SPECIAL FIRST DIVISION

[ G.R. No. 192649, June 22, 2011 ]

HOME GUARANTY CORPORATION, PETITIONER, VS. R-II BUILDERS INC. AND NATIONAL HOUSING
AUTHORITY, RESPONDENTS.
RESOLUTION

PEREZ, J.:
Before the Court are: (a) the Entry of Appearance filed by Atty. Lope E. Feble of the Toquero Exconde
Manalang Feble Law Offices as collaborating counsel for respondent R-II Builders, Inc. (R-II Builders), with
prayer to be furnished all pleadings, notices and other court processes at its given address; and (b) the
motion filed by R-II Builders, seeking the reconsideration of Court's decision dated 9 March 2011 on the
following grounds: [1]
I

THE HONORABLE COURT ERRED IN RULING THAT RTC MANILA, BRANCH 22, HAD NO JURISDICTION OVER
THE PRESENT CASE SINCE RTC-MANILA, BRANCH 24, TO WHICH THE INSTANT CASE WAS INITIALLY
RAFFLED HAD NO AUTHORITY TO HEAR THE CASE BEING A SPECIAL COMMERCIAL COURT.
II.

THE HONORABLE COURT ERRED IN RULING THAT THE CORRECT DOCKET FEES WERE NOT PAID.

In urging the reversal of the Court's decision, R-II Builders argues that it filed its complaint with the Manila
RTC which is undoubtedly vested with jurisdiction over actions where the subject matter is incapable of
pecuniary estimation; that through no fault of its own, said complaint was raffled to Branch 24, the
designated Special Commercial Court (SCC) tasked to hear intra-corporate controversies; that despite the
determination subsequently made by Branch 24 of the Manila RTC that the case did not involve an intracorporate dispute, the Manila RTC did not lose jurisdiction over the same and its Executive Judge correctly
directed its re-raffling to Branch 22 of the same Court; that the re-raffle and/or amendment of pleadings do
not affect a court's jurisdiction which, once acquired, continues until the case is finally terminated; that
since its original Complaint, Amended and Supplemental Complaint and Second Amended Complaint all
primarily sought the nullification of the Deed of Assignment and Conveyance (DAC) transferring the Asset
Pool in favor of petitioner Home Guaranty Corporation (HGC), the subject matter of the case is clearly one
which is incapable of pecuniary estimation; and, that the court erred in holding that the case was a real
action and that it evaded the payment of the correct docket fees computed on the basis of the assessed
value of the realties in the Asset Pool.
R-II Builders' motion is bereft of merit.
The record shows that, with the raffle of R-II Builders' complaint before Branch 24 of the Manila RTC and

said court's grant of the application for temporary restraining order incorporated therein, HGC sought a
preliminary hearing of its affirmative defenses which included, among other grounds, lack of jurisdiction
and improper venue. It appears that, at said preliminary hearing, it was established that R-II Builders'
complaint did not involve an intra-corporate dispute and that, even if it is, venue was improperly laid since
none of the parties maintained its principal office in Manila. While it is true, therefore, that R-II Builders
had no hand in the raffling of the case, it cannot be gainsaid that Branch 24 of the RTC Manila had no
jurisdiction over the case. Rather than ordering the dismissal of the complaint, however, said court issued
the 2 January 2008 order erroneously ordering the re-raffle of the case. In Atwel v. Concepcion Progressive
Association, Inc. [2] and Reyes v. Hon. Regional Trial Court of Makati, Branch 142 [3] which involved SCCs
trying and/or deciding cases which were found to be civil in nature, this Court significantly ordered the
dismissal of the complaint for lack of jurisdiction instead of simply directing the re-raffle of the case to
another branch.
Even then, the question of the Manila RTC's jurisdiction over the case is tied up with R-II Builder's payment
of the correct docket fees which should be paid in full upon the filing of the pleading or other application
which initiates an action or proceeding. [4] While it is, consequently, true that jurisdiction, once acquired,
cannot be easily ousted, [5] it is equally settled that a court acquires jurisdiction over a case only upon the
payment of the prescribed filing and docket fees. [6] Already implicit from the filing of the complaint in the
City of Manila where the realties comprising the Asset Pool are located, the fact that the case is a real
action is evident from the allegations of R-II Builders' original Complaint, Amended and Supplemental
Complaint and Second Amended Complaint which not only sought the nullification of the DAC in favor of
HGC but, more importantly, prayed for the transfer of possession of and/or control of the properties in the
Asset Pool. Its current protestations to the contrary notwithstanding, no less than R-II Builders - in its
opposition to HGC's motion to dismiss - admitted that the case is a real action as it affects title to or
possession of real property or an interest therein. [7] Having only paid docket fees corresponding to an
action where the subject matter is incapable of pecuniary estimation, R-II Builders cannot expediently claim
that jurisdiction over the case had already attached.
In De Leon v. Court of Appeals, [8] this Court had, of course, ruled that a case for rescission or annulment of
contract is not susceptible of pecuniary estimation although it may eventually result in the recovery of real
property. Taking into consideration the allegations and the nature of the relief sought in the complaint in
the subsequent case of Serrano v. Delica, [9] however, this Court determined the existence of a real action
and ordered the payment of the appropriate docket fees for a complaint for cancellation of sale which
prayed for both permanent and preliminary injunction aimed at the restoration of possession of the land in
litigation is a real action. In discounting the apparent conflict in said rulings, the Court went on to rule as
follows in Ruby Shelter Builders and Realty Development Corporation v. Hon. Pablo C, Formaran, [10] to wit:
The Court x x x does not perceive a contradiction between Serrano and the Spouses De Leon. The Court calls
attention to the following statement in Spouses De Leon: "A review of the jurisprudence of this Court
indicates that in determining whether an action is one the subject matter of which is not capable of
pecuniary estimation, this Court has adopted the criterion of first ascertaining the nature of the principal
action or remedy sought." Necessarily, the determination must be done on a case-to-case basis, depending
on the facts and circumstances of each. What petitioner conveniently ignores is that in Spouses De Leon,
the action therein that private respondents instituted before the RTC was "solely for annulment or
rescission" of the contract of sale over a real property. There appeared to be no transfer of title or
possession to the adverse party x x x. (Underscoring Supplied)

Having consistently sought the transfer of possession and control of the properties comprising the Asset
Pool over and above the nullification of the Deed of Conveyance in favor of HGC, it follows R-II Builders
should have paid the correct and appropriate docket fees, computed according to the assessed value
thereof. This much was directed in the 19 May 2008 Order issued by Branch 22 of the Manila RTC which
determined that the case is a real action and admitted the Amended and Supplemental Complaint R-II
Builders subsequently filed in the case. [11] In obvious evasion of said directive to pay the correct docket
fees, however, R-II Builders withdrew its Amended and Supplemental Complaint and, in lieu thereof, filed
its Second Amended Complaint which, while deleting its causes of action for accounting and conveyance of
title to and/or possession of the entire Asset Pool, nevertheless prayed for its appointment as Receiver of
the properties comprising the same. In the landmark case of Manchester Development Corporation v. Court
of Appeals, [12] this Court ruled that jurisdiction over any case is acquired only upon the payment of the
prescribed docket fee which is both mandatory and jurisdictional. Although it is true that the Manchester
Rule does not apply despite insufficient filing fees when there is no intent to defraud the government, [13] RII Builders' evident bad faith should clearly foreclose the relaxation of said rule.
In addition to the jurisdictional and pragmatic aspects underlying the payment of the correct docket fees
which have already been discussed in the decision sought to be reconsidered, it finally bears emphasizing
that the Asset Pool is comprised of government properties utilized by HGC as part of its sinking fund, in
pursuit of its mandate as statutory guarantor of government housing programs. With the adverse
consequences that could result from the transfer of possession and control of the Asset Pool, it is
imperative that R-II Builders should be made to pay the docket and filing fees corresponding to the
assessed value of the properties comprising the same.
WHEREFORE, the Court resolves to:
(a) NOTE the Entry of Appearance of Atty. Lope E. Feble of Tuquero Exconde Manalang Feble Law Offices as
collaborating counsel for respondent R-II Builders, Inc.; and DENY counsel's prayer to be furnished with all
pleadings notices and other court processes at Unit 2704-A, West Tower, Philippine Stock Exchange Centre,
Exchange Road, Ortigas Center Pasig, since only the lead counsel is entitled to service of court processes;
(b) DENY with FINALITY R-II Builders, Inc.'s Motion for Reconsideration of the Decision dated 9 March 2011
for lack of merit, the basic issues having been already passed upon and there being no substantial
argument to warrant a modification of the same. No further pleadings or motions shall be entertained
herein.
Let an Entry of Judgment in this case be made in due course.
SO ORDERED.
Corona, C.J., (Chairperson), Leonardo De-Castro, and Peralta,* JJ., concur.
Velasco, Jr., J., I dissent. (pls. see dissenting opinion.)

FIRST DIVISION
[ G.R. No. 173915, February 22, 2010 ]
IRENE SANTE AND REYNALDO SANTE, PETITIONERS, VS. HON. EDILBERTO T. CLARAVALL, IN HIS CAPACITY
AS PRESIDING JUDGE OF BRANCH 60, REGIONAL TRIAL COURT OF BAGUIO CITY, AND VITA N. KALASHIAN,
RESPONDENTS.
DECISION

VILLARAMA, JR., J.:

Before this Court is a petition for certiorari [1] under Rule 65 of the 1997 Rules of Civil Procedure, as
amended, filed by petitioners Irene and Reynaldo Sante assailing the Decision [2] dated January 31, 2006
and the Resolution [3] dated June 23, 2006 of the Seventeenth Division of the Court of Appeals in CA-G.R. SP
No. 87563. The assailed decision affirmed the orders of the Regional Trial Court (RTC) of Baguio City, Branch
60, denying their motion to dismiss the complaint for damages filed by respondent Vita Kalashian against
them.
The facts, culled from the records, are as follows:
On April 5, 2004, respondent filed before the RTC of Baguio City a complaint for damages [4] against
petitioners. In her complaint, docketed as Civil Case No. 5794-R, respondent alleged that while she was
inside the Police Station of Natividad, Pangasinan, and in the presence of other persons and police officers,
petitioner Irene Sante uttered words, which when translated in English are as follows, "How many rounds
of sex did you have last night with your boss, Bert? You fuckin' bitch!" Bert refers to Albert Gacusan,
respondent's friend and one (1) of her hired personal security guards detained at the said station and who
is a suspect in the killing of petitioners' close relative. Petitioners also allegedly went around Natividad,
Pangasinan telling people that she is protecting and cuddling the suspects in the aforesaid killing. Thus,
respondent prayed that petitioners be held liable to pay moral damages in the amount of P300,000.00;
P50,000.00 as exemplary damages; P50,000.00 attorney's fees; P20,000.00 litigation expenses; and costs of
suit.
Petitioners filed a Motion to Dismiss [5] on the ground that it was the Municipal Trial Court in Cities (MTCC)
and not the RTC of Baguio, that had jurisdiction over the case. They argued that the amount of the claim for
moral damages was not more than the jurisdictional amount of P300,000.00, because the claim for
exemplary damages should be excluded in computing the total claim.
On June 24, 2004, [6] the trial court denied the motion to dismiss citing our ruling in Movers-Baseco
Integrated Port Services, Inc. v. Cyborg Leasing Corporation. [7] The trial court held that the total claim of
respondent amounted to P420,000.00 which was above the jurisdictional amount for MTCCs outside Metro
Manila. The trial court also later issued Orders on July 7, 2004 [8] and July 19, 2004, [9] respectively
reiterating its denial of the motion to dismiss and denying petitioners' motion for reconsideration.
Aggrieved, petitioners filed on August 2, 2004, a Petition for Certiorari and Prohibition, [10] docketed as CAG.R. SP No. 85465, before the Court of Appeals. Meanwhile, on July 14, 2004, respondent and her husband

filed an Amended Complaint [11] increasing the claim for moral damages from P300,000.00 to
P1,000,000.00. Petitioners filed a Motion to Dismiss with Answer Ad Cautelam and Counterclaim, but the
trial court denied their motion in an Order [12] dated September 17, 2004.
Hence, petitioners again filed a Petition for Certiorari and Prohibition [13] before the Court of Appeals,
docketed as CA-G.R. SP No. 87563, claiming that the trial court committed grave abuse of discretion in
allowing the amendment of the complaint to increase the amount of moral damages from P300,000.00 to
P1,000,000.00. The case was raffled to the Seventeenth Division of the Court of Appeals.
On January 23, 2006, the Court of Appeals, Seventh Division, promulgated a decision in CA-G.R. SP No.
85465, as follows:
WHEREFORE, finding grave abuse of discretion on the part of [the] Regional Trial Court of Baguio, Branch
60, in rendering the assailed Orders dated June 24, 2004 and July [19], 2004 in Civil Case No. 5794-R the
instant petition for certiorari is GRANTED. The assailed Orders are herebyANNULLED and SET ASIDE. Civil
Case No. 5794-R for damages is ordered DISMISSED for lack of jurisdiction.
SO ORDERED. [14]

The Court of Appeals held that the case clearly falls under the jurisdiction of the MTCC as the allegations
show that plaintiff was seeking to recover moral damages in the amount of P300,000.00, which amount
was well within the jurisdictional amount of the MTCC. The Court of Appeals added that the totality of
claim rule used for determining which court had jurisdiction could not be applied to the instant case
because plaintiff's claim for exemplary damages was not a separate and distinct cause of action from her
claim of moral damages, but merely incidental to it. Thus, the prayer for exemplary damages should be
excluded in computing the total amount of the claim.
On January 31, 2006, the Court of Appeals, this time in CA-G.R. SP No. 87563, rendered a decision affirming
the September 17, 2004 Order of the RTC denying petitioners' Motion to Dismiss Ad Cautelam. In the said
decision, the appellate court held that the total or aggregate amount demanded in the complaint
constitutes the basis of jurisdiction. The Court of Appeals did not find merit in petitioners' posture that the
claims for exemplary damages and attorney's fees are merely incidental to the main cause and should not
be included in the computation of the total claim.
The Court of Appeals additionally ruled that respondent can amend her complaint by increasing the
amount of moral damages from P300,000.00 to P1,000,000.00, on the ground that the trial court has
jurisdiction over the original complaint and respondent is entitled to amend her complaint as a matter of
right under the Rules.
Unable to accept the decision, petitioners are now before us raising the following issues:
I.

WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF
JURISDICTION ON THE PART OF THE (FORMER) SEVENTEENTH DIVISION OF THE HONORABLE COURT OF

APPEALS WHEN IT RESOLVED THAT THE REGIONAL TRIAL COURT OF BAGUIO CITY BRANCH 60 HAS
JURISDICTION OVER THE SUBJECT MATTER OF THE CASE FOR DAMAGES AMOUNTING TO P300,000.00;
II.

WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION ON THE PART OF THE HONORABLE
RESPONDENT JUDGE OF THE REGIONAL TRIAL COURT OF BAGUIO BRANCH 60 FOR ALLOWING THE
COMPLAINANT TO AMEND THE COMPLAINT (INCREASING THE AMOUNT OF DAMAGES TO 1,000,000.00 TO
CONFER JURISDICTION OVER THE SUBJECT MATTER OF THE CASE DESPITE THE PENDENCY OF A PETITION
FOR CERTIORARI FILED AT THE COURT OF APPEALS, SEVENTH DIVISION, DOCKETED AS CA G.R. NO. 85465.
[15]

In essence, the basic issues for our resolution are:

1) Did the RTC acquire jurisdiction over the case? and
2) Did the RTC commit grave abuse of discretion in allowing the amendment of the complaint?

Petitioners insist that the complaint falls under the exclusive jurisdiction of the MTCC. They maintain that
the claim for moral damages, in the amount of P300,000.00 in the original complaint, is the main action.
The exemplary damages being discretionary should not be included in the computation of the jurisdictional
amount. And having no jurisdiction over the subject matter of the case, the RTC acted with grave abuse of
discretion when it allowed the amendment of the complaint to increase the claim for moral damages in
order to confer jurisdiction.
In her Comment, [16] respondent averred that the nature of her complaint is for recovery of damages. As
such, the totality of the claim for damages, including the exemplary damages as well as the other damages
alleged and prayed in the complaint, such as attorney's fees and litigation expenses, should be included in
determining jurisdiction. The total claim being P420,000.00, the RTC has jurisdiction over the complaint.
We deny the petition, which although denominated as a petition for certiorari, we treat as a petition for
review on certiorari under Rule 45 in view of the issues raised.
Section 19(8) of Batas Pambansa Blg. 129, [17] as amended by Republic Act No. 7691, [18] states:
SEC. 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive original jurisdiction:
xxxx
(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorney's fees,
litigation expenses, and costs or the value of the property in controversy exceeds One hundred thousand
pesos (P100,000.00) or, in such other cases in Metro Manila, where the demand, exclusive of the
abovementioned items exceeds Two hundred thousand pesos (P200,000.00).

Section 5 of Rep. Act No. 7691 further provides:

SEC. 5. After five (5) years from the effectivity of this Act, the jurisdictional amounts mentioned in Sec.
19(3), (4), and (8); and Sec. 33(1) of Batas Pambansa Blg. 129 as amended by this Act, shall be adjusted to
Two hundred thousand pesos (P200,000.00). Five (5) years thereafter, such jurisdictional amounts shall be
adjusted further to Three hundred thousand pesos (P300,000.00): Provided, however, That in the case of
Metro Manila, the abovementioned jurisdictional amounts shall be adjusted after five (5) years from the
effectivity of this Act to Four hundred thousand pesos (P400,000.00).

Relatedly, Supreme Court Circular No. 21-99 was issued declaring that the first adjustment in jurisdictional
amount of first level courts outside of Metro Manila from P100,000.00 to P200,000.00 took effect on
March 20, 1999. Meanwhile, the second adjustment from P200,000.00 to P300,000.00 became effective on
February 22, 2004 in accordance with OCA Circular No. 65-2004 issued by the Office of the Court
Administrator on May 13, 2004.
Based on the foregoing, there is no question that at the time of the filing of the complaint on April 5, 2004,
the MTCC's jurisdictional amount has been adjusted to P300,000.00.
But where damages is the main cause of action, should the amount of moral damages prayed for in the
complaint be the sole basis for determining which court has jurisdiction or should the total amount of all
the damages claimed regardless of kind and nature, such as exemplary damages, nominal damages, and
attorney's fees, etc., be used?
In this regard, Administrative Circular No. 09-94 [19] is instructive:
xxxx
2. The exclusion of the term "damages of whatever kind" in determining the jurisdictional amount under
Section 19 (8) and Section 33 (1) of B.P. Blg. 129, as amended by R.A. No. 7691, applies to cases where the
damages are merely incidental to or a consequence of the main cause of action. However, in cases where
the claim for damages is the main cause of action, or one of the causes of action, the amount of such
claim shall be considered in determining the jurisdiction of the court. (Emphasis ours.)

In the instant case, the complaint filed in Civil Case No. 5794-R is for the recovery of damages for the
alleged malicious acts of petitioners. The complaint principally sought an award of moral and exemplary
damages, as well as attorney's fees and litigation expenses, for the alleged shame and injury suffered by
respondent by reason of petitioners' utterance while they were at a police station in Pangasinan. It is
settled that jurisdiction is conferred by law based on the facts alleged in the complaint since the latter
comprises a concise statement of the ultimate facts constituting the plaintiff's causes of action. [20] It is
clear, based on the allegations of the complaint, that respondent's main action is for damages. Hence, the
other forms of damages being claimed by respondent, e.g., exemplary damages, attorney's fees and
litigation expenses, are not merely incidental to or consequences of the main action but constitute the
primary relief prayed for in the complaint.

In Mendoza v. Soriano, [21] it was held that in cases where the claim for damages is the main cause of action,
or one of the causes of action, the amount of such claim shall be considered in determining the jurisdiction
of the court. In the said case, the respondent's claim of P929,000.06 in damages and P25,000 attorney's
fees plus P500 per court appearance was held to represent the monetary equivalent for compensation of
the alleged injury. The Court therein held that the total amount of monetary claims including the claims for
damages was the basis to determine the jurisdictional amount.
Also, in Iniego v. Purganan, [22] the Court has held:
The amount of damages claimed is within the jurisdiction of the RTC, since it is the claim for all kinds of
damages that is the basis of determining the jurisdiction of courts, whether the claims for damages arise
from the same or from different causes of action.
xxxx

Considering that the total amount of damages claimed was P420,000.00, the Court of Appeals was correct
in ruling that the RTC had jurisdiction over the case.
Lastly, we find no error, much less grave abuse of discretion, on the part of the Court of Appeals in
affirming the RTC's order allowing the amendment of the original complaint from P300,000.00 to
P1,000,000.00 despite the pendency of a petition for certiorari filed before the Court of Appeals. While it is
a basic jurisprudential principle that an amendment cannot be allowed when the court has no jurisdiction
over the original complaint and the purpose of the amendment is to confer jurisdiction on the court, [23]
here, the RTC clearly had jurisdiction over the original complaint and amendment of the complaint was
then still a matter of right. [24]
WHEREFORE, the petition is DENIED, for lack of merit. The Decision and Resolution of the Court of Appeals
dated January 31, 2006 and June 23, 2006, respectively, are AFFIRMED. The Regional Trial Court of Baguio
City, Branch 60 is DIRECTED to continue with the trial proceedings in Civil Case No. 5794-R with deliberate
dispatch.
No costs.
SO ORDERED.

