewise discharged the functions
arrest was actually served on Tumbagahan and Cajilo 107 on September of Port Manager. On December 1, 1982, the PPA General Manager
2, 1987 and that they were in fact detained. 108 designated Atty. William A. Enriquez as officer-in-charge of PPA-PMU,
Tacloban City effective December 6, 1982. On January 6, 1983,
In view of the absence of any other aggravating or mitigating petitioner was ordered to immediately report to the Assistant General
circumstance, the trial court correctly imposed reclusion perpetua. Manager (AGM) for Operation, PPA, Manila, Petitioner reported at PPA
Manila on the same date and performed the duties and functions
WHEREFORE, the appeal is hereby DENIED and the assailed assigned to him.
Decision is AFFIRMED with the following MODIFICATIONS: (1) the
award of P6,000 as actual damages is DELETED, and (2) the award In an Internal Control Department Report dated March 5, 1984, the PMU-
for loss of earning capacity is INCREASED to P928,000. Costs Tacloban Inventory Committee and the Commission on Audit (COA)
against appellant. stated that petitioner failed to account for equipment of PPA value at
P65,542.25 and to liquidate cash advances amounting to P130,069.61.
SO ORDERED. He was found also to have incurred unauthorized absences from May 25,
1984 to July 23, 1984.
On July 23, 1984, or nineteen months after he began reporting in Manila, Moreover, Section 105, Chapter 5 of Presidential Decree
a formal charge for Dishonesty, Pursuit of Private Business without 1445, otherwise known as "The Government Auditing
permission as required by Civil Service Rules and Regulations, Frequent Code of the Philippines" measured the liability of an
and Unauthorized Absences and Neglect of Duty was filed against officer accountable for government property only to the
petitioner. Based on said charges he was ordered preventively money value of said property. Though respondent is the
suspended and has been out of service since then. person primarily liable for these funds and property, he
holds this liability jointly with the person who has the
For almost four years the case remained unacted upon. The formal actual possession thereof and who has the immediate
investigation and hearing resumed on September 18, 1987. responsibility for the safekeeping.

On January 18, 1989 a Decision was rendered by the Secretary of the As to the charge relative to respondent's frequent
Department of Transportation and Communication (DOTC), through its unauthorized absences had been sufficiently and
Administrative Action Board, finding petitioner guilty of Gross Negligence convincingly explained, due to which the Board found him
on two counts: (a) for his failure to account for the forty-four (44) assorted not at all guilty of the offense charged (sic).
units of equipment, among them a Sony Betamax and a TV Camera, and
(b) for failing to render the required liquidation of his cash advances IN VIEW THEREOF, the decision appealed from is
amounting to P44,877.00 for a period of four years. Petitioner was also hereby reversed. Respondent-Appellant Magpale should
found guilty of frequent and unauthorized absences. Accordingly, he was immediately by reinstated in the service without loss of
meted the penalty of dismissal from the service with the corresponding seniority rights and with payment of back salaries and
accessory penalties. other emoluments to which he is entitled under the law.
(pp. 31-32, Rollo.)
When petitioner's motion for reconsideration of the aforesaid Decision
was denied in the DOTC's Order of February 20, 1989, he appealed to On March 1, 1990, PPA, through its General Manager, herein respondent
the Merit System and Protection Board (MSPB) of respondent Civil Rogelio A Dayan, filed an appeal with the Civil Service Field Office-PPA,
Service Commission. and the latter office indorsed the appeal to respondent CSC in a letter
dated March 5, 1990.
On February 5, 1990, the MSPB rendered a Decision reversing the
Decision of the DOTC. The pertinent portion of the MSPB's Decision On March 5, 1990, petitioner requested the Secretary of the DOTC to
reads: direct the PPA to implement the MSPB decision as it has become final
and executory. Said request was reiterated in another letter also dated
After a careful review of the record of the case, this Board March 5, 1990 by petitioner to OIC Wilfredo M. Trinidad of the Office of
found the appeal meritorious. Respondent cannot be held the Assistant Secretary for Administration and Legal Affairs, DOTC.
liable for Gross Negligence for his alleged failure to
account for several properties and for failure to liquidate On March 13, 1990, petitioner filed with the MSPB a Motion for
the cash advances he received as there was no showing Implementation of the MSPB decision. This was opposed by the PPA
that he has been specifically required to do so either by through its General Manager.
law or regulation. The mere detail of respondent to PPA-
Manila, in the absence of an order requiring him to turn On April 27, 1990 petitioner filed with respondent CSC his comment to
over and account for the funds and property received for the appeal of the PPA contending that he is not an accountable officer
his office at PMU-Tacloban will not necessarily obligate and is under no obligation to account for the property and equipment; that
him to make accounting for the same. said property and equipment were not received by him as custodian and
he should not be held liable for the loss of the same; that the said
property and equipment were place in PPA-PMU Tacloban City which the
herein petitioner left on October 8, 1982 and since then had lost control Accordingly, considering two mitigating circumstances of
over them. Moreover, petitioner averred that as to the unliquidated cash length of service and first offense in favor of respondent,
advances of P44,877.00, the same had long been liquidated. Finally, the commission hereby imposes a penalty of suspension
petitioner claimed that his failure to secure the clearance for any possible for a period of one (1) year against him. As he has been
property or financial obligation in PMU-Tacloban was due to the urgency out of the service since 1984, the penalty is deemed
of his transfer to PPA-Manila and the absence of any order or demand to served and he should now be reinstated to his former
secure the clearance. position. This is, however, without prejudice to any
criminal or civil proceedings that the agency concerned or
On May 29, 1990, the MSPB issued an Order for the immediate the COA may institute as proper under the premises.
implementation of its February 5, 1990 Decision ruling that:
Finally, the decision of the MSPB exonerating the
Records further show that a copy of this Board's decision respondent Magpale for Gross Negligence is hereby
was received by the Office of the Honorable Secretary, reversed. Corollarily, the order of payment of back
that Department, thru Mr. Frankie Tampus on February 6, salaries is hereby set aside. MSPB is likewise reminded
1990. Records finally show that as of March 5, 1990, no to be more circumspect on matters of this nature,
motion for reconsideration of this Board's aforementioned especially as the instant case involves accountability of
decision has ever been filed as evidenced by the public funds and property.
certification of even date issued and signed by Director
Adelaida C. Montero of the Office for Central Personnel WHEREFORE, foregoing premises considered, the
Records, this Commission. Hence, said decision has long Commission finds respondent Benigno V. Magpale, Jr.,
become final and executory. (p. 34, Rollo.) guilty of Gross Neglect of Duty on two (2) counts for
failure to account for the forty-four (44) equipments (sic)
On June 28, 1990, petitioner filed a Motion to Dismiss the appeal of PPA under his charge and to render an accounting for cash
claiming that: advance amounting to P44,877.90. In view of the
attendant mitigating circumstances of length of service
1. Appeal of PPA was filed out of time and that the CSC and first offense in favor of respondents and the Neglect
has no jurisdiction over it; of Duty to account for cash advance in the amount of
P44,877.90 (second count) be appreciated as an
aggravating circumstances, the penalty of suspension for
2. The PPA has not exhausted administrative remedies
one (1) year shall be imposed against respondent. This
before appealing to the higher body, the CSC;
shall be without prejudice to any criminal or civil
proceeding that PPA or COA may institute against
3. The MSPB decision has become final and therefore respondent. Accordingly, the Decision and Order of
cannot be disturbed anymore. MSBP dated February 5, 1990 and May 29, 1990,
respectively, are hereby set aside. (pp. 27-28, Rollo.)
(p. 22, Rollo.)
Hence, the present recourse.
On October 19, 1990, respondent CSC rendered its now assailed
Resolution No. 90-962, the pertinent portion of which reads as follows: The petition alleges that respondent CSC, in issuing its Resolution No.
90-962, gravely abused its discretion because:
The Commission thus holds respondent Magpale guilty of
Gross Neglect of Duty on two (2) counts for the forty-four
(44) equipments (sic) under his charge and to render an
accounting for cash advances amounting to P44,877.90.
 1. The law did not authorize an appeal by the government with payment of back salaries, the said MSBP decision should be
from an adverse decision of the Merit Systems Protection deemed final, immediately executory and unappealable.
Board (MSBP);
Petitioner next contends that assuming, for the sake of argument, that the
2. Respondent PPA General Manager did not have the decision of the MSBP was appealable, respondent Dayan, even in his
right or legal personality to appeal from the MSPB capacity as General Manager of the PPA, did not have the legal
decision; personality not the right to appeal the decision of the
MSBP, citing Paragraph 1, Section 49, Chapter 7, Subtitle A, Title I, Book
3. Assuming that the appeal was available to respondent V, of Executive Order No. 292 and the case of Paredes vs. CSC, G.R.
DAYAN, the same was filed out time after the MSPB No. 88177, December 4, 1990, 192 SCRA 84.
decision had long become final and executory. (pp. 6-7,
Petition; pp. 7-8, Rollo.) Assuming further that the MSBP decision was appealable and that
respondent Dayan had the legal personality to appeal the MSBP
In support of this first contention, petitioner invokes Paragraph 2(a). decision, petitioner still contends that the appeal should not have been
Section 16, Chapter 3, Subtitle A, Title I, Book V of Executive Order No. given due course by the respondent CSC because the appeal was not
292, otherwise known as the Administrative Code of 1987 which filed with the proper disciplining office in accordance with same Section
provides: 49 of Executive Order No. 292, which in this case, should be the DOTC,
not with the CSC Field Office at the PPA.
Sec. 16. Offices in the Commission. — The Commission
shall have the following offices: On the merit of the petition, petitioner claims that assuming even further
that an appeal lies from the MSBP decision, that respondent Dayan had
xxx xxx xxx the legal personality or standing to institute the appeal that it was filed
with the proper office, still CSC Resolution 90-962 was rendered with
grave abuse of discretion because petitioner cannot be suspended for
(2) The Merit Systems Protection Board
alleged failure to account for pieces of equipment and cash advances
composed of a Chairman and two (2)
since this is not the neglect of duty contemplated by Section 36 of
members shall have the following
Presidential Degree No. 807 or Section 46 of chapter in the Civil Service
functions:
in Executive Order 292. At most, petitioner can be held liable for the
money value of the equipment and advances as mandated by Section
(a) Hear and decide on 105 of Presidential Decree No. 1445, the Government Auditing Code of
appeal administrative the Philippines.
cases involving officials
and employees of the Civil
For its part, respondent CSC maintains —
Service. Its decision shall
be final except those
involving dismissal or First, that the finality of the MSPB decision in the disciplinary cases as
separation from the stated in Section 16, Paragraph 2(a), Book V of Executive Order No. 292,
service which may be relied upon by petitioner, is modified by section 12, Paragraph 11, Book
appealed to the V, of the same Executive Order No. 292, which reads:
Commission. (Emphasis
supplied.) Sec. 12. Powers and Functions. — The Commission shall
have the following powers and functions:
claiming that since the MSBP decision was for dismissal or separation
from the service, but reinstatement without loss of seniority rights and xxx xxx xxx
 (11) Hear and decide administrative case instituted by or cash advances, petitioner is guilty of Gross Neglect of Duty and should
bought directly or on appeal, including contested have been dismissed from the service if no mitigating circumstances
appointments, and review decisions and actions of its were considered in his favor.
offices and of the agencies attached to it.
We gave due course to the petition and required the parties to file their
Furthermore, relevant provisions of Executive Order No 135 dated respective memoranda. After considering the same and the pertinent
February 25, 1987 amending Section 19(b) of Presidential Decree No. laws and jurisprudence, We find that the petition must be granted.
807 and Section 8 of Presidential Decree No. 1409 state, thus:
After Mendez vs. Civil Service Commission, (204 SCRA 965 [1991]), the
WHEREAS, in the interest of justice, there is a need to extent of the authority of respondent CSC to review the decisions of the
confer upon the Civil Service Commission jurisdiction MSPB is now a settled matter.
over appeal in contested or provisional appointments and
to make its decision thereon, as well as in administrative The Court, in said case held:
disciplinary cases final and reviewable by the Supreme
Court. It is axiomatic that the right to appeal is
merely a statutory privilege and may be
xxx xxx xxx exercised only in the manner and in
accordance with the provisions of law.
Relationship with the Civil Service Commission. –– The (Victorias Milling Co., Inc. vs. Office of the
Commission shall hear and decide appeals from other Presidential Assistant for Legal Affairs,
decisions of the Board provided that the decisions of the 153 SCRA 318).
Commission shall be subject to review on certiorari upon
receipt of the copy thereof by the aggrieved part. A cursory reading of P.D. 807, otherwise
known as "The Philippines Civil Service
Thus, respondent CSC argues that it is deemed not to have lost its Law" shows that said law does not
appellate jurisdiction over the decisions of the MSPB in administrative contemplate a review of decisions
disciplinary case. exonerating officers or employees from
administrative charges.
Second, the case of Paredes vs. CSC is not applicable. Respondent
Dayan appealed the MSPB decision not in his personal capacity nor in Section 37 paragraph (a) thereof, provides:
pursuit in his private interest, but as head of PPA, being the general
manager thereof. The Commission shall decide upon appeal
all administrative disciplinary cases
Third, the appeal was filed with the proper disciplining office because the involving the imposition of the penalty of
decision appealed from was that of the MSPB, one of the offices in suspension for more than thirty days, or
respondent CSC. Thus, respondent CSC was justified in giving due fine in an amount exceeding thirty day's
course to PPA's notice of appeal filed with its (CSC) Field Office at the salary, demotion in rank or salary or
PPA. transfer, removal or dismissal from office. .
. . (Emphasis supplied) (p. 7. Rollo)
Finally, petitioner's claim that he is liable only for the money value of the
property and cash advances and cannot be administratively charged for Said provisions must be read together with Section 39
such infraction is untenable and a mockery of the civil service law. For his paragraph (a) of P.D. 805 which contemplates:
failure to account for the property under his charge and to liquidate his
 Appeals, where allowable, shall be made allowed by law must be filed within fifteen days from
by the party adversely affected by the receipt of the decision.
decision . . . (Emphasis supplied) (p.
104, Rollo) Here the MSPB after hearing and the submission of
memoranda exonerated private respondent Amor of all
The phrase "party adversely affective by the decision" charges except for habitual tardiness. The penalty was
refers to the government employees against whom the only a reprimand so that even private respondent Amor,
administrative case is filed for the purpose of disciplinary the party adversely affected by the decision, cannot even
action which may take the form of suspension, demotion interpose an appeal to the Civil Service Commission.
in rank or salary, transfer, removal or dismissal from
office. In the instant case, Coloyan who filed the appeal As correctly ruled by respondent, petitioner Paredes the
cannot be considered an aggrieved party because he is complainant is not the part adversely affected by the
not the respondent of the administrative case below. decision so that she has no legal personality to interpose
an appeal to the Civil Service Commission. In an
Finally, pursuant to Section 37 paragraph (b) of P.D. 807, administrative case, the complainant is a mere witness
the city mayor, as head of the city government, is (Gonzalo vs. D. Roda, 64 SCRA 120). Even if she is the
empowered to enforce judgment with finality on lesser Head of the Administrative Services Department of the
penalties like suspension from work for one month and HSRC as a complaint she is merely a witness for the
forfeiture of salary equivalent to one month against erring government in an administrative case. No private interest
employees. is involved in an administrative case as the offense is
committed against the government. (pp. 98-99)
By inference or implication, the remedy of appeal may be
availed of only in a case where the respondent is found While it is true, as contended by respondent Civil Service Commission
guilty of the charges filed against him. But the respondent that under Section 12 (par. 11), Chapter 3, Subtitle A, Book V of
is exonerated of said charges, as in this case, there is no Executive Order 292, the CSC does have the power to —
occasion on appeal. (pp. 967-968)
Hear and decide administrative cases instituted by or
The above ruling is a reiteration of the earlier pronouncement in Paredes brought before it directly or on appeal, including contested
vs. Civil Service Commission, (192 SCRA 84 [1990]) cited by petitioner, appointments, and review decisions and actions of its
where We said: offices and of the agencies attached to it. . . .

Based on the above provisions of law, appeal to the Civil the exercise of the power is qualified by and should be read together with
Service Commission in an administrative case is the other sections of the same sub-title and book of Executive Order 292,
extended to the party adversely affected by the decision, particularly Section 49 which prescribes the following requisites for the
that is, the person or the respondent employee who has exercise of the power of appeal, to wit:
been meted out the penalty of suspension for more than
thirty days; or fine in an amount exceeding thirty days (a) the decision must be appealable;
salary demotion in rank or salary or transfer, removal or
dismissal from office. The decision of the disciplining (b) the appeal must be made by the party adversely
authority is even final and not appealable to the Civil affected by the decision;
Service Commission in cases where the penalty imposed
is suspension for not more than thirty days or fine in an
amount not exceeding thirty days salary. Appeal in cases
 (c) the appeal must be made within fifteen days from G.R. No. 90503 September 27, 1990
receipt of the decision, unless a petition for the
reconsideration is seasonably filed; and NESTOR SANDOVAL, petitioner,
vs.
(d) the notice of appeal must be filed with the disciplining HON. DOROTEO CAÑEBA, Presiding Judge, RTC, Manila, Branch
office, which shall forward the records of the case, 20, DEPUTY SHERIFF OF MANILA (RTC, Manila, Branch 20), and
together with the notice of appeal to the appellate ESTATE DEVELOPERS & INVESTORS CORPORATION, respondents.
authority within fifteen days from filing of the notice of
appeal, with its comments, if any. Arnold V. Guerrero & Associates for petitioner.

Under Section 47 of the same Code, the CSC shall decide on appeal all Lino M. Patajo for private respondent.
administrative disciplinary cases involving the imposition of:

(a) a penalty of suspension for more than thirty days; or

GANCAYCO, J.:
(b) fine in an amount exceeding thirty days salary; or
The issue in this petition is whether or not the ordinary courts have jurisdiction over the collection of
unpaid installments regarding a subdivision lot.
c) demotion in rank or salary or transfer; or

(d) removal or dismissal from office. On August 20, 1987 private respondent filed a complaint in the Regional
Trial Court (RTC) of Manila for the collection of unpaid installments
regarding a subdivision lot, pursuant to a promissory note, plus interest.
The February 5, 1990 decision of the MSPB did not involve dismissal or On January 29, 1988 the trial court rendered a decision.
separation from office, rather, the decision exonerated petitioner and
ordered him reinstated to his former position. Consequently, in the light of
our pronouncements in the aforecited cases of Mendez v. Civil Service It appears that petitioner was declared in default so much so that after
Commission and Paredes vs. Civil Service Commission, the MSPB receiving the evidence of private respondent, the trial court rendered its
decision was not a proper subject of appeal to the CSC. decision on January 19,1988, the dispositive portion of which reads as
follows:
Settled is the rule that a tribunal, board, or officer exercising judicial
functions acts without jurisdiction if no authority has been conferred by WHEREFORE, on the allegations and the
law to hear and decide the case. (Acena v. Civil Service Commission, prayer of the complaint and the evidence
193 SCRA 623 [1991]). adduced in support therefor, judgment is
hereby rendered, ordering the defendant
to pay plaintiff the following:
WHEREFORE, the decision of the Civil Service Commission is hereby
ANNULLED and SET ASIDE and the decision of the Merit Systems
Protection Board dated February 5, 1990 is hereby REINSTATED. 1. The sum of P73,867.42 plus interest and other charges
commencing from January 1, 1988 until fully paid;
SO ORDERED.
2. Such sum which shall not be less than P2,000.00 or
25% of the amount of delinquency whichever is greater,
as and for attorney's fees.

3. Costs against the defendant.

 4. SO ORDERED. 1 Housing Authority shall have exclusive jurisdiction to hear
and decide cases of the following nature:
On September 28, 1988 the trial court issued an order directing the
issuance of a writ of execution to enforce its decision that had become A. Unsound real estate business practices:
final and executory.
B. Claims involving refund and any other claims filed by
On September 30, 1988 petitioner filed a motion to vacate judgment and subdivision lot or condominium unit buyer against the
to dismiss the complaint on the ground that the lower court has no project owner, developer, dealer, broker or salesman;and
jurisdiction over the subject matter and that its decision is null and void. A
motion for reconsideration of the writ of execution was also filed by C. Cases involving specific performance of contractual
petitioner. An opposition to both motions was filed by private respondent and statutory obligations filed by buyers of subdivision lot
to which a reply was filed by petitioner. or condominium unit against the owner, developer,
dealer, broker or salesman. (Emphasis supplied.)
On February 17, 1989 the trial court denied the motion to vacate the
judgment on the ground that it is now beyond the jurisdiction of the Court The language of this section, particularly, the second portion thereof,
to do so. It directed the issuance of a writ of execution anew. leaves no room for doubt that exclusive jurisdiction over the case
between the petitioner and private respondent is vested not on the RTC
Hence the herein petition wherein it is alleged that the trial court but on the NHA. The NHA was re-named Human Settlements Regulatory
committed a grave abuse of discretion as follows: Commission and thereafter it was re-named as the Housing and Land
Use Regulatory Board (HLURB). 3
5.1. The respondent Judge gravely abused his discretion
and acted without jurisdiction in taking cognizance of the Undeniably the sum of money sought to be collected by private
complaint before him notwithstanding respondent from petitioner represented unpaid installments of a
that exclusive and original jurisdiction over the subject- subdivision lot which the petitioner purchased. Petitioner alleges that he
matter thereof is vested with the Housing and Land Use suspended payments thereof because of the failure of the developer to
Regulatory Board (HLURB) pursuant to PD 957. develop the subdivision pursuant to their agreement.

5.2. The respondent Judge gravely abused his discretion In Antipolo Realty Corporation vs. National Housing Authority, 4 the suit
and acted without jurisdiction in refusing to vacate his which was filed with the NHA, likewise involved non-payment of
judgment rendered without jurisdiction and in issuing a installments over a subdivision lot, wherein this Court held that the NHA
writ of execution to implement his abovesaid void has exclusive authority to hear and decide the case.
judgment. 2
In Solid Homes, Inc. vs. Teresita Payawal, 5 this Court ruled that upon the
The petition is impressed with merit. issuance of Presidential Decree No. 957, the trial court may no longer
assume jurisdiction over the cases enumerated in Section 1 of
Under Section 1 of Presidential Decree No. 957 the National Housing Presidential Decree No. 397. We even stated therein that the Housing
Authority (NHA) was given the exclusive jurisdiction to hear and decide and Land Use Regulatory Board has the authority to award damages in
certain cases as follows: the exercise of this exclusive power conferred upon it by Presidential
Decree No. 1344.
SEC.1. In the exercise of its function to regulate the real
estate trade and business and in addition to its powers In Estate Developers and Investors Corporation vs. Antonio Sarte and
provided for in Presidential Decree No. 957, the National Erlinda Sarte, G.R. No. 93646, which is a case substantially similar to the
instant case, in a resolution of August 13, 1990 this Court upheld the G.R. No. 155713 May 5, 2006
exclusive jurisdiction of the HLURB over the collection suit.
MILAGROS G. LUMBUAN,* Petitioner,
Considering that the trial court has no jurisdiction under the vs.
circumstances obtaining in this case, the decision it rendered is null and ALFREDO A. RONQUILLO, Respondent.
void ab initio. It is as if no decision was rendered by the trial court at all.
DECISION
When as in this case the attention of the trial court is drawn to its lack of
competence and authority to act on the case, certainly the trial court has QUISUMBING, J.:
a duty to vacate the judgment by declaring the same to be null and
void ab initio. This petition for review on certiorari seeks to reverse and set aside the
Decision1 dated April 12, 2002, of the Court of Appeals in CA-G.R. SP
This is as it should be. Inasmuch as the questioned judgment is null and No. 52436 and its Resolution2 dated October 14, 2002, denying the
void, it is, as above observed, as if no decision had been rendered by the petitioner’s motion for reconsideration.
trial court. It cannot become final and exucutory, much less can it be
enforced by a writ of execution. The salient facts, as found by the Court of Appeals, 3 are as follows:

The trial court, rather than reiterating the issuance of a writ of execution Petitioner Milagros G. Lumbuan is the registered owner of Lot 19-A,
in this case, which it did, should have recalled and cancelled the writ of Block 2844 with Transfer Certificate of Title No. 193264, located in
execution of the judgment. Gagalangin, Tondo, Manila. On February 20, 1995, she leased it to
respondent Alfredo A. Ronquillo for a period of three years with a monthly
WHEREFORE, the petition is GRANTED. The questioned decision of the rental of P5,000. The parties also agreed that there will be a 10% annual
trial court dated January 29, 1988 is hereby declared null and void for increase in rent for the succeeding two years, i.e., 1996 and 1997, 4 and
lack of jurisdiction. No pronouncement as to costs. the leased premises will be used exclusively for the respondent’s fastfood
business, unless any other use is given, with the petitioner’s prior written
SO ORDERED. consent.5

Narvasa (Chairman), Cruz, Griño-Aquino and Medialdea, JJ., concur. While the respondent at the start operated a fastfood business, he later
used the premises as residence without the petitioner’s prior written
consent. He also failed to pay the 10% annual increase in rent
of P500/month starting 1996 and P1,000/month in 1997 to the present.
Despite repeated verbal and written demands, the respondent refused to
pay the arrears and vacate the leased premises.

On November 15, 1997, the petitioner referred the matter to the

Barangay Chairman’s office but the parties failed to arrive at a
settlement. The Barangay Chairman then issued a Certificate to File
Action.6

On December 8, 1997, the petitioner filed against the respondent an

action for Unlawful Detainer, docketed as Civil Case No. 157922-CV. It
was raffled to the Metropolitan Trial Court (MeTC) of Manila, Branch 6.
On December 15, 1997, the respondent received the summons and copy
of the complaint. On December 24, 1997, he filed his Answer by mail. On April 25, 2000, the MeTC rendered a second decision, the dispositive
Before the MeTC could receive the respondent’s Answer, the petitioner portion of which reads:
filed a Motion for Summary Judgment dated January 7, 1998.7 Acting
upon this motion, the MeTC rendered a decision8 on January 15, 1998, WHEREFORE, premises considered, judgment on the merits is hereby
ordering the respondent to vacate and surrender possession of the rendered for the plaintiff as follows:
leased premises; to pay the petitioner the amount of P46,000 as unpaid
rentals with legal interest until fully paid; and to pay the petitioner P5,000 1. Ordering defendant and all persons claiming right of
as attorney’s fees plus cost of the suit. possession under him to voluntarily vacate the property located at
Lot 19-A Block 2844, Gagalangin, Tondo, Manila and surrender
The respondent then filed a Manifestation calling the attention of the possession thereof to the plaintiff;
MeTC to the fact that his Answer was filed on time and praying that the
decision be set aside. The MeTC denied the prayer, ruling that the 2. Ordering defendant to pay to plaintiff the amount of
Manifestation was in the nature of a motion for reconsideration which is a P387,512.00 as actual damages in the form of unpaid rentals and
prohibited pleading under the Rules on Summary Procedure. its agreed increase up to January 2000 and to pay the amount of
P6,500.00 a month thereafter until the same is actually vacated;
Upon appeal, the case was raffled to the Regional Trial Court (RTC) of
Manila, Branch 38, and docketed as Civil Case No. 98-87311. On July 8, 3. Ordering the defendant to pay to plaintiff the sum of
1998, the RTC rendered its decision9 setting aside the MeTC decision. P10,000.00 as and for attorney’s fees plus cost of the suit.
The RTC directed the parties to go back to the Lupon Chairman or
Punong Barangay for further proceedings and to comply strictly with the
SO ORDERED.12
condition that should the parties fail to reach an amicable settlement, the
entire records of the case will be remanded to MeTC of Manila, Branch 6,
for it to decide the case anew. The respondent appealed the foregoing decision. The case was raffled
1avvphil.net

to RTC of Manila, Branch 22, and docketed as Civil Case No. 00-98173.
The RTC ruled in favor of the petitioner and dismissed the appeal. The
The respondent sought reconsideration but the RTC denied the motion in
respondent elevated the case to the Court of Appeals, where it is now
an Order dated March 15, 1999. Thus, he sought relief from the Court of
pending.
Appeals through a petition for review.10 On April 12, 2002, the appellate
court promulgated a decision, reversing the decision of the RTC and
ordering the dismissal of the ejectment case. The appellate court ruled The sole issue for our resolution is:
that when a complaint is prematurely instituted, as when the mandatory
mediation and conciliation in the barangay level had not been complied [WHETHER] THE COURT OF APPEALS GRAVELY ERRED IN
with, the court should dismiss the case and not just remand the records DISMISSING THE COMPLAINT FOR THE ALLEGED FAILURE OF THE
to the court of origin so that the parties may go through the prerequisite PARTIES TO COMPLY WITH THE MANDATORY MEDIATION AND
proceedings. CONCILIATION PROCEEDINGS IN THE BARANGAY LEVEL.13

The petitioner filed a motion for reconsideration, which was denied by the With the parties’ subsequent meeting with the Lupon Chairman or
appellate court. Hence, this present petition. Punong Barangay for further conciliation proceedings, the procedural
defect was cured. Nevertheless, if only to clear any lingering doubt why
In the meantime, while this petition was pending before this Court, the the Court of Appeals erred in dismissing the complaint, we shall delve on
parties went through barangay conciliation proceedings as directed by the issue.
the RTC of Manila, Branch 38. Again, they failed to arrive at an amicable
settlement prompting the RTC to issue an Order 11 remanding the case to The petitioner alleges that the parties have gone through barangay
the MeTC of Manila, Branch 6, where the proceedings took place anew. conciliation proceedings to settle their dispute as shown by the Certificate
to File Action issued by the Lupon/Pangkat Secretary and attested by the
Lupon/Pangkat Chairman. The respondent, on the other hand, contends would end up with this Court, we find that we cannot do so in the instant
that whether there was defective compliance or no compliance at all with case.
the required conciliation, the case should have been dismissed.
It must be underscored that supervening events have taken place before
The primordial objective of the Katarungang Pambarangay Rules,14 is to the lower courts where the parties have been adequately heard, and all
reduce the number of court litigations and prevent the deterioration of the the issues have been ventilated. Since the records of those proceedings
quality of justice which has been brought about by the indiscriminate filing are with the Court of Appeals, it is in a better position to fully adjudicate
of cases in the courts. To attain this objective, Section 412(a) of Republic the rights of the parties. To rely on the records before this Court would
Act No. 716015 requires the parties to undergo a conciliation process prevent us from rendering a sound judgment in this case. Thus, we are
before the Lupon Chairman or the Pangkat as a precondition to filing a left with no alternative but to leave the matter of ruling on the merits to
complaint in court,16 thus: the appellate court.

SECTION 412. Conciliation. – (a) Pre-condition to Filing of Complaint in WHEREFORE, the petition is GRANTED. The decision and resolution of
Court. – No complaint, petition, action, or proceeding involving any matter the Court of Appeals in CA-G.R. SP No. 52436 are REVERSED and SET
within the authority of the lupon shall be filed or instituted directly in court ASIDE, and the decision of the Regional Trial Court of Manila, Branch
or any other government office for adjudication, unless there has been a 38, in Civil Case No. 98-87311 is AFFIRMED.
confrontation between the parties before the lupon chairman or the
pangkat, and that no conciliation or settlement has been reached as The Court of Appeals is ordered to proceed with the appeal in CA – G.R.
certified by the lupon secretary or pangkat secretary as attested to by the No. 73453 and decide the case with dispatch.
lupon or pangkat chairman….
SO ORDERED.
Here, the Lupon/Pangkat Chairman and Lupon/Pangkat Secretary signed
the Certificate to File Action stating that no settlement was reached by LEONARDO A. QUISUMBING
the parties. While admittedly no pangkat was constituted, it was not Associate Justice
denied that the parties met at the office of the Barangay Chairman for
possible settlement. The efforts of the Barangay Chairman, however,
proved futile as no agreement was reached. Although no pangkat was
formed, in our mind, there was substantial compliance with the law. It is
noteworthy that under the aforequoted provision, the confrontation before
the Lupon Chairman or the pangkat is sufficient compliance with the
precondition for filing the case in court. 17 This is true notwithstanding the
mandate of Section 410(b) of the same law that the Barangay Chairman
shall constitute a pangkat if he fails in his mediation efforts. Section
410(b) should be construed together with Section 412, as well as the
circumstances obtaining in and peculiar to the case. On this score, it is
significant that the Barangay Chairman or Punong Barangay is herself
the Chairman of the Lupon under the Local Government Code. 18

Finally, this Court is aware that the resolution of the substantial issues in
this case is pending with the Court of Appeals. While ordinarily, we would
have determined the validity of the parties’ substantial claims since to
await the appellate court’s decision will only frustrate speedy justice and,
in any event, would be a futile exercise, as in all probability the case
G.R. No. 140954. April 12, 2005 exemplary damages, attorney’s fees and litigation expenses "in amounts
justified by the evidence." 2
HEIRS OF BERTULDO1 HINOG: Bertuldo Hinog II, Bertuldo Hinog III,
Bertuldo Hinog, Jr., Jocelyn Hinog, Bertoldo Hinog IV, Bertoldo On July 2, 1991, Bertuldo filed his Answer. He alleged ownership of the
Hinog V, Edgardo Hinog, Milagros H. Pabatao, Lilian H. King, disputed property by virtue of a Deed of Absolute Sale dated July 2,
Victoria H. Engracia, Terisita C. Hinog, Paz H. Besana, Roberto C. 1980, executed by one Tomas Pahac with the knowledge and conformity
Hinog, Vicente C. Hinog, Roel C. Hinog, Marilyn C. Hinog, Bebot C. of private respondents.3
Hinog, lordes C. Hinog, Pablo Chiong, Arlene Lanasang (All
respresented by Bertuldo Hinog III), Petitioners, After the pre-trial, trial on the merits ensued. On November 18, 1997,
vs. private respondents rested their case. Thereupon, Bertuldo started his
HON. ACHILLES MELICOR, in his capacity as Presiding Judge, RTC, direct examination. However, on June 24, 1998, Bertuldo died without
Branch 4, 7th Judicial Region, Tagbiliran City, Bohol, and completing his evidence.
CUSTODIO BALANE, RUFO BALANE, HONORIO BALANE, and
TOMAS BALANE, Respondents. On August 4, 1998, Atty. Sulpicio A. Tinampay withdrew as counsel for
Bertuldo as his services were terminated by petitioner Bertuldo Hinog III.
DECISION Atty. Veronico G. Petalcorin then entered his appearance as new
counsel for Bertuldo.4
AUSTRIA-MARTINEZ, J.:
On September 22, 1998, Atty. Petalcorin filed a motion to expunge the
Before us is a petition for certiorari and prohibition under Rule 65 of the complaint from the record and nullify all court proceedings on the ground
Rules of Court which assails the Orders dated March 22, 1999, August that private respondents failed to specify in the complaint the amount of
13, 1999 and October 15, 1999 of the Regional Trial Court, Branch 4, of damages claimed so as to pay the correct docket fees; and that
Tagbilaran City, Bohol in Civil Case No. 4923. under Manchester Development Corporation vs. Court of Appeals,5 non-
payment of the correct docket fee is jurisdictional.6
The factual background of the case is as follows:
In an amended motion, filed on October 2, 1998, Atty. Petalcorin further
On May 21, 1991, private respondents Custodio, Rufo, Tomas and alleged that the private respondents failed to pay the correct docket fee
Honorio, all surnamed Balane, filed a complaint for "Recovery of since the main subject matter of the case cannot be estimated as it is for
Ownership and Possession, Removal of Construction and Damages" recovery of ownership, possession and removal of construction. 7
against Bertuldo Hinog (Bertuldo for brevity). They alleged that: they own
a 1,399- square meter parcel of land situated in Malayo Norte, Cortes, Private respondents opposed the motion to expunge on the following
Bohol, designated as Lot No. 1714; sometime in March 1980, they grounds: (a) said motion was filed more than seven years from the
allowed Bertuldo to use a portion of the said property for a period of ten institution of the case; (b) Atty. Petalcorin has not complied with Section
years and construct thereon a small house of light materials at a nominal 16, Rule 3 of the Rules of Court which provides that the death of the
annual rental of ₱100.00 only, considering the close relations of the original defendant requires a substitution of parties before a lawyer can
parties; after the expiration of the ten-year period, they demanded the have legal personality to represent a litigant and the motion to expunge
return of the occupied portion and removal of the house constructed does not mention of any specific party whom he is representing; (c)
thereon but Bertuldo refused and instead claimed ownership of the entire collectible fees due the court can be charged as lien on the judgment;
property. and (d) considering the lapse of time, the motion is merely a dilatory
scheme employed by petitioners.8
Accordingly, private respondents sought to oust Bertuldo from the
premises of the subject property and restore upon themselves the In their Rejoinder, petitioners manifested that the lapse of time does not
ownership and possession thereof, as well as the payment of moral and vest the court with jurisdiction over the case due to failure to pay the
correct docket fees. As to the contention that deficiency in payment of After the submission of private respondents’ opposition20 and petitioners’
docket fees can be made as a lien on the judgment, petitioners argued rejoinder,21 the trial court issued the second assailed Order on August 13,
that the payment of filing fees cannot be made dependent on the result of 1999, essentially denying petitioners’ manifestation/rejoinder. The trial
the action taken.9 court held that the issues raised in such manifestation/rejoinder are
practically the same as those raised in the amended motion to expunge
On January 21, 1999, the trial court, while ordering the complaint to be which had already been passed upon in the Order dated January 21,
expunged from the records and the nullification of all court proceedings 1999. Moreover, the trial court observed that the Order dated March 22,
taken for failure to pay the correct docket fees, nonetheless, held: 1999 which reinstated the case was not objected to by petitioners within
the reglementary period or even thereafter via a motion for
The Court can acquire jurisdiction over this case only upon the payment reconsideration despite receipt thereof on March 26, 1999. 22
of the exact prescribed docket/filing fees for the main cause of action,
plus additional docket fee for the amount of damages being prayed for in On August 25, 1999, petitioners filed a motion for reconsideration23 but the
the complaint, which amount should be specified so that the same can be same was denied by the trial court in its third assailed Order dated
considered in assessing the amount of the filing fees. Upon the complete October 15, 1999. The trial court held that the Manchester rule was
payment of such fees, the Court may take appropriate action in the light relaxed in Sun Insurance Office, Ltd. vs. Asuncion.24 Noting that there has
of the ruling in the case of Manchester Development Corporation vs. been no substitution of parties following the death of Bertuldo, the trial
Court of Appeals, supra.10 court directed Atty. Petalcorin to comply with the provisions of Section 16,
Rule 3 of the Rules of Court. The trial court also reiterated that the Order
Accordingly, on January 28, 1999, upon payment of deficiency docket dated March 22, 1999 reinstating the case was not assailed by
fee, private respondents filed a manifestation with prayer to reinstate the petitioners within the reglementary period, despite receipt thereof on
case.11 Petitioners opposed the reinstatement12 but on March 22, 1999, the March 26, 1999.25
trial court issued the first assailed Order reinstating the case.13
On November 19, 1999, Atty. Petalcorin complied with the directive of the
On May 24, 1999, petitioners, upon prior leave of court,14 filed their trial court to submit the names and addresses of the heirs of Bertuldo. 26
supplemental pleading, appending therein a Deed of Sale dated
November 15, 1982.15 Following the submission of private respondents’ On November 24, 1999, petitioners filed before us the present petition
opposition thereto,16 the trial court, in its Order dated July 7, 1999, denied for certiorari and prohibition.27 They allege that the public respondent
the supplemental pleading on the ground that the Deed of Absolute Sale committed grave abuse of discretion in allowing the case to be reinstated
is a new matter which was never mentioned in the original answer dated after private respondents paid the docket fee deficiency since the trial
July 2, 1991, prepared by Bertuldo’s original counsel and which Bertuldo court had earlier expunged the complaint from the record and nullified all
verified; and that such new document is deemed waived in the light of proceedings of the case and such ruling was not contested by the private
Section 1, Rule 917 of the Rules of Court. The trial court also noted that no respondents. Moreover, they argue that the public respondent committed
formal substitution of the parties was made because of the failure of grave abuse of discretion in allowing the case to be filed and denying the
defendant’s counsel to give the names and addresses of the legal manifestation with motion to dismiss, despite the defect in the complaint
representatives of Bertuldo, so much so that the supposed heirs of which prayed for damages without specifying the amounts, in violation of
Bertuldo are not specified in any pleading in the case. 18 SC Circular No. 7, dated March 24, 1988.