SECOND DIVISION
[ G.R. No. 182980, June 22, 2011 ]
BIENVENIDO CASTILLO, PETITIONER, VS. REPUBLIC OF THE PHILIPPINES, RESPONDENT.
DECISION

CARPIO, J.:
The Case

Petitioner Bienvenido Castillo (Bienvenido) filed the present petition for review on certiorari[1] of the
Decision[2] dated 23 October 2007 as well as the Resolution[3] dated 7 May 2008 of the Court of Appeals
(appellate court) in CA-G.R. CV No. 81916. The appellate court reversed the Decision[4] dated 3 October
2003 of Branch 22, Regional Trial Court of Malolos, Bulacan (trial court) in P-111-2002. The trial court
ordered the reconstitution of the original copy of Transfer Certificate of Title (TCT) No. T-16755 as well as
the issuance of another owner's duplicate copy, in the name of the registered owner and in the same terms
and conditions as the original, in lieu of the lost original copy.
The Facts

Bienvenido filed on 7 March 2002 a Petition for Reconstitution and Issuance of Second Owner's Copy of
Transfer Certificate of Title No. T-16755. The petition reads as follows:
1. That petitioner is of legal age, Filipino, widower and with residence and postal address at Poblacion,
Pulilan, Bulacan;
2. That petitioner is the registered owner of a parcel of land situated at Paltao, Pulilan, Bulacan covered by
Transfer Certificate of Title No. T-16755, a zerox [sic] copy of which is hereto attached as Annex "A";
3. That the zerox [sic] copy of technical description and subdivision plan of the parcel of land with an area
of 50,199 [square meters] (Lot 6-A) are hereto attached as Annexes "B" and "C";
4. That the original copy of the said certificate of title on file with the Register of Deeds of Bulacan was lost
and/or destroyed during the fire on March 7, 1987 in the Office of the Register of Deeds of Bulacan,
certification from the said office is hereto attached as Annex "D";
5. That, the owner's copy of the said certificate of title was likewise lost and all efforts to locate the same
proved futile and in vain, copy of the the [sic] "Affidavit of Loss" is hereto attached as Annex "E";
6. That no co-owner's copy of duplicate of the same certificate has been issued;
7. The names and addresses of the boundary owners of said lot are the following:

a. West - Jorge Peralta

b. North - Lorenzo Calderon
c. South - Lorenzo Calderon
d. East - Melvin & Marlon Reyes

with postal address at Poblacion, Pulilan, Bulacan;

8. That said property has been declared for taxation purposes under Tax Declaration No. 97-19001-00019,
zerox [sic] copy of which is hereto attached as Annex "F";
9. That the real estate tax for the current year has been paid per official receipt no. 0287074, zerox [sic]
copy of which is hereto attached as Annex "G";
10. That said property is free from all liens and encumbrances;
11. That there exist no deeds or instruments affecting the said property which has been presented for and
pending registration with the Register of Deeds of Bulacan;
WHEREFORE, it is most respectfully prayed of this Honorable Court that after due notice and hearing
judgment be rendered:
1. Declaring the Original Owner's Duplicate Certificate of Title No. T-16755 that was lost as null and void;
2. Ordering the Register of Deeds of Bulacan to issue second owner's duplicate copy of the said certificate
of title upon payment of proper fees.[5]

The trial court furnished the Land Registration Authority (LRA) with a duplicate copy of Bienvenido's
petition and its Annexes, with a note stating that "No Tracing Cloth of Plan [sic] and Blue print of plan
attached."[6] As requested by the LRA in its letter dated 17 April 2002,[7] the trial court ordered Bienvenido
to submit within 15 days from receipt of the order (a) the original of the technical description of the parcel
of land covered by the lost/destroyed certificate of title, certified by the authorized officer of the Land
Management Bureau/Land Registration Authority and two duplicate copies thereof, and (b) the sepia film
plan of the subject parcel of land prepared by a duly licensed Geodetic Engineer, who shall certify thereon
that its preparation was made on the basis of a certified technical description, and two blue print copies
thereof.[8] Bienvenido complied with the order.[9]
The trial court, in an order dated 7 August 2002, ordered Bienvenido to supply the names and addresses of
the occupants of the subject property.[10] Bienvenido manifested that there is no actual occupant in the
subject property.[11]
On 4 October 2002, the trial court issued an order which found Bienvenido's petition sufficient in form and
substance and set the same for hearing.[12]
Copies of the 4 October 2002 order were posted on three bulletin boards: at the Bulacan Provincial Capitol
Building, at the Pulilan Municipal Building, and at the Bulacan Regional Trial Court.[13] The 4 October 2002

order was also published twice in the Official Gazette: on 13 January 2003 (Volume 99, Number 2, Pages
237 to 238), and on 20 January 2003 (Volume 99, Number 3, Pages 414 to 415).[14] After two
cancellations,[15] a hearing was conducted on 12 March 2003.
During the hearing, the following were marked in evidence for jurisdictional requirements:
Exhibit "A" - Order of the Court dated 4 October 2002
Exhibit "A-1" - Second page of the Order of the Court dated 4 October 2002
Exhibit "A-2" - Third page of the Order of the Court dated 4 October 2002
Exhibit "A-3" - Registry return receipt of notice to the Office of the Solicitor General
Exhibit "A-4" - Registry return receipt of notice to the Land Registration Authority
Exhibit "A-5" - Registry return receipt of notice to the Register of Deeds
Exhibit "A-6" - Registry return receipt of notice to the Public Prosecutor
Exhibit "A-7" - Registry return receipt of notice to boundary owner Jorge Peralta
Exhibit "A-8" - Registry return receipt of notice to boundary owner Lorenzo Calderon
Exhibit "A-9" - Registry return receipt of notice to boundary owners Melvin and Marlon Reyes
Exhibit "B" - Certificate of Posting
Exhibit "C" - Certificate of Publication from the Director of the National Printing Office
Exhibit "D" - Official Gazette, Volume 99, Number 2, 13 January 2003
Exhibit "D-1" - Page 237, Publication of the trial court's Order dated 4 October 2002
Exhibit "D-2" - Page 238, Publication of the trial court's Order dated 4 October 2002
Exhibit "E" - Official Gazette, Volume 99, Number 3, 20 January 2003
Exhibit "E-1" - Page 414, Publication of the trial court's Order dated 4 October 2002
Exhibit "E-2" - Page 415, Publication of the trial court's Order dated 4 October 2002[16]

Fernando Castillo (Fernando), Bienvenido's son and attorney-in-fact, testified on his father's behalf. During
the course of his testimony, Fernando identified the following:

Exhibit "F" - Photocopy of TCT No. T-16755

Exhibit "G" - Blueprint of the subject property
Exhibit "H" - Technical description of the property
Exhibit "I" - Affidavit of Loss executed by Bienvenido Castillo
Exhibit "I-1" - Entry of the Affidavit of Loss in the book of the Register of Deeds
Exhibit "J" - Certification issued by the Office of the Register of Deeds, Malolos, Bulacan that TCT No. T16755 was burned in a fire on 7 March 1987
Exhibit "K" - Tax declaration
Exhibit "L" - 2002 Real Estate Tax Receipt

Upon presentation of the photocopy of TCT No. T-16755, Fernando stated that the title was issued in the
names of his parents, Bienvenido Castillo and Felisa Cruz (Felisa), and that his mother died in 1982.
Fernando did not mention any sibling. Fernando further testified that on 6 February 2002, Bienvenido
executed an Affidavit of Loss which stated that he misplaced the owner's copy of the certificate of title
sometime in April 1993 and that all efforts to locate the same proved futile. The title is free from all liens
and encumbrances, and there are no other persons claiming interest over the land.[17]
The LRA submitted a Report dated 25 July 2003, portions of which the trial court quoted in its Decision. The
LRA stated that:
(2) The plan and technical description of Lot 6-A of the subdivision plan Psd-37482 were verified correct by
this Authority to represent the aforesaid lot and the same have been approved under (LRA) PR-03-00321-R
pursuant to the provisions of Section 12 of Republic Act No. 26.
WHEREFORE, the foregoing information anent the lot in question is respectfully submitted for
consideration in the resolution of the instant petition, and if the Honorable Court, after notice and hearing,
finds justification pursuant to Section 15 of Republic Act No. 26 to grant the same, the plan and technical
description having been approved, may be used as basis for the inscription of the technical description on
the reconstituted certificate. Provided, however, that in case the petition is granted, the reconstituted title
should be made subject to such encumbrances as may be subsisting; and provided further, that no
certificate of title covering the same parcel of land exists in the office of the Register of Deeds
concerned.[18]

The Trial Court's Ruling

On 3 October 2003, the trial court promulgated its Decision in favor of Bienvenido. The trial court found
valid justifications to grant Bienvenido's petition as the same is in order and meritorious.

The dispositive portion reads:

WHEREFORE, the Register of Deeds for the province of Bulacan is hereby ordered, upon payment of the
prescribed fees, to reconstitute the original copy of Original Certificate of Title No. 16755 and to issue
another owner's duplicate copy thereof, in the name of the registered owner and in the same terms and
conditions as the original thereof, pursuant to the provisions of R.A. No. 26, as amended by P.D. No. 1529,
in lieu of the lost original copy. The new original copy shall in all respects be accorded the same validity and
legal effect as the lost original copy for all intents and purposes. Provided, that no certificate of title
covering the same parcel of land exists in the office of the Register of Deeds concerned.
SO ORDERED.[19]

The Office of the Solicitor General (OSG) filed its Notice of Appeal on 18 November 2003. The OSG stated
that it was grave error for the trial court to order reconstitution despite absence of any prayer seeking such
relief in the petition and on the basis of a mere photocopy of TCT No. T-16755. Counsel for Bienvenido filed
a motion for early resolution on 25 January 2006.
The Appellate Court's Ruling

On 23 October 2007, the appellate court rendered its Decision which reversed the 3 October 2003 Decision
of the trial court. Bienvenido's counsel withdrew from the case on 11 October 2007 and was substituted by
Mondragon and Montoya Law Offices.
The appellate court ruled that even if Bienvenido failed to specifically include a prayer for the
reconstitution of TCT No. T-16755, the petition is captioned as "In re: Petition for Reconstitution and
Issuance of Second Owner's Copy of Transfer Certificate of Title No. T-16755, Bienvenido Castillo,
Petitioner." The prayer for "such other reliefs and remedies just and proper under the premises" is broad
and comprehensive enough to justify the extension of a remedy different from that prayed for.
However, the appellate court still ruled that the trial court erred in ordering the reconstitution of the
original copy of TCT No. T-16755 and the issuance of another owner's duplicate copy thereof in the name of
the registered owner. Section 3 of Republic Act No. 26 specified the order of sources from which transfer
certificates of title may be reconstituted, and Bienvenido failed to comply with the order. Moreover, the
documentary evidences presented before the trial court were insufficient to support reconstitution. The
loss of the original copy on file with the Registry of Deeds of Bulacan may be credible, but Bienvenido failed
to adequately explain the circumstances which led to the loss of the owner's copy. The tax declaration
presented is not a conclusive evidence of ownership, but merely indicates possession. The plan and
technical description of the property are merely additional documents that must accompany the petition
for the LRA's verification and approval.
The dispositive portion of the appellate court's Decision reads:
WHEREFORE, the instant appeal is GRANTED. The assailed Decision dated October 3, 2003 of Branch 22,
RTC of Malolos, Bulacan in P-111-2002 is hereby SET ASIDE and a new judgment is entered dismissing the
Petition therein.

SO ORDERED.[20]

On 3 December 2007, Bienvenido's counsel filed a Motion for Reconsideration and/or for New Trial.[21] The
motion asserted that Bienvenido presented sufficient documents to warrant reconstitution of TCT No. T16755. Aside from the photocopy of TCT No. T-16755, Fernando presented the plan and technical
description approved by the LRA. Moreover, to support the Motion for New Trial, Fernando went through
Bienvenido's papers and found the Deed of Absolute Sale[22] from the original owner, Elpidio Valencia, to
spouses Bienvenido and Felisa. Fernando also found the cancellation of mortgage[23] of the property
covered by TCT No. T-16755 issued by the Development Bank of the Philippines. Fernando also submitted a
copy of the Extra-Judicial Partition[24] by and among the heirs of his mother. The property covered by TCT
No. T-16755 was partitioned among Bienvenido, Fernando, and Fernando's siblings Emma Castillo Bajet
(Emma) and Elpidio Castillo (Elpidio).
In Fernando's affidavit attached to the Motion for Reconsideration and/or for New Trial, Fernando stated,
but without presenting any proof, that Bienvenido passed away at the age of 91 on 14 February 2006.
The Republic, through the OSG, opposed the Motion for Reconsideration and/or for New Trial. Bienvenido's
petition failed to satisfy Section 3(f) of R.A. No. 26. The Affidavit of Loss is hearsay because Bienvenido
failed to affirm it in court. Therefore, the loss of the owner's duplicate copy of TCT No. T-16755 is not
established. The plan and technical description approved by the LRA are not independent sources of
reconstitution and are mere supporting documents. The documents submitted in support of the Motion for
New Trial are not newly discovered, but could have been discovered earlier by exercise of due diligence.
In its Resolution[25] dated 7 May 2008, the appellate court denied the Motion for Reconsideration and/or
for New Trial.
Issues

The following were assigned as errors of the appellate court:

I. The Honorable Court of Appeals erred in holding that the documentary evidence presented by petitioner
in the lower court are insufficient to support the reconstitution prayed for.
II. The Honorable Court of Appeals erred in finding that petitioner failed to establish the circumstances
which led to the loss of his duplicate owner's copy of TCT No. T-16755.
III. The Honorable Court of Appeals erred in finding that there is no merit in the motion for new trial filed by
petitioner.[26]

The Court's Ruling

The petition must fail. There can be no reconstitution as the trial court never acquired jurisdiction over the
present case.
Process of Reconstitution of
Transfer Certificates of Title under R.A. No. 26

Section 3 of R.A. No. 26 enumerates the sources from which transfer certificates of title shall be
reconstituted. Section 3 reads:
Sec. 3. Transfer certificates of title shall be reconstituted from such of the sources hereunder enumerated
as may be available, in the following order:
(a) The owner's duplicate of the certificate of title;
(b) The co-owner's, mortgagee's, or lessee's duplicate of the certificate of title;
(c) A certified copy of the certificate of title, previously issued by the register of deeds or by a legal
custodian thereof;
(d) The deed of transfer or other document, on file in the registry of deeds, containing the description of
the property, or an authenticated copy thereof, showing that its original had been registered, and pursuant
to which the lost or destroyed transfer certificate of title was issued;
(e) A document, on file in the registry of deeds, by which the property, the description of which is given in
said document, is mortgaged, leased, or encumbered, or an authenticated copy of said document showing
that its original had been registered; and
(f) Any other document which, in the judgment of the court, is sufficient and proper basis for reconstituting
the lost or destroyed certificate of title.

Bienvenido already admitted that he cannot comply with Section 3(a) to 3(e), and that 3(f) is his last
recourse. Bienvenido, through Fernando's testimony, presented a photocopy of TCT No. T-16755 before the
trial court. The owner's original duplicate copy was lost, while the original title on file with the Register of
Deeds of Malolos, Bulacan was burned in a fire on 7 March 1987. The property was neither mortgaged nor
leased at the time of Bienvenido's loss of the owner's original duplicate copy.
Section 12 of R.A. No. 26 describes the requirements for a petition for reconstitution. Section 12 reads:
Sec. 12. Petitions for reconstitution from sources enumerated in Sections 2(c), 2(d), 2(e), 2(f), 3(c), 3(d),
and/or 3(f) of this Act, shall be filed with the proper Court of First Instance, by the registered owner, his
assigns, or any person having an interest in the property. The petition shall state or contain, among other
things, the following: (a) that the owner's duplicate of the certificate of title had been lost or destroyed; (b)
that no co-owner's, mortgagee's, or lessee's duplicate had been issued, or, if any had been issued, the same
had been lost or destroyed; (c) the location and boundaries of the property; (d) the nature and description
of the building or improvements, if any, which do not belong to the owner of the land, and the names and

addresses of the owners of such buildings or improvements; (e) the names and addresses of the occupants
or persons in possession of the property, of the owners of the adjoining properties and of all persons who
may have any interest in the property; (f) a detailed description of the encumbrances, if any, affecting the
property; and (g) a statement that no deeds or other instruments affecting the property have been
presented for registration, or if there be any, the registration thereof has not been accomplished, as yet. All
the documents, or authenticated copies thereof, to be introduced in evidence in support to the petition for
reconstitution shall be attached thereto and filed with the same: Provided, That in case the reconstitution is
to be made exclusively from sources enumerated in Section 2(f) or 3(f) of this Act, the petition shall be
further accompanied with a plan and technical description of the property duly approved by the Chief of
the General Land Registration office (now Commission of Land Registration) or with a certified copy of the
description taken from a prior certificate of title covering the same property.

We compared the requirements of Section 12 to the allegations in Bienvenido's petition. Bienvenido's

petition complied with items (a), (b), (f) and (g): in paragraph 5 of the petition, he alleged the loss of his
copy of TCT No. T-16755; paragraph 6 declared that no co-owner's copy of the duplicate title has been
issued; paragraph 10 stated that the property covered by the lost TCT is free from liens and encumbrances;
and paragraph 11 stated that there are no deeds or instruments presented for or pending registration with
the Register of Deeds. There was substantial compliance as to item (c): the location of the property is
mentioned in paragraph 2; while the boundaries of the property, although not specified in the petition,
refer to an annex attached to the petition. The petition did not mention anything pertaining to item (d).
There was a failure to fully comply with item (e). By Fernando's admission, there exist two other co-owners
of the property covered by TCT No. T-16755. Fernando's siblings Emma and Elpidio were not mentioned
anywhere in the petition.
Section 13 of R.A. No. 26 prescribes the requirements for a notice of hearing of the petition:
Sec. 13. The court shall cause a notice of the petition, filed under the preceding section, to be published, at
the expense of the petitioner, twice in successive issues of the Official Gazette, and to be posted on the
main entrance of the provincial building and of the municipal building of the municipality or city in which
the land is situated, at least thirty days prior to the date of hearing. The court shall likewise cause a copy of
the notice to be sent, by registered mail or otherwise, at the expense of the petitioner, to every person
named therein whose address is known, at least thirty days prior to the date of the hearing. Said notice
shall state, among other things, the number of the lost or destroyed certificate of title, if known, the name
of the registered owner, the names of the occupants or persons in possession of the property, the owners
of the adjoining properties and all other interested parties, the location area and boundaries of the
property, and the date on which all persons having any interest therein must appear and file their claim or
objections to the petition. The petitioner shall, at the hearing, submit proof of the publication, posting and
service of the notice as directed by the court.

The trial court's 4 October 2002 Order was indeed posted in the places mentioned in Section 13, and
published twice in successive issues of the Official Gazette: Volume 99, Number 2 dated 13 January 2003
and Volume 99, Number 3 dated 20 January 2003. The last issue was released by the National Printing
Office on 21 January 2003.[27] The notice, however, did not state Felisa as a registered co-owner. Neither
did the notice identify Fernando's siblings Emma and Elpidio as interested parties.

The non-compliance with the requirements prescribed in Sections 12 and 13 of R.A. No. 26 is fatal. Hence,
the trial court did not acquire jurisdiction over the petition for reconstitution. We cannot stress enough
that our jurisprudence is replete with rulings regarding the mandatory character of the requirements of
R.A. No. 26. As early as 1982, we ruled:
Republic Act No. 26 entitled "An act providing a special procedure for the reconstitution of Torrens
Certificates of Title lost or destroyed" approved on September 25, 1946 confers jurisdiction or authority to
the Court of First Instance to hear and decide petitions for judicial reconstitution. The Act specifically
provides the special requirements and mode of procedure that must be followed before the court can
properly act, assume and acquire jurisdiction or authority over the petition and grant the reconstitution
prayed for. These requirements and procedure are mandatory. The Petition for Reconstitution must allege
certain specific jurisdictional facts; the notice of hearing must be published in the Official Gazette and
posted in particular places and the same sent or notified to specified persons. Sections 12 and 13 of the Act
provide specifically the mandatory requirements and procedure to be followed.[28]

We cannot simply dismiss these defects as "technical." Liberal construction of the Rules of Court does not
apply to land registration cases.[29] Indeed, to further underscore the mandatory character of these
jurisdictional requirements, the Rules of Court do not apply to land registration cases.[30] In all cases where
the authority of the courts to proceed is conferred by a statute, and when the manner of obtaining
jurisdiction is prescribed by a statute, the mode of proceeding is mandatory, and must be strictly complied
with, or the proceeding will be utterly void.[31] When the trial court lacks jurisdiction to take cognizance of a
case, it lacks authority over the whole case and all its aspects.[32] All the proceedings before the trial court,
including its order granting the petition for reconstitution, are void for lack of jurisdiction.[33]
WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 23 October 2007 and the Resolution
dated 7 May 2008 of the Court of Appeals in CA-G.R. CV No. 81916.
SO ORDERED.

FIRST DIVISION
[ G.R. No. 174975, January 20, 2009 ]
LUISA KHO MONTAER, ALEJANDRO MONTAER, JR., LILLIBETH MONTAER-BARRIOS, AND RHODORA
ELEANOR MONTAER-DALUPAN, PETITIONERS, VS. SHARI'A DISTRICT COURT, FOURTH SHARI'A JUDICIAL
DISTRICT, MARAWI CITY, LILING DISANGCOPAN, AND ALMAHLEEN LILING S. MONTAER, RESPONDENTS.
DECISION

PUNO, C.J.:
This Petition for Certiorari and Prohibition seeks to set aside the Orders of the Shari'a District Court, Fourth
Shari'a Judicial District, Marawi City, dated August 22, 2006[1] and September 21, 2006.[2]
On August 17, 1956, petitioner Luisa Kho Montaer, a Roman Catholic, married Alejandro Montaer, Sr. at
the Immaculate Conception Parish in Cubao, Quezon City.[3] Petitioners Alejandro Montaer, Jr., Lillibeth
Montaer-Barrios, and Rhodora Eleanor Montaer-Dalupan are their children.[4] On May 26, 1995,
Alejandro Montaer, Sr. died.[5]
On August 19, 2005, private respondents Liling Disangcopan and her daughter, Almahleen Liling S.
Montaer, both Muslims, filed a "Complaint" for the judicial partition of properties before the Shari'a
District Court.[6] The said complaint was entitled "Almahleen Liling S. Montaer and Liling M. Disangcopan
v. the Estates and Properties of Late Alejandro Montaer, Sr., Luisa Kho Montaer, Lillibeth K. Montaer,
Alejandro Kho Montaer, Jr., and Rhodora Eleanor K. Montaer," and docketed as "Special Civil Action No.
7-05."[7] In the said complaint, private respondents made the following allegations: (1) in May 1995,
Alejandro Montaer, Sr. died; (2) the late Alejandro Montaer, Sr. is a Muslim; (3) petitioners are the first
family of the decedent; (4) Liling Disangcopan is the widow of the decedent; (5) Almahleen Liling S.
Montaer is the daughter of the decedent; and (6) the estimated value of and a list of the properties
comprising the estate of the decedent.[8] Private respondents prayed for the Shari'a District Court to order,
among others, the following: (1) the partition of the estate of the decedent; and (2) the appointment of an
administrator for the estate of the decedent.[9]
Petitioners filed an Answer with a Motion to Dismiss mainly on the following grounds: (1) the Shari'a
District Court has no jurisdiction over the estate of the late Alejandro Montaer, Sr., because he was a
Roman Catholic; (2) private respondents failed to pay the correct amount of docket fees; and (3) private
respondents' complaint is barred by prescription, as it seeks to establish filiation between Almahleen Liling
S. Montaer and the decedent, pursuant to Article 175 of the Family Code.[10]
On November 22, 2005, the Shari'a District Court dismissed the private respondents' complaint. The district
court held that Alejandro Montaer, Sr. was not a Muslim, and its jurisdiction extends only to the
settlement and distribution of the estate of deceased Muslims.[11]
On December 12, 2005, private respondents filed a Motion for Reconsideration.[12] On December 28, 2005,
petitioners filed an Opposition to the Motion for Reconsideration, alleging that the motion for
reconsideration lacked a notice of hearing.[13] On January 17, 2006, the Shari'a District Court denied

petitioners' opposition.[14] Despite finding that the said motion for reconsideration "lacked notice of
hearing," the district court held that such defect was cured as petitioners "were notified of the existence of
the pleading," and it took cognizance of the said motion.[15] The Shari'a District Court also reset the hearing
for the motion for reconsideration.[16]
In its first assailed order dated August 22, 2006, the Shari'a District Court reconsidered its order of dismissal
dated November 22, 2005.[17] The district court allowed private respondents to adduce further evidence.[18]
In its second assailed order dated September 21, 2006, the Shari'a District Court ordered the continuation
of trial, trial on the merits, adducement of further evidence, and pre-trial conference.[19]
Seeking recourse before this Court, petitioners raise the following issues:
I.