On July 14, 1999, petitioners manifested that the trial court having In their Comment, private respondents aver that no grave abuse of
expunged the complaint and nullified all court proceedings, there is no discretion was committed by the trial court in reinstating the complaint
valid case and the complaint should not be admitted for failure to pay the upon the payment of deficiency docket fees because petitioners did not
correct docket fees; that there should be no case to be reinstated and no object thereto within the reglementary period. Besides, Atty. Petalcorin
case to proceed as there is no complaint filed. 19 possessed no legal personality to appear as counsel for the heirs of
Bertuldo until he complies with Section 16, Rule 3 of the Rules of Court. 28
At the outset, we note the procedural error committed by petitioners in (b) Government of the United States of America vs. Purganan34 on bail in
directly filing the instant petition before this Court for it violates the extradition proceedings; (c) Commission on Elections vs. Quijano-
established policy of strict observance of the judicial hierarchy of courts. Padilla35 on government contract involving modernization and
computerization of voters’ registration list; (d) Buklod ng Kawaning EIIB
Although the Supreme Court, Court of Appeals and the Regional Trial vs. Zamora36 on status and existence of a public office; and (e) Fortich vs.
Courts have concurrent jurisdiction to issue writs of certiorari, Corona37 on the so-called "Win-Win Resolution" of the Office of the
prohibition, mandamus, quo warranto, habeas corpus and injunction, President which modified the approval of the conversion to agro-industrial
such concurrence does not give the petitioner unrestricted freedom of area.
choice of court forum.29 As we stated in People vs. Cuaresma:30
In this case, no special and important reason or exceptional and
This Court's original jurisdiction to issue writs of certiorari is not exclusive. compelling circumstance analogous to any of the above cases has been
It is shared by this Court with Regional Trial Courts and with the Court of adduced by the petitioners so as to justify direct recourse to this Court.
Appeals. This concurrence of jurisdiction is not, however, to be taken as The present petition should have been initially filed in the Court of
according to parties seeking any of the writs an absolute, unrestrained Appeals in strict observance of the doctrine on the hierarchy of courts.
freedom of choice of the court to which application therefor will be Failure to do so is sufficient cause for the dismissal of the petition at bar.
directed. There is after all a hierarchy of courts. That hierarchy is
determinative of the venue of appeals, and also serves as a general In any event, even if the Court disregards such procedural flaw, the
determinant of the appropriate forum for petitions for the extraordinary petitioners’ contentions on the substantive aspect of the case fail to invite
writs. A becoming regard for that judicial hierarchy most certainly judgment in their favor.
indicates that petitions for the issuance of extraordinary writs against first
level ("inferior") courts should be filed with the Regional Trial Court, and The unavailability of the writ of certiorari and prohibition in this case is
those against the latter, with the Court of Appeals. A direct invocation of borne out of the fact that petitioners principally assail the Order dated
the Supreme Court’s original jurisdiction to issue these writs should be March 22, 1999 which they never sought reconsideration of, in due time,
allowed only when there are special and important reasons therefor, despite receipt thereof on March 26, 1999. Instead, petitioners went
clearly and specifically set out in the petition. This is [an] established through the motion of filing a supplemental pleading and only when the
policy. It is a policy necessary to prevent inordinate demands upon the latter was denied, or after more than three months have passed, did they
Court’s time and attention which are better devoted to those matters raise the issue that the complaint should not have been reinstated in the
within its exclusive jurisdiction, and to prevent further over-crowding of first place because the trial court had no jurisdiction to do so, having
the Court’s docket.31 already ruled that the complaint shall be expunged.

The rationale for this rule is two-fold: (a) it would be an imposition upon After recognizing the jurisdiction of the trial court by seeking affirmative
the precious time of this Court; and (b) it would cause an inevitable and relief in their motion to serve supplemental pleading upon private
resultant delay, intended or otherwise, in the adjudication of cases, which respondents, petitioners are effectively barred by estoppel from
in some instances had to be remanded or referred to the lower court as challenging the trial court’s jurisdiction. 38 If a party invokes the jurisdiction
the proper forum under the rules of procedure, or as better equipped to of a court, he cannot thereafter challenge the court’s jurisdiction in the
resolve the issues because this Court is not a trier of facts. 32 same case.39 To rule otherwise would amount to speculating on the
fortune of litigation, which is against the policy of the Court. 40
Thus, this Court will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts, and exceptional Nevertheless, there is a need to correct the erroneous impression of the
and compelling circumstances, such as cases of national interest and of trial court as well as the private respondents that petitioners are barred
serious implications, justify the availment of the extraordinary remedy of from assailing the Order dated March 22, 1999 which reinstated the case
writ of certiorari, calling for the exercise of its primary jurisdiction. because it was not objected to within the reglementary period or even
Exceptional and compelling circumstances were held present in the
following cases: (a) Chavez vs. Romulo33 on citizens’ right to bear arms;
thereafter via a motion for reconsideration despite receipt thereof on or if specified the same has been left for determination by the court, the
March 26, 1999. additional filing fee therefor shall constitute a lien on the judgment. It shall
be the responsibility of the Clerk of Court or his duly authorized deputy to
It must be clarified that the said order is but a resolution on an incidental enforce said lien and assess and collect the additional fee.
matter which does not touch on the merits of the case or put an end to
the proceedings.41 It is an interlocutory order since there leaves something Plainly, while the payment of the prescribed docket fee is a jurisdictional
else to be done by the trial court with respect to the merits of the requirement, even its non-payment at the time of filing does not
case.42 As such, it is not subject to a reglementary period. Reglementary automatically cause the dismissal of the case, as long as the fee is paid
period refers to the period set by the rules for appeal or further review of within the applicable prescriptive or reglementary period, more so when
a final judgment or order, i.e., one that ends the litigation in the trial court. the party involved demonstrates a willingness to abide by the rules
prescribing such payment.46 Thus, when insufficient filing fees were
Moreover, the remedy against an interlocutory order is generally not to initially paid by the plaintiffs and there was no intention to defraud the
resort forthwith to certiorari, but to continue with the case in due course government, the Manchester rule does not apply.47
and, when an unfavorable verdict is handed down, to take an appeal in
the manner authorized by law.43 Only when the court issued such order Under the peculiar circumstances of this case, the reinstatement of the
without or in excess of jurisdiction or with grave abuse of discretion and complaint was just and proper considering that the cause of action of
when the assailed interlocutory order is patently erroneous and the private respondents, being a real action, prescribes in thirty years,48 and
remedy of appeal would not afford adequate and expeditious relief private respondents did not really intend to evade the payment of the
will certiorari be considered an appropriate remedy to assail an prescribed docket fee but simply contend that they could not be faulted
interlocutory order.44 Such special circumstances are absolutely wanting in for inadequate assessment because the clerk of court made no notice of
the present case. demand or reassessment.49 They were in good faith and simply relied on
the assessment of the clerk of court.
Time and again, the Court has held that the Manchester rule has been
modified in Sun Insurance Office, Ltd. (SIOL) vs. Asuncion45 which defined Furthermore, the fact that private respondents prayed for payment of
the following guidelines involving the payment of docket fees: damages "in amounts justified by the evidence" does not call for the
dismissal of the complaint for violation of SC Circular No. 7, dated March
1. It is not simply the filing of the complaint or appropriate initiatory 24, 1988 which required that all complaints must specify the amount of
pleading, but the payment of the prescribed docket fee, that vests a trial damages sought not only in the body of the pleadings but also in the
court with jurisdiction over the subject-matter or nature of the action. prayer in order to be accepted and admitted for filing. Sun
Where the filing of the initiatory pleading is not accompanied by payment Insurance effectively modified SC Circular No. 7 by providing that filing
of the docket fee, the court may allow payment of the fees within a fees for damages and awards that cannot be estimated constitute liens
reasonable time but in no case beyond the applicable prescriptive or on the awards finally granted by the trial court. 50
reglementary period.
Thus, while the docket fees were based only on the real property
2. The same rule applies to permissive counterclaims, third-party claims valuation, the trial court acquired jurisdiction over the action, and
and similar pleadings, which shall not be considered filed until and unless judgment awards which were left for determination by the court or as may
the filing fee prescribed therefor is paid. The court may also allow be proven during trial would still be subject to additional filing fees which
payment of said fee within a reasonable time but also in no case beyond shall constitute a lien on the judgment. It would then be the responsibility
its applicable prescriptive or reglementary period. of the Clerk of Court of the trial court or his duly authorized deputy to
enforce said lien and assess and collect the additional fees. 51
3. Where the trial court acquires jurisdiction over a claim by the filing of
the appropriate pleading and payment of the prescribed filing fee but, It is worth noting that when Bertuldo filed his Answer on July 2, 1991, he
subsequently, the judgment awards a claim not specified in the pleading, did not raise the issue of lack of jurisdiction for non-payment of correct
docket fees. Instead, he based his defense on a claim of ownership and jurisdiction, or with grave abuse of discretion which is tantamount to lack
participated in the proceedings before the trial court. It was only in or in excess of jurisdiction,59 not to be used for any other purpose,60 such
September 22, 1998 or more than seven years after filing the answer, as to cure errors in proceedings or to correct erroneous conclusions of
and under the auspices of a new counsel, that the issue of jurisdiction law or fact.61 A contrary rule would lead to confusion, and seriously
was raised for the first time in the motion to expunge by Bertuldo’s heirs. hamper the administration of justice.

After Bertuldo vigorously participated in all stages of the case before the Petitioners utterly failed to show that the trial court gravely abused its
trial court and even invoked the trial court’s authority in order to ask for discretion in issuing the assailed resolutions. On the contrary, it acted
affirmative relief, petitioners, considering that they merely stepped into prudently, in accordance with law and jurisprudence.
the shoes of their predecessor, are effectively barred by estoppel from
challenging the trial court’s jurisdiction. Although the issue of jurisdiction WHEREFORE, the instant petition for certiorari is DISMISSED for lack of
may be raised at any stage of the proceedings as the same is conferred merit.
by law, it is nonetheless settled that a party may be barred from raising it
on ground of laches or estoppel.52 No costs.

Moreover, no formal substitution of the parties was effected within thirty SO ORDERED.
days from date of death of Bertuldo, as required by Section 16, Rule 3 53 of
the Rules of Court. Needless to stress, the purpose behind the rule on
Puno, (Chairman), Callejo, Sr., Tinga and Chico-Nazario, JJ., concur.
substitution is the protection of the right of every party to due process. It
is to ensure that the deceased party would continue to be properly
represented in the suit through the duly appointed legal representative of
his estate.54 Non-compliance with the rule on substitution would render the
proceedings and judgment of the trial court infirm because the court
acquires no jurisdiction over the persons of the legal representatives or of
the heirs on whom the trial and the judgment would be binding. 55 Thus,
proper substitution of heirs must be effected for the trial court to acquire
jurisdiction over their persons and to obviate any future claim by any heir
that he was not apprised of the litigation against Bertuldo or that he did
not authorize Atty. Petalcorin to represent him.

The list of names and addresses of the heirs was submitted sixteen
months after the death of Bertuldo and only when the trial court directed
Atty. Petalcorin to comply with the provisions of Section 16, Rule 3 of the
Rules of Court. Strictly speaking therefore, before said compliance, Atty.
Petalcorin had no standing in the court a quo when he filed his pleadings.
Be that as it may, the matter has been duly corrected by the Order of the
trial court dated October 15, 1999.

To be sure, certiorari under Rule 6556 is a remedy narrow in scope and

inflexible in character. It is not a general utility tool in the legal
workshop.57 It offers only a limited form of review. Its principal function is
to keep an inferior tribunal within its jurisdiction. 58 It can be invoked only
for an error of jurisdiction, that is, one where the act complained of was
issued by the court, officer or a quasi-judicial body without or in excess of
G.R. Nos. 79937-38 February 13, 1989 objection was disregarded by respondent Judge Jose P. Castro who was
then presiding over said case. Upon the order of this Court, the records
SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J. of said case together with twenty-two other cases assigned to different
WARBY, petitioners, branches of the Regional Trial Court of Quezon City which were under
vs. investigation for under-assessment of docket fees were transmitted to
HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, this Court. The Court thereafter returned the said records to the trial court
Regional Trial Court, Quezon City and MANUEL CHUA UY PO with the directive that they be re-raffled to the other judges in Quezon
TIONG, respondents. City, to the exclusion of Judge Castro. Civil Case No. Q-41177 was re-
raffled to Branch 104, a sala which was then vacant.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices
for petitioners. Tanjuatco, Oreta, Tanjuatco, Berenguer & Sanvicente Law On October 15, 1985, the Court en banc issued a Resolution in
Offices for private respondent. Administrative Case No. 85-10-8752-RTC directing the judges in said
cases to reassess the docket fees and that in case of deficiency, to order
its payment. The Resolution also requires all clerks of court to issue
certificates of re-assessment of docket fees. All litigants were likewise
required to specify in their pleadings the amount sought to be recovered
GANCAYCO, J.:
in their complaints.
Again the Court is asked to resolve the issue of whether or not a court
On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil
acquires jurisdiction over a case when the correct and proper docket fee
Case No. Q-41177 was temporarily assigned, issuedan order to the Clerk
has not been paid.
of Court instructing him to issue a certificate of assessment of the docket
fee paid by private respondent and, in case of deficiency, to include the
On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for same in said certificate.
brevity) filed a complaint with the Regional Trial Court of Makati, Metro
Manila for the consignation of a premium refund on a fire insurance policy
On January 7, 1984, to forestall a default, a cautionary answer was filed
with a prayer for the judicial declaration of its nullity against private
by petitioners. On August 30,1984, an amended complaint was filed by
respondent Manuel Uy Po Tiong. Private respondent as declared in
private respondent including the two additional defendants aforestated.
default for failure to file the required answer within the reglementary
period.
Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was
thereafter assigned, after his assumption into office on January 16, 1986,
On the other hand, on March 28, 1984, private respondent filed a
issued a Supplemental Order requiring the parties in the case to
complaint in the Regional Trial Court of Quezon City for the refund of
comment on the Clerk of Court's letter-report signifying her difficulty in
premiums and the issuance of a writ of preliminary attachment which was
complying with the Resolution of this Court of October 15, 1985 since the
docketed as Civil Case No. Q-41177, initially against petitioner SIOL, and
pleadings filed by private respondent did not indicate the exact amount
thereafter including E.B. Philipps and D.J. Warby as additional
sought to be recovered. On January 23, 1986, private respondent filed a
defendants. The complaint sought, among others, the payment of actual,
"Compliance" and a "Re-Amended Complaint" stating therein a claim of
compensatory, moral, exemplary and liquidated damages, attorney's
"not less than Pl0,000,000. 00 as actual compensatory damages" in the
fees, expenses of litigation and costs of the suit. Although the prayer in
prayer. In the body of the said second amended complaint however,
the complaint did not quantify the amount of damages sought said
private respondent alleges actual and compensatory damages and
amount may be inferred from the body of the complaint to be about Fifty
attorney's fees in the total amount of about P44,601,623.70.
Million Pesos (P50,000,000.00).
On January 24, 1986, Judge Asuncion issued another Order admitting
Only the amount of P210.00 was paid by private respondent as docket
the second amended complaint and stating therein that the same
fee which prompted petitioners' counsel to raise his objection. Said
constituted proper compliance with the Resolution of this Court and that a fee. Petitioners allege that while it may be true that private respondent
copy thereof should be furnished the Clerk of Court for the reassessment had paid the amount of P182,824.90 as docket fee as herein-above
of the docket fees. The reassessment by the Clerk of Court based on related, and considering that the total amount sought to be recovered in
private respondent's claim of "not less than P10,000,000.00 as actual and the amended and supplemental complaint is P64,601,623.70 the docket
compensatory damages" amounted to P39,786.00 as docket fee. This fee that should be paid by private respondent is P257,810.49, more or
was subsequently paid by private respondent. less. Not having paid the same, petitioners contend that the complaint
should be dismissed and all incidents arising therefrom should be
Petitioners then filed a petition for certiorari with the Court of Appeals annulled. In support of their theory, petitioners cite the latest ruling of the
questioning the said order of Judie Asuncion dated January 24, 1986. Court in Manchester Development Corporation vs. CA, 4 as follows:

On April 24, 1986, private respondent filed a supplemental complaint The Court acquires jurisdiction over any case only upon
alleging an additional claim of P20,000,000.00 as d.qmages so the total the payment of the prescribed docket fee. An amendment
claim amounts to about P64,601,623.70. On October 16, 1986, or some of the complaint or similar pleading will not thereby vest
seven months after filing the supplemental complaint, the private jurisdiction in the Court, much less the payment of the
respondent paid the additional docket fee of P80,396.00. 1 docket fee based on the amounts sought in the amended
pleading. The ruling in the Magaspi Case in so far as it is
On August 13, 1987, the Court of Appeals rendered a decision ruling, inconsistent with this pronouncement is overturned and
among others, as follows: reversed.

WHEREFORE, judgment is hereby rendered: On the other hand, private respondent claims that the ruling
in Manchester cannot apply retroactively to Civil Case No. Q41177 for at
the time said civil case was filed in court there was no
1. Denying due course to the petition in CA-G.R. SP No.
such Manchester ruling as yet. Further, private respondent avers that
1, 09715 insofar as it seeks annulment of the order
what is applicable is the ruling of this Court in Magaspi v.
Ramolete, 5 wherein this Court held that the trial court acquired
(a) denying petitioners' motion to dismiss the complaint, jurisdiction over the case even if the docket fee paid was insufficient.
as amended, and
The contention that Manchester cannot apply retroactively to this case is
(b) granting the writ of preliminary attachment, but giving untenable. Statutes regulating the procedure of the courts will be
due course to the portion thereof questioning the construed as applicable to actions pending and undetermined at the time
reassessment of the docketing fee, and requiring the of their passage. Procedural laws are retrospective in that sense and to
Honorable respondent Court to reassess the docketing that extent. 6
fee to be paid by private respondent on the basis of the
amount of P25,401,707.00. 2
In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of
the full amount of the docket fee is an indispensable step for the
Hence, the instant petition. perfection of an appeal. In a forcible entry and detainer case before the
justice of the peace court of Manaoag, Pangasinan, after notice of a
During the pendency of this petition and in conformity with the said judgment dismissing the case, the plaintiff filed a notice of appeal with
judgment of respondent court, private respondent paid the additional said court but he deposited only P8.00 for the docket fee, instead of
docket fee of P62,432.90 on April 28, 1988. 3 P16.00 as required, within the reglementary period of appeal of five (5)
days after receiving notice of judgment. Plaintiff deposited the additional
The main thrust of the petition is that the Court of Appeals erred in not P8.00 to complete the amount of the docket fee only fourteen (14) days
finding that the lower court did not acquire jurisdiction over Civil Case No. later. On the basis of these facts, this court held that the Court of First
Q-41177 on the ground of nonpayment of the correct and proper docket
Instance did notacquire jurisdiction to hear and determine the appeal as moral damages, attorney's fees in the amount of P250,000.00, the costs
the appeal was not thereby perfected. of the action and exemplary damages in the amount of P500,000.00.

In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention The defendant then filed a motion to compel the plaintiff to pay the
to become a Filipino citizen by sending it through registered mail to the correct amount of the docket fee to which an opposition was filed by the
Office of the Solicitor General in 1953 but the required filing fee was paid plaintiff alleging that the action was for the recovery of a parcel of land so
only in 1956, barely 5V2 months prior to the filing of the petition for the docket fee must be based on its assessed value and that the amount
citizenship. This Court ruled that the declaration was not filed in of P60.00 was the correct docketing fee. The trial court ordered the
accordance with the legal requirement that such declaration should be plaintiff to pay P3,104.00 as filing fee.
filed at least one year before the filing of the petition for citizenship.
Citing Lazaro, this Court concluded that the filing of petitioner's The plaintiff then filed a motion to admit the amended complaint to
declaration of intention on October 23, 1953 produced no legal effect until include the Republic as the defendant. In the prayer of the amended
the required filing fee was paid on May 23, 1956. complaint the exemplary damages earlier sought was eliminated. The
amended prayer merely sought moral damages as the court may
In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and determine, attorney's fees of P100,000.00 and the costs of the action.
Lee were applied. It was an original petition for quo warranto contesting The defendant filed an opposition to the amended complaint. The
the right to office of proclaimed candidates which was mailed, addressed opposition notwithstanding, the amended complaint was admitted by the
to the clerk of the Court of First Instance, within the one-week period after trial court. The trial court reiterated its order for the payment of the
the proclamation as provided therefor by law.10 However, the required additional docket fee which plaintiff assailed and then challenged before
docket fees were paid only after the expiration of said period. this Court. Plaintiff alleged that he paid the total docket fee in the amount
Consequently, this Court held that the date of such payment must be of P60.00 and that if he has to pay the additional fee it must be based on
deemed to be the real date of filing of aforesaid petition and not the date the amended complaint.
when it was mailed.
The question posed, therefore, was whether or not the plaintiff may be
Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the considered to have filed the case even if the docketing fee paid was not
docket fee must be paid before a court will act on a petition or complaint. sufficient. In Magaspi, We reiterated the rule that the case was deemed
However, we also held that said rule is not applicable when petitioner filed only upon the payment of the correct amount for the docket fee
seeks the probate of several wills of the same decedent as he is not regardless of the actual date of the filing of the complaint; that there was
required to file a separate action for each will but instead he may have an honest difference of opinion as to the correct amount to be paid as
other wills probated in the same special proceeding then pending before docket fee in that as the action appears to be one for the recovery of
the same court. property the docket fee of P60.00 was correct; and that as the action is
also one, for damages, We upheld the assessment of the additional
Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that docket fee based on the damages alleged in the amended complaint as
a case is deemed filed only upon payment of the docket fee regardless of against the assessment of the trial court which was based on the
the actual date of its filing in court. Said case involved a complaint for damages alleged in the original complaint.
recovery of ownership and possession of a parcel of land with damages
filed in the Court of First Instance of Cebu. Upon the payment of P60.00 However, as aforecited, this Court
for the docket fee and P10.00 for the sheriffs fee, the complaint was overturned Magaspi in Manchester. Manchester involves an action for
docketed as Civil Case No. R-11882. The prayer of the complaint sought torts and damages and specific performance with a prayer for the
that the Transfer Certificate of Title issued in the name of the defendant issuance of a temporary restraining order, etc. The prayer in said case is
be declared as null and void. It was also prayed that plaintiff be declared for the issuance of a writ of preliminary prohibitory injunction during the
as owner thereof to whom the proper title should be issued, and that pendency of the action against the defendants' announced forfeiture of
defendant be made to pay monthly rentals of P3,500.00 from June 2, the sum of P3 Million paid by the plaintiffs for the property in question, the
1948 up to the time the property is delivered to plaintiff, P500,000.00 as attachment of such property of defendants that may be sufficient to
satisfy any judgment that may be rendered, and, after hearing, the could be amended. Consequently, the order admitting the amended
issuance of an order requiring defendants to execute a contract of complaint and all subsequent proceedings and actions taken by the trial
purchase and sale of the subject property and annul defendants' illegal court were declared null and void.13
forfeiture of the money of plaintiff. It was also prayed that the defendants
be made to pay the plaintiff jointly and severally, actual, compensatory The present case, as above discussed, is among the several cases of
and exemplary damages as well as 25% of said amounts as may be under-assessment of docket fee which were investigated by this Court
proved during the trial for attorney's fees. The plaintiff also asked the trial together with Manchester. The facts and circumstances of this case are
court to declare the tender of payment of the purchase price of plaintiff similar to Manchester. In the body of the original complaint, the total
valid and sufficient for purposes of payment, and to make the injunction amount of damages sought amounted to about P50 Million. In the prayer,
permanent. The amount of damages sought is not specified in the prayer the amount of damages asked for was not stated. The action was for the
although the body of the complaint alleges the total amount of over P78 refund of the premium and the issuance of the writ of preliminary
Millon allegedly suffered by plaintiff. attachment with damages. The amount of only P210.00 was paid for the
docket fee. On January 23, 1986, private respondent filed an amended
Upon the filing of the complaint, the plaintiff paid the amount of only complaint wherein in the prayer it is asked that he be awarded no less
P410.00 for the docket fee based on the nature of the action for specific than P10,000,000.00 as actual and exemplary damages but in the body
performance where the amount involved is not capable of pecuniary of the complaint the amount of his pecuniary claim is approximately
estimation. However, it was obvious from the allegations of the complaint P44,601,623.70. Said amended complaint was admitted and the private
as well as its designation that the action was one for damages and respondent was reassessed the additional docket fee of P39,786.00
specific performance. Thus, this court held the plaintiff must be assessed based on his prayer of not less than P10,000,000.00 in damages, which
the correct docket fee computed against the amount of damages of about he paid.
P78 Million, although the same was not spelled out in the prayer of the
complaint. On April 24, 1986, private respondent filed a supplemental complaint
alleging an additional claim of P20,000,000.00 in damages so that his
Meanwhile, plaintiff through another counsel, with leave of court, filed an total claim is approximately P64,601,620.70. On October 16, 1986,
amended complaint on September 12, 1985 by the inclusion of another private respondent paid an additional docket fee of P80,396.00. After the
co-plaintiff and eliminating any mention of the amount of damages in the promulgation of the decision of the respondent court on August 31, 1987
body of the complaint. The prayer in the original complaint was wherein private respondent was ordered to be reassessed for additional
maintained. docket fee, and during the pendency of this petition, and after the
promulgation of Manchester, on April 28, 1988, private respondent paid
On October 15, 1985, this Court ordered the re-assessment of the docket an additional docket fee of P62,132.92. Although private respondent
fee in the said case and other cases that were investigated. On appears to have paid a total amount of P182,824.90 for the docket fee
November 12, 1985, the trial court directed the plaintiff to rectify the considering the total amount of his claim in the amended and
amended complaint by stating the amounts which they were asking for. supplemental complaint amounting to about P64,601,620.70, petitioner
This plaintiff did as instructed. In the body of the complaint the amount of insists that private respondent must pay a docket fee of P257,810.49.
damages alleged was reduced to P10,000,000.00 but still no amount of
damages was specified in the prayer. Said amended complaint was The principle in Manchester could very well be applied in the present
admitted. case. The pattern and the intent to defraud the government of the docket
fee due it is obvious not only in the filing of the original complaint but also
Applying the principle in Magaspi that "the case is deemed filed only in the filing of the second amended complaint.
upon payment of the docket fee regardless of the actual date of filing in
court," this Court held that the trial court did not acquire jurisdiction over However, in Manchester, petitioner did not pay any additional docket fee
the case by payment of only P410.00 for the docket fee. Neither can the until] the case was decided by this Court on May 7, 1987. Thus,
amendment of the complaint thereby vest jurisdiction upon the Court. For in Manchester, due to the fraud committed on the government, this Court
all legal purposes there was no such original complaint duly filed which held that the court a quo did not acquire jurisdiction over the case and
that the amended complaint could not have been admitted inasmuch as WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of
the original complaint was null and void. Court of the court a quo is hereby instructed to reassess and determine
the additional filing fee that should be paid by private respondent
In the present case, a more liberal interpretation of the rules is called for considering the total amount of the claim sought in the original complaint
considering that, unlike Manchester, private respondent demonstrated his and the supplemental complaint as may be gleaned from the allegations
willingness to abide by the rules by paying the additional docket fees as and the prayer thereof and to require private respondent to pay the
required. The promulgation of the decision in Manchester must have had deficiency, if any, without pronouncement as to costs.
that sobering influence on private respondent who thus paid the
additional docket fee as ordered by the respondent court. It triggered his SO ORDERED.
change of stance by manifesting his willingness to pay such additional
docket fee as may be ordered. Fernan (C.J), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
Feliciano, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea and
Nevertheless, petitioners contend that the docket fee that was paid is still Regalado, JJ., concur.
insufficient considering the total amount of the claim. This is a matter
which the clerk of court of the lower court and/or his duly authorized
docket clerk or clerk in-charge should determine and, thereafter, if any
amount is found due, he must require the private respondent to pay the
same.

Thus, the Court rules as follows:

1. It is not simply the filing of the complaint or appropriate initiatory

pleading, but the payment of the prescribed docket fee, that vests a trial
court with jurisdiction over the subject matter or nature of the action.
Where the filing of the initiatory pleading is not accompanied by payment
of the docket fee, the court may allow payment of the fee within a
reasonable time but in no case beyond the applicable prescriptive or
reglementary period.

2. The same rule applies to permissive counterclaims, third party claims

and similar pleadings, which shall not be considered filed until and unless
the filing fee prescribed therefor is paid. The court may also allow
payment of said fee within a reasonable time but also in no case beyond
its applicable prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of
the appropriate pleading and payment of the prescribed filing fee but,
subsequently, the judgment awards a claim not specified in the pleading,
or if specified the same has been left for determination by the court, the
additional filing fee therefor shall constitute a lien on the judgment. It shall
be the responsibility of the Clerk of Court or his duly authorized deputy to
enforce said lien and assess and collect the additional fee.
G.R. No. L-41423 February 23, 1989 consideration from Dagupan City to Manila. On January 12, 1973, said
cargo truck driven by defendant Domingo Villa was on its way to
LUIS JOSEPH, petitioner Valenzuela, Bulacan from Pangasinan. Petitioner, with a cargo of
vs. livestock, boarded the cargo truck at Dagupan City after paying the sum
HON. CRISPIN V. BAUTISTA, PATROCINIO PEREZ, ANTONIO of P 9.00 as one way fare to Valenzuela, Bulacan. While said cargo truck
SIOSON, JACINTO PAGARIGAN, ALBERTO CARDENO and LAZARO was negotiating the National Highway proceeding towards Manila,
VILLANUEVA, respondents. defendant Domingo Villa tried to overtake a tricycle likewise proceeding
in the same direction. At about the same time, a pick-up truck with Plate
Jose M. Castillo for petitioner. No. 45-95 B, supposedly owned by respondents Antonio Sioson and
Jacinto Pagarigan, then driven by respondent Lazaro Villanueva, tried to
overtake the cargo truck which was then in the process of overtaking the
Arturo Z. Sioson for private respondent, Patrocinio Perez.
tricycle, thereby forcing the cargo truck to veer towards the shoulder of
the road and to ram a mango tree. As a result, petitioner sustained a
Cipriano B. Farrales for private respondents except P. Perez. bone fracture in one of his legs. 1

The following proceedings thereafter took place: 2

REGALAD0, J.: Petitioner filed a complaint for damages against respondent Patrocinio
Perez, as owner of the cargo truck, based on a breach of contract of
Petitioner prays in this appeal by certiorari for the annulment and setting carriage and against respondents Antonio Sioson and Lazaro Villanueva,
aside of the order, dated July 8, 1975, dismissing petitioner's complaint, as owner and driver, respectively, of the pick-up truck, based on quasi-
as well as the order, dated August 22, 1975, denying his motion for delict.
reconsideration of said dismissal, both issued by respondent Judge
Crispin V. Bautista of the former Court of First Instance of Bulacan, Respondent Sioson filed his answer alleging that he is not and never was
Branch III. an owner of the pick-up truck and neither would he acquire ownership
thereof in the future.
Petitioner herein is the plaintiff in Civil Case No. 50-V-73 entitled "Luis
Joseph vs. Patrocinio Perez, Domingo Villa y de Jesus, Rosario Vargas, On September 24, 1973, petitioner, with prior leave of court, filed his
Antonio Sioson, Lazaro Villanueva and Jacinto Pagarigan", filed before amended complaint impleading respondents Jacinto Pagarigan and a
the Court of First Instance of Bulacan, Branch III, and presided over by certain Rosario Vargas as additional alternative defendants. Petitioner
respondent Judge Crispin V. Bautista; while private respondents apparently could not ascertain who the real owner of said cargo truck
Patrocinio Perez, Antonio Sioson, Jacinto Pagarigan and Lazaro was, whether respondents Patrocinio Perez or Rosario Vargas, and who
Villanueva are four of the defendants in said case. Defendant Domingo was the real owner of said pick-up truck, whether respondents Antonio
Villa y de Jesus did not answer either the original or the amended Sioson or Jacinto Pagarigan.
complaint, while defendant Rosario Vargas could not be served with
summons; and respondent Alberto Cardeno is included herein as he was
Respondent Perez filed her amended answer with crossclaim against her
impleaded by defendant Patrocinio Perez, one of respondents herein, in
co-defendants for indemnity and subrogation in the event she is ordered
her cross-claim.
to pay petitioner's claim, and therein impleaded cross-defendant Alberto
Cardeno as additional alternative defendant.
The generative facts of this case, as culled from the written submission of
the parties, are as follows:
On September 27, 1974, respondents Lazaro Villanueva, Alberto
Cardeno, Antonio Sioson and Jacinto Pagarigan, thru their insurer,
Respondent Patrocinio Perez is the owner of a cargo truck with Plate No. Insurance Corporation of the Philippines, paid petitioner's claim for
25-2 YT Phil. '73 for conveying cargoes and passengers for a
injuries sustained in the amount of P 1,300.00. By reason thereof, violation of several separate and distinct legal obligations. However
petitioner executed a release of claim releasing from liability the following where there is only one delict or wrong, there is but a single cause of
parties, viz: Insurance Corporation of the Philippines, Alberto Cardeno, action regardless of the number of rights that may have been violated
Lazaro Villanueva, Antonio Sioson and Jacinto Pagarigan. belonging to one person. 4

On December 2, 1974, respondents Lazaro Villanueva, Alberto Cardeno The singleness of a cause of action lies in the singleness of the- delict or
and their insurer, the Insurance Corporation of the Philippines, paid wrong violating the rights of one person. Nevertheless, if only one injury
respondent Patrocinio Perez' claim for damages to her cargo truck in the resulted from several wrongful acts, only one cause of action arises. 5 In
amount of P 7,420.61. the case at bar, there is no question that the petitioner sustained a single
injury on his person. That vested in him a single cause of action, albeit
Consequently, respondents Sioson, Pagarigan, Cardeno and Villanueva with the correlative rights of action against the different respondents
filed a "Motion to Exonerate and Exclude Defs/ Cross defs. Alberto through the appropriate remedies allowed by law.
Cardeno, Lazaro Villanueva, Antonio Sioson and Jacinto Pagarigan on
the Instant Case", alleging that respondents Cardeno and Villanueva The trial court was, therefore, correct in holding that there was only one
already paid P 7,420.61 by way of damages to respondent Perez, and cause of action involved although the bases of recovery invoked by
alleging further that respondents Cardeno, Villanueva, Sioson and petitioner against the defendants therein were not necessarily Identical
Pagarigan paid P 1,300.00 to petitioner by way of amicable settlement. since the respondents were not identically circumstanced. However, a
recovery by the petitioner under one remedy necessarily bars recovery
Thereafter, respondent Perez filed her "Opposition to Cross-defs.' motion under the other. This, in essence, is the rationale for the proscription in
dated Dec. 2, 1974 and Counter Motion" to dismiss. The so-called our law against double recovery for the same act or omission which,
counter motion to dismiss was premised on the fact that the release of obviously, stems from the fundamental rule against unjust enrichment.
claim executed by petitioner in favor of the other respondents inured to
the benefit of respondent Perez, considering that all the respondents are There is no question that the respondents herein are solidarily liable to
solidarity liable to herein petitioner. petitioner. On the evidence presented in the court below, the trial court
found them to be so liable. It is undisputed that petitioner, in his amended
On July 8, 1975, respondent judge issued the questioned order complaint, prayed that the trial court hold respondents jointly and
dismissing the case, and a motion for the reconsideration thereof was severally liable. Furthermore, the allegations in the amended complaint
denied. Hence, this appeal, petitioner contending that respondent judge clearly impleaded respondents as solidary debtors. We cannot accept the
erred in declaring that the release of claim executed by petitioner in favor vacuous contention of petitioner that said allegations are intended to
of respondents Sioson, Villanueva and Pagarigan inured to the benefit of apply only in the event that execution be issued in his favor. There is
respondent Perez; ergo, it likewise erred in dismissing the case. nothing in law or jurisprudence which would countenance such a
procedure.
We find the present recourse devoid of merit.
The respondents having been found to be solidarity liable to petitioner,
The argument that there are two causes of action embodied in the full payment made by some of the solidary debtors and their
petitioner's complaint, hence the judgment on the compromise agreement subsequent release from any and all liability to petitioner inevitably
under the cause of action based on quasi-delict is not a bar to the cause resulted in the extinguishment and release from liability of the other
of action for breach of contract of carriage, is untenable. solidary debtors, including herein respondent Patrocinio Perez.

A cause of action is understood to be the delict or wrongful act or The claim that there was an agreement entered into between the parties
omission committed by the defendant in violation of the primary rights of during the pre-trial conference that, after such payment made by the
the plaintiff. 3 It is true that a single act or omission can be violative of other respondents, the case shall proceed as against respondent Perez
various rights at the same time, as when the act constitutes juridically a is both incredible and unsubstantiated. There is nothing in the records to
show, either by way of a pre-trial order, minutes or a transcript of the The loan agreement provided, among other things, that DATICOR shall
notes of the alleged pre-trial hearing, that there was indeed such as pay: (1) a service fee of one percent (1%) per annum (later increased to
agreement. six percent [6%] per annum) on the outstanding balance of the peso loan;
(2) 12 percent (12%) per annum interest on the peso loan; and (3)
WHEREFORE, the challenged orders of the respondent judge are hereby penalty charges of two percent (2%) per month in case of default.
AFFIRMED.
The loans were secured by real estate mortgages over six parcels of land
SO ORDERED. – one situated in Manila (the Otis property) which was registered in the
name of petitioner Ernesto C. Del Rosario, and five in Mati, Davao
Oriental – and chattel mortgages over pieces of machinery and
equipment.

Petitioners paid a total of P3 million to PDCP, which the latter applied to

interest, service fees and penalty charges. This left petitioners, by
PDCP's computation, with an outstanding balance on the principal of
G.R. No. 150134 October 31, 2007 more than P10 million as of May 15, 1983.

ERNESTO C. DEL ROSARIO and DAVAO TIMBER By March 31, 1982, petitioners had filed a complaint against PDCP
CORPORATION, petitioners, before the then Court of First Instance (CFI) of Manila for violation of the
vs. Usury Law, annulment of contract and damages. The case, docketed as
FAR EAST BANK & TRUST COMPANY1 and PRIVATE Civil Case No. 82-8088, was dismissed by the CFI.
DEVELOPMENT CORPORATION OF THE PHILIPPINES, respondents.
On appeal, the then Intermediate Appellate Court (IAC) set aside the
DECISION CFI's dismissal of the complaint and declared void and of no effect the
stipulation of interest in the loan agreement between DATICOR and
CARPIO MORALES, J.: PDCP.

The Regional Trial Court (RTC) of Makati City, Branch "65" (sic) 2 having, PDCP appealed the IAC's decision to this Court where it was docketed
by Decision3 of July 10, 2001, dismissed petitioners' complaint in Civil as G.R. No. 73198.
Case No. 00-540 on the ground of res judicata and splitting of a cause of
action, and by Order of September 24, 20014 denied their motion for In the interim, PDCP assigned a portion of its receivables from petitioners
reconsideration thereof, petitioners filed the present petition for review on (the receivables) to its co-respondent Far East Bank and Trust Company
certiorari. (FEBTC) under a Deed of Assignment dated April 10, 19875 for a
consideration of P5,435,000. The Deed of Assignment was later
From the rather lengthy history of the present controversy, a recital of the amended by two Supplements.6
following material facts culled from the records is in order.
FEBTC, as assignee of the receivables, and petitioners later executed a
On May 21, 1974, petitioner Davao Timber Corporation (DATICOR) and Memorandum of Agreement (MOA) dated December 8, 1988 whereby
respondent Private Development Corporation of the Philippines (PDCP) petitioners agreed to, as they did pay FEBTC7 the amount of P6.4
entered into a loan agreement under which PDCP extended to DATICOR million as full settlement of the receivables.
a foreign currency loan of US $265,000 and a peso loan of P2.5 million or
a total amount of approximately P4.4 million, computed at the then On September 2, 1992, this Court promulgated its Decision in G.R. No.
prevailing rate of exchange of the dollar with the peso. 731988 affirming in toto the decision of the IAC. It determined that after
deducting the P3 million earlier paid by petitioners to PDCP, their receivables based on the terms of the Deed of Assignment or on the
remaining balance on the principal loan was only P1.4 million. general principle of equity.

Petitioners thus filed on April 25, 1994 a Complaint 9 for sum of Noting, however, that DATICOR claimed in its complaint only the amount
money against PDCP and FEBTC before the RTC of Makati, mainly to of P965,000 from FEBTC, the CA held that it could not grant a relief
recover the excess payment which they computed to be P5.3 different from or in excess of that prayed for.
million10 – P4.335 million from PDCP, and P965,000 from FEBTC. The
case, Civil Case No. 94-1610, was raffled to Branch 132 of the Makati Finally, the CA held that the claim of PDCP against DATICOR for the
RTC. payment of P1.4 million had no basis, DATICOR's obligation having
already been paid in full, overpaid in fact, when it paid assignee FEBTC
On May 31, 1995, Branch 132 of the Makati RTC rendered a decision11 in the amount of P6.4 million.
Civil Case No. 94-1610 ordering PDCP to pay petitioners the sum
of P4.035 million,12 to bear interest at 12% per annum from April 25, 1994 Accordingly, the CA ordered PDCP to execute a release or cancellation
until fully paid; to execute a release or cancellation of the mortgages on of the mortgages it was holding over the Mati real properties and the
the five parcels of land in Mati, Davao Oriental and on the pieces of machinery and equipment, and to return the corresponding certificates of
machinery and equipment and to return the corresponding titles to title to petitioners. And it ordered FEBTC to pay petitioners the amount
petitioners; and to pay the costs of the suit. of P965,000 with legal interest from the date of the promulgation of its
judgment.
As for the complaint of petitioners against respondent FEBTC, the trial
court dismissed it for lack of cause of action, ratiocinating that the MOA FEBTC's motion for reconsideration of the CA Decision was denied, and
between petitioners and FEBTC was not subject to this Court's Decision so was its subsequent appeal to this Court.
in G.R. No. 73198, FEBTC not being a party thereto.
On April 25, 2000, petitioners filed before the RTC of Makati a
From the trial court's decision, petitioners and respondent PDCP Complaint17 against FEBTC to recover the balance of the excess
appealed to the Court of Appeals (CA). The appeal was docketed as CA- payment of P4.335 million.18 The case was docketed as Civil Case No.
G.R. CV No. 50591. 00-540, the precursor of the present case and raffled to Branch 143 of
the RTC.
On May 22, 1998, the CA rendered a decision13 in CA-G.R. CV No.
50591, holding that petitioners' outstanding obligation, which this Court In its Answer,19 FEBTC denied responsibility, it submitting that nowhere in
had determined in G.R. No. 73198 to be P1.4 million, could not be the dispositive portion of the CA Decision in CA-G.R. CV No. 50591 was
increased or decreased by any act of the creditor PDCP. it held liable to return the whole amount of P5.435 million representing
the consideration for the assignment to it of the receivables, and since
The CA held that when PDCP assigned its receivables, the amount petitioners failed to claim the said whole amount in their original
payable to it by DATICOR was the same amount payable to assignee complaint in Civil Case No. 94-1610 as they were merely claiming the
FEBTC, irrespective of any stipulation that PDCP and FEBTC might have amount of P965,000 from it, they were barred from claiming it.
provided in the Deed of Assignment, DATICOR not having been a party
thereto, hence, not bound by its terms. FEBTC later filed a Third Party Complaint20 against PDCP praying that
the latter be made to pay the P965,000 and the interests adjudged by the
Citing Articles 215414 and 216315 of the Civil Code which embody the CA in favor of petitioners, as well as the P4.335 million and interests that
principle of solutio indebiti, the CA held that the party bound to refund the petitioners were claiming from it. It posited that PDCP should be held
excess payment of P5 million16 was FEBTC as it received the liable because it received a consideration of P5.435 million when it
overpayment; and that FEBTC could recover from PDCP the amount assigned the receivables.
of P4.035 million representing its overpayment for the assigned
Answering21 the Third Party Complaint, PDCP contended that since covered by this Agreement." That statement in the MOA, the trial court
petitioners were not seeking the recovery of the amount of P965,000, the ruled, categorically made only the loan subject to this Court's Decision in
same cannot be recovered via the third party complaint. G.R. No. 73198, hence, it was with the parties' full knowledge and
consent that petitioners agreed to pay P6.4 million to FEBTC as
PDCP went on to contend that since the final and executory decision in consideration for the settlement. The parties cannot thus be allowed to
CA-G.R. CV No. 50591 had held that DATICOR has no cause of action welsh on their contractual obligations, the trial court concluded.
against it for the refund of any part of the excess payment, FEBTC can
no longer re-litigate the same issue. Respecting the third party claim of FEBTC, the trial court held that
FEBTC's payment of the amount of P1,224,906.67 (P965,000 plus
Moreover, PDCP contended that it was not privy to the MOA which interest) to petitioners was in compliance with the final judgment of the
explicitly excluded the receivables from the effect of the Supreme Court CA, hence, it could not entertain such claim because the Complaint filed
decision, and that the amount of P6.4 million paid by petitioners to by petitioners merely sought to recover from FEBTC the alleged
FEBTC was clearly intended as consideration for the release and overpayment of P4.335 million and attorney's fees of P200,000.
cancellation of the lien on the Otis property.
Petitioners' motion for reconsideration26 of the July 10, 2001 decision of
Replying,22 FEBTC pointed out that PDCP cannot deny that it benefited the trial court was denied by Order of September 24, 2001.
from the assignment of its rights over the receivables from petitioners. It
added that the third party claim being founded on a valid and justified Hence, the present petition.
cause, PDCP's counterclaims lacked factual and legal basis.
In their Memorandum,27 petitioners proffer that, aside from the issue of
Petitioners thereafter filed a Motion for Summary Judgment 23 to which whether their complaint is dismissible on the ground of res judicata and
FEBTC filed its opposition.24 splitting of cause of action, the issues of 1) whether FEBTC can be held
liable for the balance of the overpayment of P4.335 million plus interest
By Order of March 5, 2001, the trial court denied the motion for summary which petitioners previously claimed against PDCP in Civil Case No. 94-
judgment for lack of merit.25 1610, and 2) whether PDCP can interpose as defense the provision in
the Deed of Assignment and the MOA that the assignment of the
On July 10, 2001, the trial court issued the assailed Decision dismissing receivables shall not be affected by this Court's Decision in G.R. No.
petitioners' complaint on the ground of res judicata and splitting of cause 73198, be considered.
of action. It recalled that petitioners had filed Civil Case No. 94-1610 to
recover the alleged overpayment both from PDCP and FEBTC and to Stripped of the verbiage, the only issue for this Court's consideration is
secure the cancellation and release of their mortgages on real properties, the propriety of the dismissal of Civil Case No. 00-540 upon the grounds
machinery and equipment; that when said case was appealed, the CA, in stated by the trial court. This should be so because a Rule 45 petition,
its Decision, ordered PDCP to release and cancel the mortgages and like the one at bar, can raise only questions of law (and that justifies
FEBTC to pay P965,000 with interest, which Decision became final and petitioners' elevation of the case from the trial court directly to this Court)
executory on November 23, 1999; and that a Notice of Satisfaction of which must be distinctly set forth.28
Judgment between petitioners and FEBTC was in fact submitted on
August 8, 2000, hence, the issue between them was finally settled under The petition is bereft of merit.
the doctrine of res judicata.
Section 47 of Rule 39 of the Rules of Court, on the doctrine of res
The trial court moreover noted that the MOA between petitioners and judicata, reads:
FEBTC clearly stated that the "pending litigation before the Supreme
Court of the Philippines with respect to the Loan exclusive of the Sec. 47. Effect of judgments or final orders. — The effect of a
Receivables assigned to FEBTC shall prevail up to the extent not judgment or final order rendered by a court of the Philippines,
 having jurisdiction to pronounce the judgment or final order, may matter of the two suits is the same. 32 It refers to a situation where the
be as follows: judgment in the prior action operates as an estoppel only as to the
matters actually determined or which were necessarily included therein. 33
xxxx
The case at bar satisfies the four essential requisites of "bar by prior
(b) In other cases, the judgment or final order is, with respect to judgment," viz:
the matter directly adjudged or as to any other matter that could
have been raised in relation thereto, conclusive between the (a) finality of the former judgment;
parties and their successors in interest by title subsequent to the
commencement of the action or special proceeding, litigating for (b) the court which rendered it had jurisdiction over the subject
the same thing and under the same title and in the same matter and the parties;
capacity; and
(c) it must be a judgment on the merits; and
(c) In any other litigation between the same parties or their
successors in interest, that only is deemed to have been (d) there must be, between the first and second actions, identity
adjudged in a former judgment or final order which appears upon of parties, subject matter and causes of action.34
its face to have been so adjudged, or which was actually and
necessarily included therein or necessary thereto. (Underscoring
There is no doubt that the judgment on appeal relative to Civil Case No.
supplied)
94-1610 (that rendered in CA-G.R. CV No. 50591) was a final judgment.
Not only did it dispose of the case on the merits; it also became
The above-quoted provision lays down two main rules. Section 49(b) executory as a consequence of the denial of FEBTC's motion for
enunciates the first rule of res judicata known as "bar by prior judgment" reconsideration and appeal.35
or "estoppel by judgment," which states that the judgment or decree of a
court of competent jurisdiction on the merits concludes the parties and
Neither is there room to doubt that the judgment in Civil Case No. 94-
their privies to the litigation and constitutes a bar to a new action or suit
1610 was on the merits for it determined the rights and liabilities of the
involving the same cause of action either before the same or any other
parties.36 To recall, it was ruled that: (1) DATICOR overpaid by P5.3
tribunal.29
million; (2) FEBTC was bound to refund the excess payment but because
DATICOR's claim against FEBTC was only P965,000, the court could
Stated otherwise, "bar by former judgment" makes the judgment only grant so much as the relief prayed for; and (3) PDCP has no further
rendered in the first case an absolute bar to the subsequent action since claim against DATICOR because its obligation had already been paid in
that judgment is conclusive not only as to the matters offered and full.
received to sustain it but also as to any other matter which might have
been offered for that purpose and which could have been adjudged
Right or wrong, that judgment bars another case based upon the same
therein. 30 It is in this concept that the term res judicata is more commonly
cause of action.37
and generally used as a ground for a motion to dismiss in civil cases. 31
As to the requisite of identity of parties, subject matter and causes of
The second rule of res judicata embodied in Section 47(c), Rule 39 is
action, it cannot be gainsaid that the first case, Civil Case No. 94-1610,
"conclusiveness of judgment." This rule provides that any right, fact, or
was brought by petitioners to recover an alleged overpayment of P5.3
matter in issue directly adjudicated or necessarily involved in the
million –P965,000 from FEBTC and P4.335 million from PDCP.
determination of an action before a competent court in which a judgment
or decree is rendered on the merits is conclusively settled by the
judgment therein and cannot again be litigated between the parties and On the other hand, Civil Case No. 00-540, filed by the same petitioners,
their privies whether or not the claim or demand, purpose, or subject was for the recovery of P4.335 million which is admittedly part of the P5.3
million earlier sought to be recovered in Civil Case No. 94-1610. This
time, the action was brought solely against FEBTC which in turn This Court finds well-taken then the pronouncement of the court a quo
impleaded PDCP as a third party defendant. that to allow the re-litigation of an issue that was finally settled as
between petitioners and FEBTC in the prior case is to allow the splitting
In determining whether causes of action are identical to warrant the of a cause of action, a ground for dismissal under Section 4 of Rule 2 of
application of the rule of res judicata, the test is to ascertain whether the the Rules of Court reading:
same evidence which is necessary to sustain the second action would
suffice to authorize a recovery in the first even in cases in which the SEC. 4. Splitting of a single cause of action; effect of. – If two or
forms or nature of the two actions are different. 38 Simply stated, if the more suits are instituted on the basis of the same cause of action,
same facts or evidence would sustain both, the two actions are the filing of one or a judgment upon the merits in any one is
considered the same within the rule that the judgment in the former is a available as a ground for the dismissal of the others.
bar to the subsequent action. (Emphasis and underscoring supplied)

It bears remembering that a cause of action is the delict or the wrongful This rule proscribes a party from dividing a single or indivisible cause of
act or omission committed by the defendant in violation of the primary action into several parts or claims and instituting two or more actions
rights of the plaintiff.39 based on it.42 Because the plaintiff cannot divide the grounds for
recovery, he is mandated to set forth in his first action every ground for
In the two cases, petitioners imputed to FEBTC the same alleged relief which he claims to exist and upon which he relies; he cannot be
wrongful act of mistakenly receiving and refusing to return an amount in permitted to rely upon them by piecemeal in successive actions to
excess of what was due it in violation of their right to a refund. The same recover for the same wrong or injury.43
facts and evidence presented in the first case, Civil Case No. 94-1610,
were the very same facts and evidence that petitioners presented in Civil Clearly then, the judgment in Civil Case No. 94-1610 operated as a bar to
Case No. 00-540. Civil Case No. 00-540, following the above-quoted Section 4, Rule 2 of
the Rules of Court.
Thus, the same Deed of Assignment between PDCP and FEBTC, the
first and second supplements to the Deed, the MOA between petitioners A final word. Petitioners are sternly reminded that both the rules on res
and FEBTC, and this Court's Decision in G.R. No. 73198 were submitted judicata and splitting of causes of action are based on the salutary public
in Civil Case No. 00-540. policy against unnecessary multiplicity of suits – interest reipublicae ut sit
finis litium.44 Re-litigation of matters already settled by a court's final
Notably, the same facts were also pleaded by the parties in support of judgment merely burdens the courts and the taxpayers, creates
their allegations for, and defenses against, the recovery of the P4.335 uneasiness and confusion, and wastes valuable time and energy that
million. Petitioners, of course, plead the CA Decision as basis for their could be devoted to worthier cases. 45
subsequent claim for the remainder of their overpayment. It is well
established, however, that a party cannot, by varying the form of action or WHEREFORE, the Petition is DENIED. The assailed Decision of the
adopting a different method of presenting his case, or by pleading RTC, Branch 143, Makati dismissing petitioners' complaint in Civil Case
justifiable circumstances as herein petitioners are doing, escape the No. 00-540 is AFFIRMED.
operation of the principle that one and the same cause of action shall not
be twice litigated.40 Costs against petitioners.

In fact, authorities tend to widen rather than restrict the doctrine of res SO ORDERED.
judicata on the ground that public as well as private interest demands the
ending of suits by requiring the parties to sue once and for all in the same
case all the special proceedings and remedies to which they are
entitled.41
G.R. No. 123555 January 22, 1999 other charges indicated in the FLP when due within the
time herein stipulated and in any such cases, LESSEE
PROGRESSIVE DEVELOPMENT CORPORATION, INC., petitioner, hereby irrevocably appoints LESSOR, its authorized
vs. agents, employees and/or representatives as his duly
COURT OF APPEALS and WESTIN SEAFOOD MARKET, authorized attorney-in-fact, even after the termination,
INC. respondents. expiration or cancellation of this Contract, with full power
and authority to open, enter, repossess, secure, enclose,
fence and otherwise take full and complete physical
possession and control of the leased premises and its
contents without resorting to court action and/or to
BELLOSILLO, J.:
summarily disconnect electrical and/or water services
thereof, and that LESSEE hereby irrevocably empowers
May the lessee which instituted before the Metropolitan Trial Court an LESSOR, his authorized agents, employees and/or
action for forcible entry with damages against its lessor file a separate representatives to take inventory and possession of
suit with the Regional Trial Court against the same lessor for moral and whatever equipment, furniture, articles, merchandise,
exemplary damages plus actual and compensatory damages based on appliances, etc., found therein belonging to LESSEE,
the same forcible entry? consignors and/or to any other persons and to place the
same in LESSOR's warehouse or any other place at
On grounds of litis pendencia and forum-shopping petitioner invokes LESSOR's discretion for safekeeping; charging LESSEE
established jurisprudence that a party cannot by varying the form of the corresponding storage fees therefor; that in case
action or adopting a different method of presenting his case evade the LESSEE fails to claim-said equipment, furniture, articles,
principle that the same cause of action shall not be litigated twice merchandise, appliances, etc. from storage and
between the same parties or their privies. 1 Petitioner therefore prays for simultaneously liquidate any liability with LESSOR within
reversal of the decision of the Court of Appeals dated 27 May 1995, as seven (7) days from date of said transfer to LESSOR's
well as its Resolution dated 17 January 1996 denying reconsideration, warehouse, LESSOR is likewise hereby expressly
which upheld the denial by the Regional Trial Court of petitioner's motion authorized and empowered by LESSEE to dispose of said
to dismiss private respondent's damage suit. property/properties in a public sale through a Notary
Public of LESSOR's choice and to apply the proceeds
The antecedents: On 27 May 1991 petitioner leased to private, thereof to whatever liability and/or indebtedness LESSEE
respondent Westin Seafood Market, Inc., a parcel of land with a may have to LESSOR plus reasonable expenses for the
commercial building thereon located at Aranet Center, Cubao, Quezon same, including storage fees, and the balance, if any,
City, for a period of nine (9) years and three (3) months, i.e., from 2 shall be turned over to LESSEE; that LESSEE hereby
January 1989 to 30 April 1998, with a monhtly rental of approximately expressly agrees that any or all acts performed by
P600,000.00. The contract contained, among others, the following LESSOR, his authorized agents, employees and/or
pertinent terms and conditions: representatives under the provisions of this Section may
not be the subject of any petition for a Writ of Preliminary
EFFECT OF VIOLATIONS Injunction or Mandatory Injunction in court, and that
LESSOR and/or his authorized agents, employees,
25. LESSEE hereby agrees that all the provisions and/or representatives shall be free from any civil and/or
contained in this Contract shall be deemed as conditions, criminal liability or responsibility whatsoever therefor.
as-well as covenants, and that this Contract shall be
automatically terminated and cancelled without resorting TERMINATION OF LEASE
to court action should LESSEE violate any or all said
conditions, including the payment of Rent, CUSA and
 26. Upon-the automatic termination of this lease contract, the amount of P8,000,000.00 to guarantee the payment of its back
as the case may be, LESSEE shall immediately vacate rentals; (b) petitioner would defer the sale of the personal properties of
and redeliver physical possession of the leased premises, the Westin Seafood Market, Inc., until a final settlement of the case had
including the keys appertaining thereto, to LESSOR in been arrived, at; (c) petitioner shall allow private respondent to retrieve all
good, clean and sanitary condition, reasonable wear and the perishable goods from inside the leased premises like frozen meat,
tear excepted, devoid of all occupants,. equipment, vegetables and fish, all properly receipted for; (d) petitioner shall allow
furnitures articles, merchandise, etc., belonging to three (3) maintenance personnel of private respondent to enter the
LESSEE or to any other person except those belonging to premises at reasonable working hours to maintain the restaurant
LESSOR; that should LESSEE fail to comply with this equipment; and (e) the parties shall negotiate for the restoration of the
provision, LESSOR is hereby given the same rights and premises to private respondent, and if no settlement be arrived at on or
power to proceed against LESSEE as expressly granted before January 8, 1993, the hearing on the merits of the case shall
in the immediately; preceding section. proceed and the disposition of the amount deposited representing the
rental arrearages shall be left to the. discretion of the court.
Private respondent failed to pay rentals despite several demands by
petitioner. As of 19 October 1992 the arrearages amounted to This agreement was incorporated in the order of the court dated 22
P8,608,284.66. Admittedly, non-payment of rentals constituted breach of December 1992 3 which in effect terminated for all intents and purposes
their contract; thus, pursuant to the express authority granted petitioner the incident on the issuance of a preliminary writ of injunction.
under the above-quoted Secs. 25 and 26 of the lease agreement,
petitioner on 31 October 1992 repossessed the leased premises, Private respondent did not comply with its undertaking to deposit with the
inventoried the movable properties found within and owned by private designated bank the amount representing its back rentals. Instead, with
respondent and scheduled public auction for the sale of the movables on the forcible entry case still pending with the MeTC, private respondent
19 August 1993 with notice to private respondent. instituted on 9 June 1993 another action for damages against petitioner
with the Regional Trial Court of Quezon City. The case was raffled to
On 26 November 1992 private respondent filed with the Metropolitan Trial Branch 101 presided over by Judge Pedro T. Santiago. 4
Court of Quezon City a complaint against petitioner for forcible entry with
damages and a prayer for a temporary restraining order and/or writ of Petitioner filed a motion, to dismiss the damage suit on the ground of litis
preliminary injunction. 2 The case was raffled to Branch 40 presided over pendencia and forum shopping. On 2 July 1993, instead of ruling on the
by Judge Guillermo L. Loja Jr. who issued a temporary restraining order motion, Judge Santiago issued an order archiving the case pending the
enjoining petitioner from selling private respondent's properties at a outcome of the forcible entry case being heard at the MeTC for the
public auction. reason that "the damages is (sic) principally anchored on whether or not
the defendants (petitioner herein) have committed forcible entry." 5 On 2
On 9 December 1992 Judge Loja inhibited himself from trying the case August 1993 petitioner moved for reconsideration of the order and
and directed its transfer to Branch 34 presided over by Judge Joselito SD reiterated its motion to dismiss the suit for damages.
Generoso. Soon after, petitioner filed an urgent motion for the inhibition
of Judge Generoso and the immediate reraffle of the case arguing that Before petitioner's motion to dismiss could be resolved, private
the summary transfer of the case to Judge Generoso was irregular as it respondent filed with the RTC on 18 August 1993 an amended complaint
was not done by raffle. for damages. On 14 September 1993 it also filed an Urgent Ex-Parte
Motion for the Issuance of a Temporary Restraining Order and Motion for
The motion was granted and the case went to Branch 36 presided over the Grant of a Preliminary Prohibitory and Preliminary Mandatory
by Judge Francisco D. Villanueva. Thereafter, on 22 December 1992, at Injunction. On the very same day, Judge Santiago issued an order (a)
the continuation of the hearing on the issuance of a writ preliminary denying petitioner's motion to dismiss, (b) admitting private respondent's
mandatory injunction, the parties agreed, among others, on the following: amended complaint, and (c) granting private respondent's application for
(a) private respondent would deposit with the Philippine Commercial and a temporary restraining order against petitioner.
Industrial Bank in the name of the Metropolitan Trial Court, Branch 36,
Thus, petitioner filed with the Court of Appeals a special civil action same as those already squarely presented to and passed upon by the
for certiorari and prohibition on the ground that Judge Santjago acted in lower court
excess of his jurisdiction and/or committed grave abuse of discretion
amounting to lack of jurisdiction in admitting, the amended complaint of In its motion for dismissal of the action for damages with the RTC
private respondent and issuing a restraining order against petitioner; in petitioner raised the ground that another action for forcible entry was
allowing private respondent to engage in forum shopping; and, taking pending at the MeTC between the same parties involving the same
cognizance of the action; for damages despite lack of jurisdiction. 6 matter and cause of action. Outrightly rejected by the RTC, the same
issue was elevated by petitioner on certiorari before the Court of Appeals.
But the Court of Appeals dismissed the petition due to the failure of Clearly, under the prevailing circumstance, any motion for
petitioner to file a motion for reconsideration of Judge Santiago's order of reconsideration of the trial court would have been a pointless exercise. 12
14 September 1993 which, it explained, was a prerequisite to the
institution of a petition for certiorari and prohibition. It also found that the We now turn to the issue of whether an action for damages filed with the
elements of litis pendencia were lacking to justify the dismissal of the Regional Trial Court by the lessee against the lessor should be dismissed
action for damages with the RTC because despite the pendency of the on the ground of pendency of another action for forcible entry and
forcible entry case with the MeTC the only damages recoverable thereat damages earlier filed by the same lessee against the same lessor before
were those caused by the loss of the use and occupation of the property the Metropolitan Trial Court.
and not the kind of damages being claimed before the RTC which had no
direct relation to loss of material possession. It clarified that since the Sec. 1 of Rule 70 of the Rules of Court provides that any person deprived
damages prayed for in the amended complaint with the RTC were those of the possession of any land or building by force, indimidation, threat,
caused by the alleged high-handed manner with which petitioner strategy or stealth, or against whom thepossession of any land or
reacquired possession of the leased premises and the sale of private building is unlawfully withheld, may bring an action in the proper
respondent's movables found therein, the RTC and not the MeTC had Municipal Trial Court against the person or persons unlawfully
jurisdiction over the action of damages. 7 withholding or depriving of possession, together with damages and costs.
The mandate under this rule is categorical: that all cases for forcible entry
Petitioner, aggrieved by the decision of the appellate court, filed the or unlawful detainer shall be filed before the Municipal Trial Court which
instant petition for review on certiorari under Rule 45 of the Rules of shall include not only the plea for restoration of possession but also all
Court alleging that it erred in (a) finding that petitioner failed to avail of its claims for damages and costs arising therefrom. Otherwise expressed,
plain, speedy and adequate remedy of a prior motion for reconsideration no claim for damages arising out of forcible entry or unlawful detainer
with the RTC; (b) ruling that, the trial judge did not act with grave abuse may be filed separately and independently of the claim for restoration of
of discretion in taking cognizance of the action for damages and possession.
injunction despite the pendency of the forcible entry case with the MeTC;
and, (c) ruling that private respondent did not commit forum shopping This is consistent with the principle laid down in Sec. 1, par. (e), of Rule
since the causes of action before the RTC and MeTC were not identical 16 of the Rules of Court which states that the pendency of another action
with each other. between the same parties for the same cause is a ground for dismissal of
an action. Res adjudicata requires that there must be between the action
There is merit in the petition. While generally a motion for reconsideration sought to be dismissed and the other action the following elements: (a)
must first be filed before resorting to certiorari in order to give the lower identity of parties or at least such as representing the same interest in
court an opportunity to correct the errors imputed to it 8 this rule admits of both actions; (b) identity of rights asserted and relief prayed for, the relief
exceptions and is not intended to be applied without considering the being founded on the same facts; and, (c) the identity in the two (2)
circumstances of the case. 9 The filing of the motion for reconsideration preceding particulars should be such that any judgment which may be
before availing of the remedy of certiorari is not sine qua non when the rendered on the other action will, regardless of which party is successful,
issue raised is one purely of law, 10 or where the error is patent or the amount to res adjudicata in the action under
disputed order is void, 11 or the questions raised on certiorari are the consideration. 13
It is likewise basic under Sec. 3 of Rule 2 of the Revised Rules of Court, xxx xxx xxx
as amended, that a party may not institute more than one suit for a single
cause of action. Under Sec. 4 of the same Rule, if two or more suits are 3.02 Plaintiff, being the lessee of the Subject Premises, is
instituted on the basis of the same cause of action, the filing of one or a entitled to the peaceful occupation and enjoyment of the
judgment upon the merits in any one is available as a ground for the Subject Premises to the exclusion of all others, including
dismissal of the other or others. "Cause of action" is defined by Sec. 2 of defendants herein.
Rule 2 as the act of omission by which a party violates a right of
another. 14 These premises obtaining, there is no question at all that 3.03 Defendants' resort to strong arms tactics to forcibly
private respondent's cause of action in the forcible entry case and in the wrest possession of the Subject Premises from plaintiff
suit for damages is the alleged illegal retaking of possession of the and maintain possession thereof through the use of force,
leased premises by the lessor, petitioner herein, from which all legal threat, strategy and intimidation by the use of superior
reliefs arise. Simply stated, the restoration of possession and demand for number of men and arms amounts to the taking of the law
actual damages in the case before the MeTC and the demand for into their own hands.
damages with the RTC both arise from the same cause of action, i.e., the
forcible entry by petitioner into the least premises.
3.04 Thus, defendants' act of unlawfully evicting out
plaintiff from the Subject Premises it is leasing from
A comparative study of the two (2) complaints filed by private respondent defendant PDC and depriving it of possession thereof
against petitioner before the two (2) trial courts shows that not only are through the use of force, threat, strategy and intimidation
the elements of res adjudicata present, at least insofar as the claim for should be condemned and declared illegal for being
actual and compensatory damages is concerned, but also that the claim contrary; to public order and policy.
for damages — moral and exemplary in addition to actual and
compensatory — constitutes splitting a single cause of action. Since this
3.05 Consequently, defendants should be enjoined from
runs counter to the rule against multiplicity of suits, the dismissal of the
continuing with their illegal acts and be ordered to vacate
second action becomes imperative.
the Subject Premises and restore possession thereof,
together with its contents, to plaintiff.
The complaint for forcible entry contains the following pertinent
allegations —
xxx xxx xxx
2.01 On 02 January 1989, plaintiff entered, into a contract
4.07 Considering that defendants' act of forcibly grabbing
of lease with defendant PDC over a property designated
possession of the Subject Premises from plaintiff is illegal
as Ground Floor, Seafood Market (hereinafter "Subject
and null and void, defendant should be adjudged liable to
Premises") situated at the corner of EDSA, corner
plaintiff for all the aforedescribed damages which plaintiff
MacArthur Street, Araneta Center, Cubao, Quezon City,
incurred as a result thereof.
for a period of ten (10) years from 02 January 1989 to 30
April 1998.
The amended complaint for damages filed by private respondent alleges
basically the same factual circumstances and issues as bases for the
2.02 Immediately after having acquired actual physical
relief prayed for, to wit:
possession of the Subject Premises, plaintiff established
and now operates thereon the now famous Seafood
Market Restaurant. Since then, plaintiff had been in 4. On May 28, 1991, plaintiff and defendant PDC entered
actual, continuous, and peaceful physical possession of into a Contract of Lease for a period of ten years or from
the Subject Premises until 31 October 1992. January 2, 1989 up to April 30, 1998 over a property
designated as Ground Floor, Seafood Market (hereinafter
referred to as Subject Premises) situated at the corner of
EDSA corner McArthur Street, Araneta Center, Cubao, 12. Defendants' unlawful takeover of the premises
Quezon City. A copy of the lease contract is attached constitutes a violation of its obligation under Art. 1654 of
hereto as Annex "A". the New Civil Code requiring the lessor to maintain the
lessee in peaceful and adequate enjoyment of the lease
5. Immediately thereafter, plaintiff took over actual for the entire duration of the contract. Hence, plaintiff has
physical possession of Subject Premises, and established filed the present suit for the recovery of damages under
thereon the now famous "Seafood Market Restaurant." Art. 1659 of the New Civil Code. . . .

xxx xxx xxx Restated in its bare essentials, the forcible entry case has one cause of
action, namely, the alleged unlawful entry by petitioner into the leased
7 On October 31, 1992 at around 8:30 p.m., defendant premises out of which three (3) reliefs (denominated by private
PDC, without the benefit of any writ of possession or any respondent as is causes of action) arose: (a) the restoration by the lessor
lawful court order and with the aid of approximately forty (petitioner herein) of the possession of the leased premises to the lessee;
(40) armed security guards and policemen under the (b) the claim for actual damages due to the losses suffered by private
supervision of defendant Tejam, forcibly entered the respondent such as the deterioration of perishable foodstuff stored inside
subject premises through force, intimidation, threats and the premises and the deprivation of the use of the premises causing loss
stealth and relying on brute force and in a thunderboltish of expected profits; and, (c) the claim for attoney's fees and cost of suit.
manner and against plaintiff's will, unceremoniously drew
away all of plaintiff's men out of the subject premises, On the other hand, the complaint for damages prays for a monetary
thereby depriving herein plaintiff of its actual, physical and award consisting of (a) moral damages of P500,000.00 and exemplary
natural possession of the subject premises. The illegal, damages of another P500,000.00; (b) actual damages of P20,000,000.00
high-handed manner and gestapo like take-over by and compensatory damages of P1,000,000.00 representing unrealized
defendants of subject premises is more particularly profits; and, (c) P200,000.00 for attorney's fees and costs, all based on
described as follows: . . . the alleged forcible takeover of the leased premises by petitioner. Since
actual and compensatory damages were already prayed for in the
8. To date, defendants continue to illegally possess and forcible entry case before the MeTC, it is obvious that this cannot be
hold the Subject Premises, including all the multi-million relitigated in the damage suit before the RTC by reason of res adjudicata.
improvements, fixtures and equipment therein owned by
plaintiff, all to the damage and prejudice of plaintiff. The The other claims for moral and exemplary damages cannot also succeed
actuations of defendants constitute an unlawful considering that these sprung from the main incident being heard before
appropriation, seizure and taking of property against the the MeTC. Jurisprudence is unequivocal that when a single delict or
will and consent of plaintiff. Worse, defendants are wrong is committed — like the unlawful taking or detention of the property
threatening to sell at public auction and without the of the another — there is but one single cause of action regardless of the
consent of plaintiff and without lawful authority, the multi- number of rights that may have been violated, and all such rights should
million fixtures and equipment of plaintiff and at prices be alleged in a single complaint as constituting one single cause of
way below the market value thereof. Plaintiff hereby action. 15 In a forcible entry case, the real issue is the physical possession
attaches as Annex "B" the letter from defendants dated of the real property. The question of damages is merely secondary or
August 6, 1993 addressed to plaintiff, informing the latter incidental, so much so that the amount thereof does not affect the
that the former intends to sell at an auction on August 19, jurisdiction of the court. In other words, the unlawful act of a deforciant in
1993 at 2:00 p.m. properties of the plaintiff presently in taking possession of a piece of land by means of force and intimidation
defendants' possession. against the rights of the party actually in possession thereof is a delict or
wrong, or a cause of action that gives rise to two (2) remedies, namely,
xxx xxx xxx the recovery of possession and recovery of damages arising from the
loss of possession, but only to one action. For obvious reasons, both
remedies cannot be the subject of two (2) separate and independent The foregoing discussions provide sufficient basis to petitioner's charge
actions, one for recovery of posssession only, and the other, for the that private respondent and its counsel in the trial courts committed forum
recovery of damages. That would inevitably lead to what is termed in law shopping. In Crisostomo v. Securities and Exchange Commission 23 we
as splitting up a cause of action. 16 In David v. de la Cruz 17 we observed ruled —
—
There is forum-shopping whenever, as a result of an
Herein tenants have but one cause of action against their adverse opinion in one forum, party seeks a favorable
landlord, their illegal ejectment or removal from their opinion (other than by appeal or certiorari) in another. The
landholdings, which cause of action however entitles principle applies . . . with respect to suits filed in the
them to two (2) claims or remedies — for reinstatement of courts . . . in connection with litigations commenced in the
damages. As both claims arise from the same cause of court . . . in anticipation of an unfavorable . . . ruling and a
action, they should be alleged in a single complaint. favorable case where the court in which the second suit
was brought, has no jurisdiction.
A claim cannot be divided in such a way that a part of the amount of
damages may be recovered in one case and the rest, in This Court likewise elucidated in New Pangasinan Review, Inc. v.
another. 18 In Bacharach v. Icarangal 19 we explained that the rule was National Labor Relations Commission 24 that there is forum-shopping
aimed at preventing repeated litigations betweent the same parties in when the actions involve the same transactions, the same essential facts
regard to the same subject of the controversy and to protect the and circumstances. The reason behind the proscription of forum
defendant from unnecessary vexation. Nemo debet bis vexari pro una et shopping is obvious. This unnecessarily burdens our courts with heavy
eadem causa. caseloads, unduly taxes the manpower and financial resources of the
judiciary and trifles with and mocks our judicial processes, thereby
What then is the effect of the dismissal of the other action? Since the rule adversely affecting the efficient administration of justice. This
is that all such rights should be alleged in a single complaint, it goes condemnable conduct has prompted the Court to issue
without saying that those not therein included cannot be the subject of circulars 25 ordering among others that a violation thereof shall be cause
subsequent complaints for they are barred forever. 20 If a suit is brought for the dismissal of the case or cases without prejudice to the taking of
for a part of a claim, a judgment obtained in that action precludes the appropriate action against the counsel or party concerned.
plaintiff from bringing a second action for the residue of the claim,
notwithstanding that the second form of action is not identical with the The records ineluctably show that the complaint lodged, by private
first or different grounds for relief are set for the second suit. This respondent with the Regional Trial Court of Quezon City contained no
principle not only embraces what was actually determined, but also certification of non-forum shopping. When petitioner filed a motion to
extends to every matter which the parties might have litigated in the dismiss the case raising among others the ground of forum shopping it
case. 21 This is why the legal basis upon which private respondent pointed out the absence of the required certification. The amended
anchored its second claim for damages, i.e., Art. 1659 in relation to Art. complaint, as well as the second and third amended complaints,
1654 of the Civil Code, 22 not otherwise raised and cited by private attempted to rectify the error by invariably stating that there was no other
respondent in the forcible entry case, cannot be used as justification for action pending between the parties involving the same causes of action
the second suit for damages. We note, not without some degree of although there was actually a forcible entry case pending before the MTC
displeasure, that by filing a second suit for damages, private respondent of Quezon City. By its admission of a pending forcible entry case, it is
was not only able to press a claim for moral and exemplary damages obvious that private respondent was indulging in forum shopping. While
which by its failure to allege the same in its suit before the MeTC private respondent conveniently failed to inform the RTC that it had
foreclosed its right to sue on it, but it was also able to obtain from the likewise sought damages in the MTC on the basis of the same forcible
RTC, by way of another temporary restraining order, a second entry, the fact remains that it precisely did so, which stratagem was being
reprieve from an impending public auction sale of its movables which duplicated in the second case. This is a compelling reason to dismiss the
could not anymore secure from the MeTC before which the matter of the second case.
issuance of a preliminary writ of injunction was already closed.
WHEREFORE, the Petition is GRANTED. The questioned Decision of the Barangay Bulanon, Sagay City, Negros Occidental even before the
Court of Appeals dated 27 September 1995 and the Order of the notarized separate Fishpond Lease Agreement Nos. 5674,3 56944 and
Regional Trial Court of Quezon City dated 24 September 1993 are 56955 in their respective favor were approved in October 2000 by the
REVERSED and SET ASIDE. The Regional Trial Court of Quezon City is Secretary of Agriculture for a period of twenty-five (25) years or until
directed to dismiss Civil Case No. Q-93-16409, "Westin Seafood Market, December 31, 2024.
Inc. v. Progressive Development Corporation, et al.," and the
Metropolitan Trial Court of Quezon City to proceed with the proper On November 18, 2000, Ernesto L. Treyes, Jr. (respondent) allegedly
disposition of Civil Case No. 6589, "Westin Seafood Market, Inc. v. forcibly and unlawfully entered the leased properties and once
Progressive Development Corporation, et al.," with dispacth considering inside barricaded the entrance to the fishponds, set up a barbed wire
the summary nature of the case. Treble costs against private respondent. 1â

fence along the road going to petitioners’ fishponds, and harvested

several tons of milkfish, fry and fingerlings owned by petitioners.