RESPONDENT SHARI'A DISTRICT COURT - MARAWI CITY LACKS JURISDICTION OVER PETITIONERS WHO ARE
ROMAN CATHOLICS AND NON-MUSLIMS.
II.

RESPONDENT SHARI'A DISTRICT COURT - MARAWI CITY DID NOT ACQUIRE JURISDICTION OVER "THE
ESTATES AND PROPERTIES OF THE LATE ALEJANDRO MONTAER, SR." WHICH IS NOT A NATURAL OR
JURIDICAL PERSON WITH CAPACITY TO BE SUED.
III.

RESPONDENT SHARI'A DISTRICT COURT DID NOT ACQUIRE JURISDICTION OVER THE COMPLAINT OF
PRIVATE RESPONDENTS AGAINST PETITIONERS DUE TO NON-PAYMENT OF THE FILING AND DOCKETING
FEES.
IV.

RESPONDENT SHARI'A DISTRICT COURT--MARAWI CITY COMMITTED GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OF JURISDICTION WHEN IT DENIED THE OPPOSITION OF PETITIONERS AND THEN
GRANTED THE MOTION FOR RECONSIDERATION OF RESPONDENTS LILING DISANGCOPAN, ET AL. WHICH
WAS FATALLY DEFECTIVE FOR LACK OF A "NOTICE OF HEARING."
V.

RESPONDENT SHARI'A DISTRICT COURT--MARAWI CITY COMMITTED GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OF JURISDICTION WHEN IT SET SPL. CIVIL ACTION 7-05 FOR TRIAL EVEN IF THE
COMPLAINT PLAINLY REVEALS THAT RESPONDENT ALMAHLEEN LILING S. MONTAER SEEKS RECOGNITION
FROM ALEJANDRO MONTAER, SR. WHICH CAUSE OF ACTION PRESCRIBED UPON THE DEATH OF
ALEJANDRO MONTAER, SR. ON MAY 26, 1995.

In their Comment to the Petition for Certiorari, private respondents stress that the Shari'a District Court
must be given the opportunity to hear and decide the question of whether the decedent is a Muslim in
order to determine whether it has jurisdiction.[20]
Jurisdiction: Settlement of the Estate of Deceased Muslims
Petitioners' first argument, regarding the Shari'a District Court's jurisdiction, is dependent on a question of
fact, whether the late Alejandro Montaer, Sr. is a Muslim. Inherent in this argument is the premise that
there has already been a determination resolving such a question of fact. It bears emphasis, however, that
the assailed orders did not determine whether the decedent is a Muslim. The assailed orders did, however,
set a hearing for the purpose of resolving this issue.
Article 143(b) of Presidential Decree No. 1083, otherwise known as the Code of Muslim Personal Laws of
the Philippines, provides that the Shari'a District Courts have exclusive original jurisdiction over the
settlement of the estate of deceased Muslims:
ARTICLE 143. Original jurisdiction. -- (1) The Shari'a District Court shall have exclusive original jurisdiction
over:
xxxx
(b) All cases involving disposition, distribution and settlement of the estate of deceased Muslims, probate
of wills, issuance of letters of administration or appointment of administrators or executors regardless of
the nature or the aggregate value of the property.
The determination of the nature of an action or proceeding is controlled by the averments and character of
the relief sought in the complaint or petition.[21] The designation given by parties to their own pleadings
does not necessarily bind the courts to treat it according to the said designation. Rather than rely on "a
falsa descriptio or defective caption," courts are "guided by the substantive averments of the pleadings."[22]
Although private respondents designated the pleading filed before the Shari'a District Court as a
"Complaint" for judicial partition of properties, it is a petition for the issuance of letters of administration,
settlement, and distribution of the estate of the decedent. It contains sufficient jurisdictional facts required
for the settlement of the estate of a deceased Muslim,[23] such as the fact of Alejandro Montaer, Sr.'s
death as well as the allegation that he is a Muslim. The said petition also contains an enumeration of the
names of his legal heirs, so far as known to the private respondents, and a probable list of the properties
left by the decedent, which are the very properties sought to be settled before a probate court.
Furthermore, the reliefs prayed for reveal that it is the intention of the private respondents to seek judicial
settlement of the estate of the decedent.[24] These include the following: (1) the prayer for the partition of
the estate of the decedent; and (2) the prayer for the appointment of an administrator of the said estate.
We cannot agree with the contention of the petitioners that the district court does not have jurisdiction
over the case because of an allegation in their answer with a motion to dismiss that Montaer, Sr. is not a
Muslim. Jurisdiction of a court over the nature of the action and its subject matter does not depend upon
the defenses set forth in an answer[25] or a motion to dismiss.[26] Otherwise, jurisdiction would depend
almost entirely on the defendant[27] or result in having "a case either thrown out of court or its proceedings
unduly delayed by simple stratagem.[28] Indeed, the "defense of lack of jurisdiction which is dependent on a

question of fact does not render the court to lose or be deprived of its jurisdiction."[29]
The same rationale applies to an answer with a motion to dismiss.[30] In the case at bar, the Shari'a District
Court is not deprived of jurisdiction simply because petitioners raised as a defense the allegation that the
deceased is not a Muslim. The Shari'a District Court has the authority to hear and receive evidence to
determine whether it has jurisdiction, which requires an a priori determination that the deceased is a
Muslim. If after hearing, the Shari'a District Court determines that the deceased was not in fact a Muslim,
the district court should dismiss the case for lack of jurisdiction.
Special Proceedings
The underlying assumption in petitioners' second argument, that the proceeding before the Shari'a District
Court is an ordinary civil action against a deceased person, rests on an erroneous understanding of the
proceeding before the court a quo. Part of the confusion may be attributed to the proceeding before the
Shari'a District Court, where the parties were designated either as plaintiffs or defendants and the case was
denominated as a special civil action. We reiterate that the proceedings before the court a quo are for the
issuance of letters of administration, settlement, and distribution of the estate of the deceased, which is a
special proceeding. Section 3(c) of the Rules of Court (Rules) defines a special proceeding as "a remedy by
which a party seeks to establish a status, a right, or a particular fact." This Court has applied the Rules,
particularly the rules on special proceedings, for the settlement of the estate of a deceased Muslim.[31] In a
petition for the issuance of letters of administration, settlement, and distribution of estate, the applicants
seek to establish the fact of death of the decedent and later to be duly recognized as among the decedent's
heirs, which would allow them to exercise their right to participate in the settlement and liquidation of the
estate of the decedent.[32] Here, the respondents seek to establish the fact of Alejandro Montaer, Sr.'s
death and, subsequently, for private respondent Almahleen Liling S. Montaer to be recognized as among
his heirs, if such is the case in fact.
Petitioners' argument, that the prohibition against a decedent or his estate from being a party defendant in
a civil action[33] applies to a special proceeding such as the settlement of the estate of the deceased, is
misplaced. Unlike a civil action which has definite adverse parties, a special proceeding has no definite
adverse party. The definitions of a civil action and a special proceeding, respectively, in the Rules illustrate
this difference. A civil action, in which "a party sues another for the enforcement or protection of a right, or
the prevention or redress of a wrong"[34] necessarily has definite adverse parties, who are either the
plaintiff or defendant.[35] On the other hand, a special proceeding, "by which a party seeks to establish a
status, right, or a particular fact,"[36] has one definite party, who petitions or applies for a declaration of a
status, right, or particular fact, but no definite adverse party. In the case at bar, it bears emphasis that the
estate of the decedent is not being sued for any cause of action. As a special proceeding, the purpose of the
settlement of the estate of the decedent is to determine all the assets of the estate,[37] pay its liabilities,[38]
and to distribute the residual to those entitled to the same.[39]
Docket Fees
Petitioners' third argument, that jurisdiction was not validly acquired for non-payment of docket fees, is
untenable. Petitioners point to private respondents' petition in the proceeding before the court a quo,
which contains an allegation estimating the decedent's estate as the basis for the conclusion that what
private respondents paid as docket fees was insufficient. Petitioners' argument essentially involves two

aspects: (1) whether the clerk of court correctly assessed the docket fees; and (2) whether private
respondents paid the correct assessment of the docket fees.
Filing the appropriate initiatory pleading and the payment of the prescribed docket fees vest a trial court
with jurisdiction over the subject matter.[40] If the party filing the case paid less than the correct amount for
the docket fees because that was the amount assessed by the clerk of court, the responsibility of making a
deficiency assessment lies with the same clerk of court.[41] In such a case, the lower court concerned will
not automatically lose jurisdiction, because of a party's reliance on the clerk of court's insufficient
assessment of the docket fees.[42] As "every citizen has the right to assume and trust that a public officer
charged by law with certain duties knows his duties and performs them in accordance with law," the party
filing the case cannot be penalized with the clerk of court's insufficient assessment.[43] However, the party
concerned will be required to pay the deficiency.[44]
In the case at bar, petitioners did not present the clerk of court's assessment of the docket fees. Moreover,
the records do not include this assessment. There can be no determination of whether private respondents
correctly paid the docket fees without the clerk of court's assessment.
Exception to Notice of Hearing
Petitioners' fourth argument, that private respondents' motion for reconsideration before the Shari'a
District Court is defective for lack of a notice of hearing, must fail as the unique circumstances in the
present case constitute an exception to this requirement. The Rules require every written motion to be set
for hearing by the applicant and to address the notice of hearing to all parties concerned.[45] The Rules also
provide that "no written motion set for hearing shall be acted upon by the court without proof of service
thereof."[46] However, the Rules allow a liberal construction of its provisions "in order to promote [the]
objective of securing a just, speedy, and inexpensive disposition of every action and proceeding."[47]
Moreover, this Court has upheld a liberal construction specifically of the rules of notice of hearing in cases
where "a rigid application will result in a manifest failure or miscarriage of justice especially if a party
successfully shows that the alleged defect in the questioned final and executory judgment is not apparent
on its face or from the recitals contained therein."[48] In these exceptional cases, the Court considers that
"no party can even claim a vested right in technicalities," and for this reason, cases should, as much as
possible, be decided on the merits rather than on technicalities.[49]
The case at bar falls under this exception. To deny the Shari'a District Court of an opportunity to determine
whether it has jurisdiction over a petition for the settlement of the estate of a decedent alleged to be a
Muslim would also deny its inherent power as a court to control its process to ensure conformity with the
law and justice. To sanction such a situation simply because of a lapse in fulfilling the notice requirement
will result in a miscarriage of justice.
In addition, the present case calls for a liberal construction of the rules on notice of hearing, because the
rights of the petitioners were not affected. This Court has held that an exception to the rules on notice of
hearing is where it appears that the rights of the adverse party were not affected.[50] The purpose for the
notice of hearing coincides with procedural due process,[51] for the court to determine whether the adverse
party agrees or objects to the motion, as the Rules do not fix any period within which to file a reply or
opposition.[52] In probate proceedings, "what the law prohibits is not the absence of previous notice, but
the absolute absence thereof and lack of opportunity to be heard."[53] In the case at bar, as evident from

the Shari'a District Court's order dated January 17, 2006, petitioners' counsel received a copy of the motion
for reconsideration in question. Petitioners were certainly not denied an opportunity to study the
arguments in the said motion as they filed an opposition to the same. Since the Shari'a District Court reset
the hearing for the motion for reconsideration in the same order, petitioners were not denied the
opportunity to object to the said motion in a hearing. Taken together, these circumstances show that the
purpose for the rules of notice of hearing, procedural process, was duly observed.
Prescription and Filiation
Petitioners' fifth argument is premature. Again, the Shari'a District Court has not yet determined whether it
has jurisdiction to settle the estate of the decedent. In the event that a special proceeding for the
settlement of the estate of a decedent is pending, questions regarding heirship, including prescription in
relation to recognition and filiation, should be raised and settled in the said proceeding.[54] The court, in its
capacity as a probate court, has jurisdiction to declare who are the heirs of the decedent.[55] In the case at
bar, the determination of the heirs of the decedent depends on an affirmative answer to the question of
whether the Shari'a District Court has jurisdiction over the estate of the decedent.
IN VIEW WHEREOF, the petition is DENIED. The Orders of the Shari'a District Court, dated August 22, 2006
and September 21, 2006 respectively, are AFFIRMED. Cost against petitioners.
SO ORDERED.

FIRST DIVISION
[ G.R. No. 182403, March 09, 2010 ]
ATTY. RESTITUTO G. CUDIAMAT, ERLINDA P. CUDIAMAT[1] AND CORAZON D. CUDIAMAT, PETITIONERS,
VS. BATANGAS SAVINGS AND LOAN BANK, INC., AND THE REGISTER OF DEEDS, NASUGBU, BATANGAS,
RESPONDENTS.
DECISION

CARPIO MORALES, J.:

Petitioner Atty. Restituto Cudiamat and his brother Perfecto were the registered co-owners of a 320 square
meter parcel of land (the property) in Balayan, Batangas, covered by TCT No. T-37889 of the Register of
Deeds of Nasugbu, Batangas. Restituto, who resided in Ozamiz City with his wife, entrusted the custody of
the title to who was residing in Balayan.
In 1979, Perfecto, without the knowledge and consent of Restituto, obtained a loan from respondent
Batangas Savings and Loan Bank, Inc. (the bank). To secure the payment of the loan, Perfecto mortgaged
the property for the purpose of which he presented a Special Power of Attorney (SPA) purportedly
executed by Restituto, with the marital consent of his wife-herein co-petitioner Erlinda Cudiamat.
On June 19, 1991, Restituto was informed, via letter[2] dated June 7, 1991 from the bank, that the property
was foreclosed. He thus, by letter[3] dated June 25, 1991, informed the bank that he had no participation in
the execution of the mortgage and that he never authorized Perfecto for the purpose.
In the meantime, Perfecto died in 1990. In 1998, as Perfecto's widow petitioner Corazon was being evicted
from the property, she and her co-petitioner-spouses Restituto and Erlinda filed on August 9, 1999 before
the Regional Trial Court (RTC) of Balayan a complaint[4] "for quieting of title with damages" against the bank
and the Register of Deeds of Nasugbu, docketed as Civil Case No. 3618, assailing the mortgage as being null
and void as they did not authorize the encumbrance of the property.
In its Answer to the complaint, the bank, maintaining the validity of the mortgage, alleged that it had in fact
secured a title in its name, TCT No. T-48405, after Perfecto failed to redeem the mortgage; that the Balayan
RTC had no jurisdiction over the case as the bank had been placed under receivership and under liquidation
by the Philippine Deposit Insurance Corporation (PDIC); that PDIC filed before the RTC of Nasugbu a
petition for assistance in the liquidation of the bank which was docketed as SP No. 576; and that
jurisdiction to adjudicate disputed claims against it is lodged with the liquidation court-RTC Nasugbu.
By Decision of January 17, 2006,[5] Branch 9 of the Balayan RTC rendered judgment, in the complaint for
quieting of title, in favor of the plaintiffs-herein petitioners. It ordered respondent Register of Deeds of
Nasugbu to cancel the encumbrance annotated on TCT No. T-37889, and to cancel TCT No. T-48405 issued
in the name of the bank and reinstate the former title. It also directed the bank to return the property to
petitioner spouses Restituto and Erlinda and to pay P20,000 to all the petitioners to defray the costs of suit.
The bank appealed to the Court of Appeals, contending, inter alia, that the Balayan RTC had no jurisdiction

over petitioners' complaint for quieting of title.

By the assailed Decision of December 21, 2007,[6] the appellate court, ruling in favor of the bank, dismissed
petitioners' complaint for quieting of title, without prejudice to the right of petitioners to take up their
claims with the Nasugbu RTC sitting as a liquidation court.
To the appellate court, the Balayan RTC, as a court of general jurisdiction, should have deferred to the
Nasugbu RTC which sits as a liquidation court, given that the bank was already under receivership when
petitioners filed the complaint for quieting of title.
Petitioners' Motion for Reconsideration having been denied by the appellate court by Resolution of March
27, 2008, they filed the present petition for review on certiorari.
Assailing the appellate court's ruling that the Balayan RTC had no jurisdiction over their complaint,
petitioners argue that their complaint was filed earlier than PDIC's petition for assistance in the liquidation;
and that the bank is now estopped from questioning the jurisdiction of the Balayan RTC because it actively
participated in the proceedings thereat.
The petition is impressed with merit.
Estoppel bars the bank from raising the issue of lack of jurisdiction of the Balayan RTC.
In Lozon v. NLRC,[7] the Court came up with a clear rule on when jurisdiction by estoppel applies and when it
does not:
The operation of estoppel on the question of jurisdiction seemingly depends on whether the lower court
actually had jurisdiction or not. If it had no jurisdiction, but the case was tried and decided upon the theory
that it had jurisdiction, the parties are not barred, on appeal, from assailing such jurisdiction, for the same
"must exist as a matter of law, and may not be conferred by the consent of the parties or by estoppel."
However, if the lower court had jurisdiction, and the case was heard and decided upon a given theory,
such, for instance, as that the court had no jurisdiction, the party who induced it to adopt such theory will
not be permitted, on appeal, to assume an inconsistent position - that the lower court had jurisdiction...
(underscoring supplied)

The ruling was echoed in Metromedia Times Corporation v. Pastorin.[8]

In the present case, the Balayan RTC, sitting as a court of general jurisdiction, had jurisdiction over the
complaint for quieting of title filed by petitioners on August 9, 1999. The Nasugbu RTC, as a liquidation
court, assumed jurisdiction over the claims against the bank only on May 25, 2000, when PDIC's petition for
assistance in the liquidation was raffled thereat and given due course.
While it is well-settled that lack of jurisdiction on the subject matter can be raised at any time and is not
lost by estoppel by laches, the present case is an exception. To compel petitioners to re-file and relitigate
their claims before the Nasugbu RTC when the parties had already been given the opportunity to present
their respective evidence in a full-blown trial before the Balayan RTC which had, in fact, decided
petitioners' complaint (about two years before the appellate court rendered the assailed decision) would

be an exercise in futility and would unjustly burden petitioners.

The Court, in Valenzuela v. Court of Appeals,[9] held that as a general rule, if there is a judicial liquidation of
an insolvent bank, all claims against the bank should be filed in the liquidation proceeding. The Court in
Valenzuela, however, after considering the circumstances attendant to the case, held that the general rule
should not be applied if to order the aggrieved party to refile or relitigate its case before the litigation court
would be "an exercise in futility." Among the circumstances the Court considered in that case is the fact
that the claimants were poor and the disputed parcel of land was their only property, and the parties'
claims and defenses were properly ventilated in and considered by the judicial court.
In the present case, the Court finds that analogous considerations exist to warrant the application of
Valenzuela. Petitioner Restituto was 78 years old at the time the petition was filed in this Court, and his copetitioner-wife Erlinda died[10] during the pendency of the case. And, except for co-petitioner Corazon,
Restituto is a resident of Ozamis City. To compel him to appear and relitigate the case in the liquidation
court-Nasugbu RTC when the issues to be raised before it are the same as those already exhaustively
passed upon and decided by the Balayan RTC would be superfluous.
WHEREFORE, the petition is GRANTED. The Decision of December 21, 2007 and Resolution dated March 27,
2008 of the Court of Appeals are SET ASIDE. The Decision dated January 17, 2006 of the Regional Trial Court
of Balayan, Batangas, Branch 9 is REINSTATED.
SO ORDERED.

SECOND DIVISION
[ G.R. No. 176339, January 10, 2011 ]
DO-ALL METALS INDUSTRIES, INC., SPS. DOMINGO LIM AND LELY KUNG LIM, PETITIONERS, VS. SECURITY
BANK CORP., TITOLAIDO E. PAYONGAYONG, EVYLENE C. SISON, PHIL. INDUSTRIAL SECURITY AGENCY
CORP. AND GIL SILOS, RESPONDENTS.
DECISION

ABAD, J.:
This case is about the propriety of awarding damages based on claims embodied in the plaintiff's
supplemental complaint filed without prior payment of the corresponding filing fees.
The Facts and the Case

From 1996 to 1997, Dragon Lady Industries, Inc., owned by petitioner spouses Domingo Lim and Lely Kung
Lim (the Lims) took out loans from respondent Security Bank Corporation (the Bank) that totaled
P92,454,776.45. Unable to pay the loans on time, the Lims assigned some of their real properties to the
Bank to secure the same, including a building and the lot on which it stands (the property), located at M. de
Leon St., Santolan, Pasig City.[1]
In 1998 the Bank offered to lease the property to the Lims through petitioner Do-All Metals Industries, Inc.
(DMI) primarily for business although the Lims were to use part of the property as their residence. DMI and
the Bank executed a two-year lease contract from October 1, 1998 to September 30, 2000 but the Bank
retained the right to pre-terminate the lease. The contract also provided that, should the Bank decide to
sell the property, DMI shall have the right of first refusal.
On December 3, 1999, before the lease was up, the Bank gave notice to DMI that it was pre-terminating the
lease on December 31, 1999. Wanting to exercise its right of first refusal, DMI tried to negotiate with the
Bank the terms of its purchase. DMI offered to pay the Bank P8 million for the property but the latter
rejected the offer, suggesting P15 million instead. DMI made a second offer of P10 million but the Bank
declined the same.
While the negotiations were on going, the Lims claimed that they continued to use the property in their
business. But the Bank posted at the place private security guards from Philippine Industrial Security
Agency (PISA). The Lims also claimed that on several occasions in 2000, the guards, on instructions of the
Bank representatives Titolaido Payongayong and Evylene Sison, padlocked the entrances to the place and
barred the Lims as well as DMI's employees from entering the property. One of the guards even pointed his
gun at one employee and shots were fired. Because of this, DMI was unable to close several projects and
contracts with prospective clients. Further, the Lims alleged that they were unable to retrieve assorted
furniture, equipment, and personal items left at the property.
The Lims eventually filed a complaint with the Regional Trial Court (RTC) of Pasig City for damages with
prayer for the issuance of a temporary restraining order (TRO) or preliminary injunction against the Bank

and its co-defendants Payongayong, Sison, PISA, and Gil Silos.[2] Answering the complaint, the Bank pointed
out that the lease contract allowed it to sell the property at any time provided only that it gave DMI the
right of first refusal. DMI had seven days from notice to exercise its option. On September 10, 1999 the
Bank gave notice to DMI that it intended to sell the property to a third party. DMI asked for an extension of
its option to buy and the Bank granted it. But the parties could not agree on a purchase price. The Bank
required DMI to vacate and turnover the property but it failed to do so. As a result, the Bank's buyer
backed-out of the sale. Despite what happened, the Bank and DMI continued negotiations for the purchase
of the leased premises but they came to no agreement.
The Bank denied, on the other hand, that its guards harassed DMI and the Lims. To protect its property, the
Bank began posting guards at the building even before it leased the same to DMI. Indeed, this arrangement
benefited both parties. The Bank alleged that in October of 2000, when the parties could not come to an
agreement regarding the purchase of the property, DMI vacated the same and peacefully turned over
possession to the Bank.
The Bank offered no objection to the issuance of a TRO since it claimed that it never prevented DMI or its
employees from entering or leaving the building. For this reason, the RTC directed the Bank to allow DMI
and the Lims to enter the building and get the things they left there. The latter claimed, however, that on
entering the building, they were unable to find the movable properties they left there. In a supplemental
complaint, DMI and the Lims alleged that the Bank surreptitiously took such properties, resulting in
additional actual damages to them of over P27 million.
The RTC set the pre-trial in the case for December 4, 2001. On that date, however, counsel for the Bank
moved to reset the proceeding. The court denied the motion and allowed DMI and the Lims to present
their evidence ex parte. The court eventually reconsidered its order but only after the plaintiffs had already
presented their evidence and were about to rest their case. The RTC declined to recall the plaintiffs'
witnesses for cross- examination but allowed the Bank to present its evidence.[3] This prompted the Bank to
seek relief from the Court of Appeals (CA) and eventually from this Court but to no avail.[4]
During its turn at the trial, the Bank got to present only defendant Payongayong, a bank officer. For
repeatedly canceling the hearings and incurring delays, the RTC declared the Bank to have forfeited its right
to present additional evidence and deemed the case submitted for decision.
On September 30, 2004 the RTC rendered a decision in favor of DMI and the Lims. It ordered the Bank to
pay the plaintiffs P27,974,564.00 as actual damages, P500,000.00 as moral damages, P500,000 as
exemplary damages, and P100,000.00 as attorney's fees. But the court absolved defendants Payongayong,
Sison, Silos and PISA of any liability.
The Bank moved for reconsideration of the decision, questioning among other things the RTC's authority to
grant damages considering plaintiffs' failure to pay the filing fees on their supplemental complaint. The RTC
denied the motion. On appeal to the CA, the latter found for the Bank, reversed the RTC decision, and
dismissed the complaint as well as the counterclaims.[5] DMI and the Lims filed a motion for reconsideration
but the CA denied the same, hence this petition.
The Issues Presented

The issues presented in this case are:

1. Whether or not the RTC acquired jurisdiction to hear and adjudicate plaintiff's supplemental complaint
against the Bank considering their failure to pay the filing fees on the amounts of damages they claim in it;
2. Whether or not the Bank is liable for the intimidation and harassment committed against DMI and its
representatives; and
3. Whether or not the Bank is liable to DMI and the Lims for the machineries, equipment, and other
properties they allegedly lost after they were barred from the property.
The Court's Rulings

One. On the issue of jurisdiction, respondent Bank argues that plaintiffs' failure to pay the filing fees on
their supplemental complaint is fatal to their action.
But what the plaintiffs failed to pay was merely the filing fees for their Supplemental Complaint. The RTC
acquired jurisdiction over plaintiffs' action from the moment they filed their original complaint
accompanied by the payment of the filing fees due on the same. The plaintiffs' non-payment of the
additional filing fees due on their additional claims did not divest the RTC of the jurisdiction it already had
over the case.[6]
Two. As to the claim that Bank's representatives and retained guards harassed and intimidated DMI's
employees and the Lims, the RTC found ample proof of such wrongdoings and accordingly awarded
damages to the plaintiffs. But the CA disagreed, discounting the testimony of the police officers regarding
their investigations of the incidents since such officers were not present when they happened. The CA may
be correct in a way but the plaintiffs presented eyewitnesses who testified out of personal knowledge. The
police officers testified merely to point out that there had been trouble at the place and their investigations
yielded their findings.
The Bank belittles the testimonies of the petitioners' witnesses for having been presented ex parte before
the clerk of court. But the ex parte hearing, having been properly authorized, cannot be assailed as less
credible. It was the Bank's fault that it was unable to attend the hearing. It cannot profit from its lack of
diligence.
Domingo Lim and some employees of DMI testified regarding the Bank guards' unmitigated use of their
superior strength and firepower. Their testimonies were never refuted. Police Inspector Priscillo dela Paz
testified that he responded to several complaints regarding shooting incidents at the leased premises and
on one occasion, he found Domingo Lim was locked in the building. When he asked why Lim had been
locked in, a Bank representative told him that they had instructions to prevent anyone from taking any
property out of the premises. It was only after Dela Paz talked to the Bank representative that they let Lim
out.[7]
Payongayong, the Bank's sole witness, denied charges of harassment against the Bank's representatives
and the guards. But his denial came merely from reports relayed to him. They were not based on personal

knowledge.
While the lease may have already lapsed, the Bank had no business harassing and intimidating the Lims and
their employees. The RTC was therefore correct in adjudging moral damages, exemplary damages, and
attorney's fees against the Bank for the acts of their representatives and building guards.
Three. As to the damages that plaintiffs claim under their supplemental complaint, their stand is that the
RTC committed no error in admitting the complaint even if they had not paid the filing fees due on it since
such fees constituted a lien anyway on the judgment award. But this after-judgment lien, which implies
that payment depends on a successful execution of the judgment, applies to cases where the filing fees
were incorrectly assessed or paid or where the court has discretion to fix the amount of the award.[8] None
of these circumstances obtain in this case.
Here, the supplemental complaint specified from the beginning the actual damages that the plaintiffs
sought against the Bank. Still plaintiffs paid no filing fees on the same. And, while petitioners claim that
they were willing to pay the additional fees, they gave no reason for their omission nor offered to pay the
same. They merely said that they did not yet pay the fees because the RTC had not assessed them for it.
But a supplemental complaint is like any complaint and the rule is that the filing fees due on a complaint
need to be paid upon its filing.[9] The rules do not require the court to make special assessments in cases of
supplemental complaints.
To aggravate plaintiffs' omission, although the Bank brought up the question of their failure to pay
additional filing fees in its motion for reconsideration, plaintiffs made no effort to make at least a late
payment before the case could be submitted for decision, assuming of course that the prescription of their
action had not then set it in. Clearly, plaintiffs have no excuse for their continuous failure to pay the fees
they owed the court. Consequently, the trial court should have treated their Supplemental Complaint as
not filed.
Plaintiffs of course point out that the Bank itself raised the issue of non-payment of additional filing fees
only after the RTC had rendered its decision in the case. The implication is that the Bank should be deemed
to have waived its objection to such omission. But it is not for a party to the case or even for the trial court
to waive the payment of the additional filing fees due on the supplemental complaint. Only the Supreme
Court can grant exemptions to the payment of the fees due the courts and these exemptions are embodied
in its rules.
Besides, as correctly pointed out by the CA, plaintiffs had the burden of proving that the movable
properties in question had remained in the premises and that the bank was responsible for their loss. The
only evidence offered to prove the loss was Domingo Lim's testimony and some undated and unsigned
inventories. These were self-serving and uncorroborated.
WHEREFORE, the Court PARTIALLY GRANTS the petition and REINSTATES with modification the decision of
the Regional Trial Court of Pasig City in Civil Case 68184. The Court DIRECTS respondent Security Bank
Corporation to pay petitioners DMI and spouses Domingo and Lely Kung Lim damages in the following
amounts: P500,000.00 as moral damages, P500,000.00 as exemplary damages, and P100,000.00 for
attorney's fees. The Court DELETES the award of actual damages of P27,974,564.00.
SO ORDERED.

SECOND DIVISION
[ G.R. No. 168785, February 05, 2010 ]
HERALD BLACK DACASIN, PETITIONER, VS. SHARON DEL MUNDO DACASIN, RESPONDENT.
DECISION

CARPIO, J.:
The Case

For review [1] is a dismissal [2] of a suit to enforce a post-foreign divorce child custody agreement for lack of
jurisdiction.
The Facts

Petitioner Herald Dacasin (petitioner), American, and respondent Sharon Del Mundo Dacasin (respondent),
Filipino, were married in Manila in April 1994. They have one daughter, Stephanie, born on 21 September
1995. In June 1999, respondent sought and obtained from the Circuit Court, 19th Judicial Circuit, Lake
County, Illinois (Illinois court) a divorce decree against petitioner. [3] In its ruling, the Illinois court dissolved
the marriage of petitioner and respondent, awarded to respondent sole custody of Stephanie and retained
jurisdiction over the case for enforcement purposes.
On 28 January 2002, petitioner and respondent executed in Manila a contract (Agreement [4] ) for the joint
custody of Stephanie. The parties chose Philippine courts as exclusive forum to adjudicate disputes arising
from the Agreement. Respondent undertook to obtain from the Illinois court an order "relinquishing"
jurisdiction to Philippine courts.
In 2004, petitioner sued respondent in the Regional Trial Court of Makati City, Branch 60 (trial court) to
enforce the Agreement. Petitioner alleged that in violation of the Agreement, respondent exercised sole
custody over Stephanie.
Respondent sought the dismissal of the complaint for, among others, lack of jurisdiction because of the
Illinois court's retention of jurisdiction to enforce the divorce decree.
The Ruling of the Trial Court

In its Order dated 1 March 2005, the trial court sustained respondent's motion and dismissed the case for
lack of jurisdiction. The trial court held that: (1) it is precluded from taking cognizance over the suit
considering the Illinois court's retention of jurisdiction to enforce its divorce decree, including its order
awarding sole custody of Stephanie to respondent; (2) the divorce decree is binding on petitioner following
the "nationality rule" prevailing in this jurisdiction; [5] and (3) the Agreement is void for contravening Article
2035, paragraph 5 of the Civil Code [6] prohibiting compromise agreements on jurisdiction. [7]

Petitioner sought reconsideration, raising the new argument that the divorce decree obtained by
respondent is void. Thus, the divorce decree is no bar to the trial court's exercise of jurisdiction over the
case.
In its Order dated 23 June 2005, the trial court denied reconsideration, holding that unlike in the case of
respondent, the divorce decree is binding on petitioner under the laws of his nationality.
Hence, this petition.
Petitioner submits the following alternative theories for the validity of the Agreement to justify its
enforcement by the trial court: (1) the Agreement novated the valid divorce decree, modifying the terms of
child custody from sole (maternal) to joint; [8] or (2) the Agreement is independent of the divorce decree
obtained by respondent.
The Issue

The question is whether the trial court has jurisdiction to take cognizance of petitioner's suit and enforce
the Agreement on the joint custody of the parties' child.
The Ruling of the Court

The trial court has jurisdiction to entertain petitioner's suit but not to enforce the Agreement which is void.
However, factual and equity considerations militate against the dismissal of petitioner's suit and call for the
remand of the case to settle the question of Stephanie's custody.
Regional Trial Courts Vested With Jurisdiction
to Enforce Contracts

Subject matter jurisdiction is conferred by law. At the time petitioner filed his suit in the trial court,
statutory law vests on Regional Trial Courts exclusive original jurisdiction over civil actions incapable of
pecuniary estimation. [9] An action for specific performance, such as petitioner's suit to enforce the
Agreement on joint child custody, belongs to this species of actions. [10] Thus, jurisdiction-wise, petitioner
went to the right court.
Indeed, the trial court's refusal to entertain petitioner's suit was grounded not on its lack of power to do so
but on its thinking that the Illinois court's divorce decree stripped it of jurisdiction. This conclusion is
unfounded. What the Illinois court retained was "jurisdiction x x x for the purpose of enforcing all and
sundry the various provisions of [its] Judgment for Dissolution." [11] Petitioner's suit seeks the enforcement
not of the "various provisions" of the divorce decree but of the post-divorce Agreement on joint child
custody. Thus, the action lies beyond the zone of the Illinois court's so-called "retained jurisdiction."
Petitioner's Suit Lacks Cause of Action

The foregoing notwithstanding, the trial court cannot enforce the Agreement which is contrary to law.

In this jurisdiction, parties to a contract are free to stipulate the terms of agreement subject to the
minimum ban on stipulations contrary to law, morals, good customs, public order, or public policy. [12]
Otherwise, the contract is denied legal existence, deemed "inexistent and void from the beginning." [13] For
lack of relevant stipulation in the Agreement, these and other ancillary Philippine substantive law serve as
default parameters to test the validity of the Agreement's joint child custody stipulations. [14]
At the time the parties executed the Agreement on 28 January 2002, two facts are undisputed: (1)
Stephanie was under seven years old (having been born on 21 September 1995); and (2) petitioner and
respondent were no longer married under the laws of the United States because of the divorce decree. The
relevant Philippine law on child custody for spouses separated in fact or in law [15] (under the second
paragraph of Article 213 of the Family Code) is also undisputed: "no child under seven years of age shall be
separated from the mother x x x." [16] (This statutory awarding of sole parental custody [17] to the mother is
mandatory, [18] grounded on sound policy consideration, [19] subject only to a narrow exception not alleged
to obtain here. [20] ) Clearly then, the Agreement's object to establish a post-divorce joint custody regime
between respondent and petitioner over their child under seven years old contravenes Philippine law.
The Agreement is not only void ab initio for being contrary to law, it has also been repudiated by the
mother when she refused to allow joint custody by the father. The Agreement would be valid if the spouses
have not divorced or separated because the law provides for joint parental authority when spouses live
together. [21] However, upon separation of the spouses, the mother takes sole custody under the law if the
child is below seven years old and any agreement to the contrary is void. Thus, the law suspends the joint
custody regime for (1) children under seven of (2) separated or divorced spouses. Simply put, for a child
within this age bracket (and for commonsensical reasons), the law decides for the separated or divorced
parents how best to take care of the child and that is to give custody to the separated mother. Indeed, the
separated parents cannot contract away the provision in the Family Code on the maternal custody of
children below seven years anymore than they can privately agree that a mother who is unemployed,
immoral, habitually drunk, drug addict, insane or afflicted with a communicable disease will have sole
custody of a child under seven as these are reasons deemed compelling to preclude the application of the
exclusive maternal custody regime under the second paragraph of Article 213. [22]
It will not do to argue that the second paragraph of Article 213 of the Family Code applies only to judicial
custodial agreements based on its text that "No child under seven years of age shall be separated from the
mother, unless the court finds compelling reasons to order otherwise." To limit this provision's
enforceability to court sanctioned agreements while placing private agreements beyond its reach is to
sanction a double standard in custody regulation of children under seven years old of separated parents.
This effectively empowers separated parents, by the simple expedient of avoiding the courts, to subvert a
legislative policy vesting to the separated mother sole custody of her children under seven years of age "to
avoid a tragedy where a mother has seen her baby torn away from her." [23] This ignores the legislative basis
that "[n]o man can sound the deep sorrows of a mother who is deprived of her child of tender age." [24]
It could very well be that Article 213's bias favoring one separated parent (mother) over the other (father)
encourages paternal neglect, presumes incapacity for joint parental custody, robs the parents of custodial
options, or hijacks decision-making between the separated parents. [25] However, these are objections
which question the law's wisdom not its validity or uniform enforceability. The forum to air and remedy
these grievances is the legislature, not this Court. At any rate, the rule's seeming harshness or undesirability
is tempered by ancillary agreements the separated parents may wish to enter such as granting the father

visitation and other privileges. These arrangements are not inconsistent with the regime of sole maternal
custody under the second paragraph of Article 213 which merely grants to the mother final authority on
the care and custody of the minor under seven years of age, in case of disagreements.
Further, the imposed custodial regime under the second paragraph of Article 213 is limited in duration,
lasting only until the child's seventh year. From the eighth year until the child's emancipation, the law gives
the separated parents freedom, subject to the usual contractual limitations, to agree on custody regimes
they see fit to adopt. Lastly, even supposing that petitioner and respondent are not barred from entering
into the Agreement for the joint custody of Stephanie, respondent repudiated the Agreement by asserting
sole custody over Stephanie. Respondent's act effectively brought the parties back to ambit of the default
custodial regime in the second paragraph of Article 213 of the Family Code vesting on respondent sole
custody of Stephanie.
Nor can petitioner rely on the divorce decree's alleged invalidity - not because the Illinois court lacked
jurisdiction or that the divorce decree violated Illinois law, but because the divorce was obtained by his
Filipino spouse [26] - to support the Agreement's enforceability. The argument that foreigners in this
jurisdiction are not bound by foreign divorce decrees is hardly novel. Van Dorn v. Romillo [27] settled the
matter by holding that an alien spouse of a Filipino is bound by a divorce decree obtained abroad. [28] There,
we dismissed the alien divorcee's Philippine suit for accounting of alleged post-divorce conjugal property
and rejected his submission that the foreign divorce (obtained by the Filipino spouse) is not valid in this
jurisdiction in this wise:
There can be no question as to the validity of that Nevada divorce in any of the States of the United
States. The decree is binding on private respondent as an American citizen. For instance, private
respondent cannot sue petitioner, as her husband, in any State of the Union. What he is contending in this
case is that the divorce is not valid and binding in this jurisdiction, the same being contrary to local law
and public policy.
It is true that owing to the nationality principle embodied in Article 15 of the Civil Code, only Philippine
nationals are covered by the policy against absolute divorces the same being considered contrary to our
concept of public policy and morality. However, aliens may obtain divorces abroad, which may be
recognized in the Philippines, provided they are valid according to their national law. In this case, the
divorce in Nevada released private respondent from the marriage from the standards of American law,
under which divorce dissolves the marriage.
xxxx
Thus, pursuant to his national law, private respondent is no longer the husband of petitioner. He would
have no standing to sue in the case below as petitioner's husband entitled to exercise control over conjugal
assets. As he is bound by the Decision of his own country's Court, which validly exercised jurisdiction over
him, and whose decision he does not repudiate, he is estopped by his own representation before said Court
from asserting his right over the alleged conjugal property. (Emphasis supplied)

We reiterated Van Dorn in Pilapil v. Ibay-Somera [29] to dismiss criminal complaints for adultery filed by the
alien divorcee (who obtained the foreign divorce decree) against his former Filipino spouse because he no
longer qualified as "offended spouse" entitled to file the complaints under Philippine procedural rules.

Thus, it should be clear by now that a foreign divorce decree carries as much validity against the alien
divorcee in this jurisdiction as it does in the jurisdiction of the alien's nationality, irrespective of who
obtained the divorce.
The Facts of the Case and Nature of Proceeding

Justify Remand
Instead of ordering the dismissal of petitioner's suit, the logical end to its lack of cause of action, we
remand the case for the trial court to settle the question of Stephanie's custody. Stephanie is now nearly 15
years old, thus removing the case outside of the ambit of the mandatory maternal custody regime under
Article 213 and bringing it within coverage of the default standard on child custody proceedings - the best
interest of the child. [30] As the question of custody is already before the trial court and the child's parents,
by executing the Agreement, initially showed inclination to share custody, it is in the interest of swift and
efficient rendition of justice to allow the parties to take advantage of the court's jurisdiction, submit
evidence on the custodial arrangement best serving Stephanie's interest, and let the trial court render
judgment. This disposition is consistent with the settled doctrine that in child custody proceedings, equity
may be invoked to serve the child's best interest. [31]
WHEREFORE, we REVERSE the Orders dated 1 March 2005 and 23 June 2005 of the Regional Trial Court of
Makati City, Branch 60. The case is REMANDED for further proceedings consistent with this ruling.
SO ORDERED.