On November 22, 2000, petitioners promptly filed with the Municipal Trial
SO ORDERED. Court (MTC) in Sagay City separate complaints for Forcible Entry With
Temporary Restraining Order And/Or Preliminary Injunction And
Damages, docketed as Civil Case Nos. 1331,6 13327 and 1333,8 against
Ernesto M. Treyes, Sr. and respondent.

In a separate move, petitioners filed in March 2004 with the Bacolod RTC
G.R. No. 170916 April 27, 2007 a complaint for damages against respondent, docketed as Civil Case No,
04-12284, alleging, inter alia,
CGR CORPORATION herein represented by its President ALBERTO
RAMOS, III, HERMAN M. BENEDICTO and ALBERTO R. xxxx
BENEDICTO, Petitioners,
vs. V
ERNESTO L. TREYES, JR., Respondent
That prior to the issuance of the fishpond lease agreement in
DECISION favor of the plaintiffs, they had already been in open and
continuous possession of the same parcel of land;
CARPIO MORALES, J.:
VI
Assailed via petition for review are issuances of the Regional Trial Court
(RTC), Branch 43, Bacolod City, in Civil Case No. 04-12284, to wit: As lessee and in possession of the above[-]described fishpond,
Order1 dated August 26, 2005 which dismissed petitioners’ complaint for plaintiffs have continuously occupied, cultivated and developed
damages on the ground of prematurity, and Order 2 dated January 2, 2006 the said fishpond and since then, had been regularly harvesting
which denied petitioners’ motion for reconsideration. milkfish, shrimps, mud crabs and other produce of the
fishponds; 1a\^/phi1.net

In issue is one of law – whether a complainant in a forcible entry case

can file an independent action for damages arising after the act of VII
dispossession had occurred.
That the yearly income of the fishpond of the plaintiff corporation
CGR Corporation, Herman M. Benedicto and Alberto R. Benedicto is at least ₱300,000.00 more or less, while the yearly income of
(petitioners) claimed to have occupied 37.3033 hectares of public land in the fishpond of plaintiff Herman Benedicto, Sr. is at least
 ₱100,000.00 more or less, and the yearly income of the fishpond of actual damages and such other amounts as proved during the
of plaintiff Alberto Benedicto is at least ₱100,000.00 more or less; trial;

VIII 2) Ordering the defendant to pay the plaintiffs the sum of

₱100,000.00 each as moral damages;
That sometime last November 18, 2000 or thereabout, defendant
Ernesto L. Treyes, Jr. and his armed men and with the help of the 3) Ordering the defendant to pay the plaintiffs the sum of
blue guards from the Negros Veterans Security Agency forcibly ₱100,000.00 each as exemplary damages;
and unlawfully entered the fishponds of the plaintiffs and once
inside barricaded the entrance of the fishpond and set up barb 4) Ordering the defendant to pay the plaintiffs the sum of
wire fence along the road going to plaintiffs fishpond ₱200,000.00 as attorney’s fees, and to reimburse plaintiffs with all
and harvested the milkfish and carted away several tons of such sums paid to their counsel by way of appearance
milkfish owned by the plaintiffs; fees.10 (Underscoring supplied)

IX Respondent filed a Motion to Dismiss11 petitioners’ complaint for

damages on three grounds – litis pendentia, res
That on succeeding days, defendant’s men continued their forage judicata and forum shopping.
on the fishponds of the plaintiffs by carting and taking away the
remaining full grown milkfish, fry and fingerlings and other marine By the assailed Order12 of August 26, 2005, Branch 43 of the Bacolod
products in the fishponds. NOT ONLY THAT, even the chapel RTC dismissed petitioners’ complaint on the ground of prematurity, it
built by plaintiff CGR Corporation was ransacked and destroyed holding that a complaint for damages may only be maintained "after a
and the materials taken away by defendant’s men. Religious final determination on the forcible entry cases has been made."
icons were also stolen and as an extreme act of sacrilege, even
decapitated the heads of some of these icons; Hence, the present petition for review.

xxxx The only issue is whether, during the pendency of their separate
complaints for forcible entry, petitioners can independently institute and
XIII maintain an action for damages which they claim arose from incidents
occurring after the dispossession by respondent of the premises.
That the unlawful, forcible and illegal intrusion/destruction of
defendant Ernesto Treyes, Jr. and his men on the fishpond Petitioners meet the issue in the affirmative. Respondents assert
leased and possessed by the plaintiffs is without any authority of otherwise.
law and in violation of Article 539 of the New Civil Code which
states: The petition is impressed with merit.

"Art. 539. Every possessor has a right to be respected in his possession; Section 17, Rule 70 of the Rules of Court provides:
and should he be disturbed therein he shall be protected in or restored to
said possession by the means established by the laws and rules of the
SEC. 17. Judgment. – If after trial the court finds that the allegations of
Court."9 (Underscoring supplied) and praying for the following reliefs:
the complaint are true, it shall render judgment in favor of the plaintiff for
the restitution of the premises, the sum justly due as arrears of rent or as
1) Ordering the defendant to pay plaintiff CGR Corporation the reasonable compensation for the use and occupation of the premises,
sum of at least ₱900,000.00 and to plaintiffs Herman and Alberto attorney’s fees and costs. If it finds that said allegations are not true, it
Benedicto, the sum of at least ₱300,000.00 each by way
shall render judgment for the defendant to recover his costs. If a Progressive brought the case to this Court. Citing Section 1, Rule 70 of
counterclaim is established, the court shall render judgment for the sum the Rules of Court, this Court reversed the lower courts’ ruling, it holding
found in arrears from either party and award costs as justice requires. that "all cases for forcible entry or unlawful detainer shall be filed before
(Emphasis supplied) the Municipal Trial Court which shall include not only the plea for
restoration of possession but also all claims for damages and costs
The recoverable damages in forcible entry and detainer cases thus refer therefrom." In other words, this Court held that "no claim for damages
to "rents" or "the reasonable compensation for the use and occupation of arising out of forcible entry or unlawful detainer may be filed separately
the premises" or "fair rental value of the property" and attorney’s fees and and independently of the claim for restoration of
costs.13 possession."18 (Underscoring supplied)

The 2006 case of Dumo v. Espinas14 reiterates the long-established rule In thus ruling, this Court in Progressive made a comparative study of the
that the only form of damages that may be recovered in an action for therein two complaints, thus:
forcible entry is the fair rental value or the reasonable compensation for
the use and occupation of the property: A comparative study of the two (2) complaints filed by private respondent
against petitioner before the two (2) trial courts shows that not only are
Lastly, we agree with the CA and the RTC that there is no basis for the the elements of res adjudicata present, at least insofar as the claim for
MTC to award actual, moral, and exemplary damages in view of the actual and compensatory damages is concerned, but also that the claim
settled rule that in ejectment cases, the only damage that can be for damages–moral and exemplary in addition to actual and
recovered is the fair rental value or the reasonable compensation for the compensatory–constitutes splitting a single cause of action. Since this
use and occupation of the property. Considering that the only issue runs counter to the rule against multiplicity of suits, the dismissal of the
raised in ejectment is that of rightful possession, damages which could second action becomes imperative.
be recovered are those which the plaintiff could have sustained as a
mere possessor, or those caused by the loss of the use and occupation The complaint for forcible entry contains the following pertinent
of the property, and not the damages which he may have suffered but allegations –
which have no direct relation to his loss of material possession. x x
x15 (Emphasis, underscoring and italics supplied; citations omitted) 2.01 On 02 January 1989, plaintiff entered into a contract of lease with
defendant PDC over a property designated as Ground Floor, Seafood
Other damages must thus be claimed in an ordinary action. 16 Market (hereinafter "Subject Premises") situated at the corner of EDSA
corner MacArthur Street, Araneta Center, Cubao, Quezon City, for a
In asserting the negative of the issue, respondent cites the 1999 case of period of ten (10) years from 02 January 1989 to 30 April 1998.
Progressive Development Corporation, Inc. v. Court of Appeals. 17 In this
case, Progressive Development Corporation, Inc. (Progressive), as 2.02 Immediately after having acquired actual physical possession of the
lessor, repossessed the leased premises from the lessee allegedly Subject Premises, plaintiff established and now operates thereon the now
pursuant to their contract of lease whereby it was authorized to do so if famous Seafood Market Restaurant. Since then, plaintiff had been in
the lessee failed to pay monthly rentals. The lessee filed a case for actual, continuous, and peaceful physical possession of the Subject
forcible entry with damages against Progressive before the Metropolitan Premises until 31 October 1992.
Trial Court (MeTC) of Quezon City. During the pendency of the case, the
lessee filed an action for damages before the RTC, drawing Progressive xxxx
to file a motion to dismiss based on litis pendentia. The RTC denied the
motion. 3.02 Plaintiff, being the lessee of the Subject Premises, is entitled to the
peaceful occupation and enjoyment of the Subject Premises to the
On appeal by Progressive, the Court of Appeals sustained the RTC order exclusion of all others, including defendants herein.
denying the motion to dismiss.
3.03 Defendants’ resort to strong arms tactics to forcibly wrest the supervision of defendant Tejam, forcibly entered the subject premises
possession of the Subject Premises from plaintiff and maintain through force, intimidation, threats and stealth and relying on brute force
possession thereof through the use of force, threat, strategy and and in a thunderboltish manner and against plaintiff’s will,
intimidation by the use of superior number of men and arms amounts to unceremoniously drew away all of plaintiffs men out of the subject
the taking of the law into their own hands. premises, thereby depriving herein plaintiff of its actual, physical and
natural possession of the subject premises. The illegal high-handed
3.04 Thus, defendants’ act of unlawfully evicting out plaintiff from the manner of gestapo like take-over by defendants of subject premises is
Subject Premises it is leasing from defendant PDC and depriving it of more particularly described as follows: x x x x
possession thereof through the use of force, threat, strategy and
intimidation should be condemned and declared illegal for being contrary 8. To date, defendants continue to illegally possess and hold the Subject
to public order and policy. Premises, including all the multi-million improvements, fixtures and
equipment therein owned by plaintiff, all to the damage and prejudice of
3.05 Consequently, defendants should be enjoined from continuing with plaintiff. The actuations of defendants constitute an unlawful
their illegal acts and be ordered to vacate the Subject Premises and appropriation, seizure and taking of property against the will and consent
restore possession thereof, together with its contents to plaintiff. of plaintiff. Worse, defendants are threatening to sell at public auction
and without the consent, of plaintiff and without lawful authority, the multi-
xxxx million fixtures and equipment of plaintiff and at prices way below the
market value thereof. Plaintiff hereby attaches as Annex "B" the letter
from defendants dated August 6, 1993 addressed to plaintiff, informing
4.07 Considering that defendants’ act of forcibly grabbing possession of
the latter that the former intends to sell at an auction on August 19, 1993
the Subject Premises from plaintiff is illegal and null and void, defendant
at 2:00 p.m. properties of the plaintiff presently in defendants’
should be adjudged liable to plaintiff for all the aforedescribed damages
possession.
which plaintiff incurred as a result thereof.
xxxx
The amended complaint for damages filed by private respondent alleges
basically the same factual circumstances and issues as bases for the
relief prayed for, to wit: 12. Defendant’s unlawful takeover of the premises constitutes a violation
of its obligation under Art. 1654 of the New Civil Code requiring the lessor
to maintain the lessee in peaceful and adequate enjoyment of the lease
4. On May 28, 1991, plaintiff and defendant PDC entered into a Contract
for the entire duration of the contract. Hence, plaintiff has filed the
of Lease for a period of ten years or from January 2, 1989 up to April 30,
present suit for the recovery of damages under Art. 1659 of the New Civil
1998 over a property designated as Ground Floor, Seafood Market
Code x x x x19 (Emphasis in the original; underscoring supplied)
(hereinafter referred to as Subject Premises) situated at the corner of
EDSA corner McArthur Street, Araneta Center, Cubao, Quezon City. A
copy of the lease contract is attached hereto as Annex "A." Analyzing the two complaints, this Court, still in Progressive, observed:

5. Immediately thereafter, plaintiff took over actual physical possession of Restated in its bare essentials, the forcible entry case has one cause of
Subject Premises, and established thereon the now famous "Seafood action, namely, the alleged unlawful entry by petitioner into the leased
Market Restaurant." premises out of which three (3) reliefs (denominated by private
respondent as its causes of action) arose: (a) the restoration by the
lessor (petitioner herein) of the possession of the leased premises to the
xxxx
lessee, (b) the claim for actual damages due to the losses suffered by
private respondent such as the deterioration of perishable foodstuffs
7. On October 31, 1992 at around 8:30 p.m., defendant PDC, without the stored inside the premises and the deprivation of the use of the premises
benefit of any writ of possession or any lawful court order and with the aid
of approximately forty (40) armed security guards and policemen under
causing loss of expected profits; and, (c) the claim for attorney’s fees and Petitioners’ filing of an independent action for damages other than those
costs of suit. sustained as a result of their dispossession or those caused by the loss
of their use and occupation of their properties could not thus be
On the other hand, the complaint for damages prays for a monetary considered as splitting of a cause of action.
award consisting of (a) moral damages of P500,000.00 and exemplary
damages of another P500,000.00; (b) actual damages of P20,000.00 and WHEREFORE, the Orders dated August 26, 2005 and January 2, 2006
compensatory damages of P1,000,000.00 representing unrealized issued by the Regional Trial Court, Branch 43, Bacolod City, in Civil Case
profits; and, (c) P200,000.00 for attorney’s fees and costs, all based on No. 04-12284 are REVERSED and SET ASIDE.
the alleged forcible takeover of the leased premises by petitioner. Since
actual and compensatory damages were already prayed for in the The Regional Trial Court, Branch 43, Bacolod City, is directed to
forcible entry case before the MeTC, it is obvious that this cannot be REINSTATE Civil Case No. 04-12284 to its docket and to conduct
relitigated in the damage suit before the RTC by reason of res adjudicata. proceedings thereon with dispatch.

The other claims for moral and exemplary damages cannot also succeed SO ORDERED.
considering that these sprung from the main incident being heard before
the MeTC. x x x20 (Italics in the original; Emphasis and underscoring CONCHITA CARPIO MORALES
supplied) Associate Justice

It bears noting, however, that as reflected in the earlier-quoted

allegations in the complaint for damages of herein petitioners, their claim
for damages have no direct relation to their loss of possession of the
premises. It had to do with respondent’s alleged harvesting and carting
away several tons of milkfish and other marine products in their
fishponds, ransacking and destroying of a chapel built by petitioner CGR
Corporation, and stealing religious icons and even decapitating the heads
of some of them, after the act of dispossession had occurred.

Surely, one of the elements of litis pendentia - that the identity between
the pending actions, with respect to the parties, rights asserted and
reliefs prayed for, is such that any judgment rendered on one action will,
regardless of which is successful, amount to res judicata in the action
under consideration - is not present, hence, it may not be invoked to
dismiss petitioners’ complaint for damages.21

Res judicata may not apply because the court in a forcible entry case has
no jurisdiction over claims for damages other than the use and
occupation of the premises and attorney’s fees.22

Neither may forum-shopping justify a dismissal of the complaint for

damages, the elements of litis pendentia not being present, or where a
final judgment in the forcible entry case will not amount to res judicata in
the former.23
G.R. No. L-16797 February 27, 1963 special defense in her answer. After trial, on 16 December 1959, the
Court of First Instance of Quezon City rendered judgment against
RODRIGO ENRIQUEZ, ET AL., plaintiffs-appellees, defendant Ramos; ordered her to pay P96,000.00, with 12% interest from
vs. 24 February 1959 until payment, 10% of the amount due as attorney's
SOCORRO A. RAMOS, ET AL., defendants-appellants. fees, and the costs of the suit; and further decreed the foreclosure sale of
the mortgaged properties in case of non-payment within ninety (90) days.
Gelasio L. Dimaano for plaintiffs-appellees.
Vicente K. Aranda for defendants-appellants. Socorro Ramos appealed directly to this Court, and here insists that the
action should be dismissed on account of the alleged splitting of
REYES, J.B.L., J.: appellee's cause of action, and that the obligation not having fixed a
period, although one was intended, the court below should have set first
a date of maturity before ordering payment or foreclosure.
Direct appeal on points of law from a decision of the Court of First
Instance of Rizal in its Civil Case No. Q-4232.
We find no merit in the appeal.
The record is to the effect that on 24 November 1958, Rodrigo Enriquez
and the spouses Urbano Dizon and Aurea Soriano de Dizon sold to Wherefore, the parties respectfully pray that the foregoing stipulation of
Socorro A. Ramos, by a notarial deed of even date, eleven (11) parcels facts be admitted and approved by this Honorable Court, without
of land situated in Bago Bantay, Quezon City, and covered by their prejudice to the parties adducing other evidence to prove their case not
corresponding certificates of title, for the stipulated price of P101,000.00. covered by this stipulation of facts.1äwphï1.ñët

The vendee paid P5,000.00 down, P2,500.00 in cash, and P2,500.00 by

a check drawn against the Philippine National Bank, and agreed to An examination of the first complaint filed against appellant in the Court
satisfy the balance of P96,000.00 within ninety (90) days. To secure the of First Instance of Manila shows that it was based on appellants' having
said balance, the vendee Socorro A. Ramos, in the same deed of sale, unlawfully stopped payment of the check for P2,500.00 she had issued in
mortgaged the eleven parcels in favor of the vendors. By way of favor of appellees; while the complaint in the present action was for non-
additional security, Socorro A. Ramos, as attorney-in-fact of her children, payment of the balance of P96,000.00 guaranteed by the mortgage. The
Enrique, Antonio, Milagros, and Lourdes, and as judicial guardian of her claim for P2,500.00 was, therefore, a distinct debt not covered by the
minor child Angelita Ramos, executed another mortgage on Lot No. 409 security; and since the mortgage was constituted on lands situated in
of the Malinta Estate. Quezon City, the appellees could not ask for its foreclosure in the Manila
courts. The two causes of action being different, section 4 of Rule 2 does
Because of the vendee-mortgagor's failure to comply with some not apply.
conditions of the mortgage, this action for foreclosure of the mortgage
was filed by the vendors-mortgagees in the court below, on 29 April On the second assignment of error: the stipulation in the mortgage
1959. Defendant Socorro Ramos moved to dismiss, alleging that the contract that the obligation for P96,000.00 was to be —
plaintiffs previously had filed action against her in the Court of First
Instance of Manila on 24 February 1959 for the recovery of P2,500.00 without interest, payable within ninety (90) days from this date,
paid by check as part of the down payment on the price of the mortgaged provided that in case of default it shall bear interest at the rate of
lands; that at the time this first suit was filed, the mortgage debt was 12% per annum,
already accrued and demandable; that plaintiffs were, therefore, guilty of
splitting a single cause of action, and under section 4 of Rule 2 of the clearly fixes a date of maturity, the stipulated twelve per cent in case of
Rules of Court, the filing of the first action for P2,500.00 was a defense default being nothing more than a penalty, designed to induce the debtor
that could be pleaded in abatement of the second suit. Upon opposition to pay on or before the expiration of the ninety (90) days. Hence, there
by the plaintiffs, the Court of First Instance of Quezon City denied the was no call upon the court to set another due date.
motion to dismiss; but defendant Ramos repleaded the averments as a
Finding no error in the judgment appealed from, the same is affirmed, Case No. 8084.7 The respondent used as a ground for ejectment the
with costs against appellants. petitioner’s violation of stipulations in the lease contract regarding the use
of the property. Under this contract, the petitioner shall use the leased lot
as a parking space for light vehicles and as a site for a small drivers’
canteen,8 and may not utilize the subject premises for other purposes
without the respondent’s prior written consent. 9 The petitioner, however,
constructed restaurant buildings and other commercial establishments on
G.R. No. 167246 July 20, 2011 the lot, without first securing the required written consent from the
respondent, and the necessary permits from the Association and the
Ortigas & Co. Ltd. Partnership. The petitioner also subleased the
GEORGE LEONARD S. UMALE, Petitioner,
property to various merchants-tenants in violation of the lease contract.
vs.
CANOGA PARK DEVELOPMENT CORPORATION, Respondent.
The MTC-Branch 68 decided the ejectment case in favor of the
respondent. On appeal, the RTC-Branch 155, Pasig City affirmed
DECISION
in toto the MTC-Branch 68 decision.10 The case, however, was re-raffled
to the RTC-Branch 267, Pasig City because the Presiding Judge of the
BRION, J.: RTC-Branch 155, upon motion, inhibited himself from resolving the
petitioner’s motion for reconsideration.11 The RTC-Branch 267 granted
Before us is a petition for review on certiorari1 filed by George Leonard S. the petitioner’s motion, thereby reversing and setting aside the MTC-
Umale (petitioner), challenging the August 20, 2004 Decision2 of the Branch 68 decision. Accordingly, Civil Case No. 8084 was dismissed for
Court of Appeals (CA) in CA-G.R. SP. No. 78836 and its subsequent being prematurely filed.12 Thus, the respondent filed a petition for review
February 23, 2005 Resolution3 that denied his motion for reconsideration. with the CA on April 10, 2002.13
The CA reversed the Decision4 of the Regional Trial Court (RTC)-Branch
68, Pasig City, that dismissed Canoga Park Development Corporation’s During the pendency of the petition for review, the respondent filed on
complaint for unlawful detainer on the ground of litis pendentia. May 3, 2002 another case for unlawful detainer against the petitioner
before the MTC-Branch 71, Pasig City. The case was docketed as Civil
ANTECEDENTS Case No. 9210.14 This time, the respondent used as a ground for
ejectment the expiration of the parties’ lease contract.
On January 4, 2000, the parties entered into a Contract of
Lease5 whereby the petitioner agreed to lease, for a period of two (2) On December 4, 2002, the MTC-Branch 71 rendered a decision15 in favor
years starting from January 16, 2000, an eight hundred sixty (860)- of the respondent, the dispositive portion of which read, as follows:
square-meter prime lot located in Ortigas Center, Pasig City owned by
the respondent. The respondent acquired the subject lot from Ortigas & WHEREFORE, judgment is hereby rendered in favor of the plaintiff
Co. Ltd. Partnership through a Deed of Absolute Sale, subject to the [referring to the respondent] and against the defendant and all persons
following conditions: (1) that no shopping arcades or retail stores, claiming rights under him, as follows:
restaurants, etc. shall be allowed to be established on the property,
except with the prior written consent from Ortigas & Co. Ltd. Partnership
1. Defendant and all persons claiming rights under him are
and (2) that the respondent and/or its successors-in-interest shall
ordered to peacefully vacate the premises located at Lot 9, Block
become member/s of the Ortigas Center Association, Inc. (Association),
5, San Miguel Avenue, Ortigas Center, Pasig City, covered by
and shall abide by its rules and regulations. 6
Transfer Certificate of Title No. 488797 of the Registry of Deeds
of Pasig City and to surrender the possession thereof to the
On October 10, 2000, before the lease contract expired, the respondent plaintiff;
filed an unlawful detainer case against the petitioner before the
Metropolitan Trial Court (MTC)-Branch 68, Pasig City, docketed as Civil
 2. Defendant is ordered to pay unto plaintiff the following: In presenting his case before this Court, the petitioner insists that litis
pendentia exists between the two ejectment cases filed against him
a. Damages for the use of the property after the expiration because of their identity with one another and that any judgment on the
of the lease contract therefor in the amount of One first case will amount to res judicata on the other. The petitioner argues
Hundred Fifty Thousand Pesos (₱150,000.00) a month, that the respondent reiterated the ground of violations of the lease
beginning 16 January 2002 until he and all those claiming contract, with the additional ground of the expiration of the lease contract
rights under him have vacated and peacefully turned over in the second ejectment case. Also, the petitioner alleges that all of the
the subject premises to the plaintiff; and elements of litis pendentia are present in this case, thus, he prays for the
reversal and setting aside of the assailed CA decision and resolution, and
b. One Hundred Thousand Pesos (₱100,000.00) as and for the dismissal of the complaint in Civil Case No. 9210 on the ground
for attorney’s fees together with costs of suit. of litis pendentia and/or forum shopping.

3. With respect to the commercial units built by [the] defendant on THE COURT’S RULING
the subject land, he is hereby ordered to remove the same from
the subject land and to restore the subject land in the same We disagree with the petitioner and find that there is no litis
condition as it was received unto the plaintiff, at his exclusive pendentia.
account, failing which the same shall be removed by the plaintiff,
with expenses therefor chargeable to the defendant. As a ground for the dismissal of a civil action, litis pendentia refers to a
situation where two actions are pending between the same parties for the
On appeal, the RTC-Branch 68 reversed and set aside the decision of same cause of action, so that one of them becomes unnecessary and
the MTC-Branch 71, and dismissed Civil Case No. 9210 on the ground vexatious.19
of litis pendentia.16 The petitioner, however, was still ordered to pay rent
in the amount of seventy-one thousand five hundred pesos (₱71,500.00) Litis pendentia exists when the following requisites are present: identity of
per month beginning January 16, 2002, which amount is the monthly rent the parties in the two actions; substantial identity in the causes of action
stipulated in the lease contract. and in the reliefs sought by the parties; and the identity between the two
actions should be such that any judgment that may be rendered in one
Aggrieved by the reversal, the respondent filed a Petition for Review case, regardless of which party is successful, would amount to res
under Rule 42 of the Rules of Court with the CA. The respondent argued judicata in the other.20
that there exists no litis pendentia between Civil Case Nos. 8084 and
9210 because the two cases involved different grounds for ejectment, In the present case, the parties’ bone of contention is whether Civil Case
i.e., the first case was filed because of violations of the lease contract, Nos. 8084 and 9210 involve the same cause of action. The petitioner
while the second case was filed due to the expiration of the lease argues that the causes of action are similar, while the respondent argues
contract. The respondent emphasized that the second case was filed otherwise. If an identity, or substantial identity, of the causes of action in
based on an event or a cause not yet in existence at the time of the filing both cases exist, then the second complaint for unlawful detainer may be
of the first case.17 The lease contract expired on January 15, dismissed on the ground of litis pendentia.
2002,18 while the first case was filed on October 10, 2000.
We rule that Civil Case Nos. 8084 and 9210 involve different causes
On August 20, 2004, the CA nullified and set aside the assailed decision of action.
of the RTC-Branch 68, and ruled that there was no litis
pendentia because the two civil cases have different causes of Generally, a suit may only be instituted for a single cause of action. 21 If
action. The decision of the MTC- Branch 71 was ordered reinstated. two or more suits are instituted on the basis of the same cause of action,
Subsequently, the petitioner’s motion for reconsideration was denied; the filing of one or a judgment on the merits in any one is ground for the
hence, the filing of the present petition for review on certiorari. dismissal of the others.22
Several tests exist to ascertain whether two suits relate to a single or alleged violations of the lease contract committed by the petitioner. We
common cause of action, such as whether the same evidence would note that the damages awarded by the MTC-Branch 71 in Civil Case No.
support and sustain both the first and second causes of action23 (also 9210 were for those incurred after the expiration of the lease
known as the "same evidence" test),24 or whether the defenses in one contract,28 not for those incurred prior thereto.
case may be used to substantiate the complaint in the other.25 Also
fundamental is the test of determining whether the cause of action in Similarly, we do not find the respondent guilty of forum shopping in filing
the second case existed at the time of the filing of the first Civil Case No. 9210, the second civil case. To determine whether a party
complaint.26 violated the rule against forum shopping, the test applied is whether the
elements of litis pendentia are present or whether a final judgment in one
Of the three tests cited, the third one is especially applicable to the case will amount to res judicata in another.29 Considering our
present case, i.e., whether the cause of action in the second case existed pronouncement that not all the requisites of litis pendentia are present in
at the time of the filing of the first complaint – and to which we answer in this case, the CA did not err in declaring that the respondent committed
the negative. The facts clearly show that the filing of the first ejectment no forum shopping. Also, a close reading of the Verification and
case was grounded on the petitioner’s violation of stipulations in the Certification of Non-Forum Shopping30 (attached to the second ejectment
lease contract, while the filing of the second case was based on the complaint) shows that the respondent did disclose that it had filed a
expiration of the lease contract. At the time the respondent filed the first former complaint for unlawful detainer against the petitioner. Thus, the
ejectment complaint on October 10, 2000, the lease contract between the respondent cannot be said to have committed a willful and deliberate
parties was still in effect. The lease was fixed for a period of two (2) forum shopping.
years, from January 16, 2000, and in the absence of a renewal agreed
upon by the parties, the lease remained effective until January 15, 2002. WHEREFORE, the instant petition is DENIED. The assailed Decision
It was only at the expiration of the lease contract that the cause of action dated August 20, 2004 and Resolution dated February 23, 2005 of the
in the second ejectment complaint accrued and made available to the Court of Appeals in CA-G.R. SP. No. 78836 are AFFIRMED.
respondent as a ground for ejecting the petitioner. Thus, the cause of
action in the second case was not yet in existence at the time of filing of SO ORDERED.
the first ejectment case.
ARTURO D. BRION
In response to the petitioner’s contention that the similarity of Civil Case Associate Justice
Nos. 8084 and 9210 rests on the reiteration in the second case of the
cause of action in the first case, we rule that the restatement does not
result in substantial identity between the two cases. Even if the
respondent alleged violations of the lease contract as a ground for
ejectment in the second complaint, the main basis for ejecting the
petitioner in the second case was the expiration of the lease contract. If
not for this subsequent development, the respondent could no longer file
a second complaint for unlawful detainer because an ejectment complaint
may only be filed within one year after the accrual of the cause of
action,27 which, in the second case, was the expiration of the lease
contract.1awphi1

Also, contrary to petitioner’s assertion, there can be no conflict between

the decisions rendered in Civil Case Nos. 8084 and 9210 because the
MTC-Branch 71 decided the latter case on the sole issue of whether the
lease contract between the parties had expired. Although alleged by the
respondent in its complaint, the MTC-Branch 71 did not rule on the
 G.R. No. 173783, June 17, 2015 Riviera Golf initially paid the agreed fees, but defaulted in its
payment of the licensing fees and the reimbursement claims in
RIVIERA GOLF CLUB, INC., Petitioner, v. CCA HOLDINGS, September 1997. Riviera Golf likewise failed to pay the monthly
B.V., Respondent. management and incentive fees in June 1999, prompting CCA
Holdings to demand the amounts due under both agreements.
DECISION
On October 29, 1999, Riviera Golf sent CCA Holdings a letter
BRION, J.: informing the latter that it was pre-terminating the
Management Agreement purportedly to alleviate the financial
Before the Court is the petition for review on certiorari1 filed by crisis that the AFP-RSBS was experiencing. The Royalty
Riviera Golf Club, Inc. (Riviera Golf) assailing the January 11, Agreement was also deemed pre-terminated.
2006 decision2 and the July 5, 2006 resolution3 of the Court of
Appeals (CA) in CA-G.R.CV No. 83824. CCA Holdings protested the termination of the agreement and
demanded that Riviera Golf settle its unpaid management and
Background Facts royalty fees. Riviera Golf however refused on the ground that
CCA Holdings violated the terms of the agreement.
Riviera Golf, a domestic corporation, is the owner of Riviera Golf
Club (Club), a 36-hole golf course and recreational facility in In April 2001, CCA Holdings filed before the Regional Trial Court
Silang, Cavite. On October 11, 1996, Riviera Golf entered into (RTC), Branch 146, Makati City, a complaint for sum of money
a Management Agreement with CCA Holdings, B.V. (CCA with damages docketed as Civil Case No. 01-611 (first
Holdings), a foreign corporation, for the management and complaint) against Riviera Golf. During the pendency of the
operation of the Club. case, the parties tried to extrajudicially settle their differences
and executed a Compromise Agreement.
The Management Agreement was for a period of five (5) years.
Under this agreement, Riviera Golf would pay CCA Holdings a On April 25, 2002, the RTC rendered a decision4 approving the
monthly Base Management Fee of 5.5% of the Adjusted Gross parties' Compromise Agreement. Paragraph 4 of the agreement
Revenue equivalent to US$16,500.00 per month, adjusted to reads:
chanRoblesvirtualLaw libra ry

4.5% per month from the opening date, plus an incentive 4) It is understood that the execution of this compromise
Management Fee of 10% of the Gross Operating Profit. agreement or the payment of the aforementioned sum of
money shall not be construed as a waiver of or with
The parties also entered into a co-terminous Royalty prejudice to plaintiffs rights/cause of action, if any,
Agreement that would allow Riviera Golf and the Club's arising from or relative to the pre-termination of the
developer, Armed Forces of the Philippines' Retirement and parties' Management and Royalty Agreements by the
Separation Benefits System (AFP-RSBS), to use CCA Holdings' defendant subject to whatever claims and defenses may have
name and facilities to market the Club's shares. In consideration relative thereto; (Emphasis supplied.)
chanroblesvirtual lawlib rary

of the license to use CCA Holdings' name, Riviera Golf and AFP- Subsequently, or on November 22, 2002, CCA Holdings again
RSBS will pay CCA Holdings a gross licensing fee of 1% on all sent a letter to Riviera Golf, this time, demanding the sum of
membership fees paid in the sale of shares, an additional gross US$390,768.00 representing the projected net income or
licensing fee of 4% on all club shares, and 7% on non-golf expected business profits it was supposed to derive for the
memberships sold. unexpired two-year term of the Management Agreement. As its
demands went unheeded, CCA Holdings filed another complaint
for sum of money and damages docketed as Civil Case No. 03- The CA Ruling
399 (second complaint) before Branch 57 of the RTC of Makati
City. In its decision dated January 11, 2006, the CA set aside the
order granting the motion to dismiss, and remanded the case
Noting that the first and second complaints involve the same to the RTC for adjudication on the merits. The CA held that res
parties, the same subject matter, and the same causes of judicata and splitting of a single cause of action were not
action, Riviera Golf filed on August 6, 2003, a Motion to Dismiss committed based on the following reasons:
on the grounds of res judicata and violation of the rule against
splitting of causes of action. CCA Holdings opposed the motion First, there is no identity of causes of action in the two
contending that there is no splitting of causes of action since civil cases.
the two cases are entirely independent of each other. CCA
Holdings also justified its belated filing of the second complaint, The test to determine the identity of causes of action is to
arguing that the needed financial records were in Riviera Golfs ascertain whether the same evidence is necessary to sustain
possession. the two suits. In this case, the sets of evidence in the two
complaints were different.
The RTC Ruling
Second, there is no splitting of a single cause of
The RTC, Branch 57, Makati City granted the motion to dismiss, action because Riviera Golf violated separate primary rights of
holding that the first and second complaints have identical CCA Holdings under the management contract.
causes of action and subject matter. Since the claims in Civil
Case No. 01-611 and Civil Case No. 03-399 arose from alleged Third, Riviera Golf recognized CCA Holdings' right to seek
violations of the terms and conditions of the Management and damages arising from or relative to the premature termination
Royalty Agreements, the rules on res judicata and splitting of of the Management Agreement. This view is evident from the
causes of action apply. literal interpretation of Paragraph 4 (or the "non waiver clause")
of the parties' compromise agreement.
The RTC also noted that CCA Holdings had every opportunity to
raise the issue of pre-termination when it filed Civil Case No. Riviera Golf moved for the reconsideration of the decision, but
01-611. That CCA Holdings did not do so and opted instead to the CA denied its motion in its resolution of July 5, 2006; hence,
reserve it for future litigation only show that it was speculating the present recourse to us pursuant to Rule 45 of the Rules of
on the results of the litigation. Court.