SECOND DIVISION
[ G.R. No. 173351, July 29, 2010 ]
BF CITILAND CORPORATION, PETITIONER, VS. MARILYN B. OTAKE, RESPONDENT.
DECISION

CARPIO, J.:
The Case

This is a petition for review[1] of the Resolutions dated 28 July 2005[2] and 5 July 2006[3] of the Court of
Appeals in CA-G.R. SP No. 88995. The 28 July 2005 Resolution dismissed the petition for review filed by
petitioner seeking the reversal of the 29 December 2004 Decision[4] of the Regional Trial Court (Branch 257)
of Paraaque City. The 5 July 2006 Resolution denied petitioner's motion for reconsideration.
The Antecedent Facts

Petitioner BF Citiland Corporation is the registered owner of Lot 2, Block 101 situated in Brisbane Street,
Phase III, BF Homes Subdivision, Paraaque City and covered by Transfer Certificate of Title No. 52940.[5]
Based on the tax declaration[6] filed in the Office of the Assessor, the lot has an assessed value of
P48,000.00.
On 24 February 1987, respondent Merlinda B. Bodullo[7] bought the adjoining Lot 1, Block 101 covered by
TCT No. 77549.[8] However, records show respondent occupied not just the lot she purchased. She also
encroached upon petitioner's lot.
On 13 October 2000, petitioner filed in the Metropolitan Trial Court (Branch 77) of Paraaque City a
complaint[9] for accion publiciana praying that judgment be rendered ordering respondent to vacate the
subject lot. Petitioner also prayed that respondent be ordered to pay P15,000.00 per month by way of
reasonable compensation for the use of the lot.
The Ruling of the MeTC

In its 25 April 2003 Decision,[10] the MeTC ruled in favor of petitioner, to wit:
WHEREFORE, premises considered, this Court renders judgment in favor of the plaintiff and against the
defendant and the latter, including any and all persons claiming rights under her is ORDERED:
1. To VACATE Lot 2, Block 101 subject lot in this instant case and SURRENDER peaceful possession to the
plaintiff;
2. To PAY the plaintiff the sum of P10,000.00 per month by way of reasonable compensation for the use
and occupancy of the subject lot from the filing of this case until the defendant shall have fully vacated the
same;

3. To PAY the plaintiff the sum of P20,000.00 as and by way of attorney's fees; and
4. To PAY the costs of this suit.
SO ORDERED.[11]

Respondent filed a motion for reconsideration[12] claiming she was a lawful possessor and buyer in good
faith of the disputed lot. In its Order dated 20 June 2003, the MeTC denied[13] the motion for
reconsideration for lack of merit and for lack of the requisite notice of hearing. The MeTC then issued a writ
of execution.[14] Respondent filed a motion[15] to quash the writ of execution on the ground that the MeTC
had no jurisdiction over accion publiciana cases. In its 30 January 2004 Order,[16] the MeTC denied the
motion to quash the writ of execution. It held that under Section 33 of Batas Pambansa Blg. 129, as
amended by Republic Act 7691,[17] the MeTC had exclusive original jurisdiction in all civil actions involving
title to or possession of real property with assessed value not exceeding P50,000.00.
Petitioner filed a motion for special order of demolition[18] alleging that the lot subject of execution
contained improvements introduced by respondent. Respondent opposed the motion for being
premature[19] and moved for reconsideration[20] of the 30 January 2004 Order of the MeTC. Respondent
argued that even if the MeTC had jurisdiction over accion publiciana cases, the total value of the lot
together with the residential house she built on it exceeded P50,000.00.
In its 23 July 2004 Order,[21] the MeTC ruled that since the subject lot had an assessed value of P48,000.00,
it had jurisdiction under Section 33 of BP 129, as amended. The MeTC held that since the action was only
for the recovery of the lot, the residential house respondent built on it should not be included in computing
the assessed value of the property. Thus, the MeTC granted petitioner's motion for demolition and denied
respondent's motion for reconsideration of its 30 January 2004 Order.
Respondent filed in the Regional Trial Court (Branch 257) of Paraaque City a petition for certiorari[22] under
Rule 65 of the Rules of Court seeking dismissal of the accion publiciana case for lack of jurisdiction of the
MeTC.
The Ruling of the RTC

In its 29 December 2004 Decision,[23] the RTC held that accion publiciana was within the exclusive original
jurisdiction of regional trial courts. The RTC further explained that BP 129, as amended, did not modify the
jurisprudential doctrine that a suit for accion publiciana fell under the exclusive original jurisdiction of the
RTC. It disposed of the petition for certiorari in this wise:
WHEREFORE, the preliminary injunction previously issued by this Court in the Order dated September 8,
2004 enjoining the court a quo and its sheriff from implementing the Writ of Execution is hereby made
permanent. Since the court a quo has no jurisdiction over Civil Case No. 11868, a suit for accion publiciana
filed by BF Citiland Corporation against petitioner, the said case is dismissed. Consequently, all Orders and
the Decision rendered on the said case by the court a quo are deemed void or without force and effect.
SO ORDERED.[24]

Petitioner filed a motion for reconsideration[25] insisting that accion publiciana was the civil action involving
title to or possession of real property referred to in Section 33 of BP 129, as amended. Petitioner also
claimed respondent was already estopped from assailing the jurisdiction of the MeTC because of
respondent's participation in all the proceedings in the MeTC coupled with respondent's failure to timely
object to the jurisdiction of the MeTC.
In her comment,[26] respondent reasoned that while Section 33 of BP 129, as amended, explicitly qualified
the court's jurisdiction depending on the assessed value of the real property, accion publiciana conferred
jurisdiction on regional trial courts regardless of the value of the property. Respondent further argued that
lack of jurisdiction could be raised anytime.
Upon the RTC's denial[27] of petitioner's motion for reconsideration, petitioner filed in the Court of Appeals
a petition for review[28] under Rule 42 of the Rules of Court contending that the RTC erred in ruling that the
MeTC had no jurisdiction over accion publiciana cases. Petitioner maintained respondent was already
estopped from questioning the jurisdiction of the MeTC. In her comment,[29] respondent stressed that the
MeTC had no jurisdiction over accion publiciana cases. Respondent reiterated the argument that lack of
jurisdiction could be raised anytime. In its reply,[30] petitioner cited Refugia v. Court of Appeals[31] in claiming
that the MeTC had limited original jurisdiction in civil actions involving title to or possession of real property
depending on the property's assessed value.
The Ruling of the Court of Appeals

In its 28 July 2005 Resolution,[32] the Court of Appeals dismissed the petition for review holding that appeal
from a decision of the RTC rendered in the exercise of its original jurisdiction should be by way of a notice
of appeal.
The Court of Appeals ruled that appeal by way of petition for review under Rule 42 of the Rules of Court
could be resorted to only when what was appealed from was a decision of the RTC rendered in the exercise
of its appellate jurisdiction. In its 5 July 2006 Resolution,[33] the Court of Appeals denied petitioner's motion
for reconsideration.[34]
Hence, the instant petition for review.
The Issues

The issues for resolution are (1) whether a petition for review under Rule 42 is the proper mode of appeal
from a decision of the RTC in a petition for certiorari under Rule 65; and (2) whether the RTC correctly ruled
that the MeTC has no jurisdiction over accion publiciana cases.
The Court's Ruling

The petition is meritorious.

Petitioner posits that even if the RTC rendered the judgment in the exercise of its original jurisdiction, the

Court of Appeals still erred in dismissing the petition for review because a petition for review contains all
the requisites of a notice of appeal. Petitioner argues the Court of Appeals erred in dismissing the petition
for review on technicality without considering the merits of the case. Petitioner maintains the MeTC has
jurisdiction since the assessed value of the lot subject of accion publiciana is only P48,000.00.
Respondent counters that the decision of the RTC was rendered in a petition for certiorari under Rule 65,
unmistakably an original action. Respondent maintains that a petition for review cannot be treated as a
form of a notice of appeal because of the inextendible nature of the latter. Respondent further argues that
the RTC correctly ruled the MeTC has no jurisdiction in accion publiciana cases. Respondent claims she is
not estopped from questioning the jurisdiction of the MeTC.
Section 2, Rule 41 of the Rules of Court states:
(a) Ordinary appeal. - The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the
exercise of its original jurisdiction shall be taken by filing a notice of appeal with the court which rendered
the judgment or final order appealed from and serving a copy thereof upon the adverse party. x x x
(b) Petition for review. - The appeal to the Court of Appeals in cases decided by the Regional Trial Court in
the exercise of its appellate jurisdiction shall be by petition for review in accordance with Rule 42.
(Emphasis supplied)
xxxx

The Rule is clear. In cases decided by the RTC in the exercise of its original jurisdiction, appeal to the Court
of Appeals is taken by filing a notice of appeal. On the other hand, in cases decided by the RTC in the
exercise of its appellate jurisdiction, appeal to the Court of Appeals is by a petition for review under Rule
42.
A petition for certiorari under Rule 65 does not interrupt the course of the principal case unless a
temporary restraining order or a writ of preliminary injunction from further proceeding has been issued
against the public respondent.[35] A petition for certiorari under Rule 65 is, without a doubt, an original
action.[36]
Since the decision of the RTC in the petition for certiorari under Rule 65 was rendered in the exercise of its
original jurisdiction, appeal from the said RTC decision to the Court of Appeals should have been made by
filing a notice of appeal, not a petition for review under Rule 42.
However, in numerous cases, this Court has allowed liberal construction of the rules when to do so would
serve the demands of substantial justice. Dismissal of appeals purely on technical grounds is frowned upon.
It is better to excuse a technical lapse rather than dispose of a case on technicality, giving a false impression
of speedy disposal of cases while actually resulting in more delay, if not a miscarriage of justice.[37] In the
present case, a dismissal on a technicality would only mean a new round of litigation between the same
parties for the same cause of action, over the same subject matter. Thus, notwithstanding petitioner's
wrong mode of appeal, the Court of Appeals should not have so easily dismissed the petition.
Under Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act of 1980, the plenary

action of accion publiciana must be brought before regional trial courts.[38] With the modifications
introduced by Republic Act No. 7691, the jurisdiction of regional trial courts has been limited to real actions
where the assessed value exceeds P20,000.00 or P50,000.00 if the action is filed in Metro Manila. If the
assessed value is below the said amounts, the action must be brought before first level courts. As so
amended, BP 129 now provides:
Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts in
Civil Cases. - Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall
exercise:
xxxx
(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property, or
any interest therein where the assessed value of the property or interest therein does not exceed Twenty
thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not
exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees,
litigation expenses, and costs: Provided, That in cases of land not declared for taxation purposes, the value
of such property shall be determined by the assessed value of the adjacent lots. (Emphasis supplied)

Under BP 129, as amended, jurisdiction even in accion publiciana cases is determined by the assessed value
of the property.[39] The Court recently explained in Spouses Alcantara v. Nido[40] that assessed value is the
worth or value of the property as fixed by the taxing authorities for the purpose of determining the
applicable tax rate. The assessed value does not necessarily represent the true or market value of the
property.[41]
In the present case, the complaint,[42] which was filed after the enactment of R.A. 7691, contained a
statement that, based on the tax declaration[43] filed in the Office of the Assessor, the lot subject of the
accion publiciana has an assessed value of P48,000.00. A copy of the tax declaration was attached as Annex
"B" of the complaint. The subject lot, with an assessed value below the jurisdictional limit of P50,000.00 for
Metro Manila, comes within the exclusive original jurisdiction of the MeTC under BP 129, as amended.
Thus, the RTC erred in holding that the MeTC had no jurisdiction in this case.
WHEREFORE, we GRANT the petition. We SET ASIDE the Resolutions dated 28 July 2005 and 5 July 2006 of
the Court of Appeals in CA-G.R. SP No. 88995. We REINSTATE the 25 April 2003 Decision and the 20 June
2003 Order of the Metropolitan Trial Court (Branch 77) of Paraaque City in Civil Case No. 11868.
Costs against petitioner.
SO ORDERED.

FIRST DIVISION
[ G.R. No. 180062, May 05, 2010 ]
GOVERNMENT SERVICE INSURANCE SYSTEM, PETITIONER, VS. BOARD OF COMMISSIONERS (2ND
DIVISION), BOARD OF COMMISSIONERS OF THE HOUSING AND LAND USE REGULATORY BOARD (HLURB)
HLURB NATIONAL CAPITAL REGION FIELD OFFICE, SPOUSES MARCELINO H. DE LOS REYES AND ALMA T.
DE LOS REYES, AND NEW SAN JOSE BUILDERS, INC., RESPONDENTS.
DECISION

CARPIO MORALES, J.:

New San Jose Builders, Inc. (NSJBI) mortgaged on December 10, 1997 three parcels of land together with
the existing improvements, 366 lots with existing low cost houses, and 102 condominium units located on
Scout Rallos Street, Quezon City to the Government Service Insurance System (GSIS) to secure the payment
of a loan amounting to Six Hundred Million (P600,000,000) Pesos. The mortgaged properties included
Condominium Unit 312 (the condominium unit) which was later sold by NSJBI to respondent spouses
Marcelino and Alma De los Reyes (spouses De los Reyes) by Deed of Absolute Sale dated May 28, 2001.
NSJBI defaulted in its loan obligation, hence, the GSIS foreclosed the mortgage and purchased the
properties covered thereby on June 17, 2003. The Certificate of Sale, dated June 20, 2003, issued to GSIS
was registered with the Registry of Deeds of Quezon City on September 19, 2003.
The spouses De los Reyes later discovered the mortgage and eventual sale of the condominium unit to
GSIS, hence, they filed on June 15, 2004, a complaint against herein respondents NSJBI, et al. with the
Housing and Land Use Regulatory Board (HLURB), docketed as REM - 061504-12726,[1] praying as follows:
1. Ordering the revocation of the Certificate of Registration and License to Sell of the respondent
corporation, New San Jose Builders, Inc. (NSJBI);
2. Ordering the respondent corporation New San Jose Builders, Inc. (NSJBI) and the individual
respondents Rey L. Vergara and Carol B. Ros to immediately cause the release and delivery to
herein complainants of the Condominium Certificate of Title No. N-18117 covering Unit 312 of Saint
John Condominium, free from all liens and encumbrances;
3. Ordering the respondent Government Service Insurance System to release the mortgage on
Condominium Certificate of Title No. N-18117 covering Unit 312 of Saint John Condominium;
4. Ordering the respondent corporation New San Jose Builders, Inc. (NSJBI) and individual
respondents President Rey L. Vergara and AVP for Marketing Carol B. Ros to indemnify the
complainants, jointly and severally, the following amounts . . .
x x x x[2]

In its Answer, GSIS claimed that the spouses De los Reyes had no cause of action against it as the mortgage
was executed prior to the sale of the condominium unit[3] to which sale it (GSIS) was not a party.

Before the expiration of the redemption period or on September 20, 2004, the spouses De los Reyes filed
an Urgent Motion for Issuance of a Writ of Preliminary Injunction with Prayer for a Temporary Restraining
Order to restrain GSIS from consolidating its title to the condominium unit.
GSIS opposed the motion, alleging that Presidential Decree (PD) No. 385,[4] in relation to Letter of
Instruction No. 411, prohibits the issuance of a restraining order against any government financial
institution in any action taken by it in compliance with the mandatory foreclosure under said PD.[5]
By Order of November 16, 2004,[6] House and Land Use Arbiter Rowena C. Balasolla granted the spouses De
los Reyes's motion and issued a Cease and Desist Order (CDO) restraining GSIS from consolidating
ownership of the condominium unit.
On the appeal of GSIS, the HLURB Second Division, by Decision of June 23, 2005, affirmed the Arbiter's
ruling, it holding that PD No. 385 applies only to on-going foreclosure proceedings. Besides, it noted that
. . . an examination of the project's technical docket shows that no mortgage clearance was secured
beforehand. Thus, said respondents violated Section 18 of P.D. No. 957 which provides that no mortgage
on any unit or lot shall be made by the owner or developer without prior written approval of this Board.
This being so, the said mortgage and the incidents which transpired subsequent thereto are void.[7]
(emphasis and underscoring supplied)

GSIS's motion for reconsideration, filed before the Board En Banc, was denied by the Second Division by
Resolution of October 21, 2005, prompting it to file a petition for certiorari before the Court of Appeals.
In addition to its arguments proffered before the HLURB, GSIS alleged that the HLURB acted without
jurisdiction, for only three members, instead of the nine-man Board of Commissioners, entertained the
appeal, contrary to the mandate of Sections 5 and 6(a) of Executive Order (E.O.) No. 648 (1981), as
amended.[8]
The Court of Appeals, by Decision of June 28, 2007,[9] dismissed GSIS's petition and accordingly ordered the
Arbiter to proceed with dispatch in the disposition of the spouses De los Reyes's complaint.
In dismissing GSIS's petition, the appellate court held that the HLURB Second Division did not abuse its
discretion in taking jurisdiction over GSIS's motion for reconsideration-appeal, for 2004, the HLURB Revised
Rules of Procedure provides that appeals shall be decided by the Board of Commissioners sitting en banc or
by division in accordance with the internal rules of the Board.[10]
On the merits, the Court of Appeals ratiocinated that the requisites for the issuance of a writ of preliminary
injunction were present; and since the act sought to be enjoined pertains to the consolidation process, it is
outside the intended ambit of PD No. 385.
GSIS's motion for reconsideration having been denied by the appellate court by Resolution of October 10,
2007, the present petition for review was filed.
GSIS argues in the main that the HLURB Revised Rules of Procedure did not vest authority in the Board's

Second Division to entertain appeals.

The Court is not persuaded.
Section 5 of E.O. No. 648 specifically mandates the HLURB Board of Commissioners to adopt rules of
procedure for the conduct of its business and perform such functions necessary for the effective discharge
thereof. Such grant of power necessary to carry out its functions has been held to be an adequate source of
authority to delegate a particular function, unless, by express provision of the Act or by implication, it has
been withheld.[11]
The present composition of the Board of Commissioners,[12] wherein five out of its nine members sit in exofficio capacity while the remaining four serve as full time commissioners, practicality necessitates the
establishment of a procedure whereby a case on appeal may be decided by members of a division.
Since the 2004 HLURB Rules of Procedure provides that a motion for reconsideration shall be assigned to
the Division from which the decision, order or ruling originated,[13] the questioned cognizance by the HLURB
Second Division of GSIS's motion for reconsideration is in order.
Respecting GSIS's argument that PD No. 385 prohibits the issuance of a CDO, the pertinent provisions of the
decree read:
Section 1. It shall be mandatory for government financial institutions, after the lapse of sixty (60) days from
the issuance of this Decree, to foreclose the collaterals and/or securities for any loan, credit,
accommodation, and/or guarantees granted by them whenever the arrearages on such account, including
accrued interest and other charges, amount to at least twenty percent (20%) of the total outstanding
obligations, including interest and other charges, as appearing in the books of account and/or related
records of the financial institution concerned. This shall be without prejudice to the exercise by the
government financial institutions of such rights and/or remedies available to them under their respective
contracts with their debtors, including the right to foreclose on loans, credits, accommodations and/or
guarantees on which the arrearages are less than twenty percent (20%).
Section 2. No restraining order, temporary or permanent injunction shall be issued by the court against any
government financial institution in any action taken by such institution in compliance with the mandatory
foreclosure provided in Section 1 hereof, whether such restraining order, temporary or permanent
injunction is sought by the borrower(s) or any third party or parties, except after due hearing in which it is
established by the borrower and admitted by the government financial institution concerned that twenty
percent (20%) of the outstanding arrearages has been paid after the filing of foreclosure proceedings.
In case a restraining order or injunction is issued, the borrower shall nevertheless be legally obligated to
liquidate the remaining balance of the arrearages outstanding as of the time of foreclosure, plus interest
and other charges, on every succeeding thirtieth (30th) day after the issuance of such restraining order or
injunction until the entire arrearages have been liquidated. These shall be in addition to the payment of
amortization currently maturing. The restraining order or injunction shall automatically be dissolved should
the borrower fail to make any of the above-mentioned payments on due dates, and no restraining order or
injunction shall be issued thereafter. This shall be without prejudice to the exercise by the government
financial institutions of such rights and/or remedies available to them under their respective charters and

their respective contracts with their debtors, nor should this provision be construed as restricting the
government financial institutions concerned from approving, solely at its own discretion, any restructuring,
recapitalization, or any other arrangement that would place the entire account on a current basis,
provided, however, that at least twenty percent (20%) of the arrearages outstanding at the time of the
foreclosure is paid.
All restraining orders and injunctions existing as of the date of this Decree on foreclosure proceedings filed
by said government financial institutions shall be considered lifted unless finally resolved by the court
within sixty (60) days from date hereof. (underscoring supplied)

The act subject of the CDO was the intended consolidation by the GSIS of ownership of the condominium
unit, not the mandatory foreclosure of the mortgage. At any rate, the second paragraph of the abovequoted Section 2 of PD No. 385 in fact recognizes the eventuality that an injunction may be issued against a
government financial institution, hence, it obliges the borrower to liquidate the arrearages due in order to
safeguard the interests of the government financial institution-lender.
Undoubtedly, the jurisdiction of the HLURB to regulate the real estate business is broad enough to include
jurisdiction over a complaint for annulment of foreclosure sale and mortgage and the grant of incidental
reliefs such as a CDO. [14] Even Presidential Decree No. 957, "The Subdivision and Condominium Buyers
Protective Decree," authorizes the HLURB as successor of the National Housing Authority to issue CDOs in
relevant cases, viz:
SECTION 16. Cease and Desist Order. -- Whenever it shall appear to the Authority that any person is
engaged or about to engage in any act or practice which constitutes or will constitute a violation of the
provisions of this Decree, or of any rule or regulation thereunder, it may, upon due notice and hearing as
provided in Section 13 hereof, issue a cease and desist order to enjoin such act or practices.

WHEREFORE, the challenged Court of Appeals Decision of June 28, 2007 is AFFIRMED. The Housing and
Land Use Arbiter is ORDERED to proceed with dispatch with private respondent spouses De los Reyes's
complaint.
SO ORDERED.

THIRD DIVISION
[ G.R. No. 151800, November 05, 2009 ]
OFFICE OF THE OMBUDSMAN, REPRESENTED BY HON. ANIANO A. DESIERTO, PETITIONER, VS. HEIRS OF
MARGARITA VDA. DE VENTURA, REPRESENTED BY PACITA V. PASCUAL, EMILIANO EUSEBIO, JR., AND
CARLOS RUSTIA, RESPONDENTS.
DECISION

PERALTA, J.:
This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court, praying that the
Decision[1] of the Court of Appeals (CA) dated February 27, 2001, and the CA Resolution[2] dated December
11, 2001, be reversed and set aside.
The undisputed facts are as follows.
On November 17, 1996, respondents filed with the Office of the Ombudsman a Complaint for Falsification
of Public Documents and Violation of Section 3, paragraph (e)[3] of Republic Act (R.A.) No. 3019, as
amended (the Anti-Graft and Corrupt Practices Act) against Zenaida H. Palacio and spouses Edilberto and
Celerina Darang. Respondents alleged therein that Palacio, then officer-in-charge of the Department of
Agrarian Reform (DAR) Office in San Jose City, Nueva Ecija, designated Celerina Darang, Senior Agrarian
Reform Program Technologist stationed at Sto. Tomas, San Jose City, to investigate the claims of
respondents against the former's husband Edilberto Darang; that Celerina Darang accepted such
designation, conducted an investigation and rendered a report favorable to her husband, Edilberto Darang;
that Celerina Darang supported such report with public documents which she falsified; and that Palacios
then issued a recommendation, based on Celerina Darang's report, to award the landholding in dispute to
Edilberto Darang.[4]
Acting on respondents' complaint against the aforementioned DAR officers and Edilberto Darang,
petitioner issued a Resolution[5] dated June 9, 1998, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, it is respectfully recommended that the charge against respondents for
falsification of public documents be dismissed for insufficiency of evidence.
It is further recommended that the charge against respondents for Violation of Section 3, par. (e) of R.A.
No. 3019, as amended, be provisionally dismissed. This is, however, without prejudice to its re-opening
should the outcome of DARAB Case No. 0040 pending before the DAR Adjudication Board, Diliman, Quezon
City, so warrant.
SO RESOLVED.[6]
Respondents filed several motions seeking reconsideration of the above Resolution, all of which were
denied.
Herein respondents then filed a petition for certiorari and mandamus with this Court, but per Resolution

dated July 14, 1999, the petition was referred to the CA. On February 27, 2001, the CA promulgated the
assailed Decision, the dispositive portion of which is reproduced hereunder:
WHEREFORE, premises considered, the petition for certiorari, in regard to the public respondent's
Resolution dated June 09, 1998 and Orders dated August 06 and 26, 1998 in OMB-196-2268, is hereby
DENIED as to the dismissal of the complaint against private respondents for falsification of public
documents, but GRANTED as to the provisional dismissal of the complaint for violation of Section 3, Par. (e)
of R.A. 3019, as amended, which is hereby REVERSED and SET ASIDE for having been done with grave
abuse of discretion, and consequently, the appropriate criminal charges under the Anti-Graft and Corrupt
Practices Act are hereby ordered filed against the individual respondents.
SO ORDERED.[7]

Petitioner's motion for reconsideration of the CA Decision was denied in its Resolution dated December 11,
2001.
Hence, this petition, where it is alleged that:
I

THE COURT OF APPEALS HAS NO JURISDICTION TO REVIEW THE FINDINGS OF PROBABLE CAUSE BY THE
OMBUDSMAN IN CRIMINAL CASE OMB-1-96-2268.
II

THE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE OMBUDSMAN'S PROVISIONAL DISMISSAL
OF OMB-1-96-2268 WAS INFIRM, AS THE SAID COURT CANNOT COMPEL THE OMBUDSMAN TO USURP THE
PREROGATIVES AND FUNCTIONS OF THE DARAB.
III

THE COURT OF APPEALS HAS NO AUTHORITY TO DETERMINE THE EXISTENCE OF PROBABLE CAUSE IN OMB1-96-2268 AS SUCH AUTHORITY IS GIVEN EXCLUSIVELY TO THE OMBUDSMAN.[8]

The petition deserves ample consideration.

The crux of the matter is whether the CA has jurisdiction over decisions and orders of the Ombudsman in
criminal cases. This issue has been directly addressed in Kuizon v. Desierto[9] and reiterated in the more
recent Golangco v. Fung,[10] wherein the Court declared, thus:
The Court of Appeals has jurisdiction over orders, directives and decisions of the Office of the
Ombudsman in administrative disciplinary cases only. It cannot, therefore, review the orders, directives
or decisions of the Office of the Ombudsman in criminal or non-administrative cases.

In Kuizon v. Desierto, this Court clarified:

The appellate court correctly ruled that its jurisdiction extends only to decisions of the Office of the
Ombudsman in administrative cases. In the Fabian case, we ruled that appeals from decisions of the Office
of the Ombudsman in administrative disciplinary cases should be taken to the Court of Appeals under Rule
43 of the 1997 Rules of Civil Procedure. It bears stressing that when we declared Section 27 of Republic Act
No. 6770 as unconstitutional, we categorically stated that said provision is involved only whenever an
appeal by certiorari under Rule 45 is taken from a decision in an administrative disciplinary action. It cannot
be taken into account where an original action for certiorari under Rule 65 is resorted to as a remedy for
judicial review, such as from an incident in a criminal action.
x x x It is settled that a judgment rendered by a court without jurisdiction over the subject matter is void.
Since the Court of Appeals has no jurisdiction over decisions and orders of the Ombudsman in criminal
cases, its ruling on the same is void.[11]

The question that arises next is what remedy should an aggrieved party avail of to assail the Ombudsman's
finding of the existence or lack of probable cause in criminal cases or non-administrative cases. In Estrada v.
Desierto,[12] the Court emphasized that parties seeking to question the resolutions of the Office of the
Ombudsman in criminal cases or non-administrative cases, may file an original action for certiorari with this
Court, not with the CA, when it is believed that the Ombudsman acted with grave abuse of discretion.
Respondents originally filed a petition for certiorari before this Court but the same was referred to the CA.
It, thus, behooves this Court to now look into whether the Ombudsman indeed acted with grave abuse of
discretion in dismissing the charge of Falsification of Public Documents and provisionally dismissing the
charge of Violation of Section 3, par. (e) of R.A. No. 3019, as amended, against Zenaida H. Palacio and
spouses Edilberto and Celerina Darang.
A close examination of the records will reveal that the Ombudsman acted properly in dismissing the charge
for falsification of public documents because herein respondents utterly failed to identify the supposedly
falsified documents and submit certified true copies thereof. In fact, respondents admitted in their petition
for certiorari, originally filed with this Court but referred to the CA, that they had not yet submitted
documents in support of the charge for falsification of documents as they intended to present the same in
a formal preliminary investigation, which they expected to be conducted by the Ombudsman.[13] However,
it has long been acknowledged that in administrative proceedings, even those before the Ombudsman, a
formal hearing is not required and cases may be submitted for resolution based only on affidavits,
supporting documents and pleadings. Such procedure has been held to be sufficient compliance with the
requirements of procedural due process as all that is needed is an opportunity to explain one's side or an
opportunity to seek reconsideration of the action or ruling complained of.[14] In this case, records show that
respondents had been afforded such opportunities.
As to the provisional dismissal of the charge for Violation of Section 3 par. (e) of R.A. No. 3019, as amended,
the Court likewise finds no reason to overturn the ruling of the Ombudsman. The hornbook doctrine
emphasized in Presidential Commission on Good Government v. Desierto[15] must be borne in mind, to wit:
x x x the Supreme Court will not ordinarily interfere with the Ombudsman's exercise of his investigatory
and prosecutory powers without good and compelling reasons to indicate otherwise. Said exercise of

powers is based upon his constitutional mandate and the courts will not interfere in its exercise. The rule
is based not only upon respect for the investigatory and prosecutory powers granted by the Constitution to
the Office of the Ombudsman, but upon practicality as well. Otherwise, innumerable petitions seeking
dismissal of investigatory proceedings conducted by the Ombudsman will grievously hamper the functions
of the office and the courts, in much the same way that courts will be swamped if they had to review the
exercise of discretion on the part of public prosecutors each time they decided to file an information or
dismiss a complaint by a private complainant.[16]

Nevertheless, the Ombudsman's discretion in determining the existence of probable cause is not absolute.
However, it is incumbent upon petitioner to prove that such discretion was gravely abused in order to
warrant the reversal of the Ombudsman's findings by this Court.[17]
In Velasco v. Commission on Elections,[18] the Court defined "grave abuse of discretion" as follows:
x x x grave abuse of discretion is such "capricious and whimsical exercise of judgment as is equivalent to
lack of jurisdiction, or [an] exercise of power in an arbitrary and despotic manner by reason of passion or
personal hostility, or an exercise of judgment so patent and gross as to amount to an evasion of a positive
duty or to a virtual refusal to perform the duty enjoined, or to act in a manner not at all in contemplation of
law."

Here, the Ombudsman based its provisional dismissal on the ground that the case between the same
parties before the DAR Adjudication Board (DARAB), DARAB Case No. 0040, had not yet reached finality, as
there was a pending Motion for Relief from Judgment that was yet to be resolved. The Ombudsman
reasoned out that since what Section 3, par. (e), R.A. No. 3019 penalized was the giving of unwarranted
advantage or preference to a private party, it was only prudent to await the final resolution in DARAB Case
No. 0040, which would show if the favorable recommendation given by Celerina Darang benefiting her
husband Edilberto was, indeed, unjustified, unwarranted or unfounded.
The Ombudsman's reasoning was not unfounded. Note that the elements of the offense in Section 3(e) are:
(1) that the accused are public officers or private persons charged in conspiracy with them; (2) that said
public officers have committed the prohibited acts during the performance of their official duties or in
relation to their public positions; (3) that they have caused undue injury to a party, whether the
Government or a private party; (4) that such injury was caused by giving an unwarranted benefit,
advantage or preference to such party; and (5) that the public officers have acted with manifest partiality,
evident bad faith or gross inexcusable negligence.[19] From the foregoing, it can be seen that the
complainants must show that the benefits, advantage or preference given to a party is unwarranted. Since
the main issue in DARAB Case No. 0040 is whether the disputed parcel of land should be awarded to
Edilberto Darang, then it is true that a final resolution of the aforementioned DARAB case would establish
whether the benefit or advantage given to him was indeed unwarranted.
Verily, the action of the Ombudsman in provisionally dismissing the complaint for violation of Section 3(e),
without prejudice to its re-opening upon final resolution of DARAB Case No. 0040, is not whimsical or
arbitrary. Such action finds support in the Court's rulings that a trial court, or in this case a quasi-judicial
tribunal, has the inherent power to control the disposition of cases by holding in abeyance the proceedings
before it in the exercise of its sound discretion to await the outcome of another case pending in another

court or body, especially where the parties and the issues are the same. This is to avoid multiplicity of suits
and prevent vexatious litigations, conflicting judgments, confusion between litigants and courts, and
ensuring economy of time and effort for itself, for counsel, and for litigants. Where the rights of parties to
the second action (in this case, the criminal complaint for violation of Section 3(e) before the Ombudsman)
cannot be properly determined until the questions raised in the first action (DARAB Case No. 0040) are
settled, the second action should be stayed.[20]
The reason behind the doctrine of primary jurisdiction may also be applied here by analogy. The objective
of said doctrine is to guide a court in determining whether it should refrain from exercising its jurisdiction
until after an administrative agency, which has special knowledge, experience and tools to determine
technical and intricate matters of fact, has determined some question or a particular aspect of some
question arising in the proceeding before the court.[21] This is not to say that the Ombudsman cannot
acquire jurisdiction or take cognizance of a criminal complaint until after the administrative agency has
decided on a particular issue that is also involved in the complaint before it. Rather, using the same
reasoning behind the doctrine of primary jurisdiction, it is only prudent and practical for the Ombudsman
to refrain from proceeding with the criminal action until after the DARAB, which is the administrative
agency with special knowledge and experience over agrarian matters, has arrived at a final resolution on
the issue of whether Edilberto Darang is indeed entitled under the law to be awarded the land in dispute.
This would establish whether the benefits or advantages given to him by the public officials charged under
the complaint, are truly unwarranted.
Thus, aside from the fact that the CA has no jurisdiction over decisions and orders of the Ombudsman in
criminal cases, it was also incorrect to hold that the Ombudsman acted with grave abuse of discretion. The
Court finds no cogent reason to disturb the assailed Resolution of the Ombudsman.
IN VIEW OF THE FOREGOING, the petition is GRANTED. The Decision of the Court of Appeals dated
February 27, 2001, reversing the Resolution of the Office of the Ombudsman, dated June 9, 1998, and its
Resolution dated December 11, 2001, are declared VOID.
SO ORDERED.

SECOND DIVISION
[ G.R. No. 171092, March 15, 2010 ]
EDNA DIAGO LHUILLIER, PETITIONER, VS. BRITISH AIRWAYS, RESPONDENT.
DECISION

DEL CASTILLO, J.:

Jurisdictio est potestas de publico introducta cum necessitate juris dicendi. Jurisdiction is a power
introduced for the public good, on account of the necessity of dispensing justice.[1]
Factual Antecedents
On April 28, 2005, petitioner Edna Diago Lhuillier filed a Complaint[2] for damages against respondent
British Airways before the Regional Trial Court (RTC) of Makati City. She alleged that on February 28, 2005,
she took respondent's flight 548 from London, United Kingdom to Rome, Italy. Once on board, she allegedly
requested Julian Halliday (Halliday), one of the respondent's flight attendants, to assist her in placing her
hand-carried luggage in the overhead bin. However, Halliday allegedly refused to help and assist her, and
even sarcastically remarked that "If I were to help all 300 passengers in this flight, I would have a broken
back!"
Petitioner further alleged that when the plane was about to land in Rome, Italy, another flight attendant,
Nickolas Kerrigan (Kerrigan), singled her out from among all the passengers in the business class section to
lecture on plane safety. Allegedly, Kerrigan made her appear to the other passengers to be ignorant,
uneducated, stupid, and in need of lecturing on the safety rules and regulations of the plane. Affronted,
petitioner assured Kerrigan that she knew the plane's safety regulations being a frequent traveler.
Thereupon, Kerrigan allegedly thrust his face a mere few centimeters away from that of the petitioner and
menacingly told her that "We don't like your attitude."
Upon arrival in Rome, petitioner complained to respondent's ground manager and demanded an apology.
However, the latter declared that the flight stewards were "only doing their job."
Thus, petitioner filed the complaint for damages, praying that respondent be ordered to pay P5 million as
moral damages, P2 million as nominal damages, P1 million as exemplary damages, P300,000.00 as
attorney's fees, P200,000.00 as litigation expenses, and cost of the suit.
On May 16, 2005, summons, together with a copy of the complaint, was served on the respondent through
Violeta Echevarria, General Manager of Euro-Philippine Airline Services, Inc.[3]
On May 30, 2005, respondent, by way of special appearance through counsel, filed a Motion to Dismiss[4]
on grounds of lack of jurisdiction over the case and over the person of the respondent. Respondent alleged
that only the courts of London, United Kingdom or Rome, Italy, have jurisdiction over the complaint for
damages pursuant to the Warsaw Convention,[5] Article 28(1) of which provides:

An action for damages must be brought at the option of the plaintiff, either before the court of domicile of
the carrier or his principal place of business, or where he has a place of business through which the
contract has been made, or before the court of the place of destination.
Thus, since a) respondent is domiciled in London; b) respondent's principal place of business is in London; c)
petitioner bought her ticket in Italy (through Jeepney Travel S.A.S, in Rome);[6] and d) Rome, Italy is
petitioner's place of destination, then it follows that the complaint should only be filed in the proper courts
of London, United Kingdom or Rome, Italy.
Likewise, it was alleged that the case must be dismissed for lack of jurisdiction over the person of the
respondent because the summons was erroneously served on Euro-Philippine Airline Services, Inc. which is
not its resident agent in the Philippines.
On June 3, 2005, the trial court issued an Order requiring herein petitioner to file her Comment/Opposition
on the Motion to Dismiss within 10 days from notice thereof, and for respondent to file a Reply thereon.[7]
Instead of filing a Comment/Opposition, petitioner filed on June 27, 2005, an Urgent Ex-Parte Motion to
Admit Formal Amendment to the Complaint and Issuance of Alias Summons.[8] Petitioner alleged that upon
verification with the Securities and Exchange Commission, she found out that the resident agent of
respondent in the Philippines is Alonzo Q. Ancheta. Subsequently, on September 9, 2005, petitioner filed a
Motion to Resolve Pending Incident and Opposition to Motion to Dismiss.[9]
Ruling of the Regional Trial Court
On October 14, 2005, the RTC of Makati City, Branch 132, issued an Order[10] granting respondent's Motion
to Dismiss. It ruled that:
The Court sympathizes with the alleged ill-treatment suffered by the plaintiff. However, our Courts have to
apply the principles of international law, and are bound by treaty stipulations entered into by the
Philippines which form part of the law of the land. One of this is the Warsaw Convention. Being a signatory
thereto, the Philippines adheres to its stipulations and is bound by its provisions including the place where
actions involving damages to plaintiff is to be instituted, as provided for under Article 28(1) thereof. The
Court finds no justifiable reason to deviate from the indicated limitations as it will only run counter to the
provisions of the Warsaw Convention. Said adherence is in consonance with the comity of nations and
deviation from it can only be effected through proper denunciation as enunciated in the Santos case (ibid).
Since the Philippines is not the place of domicile of the defendant nor is it the principal place of business,
our courts are thus divested of jurisdiction over cases for damages. Neither was plaintiff's ticket issued in
this country nor was her destination Manila but Rome in Italy. It bears stressing however, that referral to
the court of proper jurisdiction does not constitute constructive denial of plaintiff's right to have access to
our courts since the Warsaw Convention itself provided for jurisdiction over cases arising from international
transportation. Said treaty stipulations must be complied with in good faith following the time honored
principle of pacta sunt servanda.
The resolution of the propriety of service of summons is rendered moot by the Court's want of jurisdiction
over the instant case.
WHEREFORE, premises considered, the present Motion to Dismiss is hereby GRANTED and this case is
hereby ordered DISMISSED.

Petitioner filed a Motion for Reconsideration but the motion was denied in an Order[11] dated January 4,
2006.
Petitioner now comes directly before us on a Petition for Review on Certiorari on pure questions of law,
raising the following issues:
Issues

I.

WHETHER X X X PHILIPPINE COURTs HAVE JURISDICTION OVER A TORTIOUS CONDUCT COMMITTED

AGAINST A FILIPINO CITIZEN AND RESIDENT BY AIRLINE PERSONNEL OF A FOREIGN CARRIER
TRAVELLING BEYOND THE TERRITORIAL LIMIT OF ANY FOREIGN COUNTRY; AND THUS IS OUTSIDE
THE AMBIT OF THE WARSAW CONVENTION.

II.

WHETHER x x x RESPONDENT AIR CARRIER OF PASSENGERS, IN FILING ITS MOTION TO DISMISS

BASED ON LACK OF JURISDICTION OVER THE SUBJECT MATTER OF THE CASE AND OVER ITS PERSON
MAY BE DEEMED AS HAVING IN FACT AND IN LAW SUBMITTED ITSELF TO THE JURISDICTION OF
THE LOWER COURT, ESPECIALLY SO, WHEN THE VERY LAWYER ARGUING FOR IT IS HIMSELF THE
RESIDENT AGENT OF THE CARRIER.

Petitioner's Arguments
Petitioner argues that her cause of action arose not from the contract of carriage, but from the tortious
conduct committed by airline personnel of respondent in violation of the provisions of the Civil Code on
Human Relations. Since her cause of action was not predicated on the contract of carriage, petitioner
asserts that she has the option to pursue this case in this jurisdiction pursuant to Philippine laws.
Respondent's Arguments
In contrast, respondent maintains that petitioner's claim for damages fell within the ambit of Article 28(1)
of the Warsaw Convention. As such, the same can only be filed before the courts of London, United
Kingdom or Rome, Italy.
Our Ruling

The petition is without merit.

The Warsaw Convention has the force and effect of law in this country.
It is settled that the Warsaw Convention has the force and effect of law in this country. In Santos III v.
Northwest Orient Airlines,[12] we held that:
The Republic of the Philippines is a party to the Convention for the Unification of Certain Rules Relating to
International Transportation by Air, otherwise known as the Warsaw Convention. It took effect on February
13, 1933. The Convention was concurred in by the Senate, through its Resolution No. 19, on May 16, 1950.

The Philippine instrument of accession was signed by President Elpidio Quirino on October 13, 1950, and
was deposited with the Polish government on November 9, 1950. The Convention became applicable to the
Philippines on February 9, 1951. On September 23, 1955, President Ramon Magsaysay issued Proclamation
No. 201, declaring our formal adherence thereto, "to the end that the same and every article and clause
thereof may be observed and fulfilled in good faith by the Republic of the Philippines and the citizens
thereof."
The Convention is thus a treaty commitment voluntarily assumed by the Philippine government and, as
such, has the force and effect of law in this country.[13]

The Warsaw Convention applies

because the air travel, where the
alleged tortious conduct occurred,
was between the United Kingdom
and Italy, which are both signatories
to the Warsaw Convention.
Article 1 of the Warsaw Convention provides:
1. This Convention applies to all international carriage of persons, luggage or goods performed by
aircraft for reward. It applies equally to gratuitous carriage by aircraft performed by an air
transport undertaking.
2. For the purposes of this Convention the expression "international carriage" means any carriage in
which, according to the contract made by the parties, the place of departure and the place of
destination, whether or not there be a break in the carriage or a transhipment, are situated either
within the territories of two High Contracting Parties, or within the territory of a single High
Contracting Party, if there is an agreed stopping place within a territory subject to the sovereignty,
suzerainty, mandate or authority of another Power, even though that Power is not a party to this
Convention. A carriage without such an agreed stopping place between territories subject to the
sovereignty, suzerainty, mandate or authority of the same High Contracting Party is not deemed to
be international for the purposes of this Convention. (Emphasis supplied)

Thus, when the place of departure and the place of destination in a contract of carriage are situated within
the territories of two High Contracting Parties, said carriage is deemed an "international carriage". The High
Contracting Parties referred to herein were the signatories to the Warsaw Convention and those which
subsequently adhered to it.[14]
In the case at bench, petitioner's place of departure was London, United Kingdom while her place of
destination was Rome, Italy.[15] Both the United Kingdom[16] and Italy[17] signed and ratified the Warsaw
Convention. As such, the transport of the petitioner is deemed to be an "international carriage" within the
contemplation of the Warsaw Convention.
Since the Warsaw Convention applies
in the instant case, then the jurisdiction

over the subject matter of the action

is governed by the provisions of the
Warsaw Convention.
Under Article 28(1) of the Warsaw Convention, the plaintiff may bring the action for damages before 1. the court where the carrier is domiciled;
2. the court where the carrier has its principal place of business;
3. the court where the carrier has an establishment by which the contract has been made; or
4. the court of the place of destination.

In this case, it is not disputed that respondent is a British corporation domiciled in London, United Kingdom
with London as its principal place of business. Hence, under the first and second jurisdictional rules, the
petitioner may bring her case before the courts of London in the United Kingdom. In the passenger ticket
and baggage check presented by both the petitioner and respondent, it appears that the ticket was issued
in Rome, Italy. Consequently, under the third jurisdictional rule, the petitioner has the option to bring her
case before the courts of Rome in Italy. Finally, both the petitioner and respondent aver that the place of
destination is Rome, Italy, which is properly designated given the routing presented in the said passenger
ticket and baggage check. Accordingly, petitioner may bring her action before the courts of Rome, Italy. We
thus find that the RTC of Makati correctly ruled that it does not have jurisdiction over the case filed by the
petitioner.
Santos III v. Northwest Orient
Airlines[18] applies in this case.
Petitioner contends that Santos III v. Northwest Orient Airlines[19] cited by the trial court is inapplicable to
the present controversy since the facts thereof are not similar with the instant case.
We are not persuaded.
In Santos III v. Northwest Orient Airlines,[20] Augusto Santos III, a resident of the Philippines, purchased a
ticket from Northwest Orient Airlines in San Francisco, for transport between San Francisco and Manila via
Tokyo and back to San Francisco. He was wait-listed in the Tokyo to Manila segment of his ticket, despite
his prior reservation. Contending that Northwest Orient Airlines acted in bad faith and discriminated
against him when it canceled his confirmed reservation and gave his seat to someone who had no better
right to it, Augusto Santos III sued the carrier for damages before the RTC. Northwest Orient Airlines moved
to dismiss the complaint on ground of lack of jurisdiction citing Article 28(1) of the Warsaw Convention. The
trial court granted the motion which ruling was affirmed by the Court of Appeals. When the case was
brought before us, we denied the petition holding that under Article 28(1) of the Warsaw Convention,
Augusto Santos III must prosecute his claim in the United States, that place being the (1) domicile of the
Northwest Orient Airlines; (2) principal office of the carrier; (3) place where contract had been made (San
Francisco); and (4) place of destination (San Francisco).[21]
We further held that Article 28(1) of the Warsaw Convention is jurisdictional in character. Thus:

A number of reasons tends to support the characterization of Article 28(1) as a jurisdiction and not a venue
provision. First, the wording of Article 32, which indicates the places where the action for damages "must"
be brought, underscores the mandatory nature of Article 28(1). Second, this characterization is consistent
with one of the objectives of the Convention, which is to "regulate in a uniform manner the conditions of
international transportation by air." Third, the Convention does not contain any provision prescribing rules
of jurisdiction other than Article 28(1), which means that the phrase "rules as to jurisdiction" used in Article
32 must refer only to Article 28(1). In fact, the last sentence of Article 32 specifically deals with the
exclusive enumeration in Article 28(1) as "jurisdictions," which, as such, cannot be left to the will of the
parties regardless of the time when the damage occurred.
xxxx
In other words, where the matter is governed by the Warsaw Convention, jurisdiction takes on a dual
concept. Jurisdiction in the international sense must be established in accordance with Article 28(1) of the
Warsaw Convention, following which the jurisdiction of a particular court must be established pursuant to
the applicable domestic law. Only after the question of which court has jurisdiction is determined will the
issue of venue be taken up. This second question shall be governed by the law of the court to which the
case is submitted.[22]

Contrary to the contention of petitioner, Santos III v. Northwest Orient Airlines[23] is analogous to the instant
case because (1) the domicile of respondent is London, United Kingdom;[24] (2) the principal office of
respondent airline is likewise in London, United Kingdom;[25] (3) the ticket was purchased in Rome, Italy;[26]
and (4) the place of destination is Rome, Italy.[27] In addition, petitioner based her complaint on Article
2176[28] of the Civil Code on quasi-delict and Articles 19[29] and 21[30] of the Civil Code on Human Relations.
In Santos III v. Northwest Orient Airlines,[31] Augusto Santos III similarly posited that Article 28 (1) of the
Warsaw Convention did not apply if the action is based on tort. Hence, contrary to the contention of the
petitioner, the factual setting of Santos III v. Northwest Orient Airlines[32] and the instant case are parallel on
the material points.
Tortious conduct as ground for the
petitioner's complaint is within the
purview of the Warsaw Convention.
Petitioner contends that in Santos III v. Northwest Orient Airlines,[33] the cause of action was based on a
breach of contract while her cause of action arose from the tortious conduct of the airline personnel and
violation of the Civil Code provisions on Human Relations.[34] In addition, she claims that our
pronouncement in Santos III v. Northwest Orient Airlines[35] that "the allegation of willful misconduct
resulting in a tort is insufficient to exclude the case from the comprehension of the Warsaw Convention," is
more of an obiter dictum rather than the ratio decidendi.[36] She maintains that the fact that said acts
occurred aboard a plane is merely incidental, if not irrelevant.[37]
We disagree with the position taken by the petitioner. Black defines obiter dictum as "an opinion entirely
unnecessary for the decision of the case" and thus "are not binding as precedent."[38] In Santos III v.
Northwest Orient Airlines,[39] Augusto Santos III categorically put in issue the applicability of Article 28(1) of
the Warsaw Convention if the action is based on tort.