The RTC likewise pointed out that the reservation clause or the The Petition
"nonwaiver clause" that the parties inserted in the Compromise
Agreement was qualified by the phrase subject to whatever Riviera Golf asks the Court to set aside the CA decision,
claims and defenses the defendant may have relative thereto. contending that the appellate court committed a grave error in
The RTC held that the defenses that Riviera Golf could raise are not holding that the filing of the second complaint amounted
not limited only to those relating to the legality of the pre- to res judicata and splitting of a single cause of action. Riviera
termination of the agreements, but could also include all other Golf submits that based on the allegations in the two
claims and defenses such as res judicata and splitting of a complaints, the facts that are necessary to support the second
single cause of action. case (Civil Case No. 03-399) would have been sufficient to
authorize recovery in the first case (Civil Case No. 01-611).
CCA Holdings appealed the dismissal of its complaint to the CA.
Moreover, the documentary evidence that CCA Holdings the second complaint in view of the non-waiver clause inserted
submitted to support both complaints are also the same. Thus, in the compromise agreement.
both civil cases involve not only the same facts and the same
subject matter, but also the same cause of action, i.e., breach The Issues
of the Management and Royalty Agreements.
As defined by the parties, the issues before us are limited to:
Riviera Golf also argued that although there seems to be
several rights violated, there is only one delict or wrong 1. Whether the CCA Holdings violated the prohibitions
committed and consequently, only one cause of action that against res judicata and splitting a single cause of action when
should have been alleged in a single complaint. Since the it filed the claim for damages for unrealized profits; and
alleged breach of contract in this case was already total at
the time of the filing of Civil Case No. 01-611, the filing of 2. Whether the CA's interpretation of paragraph 4 of the
the second complaint for the recovery of damages for the pre- compromise agreement is correct. If in the affirmative, whether
termination of the Management and Royalty Agreements the parties may stipulate on an agreement violating the
constitutes splitting a single cause of action that is expressly prohibitions against res judicata and splitting a single cause of
prohibited by the Rules of Court. action.

Riviera Golf likewise disagrees with the CA's interpretation of Our Ruling
the non-waiver clause. It argues that the phrase if any and the
condition that the causes of action are subject to whatever We find the petition meritorious.
claims and defenses the defendant may have relative thereto in
the non-waiver clause limited its recognition of CCA Holdings' The Second Complaint is Barred by Res Judicata
rights and causes of action. It also maintains that the filing of
the motion to dismiss based on res judicata and splitting of Res judicata is defined as a matter adjudged; a thing judicially
causes of action clearly falls within the non-waiver clause's acted upon or decided; or a thing or matter settled by
limitation. judgment. Under this rule, a final judgment or decree on the
merits by a court of competent jurisdiction is conclusive as to
The Case for the Respondent the rights of the parties or their privies in all later suits, and on
all points and matters determined in the former suit.5 ChanRoblesVirtua lawl ibrary

CCA Holdings reiterates that there was absolutely no identity of

subject matter and causes of action because the first case The concept of res judicata is embodied in Section 47(b) and (c)
sought the payment for the services it already rendered, while of Rule 39 of the Rules of Court, which reads:
chanRoblesvirtualLaw libra ry

the second case sought the recovery of damages representing SEC. 47. Effect of judgments or final orders. — The effect of a
the projected net income that it failed to realize by reason of judgment or final order rendered by a court of the Philippines,
the unilateral and premature termination of the Management having jurisdiction to pronounce the judgment or final order,
and Royalty Agreements. Thus, the principles of res may be as follows:
judicata and splitting of a single cause of action do not apply.
(a) In case of a judgment or final order against a specific thing
Even assuming that the prohibition against res or in respect to the probate of a will, or the administration of
judicata operates in this case, CCA Holdings contends that the estate of a deceased person, or in respect to the personal,
Riviera Golf is already estopped from questioning the filing of political, or legal condition or status of a particular person or his
relationship to another, the judgment or final order is conclusive
upon the title to the thing, the will or administration, or the recovery of damages for the premature termination of the
condition, status or relationship of the person; however, the parties' agreements, both cases were nevertheless filed on the
probate of a will or granting of letters of administration shall basis of the same Management and Royalty Agreements. Thus,
only be prima facie evidence of the death of the testator or we agree that these two cases refer to the same subject matter.
intestate;
The Court is also convinced that there is identity of causes of
(b) In other cases, the judgment or final order is, with respect action between the first and the second complaints.
to the matter directly adjudged or as to any other matter that
could have been raised in relation thereto, conclusive between A cause of action may give rise to several reliefs, but only one
the parties and their successors in interest by title subsequent action can be filed.8 A single cause of action or entire claim or
to the commencement of the action or special proceeding, demand cannot be split up or divided into two or more different
litigating for the same thing and under the same title and in the actions. The rule on prohibiting the splitting of a single cause of
same capacity; and, action is clear. Section 4, Rule 2 of the Rules of Court expressly
states:
(c) In any other litigation between the same parties or their
chanRoblesvirtualLaw libra ry

Section 4. Splitting a single cause of action; effect of. - If two or

successors in interest, that only is deemed to have been more suits are instituted on the basis of the same cause of
adjudged in a former judgment or final order which appears action, the filing of one or a judgment upon the merits in any
upon its face to have been so adjudged, or which was actually one is available as a ground for the dismissal of the others.
and necessarily included therein or necessary thereto.
chanroblesvirtual lawlib rary

chanroblesvirtual lawlib rary

In both Civil Case No. 01-611 and Civil Case No. 03-399, CCA
Res judicata requires the concurrence of the following Holdings imputed the same wrongful act - the alleged
requisites: (1) the former judgment must be final; (2) it must violations of the terms and conditions of the Management
have been rendered by a court having jurisdiction of the subject and Royalty Agreements. In Civil Case No. 01-611, CCA
matter and the parties; (3) it must be a judgment on the Holdings' cause of action rests on Riviera Golfs failure to pay
merits; and (4) there must be, between the first and second the licensing fees, reimbursement claims, and monthly
actions (a) identity of parties, (b) identity of subject matter, management and incentive fees. In Civil Case No. 03-399 on
and (c) identity of causes of action.6ChanRob lesVirtua lawl ibr ary
the other hand, CCA Holdings' cause of action hinges on the
damages it allegedly incurred as a result of Riviera Golfs
All the Elements of Res Judicata are Present premature termination of the Management and Royalty
Agreements (i.e., the expected business profits it was supposed
There is no dispute as to the presence of the first three to derive for the unexpired two-year term of the Management
elements in the present case. The decision in Civil Case No. 01- Agreement). Although differing in form, these two cases are
611 is a final judgment on the merits rendered by a court which ultimately anchored on Riviera Golfs breach of the Management
had jurisdiction over the subject matter and over the parties. and Royalty Agreements. Thus, we conclude that they have
Since a judicial compromise operates as an adjudication on the identical causes of action.
merits, it has the force of law and the effect of res judicata.7 ChanRoblesVirt ualawl ibrary

Same Evidence Support and Establish Both the Present

With respect to the fourth element, a careful examination of the and the Former Cause of Action
allegations in the two complaints shows that the cases involve
the same parties and the same subject matter. While Civil Case It is a settled rule that the application of the doctrine of res
No. 01-611 is for the collection of unpaid management and judicata to identical causes of action does not depend on the
royalty fees, and Civil Case No. 03-399 on the other hand, is for similarity or differences in the forms of the two actions. A party
cannot, by varying the form of the action or by adopting a action.
different method of presenting his case, escape the operation of
the doctrine of res judicata.9 The test of identity of causes of We held in this regard in Stilianopulos v. The City of Legaspi:13 cralawlawlibra ry

action rests on whether the same evidence would support and The underlying objectives or reliefs sought in both the quieting-
establish the former and the present causes of action.10 ChanRoblesV irtuala wlib rary of-title and the annulment-of-title cases are essentially the
same adjudication of the ownership of the disputed lot and
We held in Esperas v. The Court of Appeals11 that the ultimate nullification of one of the two certificates of title. Thus, it
test in determining the presence of identity of cause of action is becomes readily apparent that the same evidence or set of facts
to consider whether the same evidence would support the cause as those considered in the quieting-of-title case would also be
of action in both the first and the second cases. Under used in this Petition.
the same evidence test, when the same evidence support and
establish both the present and the former causes of action, The difference in form and nature of the two actions is
there is likely an identity of causes of action.12 ChanRoblesV irtua lawlib rary immaterial and is not a reason to exempt petitioner from the
effects of res judicata. The philosophy behind this rule prohibits
The pleadings and record of the present case show that there the parties from litigating the same issue more than once.
is a glaring similarity in the documentary evidence When a right or fact has been judicially tried and determined by
submitted to prove the claims under the two complaints. a court of competent jurisdiction or an opportunity for such trial
The pieces of evidence both in the collection of unpaid has been given, the judgment of the court, as long as it remains
management and royalty fees, and the recovery of damages for unreversed, should be conclusive upon the parties and those in
the expected business profits aim at establishing the breach of privity with them. Verily, there should be an end to litigation by
the Management and Royalty Agreements. the same parties and their privies over a subject, once it is fully
and fairly adjudicated. (Citations omitted.)
Furthermore, the evidence in the first complaint will have to be
chanroblesvirtual lawlib rary

At the Time the First Complaint was Filed

reexamined to support the cause of action in the second
The Breach of the Agreements was Already Total
complaint. We specifically note that at least four (4) documents
were presented in both actions, namely:
chanRoblesvirtualLaw libra ry

We likewise note that the non-payment of fees and the

(1) the Management Agreement between Riviera Golf and CCA premature termination of the contract occurred as early as
Holdings; 1999. In other words, the violation of both the Management and
Royalty Agreements preceded the filing of the first complaint.
(2) the Royalty Agreement between Riviera Golf and CCA Holdings; Consequently, when CCA Holdings filed its first complaint in
2001, the breach of the agreements was already complete and
(3) the Fees Receivable Report of CCA Holdings as of October 1999, total; and the ground for the recovery of damages was
amounting to USD 97,122.00; and available and in existence. Thus, allowing CCA Holdings now to
file two separate and independent claims anchored on the same
(4) the letter dated October 29, 1999, stating the termination of the breach of contract (i.e., breach of the Management and Royalty
Management Agreement. Agreements), constitutes a blatant disregard of our prohibition
against res judicata and splitting of a single cause of action.
Based on the allegations in the two complaints, the facts that
are necessary to support the second complaint would have been
In contracts providing several obligations, each obligation may
sufficient to allow CCA Holdings to recover in the first complaint.
give rise to a single and independent cause of action. But if
The similarity in the pieces of evidence in these two cases
several obligations have matured, or if the entire
therefore strongly suggests the identity of their causes of
contract is breached at the time of the filing of the premature termination of the Management Agreement.
complaint, all obligations are integrated into one cause of
action. Hence, the claim arising from such cause of action that We do not see any merit in this contention.
is not included in the complaint is barred forever. The Court's
explanation in Blossom and Company, Inc. v. Manila Gas A compromise is a contract whereby the parties, by making
Corporation,14 citing US jurisprudence on the matter, is reciprocal concessions, avoid a litigation or put an end to one
instructive, viz: already commenced.15 Like any other contract, a compromise
agreement must be consistent with the requisites and principles
chanRoblesvirtualLaw libra ry

34 Corpus Juris, p. 839, it is said:

of contracts. While it is true that the agreement is binding
chanRoblesvirtualLaw libra ry

As a general rule[,] a contract to do several things at several

times in its nature, so as to authorize successive actions; and a between the parties and becomes the law between them, it is
judgment recovered for a single breach of a continuing contract also a rule that to be valid, a compromise agreement must not
or covenant is no bar to a suit for a subsequent breach thereof. be contrary to law, morals, good customs, and public
But where the covenant or contract is entire, and the breach policy.16 ChanRoblesV irtualaw library

total, there can be only one action, and [the] plaintiff must
therein recover all his damages. In the present case, a reading of paragraph 4 of the
Compromise Agreement shows that it allows the filing of
chanroblesvirtual lawlib rary

In the case of Rhoelm v. Horst, 178 U. U., 1; 44 Law. ed., 953, complaints based on the same cause of action (i.e., breach
that court said:
chanRoblesvirtualLaw libra ry
of the Management and Royalty Agreements), to wit:
An unqualified and positive refusal to perform a contract,
chanRoblesvirtualLaw libra ry

4) It is understood that the execution of this compromise

though the performance thereof is not yet due, may, if the agreement or the payment of the aforementioned sum of
renunciation goes to the whole contract, be treated as a money shall not be construed as a waiver of or with
complete breach which will entitle the injured party to bring his prejudice to plaintiffs rights/cause of action, if any,
action at once.
chanroblesvirtual lawlib rary
arising from or relative to the pre-termination of the
In the present case, CCA Holdings' claim for the unpaid parties' Management and Royalty Agreements by the
management and royalty fees as well as the damages for its defendant subject to whatever claims and defenses may have
expected business profits constituted an indivisible demand. relative thereto; (Emphasis supplied.)
chanroblesvirtual lawlib rary

Verily, CCA Holdings should have included and alleged the Since paragraph 4 allows the splitting of causes of action
recovery of damages for its expected business profits as a and res judicata, this provision of the Compromise Agreement
second cause of action in Civil Case No. 01-611. CCA Holdings should be invalidated for being repugnant to our public policy.
cannot be permitted to split up a single cause of action and
make that single cause of action the basis of several suits. The well-settled rule is that the principle or rule of res
judicata is primarily one of public policy. It is based on the
All told, the Court finds that the filing of the second complaint is policy against multiplicity of suits,17 whose primary objective is
barred by res judicata. to avoid unduly burdening the dockets of the courts.

The "Non-Waiver Clause" Stipulated Speaking through Justice J.B.L. Reyes, the Court in Aguila v.
in the Compromise Agreement is Null and Void J.M. Tuason & Co., Inc.18 held that:
chanRoblesvirtualLaw libra ry

Public policy is firmly set against unnecessary

CCA Holdings contends that Riviera Golf is already estopped
multiplicity of suits; the rule of res judicata, like that
from questioning the filing of the second complaint because the
against splitting causes of action, are all applications of
non-waiver clause of the Compromise Agreement recognized the same policy, that matters once settled by a Court's final
CCA Holdings' prerogative to seek damages arising from the
judgment should not thereafter be invoked against. Relitigation G.R. No. 201892, July 22, 2015
of issues already settled merely burdens the Courts and the
taxpayers, creates uneasiness and confusion, and wastes NORLINDA S. MARILAG, Petitioner, v. MARCELINO B.
valuable time and energy that could be devoted to worthier MARTINEZ, Respondent.
cases. As the Roman maxim goes, Non bis in idem.19 (Emphasis
supplied.) DECISION

Because it is contrary to our policy against multiplicity of suits, PERLAS-BERNABE, J.:

we cannot uphold paragraph 4 of the Compromise Agreement to
be valid, for we would then render legitimate the splitting of Assailed in this petition for review on certiorari1 are the
causes of action and negate the prohibition against res judicata. Decision2 dated November 4, 2011 and the Resolution3 dated
Under Article 1409 of the Civil Code, contracts which are May 14, 2012 of the Court of Appeals (CA) in CA-G.R. CV No.
contrary to public policy and those expressly prohibited or 81258 which recalled and set aside the Orders dated November
declared void by law are considered inexistent and void from 3, 20034 and January 14, 20045 of the Regional Trial Court
the beginning. (RTC) of Las Piñas City, Branch 202 (court a quo) in Civil Case
No. 98-0156, and reinstated the Decision6 dated August 28,
In sum, we declare paragraph 4 of the Compromise Agreement 2003 directing petitioner Norlinda S. Marilag (petitioner) to
null and void for being contrary to public policy. return to respondent Marcelino B. Martinez (respondent) the
latter's excess payment, plus interest, and to pay attorney's
WHEREFORE, premises considered, we GRANT the petition. fees and the costs of suit.
The decision dated January 11, 2006, of the Court of Appeals in
CA-G.R. CV No. 83824 is hereby REVERSED and SET ASIDE. The Facts
Accordingly, the decision dated September 29, 2004, of the
Regional Trial Court, Branch 57, Makati City, in Civil Case No. On July 30, 1992, Rafael Martinez (Rafael), respondent's father,
03-399 is REINSTATED. obtained from petitioner a loan in the amount of P160,000.00,
with a stipulated monthly interest of five percent (5%), payable
SO ORDERED. cralawlawlibrary
within a period of six (6) months. The loan was secured by a
real estate mortgage over a parcel of land covered by Transfer
Certificate of Title (TCT) No. T-208400. Rafael failed to settle
his obligation upon maturity and despite repeated demands,
prompting petitioner to file a Complaint for Judicial Foreclosure
of Real Estate Mortgage before the RTC of Imus, Cavite, Branch
907 (RTC-Imus) on November 10, 1995,8 docketed as Civil Case
No. 1208-95 Gudicial foreclosure case).

Rafael failed to file his answer and, upon petitioner's motion,

was declared in default. After an ex parte presentation of
petitioner's evidence, the RTC-Imus issued a Decision9 dated
January 30, 1998, (January 30, 1998 Decision) in the
foreclosure case, declaring the stipulated 5% monthly interest
to be usurious and reducing the same to 12% per annum (p.a.).
Accordingly, it ordered Rafael to pay petitioner the amount of court a quo found no valid or compelling reason to allow
P229,200.00, consisting of the principal of P160,000.00 and petitioner to recover further on the subject PN. There being an
accrued interest of P59,200.00 from July 30, 1992 to excess payment of P171,000.00, it declared that a quasi-
September 30, 1995.10 Records do not show that this Decision contract (in the concept of solutio indebiti) exists between the
had already attained finality. parties and, accordingly, directed petitioner to return the said
amount to respondent, plus 6% interest p.a.18 reckoned from
Meanwhile, prior to Rafael's notice of the above decision, the date of judicial demand19 on August 6, 1998 until fully paid,
respondent agreed to pay Rafael's obligation to petitioner which and to pay attorney's fees and the costs of suit.20redarclaw

was pegged at P689,000.00. After making a total payment of

P400,000.00,11 he executed a promissory note12 dated February In an Order21 dated November 3, 2003 (November 3, 2003
20, 1998 (subject PN), binding himself to pay on or before Order), however, the court a quo granted petitioner's motion for
March 31, 1998 the amount of P289,000.00, "representing the reconsideration, and recalled and set aside its August 28, 2003
balance of the agreed financial obligation of [his] father to Decision. It declared that the causes of action in the collection
[petitioner]."13 After learning of the January 30, 1998 Decision, and foreclosure cases are distinct, and respondent's failure to
respondent refused to pay the amount covered by the subject comply with his obligation under the subject PN justifies
PN despite demands, prompting petitioner to file a petitioner to seek judicial relief. It further opined that the
complaint14 for sum of money and damages before the court a stipulated 5% monthly interest is no longer usurious and is
quo on July 2, 1998, docketed as Civil Case No. 98-0156 binding on respondent considering the suspension of the Usury
(collection case). Law pursuant to Central Bank Circular 905, series of 1982.
Accordingly, it directed respondent to pay the amount of
Respondent filed his answer,15 contending that petitioner has no P289,000.00 due under the subject PN, plus interest at the legal
cause of action against him. He averred that he has fully settled rate reckoned from the last extra-judicial demand on May 15,
Rafael's obligation and that he committed a mistake in paying 1998, until fully paid, as well as attorney's fees and the costs of
more than the amount due under the loan, i.e., the amount of suit.22
redarclaw

P229,200.00 as adjudged by the RTC-Imus in the judicial

foreclosure case which, thus, warranted the return of the excess Aggrieved, respondent filed a motion for reconsideration23 which
payment. He therefore prayed for the dismissal of the was denied in an Order24 dated January 14, 2004, prompting
complaint, and interposed a compulsory counterclaim for the him to elevate the matter to the CA.25 redarclaw

release of the mortgage, the return of the excess payment, and

the payment of moral and exemplary damages, attorney's fees The CA Ruling
and litigation expenses.16
redarclaw

In a Decision26 dated November 4, 2011, the CA recalled and

The Court A Quo's Ruling set aside the court a quo's November 3, 2003 and January 14,
2004 Orders, and reinstated the August 28, 2003 Decision. It
In a Decision17 dated August 28, 2003 (August 28, 2003 held that the doctrine of res judicata finds application in the
Decision), the court a quo denied recovery on the subject PN. It instant case,27 considering that both the judicial foreclosure and
found that the consideration for its execution was Rafael's collection cases were filed as a consequence of the non-
indebtedness to petitioner, the extinguishment of which payment ofRafael's loan, which was the principal obligation
necessarily results in the consequent extinguishment of the secured by the real estate mortgage and the primary
cause therefor. Considering that the RTC-Imus had adjudged consideration for the execution of the subject PN. Since res
Rafael liable to petitioner only for the amount of P229,200.00, judicata only requires substantial, not actual, identity of causes
for which a total of P400,000.00 had already been paid, the of action and/or identity of issue,28 it ruled that the judgment in
the judicial foreclosure case relating to Rafael's obligation to dismissal of a civil action, refers to that situation
petitioner is final and conclusive on the collection case. wherein another action is pending between the same
parties for the same cause of action, such that the
Petitioner's motion for reconsideration was denied in a second action becomes unnecessary and vexatious. For
Resolution29 dated May 14, 2012; hence, this petition. the bar of litis pendentia to be invoked, the following requisites
must concur: (a) identity of parties, or at least such parties as
The Issue Before the Court represent the same interests in both actions; (b) identity of
rights asserted and relief prayed for, the relief being founded on
The essential issue for the Court's resolution is whether or not the same facts; and (c) the identity of the two preceding
the CA committed reversible error in upholding the dismissal of particulars is such that any judgment rendered in the pending
the collection case. case, regardless of which party is successful would amount
to res judicata in the other.31 The underlying principle of litis
The Court's Ruling pendentia is the theory that a party is not allowed to vex
another more than once regarding the same subject matter and
The petition lacks merit. for the same cause of action. This theory is founded on the
public policy that the same subject matter should not be the
A case is barred by prior judgment or res judicata when the subject of controversy in courts more than once, in order that
following elements concur: (a) the judgment sought to bar the possible conflicting judgments may be avoided for the sake of
new action must be final; (b) the decision must have been the stability of the rights and status of persons, and also to
rendered by a court having jurisdiction over the subject matter avoid the costs and expenses incident to numerous
and the parties; (c) the disposition of the case must be a suits.32 Consequently, a party will not be permitted to split up a
judgment on the merits; and (d) there must be as between the single cause of action and make it a basis for several suits as
first and second action, identity of parties, subject matter, and the whole cause must be determined in one action.33To be
causes of action.30redarclaw
sure, splitting a cause of action is a mode of forum
shopping by filing multiple cases based on the same
After a punctilious review of the records, the Court finds the cause of action, but with different prayers, where the
principle of res judicata to be inapplicable to the present case. round of dismissal is litis pendentia for res judicata, as
This is because the records are bereft of any indication that the the case may be).34 redarclaw

August 28, 2003 Decision in the judicial foreclosure case had

already attained finality, evidenced, for instance, by a copy of In this relation, it must be noted that the question of whether a
the entry of judgment in the said case. Accordingly, with the cause of action is single and entire or separate is not always
very first element of res judicata missing, said principle cannot easy to determine and the same must often be resolved, not by
be made to obtain. the general rules, but by reference to the facts and
circumstances of the particular case. The true rule, therefore,
This notwithstanding, the Court holds that petitioner's is whether the entire amount arises from one and the
prosecution of the collection case was barred, instead, by the same act or contract which must, thus, be sued for in one
principle of litis pendentia in view of the substantial identity of action, or the several parts arise from distinct and
parties and singularity of the causes of action in the foreclosure different acts or contracts, for which a party may
and collection cases, such that the prior foreclosure case barred maintain separate suits.35 redarclaw

petitioner's recourse to the subsequent collection case.

In loan contracts secured by a real estate mortgage, the rule is
To lay down the basics, litis pendentia, as a ground for the that the creditor-mortgagee has a single cause of
action against the debtor mortgagor, i.e., to recover the On the contrary, it is significant to point out that: (a) the
debt, through the filing of a personal action for collection consideration for the subject PN was the same consideration
of sum of money or the institution of a real action to that supported the original loan obligation of Rafael; (b)
foreclose on the mortgage security. The two remedies respondent merely assumed to pay Rafael's remaining unpaid
are alternative,36 not cumulative or successive,37 and each balance in the latter's behalf, i.e., as Rafael's agent or
remedy is complete by itself. Thus, if the creditor-mortgagee representative;42 and (c) the subject PN was executed after
opts to foreclose the real estate mortgage, he waives the action respondent had assumed to pay Rafael's obligation and made
for the collection of the unpaid debt,38except only for the several payments thereon. Case law states that the fact that
recovery of whatever deficiency may remain in the outstanding the creditor accepts payments from a third person, who has
obligation of the debtor-mortgagor after deducting the bid assumed the obligation, will result merely in the addition of
price in the public auction sale of the mortgaged debtors, not novation, and the creditor may enforce the
properties.39 Accordingly, a deficiency judgment shall only obligation against both debtors.43 For ready reference, the
issue after it is established that the mortgaged property was subject PN reads in full:
sold at public auction for an amount less than the outstanding
ChanRob lesVirtua lawl ibrary

February 20, 1998

obligation.
PROMISSORY NOTE
In the present case, records show that petitioner, as creditor
mortgagee, instituted an action for judicial foreclosure pursuant P289,000.00
to the provisions of Rule 68 of the Rules of Court in order to
recover on Rafael's debt. In light of the foregoing discussion, I, MARCELINO B. MARTINEZ, son of Mr. RAFAEL MARTINEZ, of
the availment of such remedy thus bars recourse to the legal age, Filipino, married and a resident of No. 091 Anabu I-A,
subsequent filing of a personal action for collection of the same Imus, Cavite, by these presents do hereby specifically and
debt, in this case, under the principle of litis pendentia, categorically PROMISE, UNDERTAKE and bind myself in behalf
considering that the foreclosure case only remains pending as it of my father, to pay to Miss NORLINDA S. MARILAG,
was not shown to have attained finality. Mortgagee-Creditor of my said father, the sum of TWO
HUNDRED EIGHTY NINE THOUSAND PESOS (P289,000.00),
While the ensuing collection case was anchored on the Philippine Currency, on or before MARCH 31,
promissory note executed by respondent who was not the 1998, representing the balance of the agreed financial
original debtor, the same does not constitute a separate and obligation of my said father to her. (Emphases supplied)
distinct contract of loan which would have given rise to a
separate cause of action upon breach. Notably, records are Executed at Pamplona I, Las Piñas City, Metro Manila, this
bereft of any indication that respondent's agreement to pay 20th day of February, 1998.
Rafael's loan obligation and the execution of the subject PN
extinguished by novation40 the contract of loan between Rafael Sgd.
and petitioner, in the absence of express agreement or any act MARCELINO B. MARTINEZ
of equal import. Well-settled is the rule that novation is never Promissor44
presumed, but must be clearly and unequivocally shown. Thus, Petitioner's contention that the judicial foreclosure and
in order for a new agreement to supersede the old one, the collection cases enforce independent rights45 must, therefore,
parties to a contract must expressly agree that they are fail because the Deed of Real Estate Mortgage46 and the subject
abrogating their old contract in favor of a new one,41 which was PN both refer to one and the same obligation, i.e., Rafael's loan
not shown here. obligation. As such, there exists only one cause of action for
a single breach of that obligation. Petitioner cannot split her x x x x In sustaining the rule that prohibits mortgage creditors
cause of action on Rafael's unpaid loan obligation by filing a from pursuing both the remedies of a personal action for debt
petition for the judicial foreclosure of the real estate mortgage or a real action to foreclose the mortgage, the Court held in the
covering the said loan, and, thereafter, a personal action for the case of Bachrach Motor Co., Inc. v. Esteban Icarangal, et al.
collection of the unpaid balance of said obligation not that a rule which would authorize the plaintiff to bring a
comprising a deficiency arising from foreclosure, without personal action against the debtor and simultaneously or
violating the proscription against splitting a single cause of successively another action against the mortgaged property,
action, where the ground for dismissal is either res would result not only in multiplicity of suits so offensive to
judicata or litis pendentia, as in this case. justice and obnoxious to law and equity, but also in subjecting
the defendant to the vexation of being sued in the place of his
As elucidated by this Court in the landmark case of Bachrach residence or of the residence of the plaintiff, and then again in
Motor Co., Inc. v. Icarangal.47 the place where the property lies. Hence, a remedy is deemed
chosen upon the filing of the suit for collection or upon
ChanRob lesVirtua lawl ibrary

For non-payment of a note secured by mortgage, the

creditor has a single cause of action against the the filing of the complaint in an action for foreclosure of
debtor. This single cause of action consists in the recovery of mortgage, pursuant to the provisions of Rule 68 of the
the credit with execution of the security. In other words, the Rules of Court. As to extrajudicial foreclosure, such remedy is
creditor in his action may make two demands, the payment of deemed elected by the mortgage creditor upon filing of the
the debt and the foreclosure of his mortgage. But both demands petition not with any court of justice but with the office of the
arise from the same cause, the non-payment of the debt, and, sheriff of the province where the sale is to be made, in
for that reason, they constitute a single cause of accordance with the provisions of Act No. 3135, as amended by
action. Though the debt and the mortgage constitute Act No. 4118. (Emphases supplied)
separate agreements, the latter is subsidiary to the As petitioner had already instituted judicial foreclosure
former, and both refer to one and the same obligation. proceedings over the mortgaged property, she is now
Consequently, there exists only one cause of action for a barred from availing herself of an ordinary action for
single breach of that obligation. Plaintiff, then, by collection, regardless of whether or not the decision in the
applying the rule above stated, cannot split up his single foreclosure case had attained finality. In fine, the dismissal of
cause of action by filing a complaint for payment of the the collection case is in order. Considering, however, that
debt, and thereafter another complaint for foreclosure of respondent's claim for return of excess payment partakes of the
the mortgage. If he does so, the filing of the first complaint nature of a compulsory counterclaim and, thus, survives the
will bar the subsequent complaint. By allowing the creditor to dismissal of petitioner's collection suit, the same should be
file two separate complaints simultaneously or successively, one resolved based on its own merits and evidentiary support.50
to recover his credit and another to foreclose his mortgage, we
redarclaw

will, in effect, be authorizing him plural redress for a single Records show that other than the matter of interest, the
breach of contract at so much cost to the courts and with so principal loan obligation and the payments made were not
much vexation and oppression to the debtor. (Emphases and disputed by the parties. Nonetheless, the Court finds the
underscoring supplied) stipulated 5% monthly interest to be excessive and
Further on the point, the fact that no foreclosure sale appears unconscionable. In a plethora of cases, the Court has affirmed
to have been conducted is of no moment because the remedy of that stipulated interest rates of three percent (3%) per
foreclosure of mortgage is deemed chosen upon the filing of the month and higher are excessive, iniquitous,
complaint therefor.48 In Suico Rattan & Buri Interiors, Inc. v. unconscionable, and exorbitant,51hence, illegal52and void
CA,49 it was explained:
ChanRob lesVirtua lawl ibrary
LawlibraryofCRAlaw
for being contrary to morals.53 In Agner v. BPI Family
Savings Bank, Inc.,54 the Court had the occasion to rule:
LawlibraryofCRA law Thus, as of January 30, 1998, only the amount of P265,600.00
was due under the loan contract, and the receipt of an amount
ChanRob lesVirtua lawl ibrary

Settled is the principle which this Court has affirmed in a

number of cases that stipulated interest rates of three percent more than that renders petitioner liable for the return of the
(3%) per month and higher are excessive, iniquitous, excess. Respondent, however, made further payment in the
unconscionable, and exorbitant. While Central Bank Circular No. amount of P100,000.0057 on the belief that the subject loan
905-82, which took effect on January 1, 1983, effectively obligation had not yet been satisfied. Such payments were,
removed the ceiling on interest rates for both secured and therefore, clearly made by mistake, giving rise to the quasi-
unsecured loans, regardless of maturity, nothing in the said contractual obligation of solutio indebiti under Article 215458 in
circular could possibly be read as granting carte relation to Article 216359 of the Civil Code. Not being a loan or
blanche authority to lenders to raise interest rates to levels forbearance of money, an interest of 6% p.a. should be
which would either enslave their borrowers or lead to a imposed on the amount to be refunded and on the damages
hemorrhaging of their assets. Since the stipulation on the and attorney's fees awarded, if any, computed from the time of
interest rate is void for being contrary to morals, if not demand60 until its satisfaction.61 Consequently, petitioner must
against the law, it is as if there was no express contract return to respondent the excess payments in the total amount
on said interest rate; thus, the interest rate may be of P134,400.00, with legal interest at the rate of 6% p.a. from
reduced as reason and equity demand. (Emphases the filing of the Answer on August 6, 199862 interposing a
supplied) counterclaim for such overpayment, until fully settled.
As such, the stipulated 5% monthly interest should be equitably
However, inasmuch as the court a quo failed to state in the
reduced to 1% per month or 12% p.a. reckoned from the
body of its decision the factual or legal basis for the award of
execution of the real estate mortgage on July 30, 1992. In
attorney's fees to the respondent, as required under Article
order to determine whether there was any overpayment as
220863 of the New Civil Code, the Court resolves to delete the
claimed by respondent, we first compute the interest until
same. The rule is well-settled that the trial court must clearly
January 30, 199855 when he made a payment in the amount of
state the reasons for awarding attorney's fees in the body of its
P300,000.00 on Rafael's loan obligation. Accordingly, the
decision, not merely in its dispositive portion, as the appellate
amount due on the loan as of the latter date is hereby
courts are precluded from supplementing the bases for such
computed as follows:
award.64
LawlibraryofCRAlaw

ChanRob lesVirtua lawl ibrary

redarclaw

Principal P160,000.00
Interest from Finally, in the absence of showing that the court a quo's award
07/30/1992 of the costs of suit in favor of respondent was patently
Add:
to capricious,65 the Court finds no reason to disturb the same.
01/30/1998
(P160,000.00 WHEREFORE, the petition is DENIED. The Decision dated
X 12% X 5.5 105,600.00 November 4, 2011 and the Resolution dated May 14, 2012 of
yrs.) the Court of Appeals in CA-G.R. CV No. 81258 reinstating the
Amount due on court a quo's Decision dated August 28, 2003 in Civil Case No.
the loan
P265,600.00 98-0156 are hereby AFFIRMED with the MODIFICATIONS:
(a) directing petitioner Norlinda S. Marilag to return to
Less: Payment (
respondent Marcelino B. Martinez the latter's excess payments
made on 01/30/98 300,000.00)
in the total amount of P134,400.00, plus legal interest at the
Overpayment as (P rate of 6% p.a. from the filing of the Answer on August 6, 1998
of 01/30/98 34,400.00)56 until full satisfaction; and (b) deleting the award of attorney's
fees. loan obtained, Benavidez executed a promissory note, dated March 11,
1998.
SO ORDERED. cralawlawlibrary

Benavidez, however, failed to deliver the required SPA. She also

defaulted in her obligation under the promissory note. All the postdated
checks which she had issued to pay for the interests were dishonored.
This development prompted Salvador to send a demand letter with a
G.R. No. 173331 December 11, 2013 corresponding statement of account, dated January 11, 2000.
Unfortunately, the demand fell on deaf ears which constrained Salvador
FLORPINA BENAVIDEZ, Petitioner, to file a complaint for sum of money with damages with prayer for
vs. issuance of preliminary attachment.
NESTOR SALVADOR, Respondent.
On May 4, 2000, Benavidez filed a motion to dismiss on the ground
DECISION of litis pendentia. She averred that prior to the filing of the case before the
RTC-Antipolo, she had filed a Complaint for Collection for Sum of Money,
Annulment of Contract and Checks with Prayer for Preliminary Injunction
MENDOZA, J.:
and Temporary Restraining Order against Salvador; his counsel, Atty.
Nepthalie Segarra; Almar Danguilan; and Cris Marcelino, before the
This is a petition for review on certiorari assailing the November 22, 2005 Regional Trial Court, Branch 80, Morong, Rizal (RTC-Morong). The
Decision1 and the June 8, 2006 Amended Decision2 of the Court of motion to dismiss, however, was denied by RTC-Antipolo on July 31,
Appeals (CA). in CA-G.R. CV No. 73487, which affirmed and modified the 2000. On September 15, 2000, Benavidez filed her answer with
June 1, 2001 Decision3 of the Regional Trial Court. Branch 74, Anti polo counterclaim. A pre-trial conference was scheduled on May 2, 2001 but
City (RTC-Antipolo) in Civil Case No. 00-5660. she and her counsel failed to appear despite due notice. Resultantly,
upon motion, Salvador was allowed by the trial court to present
The Facts: evidence ex parte.