In the said case, we held that the allegation of willful misconduct resulting in a tort is insufficient to exclude
the case from the realm of the Warsaw Convention. In fact, our ruling that a cause of action based on tort
did not bring the case outside the sphere of the Warsaw Convention was our ratio decidendi in disposing of
the specific issue presented by Augusto Santos III. Clearly, the contention of the herein petitioner that the
said ruling is an obiter dictum is without basis.
Relevant to this particular issue is the case of Carey v. United Airlines,[40] where the passenger filed an
action against the airline arising from an incident involving the former and the airline's flight attendant
during an international flight resulting to a heated exchange which included insults and profanity. The
United States Court of Appeals (9th Circuit) held that the "passenger's action against the airline carrier
arising from alleged confrontational incident between passenger and flight attendant on international flight
was governed exclusively by the Warsaw Convention, even though the incident allegedly involved
intentional misconduct by the flight attendant."[41]
In Bloom v. Alaska Airlines,[42] the passenger brought nine causes of action against the airline in the state
court, arising from a confrontation with the flight attendant during an international flight to Mexico. The
United States Court of Appeals (9th Circuit) held that the "Warsaw Convention governs actions arising from
international air travel and provides the exclusive remedy for conduct which falls within its provisions." It
further held that the said Convention "created no exception for an injury suffered as a result of intentional
conduct" [43] which in that case involved a claim for intentional infliction of emotional distress.
It is thus settled that allegations of tortious conduct committed against an airline passenger during the
course of the international carriage do not bring the case outside the ambit of the Warsaw Convention.
Respondent, in seeking remedies from
the trial court through special appearance
of counsel, is not deemed to have voluntarily
submitted itself to the jurisdiction of the trial court.
Petitioner argues that respondent has effectively submitted itself to the jurisdiction of the trial court when
the latter stated in its Comment/Opposition to the Motion for Reconsideration that "Defendant [is at a loss]
x x x how the plaintiff arrived at her erroneous impression that it is/was Euro-Philippines Airlines Services,
Inc. that has been making a special appearance since x x x British Airways x x x has been clearly specifying in
all the pleadings that it has filed with this Honorable Court that it is the one making a special
appearance."[44]
In refuting the contention of petitioner, respondent cited La Naval Drug Corporation v. Court of Appeals[45]
where we held that even if a party "challenges the jurisdiction of the court over his person, as by reason of
absence or defective service of summons, and he also invokes other grounds for the dismissal of the action
under Rule 16, he is not deemed to be in estoppel or to have waived his objection to the jurisdiction over his
person."[46]
This issue has been squarely passed upon in the recent case of Garcia v. Sandiganbayan,[47] where we
reiterated our ruling in La Naval Drug Corporation v. Court of Appeals[48] and elucidated thus:

Special Appearance to Question a Court's Jurisdiction Is Not

Voluntary Appearance
The second sentence of Sec. 20, Rule 14 of the Revised Rules of Civil Procedure clearly provides:
Sec. 20. Voluntary appearance. - The defendant's voluntary appearance in the action shall be equivalent to
service of summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction
over the person of the defendant shall not be deemed a voluntary appearance.

Thus, a defendant who files a motion to dismiss, assailing the jurisdiction of the court over his person,
together with other grounds raised therein, is not deemed to have appeared voluntarily before the court.
What the rule on voluntary appearance - the first sentence of the above-quoted rule - means is that the
voluntary appearance of the defendant in court is without qualification, in which case he is deemed to have
waived his defense of lack of jurisdiction over his person due to improper service of summons.
The pleadings filed by petitioner in the subject forfeiture cases, however, do not show that she voluntarily
appeared without qualification. Petitioner filed the following pleadings in Forfeiture I: (a) motion to
dismiss; (b) motion for reconsideration and/or to admit answer; (c) second motion for reconsideration; (d)
motion to consolidate forfeiture case with plunder case; and (e) motion to dismiss and/or to quash
Forfeiture I. And in Forfeiture II: (a) motion to dismiss and/or to quash Forfeiture II; and (b) motion for
partial reconsideration.
The foregoing pleadings, particularly the motions to dismiss, were filed by petitioner solely for special
appearance with the purpose of challenging the jurisdiction of the SB over her person and that of her three
children. Petitioner asserts therein that SB did not acquire jurisdiction over her person and of her three
children for lack of valid service of summons through improvident substituted service of summons in both
Forfeiture I and Forfeiture II. This stance the petitioner never abandoned when she filed her motions for
reconsideration, even with a prayer to admit their attached Answer Ex Abundante Ad Cautelam dated
January 22, 2005 setting forth affirmative defenses with a claim for damages. And the other subsequent
pleadings, likewise, did not abandon her stance and defense of lack of jurisdiction due to improper
substituted services of summons in the forfeiture cases. Evidently, from the foregoing Sec. 20, Rule 14 of
the 1997 Revised Rules on Civil Procedure, petitioner and her sons did not voluntarily appear before the SB
constitutive of or equivalent to service of summons.
Moreover, the leading La Naval Drug Corp. v. Court of Appeals applies to the instant case. Said case
elucidates the current view in our jurisdiction that a special appearance before the court--challenging its
jurisdiction over the person through a motion to dismiss even if the movant invokes other grounds--is not
tantamount to estoppel or a waiver by the movant of his objection to jurisdiction over his person; and such
is not constitutive of a voluntary submission to the jurisdiction of the court.
Thus, it cannot be said that petitioner and her three children voluntarily appeared before the SB to cure the
defective substituted services of summons. They are, therefore, not estopped from questioning the
jurisdiction of the SB over their persons nor are they deemed to have waived such defense of lack of
jurisdiction. Consequently, there being no valid substituted services of summons made, the SB did not
acquire jurisdiction over the persons of petitioner and her children. And perforce, the proceedings in the

subject forfeiture cases, insofar as petitioner and her three children are concerned, are null and void for
lack of jurisdiction. (Emphasis supplied)

In this case, the special appearance of the counsel of respondent in filing the Motion to Dismiss and other
pleadings before the trial court cannot be deemed to be voluntary submission to the jurisdiction of the said
trial court. We hence disagree with the contention of the petitioner and rule that there was no voluntary
appearance before the trial court that could constitute estoppel or a waiver of respondent's objection to
jurisdiction over its person.
WHEREFORE, the petition is DENIED. The October 14, 2005 Order of
the Regional Trial Court of Makati City, Branch 132, dismissing the complaint for lack of jurisdiction, is
AFFIRMED.
SO ORDERED.

FIRST DIVISION
[ G.R. No. 164703, May 04, 2010 ]
ALLAN C. GO, DOING BUSINESS UNDER THE NAME AND STYLE "ACG EXPRESS LINER," PETITIONER, VS.
MORTIMER F. CORDERO, RESPONDENT.
[G.R. No. 164747]
MORTIMER F. CORDERO, PETITIONER, VS. ALLAN C. GO, DOING BUSINESS UNDER THE NAME AND STYLE
"ACG EXPRESS LINER," FELIPE M. LANDICHO AND VINCENT D. TECSON, RESPONDENTS.
DECISION

VILLARAMA, JR., J.:

For review is the Decision[1] dated March 16, 2004 as modified by the Resolution[2] dated July 22, 2004 of
the Court of Appeals (CA) in CA-G.R. CV No. 69113, which affirmed with modifications the Decision[3] dated
May 31, 2000 of the Regional Trial Court (RTC) of Quezon City, Branch 85 in Civil Case No. 98-35332.
The factual antecedents:
Sometime in 1996, Mortimer F. Cordero, Vice-President of Pamana Marketing Corporation (Pamana),
ventured into the business of marketing inter-island passenger vessels. After contacting various overseas
fast ferry manufacturers from all over the world, he came to meet Tony Robinson, an Australian national
based in Brisbane, Australia, who is the Managing Director of Aluminium Fast Ferries Australia (AFFA).
Between June and August 1997, Robinson signed documents appointing Cordero as the exclusive
distributor of AFFA catamaran and other fast ferry vessels in the Philippines. As such exclusive distributor,
Cordero offered for sale to prospective buyers the 25-meter Aluminium Passenger catamaran known as the
SEACAT 25.[4]
After negotiations with Felipe Landicho and Vincent Tecson, lawyers of Allan C. Go who is the
owner/operator of ACG Express Liner of Cebu City, a single proprietorship, Cordero was able to close a deal
for the purchase of two (2) SEACAT 25 as evidenced by the Memorandum of Agreement dated August 7,
1997.[5] Accordingly, the parties executed Shipbuilding Contract No. 7825 for one (1) high-speed catamaran
(SEACAT 25) for the price of US$1,465,512.00.[6] Per agreement between Robinson and Cordero, the latter
shall receive commissions totalling US$328,742.00, or 22.43% of the purchase price, from the sale of each
vessel.[7]
Cordero made two (2) trips to the AFFA Shipyard in Brisbane, Australia, and on one (1) occasion even
accompanied Go and his family and Landicho, to monitor the progress of the building of the vessel. He
shouldered all the expenses for airfare, food, hotel accommodations, transportation and entertainment
during these trips. He also spent for long distance telephone calls to communicate regularly with Robinson,
Go, Tecson and Landicho.
However, Cordero later discovered that Go was dealing directly with Robinson when he was informed by
Dennis Padua of Wartsila Philippines that Go was canvassing for a second catamaran engine from their

company which provided the ship engine for the first SEACAT 25. Padua told Cordero that Go instructed
him to fax the requested quotation of the second engine to the Park Royal Hotel in Brisbane where Go was
then staying. Cordero tried to contact Go and Landicho to confirm the matter but they were nowhere to be
found, while Robinson refused to answer his calls. Cordero immediately flew to Brisbane to clarify matters
with Robinson, only to find out that Go and Landicho were already there in Brisbane negotiating for the
sale of the second SEACAT 25. Despite repeated follow-up calls, no explanation was given by Robinson, Go,
Landicho and Tecson who even made Cordero believe there would be no further sale between AFFA and
ACG Express Liner.
In a handwritten letter dated June 24, 1998, Cordero informed Go that such act of dealing directly with
Robinson violated his exclusive distributorship and demanded that they respect the same, without
prejudice to legal action against him and Robinson should they fail to heed the same.[8] Cordero's lawyer,
Atty. Ernesto A. Tabujara, Jr. of ACCRA law firm, also wrote ACG Express Liner assailing the fraudulent
actuations and misrepresentations committed by Go in connivance with his lawyers (Landicho and Tecson)
in breach of Cordero's exclusive distributorship appointment.[9]
Having been apprised of Cordero's demand letter, Thyne & Macartney, the lawyer of AFFA and Robinson,
faxed a letter to ACCRA law firm asserting that the appointment of Cordero as AFFA's distributor was for
the purpose of one (1) transaction only, that is, the purchase of a high-speed catamaran vessel by ACG
Express Liner in August 1997. The letter further stated that Cordero was offered the exclusive
distributorship, the terms of which were contained in a draft agreement which Cordero allegedly failed to
return to AFFA within a reasonable time, and which offer is already being revoked by AFFA.[10]
As to the response of Go, Landicho and Tecson to his demand letter, Cordero testified before the trial court
that on the same day, Landicho, acting on behalf of Go, talked to him over the telephone and offered to
amicably settle their dispute. Tecson and Landicho offered to convince Go to honor his exclusive
distributorship with AFFA and to purchase all vessels for ACG Express Liner through him for the next three
(3) years. In an effort to amicably settle the matter, Landicho, acting in behalf of Go, set up a meeting with
Cordero on June 29, 1998 between 9:30 p.m. to 10:30 p.m. at the Mactan Island Resort Hotel lobby. On
said date, however, only Landicho and Tecson came and no reason was given for Go's absence. Tecson and
Landicho proposed that they will convince Go to pay him US$1,500,000.00 on the condition that they will
get a cut of 20%. And so it was agreed between him, Landicho and Tecson that the latter would give him a
weekly status report and that the matter will be settled in three (3) to four (4) weeks and neither party will
file an action against each other until a final report on the proposed settlement. No such report was made
by either Tecson or Landicho who, it turned out, had no intention to do so and were just buying time as the
catamaran vessel was due to arrive from Australia. Cordero then filed a complaint with the Bureau of
Customs (BOC) to prohibit the entry of SEACAT 25 from Australia based on misdeclaration and
undervaluation. Consequently, an Alert Order was issued by Acting BOC Commissioner Nelson Tan for the
vessel which in fact arrived on July 17, 1998. Cordero claimed that Go and Robinson had conspired to
undervalue the vessel by around US$500,000.00.[11]
On August 21, 1998, Cordero instituted Civil Case No. 98-35332 seeking to hold Robinson, Go, Tecson and
Landicho liable jointly and solidarily for conniving and conspiring together in violating his exclusive
distributorship in bad faith and wanton disregard of his rights, thus depriving him of his due commissions
(balance of unpaid commission from the sale of the first vessel in the amount of US$31,522.01 and unpaid
commission for the sale of the second vessel in the amount of US$328,742.00) and causing him actual,

moral and exemplary damages, including P800,000.00 representing expenses for airplane travel to
Australia, telecommunications bills and entertainment, on account of AFFA's untimely cancellation of the
exclusive distributorship agreement. Cordero also prayed for the award of moral and exemplary damages,
as well as attorney's fees and litigation expenses.[12]
Robinson filed a motion to dismiss grounded on lack of jurisdiction over his person and failure to state a
cause of action, asserting that there was no act committed in violation of the distributorship agreement.
Said motion was denied by the trial court on December 20, 1999. Robinson was likewise declared in default
for failure to file his answer within the period granted by the trial court.[13] As for Go and Tecson, their
motion to dismiss based on failure to state a cause of action was likewise denied by the trial court on
February 26, 1999.[14] Subsequently, they filed their Answer denying that they have anything to do with the
termination by AFFA of Cordero's authority as exclusive distributor in the Philippines. On the contrary, they
averred it was Cordero who stopped communicating with Go in connection with the purchase of the first
vessel from AFFA and was not doing his part in making progress status reports and airing the client's
grievances to his principal, AFFA, such that Go engaged the services of Landicho to fly to Australia and
attend to the documents needed for shipment of the vessel to the Philippines. As to the inquiry for the
Philippine price for a Wartsila ship engine for AFFA's other on-going vessel construction, this was merely
requested by Robinson but which Cordero misinterpreted as indication that Go was buying a second vessel.
Moreover, Landicho and Tecson had no transaction whatsoever with Cordero who had no document to
show any such shipbuilding contract. As to the supposed meeting to settle their dispute, this was due to the
malicious demand of Cordero to be given US$3,000,000 as otherwise he will expose in the media the
alleged undervaluation of the vessel with the BOC. In any case, Cordero no longer had cause of action for
his commission for the sale of the second vessel under the memorandum of agreement dated August 7,
1997 considering the termination of his authority by AFFA's lawyers on June 26, 1998.[15]
Pre-trial was reset twice to afford the parties opportunity to reach a settlement. However, on motion filed
by Cordero through counsel, the trial court reconsidered the resetting of the pre-trial to another date for
the third time as requested by Go, Tecson and Landicho, in view of the latter's failure to appear at the pretrial conference on January 7, 2000 despite due notice. The trial court further confirmed that said
defendants misled the trial court in moving for continuance during the pre-trial conference held on
December 10, 1999, purportedly to go abroad for the holiday season when in truth a Hold-Departure Order
had been issued against them.[16] Accordingly, plaintiff Cordero was allowed to present his evidence ex
parte.
Cordero's testimony regarding his transaction with defendants Go, Landicho and Tecson, and the latter's
offer of settlement, was corroborated by his counsel who also took the witness stand. Further,
documentary evidence including photographs taken of the June 29, 1998 meeting with Landicho, Tecson
and Atty. Tabujara at Shangri-la's Mactan Island Resort, photographs taken in Brisbane showing Cordero,
Go with his family, Robinson and Landicho, and also various documents, communications, vouchers and
bank transmittals were presented to prove that: (1) Cordero was properly authorized and actually
transacted in behalf of AFFA as exclusive distributor in the Philippines; (2) Cordero spent considerable sums
of money in pursuance of the contract with Go and ACG Express Liner; and (3) AFFA through Robinson paid
Cordero his commissions from each scheduled payment made by Go for the first SEACAT 25 purchased
from AFFA pursuant to Shipbuilding Contract No. 7825.[17]
On May 31, 2000, the trial court rendered its decision, the dispositive portion of which reads as follows:

WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in favor of Plaintiff and against
defendants Allan C. Go, Tony Robinson, Felipe Landicho, and Vincent Tecson. As prayed for, defendants are
hereby ordered to pay Plaintiff jointly and solidarily, the following:
1. On the First Cause of Action, the sum total of SIXTEEN MILLION TWO HUNDRED NINETY ONE
THOUSAND THREE HUNDRED FIFTY TWO AND FORTY THREE CENTAVOS (P16,291,352.43) as actual
damages with legal interest from 25 June 1998 until fully paid;
2. On the Second Cause of Action, the sum of ONE MILLION PESOS (P1,000,000.00) as moral damages;
3. On the Third Cause of Action, the sum of ONE MILLION PESOS (P1,000,000.00) as exemplary
damages; and
4. On the Fourth Cause of Action, the sum of ONE MILLION PESOS (P1,000,000.00) as attorney's fees;
Costs against the defendants.
SO ORDERED.[18]

Go, Robinson, Landicho and Tecson filed a motion for new trial, claiming that they have been unduly
prejudiced by the negligence of their counsel who was allegedly unaware that the pre-trial conference on
January 28, 2000 did not push through for the reason that Cordero was then allowed to present his
evidence ex-parte, as he had assumed that the said ex-parte hearing was being conducted only against
Robinson who was earlier declared in default.[19] In its Order dated July 28, 2000, the trial court denied the
motion for new trial.[20] In the same order, Cordero's motion for execution pending appeal was granted.
Defendants moved to reconsider the said order insofar as it granted the motion for execution pending
appeal.[21] On August 8, 2000, they filed a notice of appeal.[22]
On August 18, 2000, the trial court denied the motion for reconsideration and on August 21, 2000, the writ
of execution pending appeal was issued.[23] Meanwhile, the notice of appeal was denied for failure to pay
the appellate court docket fee within the prescribed period.[24] Defendants filed a motion for
reconsideration and to transmit the case records to the CA.[25]
On September 29, 2000, the CA issued a temporary restraining order at the instance of defendants in the
certiorari case they filed with said court docketed as CA-G.R. SP No. 60354 questioning the execution
orders issued by the trial court. Consequently, as requested by the defendants, the trial court recalled and
set aside its November 6, 2000 Order granting the ex-parte motion for release of garnished funds, cancelled
the scheduled public auction sale of levied real properties, and denied the ex-parte Motion for Break-Open
Order and Ex-Parte Motion for Encashment of Check filed by Cordero.[26] On November 29, 2000, the trial
court reconsidered its Order dated August 21, 2000 denying due course to the notice of appeal and
forthwith directed the transmittal of the records to the CA.[27]
On January 29, 2001, the CA rendered judgment granting the petition for certiorari in CA-G.R. SP No. 60354
and setting aside the trial court's orders of execution pending appeal. Cordero appealed the said judgment
in a petition for review filed with this Court which was eventually denied under our Decision dated
September 17, 2002.[28]

On March 16, 2004, the CA in CA-G.R. CV No. 69113 affirmed the trial court (1) in allowing Cordero to
present his evidence ex-parte after the unjustified failure of appellants (Go, Tecson and Landicho) to appear
at the pre-trial conference despite due notice; (2) in finding that it was Cordero and not Pamana who was
appointed by AFFA as the exclusive distributor in the Philippines of its SEACAT 25 and other fast ferry
vessels, which is not limited to the sale of one (1) such catamaran to Go on August 7, 1997; and (3) in
finding that Cordero is entitled to a commission per vessel sold for AFFA through his efforts in the amount
equivalent to 22.43% of the price of each vessel or US$328,742.00, and with payments of US$297,219.91
having been made to Cordero, there remained a balance of US$31,522.09 still due to him. The CA sustained
the trial court in ruling that Cordero is entitled to damages for the breach of his exclusive distributorship
agreement with AFFA. However, it held that Cordero is entitled only to commission for the sale of the first
catamaran obtained through his efforts with the remaining unpaid sum of US$31,522.09 or P1,355,449.90
(on the basis of US$1.00=P43.00 rate) with interest at 6% per annum from the time of the filing of the
complaint until the same is fully paid. As to the P800,000.00 representing expenses incurred by Cordero for
transportation, phone bills, entertainment, food and lodging, the CA declared there was no basis for such
award, the same being the logical and necessary consequences of the exclusive distributorship agreement
which are normal in the field of sales and distribution, and the expenditures having redounded to the
benefit of the distributor (Cordero).
On the amounts awarded by the trial court as moral and exemplary damages, as well as attorney's fees, the
CA reduced the same to P500,000.00, P300,000.00 and P50,000.00, respectively. Appellants were held
solidarily liable pursuant to the provisions of Article 1207 in relation to Articles 19, 20, 21 and 22 of the
New Civil Code. The CA further ruled that no error was committed by the trial court in denying their motion
for new trial, which said court found to be pro forma and did not raise any substantial matter as to warrant
the conduct of another trial.
By Resolution dated July 22, 2004, the CA denied the motions for reconsideration respectively filed by the
appellants and appellee, and affirmed the Decision dated March 16, 2004 with the sole modification that
the legal interest of 6% per annum shall start to run from June 24, 1998 until the finality of the decision,
and the rate of 12% interest per annum shall apply once the decision becomes final and executory until the
judgment has been satisfied.
The case before us is a consolidation of the petitions for review under Rule 45 separately filed by Go (G.R.
No. 164703) and Cordero (G.R. No. 164747) in which petitioners raised the following arguments:
G.R. No. 164703
(Petitioner Go)
I.