Sometime in February 1998, pet1t1oner Florpina On June 1, 2001, RTC-Antipolo decided the subject case for Salvador. It
Benavidez (Benavidez) approached and asked respondent Nestor found that indeed Benavidez obtained a loan from Salvador in the
Salvador (Salvador) for a loan that she would use to repurchase her amount of ₱1,500,000.00. It also noted that up to the time of the rendition
property in Tanay, Rizal which was foreclosed by the Farmers Savings of the judgment, she had failed to settle her obligation despite having
and Loan Bank, Inc. (Farmers Savings). After inspecting the said received oral and written demands from Salvador. Also, the trial court
property, Salvador agreed to lend the money subject to certain pointed out that the evidence had shown that as of January 11, 2000,
conditions. To secure the loan, Benavidez was required to execute a real Benavidez’s obligation had already reached the total amount of
estate mortgage, a promissory note and a deed of sale. She was also ₱4,810,703.21.4 Thus, the fallo of the said decision reads:
required to submit a special power of attorney (SPA) executed and
signed by Benavidez’s daughter, Florence B. Baning (Baning), whom she WHEREFORE, in view of the foregoing premises, defendant is hereby
named as the vendee in the deed of absolute sale of the repurchased directed to pay plaintiff the following:
property. In the SPA, Baning would authorize her mother to obtain a loan
and to constitute the said property as security of her indebtedness to
1. The amount of ₱4,810,703.21, covering the period from June
Salvador.
11, 1998 to January 11, 2000, exclusive of interest and penalty
charges until the said amount is fully paid;
Pursuant to the agreement, Salvador issued a manager’s check in favor
of Benavidez in the amount of One Million Pesos (₱1,000,000.00) and
2. The amount of ₱50,000.00 as exemplary damages;
released Five Hundred Thousand Pesos (₱500,000.00) in cash. For the
 3. The sum of 25% of the total obligation as and by way of cited, was not among the grounds for new trial or reconsideration as
attorney’s fees; and, required under Section 1, Rule 37 of the Rules of Civil Procedure. The
CA emphasized that well-entrenched was the rule that negligence of
4. Cost of suit. counsel bound his client. She was bound by the action of his counsel in
the conduct of the trial. The appellate court also took note that she
SO ORDERED.5 herself was guilty of negligence because she was also absent during the
pre-trial despite due notice. Thus, Benavidez’s position that the trial court
should have reopened the case was untenable. 10
Benavidez filed a motion for reconsideration but unfortunately for her,
RTC-Antipolo, in its August 10, 2001 Order,6 denied her motion for lack of
merit. With regards to the grounds of litis pendentia and forum shopping cited
by Benavidez, the CA wrote that there was no identity of the rights
asserted in the cases filed before RTC-Morong and RTC-Antipolo. The
Frustrated, Benavidez appealed the June 1, 2001 Decision and the
reliefs prayed for in those cases were different. One case was for the
August 10, 2001 Order of RTC-Antipolo to the CA. She argued, in chief,
annulment of the promissory note while the other one was a complaint for
that early on, the trial court should have dismissed the complaint for
sum of money. There could be identity of the parties, but all the other
collection of sum of money filed by Salvador on grounds of litis
requisites to warrant the dismissal of the case on the ground of litis
pendentia and erroneous certification against forum shopping. She
pendentia were wanting.11 Thus, on November 22, 2005, the CA
claimed that prior to the filing of the said complaint against her, she had
affirmed in toto the decision of RTC-Antipolo.12
already filed a complaint for the annulment of the promissory note
evidencing her obligation against Salvador. According to her, there was
substantial identity in the causes of action and any result of her complaint Feeling aggrieved by the affirmance, Benavidez filed a motion for
for annulment would necessarily affect the complaint for collection of sum reconsideration on the ground that the same was contrary to law and
of money filed against her. She added that Salvador never informed jurisprudence; that litis pendentia existed which resultantly made his
RTC-Antipolo about the pending case before RTC-Morong, rendering his certification on non-forum shopping untruthful; and, that her absence
certification on forum shopping erroneous. 7 during the pre-trial was justified.

Benavidez also argued that RTC-Antipolo erred in refusing to re-open the On June 08, 2006, the CA issued the Amended Decision, holding that the
case for pre-trial conference and disallowing her to present evidence. motion was partly meritorious. Accordingly, it modified its earlier decision
She added that the absence of her counsel on the scheduled pre-trial by deleting the award of exemplary damages and attorney’s fees
conference caused her substantial prejudice. Though she was not because the award thereof was not supported by any factual, legal and
unmindful of the general rule that a client was bound by the mistake or equitable justification. Thus, the decretal portion of the Amended
negligence of her counsel, she insisted that since the incompetence or Decision reads:
ignorance of her counsel was so great and the error committed was so
serious as it prejudiced her and denied her day in court, the litigation WHEREFORE, the motion for reconsideration is PARTIALLY
should have been reopened to give her the opportunity to present her GRANTED. The Decision dated November 22, 2005
case.8 is MODIFIED by DELETING the award of exemplary damages and
attorney’s fees.
The CA was not moved.
SO ORDERED. 13
The CA reasoned out that RTC-Antipolo did not err in allowing Salvador
to present his evidence ex-parte in accordance with Section 5, Rule 18 of Still unsatisfied, Benavidez comes before the Court via a petition for
the 1997 Rules of Court.9 Benavidez and her counsel failed to show a review under Rule 45 of the Rules of Court, raising the following issues: 14
valid reason for their non-appearance at the pre-trial and so their
absence was not excusable. Her counsel’s negligence, as Benavidez
 1. Whether or not the present case is barred by Civil Case did not bother to file the necessary pre-trial brief and did not even appear
No. 00-05660 which is pending before the RTC-Morong, Rizal. at the pre-trial conference. He did not assist her either in filing a motion
for reconsideration. Benavidez explains that Atty. Jakosalem did not
2. Whether or not the case is dismissible because the appear on the scheduled pre-trial conference because he got mad at her
certification against forum shopping was defective. when she refused to heed his advice to settle when the trial court granted
Salvador’s motion for issuance of preliminary attachment. Under the
3. Whether or not the executed promissory note is void for circumstances, she should have been exempted from the rule that the
being unconscionable and shocking to the conscience. negligence of counsel binds the client. 17

4. Whether or not the CA erred in holding that the order For her part, she failed to appear because she was then suffering from
allowing respondent to present evidence ex-parte and illness. Contrary to the finding of the CA, her medical certificate was not
submitting the case for decision is valid despite the fact that belatedly submitted. She submitted it within a reasonable period after she
default judgment is looked upon with disfavor by this Court. received the order allowing Salvador to present evidence ex-parte and
considering the case for resolution thereafter. 18
In fine, the core issue is whether or not the present case should have
been dismissed on the ground of litis pendentia. The Court’s Ruling
In litis pendentia, there is no
hard and fast rule in
Benavidez argues that the outcome of the case, before RTC-Morong,
determining which of the two
where the annulment of the promissory note was sought, would have
actions should be abated
been determinative of the subject case before RTC-Antipolo where the
enforcement of the promissory note was sought. If RTC-Morong would
rule that the promissory note was null and void, then the case with RTC- Litis pendentia is a Latin term, which literally means "a pending suit" and
Antipolo would have no more leg to stand on. He concludes that the is variously referred to in some decisions as lis pendens and auter action
requisites of litis pendentia were indeed present: first, both Benavidez pendant. As a ground for the dismissal of a civil action, it refers to the
and Salvador were parties to both complaints; second, both complaints situation where two actions are pending between the same parties for the
were concerned with the promissory note; and third, the judgment in same cause of action, so that one of them becomes unnecessary and
either of the said complaints would have been determinative of the vexatious. It is based on the policy against multiplicity of suits. 19
other.15
Litis pendentia exists when the following requisites are present: identity of
Benavidez further claims that the case should have been dismissed the parties in the two actions; substantial identity in the causes of action
because the certification on forum shopping which accompanied and in the reliefs sought by the parties; and the identity between the two
Salvador’s complaint was defective. He declared therein that he was not actions should be such that any judgment that may be rendered in one
aware of any pending case before any court similar to the one he was case, regardless of which party is successful, would amount to res
filing, when in truth and in fact, there was one. This fact could not be judicata in the other.20
denied because summons in the case before RTC-Morong was served
on him and he even filed his answer to the said complaint. 16 On the other hand, forum shopping exists when, as a result of an adverse
decision in one forum, or in anticipation thereof, a party seeks a favorable
Benavidez also pushes the argument that RTC-Antipolo committed an opinion in another forum through means other than appeal or certiorari.21
error of law when it allowed Salvador to present evidence ex-parte and
eventually decided the case without waiting to hear her side. The trial There is forum shopping when the elements of litis pendentia are present
court should have been more lenient. If there was any one to be blamed or where a final judgment in one case will amount to res judicata in
for her predicament, it should have been his counsel, Atty. Rogelio another.22
Jakosalem (Jakosalem). His counsel was negligent in his duties when he
In the present controversy, the Court is of the view that litis reconveyance and/or recovery of the same parcel of land were filed by
pendentia exists. All the elements are present: first, both Benavidez and substantially the same parties, with the second case only impleading
Salvador are parties in both cases; second, both complaints are more party-plaintiffs. The Court held that "parties who base their
concerned with the same promissory note; and third, the judgment in contention upon the same rights as the litigants in a previous suit are
either case would be determinative of the other. bound by the judgment in the latter case." Without expressly saying so
in litis pendentia terms, the Court gave priority to the suit filed earlier.
With the foregoing, which case then should be dismissed? At first glance,
it would seem that Civil Case No. 00-5660 or the complaint filed with In Pampanga Bus Company, Inc. v. Ocfemia, complaints for damages
RTC-Antipolo should have been dismissed applying the "priority-in-time arising from a collision of a cargo truck and a bus were separately filed by
rule." This rule, however, is not ironclad. The rule is not applied if the first the owners of the colliding vehicles. The complaint of the owners of the
case was filed merely to pre-empt the later action or to anticipate its filing cargo truck prevailed and the complaint of the owners of the bus had to
and lay the basis for its dismissal. A crucial consideration is the good yield, as the cargo truck owners first filed their complaint. Notably, the
faith of the parties. In recent rulings, the more appropriate case is first and prevailing case was far advanced in development, with an
preferred and survives. In Spouses Abines v. BPI,23 it was written: answer with counterclaim and an answer to the counterclaim having been
already filed, thus fully joining the issues.
There is no hard and fast rule in determining which of the actions should
be abated on the ground of litis pendentia, but through time, the Supreme In Lamis Ents. v. Lagamon, the first case was a complaint for specific
Court has endeavored to lay down certain criteria to guide lower courts performance of obligations under a Memorandum of Agreement, while
faced with this legal dilemma. As a rule, preference is given to the first the second case was a complaint for sums of money arising from
action filed to be retained. This is in accordance with the maxim Qui prior obligations under a promissory note and a chattel mortgage, and
est tempore, potior est jure. There are, however, limitations to this rule. damages. We dismissed the second case because the claims for sums of
Hence, the first action may be abated if it was filed merely to pre-empt money therein arose from the Memorandum of Agreement sued upon in
the later action or to anticipate its filing and lay the basis for its dismissal. the first case.
Thus, the bona fides or good faith of the parties is a crucial element. A
later case shall not be abated if not brought to harass or vex; and the first Ago Timber Corporation v. Ruiz offered an insightful reason after both
case can be abated if it is merely an anticipatory action or, more parties had each pleaded the pendency of another action between the
appropriately, an anticipatory defense against an expected suit – a clever same parties for the same cause. The Court ruled that the second action
move to steal the march from the aggrieved party. should be dismissed, "not only as a matter of comity with a coordinate
and co-equal court (Laureta & Nolledo, Commentaries & Jurisprudence
Another exception to the priority in time rule is the criterion of the more on Injunction, p. 79, citing Harrison v. Littlefield, 57 Tex. Div. A. 617, 619,
appropriate action. Thus, an action, although filed later, shall not be 124 SW 212), but also to prevent confusion that might seriously hinder
dismissed if it is the more appropriate vehicle for litigating the issues the administration of justice. (Cabigao, et al. v. Del Rosario, et al., 44
between the parties. [Underscoring supplied] Phil. 182)."

In the relatively recent case of Dotmatrix Trading v. Legaspi,24 the Court In all these cases, we gave preference to the first action filed to be
had the occasion to extensively discuss the various rules and retained. The "priority-in-time rule," however, is not absolute.
consideration in determining which case to dismiss in such situations. It
included its analysis of Abines. Thus: In the 1956 case of Teodoro v. Mirasol, we deviated from the "priority-in-
time rule" and applied the "more appropriate action test" and
Early on, we applied the principle of Qui prior est tempore, potior est the "anticipatory test."
jure (literally, he who is before in time is better in right) in dismissing a
case on the ground of litis pendentia. This was exemplified in the The "more appropriate action test" considers the real issue raised
relatively early case of Del Rosario v. Jacinto where two complaints for by the pleadings and the ultimate objective of the parties; the more
appropriate action is the one where the real issues raised can be complaint for damages and injunction was but a canny and preemptive
fully and completely settled. In Teodoro, the lessee filed an action for maneuver intended to block the new owner's action for ejectment.
declaratory relief to fix the period of the lease, but the lessor moved for its
dismissal because he had subsequently filed an action for ejectment We also applied the "more appropriate action test" in the 2003
against the lessee. We noted that the unlawful detainer suit was the more case Panganiban v. Pilipinas Shell Petroleum Corp., where the lessee
appropriate action to resolve the real issue between the parties - whether filed a petition for declaratory relief on the issue of renewal of the lease of
or not the lessee should be allowed to continue occupying the land under a gasoline service station, while the lessor filed an unlawful detainer case
the terms of the lease contract; this was the subject matter of the second against the lessee. On the question of which action should be dismissed,
suit for unlawful detainer, and was also the main or principal purpose of we noted that the interpretation of a provision in the lease contract as to
the first suit for declaratory relief. when the lease would expire is the key issue that would determine the
lessee's right to possess the gasoline service station. The primary issue –
In the "anticipatory test," the bona fides or good faith of the parties is the physical possession of the gasoline station - is best settled in the
the critical element. If the first suit is filed merely to preempt the later
1âwphi1 ejectment suit that directly confronted the physical possession issue, and
action or to anticipate its filing and lay the basis for its dismissal, not in any other case such as an action for declaratory relief.
then the first suit should be dismissed. In Teodoro, we noted that the
first action, declaratory relief, was filed by the lessee to anticipate the A more recent case - Abines v. Bank of the Philippine Islands in 2006 -
filing of the second action, unlawful detainer, considering the lessor's saw the application of both the "priority-in-time rule" and the "more
letter informing the lessee that the lease contract had expired. appropriate action test." In this case, the respondent filed a complaint for
collection of sum of money against the petitioners to enforce its rights
We also applied the "more appropriate action test" in Ramos v. under the promissory notes and real estate mortgages, while the
Peralta. In this case, the lessee filed an action for consignation of lease petitioners subsequently filed a complaint for reformation of the
rentals against the new owner of the property, but the new owner moved promissory notes and real estate mortgages. We held that the first case,
to dismiss the consignation case because of the quieting of title case he the collection case, should subsist because it is the first action filed and
had also filed against the lessee. Finding that the real issue between the the more appropriate vehicle for litigating all the issues in the
parties involved the right to occupy/possess the subject property, we controversy. We noted that in the second case, the reformation case, the
ordered the dismissal of the consignation case, noting that the quieting of petitioners acknowledged their indebtedness to the respondent; they
title case is the more appropriate vehicle for the ventilation of the issues merely contested the amounts of the principal, interest and the remaining
between them; the consignation case raised the issue of the right to balance. We observed, too, that the petitioners' claims in the reformation
possession of the lessee under the lease contract, an issue that was case were in the nature of defenses to the collection case and should be
effectively covered by the quieting of title case which raised the issue of asserted in this latter case.
the validity and effectivity of the same lease contract.
Under this established jurisprudence on litis pendentia, the following
In University Physician Services, Inc. v. Court of Appeals, we applied considerations predominate in the ascending order of importance in
both the "more appropriate action test" and "anticipatory test." In this determining which action should prevail: (1) the date of filing, with
case, the new owner of an apartment sent a demand letter to the lessee preference generally given to the first action filed to be
to vacate the leased apartment unit. When the lessee filed an action for retained; (2) whether the action sought to be dismissed was filed merely
damages and injunction against the new owner, the new owner moved to preempt the later action or to anticipate its filing and lay the basis for
for the dismissal of the action for damages on account of the action for its dismissal; and (3) whether the action is the appropriate vehicle for
ejectment it had also filed. We noted that ejectment suit is the more litigating the issues between the parties. 25 [Underscoring supplied]
appropriate action to resolve the issue of whether the lessee had the right
to occupy the apartment unit, where the question of possession is In the complaint filed before RTC-Morong, Benavidez alleged, among
likewise the primary issue for resolution. We also noted that the lessee, others, that it was defendant Atty. Nepthalie Segarra (Atty. Segarra) who
after her unjustified refusal to vacate the premises, was aware that an arranged the loan in the amount of ₱1,500,000.00 for her at his own
ejectment case against her was forthcoming; the lessee's filing of the initiative; that he was the one who received the amount for her on or
about March 10, 1998 from defendant Salvador; that he paid Farmers From the foregoing, it is clear that there was an amount of money
Bank the amount of ₱1,049,266.12 leaving a balance of more than borrowed from Salvador which was used in the repurchase of her
₱450,000.00 in his possession; and that he made her sign a promissory foreclosed property. Whether or not it was Atty. Segarra who arranged
note. Benavidez prayed, among others, that Atty. Segarra be ordered to the loan is immaterial. The fact stands that she borrowed from Salvador
give her the balance of the amount loaned and that the promissory note and she benefited from it. Her insistence that the remaining balance of
that Salvador allegedly executed be declared null and void because she ₱450,000.00 of the money loaned was never handed to her by Atty.
was just duped into signing the said document through machinations and Segarra is a matter between the two of them. As far as she and Salvador
that the stipulated interest therein was shocking to the conscience. are concerned, there is admittedly an obligation. Whether the promissory
Salvador, on the other hand, filed the subject case for the collection of a note was void or not could have been proven by her during the trial but
sum of money before RTC-Antipolo to enforce his rights under the she forfeited her right to do so when she and her lawyer failed to submit a
promissory note. pre-trial brief and to appear at the pre-trial as will be discussed hereafter.

Considering the nature of the transaction between the parties, the Court At this point, to dismiss Civil Case No. 00-5660 would only result in
believes that the case for collection of sum of money filed before RTC- needless delay in the resolution of the parties' dispute and bring them
Antipolo should be upheld as the more appropriate case because the back to square one. This consequence will defeat the public policy
judgment therein would eventually settle the issue in the controversy - reasons behind litis pendentia which, like the rule on forum shopping, aim
whether or not Benavidez should be made accountable for the subject to prevent the unnecessary burdening of our courts and undue taxing of
loan. In the complaint that she filed with RTC- Morong, Benavidez never the manpower and financial resources of the Judiciary; to avoid the
denied that she contracted a loan with Salvador. Under her second cause situation where co-equal courts issue conflicting decisions over the same
of action, she alleged: cause; and to preclude one party from harassing the other party through
the filing of an unnecessary or vexatious suit. 27
SECOND CAUSE OF ACTION
The failure of a party to file a
11. Defendant Atty. Nepthalie Segarra arranged a loan in the pre-trial brief or to appear at a
amount of ONE MILLION AND FIVE HUNDRED THOUSAND pre-trial conference shall be
(₱1,500,000.00) PESOS for plaintiff at his own initiative; cause to allow the other party
to present evidence ex parte.
12. Defendant Atty. Nepthalie Segarra received the
₱1,500,000.00 on or about March 10, 1998 from defendant Benavidez basically contends that she should not be made to suffer the
Nestor Salvador in behalf of and for delivery to plaintiff; irresponsibility of her former counsel, Atty. Jakosalem, and that the trial
court should have relaxed the application of the Rules of Court, reopened
13. Defendant Atty. Nepthalie Segarra paid Farmers Bank the the case and allowed her to present evidence in her favor.
amount of ₱1,049,266.12 leaving a balance of more than
₱450,000.00 in his possession. A copy of the receipt evidencing The Court is not moved.
payment is herewith attached as Annex "A" and made an integral
part hereof; Section 4, Rule 18 of the Rules of Court provides that it is the duty of the
parties and their counsel to appear at the pre-trial conference. The effect
14. Defendant Atty. Nepthalie Segarra made plaintiff sign a of their failure to appear is provided by Section 5 of the same rule where
Promissory Note evidencing the loan of ₱1,500,000.00. A copy of it states:
said Promissory Note is herewith attached as Annex "B" and
made an integral part hereof; 26 [Underscoring supplied] Sec. 5. Effect of failure to appear.- The failure of the plaintiff to appear
when so required pursuant to the next preceding section shall be cause
for dismissal of the action. The dismissal shall be with prejudice, unless
otherwise ordered by the court. A similar failure on the part of the Also, her failure to file the pre-trial brief warranted the same effect
defendant shall be cause to allow the plaintiff to present his because the rules dictate that failure to file a pre-trial brief shall have the
evidence ex parte and the court to render judgment on the basis same effect as failure to appear at the pre-trial. Settled is the rule that the
thereof. [Emphasis supplied] negligence of a counsel binds his clients. 30 Neither Benavidez nor her
counsel can now evade the effects of their misfeasance.
Furthermore, Section 6 thereof provides:
Stipulated interest should be
Sec. 6. Pre-trial brief.-The parties shall file with the court and serve on the reduced for being iniquitous
adverse party, in such manner as shall ensure their receipt thereof at and unconscionable.
least three (3) days before the date of the pre-trial, their respective pre-
trial briefs which shall contain, among others: This Court is not unmindful of the fact that parties to a loan contract have
wide latitude to stipulate on any interest rate in view of the Central Bank
xxx Circular No. 905 s. 1982 which suspended the Usury Law ceiling on
interest effective January I, 1983. It is, however, worth stressing that
Failure to file the pre-trial brief shall have the same effect as failure to interest rates whenever unconscionable may still be declared illegal.
appear at the pre-trial. There is nothing in said circular which grants lenders carte
blanche authority to raise interest rates to levels which will either enslave
their borrowers or lead to a hemorrhaging of their assets. 31 In Menchavez
From the foregoing, it is clear that the failure of a party to appear at the
v. Bermudez,32 the interest rate of 5% per month, which when summed up
pre-trial has adverse consequences. If the absent party is the plaintiff,
would reach 60% per annum, is null and void for being excessive,
then his case shall be dismissed. If it is the defendant who fails to
iniquitous, unconscionable and exorbitant, contrary to morals, and the
appear, then the plaintiff is allowed to present his evidence ex parte and
law.33
the court shall render judgment on the basis thereof. Thus, the plaintiff is
given the privilege to present his evidence without objection from the
defendant, the likelihood being that the court will decide in favor of the Accordingly, in this case, the Court considers the compounded interest
plaintiff, the defendant having forfeited the opportunity to rebut or present rate of 5% per month as iniquitous and unconscionable and void and
its own evidence.28 inexistent from the beginning. The debt is to be considered without the
stipulation of the iniquitous and unconscionable interest rate.34 In line with
the ruling in the recent case of Nacar v. Gallery Frames,35 the legal
RTC-Antipolo then had the legal basis to allow Salvador to present
interest of 6% per annum must be imposed in lieu of the excessive
evidence ex parte upon motion. Benavidez and her counsel were not
interest stipulated in the agreement.
present at the scheduled pre-trial conference despite due notice. They
did not file the required pre-trial brief despite receipt of the Order. The
rule explicitly provides that both parties and their counsel are mandated WHEREFORE, the petition is DENIED. The November 22, 2005 Decision
to appear thereat except for: (1) a valid excuse; and (2) appearance of a and the June 8, 2006 Amended Decision of the Court of Appeals
representative on behalf of a party who is fully authorized in writing to are AFFIRMED with MODIFICATION. The interest rate of 5% per month
enter into an amicable settlement, to submit to alternative modes of which was the basis in computing Benavidez's obligation is reduced to
dispute resolution, and to enter into stipulations or admissions of facts 6% per annum.
and documents.29 In this case, Benavidez’s lawyer was already negligent,
but she compounded this by being negligent herself. She was aware of SO ORDERED.
the scheduled pre-trial conference, but she did not make any move to
prevent the prejudicial consequences of her absence or that of her JOSE CATRAL MENDOZA
counsel. If she knew that her lawyer would not appear and could not Associate Justice
because she was ill, she should have sent a representative in court to
inform the judge of her predicament.
G.R. No. L-66620 September 24, 1986 However, the order appealed from states that the first cause of action
alleged in the complaint was against respondent Ignacio Binongcal for
REMEDIO V. FLORES, petitioner, refusing to pay the amount of P11,643.00 representing cost of truck tires
vs. which he purchased on credit from petitioner on various occasions from
HON. JUDGE HEILIA S. MALLARE-PHILLIPPS, IGNACIO August to October, 1981; and the second cause of action was against
BINONGCAL & FERNANDO CALION, respondents. respondent Fernando Calion for allegedly refusing to pay the amount of
P10,212.00 representing cost of truck tires which he purchased on credit
Lucio A. Dixon for respondent F. Calion. from petitioner on several occasions from March, 1981 to January, 1982.

On December 15, 1983, counsel for respondent Binongcal filed a Motion

to Dismiss on the ground of lack of jurisdiction since the amount of the
FERIA, J.: demand against said respondent was only P11,643.00, and under
Section 19(8) of BP129 the regional trial court shall exercise exclusive
The Court rules that the application of the totality rule under Section 33(l) original jurisdiction if the amount of the demand is more than twenty
of Batas Pambansa Blg. 129 and Section 11 of the Interim Rules is thousand pesos (P20,000.00). It was further averred in said motion that
subject to the requirements for the permissive joinder of parties under although another person, Fernando Calion, was allegedly indebted to
Section 6 of Rule 3 which provides as follows: petitioner in the amount of P10,212.00, his obligation was separate and
distinct from that of the other respondent. At the hearing of said Motion to
Dismiss, counsel for respondent Calion joined in moving for the dismissal
Permissive joinder of parties.-All persons in whom or
of the complaint on the ground of lack of jurisdiction. Counsel for
against whom any right to relief in respect to or arising out
petitioner opposed the Motion to Dismiss. As above stated, the trial court
of the same transaction or series of transactions is
dismissed the complaint for lack of jurisdiction.
alleged to exist, whether jointly, severally, or in the
alternative, may, except as otherwise provided in these
rules, join as plaintiffs or be joined as defendants in one Petitioner maintains that the lower court has jurisdiction over the case
complaint, where any question of law or fact common to following the "novel" totality rule introduced in Section 33(l) of BP129 and
all such plaintiffs or to all such defendants may arise in Section 11 of the Interim Rules.
the action; but the court may make such orders as may
be just to prevent any plaintiff or defendant from being The pertinent portion of Section 33(l) of BP129 reads as follows:
embarrassed or put to expense in connection with any
proceedings in which he may have no interest. ... Provided,That where there are several claims or
causes of action between the same or different parties,
Petitioner has appealed by certiorari from the order of Judge Heilia S. embodied in the same complaint, the amount of the
Mallare-Phillipps of the Regional Trial Court of Baguio City and Benguet demand shall be the totality of the claims in all the causes
Province which dismissed his complaint for lack of jurisdiction. Petitioner of action, irrespective of whether the causes of action
did not attach to his petition a copy of his complaint in the erroneous arose out of the same or different transactions. ...
belief that the entire original record of the case shall be transmitted to this
Court pursuant to the second paragraph of Section 39 of BP129. This Section 11 of the Interim Rules provides thus:
provision applies only to ordinary appeals from the regional trial court to
the Court of Appeals (Section 20 of the Interim Rules). Appeals to this Application of the totality rule.-In actions where the
Court by petition for review on certiorari are governed by Rule 45 of the jurisdiction of the court is dependent on the amount
Rules of Court (Section 25 of the Interim Rules). involved, the test of jurisdiction shall be the aggregate
sum of all the money demands, exclusive only of interest
and costs, irrespective of whether or not the separate
 claims are owned by or due to different parties. If any 1948 as amended, supra). This was based on the ruling in the case of
demand is for damages in a civil action, the amount Vda. de Rosario vs. Justice of the Peace, 99 Phil. 693. As worded, the
thereof must be specifically alleged. former rule applied only to cases of permissive joinder of parties plaintiff.
However, it was also applicable to cases of permissive joinder of parties
Petitioner compares the above-quoted provisions with the pertinent defendant, as may be deduced from the ruling in the case of Brillo vs.
portion of the former rule under Section 88 of the Judiciary Act of 1948 as Buklatan, thus:
amended which reads as follows:
Furthermore, the first cause of action is composed of
... Where there are several claims or causes of action separate claims against several defendants of different
between the same parties embodied in the same amounts each of which is not more than P2,000 and falls
complaint, the amount of the demand shall be the totality under the jurisdiction of the justice of the peace court
of the demand in all the causes of action, irrespective of under section 88 of Republic Act No, 296. The several
whether the causes of action arose out of the same or claims do not seem to arise from the same transaction or
different transactions; but where the claims or causes of series of transactions and there seem to be no questions
action joined in a single complaint are separately owned of law or of fact common to all the defendants as may
by or due to different parties, each separate claim shall warrant their joinder under Rule 3, section 6. Therefore, if
furnish the jurisdictional test. ... new complaints are to be filed in the name of the real
party in interest they should be filed in the justice of the
and argues that with the deletion of the proviso in the former rule, the peace court. (87 Phil. 519, 520, reiterated in Gacula vs.
totality rule was reduced to clarity and brevity and the jurisdictional test is Martinez, 88 Phil. 142, 146)
the totality of the claims in all, not in each, of the causes of action,
irrespective of whether the causes of action arose out of the same or Under the present law, the totality rule is applied also to cases where two
different transactions. or more plaintiffs having separate causes of action against a defendant
join in a single complaint, as well as to cases where a plaintiff has
This argument is partly correct. There is no difference between the former separate causes of action against two or more defendants joined in a
and present rules in cases where a plaintiff sues a defendant on two or single complaint. However, the causes of action in favor of the two or
more separate causes of action. In such cases, the amount of the more plaintiffs or against the two or more defendants should arise out of
demand shall be the totality of the claims in all the causes of action the same transaction or series of transactions and there should be a
irrespective of whether the causes of action arose out of the same or common question of law or fact, as provided in Section 6 of Rule 3.
different transactions. If the total demand exceeds twenty thousand
pesos, then the regional trial court has jurisdiction. Needless to state, if The difference between the former and present rules in cases of
the causes of action are separate and independent, their joinder in one permissive joinder of parties may be illustrated by the two cases which
complaint is permissive and not mandatory, and any cause of action were cited in the case of Vda. de Rosario vs. Justice of the Peace
where the amount of the demand is twenty thousand pesos or less may (supra) as exceptions to the totality rule. In the case of Soriano y Cia vs.
be the subject of a separate complaint filed with a metropolitan or Jose (86 Phil. 523), where twenty-nine dismissed employees joined in a
municipal trial court. complaint against the defendant to collect their respective claims, each of
which was within the jurisdiction of the municipal court although the total
On the other hand, there is a difference between the former and present exceeded the jurisdictional amount, this Court held that under the law
rules in cases where two or more plaintiffs having separate causes of then the municipal court had jurisdiction. In said case, although the
action against a defendant join in a single complaint. Under the former plaintiffs' demands were separate, distinct and independent of one
rule, "where the claims or causes of action joined in a single complaint another, their joint suit was authorized under Section 6 of Rule 3 and
are separately owned by or due to different parties, each separate claim each separate claim furnished the jurisdictional test. In the case of
shall furnish the jurisdictional test" (Section 88 of the Judiciary Act of International Colleges, Inc. vs. Argonza (90 Phil. 470), where twenty-five
dismissed teachers jointly sued the defendant for unpaid salaries, this
Court also held that the municipal court had jurisdiction because the G.R. No. 159912 August 17, 2007
amount of each claim was within, although the total exceeded, its
jurisdiction and it was a case of permissive joinder of parties plaintiff UNITED COCONUT PLANTERS BANK, Petitioner,
under Section 6 of Rule 3. vs.
SPOUSES SAMUEL and ODETTE BELUSO, Respondents.
Under the present law, the two cases above cited (assuming they do not
fall under the Labor Code) would be under the jurisdiction of the regional DECISION
trial court. Similarly, in the abovecited cases of Brillo vs. Buklatan and
Gacula vs. Martinez (supra), if the separate claims against the several CHICO-NAZARIO, J.:
defendants arose out of the same transaction or series of transactions
and there is a common question of law or fact, they would now be under
This is a Petition for Review on Certiorari under Rule 45 of the Rules of
the jurisdiction of the regional trial court.
Court, which seeks to annul the Court of Appeals Decision1 dated 21
January 2003 and its Resolution2 dated 9 September 2003 in CA-G.R.
In other words, in cases of permissive joinder of parties, whether as CV No. 67318. The assailed Court of Appeals Decision and Resolution
plaintiffs or as defendants, under Section 6 of Rule 3, the total of all the affirmed in turn the Decision3 dated 23 March 2000 and Order4 dated 8
claims shall now furnish the jurisdictional test. Needless to state also, if May 2000 of the Regional Trial Court (RTC), Branch 65 of Makati City, in
instead of joining or being joined in one complaint separate actions are Civil Case No. 99-314, declaring void the interest rate provided in the
filed by or against the parties, the amount demanded in each complaint promissory notes executed by the respondents Spouses Samuel and
shall furnish the jurisdictional test. Odette Beluso (spouses Beluso) in favor of petitioner United Coconut
Planters Bank (UCPB).
In the case at bar, the lower court correctly held that the jurisdictional test
is subject to the rules on joinder of parties pursuant to Section 5 of Rule 2 The procedural and factual antecedents of this case are as follows:
and Section 6 of Rule 3 of the Rules of Court and that, after a careful
scrutiny of the complaint, it appears that there is a misjoinder of parties
On 16 April 1996, UCPB granted the spouses Beluso a Promissory Notes
for the reason that the claims against respondents Binongcal and Calion
Line under a Credit Agreement whereby the latter could avail from the
are separate and distinct and neither of which falls within its jurisdiction.
former credit of up to a maximum amount of ₱1.2 Million pesos for a term
ending on 30 April 1997. The spouses Beluso constituted, other than
WHEREFORE, the order appealed from is affirmed, without their promissory notes, a real estate mortgage over parcels of land in
pronouncement as to costs. Roxas City, covered by Transfer Certificates of Title No. T-31539 and T-
27828, as additional security for the obligation. The Credit Agreement
SO ORDERED. was subsequently amended to increase the amount of the Promissory
Notes Line to a maximum of ₱2.35 Million pesos and to extend the term
thereof to 28 February 1998.

The spouses Beluso availed themselves of the credit line under the
following Promissory Notes:

Amount
PN # Date of PN Maturity Date
Secured
8314-96- 27 August
29 April 1996 ₱ 700,000
00083-3 1996
 8314-96- 30 August 97- ₱ 700,000 30.17% 32.786% ₱ 795,294.72
2 May 1996 ₱ 500,000
00085-0 1996 00366-6 (7 days) (102
8314-96- 20 November 20 March days)
₱ 800,000
000292-2 1996 1997 97- ₱ 1,300,000 28% 30.41% ₱
00368-2 (2 days) (102 1,462,124.54
The three promissory notes were renewed several times. On 30 April days)
1997, the payment of the principal and interest of the latter two 98- ₱ 150,000 33% 36% ₱ 170,034.71
promissory notes were debited from the spouses Beluso’s account with 00002-4 (102
UCPB; yet, a consolidated loan for ₱1.3 Million was again released to the days)
spouses Beluso under one promissory note with a due date of 28
February 1998. The spouses Beluso, however, failed to make any payment of the
foregoing amounts.
To completely avail themselves of the ₱2.35 Million credit line extended
to them by UCPB, the spouses Beluso executed two more promissory On 2 September 1998, UCPB demanded that the spouses Beluso pay
notes for a total of ₱350,000.00: their total obligation of ₱2,932,543.00 plus 25% attorney’s fees, but the
spouses Beluso failed to comply therewith. On 28 December 1998,
Amount UCPB foreclosed the properties mortgaged by the spouses Beluso to
PN # Date of PN Maturity Date
Secured secure their credit line, which, by that time, already ballooned to
11 December 28 February ₱3,784,603.00.
97-00363-1 ₱ 200,000
1997 1998
On 9 February 1999, the spouses Beluso filed a Petition for Annulment,
2 January 28 February
98-00002-4 ₱ 150,000 Accounting and Damages against UCPB with the RTC of Makati City.
1998 1998
On 23 March 2000, the RTC ruled in favor of the spouses Beluso,
However, the spouses Beluso alleged that the amounts covered by these disposing of the case as follows:
last two promissory notes were never released or credited to their
account and, thus, claimed that the principal indebtedness was only ₱2 PREMISES CONSIDERED, judgment is hereby rendered declaring the
Million. interest rate used by [UCPB] void and the foreclosure and Sheriff’s
Certificate of Sale void. [UCPB] is hereby ordered to return to [the
In any case, UCPB applied interest rates on the different promissory spouses Beluso] the properties subject of the foreclosure; to pay [the
notes ranging from 18% to 34%. From 1996 to February 1998 the spouses Beluso] the amount of ₱50,000.00 by way of attorney’s fees;
spouses Beluso were able to pay the total sum of ₱763,692.03. and to pay the costs of suit. [The spouses Beluso] are hereby ordered to
pay [UCPB] the sum of ₱1,560,308.00.5
From 28 February 1998 to 10 June 1998, UCPB continued to charge
interest and penalty on the obligations of the spouses Beluso, as follows: On 8 May 2000, the RTC denied UCPB’s Motion for
Reconsideration,6 prompting UCPB to appeal the RTC Decision with the
PN # Amount Interest Penalty Total Court of Appeals. The Court of Appeals affirmed the RTC Decision, to
Secured wit:
97- ₱ 200,000 31% 36% ₱ 225,313.24
WHEREFORE, premises considered, the decision dated March 23, 2000
00363-1
of the Regional Trial Court, Branch 65, Makati City in Civil Case No. 99-
314 is hereby AFFIRMED subject to the modification that defendant- WHETHER OR NOT THE HONORABLE COURT OF APPEALS
appellant UCPB is not liable for attorney’s fees or the costs of suit. 7 COMMITTED SERIOUS AND REVERSIBLE ERROR WHEN IT FAILED
TO ORDER THE DISMISSAL OF THE CASE BECAUSE THE
On 9 September 2003, the Court of Appeals denied UCPB’s Motion for RESPONDENTS ARE GUILTY OF FORUM SHOPPING8
Reconsideration for lack of merit. UCPB thus filed the present petition,
submitting the following issues for our resolution: Validity of the Interest Rates

I The Court of Appeals held that the imposition of interest in the following
provision found in the promissory notes of the spouses Beluso is void, as
WHETHER OR NOT THE HONORABLE COURT OF APPEALS the interest rates and the bases therefor were determined solely by
COMMITTED SERIOUS AND REVERSIBLE ERROR WHEN IT petitioner UCPB:
AFFIRMED THE DECISION OF THE TRIAL COURT WHICH
DECLARED VOID THE PROVISION ON INTEREST RATE AGREED FOR VALUE RECEIVED, I, and/or We, on or before due date, SPS.
UPON BETWEEN PETITIONER AND RESPONDENTS SAMUEL AND ODETTE BELUSO (BORROWER), jointly and severally
promise to pay to UNITED COCONUT PLANTERS BANK (LENDER) or
II order at UCPB Bldg., Makati Avenue, Makati City, Philippines, the sum of
______________ PESOS, (P_____), Philippine Currency, with interest
WHETHER OR NOT THE HONORABLE COURT OF APPEALS thereon at the rate indicative of DBD retail rate or as determined by the
COMMITTED SERIOUS AND REVERSIBLE ERROR WHEN IT Branch Head.9
AFFIRMED THE COMPUTATION BY THE TRIAL COURT OF
RESPONDENTS’ INDEBTEDNESS AND ORDERED RESPONDENTS UCPB asserts that this is a reversible error, and claims that while the
TO PAY PETITIONER THE AMOUNT OF ONLY ONE MILLION FIVE interest rate was not numerically quantified in the face of the promissory
HUNDRED SIXTY THOUSAND THREE HUNDRED EIGHT PESOS notes, it was nonetheless categorically fixed, at the time of execution
(₱1,560,308.00) thereof, at the "rate indicative of the DBD retail rate." UCPB contends that
said provision must be read with another stipulation in the promissory
III notes subjecting to review the interest rate as fixed:

WHETHER OR NOT THE HONORABLE COURT OF APPEALS The interest rate shall be subject to review and may be increased or
COMMITTED SERIOUS AND REVERSIBLE ERROR WHEN IT decreased by the LENDER considering among others the prevailing
AFFIRMED THE DECISION OF THE TRIAL COURT WHICH financial and monetary conditions; or the rate of interest and charges
ANNULLED THE FORECLOSURE BY PETITIONER OF THE SUBJECT which other banks or financial institutions charge or offer to charge for
PROPERTIES DUE TO AN ALLEGED "INCORRECT COMPUTATION" similar accommodations; and/or the resulting profitability to the LENDER
OF RESPONDENTS’ INDEBTEDNESS after due consideration of all dealings with the BORROWER.10

IV In this regard, UCPB avers that these are valid reference rates akin to a
"prevailing rate" or "prime rate" allowed by this Court in Polotan v. Court
of Appeals.11 Furthermore, UCPB argues that even if the proviso "as
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
determined by the branch head" is considered void, such a declaration
COMMITTED SERIOUS AND REVERSIBLE ERROR WHEN IT
would not ipso facto render the connecting clause "indicative of DBD
AFFIRMED THE DECISION OF THE TRIAL COURT WHICH FOUND
retail rate" void in view of the separability clause of the Credit Agreement,
PETITIONER LIABLE FOR VIOLATION OF THE TRUTH IN LENDING
which reads:
ACT

V
Section 9.08 Separability Clause. If any one or more of the provisions Such a contract is a veritable trap for the weaker party whom the courts
contained in this AGREEMENT, or documents executed in connection of justice must protect against abuse and imposition.
herewith shall be declared invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions hereof The provision stating that the interest shall be at the "rate indicative of
shall not in any way be affected or impaired.12 DBD retail rate or as determined by the Branch Head" is indeed
dependent solely on the will of petitioner UCPB. Under such provision,
According to UCPB, the imposition of the questioned interest rates did petitioner UCPB has two choices on what the interest rate shall be: (1) a
not infringe on the principle of mutuality of contracts, because the rate indicative of the DBD retail rate; or (2) a rate as determined by the
spouses Beluso had the liberty to choose whether or not to renew their Branch Head. As UCPB is given this choice, the rate should be
credit line at the new interest rates pegged by petitioner. 13 UCPB also categorically determinable in both choices. If either of these two choices
claims that assuming there was any defect in the mutuality of the contract presents an opportunity for UCPB to fix the rate at will, the bank can
at the time of its inception, such defect was cured by the subsequent easily choose such an option, thus making the entire interest rate
conduct of the spouses Beluso in availing themselves of the credit line provision violative of the principle of mutuality of contracts.
from April 1996 to February 1998 without airing any protest with respect
to the interest rates imposed by UCPB. According to UCPB, therefore, Not just one, but rather both, of these choices are dependent solely on
the spouses Beluso are in estoppel.14 the will of UCPB. Clearly, a rate "as determined by the Branch Head"
gives the latter unfettered discretion on what the rate may be. The
We agree with the Court of Appeals, and find no merit in the contentions Branch Head may choose any rate he or she desires. As regards the rate
of UCPB. "indicative of the DBD retail rate," the same cannot be considered as
valid for being akin to a "prevailing rate" or "prime rate" allowed by this
Article 1308 of the Civil Code provides: Court in Polotan. The interest rate in Polotan reads:

Art. 1308. The contract must bind both contracting parties; its validity or The Cardholder agrees to pay interest per annum at 3% plus the prime
compliance cannot be left to the will of one of them. rate of Security Bank and Trust Company. x x x.16

We applied this provision in Philippine National Bank v. Court of In this provision in Polotan, there is a fixed margin over the reference
Appeals,15 where we held: rate: 3%. Thus, the parties can easily determine the interest rate by
applying simple arithmetic. On the other hand, the provision in the case
In order that obligations arising from contracts may have the force of law at bar does not specify any margin above or below the DBD retail rate.
between the parties, there must be mutuality between the parties based UCPB can peg the interest at any percentage above or below the DBD
on their essential equality. A contract containing a condition which makes retail rate, again giving it unfettered discretion in determining the interest
its fulfillment dependent exclusively upon the uncontrolled will of one of rate.
the contracting parties, is void (Garcia vs. Rita Legarda, Inc., 21 SCRA
555). Hence, even assuming that the P1.8 million loan agreement The stipulation in the promissory notes subjecting the interest rate to
between the PNB and the private respondent gave the PNB a license review does not render the imposition by UCPB of interest rates on the
(although in fact there was none) to increase the interest rate at will obligations of the spouses Beluso valid. According to said stipulation:
during the term of the loan, that license would have been null and void for
being violative of the principle of mutuality essential in contracts. It would The interest rate shall be subject to review and may be increased or
have invested the loan agreement with the character of a contract of decreased by the LENDER considering among others the prevailing
adhesion, where the parties do not bargain on equal footing, the weaker financial and monetary conditions; or the rate of interest and charges
party's (the debtor) participation being reduced to the alternative "to take which other banks or financial institutions charge or offer to charge for
it or leave it" (Qua vs. Law Union & Rock Insurance Co., 95 Phil. 85). similar accommodations; and/or the resulting profitability to the LENDER
after due consideration of all dealings with the BORROWER.17
It should be pointed out that the authority to review the interest rate was Error in Computation
given UCPB alone as the lender. Moreover, UCPB may apply the
considerations enumerated in this provision as it wishes. As worded in UCPB asserts that while both the RTC and the Court of Appeals voided
the above provision, UCPB may give as much weight as it desires to the interest rates imposed by UCPB, both failed to include in their
each of the following considerations: (1) the prevailing financial and computation of the outstanding obligation of the spouses Beluso the legal
monetary condition; (2) the rate of interest and charges which other rate of interest of 12% per annum. Furthermore, the penalty charges
banks or financial institutions charge or offer to charge for similar were also deleted in the decisions of the RTC and the Court of Appeals.
accommodations; and/or (3) the resulting profitability to the LENDER Section 2.04, Article II on "Interest and other Bank Charges" of the
(UCPB) after due consideration of all dealings with the BORROWER (the subject Credit Agreement, provides:
spouses Beluso). Again, as in the case of the interest rate provision,
there is no fixed margin above or below these considerations. Section 2.04 Penalty Charges. In addition to the interest provided for in
Section 2.01 of this ARTICLE, any principal obligation of the CLIENT
In view of the foregoing, the Separability Clause cannot save either of the hereunder which is not paid when due shall be subject to a penalty
two options of UCPB as to the interest to be imposed, as both options charge of one percent (1%) of the amount of such obligation per month
violate the principle of mutuality of contracts. computed from due date until the obligation is paid in full. If the bank
accelerates teh (sic) payment of availments hereunder pursuant to
UCPB likewise failed to convince us that the spouses Beluso were in ARTICLE VIII hereof, the penalty charge shall be used on the total
estoppel. principal amount outstanding and unpaid computed from the date of
acceleration until the obligation is paid in full. 20
Estoppel cannot be predicated on an illegal act. As between the parties
to a contract, validity cannot be given to it by estoppel if it is prohibited by Paragraph 4 of the promissory notes also states:
law or is against public policy.18
In case of non-payment of this Promissory Note (Note) at maturity, I/We,
The interest rate provisions in the case at bar are illegal not only because jointly and severally, agree to pay an additional sum equivalent to twenty-
of the provisions of the Civil Code on mutuality of contracts, but also, as five percent (25%) of the total due on the Note as attorney’s fee, aside
shall be discussed later, because they violate the Truth in Lending Act. from the expenses and costs of collection whether actually incurred or
Not disclosing the true finance charges in connection with the extensions not, and a penalty charge of one percent (1%) per month on the total
of credit is, furthermore, a form of deception which we cannot amount due and unpaid from date of default until fully paid. 21
countenance. It is against the policy of the State as stated in the Truth in
Lending Act: Petitioner further claims that it is likewise entitled to attorney’s fees,
pursuant to Section 9.06 of the Credit Agreement, thus:
Sec. 2. Declaration of Policy. – It is hereby declared to be the policy of
the State to protect its citizens from a lack of awareness of the true cost If the BANK shall require the services of counsel for the enforcement of
of credit to the user by assuring a full disclosure of such cost with a view its rights under this AGREEMENT, the Note(s), the collaterals and other
of preventing the uninformed use of credit to the detriment of the national related documents, the BANK shall be entitled to recover attorney’s fees
economy.19 equivalent to not less than twenty-five percent (25%) of the total amounts
due and outstanding exclusive of costs and other expenses. 22
Moreover, while the spouses Beluso indeed agreed to renew the credit
line, the offending provisions are found in the promissory notes Another alleged computational error pointed out by UCPB is the negation
themselves, not in the credit line. In fixing the interest rates in the of the Compounding Interest agreed upon by the parties under Section
promissory notes to cover the renewed credit line, UCPB still reserved to 2.02 of the Credit Agreement:
itself the same two options – (1) a rate indicative of the DBD retail rate; or
(2) a rate as determined by the Branch Head.
Section 2.02 Compounding Interest. Interest not paid when due shall of Appeals from the computation of the total amount due and
form part of the principal and shall be subject to the same interest rate as demandable from spouses Beluso.
herein stipulated.23 and paragraph 3 of the subject promissory notes:
The spouses Beluso’s defense as to all these issues is that the demand
Interest not paid when due shall be added to, and become part of the made by UCPB is for a considerably bigger amount and, therefore, the
principal and shall likewise bear interest at the same rate. 24 demand should be considered void. There being no valid demand,
according to the spouses Beluso, there would be no default, and
UCPB lastly avers that the application of the spouses Beluso’s payments therefore the interests and penalties would not commence to run. As it
in the disputed computation does not reflect the parties’ agreement. The
1avvphi1
was likewise improper to foreclose the mortgaged properties or file a
RTC deducted the payment made by the spouses Beluso amounting to case against the spouses Beluso, attorney’s fees were not warranted.
₱763,693.00 from the principal of ₱2,350,000.00. This was allegedly
inconsistent with the Credit Agreement, as well as with the agreement of We agree with UCPB on this score. Default commences upon judicial or
the parties as to the facts of the case. In paragraph 7 of the spouses extrajudicial demand.26 The excess amount in such a demand does not
Beluso’s Manifestation and Motion on Proposed Stipulation of Facts and nullify the demand itself, which is valid with respect to the proper amount.
Issues vis-à-vis UCPB’s Manifestation, the parties agreed that the A contrary ruling would put commercial transactions in disarray, as
amount of ₱763,693.00 was applied to the interest and not to the validity of demands would be dependent on the exactness of the
principal, in accord with Section 3.03, Article II of the Credit Agreement computations thereof, which are too often contested.
on "Order of the Application of Payments," which provides:
There being a valid demand on the part of UCPB, albeit excessive, the
Section 3.03 Application of Payment. Payments made by the CLIENT spouses Beluso are considered in default with respect to the proper
shall be applied in accordance with the following order of preference: amount and, therefore, the interests and the penalties began to run at
that point.
1. Accounts receivable and other out-of-pocket expenses
As regards the award of 12% legal interest in favor of petitioner, the RTC
2. Front-end Fee, Origination Fee, Attorney’s Fee and other actually recognized that said legal interest should be imposed, thus:
expenses of collection; "There being no valid stipulation as to interest, the legal rate of interest
shall be charged."27 It seems that the RTC inadvertently overlooked its
3. Penalty charges; non-inclusion in its computation.

4. Past due interest; The spouses Beluso had even originally asked for the RTC to impose this
legal rate of interest in both the body and the prayer of its petition with the
RTC:
5. Principal amortization/Payment in arrears;
12. Since the provision on the fixing of the rate of interest by the sole will
6. Advance interest;
of the respondent Bank is null and void, only the legal rate of interest
which is 12% per annum can be legally charged and imposed by the
7. Outstanding balance; and bank, which would amount to only about P599,000.00 since 1996 up to
August 31, 1998.
8. All other obligations of CLIENT to the BANK, if any. 25
xxxx
Thus, according to UCPB, the interest charges, penalty charges, and
attorney’s fees had been erroneously excluded by the RTC and the Court WHEREFORE, in view of the foregoing, petiitoners pray for judgment or
order:
xxxx As regards the attorney’s fees, the spouses Beluso can actually be liable
therefor even if there had been no demand. Filing a case in court is the
2. By way of example for the public good against the Bank’s taking unfair judicial demand referred to in Article 116932 of the Civil Code, which
advantage of the weaker party to their contract, declaring the legal rate of would put the obligor in delay.
12% per annum, as the imposable rate of interest up to February 28,
1999 on the loan of 2.350 million.28 The RTC, however, also held UCPB liable for attorney’s fees in this case,
as the spouses Beluso were forced to litigate the issue on the illegality of
All these show that the spouses Beluso had acknowledged before the the interest rate provision of the promissory notes. The award of
RTC their obligation to pay a 12% legal interest on their loans. When the attorney’s fees, it must be recalled, falls under the sound discretion of the
RTC failed to include the 12% legal interest in its computation, however, court.33 Since both parties were forced to litigate to protect their
the spouses Beluso merely defended in the appellate courts this non- respective rights, and both are entitled to the award of attorney’s fees
inclusion, as the same was beneficial to them. We see, however, from the other, practical reasons dictate that we set off or compensate
sufficient basis to impose a 12% legal interest in favor of petitioner in the both parties’ liabilities for attorney’s fees. Therefore, instead of awarding
case at bar, as what we have voided is merely the stipulated rate of attorney’s fees in favor of petitioner, we shall merely affirm the deletion of
interest and not the stipulation that the loan shall earn interest. the award of attorney’s fees to the spouses Beluso.

We must likewise uphold the contract stipulation providing the In sum, we hold that spouses Beluso should still be held liable for a
compounding of interest. The provisions in the Credit Agreement and in compounded legal interest of 12% per annum and a penalty charge of
the promissory notes providing for the compounding of interest were 12% per annum. We also hold that, instead of awarding attorney’s fees in
neither nullified by the RTC or the Court of Appeals, nor assailed by the favor of petitioner, we shall merely affirm the deletion of the award of
spouses Beluso in their petition with the RTC. The compounding of attorney’s fees to the spouses Beluso.
interests has furthermore been declared by this Court to be legal. We
have held in Tan v. Court of Appeals, 29 that: Annulment of the Foreclosure Sale

Without prejudice to the provisions of Article 2212, interest due and Properties of spouses Beluso had been foreclosed, titles to which had
unpaid shall not earn interest. However, the contracting parties may by already been consolidated on 19 February 2001 and 20 March 2001 in
stipulation capitalize the interest due and unpaid, which as added the name of UCPB, as the spouses Beluso failed to exercise their right of
principal, shall earn new interest. redemption which expired on 25 March 2000. The RTC, however,
annulled the foreclosure of mortgage based on an alleged incorrect
As regards the imposition of penalties, however, although we are likewise computation of the spouses Beluso’s indebtedness.
upholding the imposition thereof in the contract, we find the rate
iniquitous. Like in the case of grossly excessive interests, the penalty UCPB alleges that none of the grounds for the annulment of a
stipulated in the contract may also be reduced by the courts if it is foreclosure sale are present in the case at bar. Furthermore, the
iniquitous or unconscionable.30 annulment of the foreclosure proceedings and the certificates of sale
were mooted by the subsequent issuance of new certificates of title in the
We find the penalty imposed by UCPB, ranging from 30.41% to 36%, to name of said bank. UCPB claims that the spouses Beluso’s action for
be iniquitous considering the fact that this penalty is already over and annulment of foreclosure constitutes a collateral attack on its certificates
above the compounded interest likewise imposed in the contract. If a of title, an act proscribed by Section 48 of Presidential Decree No. 1529,
36% interest in itself has been declared unconscionable by this otherwise known as the Property Registration Decree, which provides:
Court,31 what more a 30.41% to 36% penalty, over and above the
payment of compounded interest? UCPB itself must have realized this, Section 48. Certificate not subject to collateral attack. – A certificate of
as it gave us a sample computation of the spouses Beluso’s obligation if title shall not be subject to collateral attack. It cannot be altered, modified
both the interest and the penalty charge are reduced to 12%. or cancelled except in a direct proceeding in accordance with law.
The spouses Beluso retort that since they had the right to refuse payment According to UCPB, the Court of Appeals even stated that "[a]dmittedly
of an excessive demand on their account, they cannot be said to be in the original complaint did not explicitly allege a violation of the ‘Truth in
default for refusing to pay the same. Consequently, according to the Lending Act’ and no action to formally admit the amended petition [which
spouses Beluso, the "enforcement of such illegal and overcharged expressly alleges violation of the Truth in Lending Act] was made either
demand through foreclosure of mortgage" should be voided. by [respondents] spouses Beluso and the lower court. x x x." 35

We agree with UCPB and affirm the validity of the foreclosure UCPB further claims that the action to recover the penalty for the
proceedings. Since we already found that a valid demand was made by violation of the Truth in Lending Act had been barred by the one-year
UCPB upon the spouses Beluso, despite being excessive, the spouses prescriptive period provided for in the Act. UCPB asserts that per the
Beluso are considered in default with respect to the proper amount of records of the case, the latest of the subject promissory notes had been
their obligation to UCPB and, thus, the property they mortgaged to executed on 2 January 1998, but the original petition of the spouses
secure such amounts may be foreclosed. Consequently, proceeds of the Beluso was filed before the RTC on 9 February 1999, which was after the
foreclosure sale should be applied to the extent of the amounts to which expiration of the period to file the same on 2 January 1999.
UCPB is rightfully entitled.
On the matter of allegation of the violation of the Truth in Lending Act, the
As argued by UCPB, none of the grounds for the annulment of a Court of Appeals ruled:
foreclosure sale are present in this case. The grounds for the proper
annulment of the foreclosure sale are the following: (1) that there was Admittedly the original complaint did not explicitly allege a violation of the
fraud, collusion, accident, mutual mistake, breach of trust or misconduct ‘Truth in Lending Act’ and no action to formally admit the amended
by the purchaser; (2) that the sale had not been fairly and regularly petition was made either by [respondents] spouses Beluso and the lower
conducted; or (3) that the price was inadequate and the inadequacy was court. In such transactions, the debtor and the lending institutions do not
so great as to shock the conscience of the court. 34 deal on an equal footing and this law was intended to protect the public
from hidden or undisclosed charges on their loan obligations, requiring a
Liability for Violation of Truth in Lending Act full disclosure thereof by the lender. We find that its infringement may be
inferred or implied from allegations that when [respondents] spouses
The RTC, affirmed by the Court of Appeals, imposed a fine of ₱26,000.00 Beluso executed the promissory notes, the interest rate chargeable
for UCPB’s alleged violation of Republic Act No. 3765, otherwise known thereon were left blank. Thus, [petitioner] UCPB failed to discharge its
as the Truth in Lending Act. duty to disclose in full to [respondents] Spouses Beluso the charges
applicable on their loans.36
UCPB challenges this imposition, on the argument that Section 6(a) of
the Truth in Lending Act which mandates the filing of an action to recover We agree with the Court of Appeals. The allegations in the complaint,
such penalty must be made under the following circumstances: much more than the title thereof, are controlling. Other than that stated by
the Court of Appeals, we find that the allegation of violation of the Truth in
Section 6. (a) Any creditor who in connection with any credit transaction Lending Act can also be inferred from the same allegation in the
fails to disclose to any person any information in violation of this Act or complaint we discussed earlier:
any regulation issued thereunder shall be liable to such person in the
amount of ₱100 or in an amount equal to twice the finance charge b.) In unilaterally imposing an increased interest rates (sic) respondent
required by such creditor in connection with such transaction, whichever bank has relied on the provision of their promissory note granting
is greater, except that such liability shall not exceed ₱2,000 on any credit respondent bank the power to unilaterally fix the interest rates, which rate
transaction. Action to recover such penalty may be brought by such was not determined in the promissory note but was left solely to the will of
person within one year from the date of the occurrence of the violation, in the Branch Head of the respondent Bank, x x x. 37
any court of competent jurisdiction. x x x (Emphasis ours.)
The allegation that the promissory notes grant UCPB the power to (c) Any person who willfully violates any provision of this Act or any
unilaterally fix the interest rates certainly also means that the promissory regulation issued thereunder shall be fined by not less than ₱1,000 or
notes do not contain a "clear statement in writing" of "(6) the finance more than ₱5,000 or imprisonment for not less than 6 months, nor more
charge expressed in terms of pesos and centavos; and (7) the than one year or both.
percentage that the finance charge bears to the amount to be financed
expressed as a simple annual rate on the outstanding unpaid balance of As can be gleaned from Section 6(a) and (c) of the Truth in Lending Act,
the obligation."38 Furthermore, the spouses Beluso’s prayer "for such the violation of the said Act gives rise to both criminal and civil liabilities.
other reliefs just and equitable in the premises" should be deemed to Section 6(c) considers a criminal offense the willful violation of the Act,
include the civil penalty provided for in Section 6(a) of the Truth in imposing the penalty therefor of fine, imprisonment or both. Section 6(a),
Lending Act. on the other hand, clearly provides for a civil cause of action for failure to
disclose any information of the required information to any person in
UCPB’s contention that this action to recover the penalty for the violation violation of the Act. The penalty therefor is an amount of ₱100 or in an
of the Truth in Lending Act has already prescribed is likewise without amount equal to twice the finance charge required by the creditor in
merit. The penalty for the violation of the act is ₱100 or an amount equal connection with such transaction, whichever is greater, except that the
to twice the finance charge required by such creditor in connection with liability shall not exceed ₱2,000.00 on any credit transaction. The action
such transaction, whichever is greater, except that such liability shall not to recover such penalty may be instituted by the aggrieved private person
exceed ₱2,000.00 on any credit transaction.39 As this penalty depends on separately and independently from the criminal case for the same
the finance charge required of the borrower, the borrower’s cause of offense.
action would only accrue when such finance charge is required. In the
case at bar, the date of the demand for payment of the finance charge is In the case at bar, therefore, the civil action to recover the penalty under
2 September 1998, while the foreclosure was made on 28 December Section 6(a) of the Truth in Lending Act had been jointly instituted with (1)
1998. The filing of the case on 9 February 1999 is therefore within the the action to declare the interests in the promissory notes void, and (2)
one-year prescriptive period. the action to declare the foreclosure void. This joinder is allowed under
Rule 2, Section 5 of the Rules of Court, which provides:
UCPB argues that a violation of the Truth in Lending Act, being a criminal
offense, cannot be inferred nor implied from the allegations made in the SEC. 5. Joinder of causes of action.—A party may in one pleading
complaint.40 Pertinent provisions of the Act read: assert, in the alternative or otherwise, as many causes of action as he
may have against an opposing party, subject to the following conditions:
Sec. 6. (a) Any creditor who in connection with any credit transaction fails
to disclose to any person any information in violation of this Act or any (a) The party joining the causes of action shall comply with the
regulation issued thereunder shall be liable to such person in the amount rules on joinder of parties;
of ₱100 or in an amount equal to twice the finance charge required by
such creditor in connection with such transaction, whichever is the (b) The joinder shall not include special civil actions or actions
greater, except that such liability shall not exceed ₱2,000 on any credit governed by special rules;
transaction. Action to recover such penalty may be brought by such
person within one year from the date of the occurrence of the violation, in
(c) Where the causes of action are between the same parties but
any court of competent jurisdiction. In any action under this subsection in
pertain to different venues or jurisdictions, the joinder may be
which any person is entitled to a recovery, the creditor shall be liable for
allowed in the Regional Trial Court provided one of the causes of
reasonable attorney’s fees and court costs as determined by the court.
action falls within the jurisdiction of said court and the venue lies
therein; and
xxxx
 (d) Where the claims in all the causes of action are principally for (c) Where the causes of action are between the same parties but pertain
recovery of money, the aggregate amount claimed shall be the to different venues or jurisdictions, the joinder may be allowed in the
test of jurisdiction. Regional Trial Court provided one of the causes of action falls within the
jurisdiction of said court and the venue lies therein.
In attacking the RTC’s disposition on the violation of the Truth in Lending
Act since the same was not alleged in the complaint, UCPB is actually Furthermore, opening a credit line does not create a credit transaction of
asserting a violation of due process. Indeed, due process mandates that loan or mutuum, since the former is merely a preparatory contract to the
a defendant should be sufficiently apprised of the matters he or she contract of loan or mutuum. Under such credit line, the bank is merely
would be defending himself or herself against. However, in the 1 July obliged, for the considerations specified therefor, to lend to the other
1999 pre-trial brief filed by the spouses Beluso before the RTC, the claim party amounts not exceeding the limit provided. The credit transaction
for civil sanctions for violation of the Truth in Lending Act was expressly thus occurred not when the credit line was opened, but rather when the
alleged, thus: credit line was availed of. In the case at bar, the violation of the Truth in
Lending Act allegedly occurred not when the parties executed the Credit
Moreover, since from the start, respondent bank violated the Truth in Agreement, where no interest rate was mentioned, but when the parties
Lending Act in not informing the borrower in writing before the execution executed the promissory notes, where the allegedly offending interest
of the Promissory Notes of the interest rate expressed as a percentage of rate was stipulated.
the total loan, the respondent bank instead is liable to pay petitioners
double the amount the bank is charging petitioners by way of sanction for UCPB further argues that since the spouses Beluso were duly given
its violation.41 copies of the subject promissory notes after their execution, then they
were duly notified of the terms thereof, in substantial compliance with the
In the same pre-trial brief, the spouses Beluso also expressly raised the Truth in Lending Act.
following issue:
Once more, we disagree. Section 4 of the Truth in Lending Act clearly
b.) Does the expression indicative rate of DBD retail (sic) comply with the provides that the disclosure statement must be furnished prior to the
Truth in Lending Act provision to express the interest rate as a simple consummation of the transaction:
annual percentage of the loan?42
SEC. 4. Any creditor shall furnish to each person to whom credit is
These assertions are so clear and unequivocal that any attempt of UCPB extended, prior to the consummation of the transaction, a clear statement
to feign ignorance of the assertion of this issue in this case as to prevent in writing setting forth, to the extent applicable and in accordance with
it from putting up a defense thereto is plainly hogwash. rules and regulations prescribed by the Board, the following information:

Petitioner further posits that it is the Metropolitan Trial Court which has (1) the cash price or delivered price of the property or service to
jurisdiction to try and adjudicate the alleged violation of the Truth in be acquired;
Lending Act, considering that the present action allegedly involved a
single credit transaction as there was only one Promissory Note Line. (2) the amounts, if any, to be credited as down payment and/or
trade-in;
We disagree. We have already ruled that the action to recover the
penalty under Section 6(a) of the Truth in Lending Act had been jointly (3) the difference between the amounts set forth under clauses
instituted with (1) the action to declare the interests in the promissory (1) and (2)
notes void, and (2) the action to declare the foreclosure void. There had
been no question that the above actions belong to the jurisdiction of the (4) the charges, individually itemized, which are paid or to be paid
RTC. Subsection (c) of the above-quoted Section 5 of the Rules of Court by such person in connection with the transaction but which are
on Joinder of Causes of Action provides: not incident to the extension of credit;
 (5) the total amount to be financed; The spouses Beluso claim that the issue in Civil Case No. V-7227 before
the RTC of Roxas City, a Petition for Injunction Against Foreclosure, is
(6) the finance charge expressed in terms of pesos and centavos; the propriety of the foreclosure before the true account of spouses
and Beluso is determined. On the other hand, the issue in Case No. 99-314
before the RTC of Makati City is the validity of the interest rate provision.
(7) the percentage that the finance bears to the total amount to be The spouses Beluso claim that Civil Case No. V-7227 has become moot
financed expressed as a simple annual rate on the outstanding because, before the RTC of Roxas City could act on the restraining
unpaid balance of the obligation. order, UCPB proceeded with the foreclosure and auction sale. As the act
sought to be restrained by Civil Case No. V-7227 has already been
accomplished, the spouses Beluso had to file a different action, that of
The rationale of this provision is to protect users of credit from a lack of
Annulment of the Foreclosure Sale, Case No. 99-314 with the RTC,
awareness of the true cost thereof, proceeding from the experience that
Makati City.
banks are able to conceal such true cost by hidden charges, uncertainty
of interest rates, deduction of interests from the loaned amount, and the
like. The law thereby seeks to protect debtors by permitting them to fully Even if we assume for the sake of argument, however, that only one
appreciate the true cost of their loan, to enable them to give full consent cause of action is involved in the two civil actions, namely, the violation of
to the contract, and to properly evaluate their options in arriving at the right of the spouses Beluso not to have their property foreclosed for
business decisions. Upholding UCPB’s claim of substantial compliance an amount they do not owe, the Rules of Court nevertheless allows the
would defeat these purposes of the Truth in Lending Act. The belated filing of the second action. Civil Case No. V-7227 was dismissed by the
discovery of the true cost of credit will too often not be able to reverse the RTC of Roxas City before the filing of Case No. 99-314 with the RTC of
ill effects of an already consummated business decision. Makati City, since the venue of litigation as provided for in the Credit
Agreement is in Makati City.
In addition, the promissory notes, the copies of which were presented to
the spouses Beluso after execution, are not sufficient notification from Rule 16, Section 5 bars the refiling of an action previously dismissed only
UCPB. As earlier discussed, the interest rate provision therein does not in the following instances:
sufficiently indicate with particularity the interest rate to be applied to the
loan covered by said promissory notes. SEC. 5. Effect of dismissal.—Subject to the right of appeal, an order
granting a motion to dismiss based on paragraphs (f), (h) and (i) of
Forum Shopping section 1 hereof shall bar the refiling of the same action or claim. (n)

UCPB had earlier moved to dismiss the petition (originally Case No. 99- Improper venue as a ground for the dismissal of an action is found in
314 in RTC, Makati City) on the ground that the spouses Beluso paragraph (c) of Section 1, not in paragraphs (f), (h) and (i):
instituted another case (Civil Case No. V-7227) before the RTC of Roxas
City, involving the same parties and issues. UCPB claims that while Civil SECTION 1. Grounds.—Within the time for but before filing the answer to
Case No. V-7227 initially appears to be a different action, as it prayed for the complaint or pleading asserting a claim, a motion to dismiss may be
the issuance of a temporary restraining order and/or injunction to stop made on any of the following grounds:
foreclosure of spouses Beluso’s properties, it poses issues which are
similar to those of the present case.43 To prove its point, UCPB cited the (a) That the court has no jurisdiction over the person of the
spouses Beluso’s Amended Petition in Civil Case No. V-7227, which defending party;
contains similar allegations as those in the present case. The RTC of
Makati denied UCPB’s Motion to Dismiss Case No. 99-314 for lack of (b) That the court has no jurisdiction over the subject matter of
merit. Petitioner UCPB raised the same issue with the Court of Appeals, the claim;
and is raising the same issue with us now.
(c) That venue is improperly laid;
 (d) That the plaintiff has no legal capacity to sue; In these cases, it is evident that the first action was filed in anticipation of
the filing of the later action and the purpose is to preempt the later suit or
(e) That there is another action pending between the same provide a basis for seeking the dismissal of the second action.
parties for the same cause;
Even if this is not the purpose for the filing of the first action, it may
(f) That the cause of action is barred by a prior judgment or by the nevertheless be dismissed if the later action is the more appropriate
statute of limitations; vehicle for the ventilation of the issues between the parties. Thus, in
Ramos v. Peralta, it was held:
(g) That the pleading asserting the claim states no cause of
action; [T]he rule on litis pendentia does not require that the later case should
yield to the earlier case. What is required merely is that there be another
(h) That the claim or demand set forth in the plaintiff’s pleading pending action, not a prior pending action. Considering the broader
has been paid, waived, abandoned, or otherwise extinguished; scope of inquiry involved in Civil Case No. 4102 and the location of the
property involved, no error was committed by the lower court in deferring
to the Bataan court's jurisdiction.
(i) That the claim on which the action is founded is unenforceable
under the provisions of the statute of frauds; and
Given, therefore, the pendency of two actions, the following are the
relevant considerations in determining which action should be dismissed:
(j) That a condition precedent for filing the claim has not been
(1) the date of filing, with preference generally given to the first action
complied with.44 (Emphases supplied.)
filed to be retained; (2) whether the action sought to be dismissed was
filed merely to preempt the later action or to anticipate its filing and lay
When an action is dismissed on the motion of the other party, it is only the basis for its dismissal; and (3) whether the action is the appropriate
when the ground for the dismissal of an action is found in paragraphs (f), vehicle for litigating the issues between the parties.
(h) and (i) that the action cannot be refiled. As regards all the other
grounds, the complainant is allowed to file same action, but should take
In the case at bar, Civil Case No. V-7227 before the RTC of Roxas City
care that, this time, it is filed with the proper court or after the
was an action for injunction against a foreclosure sale that has already
accomplishment of the erstwhile absent condition precedent, as the case
been held, while Civil Case No. 99-314 before the RTC of Makati City
may be.
includes an action for the annulment of said foreclosure, an action
certainly more proper in view of the execution of the foreclosure sale. The
UCPB, however, brings to the attention of this Court a Motion for former case was improperly filed in Roxas City, while the latter was filed
Reconsideration filed by the spouses Beluso on 15 January 1999 with the in Makati City, the proper venue of the action as mandated by the Credit
RTC of Roxas City, which Motion had not yet been ruled upon when the Agreement. It is evident, therefore, that Civil Case No. 99-314 is the more
spouses Beluso filed Civil Case No. 99-314 with the RTC of Makati. appropriate vehicle for litigating the issues between the parties, as
Hence, there were allegedly two pending actions between the same compared to Civil Case No. V-7227. Thus, we rule that the RTC of Makati
parties on the same issue at the time of the filing of Civil Case No. 99- City was not in error in not dismissing Civil Case No. 99-314.
314 on 9 February 1999 with the RTC of Makati. This will still not change
our findings. It is indeed the general rule that in cases where there are
WHEREFORE, the Decision of the Court of Appeals is hereby
two pending actions between the same parties on the same issue, it
AFFIRMED with the following MODIFICATIONS:
should be the later case that should be dismissed. However, this rule is
not absolute. According to this Court in Allied Banking Corporation v.
Court of Appeals45 : 1. In addition to the sum of ₱2,350,000.00 as determined by the
courts a quo, respondent spouses Samuel and Odette Beluso are
also liable for the following amounts:
 a. Penalty of 12% per annum on the amount due46 from 3. The foreclosure of mortgage is hereby declared VALID.
the date of demand; and Consequently, the amounts which the Regional Trial Court and
the Court of Appeals ordered respondents to pay, as modified in
b. Compounded legal interest of 12% per annum on the this Decision, shall be deducted from the proceeds of the
amount due47 from date of demand; foreclosure sale.

2. The following amounts shall be deducted from the liability of SO ORDERED.

the spouses Samuel and Odette Beluso:
MINITA V. CHICO-NAZARIO
a. Payments made by the spouses in the amount of Associate Justice
₱763,692.00. These payments shall be applied to the
date of actual payment of the following in the order that
they are listed, to wit:

i. penalty charges due and demandable as of the

time of payment; G.R. No. 153829 August 17, 2011

ii. interest due and demandable as of the time of ROMAN CATHOLIC ARCHBISHOP OF SAN FERNANDO,
payment; PAMPANGA represented herein by the incumbent
Archbishop, Petitioner,
iii. principal amortization/payment in arrears as of vs.
the time of payment; EDUARDO SORIANO, JR., EDNA YALUN, EVANGELINA ABLAZA,
FELICIDAD Y. URBINA, FELIX SALENGA, REYNALDO I. MALLARI,
iv. outstanding balance. MARCIANA B. BARCOMA, BIENVENIDO PANGANIBAN, BRIGIDA
NAVARRO, EUFRANCIA T. FLORES, VICTORIA B. SUDSOD,
b. Penalty under Republic Act No. 3765 in the amount of EUFRONIO CAPARAS, CRISANTO MANANSALA, LILY
₱26,000.00. This amount shall be deducted from the MASANGCAY, BENJAMIN GUINTO, JR., MARTHA G. CASTRO and
liability of the spouses Samuel and Odette Beluso on 9 LINO TOLENTINO, Respondents.
February 1999 to the following in the order that they are
listed, to wit: x - - - - - - - - - - - - - - - - - - - - - - -x

i. penalty charges due and demandable as of time G.R. No. 160909

of payment;
BENJAMIN GUINTO, JR.,1 Petitioner,
ii. interest due and demandable as of the time of vs.
payment; ROMAN CATHOLIC ARCHBISHOP OF SAN FERNANDO,
PAMPANGA represented herein by the incumbent
iii. principal amortization/payment in arrears as of Archbishop, Respondent.
the time of payment;
DECISION
iv. outstanding balance.
VILLARAMA, JR., J.:
Before this Court are two petitions for resolution: the first, a Petition for binding against the whole world until it is declared void by a court of
Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure, competent jurisdiction. Thus, defendants were ordered to vacate the
as amended, filed by the Roman Catholic Archbishop (RCA) of San premises and to pay reasonable monthly rentals from August 15, 2000
Fernando, Pampanga, assailing the March 18, 2002 Decision2 and the until they shall have finally vacated the premises.7
May 30, 2002 Resolution3 of the Court of Appeals (CA) in CA-G.R. SP
No. 66974; and the second, a Petition for Injunction under Rule 58, filed Defendants appealed to the Regional Trial Court (RTC). However, the
by Benjamin Guinto, Jr. (Guinto), seeking to enjoin the implementation of appeal was dismissed because of their failure to file the appeal
the Writ of Execution4 dated October 14, 2003, issued by the Municipal memorandum. When defendants elevated the case to the CA, their
Circuit Trial Court (MCTC) of Macabebe-Masantol, Pampanga in Civil petition for certiorari was not given due course for failure to file the same
Case No. 2000(23). within the extended period. Hence, the decision ejecting the defendants
from the premises became final.
The facts follow:
Pursuant to Section 21,8 Rule 70 of the 1997 Rules of Civil Procedure, as
The RCA of San Fernando, Pampanga, represented by Most Rev. amended, the RCA filed an Urgent Motion for Immediate Issuance of a
Paciano B. Aniceto, D.D., claimed that it is the owner of a vast tract of Writ of Execution, which the MCTC granted in an Order 9 dated February
land located near the Catholic Church at Poblacion, Macabebe, 10, 2003, as follows:
Pampanga and covered by Original Certificate of Title (OCT) No. 17629
issued by the Registry of Deeds of San Fernando on February 21, WHEREFORE, on the basis of the rules and jurisprudence aforecited, the
1929.5 The RCA alleged that several individuals unlawfully occupied the Motion for Execution filed by plaintiff is hereby granted. Let a writ of
subject land and refused to vacate despite repeated demands. Having no execution be issued in connection with this case which is a ministerial
other recourse, the RCA filed an ejectment case, docketed as Civil Case duty of the Court.
No. 2000(23), before the MCTC of Macabebe-Masantol, Pampanga
against the alleged intruders, namely, Leocadio and Rufina Reyes, Jose Defendants’ Motion for Inhibition is denied for lack of merit.
Balagtas, Marcial and Victoria Balagtas, Levita Naluz, Dionisio Barcoma,
Felicidad Urbina, Justiniano Reyes, Lawrence Muniz, Eduardo Soriano,
SO ORDERED.10
Cosmer Vergara, Perlita Bustos, Brigida Navarro, Leonoda Cruz, Leonida
Manansala, Angelito Juliano, Eduardo Ibay, Edna Yalung, Reynaldo
Mallari, Lily Masangcay, Evangelina Ablaza, Crisanto Manansala, Feliza Thereafter, the MCTC issued another Order dated October 6, 2003, the
Esguerra, Gloria Manansala, Bienvenido and Felicisima Panganiban, pertinent portion of which states:
Ofroneo Caparas, Tino Enriquez, Elizabeth and Benjamin Guinto, Felix
Salenga, Eleno and Rosala Salenga, Luisa and Domingo Sison, Francia Let a writ of execution be issued to implement the Decision dated
Flores, Eduardo and Rosita Gutierrez, Zosima and Ener Basilio, Andy September 28, 2001.
and Loreto Bonifacio, Peter and Felicisima Villajuan. 6
No further defendants’ motion to stay execution shall be entertained.
On the other hand, defendants countered that the RCA has no cause of
action against them because its title is spurious. They contended that the SO ORDERED.11
subject land belonged to the State, but they have already acquired the
same by acquisitive prescription as they and their predecessors-in- Accordingly, a writ of execution12 was issued commanding the sheriff or
interest have been in continuous possession of the land for more than his deputies to implement the MCTC Decision. Thus, Sheriff Edgar
thirty (30) years. Joseph C. David sent the defendants a Notice to Vacate13 dated
December 8, 2003.
After considering the pleadings submitted by the parties, the MCTC
rendered decision on September 28, 2001 in favor of the RCA. The trial
court held that OCT No. 17629 in the name of the RCA remains valid and
Seeking to enjoin the implementation of the writ of execution and the A motion for reconsideration21 of the Decision was filed by the RCA.
notice to vacate, Guinto filed the instant Petition for Injunction with Prayer However, in the Resolution22 dated May 30, 2002, the CA denied the
for Issuance of a Temporary Restraining Order (TRO), 14 docketed as motion for lack of merit. Hence, the RCA filed the present petition for
G.R. No. 160909. review on certiorari,23 docketed as G.R. No. 153829, assailing the
Decision of the CA, as well as its Resolution denying the motion for
Meanwhile, during the pendency of the ejectment case at the MCTC, reconsideration.
some of the defendants therein, namely, Eduardo Soriano, Jr., Edna
Yalun, Evangelina Ablaza, Felicidad Y. Urbina, Felix Salenga, Reynaldo On January 14, 2004, we resolved to consolidate G.R. Nos. 160909 and
I. Mallari, Marciana B. Barcoma, Bienvenido Panganiban, Brigida 153829.24 Subsequently, the Court resolved to treat the petition for
Navarro, Eufrancia T. Flores, Victoria B. Sodsod, Eufronio Caparas, injunction with prayer for the issuance of a TRO in G.R. No. 160909 as a
Crisanto Manansala, Lily Masangcay, Benjamin Guinto, Jr., Martha G. motion for the issuance of a TRO and/or writ of preliminary injunction in
Castro and Lino Tolentino filed Civil Case No. 01-1046(M) against the G.R. No. 153829.25
RCA for Quieting of Title and Declaration of Nullity of Title before the
RTC of Macabebe, Pampanga.15 They claimed that they are in actual The RCA raises the following issues:
possession of the land in the concept of owners and alleged that OCT
No. 17629 in the name of RCA is spurious and fake. (A) WHETHER OR NOT CIVIL CASE NO. 01-1046(M) FOR QUIETING
OF TITLE AND DECLARATION OF NULLITY OF TITLE IS LEGALLY
Before filing its Answer, the RCA moved to dismiss the case on grounds DISMISSIBLE FOR VIOLATION OF THE VARIOUS PROVISIONS OF
of noncompliance with a condition precedent, laches, and for being a THE RULES OF COURT;
collateral attack on its title. The RCA likewise later filed a supplement to
its motion to dismiss. and

In an Order16 dated June 4, 2001, the RTC denied the motion to dismiss (B) WHETHER OR NOT THE CIVIL ACTION (THE ABOVE MENTIONED
reasoning that when the rules speak of noncompliance with a condition CIVIL CASE NO. 01-1046[M]) FILED BY PRIVATE RESPONDENTS
precedent, it could refer only to the failure of a party to secure the CONSTITUTES A COLLATERAL ATTACK ON PETITIONER'S TITLE.26
appropriate certificate to file action under the Local Government Code, or
the failure to exert earnest efforts towards an amicable settlement when
Essentially, the issue before us is whether the CA erred in not holding
the suit involves members of the same family. The RTC also found that
that the RTC committed grave abuse of discretion in denying the motion
plaintiffs have a cause of action. Furthermore, the trial court held that
to dismiss filed by the RCA.
RCA’s argument – that the property cannot be acquired by prescription
because it has title over it – is a matter of evidence which may be
established during the trial on the merits. We affirm the ruling of the CA.

Aggrieved, the RCA filed a motion for reconsideration, which the trial Well-entrenched in our jurisdiction is the rule that the trial court’s denial of
court denied in an Order17 dated July 24, 2001. Thereafter, the RCA filed a motion to dismiss cannot be questioned in a certiorari proceeding under
with the CA a petition for certiorari with prayer for preliminary injunction. 18 Rule 65 of the 1997 Rules of Civil Procedure, as amended. This is
because a certiorari writ is a remedy designed to correct errors of
jurisdiction and not errors of judgment. The appropriate course of action
On March 18, 2002, the CA promulgated the assailed Decision,19 the
of the movant in such event is to file an answer and interpose as
dispositive portion of which reads:
affirmative defenses the objections raised in the motion to dismiss. If,
later, the decision of the trial judge is adverse, the movant may then
WHEREFORE, for lack of merit, the petition is hereby DISMISSED. elevate on appeal the same issues raised in the motion. 27

SO ORDERED.20
The only exception to this rule is when the trial court gravely abused its An action is deemed an attack on a title when its objective is to nullify the
discretion in denying the motion.28 This exception is, nevertheless, title, thereby challenging the judgment pursuant to which the title was
applied sparingly, and only in instances when there is a clear showing decreed. The attack is direct when the objective is to annul or set aside
that the trial court exercised its judicial power in an arbitrary or despotic such judgment, or enjoin its enforcement. On the other hand, the attack is
manner by reason of passion or personal hostility. 29 Further, the abuse of indirect or collateral when, in an action to obtain a different relief, an
the court's discretion must be so patent and gross as to amount to an attack on the judgment is nevertheless made as an incident thereof. 32
evasion of a positive duty or a virtual refusal to perform the duty enjoined
by, or to act at all in contemplation of, law. 30 The complaint filed with the RTC pertinently alleged that the claim of
ownership by the RCA is spurious as its title, denominated as OCT No.
Here, in dismissing the petition for certiorari, the CA did not find grave 17629, is fake for the following reasons: (1) that the erasures are very
abuse of discretion on the part of the RTC. The appellate court was not apparent and the title itself is fake; (2) it was made to appear under
convinced with the RCA’s argument that plaintiffs failed to comply with Memorandum of Encumbrance Entry No. 1007 that the title is a
the condition precedent provided in Article 47731 of the Civil reconstituted title when in truth, it is not; and (3) the verification reveals
Code because they allegedly did not have legal or equitable title to, or that there was no petition filed before any court where an order was
interest in the real property. The CA explained that the requirement issued for the reconstitution and re-issuance of an owner’s duplicate
stated in Article 477 is not a condition precedent before one can file an copy.33 It is thus clear from the foregoing that the case filed questioning
action for quieting of title. Rather, it is a requisite for an action to quiet title the genuineness of OCT No. 17629 is a direct attack on the title of the
to prosper and the existence or nonexistence of the requisite should be RCA.
determined only after trial on the merits. The CA also agreed with the trial
court in ruling that the RCA cannot raise in a motion to dismiss the As regards the petition docketed as G.R. No. 160909 which this Court
ground that the complaint is already barred by laches for it still remains to treated as motion for the issuance of a TRO and/or writ of preliminary
be established during trial how long the plaintiffs have slept on their injunction, Guinto insists that there is a need to enjoin the sheriff from
rights, if such be the case. Evidently, the CA is correct in finding that the enforcing the writ of execution as it would cause grave and irreparable
denial by the RTC of the RCA’s motion to dismiss is not tainted with damage to Guinto, while the RCA would not suffer any damage if it would
grave abuse of discretion. later be proved that indeed its title is genuine.

Next, the RCA submits that an action for quieting of title is a special civil We disagree.
action covered by Rule 63, while an action for declaration of nullity of title
is governed by ordinary rules. Thus, it contends that these cases should Section 3, Rule 58 of the 1997 Rules of Civil Procedure, as amended,
have been dismissed for violation of the rule on joinder of actions under enumerates the grounds for the issuance of preliminary injunction, viz:
Section 5, Rule 2 of the 1997 Rules of Civil Procedure, as amended,
which requires that the joinder shall not include special civil actions
SEC. 3. Grounds for issuance of preliminary injunction. – A preliminary
governed by special rules. Such contention, however, is utterly bereft of
injunction may be granted when it is established:
merit and insufficient to show that the CA erred in upholding the trial
court’s decision. Section 6 of Rule 2 explicitly provides that misjoinder of
causes of action is not a ground for dismissal of an action. (a) That the applicant is entitled to the relief demanded, and the
whole or part of such relief consists in restraining the commission
or continuance of the act or acts complained of, or in requiring the
The RCA likewise asserts that the case for quieting of title is a collateral
performance of an act or acts, either for a limited period or
attack on its title which is prohibited by law. However, we agree with the
perpetually;
CA in holding that the complaint against the RCA does not amount to a
collateral attack because the action for the declaration of nullity of OCT
No. 17629 is a clear and direct attack on its title. (b) That the commission, continuance or nonperformance of the
act or acts complained of during the litigation would probably
work injustice to the applicant; or
 (c) That a party, court, agency or a person is doing, threatening, No costs.
or is attempting to do, or is procuring or suffering to be done,
some act or acts probably in violation of the rights of the applicant SO ORDERED.
respecting the subject of the action or proceeding, and tending to
render the judgment ineffectual. MARTIN S. VILLARAMA, JR.
Associate Justice
And as clearly explained in Ocampo v. Sison Vda. de Fernandez:34

To be entitled to the injunctive writ, the applicant must show that there
exists a right to be protected which is directly threatened by an act sought
to be enjoined. Furthermore, there must be a showing that the invasion of
the right is material and substantial and that there is an urgent and
paramount necessity for the writ to prevent serious damage. The
applicant’s right must be clear and unmistakable. In the absence of a
clear legal right, the issuance of the writ constitutes grave abuse of G.R. No. 156117 May 26, 2005
discretion. Where the applicant’s right or title is doubtful or disputed,
injunction is not proper. The possibility of irreparable damage without REPUBLIC OF THE PHILIPPINES, petitioner,
proof of an actual existing right is not a ground for injunction. vs.
JEREMIAS AND DAVID HERBIETO, respondents.
A clear and positive right especially calling for judicial protection must be
shown. Injunction is not a remedy to protect or enforce contingent,
1avvphi1
DECISION
abstract, or future rights; it will not issue to protect a right not in esse and
which may never arise, or to restrain an act which does not give rise to a CHICO-NAZARIO, J.:
cause of action. There must exist an actual right. There must be a patent
showing by the applicant that there exists a right to be protected and that Before this Court is a Petition for Review on Certiorari, under Rule 45 of
the acts against which the writ is to be directed are violative of said right. the 1997 Rules of Civil Procedure, seeking the reversal of the Decision of
the Court of Appeals in CA-G.R. CV No. 67625, dated 22 November
In this case, the defendants in the ejectment case possess no such legal 2002,1 which affirmed the Judgment of the Municipal Trial Court (MTC) of
rights that merit the protection of the courts through the writ of preliminary Consolacion, Cebu, dated 21 December 1999, 2 granting the application
injunction. The MCTC has already rendered a decision in favor of the for land registration of the respondents.
RCA and ordered the defendants therein to vacate the premises. Their
appeal to the RTC was dismissed and the decision has become final. Respondents in the present Petition are the Herbieto brothers, Jeremias
Evidently, their right to possess the property in question has already been and David, who filed with the MTC, on 23 September 1998, a single
declared inferior or inexistent in relation to the right of the RCA in the application for registration of two parcels of land, Lots No. 8422 and
MCTC decision which has already become final and executory.35 8423, located in Cabangahan, Consolacion, Cebu (Subject Lots). They
claimed to be owners in fee simple of the Subject Lots, which they
WHEREFORE, the petition in G.R. No. 153829 is DENIED. The Decision purchased from their parents, spouses Gregorio Herbieto and Isabel
dated March 18, 2002 and the Resolution dated May 30, 2002 of the Owatan, on 25 June 1976.3 Together with their application for
Court of Appeals in CA-G.R. SP No. 66974 are AFFIRMED. The motion registration, respondents submitted the following set of documents:
for the issuance of a TRO and/or writ of preliminary injunction to enjoin
the sheriff from enforcing the writ of execution in Civil Case No. 2000(23) (a) Advance Survey Plan of Lot No. 8422, in the name of
is likewise DENIED for lack of merit. respondent Jeremias; and Advance Survey Plan of Lot No. 8423,
in the name of respondent David;4
 (b) The technical descriptions of the Subject Lots; 5 During the initial hearing on 03 September 1999, the MTC issued an
Order of Special Default,17 with only petitioner Republic opposing the
(c) Certifications by the Department of Environment and Natural application for registration of the Subject Lots. The respondents, through
Resources (DENR) dispensing with the need for Surveyor's their counsel, proceeded to offer and mark documentary evidence to
Certificates for the Subject Lots;6 prove jurisdictional facts. The MTC commissioned the Clerk of Court to
receive further evidence from the respondents and to submit a Report to
(d) Certifications by the Register of Deeds of Cebu City on the the MTC after 30 days.
absence of certificates of title covering the Subject Lots;7
On 21 December 1999, the MTC promulgated its Judgment ordering the
(e) Certifications by the Community Environment and Natural registration and confirmation of the title of respondent Jeremias over Lot
Resources Office (CENRO) of the DENR on its finding that the No. 8422 and of respondent David over Lot No. 8423. It subsequently
Subject Lots are alienable and disposable, by virtue of Forestry issued an Order on 02 February 2000 declaring its Judgment, dated 21
Administrative Order No. 4-1063, dated 25 June 1963;8 December 1999, final and executory, and directing the Administrator of
the Land Registration Authority (LRA) to issue a decree of registration for
the Subject Lots.18
(f) Certified True Copies of Assessment of Real Property (ARP)
No. 941800301831, in the name of Jeremias, covering Lot No.
8422, issued in 1994; and ARP No. 941800301833, in the name Petitioner Republic appealed the MTC Judgment, dated 21 December
of David, covering Lot No. 8423, also issued in 1994;9 and 1999, to the Court of Appeals.19 The Court of Appeals, in its Decision,
dated 22 November 2002, affirmed the appealed MTC Judgment
reasoning thus:
(g) Deed of Definite Sale executed on 25 June 1976 by spouses
Gregorio Herbieto and Isabel Owatan selling the Subject Lots and
the improvements thereon to their sons and respondents herein, In the case at bar, there can be no question that the land sought
Jeremias and David, for P1,000. Lot No. 8422 was sold to to be registered has been classified as within the alienable and
Jeremias, while Lot No. 8423 was sold to David. 10 disposable zone since June 25, 1963. Article 1113 in relation to
Article 1137 of the Civil Code, respectively provides that "All
things which are within the commerce of men are susceptible of
On 11 December 1998, the petitioner Republic of the Philippines
prescription, unless otherwise provided. Property of the State or
(Republic) filed an Opposition to the respondents' application for
any of its subdivisions of patrimonial character shall not be the
registration of the Subject Lots arguing that: (1) Respondents failed to
object of prescription" and that "Ownership and other real rights
comply with the period of adverse possession of the Subject Lots
over immovables also prescribe through uninterrupted adverse
required by law; (2) Respondents' muniments of title were not genuine
possession thereof for thirty years, without need of title or of good
and did not constitute competent and sufficient evidence of bona
faith."
fide acquisition of the Subject Lots; and (3) The Subject Lots were part of
the public domain belonging to the Republic and were not subject to
private appropriation.11 As testified to by the appellees in the case at bench, their parents
already acquired the subject parcels of lands, subject matter of
this application, since 1950 and that they cultivated the same and
The MTC set the initial hearing on 03 September 1999 at 8:30 a.m. 12 All
planted it with jackfruits, bamboos, coconuts, and other trees
owners of the land adjoining the Subject Lots were sent copies of the
(Judgment dated December 21, 1999, p. 6). In short, it is
Notice of Initial Hearing.13 A copy of the Notice was also posted on 27
undisputed that herein appellees or their predecessors-in-interest
July 1999 in a conspicuous place on the Subject Lots, as well as on the
had occupied and possessed the subject land openly,
bulletin board of the municipal building of Consolacion, Cebu, where the
continuously, exclusively, and adversely since 1950.
Subject Lots were located.14 Finally, the Notice was also published in the
Consequently, even assuming arguendo that appellees'
Official Gazette on 02 August 199915 and The Freeman Banat News on
possession can be reckoned only from June 25, 1963 or from the
19 December 1999.16
time the subject lots had been classified as within the alienable
 and disposable zone, still the argument of the appellant does not they are co-owners. While an application may cover two parcels of land, it
hold water. is allowed only when the subject parcels of land belong to the same
applicant or applicants (in case the subject parcels of land are co-owned)
As earlier stressed, the subject property, being alienable since and are situated within the same province. Where the authority of the
1963 as shown by CENRO Report dated June 23, 1963, may courts to proceed is conferred by a statute and when the manner of
now be the object of prescription, thus susceptible of private obtaining jurisdiction is mandatory, it must be strictly complied with or the
ownership. By express provision of Article 1137, appellees are, proceedings will be utterly void. Since the respondents failed to comply
with much greater right, entitled to apply for its registration, as with the procedure for land registration under the Property Registration
provided by Section 14(4) of P.D. 1529 which allows individuals Decree, the proceedings held before the MTC is void, as the latter did not
to own land in any manner provided by law. Again, even acquire jurisdiction over it.
considering that possession of appelless should only be reckoned
from 1963, the year when CENRO declared the subject lands I
alienable, herein appellees have been possessing the subject
parcels of land in open, continuous, and in the concept of an Jurisdiction
owner, for 35 years already when they filed the instant application
for registration of title to the land in 1998. As such, this court finds Addressing first the issue of jurisdiction, this Court finds that the MTC had
no reason to disturb the finding of the court a quo.20 no jurisdiction to proceed with and hear the application for registration
filed by the respondents but for reasons different from those presented by
The Republic filed the present Petition for the review and reversal of the petitioner Republic.
Decision of the Court of Appeals, dated 22 November 2002, on the basis
of the following arguments: A. The misjoinder of causes of action and parties does not affect the
jurisdiction of the MTC to hear and proceed with respondents' application
First, respondents failed to establish that they and their predecessors-in- for registration.
interest had been in open, continuous, and adverse possession of the
Subject Lots in the concept of owners since 12 June 1945 or earlier. Respondents filed a single application for registration of the Subject Lots
According to the petitioner Republic, possession of the Subject Lots prior even though they were not co-owners. Respondents Jeremias and David
to 25 June 1963 cannot be considered in determining compliance with were actually seeking the individual and separate registration of Lots No.
the periods of possession required by law. The Subject Lots were 8422 and 8423, respectively.
classified as alienable and disposable only on 25 June 1963, per
CENRO's certification. It also alleges that the Court of Appeals, in
Petitioner Republic believes that the procedural irregularity committed by
applying the 30-year acquisitive prescription period, had overlooked the
the respondents was fatal to their case, depriving the MTC of jurisdiction
ruling in Republic v. Doldol,21 where this Court declared that
to proceed with and hear their application for registration of the Subject
Commonwealth Act No. 141, otherwise known as the Public Land Act, as
Lots, based on this Court's pronouncement in Director of Lands v. Court
amended and as it is presently phrased, requires that possession of land
of Appeals,22 to wit:
of the public domain must be from 12 June 1945 or earlier, for the same
to be acquired through judicial confirmation of imperfect title.
. . . In view of these multiple omissions which constitute non-
compliance with the above-cited sections of the Act, We rule that
Second, the application for registration suffers from fatal infirmity as the
said defects have not invested the Court with the authority or
subject of the application consisted of two parcels of land individually and
jurisdiction to proceed with the case because the manner or
separately owned by two applicants. Petitioner Republic contends that it
mode of obtaining jurisdiction as prescribed by the statute which
is implicit in the provisions of Presidential Decree No. 1529, otherwise
is mandatory has not been strictly followed, thereby rendering all
known as the Property Registration Decree, as amended, that the
proceedings utterly null and void.
application for registration of title to land shall be filed by a single
applicant; multiple applicants may file a single application only in case
This Court, however, disagrees with petitioner Republic in this regard. The misjoinder of causes of action and parties in the present Petition may
This procedural lapse committed by the respondents should not affect the have been corrected by the MTC motu propio or on motion of the
jurisdiction of the MTC to proceed with and hear their application for petitioner Republic. It is regrettable, however, that the MTC failed to
registration of the Subject Lots. detect the misjoinder when the application for registration was still
pending before it; and more regrettable that the petitioner Republic did
The Property Registration Decree23 recognizes and expressly allows the not call the attention of the MTC to the fact by filing a motion for
following situations: (1) the filing of a single application by several severance of the causes of action and parties, raising the issue of
applicants for as long as they are co-owners of the parcel of land sought misjoinder only before this Court.
to be registered;24 and (2) the filing of a single application for registration
of several parcels of land provided that the same are located within the B. Respondents, however, failed to comply with the publication
same province.25 The Property Registration Decree is silent, however, as requirements mandated by the Property Registration Decree, thus, the
to the present situation wherein two applicants filed a single application MTC was not invested with jurisdiction as a land registration court.
for two parcels of land, but are seeking the separate and individual
registration of the parcels of land in their respective names. Although the misjoinder of causes of action and parties in the present
Petition did not affect the jurisdiction of the MTC over the land registration
Since the Property Registration Decree failed to provide for such a proceeding, this Court, nonetheless, has discovered a defect in the
situation, then this Court refers to the Rules of Court to determine the publication of the Notice of Initial Hearing, which bars the MTC from
proper course of action. Section 34 of the Property Registration Decree assuming jurisdiction to hear and proceed with respondents' application
itself provides that, "[t]he Rules of Court shall, insofar as not inconsistent for registration.
with the provisions of this Decree, be applicable to land registration and
cadastral cases by analogy or in a suppletory character and whenever A land registration case is a proceeding in rem,28 and jurisdiction in
practicable and convenient." rem cannot be acquired unless there be constructive seizure of the land
through publication and service of notice. 29
Considering every application for land registration filed in strict
accordance with the Property Registration Decree as a single cause of Section 23 of the Property Registration Decree requires that the public be
action, then the defect in the joint application for registration filed by the given Notice of the Initial Hearing of the application for land registration
respondents with the MTC constitutes a misjoinder of causes of action by means of (1) publication; (2) mailing; and (3) posting. Publication of
and parties. Instead of a single or joint application for registration, the Notice of Initial Hearing shall be made in the following manner:
respondents Jeremias and David, more appropriately, should have filed
separate applications for registration of Lots No. 8422 and 8423, 1. By publication. –
respectively.
Upon receipt of the order of the court setting the time for initial
Misjoinder of causes of action and parties do not involve a question of hearing, the Commissioner of Land Registration shall cause a
jurisdiction of the court to hear and proceed with the case.26 They are not notice of initial hearing to be published once in the Official
even accepted grounds for dismissal thereof. 27 Instead, under the Rules Gazette and once in a newspaper of general circulation in the
of Court, the misjoinder of causes of action and parties involve an implied Philippines: Provided, however, that the publication in the Official
admission of the court's jurisdiction. It acknowledges the power of the Gazette shall be sufficient to confer jurisdiction upon the court.
court, acting upon the motion of a party to the case or on its own Said notice shall be addressed to all persons appearing to have
initiative, to order the severance of the misjoined cause of action, to be an interest in the land involved including the adjoining owners so
proceeded with separately (in case of misjoinder of causes of action); far as known, and "to all whom it may concern." Said notice shall
and/or the dropping of a party and the severance of any claim against also require all persons concerned to appear in court at a certain
said misjoined party, also to be proceeded with separately (in case of date and time to show cause why the prayer of said application
misjoinder of parties). shall not be granted.
Even as this Court concedes that the aforequoted Section 23(1) of the to the Subject Lots was deprived of due process for it was already too
Property Registration Decree expressly provides that publication in the late for him to appear before the MTC on the day of the initial hearing to
Official Gazette shall be sufficient to confer jurisdiction upon the land oppose respondents' application for registration, and to present his claim
registration court, it still affirms its declaration in Director of Lands v. and evidence in support of such claim. Worse, as the Notice itself states,
Court of Appeals30 that publication in a newspaper of general circulation should the claimant-oppositor fail to appear before the MTC on the date
is mandatory for the land registration court to validly confirm and register of initial hearing, he would be in default and would forever be barred from
the title of the applicant or applicants. That Section 23 of the Property contesting respondents' application for registration and even the
Registration Decree enumerated and described in detail the requirements registration decree that may be issued pursuant thereto. In fact, the MTC
of publication, mailing, and posting of the Notice of Initial Hearing, then all did issue an Order of Special Default on 03 September 1999.
such requirements, including publication of the Notice in a newspaper of
general circulation, is essential and imperative, and must be strictly The late publication of the Notice of Initial Hearing in the newspaper of
complied with. In the same case, this Court expounded on the reason general circulation is tantamount to no publication at all, having the same
behind the compulsory publication of the Notice of Initial Hearing in a ultimate result. Owing to such defect in the publication of the Notice, the
newspaper of general circulation, thus – MTC failed to constructively seize the Subject Lots and to acquire
jurisdiction over respondents' application for registration thereof.
It may be asked why publication in a newspaper of general Therefore, the MTC Judgment, dated 21 December 1999, ordering the
circulation should be deemed mandatory when the law already registration and confirmation of the title of respondents Jeremias and
requires notice by publication in the Official Gazette as well as by David over Lots No. 8422 and 8423, respectively; as well as the MTC
mailing and posting, all of which have already been complied with Order, dated 02 February 2000, declaring its Judgment of 21 December
in the case at hand. The reason is due process and the reality 1999 final and executory, and directing the LRA Administrator to issue a
that the Official Gazette is not as widely read and circulated as decree of registration for the Subject Lots, are both null and void for
newspaper and is oftentimes delayed in its circulation, such that having been issued by the MTC without jurisdiction.
the notices published therein may not reach the interested parties
on time, if at all. Additionally, such parties may not be owners of II
neighboring properties, and may in fact not own any other real
estate. In sum, the all encompassing in rem nature of land Period of Possession
registration cases, the consequences of default orders issued
against the whole world and the objective of disseminating the
Respondents failed to comply with the required period of possession of
notice in as wide a manner as possible demand a mandatory
the Subject Lots for the judicial confirmation or legalization of imperfect or
construction of the requirements for publication, mailing and
incomplete title.
posting.31
While this Court has already found that the MTC did not have jurisdiction
In the instant Petition, the initial hearing was set by the MTC, and was in
to hear and proceed with respondents' application for registration, this
fact held, on 03 September 1999 at 8:30 a.m. While the Notice thereof
Court nevertheless deems it necessary to resolve the legal issue on the
was printed in the issue of the Official Gazette, dated 02 August 1999,
required period of possession for acquiring title to public land.
and officially released on 10 August 1999, it was published in The
Freeman Banat News, a daily newspaper printed in Cebu City and
circulated in the province and cities of Cebu and in the rest of Visayas Respondents' application filed with the MTC did not state the statutory
and Mindanao, only on 19 December 1999, more than three months after basis for their title to the Subject Lots. They only alleged therein that they
the initial hearing. obtained title to the Subject Lots by purchase from their parents, spouses
Gregorio Herbieto and Isabel Owatan, on 25 June 1976. Respondent
Jeremias, in his testimony, claimed that his parents had been in
Indubitably, such publication of the Notice, way after the date of the initial
possession of the Subject Lots in the concept of an owner since 1950. 32
hearing, would already be worthless and ineffective. Whoever read the
Notice as it was published in The Freeman Banat News and had a claim
Yet, according to the DENR-CENRO Certification, submitted by Section 48. The following-described citizens of the Philippines,
respondents themselves, the Subject Lots are "within Alienable and occupying lands of the public domain or claiming to own any such
Disposable, Block I, Project No. 28 per LC Map No. 2545 of Consolacion, lands or an interest therein, but whose titles have not been
Cebu certified under Forestry Administrative Order No. 4-1063, dated perfected or completed, may apply to the Court of First Instance
June 25, 1963. Likewise, it is outside Kotkot-Lusaran Mananga of the province where the land is located for confirmation of their
Watershed Forest Reservation per Presidential Proclamation No. 932 claims and the issuance of a certificate of title thereafter, under
dated June 29, 1992."33 The Subject Lots are thus clearly part of the the Land Registration Act, to wit:
public domain, classified as alienable and disposable as of 25 June 1963.
(a) [Repealed by Presidential Decree No. 1073].
As already well-settled in jurisprudence, no public land can be acquired
by private persons without any grant, express or implied, from the (b) Those who by themselves or through their
government;34 and it is indispensable that the person claiming title to predecessors-in-interest have been in open, continuous,
public land should show that his title was acquired from the State or any exclusive, and notorious possession and occupation of
other mode of acquisition recognized by law. 35 agricultural lands of the public domain, under a bona
fide claim of acquisition of ownership, since June 12,
The Public Land Act, as amended, governs lands of the public domain, 1945, or earlier, immediately preceding the filing of the
except timber and mineral lands, friar lands, and privately-owned lands applications for confirmation of title, except when
which reverted to the State.36 It explicitly enumerates the means by which prevented by war or force majeure. These shall be
public lands may be disposed, as follows: conclusively presumed to have performed all the
conditions essential to a Government grant and shall be
(1) For homestead settlement; entitled to a certificate of title under the provisions of this
chapter.
(2) By sale;
(c) Members of the national cultural minorities who by
(3) By lease; themselves or through their predecessors-in-interest have
been in open, continuous, exclusive and notorious
possession and occupation of lands of the public domain
(4) By confirmation of imperfect or incomplete titles;
suitable to agriculture whether disposable or not, under
a bona fide claim of ownership since June 12, 1945 shall
(a) By judicial legalization; or be entitled to the rights granted in subsection (b) hereof.

(b) By administrative legalization (free patent). 37 Not being members of any national cultural minorities, respondents may
only be entitled to judicial confirmation or legalization of their imperfect or
Each mode of disposition is appropriately covered by separate chapters incomplete title under Section 48(b) of the Public Land Act, as amended.
of the Public Land Act because there are specific requirements and Section 48(b), as amended, now requires adverse possession of the land
application procedure for every mode.38 Since respondents herein filed since 12 June 1945 or earlier. In the present Petition, the Subject Lots
their application before the MTC,39 then it can be reasonably inferred that became alienable and disposable only on 25 June 1963. Any period of
they are seeking the judicial confirmation or legalization of their imperfect possession prior to the date when the Subject Lots were classified as
or incomplete title over the Subject Lots. alienable and disposable is inconsequential and should be excluded from
the computation of the period of possession; such possession can never
Judicial confirmation or legalization of imperfect or incomplete title to ripen into ownership and unless the land had been classified as alienable
land, not exceeding 144 hectares,40 may be availed of by persons and disposable, the rules on confirmation of imperfect title shall not apply
identified under Section 48 of the Public Land Act, as amended by thereto.41 It is very apparent then that respondents could not have
Presidential Decree No. 1073, which reads – complied with the period of possession required by Section 48(b) of the
Public Land Act, as amended, to acquire imperfect or incomplete title to the Public Land Act and the procedural requirements under the Property
the Subject Lots that may be judicially confirmed or legalized. Registration Decree.

The confirmation of respondents' title by the Court of Appeals was based Moreover, provisions of the Civil Code on prescription of ownership and
on the erroneous supposition that respondents were claiming title to the other real rights apply in general to all types of land, while the Public
Subject Lots under the Property Registration Decree. According to the Land Act specifically governs lands of the public domain. Relative to one
Decision of the Court of Appeals, dated 22 November 2002, Section another, the Public Land Act may be considered a special law45 that must
14(4) of the Property Registration Decree allows individuals to own land take precedence over the Civil Code, a general law. It is an established
in any other manner provided by law. It then ruled that the respondents, rule of statutory construction that between a general law and a special
having possessed the Subject Lots, by themselves and through their law, the special law prevails – Generalia specialibus non derogant.46
predecessors-in-interest, since 25 June 1963 to 23 September 1998,
when they filed their application, have acquired title to the Subject Lots by WHEREFORE, based on the foregoing, the instant Petition is GRANTED.
extraordinary prescription under Article 1113, in relation to Article 1137, The Decision of the Court of Appeals in CA-G.R. CV No. 67625, dated 22
both of the Civil Code.42 November 2002, is REVERSED. The Judgment of the MTC of
Consolacion, Cebu in LRC Case No. N-75, dated 21 December 1999,
The Court of Appeals overlooked the difference between the Property and its Order, dated 02 February 2000 are declared NULL AND VOID.
Registration Decree and the Public Land Act. Under the Property Respondents' application for registration is DISMISSED.
Registration Decree, there already exists a title which is confirmed by the
court; while under the Public Land Act, the presumption always is that the SO ORDERED.
land applied for pertains to the State, and that the occupants and
possessors only claim an interest in the same by virtue of their imperfect Puno, Acting C.J., (Chairman), Austria-Martinez, and Callejo, Sr.,
title or continuous, open, and notorious possession. 43 As established by JJ., concur.
this Court in the preceding paragraphs, the Subject Lots respondents Tinga, J., out of the country.
wish to register are undoubtedly alienable and disposable lands of the
public domain and respondents may have acquired title thereto only
under the provisions of the Public Land Act.

However, it must be clarified herein that even though respondents may

acquire imperfect or incomplete title to the Subject Lots under the Public
Land Act, their application for judicial confirmation or legalization thereof
must be in accordance with the Property Registration Decree, for Section
50 of the Public Land Act reads –

SEC. 50. Any person or persons, or their legal representatives or

successors in right, claiming any lands or interest in lands under
the provisions of this chapter, must in every case present an
application to the proper Court of First Instance, praying that the
validity of the alleged title or claim be inquired into and that a
certificate of title be issued to them under the provisions of the
Land Registration Act.44

Hence, respondents' application for registration of the Subject Lots must

have complied with the substantial requirements under Section 48(b) of