THE HONORABLE COURT OF APPEALS DISREGARDED THE RULES OF COURT AND PERTINENT
JURISPRUDENCE AND ACTED WITH GRAVE ABUSE OF DISCRETION IN NOT RULING THAT THE
RESPONDENT IS NOT THE REAL PARTY-IN-INTEREST AND IN NOT DISMISSING THE INSTANT CASE ON
THE GROUND OF LACK OF CAUSE OF ACTION;

II.

THE HONORABLE COURT OF APPEALS IGNORED THE LAW AND JURISPRUDENCE AND ACTED WITH
GRAVE ABUSE OF DISCRETION IN HOLDING HEREIN PETITIONER RESPONSIBLE FOR THE BREACH IN
THE ALLEGED EXCLUSIVE DISTRIBUTORSHIP AGREEMENT WITH ALUMINIUM FAST FERRIES
AUSTRALIA;

III.

THE HONORABLE APPELLATE COURT MISAPPLIED THE LAW AND ACTED WITH GRAVE ABUSE OF
DISCRETION IN FINDING PETITIONER LIABLE IN SOLIDUM WITH THE CO-DEFENDANTS WITH
RESPECT TO THE CLAIMS OF RESPONDENT;

IV.

THE HONORABLE COURT OF APPEALS MISAPPLIED LAW AND JURISPRUDENCE AND GRAVELY
ABUSED ITS DISCRETION WHEN IT FOUND PETITIONER LIABLE FOR UNPAID COMMISSIONS,
DAMAGES, ATTORNEY'S FEES, AND LITIGATION EXPENSES; and

V.

THE HONORABLE APPELLATE COURT ACTED CONTRARY TO LAW AND JURISPRUDENCE AND
GRAVELY ABUSED ITS DISCRETION WHEN IT EFFECTIVELY DEPRIVED HEREIN PETITIONER OF HIS
RIGHT TO DUE PROCESS BY AFFIRMING THE LOWER COURT'S DENIAL OF PETITIONER'S MOTION
FOR NEW TRIAL.[29]

G.R. No. 164747

(Petitioner Cordero)
I.

THE COURT OF APPEALS ERRED IN NOT SUSTAINING THE JUDGMENT OF THE TRIAL COURT AWARDING
PETITIONER ACTUAL DAMAGES FOR HIS COMMISSION FOR THE SALE OF THE SECOND VESSEL, SINCE THERE
IS SUFFICIENT EVIDENCE ON RECORD WHICH PROVES THAT THERE WAS A SECOND SALE OF A VESSEL.
A. THE MEMORANDUM OF AGREEMENT DATED 7 AUGUST 1997 PROVIDES THAT RESPONDENT GO WAS
CONTRACTUALLY BOUND TO BUY TWO (2) VESSELS FROM AFFA.
B. RESPONDENT GO'S POSITION PAPER AND COUNTER-AFFIDAVIT/POSITION PAPER THAT WERE FILED
BEFORE THE BUREAU OF CUSTOMS, ADMITS UNDER OATH THAT HE HAD INDEED PURCHASED A SECOND
VESSEL FROM AFFA.
C. RESPONDENTS ADMITTED IN THEIR PRE-TRIAL BRIEF THAT THEY HAD PURCHASED A SECOND VESSEL.

II.

THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER IS NOT ENTITLED TO HIS COMMISSIONS FOR
THE PURCHASE OF A SECOND VESSEL, SINCE IT WAS PETITIONER'S EFFORTS WHICH ACTUALLY FACILITATED
AND SET-UP THE TRANSACTION FOR RESPONDENTS.
III.

THE COURT OF APPEALS ERRED IN NOT IMPOSING THE PROPER LEGAL INTEREST RATE ON RESPONDENTS'
UNPAID OBLIGATION WHICH SHOULD BE TWELVE PERCENT (12%) FROM THE TIME OF THE BREACH OF THE
OBLIGATION.
IV.

THE COURT OF APPEALS ERRED IN NOT SUSTAINING THE ORIGINAL AMOUNT OF CONSEQUENTIAL
DAMAGES AWARDED TO PETITIONER BY THE TRIAL COURT CONSIDERING THE BAD FAITH AND
FRAUDULENT CONDUCT OF RESPONDENTS IN MISAPPROPRIATING THE MONEY OF PETITIONER.[30]

The controversy boils down to two (2) main issues: (1) whether petitioner Cordero has the legal personality
to sue the respondents for breach of contract; and (2) whether the respondents may be held liable for
damages to Cordero for his unpaid commissions and termination of his exclusive distributorship
appointment by the principal, AFFA.
I. Real Party-in-Interest

First, on the issue of whether the case had been filed by the real party-in-interest as required by Section 2,
Rule 3 of the Rules of Court, which defines such party as the one (1) to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the suit. The purposes of this provision are: 1) to
prevent the prosecution of actions by persons without any right, title or interest in the case; 2) to require
that the actual party entitled to legal relief be the one to prosecute the action; 3) to avoid a multiplicity of
suits; and 4) to discourage litigation and keep it within certain bounds, pursuant to sound public policy.[31] A
case is dismissible for lack of personality to sue upon proof that the plaintiff is not the real party-in-interest,
hence grounded on failure to state a cause of action.[32]
On this issue, we agree with the CA in ruling that it was Cordero and not Pamana who is the exclusive
distributor of AFFA in the Philippines as shown by the Certification dated June 1, 1997 issued by Tony
Robinson.[33] Petitioner Go mentions the following documents also signed by respondent Robinson which
state that "Pamana Marketing Corporation represented by Mr. Mortimer F. Cordero" was actually the
exclusive distributor: (1) letter dated 1 June 1997[34]; (2) certification dated 5 August 1997[35]; and (3) letter
dated 5 August 1997 addressed to petitioner Cordero concerning "commissions to be paid to Pamana
Marketing Corporation."[36] Such apparent inconsistency in naming AFFA's exclusive distributor in the
Philippines is of no moment. For all intents and purposes, Robinson and AFFA dealt only with Cordero who
alone made decisions in the performance of the exclusive distributorship, as with other clients to whom he
had similarly offered AFFA's fast ferry vessels. Moreover, the stipulated commissions from each progress
payments made by Go were directly paid by Robinson to Cordero.[37] Respondents Landicho and Tecson
were only too aware of Cordero's authority as the person who was appointed and acted as exclusive
distributor of AFFA, which can be gleaned from their act of immediately furnishing him with copies of bank
transmittals everytime Go remits payment to Robinson, who in turn transfers a portion of funds received to
the bank account of Cordero in the Philippines as his commission. Out of these partial payments of his
commission, Cordero would still give Landicho and Tecson their respective "commission," or "cuts" from his
own commission. Respondents Landicho and Tecson failed to refute the evidence submitted by Cordero
consisting of receipts signed by them. Said amounts were apart from the earlier expenses shouldered by
Cordero for Landicho's airline tickets, transportation, food and hotel accommodations for the trip to
Australia.[38]
Moreover, petitioner Go, Landicho and Tecson never raised petitioner Cordero's lack of personality to sue
on behalf of Pamana,[39] and did so only before the CA when they contended that it is Pamana and not
Cordero, who was appointed and acted as exclusive distributor for AFFA.[40] It was Robinson who argued in

support of his motion to dismiss that as far as said defendant is concerned, the real party plaintiff appears
to be Pamana, against the real party defendant which is AFFA.[41] As already mentioned, the trial court
denied the motion to dismiss filed by Robinson.
We find no error committed by the trial court in overruling Robinson's objection over the improper resort
to summons by publication upon a foreign national like him and in an action in personam, notwithstanding
that he raised it in a special appearance specifically raising the issue of lack of jurisdiction over his person.
Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint, while jurisdiction over the
defendants in a civil case is acquired either through the service of summons upon them in the manner
required by law or through their voluntary appearance in court and their submission to its authority.[42] A
party who makes a special appearance in court challenging the jurisdiction of said court based on the
ground of invalid service of summons is not deemed to have submitted himself to the jurisdiction of the
court.[43]
In this case, however, although the Motion to Dismiss filed by Robinson specifically stated as one (1) of the
grounds the lack of "personal jurisdiction," it must be noted that he had earlier filed a Motion for Time to
file an appropriate responsive pleading even beyond the time provided in the summons by publication.[44]
Such motion did not state that it was a conditional appearance entered to question the regularity of the
service of summons, but an appearance submitting to the jurisdiction of the court by acknowledging the
summons by publication issued by the court and praying for additional time to file a responsive pleading.
Consequently, Robinson having acknowledged the summons by publication and also having invoked the
jurisdiction of the trial court to secure affirmative relief in his motion for additional time, he effectively
submitted voluntarily to the trial court's jurisdiction. He is now estopped from asserting otherwise, even
before this Court.[45]
II. Breach of Exclusive Distributorship,
Contractual Interference and
Respondents' Liability for Damages

In Yu v. Court of Appeals,[46] this Court ruled that the right to perform an exclusive distributorship
agreement and to reap the profits resulting from such performance are proprietary rights which a party
may protect. Thus, injunction is the appropriate remedy to prevent a wrongful interference with contracts
by strangers to such contracts where the legal remedy is insufficient and the resulting injury is irreparable.
In that case, the former dealer of the same goods purchased the merchandise from the manufacturer in
England through a trading firm in West Germany and sold these in the Philippines. We held that the rights
granted to the petitioner under the exclusive distributorship agreement may not be diminished nor
rendered illusory by the expedient act of utilizing or interposing a person or firm to obtain goods for which
the exclusive distributorship was conceptualized, at the expense of the sole authorized distributor.[47]
In the case at bar, it was established that petitioner Cordero was not paid the balance of his commission by
respondent Robinson. From the time petitioner Go and respondent Landicho directly dealt with respondent
Robinson in Brisbane, and ceased communicating through petitioner Cordero as the exclusive distributor of
AFFA in the Philippines, Cordero was no longer informed of payments remitted to AFFA in Brisbane. In
other words, Cordero had clearly been cut off from the transaction until the arrival of the first SEACAT 25
which was sold through his efforts. When Cordero complained to Go, Robinson, Landicho and Tecson about
their acts prejudicial to his rights and demanded that they respect his exclusive distributorship, Go simply

let his lawyers led by Landicho and Tecson handle the matter and tried to settle it by promising to pay a
certain amount and to purchase high-speed catamarans through Cordero. However, Cordero was not paid
anything and worse, AFFA through its lawyer in Australia even terminated his exclusive dealership insisting
that his services were engaged for only one (1) transaction, that is, the purchase of the first SEACAT 25 in
August 1997.
Petitioner Go argues that unlike in Yu v. Court of Appeals[48] there is no conclusive proof adduced by
petitioner Cordero that they actually purchased a second SEACAT 25 directly from AFFA and hence there
was no violation of the exclusive distributorship agreement. Further, he contends that the CA gravely
abused its discretion in holding them solidarily liable to Cordero, relying on Articles 1207, 19 and 21 of the
Civil Code despite absence of evidence, documentary or testimonial, showing that they conspired to defeat
the very purpose of the exclusive distributorship agreement.[49]
We find that contrary to the claims of petitioner Cordero, there was indeed no sufficient evidence that
respondents actually purchased a second SEACAT 25 directly from AFFA. But this circumstance will not
absolve respondents from liability for invading Cordero's rights under the exclusive distributorship.
Respondents clearly acted in bad faith in bypassing Cordero as they completed the remaining payments to
AFFA without advising him and furnishing him with copies of the bank transmittals as they previously did,
and directly dealt with AFFA through Robinson regarding arrangements for the arrival of the first SEACAT
25 in Manila and negotiations for the purchase of the second vessel pursuant to the Memorandum of
Agreement which Cordero signed in behalf of AFFA. As a result of respondents' actuations, Cordero
incurred losses as he was not paid the balance of his commission from the sale of the first vessel and his
exclusive distributorship revoked by AFFA.
Petitioner Go contends that the trial and appellate courts erred in holding them solidarily liable for
Cordero's unpaid commission, which is the sole obligation of the principal AFFA. It was Robinson on behalf
of AFFA who, in the letter dated August 5, 1997 addressed to Cordero, undertook to pay commission
payments to Pamana on a staggered progress payment plan in the form of percentage of the commission
per payment. AFFA explicitly committed that it will, "upon receipt of progress payments, pay to Pamana
their full commission by telegraphic transfer to an account nominated by Pamana within one to two days of
[AFFA] receiving such payments."[50] Petitioner Go further maintains that he had not in any way violated or
caused the termination of the exclusive distributorship agreement between Cordero and AFFA; he had also
paid in full the first and only vessel he purchased from AFFA.[51]
While it is true that a third person cannot possibly be sued for breach of contract because only parties can
breach contractual provisions, a contracting party may sue a third person not for breach but for inducing
another to commit such breach.
Article 1314 of the Civil Code provides:
Art. 1314. Any third person who induces another to violate his contract shall be liable for damages to the
other contracting party.

The elements of tort interference are: (1) existence of a valid contract; (2) knowledge on the part of the
third person of the existence of a contract; and (3) interference of the third person is without legal
justification.[52]

The presence of the first and second elements is not disputed. Through the letters issued by Robinson
attesting that Cordero is the exclusive distributor of AFFA in the Philippines, respondents were clearly
aware of the contract between Cordero and AFFA represented by Robinson. In fact, evidence on record
showed that respondents initially dealt with and recognized Cordero as such exclusive dealer of AFFA highspeed catamaran vessels in the Philippines. In that capacity as exclusive distributor, petitioner Go entered
into the Memorandum of Agreement and Shipbuilding Contract No. 7825 with Cordero in behalf of AFFA.
As to the third element, our ruling in the case of So Ping Bun v. Court of Appeals[53] is instructive, to wit:
A duty which the law of torts is concerned with is respect for the property of others, and a cause of action
ex delicto may be predicated upon an unlawful interference by one person of the enjoyment by the other
of his private property. This may pertain to a situation where a third person induces a party to renege on or
violate his undertaking under a contract. In the case before us, petitioner's Trendsetter Marketing asked
DCCSI to execute lease contracts in its favor, and as a result petitioner deprived respondent corporation of
the latter's property right. Clearly, and as correctly viewed by the appellate court, the three elements of
tort interference above-mentioned are present in the instant case.
Authorities debate on whether interference may be justified where the defendant acts for the sole purpose
of furthering his own financial or economic interest. One view is that, as a general rule, justification for
interfering with the business relations of another exists where the actor's motive is to benefit himself. Such
justification does not exist where his sole motive is to cause harm to the other. Added to this, some
authorities believe that it is not necessary that the interferer's interest outweigh that of the party whose
rights are invaded, and that an individual acts under an economic interest that is substantial, not merely de
minimis, such that wrongful and malicious motives are negatived, for he acts in self-protection. Moreover,
justification for protecting one's financial position should not be made to depend on a comparison of his
economic interest in the subject matter with that of others. It is sufficient if the impetus of his conduct lies
in a proper business interest rather than in wrongful motives.
As early as Gilchrist vs. Cuddy, we held that where there was no malice in the interference of a contract,
and the impulse behind one's conduct lies in a proper business interest rather than in wrongful motives,
a party cannot be a malicious interferer. Where the alleged interferer is financially interested, and such
interest motivates his conduct, it cannot be said that he is an officious or malicious intermeddler.
In the instant case, it is clear that petitioner So Ping Bun prevailed upon DCCSI to lease the warehouse to
his enterprise at the expense of respondent corporation. Though petitioner took interest in the property
of respondent corporation and benefited from it, nothing on record imputes deliberate wrongful motives
or malice in him.
xxx
While we do not encourage tort interferers seeking their economic interest to intrude into existing
contracts at the expense of others, however, we find that the conduct herein complained of did not
transcend the limits forbidding an obligatory award for damages in the absence of any malice. The business
desire is there to make some gain to the detriment of the contracting parties. Lack of malice, however,
precludes damages. But it does not relieve petitioner of the legal liability for entering into contracts and

causing breach of existing ones. The respondent appellate court correctly confirmed the permanent
injunction and nullification of the lease contracts between DCCSI and Trendsetter Marketing, without
awarding damages. The injunction saved the respondents from further damage or injury caused by
petitioner's interference.[54] [emphasis supplied.]

Malice connotes ill will or spite, and speaks not in response to duty. It implies an intention to do ulterior
and unjustifiable harm. Malice is bad faith or bad motive.[55] In the case of Lagon v. Court of Appeals,[56] we
held that to sustain a case for tortuous interference, the defendant must have acted with malice or must
have been driven by purely impure reasons to injure the plaintiff; in other words, his act of interference
cannot be justified. We further explained that the word "induce" refers to situations where a person causes
another to choose one course of conduct by persuasion or intimidation. As to the allegation of private
respondent in said case that petitioner induced the heirs of the late Bai Tonina Sepi to sell the property to
petitioner despite an alleged renewal of the original lease contract with the deceased landowner, we ruled
as follows:
Assuming ex gratia argumenti that petitioner knew of the contract, such knowledge alone was not
sufficient to make him liable for tortuous interference. x x x
Furthermore, the records do not support the allegation of private respondent that petitioner induced the
heirs of Bai Tonina Sepi to sell the property to him. The word "induce" refers to situations where a person
causes another to choose one course of conduct by persuasion or intimidation. The records show that the
decision of the heirs of the late Bai Tonina Sepi to sell the property was completely of their own volition
and that petitioner did absolutely nothing to influence their judgment. Private respondent himself did not
proffer any evidence to support his claim. In short, even assuming that private respondent was able to
prove the renewal of his lease contract with Bai Tonina Sepi, the fact was that he was unable to prove
malice or bad faith on the part of petitioner in purchasing the property. Therefore, the claim of tortuous
interference was never established.[57]

In their Answer, respondents denied having anything to do with the unpaid balance of the commission due
to Cordero and the eventual termination of his exclusive distributorship by AFFA. They gave a different
version of the events that transpired following the signing of Shipbuilding Contract No. 7825. According to
them, several builder-competitors still entered the picture after the said contract for the purchase of one
(1) SEACAT 25 was sent to Brisbane in July 1997 for authentication, adding that the contract was to be
effective on August 7, 1997, the time when their funds was to become available. Go admitted he called the
attention of AFFA if it can compete with the prices of other builders, and upon mutual agreement, AFFA
agreed to give them a discounted price under the following terms and conditions: (1) that the contract
price be lowered; (2) that Go will obtain another vessel; (3) that to secure compliance of such conditions,
Go must make an advance payment for the building of the second vessel; and (4) that the payment scheme
formerly agreed upon as stipulated in the first contract shall still be the basis and used as the guiding factor
in remitting money for the building of the first vessel. This led to the signing of another contract
superseding the first one (1), still to be dated 07 August 1997. Attached to the answer were photocopies of
the second contract stating a lower purchase price (US$1,150,000.00) and facsimile transmission of AFFA to
Go confirming the transaction.[58]
As to the cessation of communication with Cordero, Go averred it was Cordero who was nowhere to be

contacted at the time the shipbuilding progress did not turn good as promised, and it was always Landicho
and Tecson who, after several attempts, were able to locate him only to obtain unsatisfactory reports such
that it was Go who would still call up Robinson regarding any progress status report, lacking documents for
MARINA, etc., and go to Australia for ocular inspection. Hence, in May 1998 on the scheduled launching of
the ship in Australia, Go engaged the services of Landicho who went to Australia to see to it that all
documents needed for the shipment of the vessel to the Philippines would be in order. It was also during
this time that Robinson's request for inquiry on the Philippine price of a Wartsila engine for AFFA's then ongoing vessel construction, was misinterpreted by Cordero as indicating that Go was buying a second
vessel.[59]
We find these allegations unconvincing and a mere afterthought as these were the very same averments
contained in the Position Paper for the Importer dated October 9, 1998, which was submitted by Go on
behalf of ACG Express Liner in connection with the complaint-affidavit filed by Cordero before the BOC-SGS
Appeals Committee relative to the shipment valuation of the first SEACAT 25 purchased from AFFA.[60] It
appears that the purported second contract superseding the original Shipbuilding Contract No. 7825 and
stating a lower price of US$1,150,000.00 (not US$1,465,512.00) was only presented before the BOC to
show that the vessel imported into the Philippines was not undervalued by almost US$500,000.00. Cordero
vehemently denied there was such modification of the contract and accused respondents of resorting to
falsified documents, including the facsimile transmission of AFFA supposedly confirming the said sale for
only US$1,150,000.00. Incidentally, another document filed in said BOC case, the Counter-Affidavit/Position
Paper for the Importer dated November 16, 1998,[61] states in paragraph 8 under the Antecedent facts
thereof, that
8. As elsewhere stated, the total remittances made by herein Importer to AFFA does not alone represent
the purchase price for Seacat 25. It includes advance payment for the acquisition of another vessel as part
of the deal due to the discounted price.[62]

which even gives credence to the claim of Cordero that respondents negotiated for the sale of the second
vessel and that the nonpayment of the remaining two (2) instalments of his commission for the sale of the
first SEACAT 25 was a result of Go and Landicho's directly dealing with Robinson, obviously to obtain a
lower price for the second vessel at the expense of Cordero.
The act of Go, Landicho and Tecson in inducing Robinson and AFFA to enter into another contract directly
with ACG Express Liner to obtain a lower price for the second vessel resulted in AFFA's breach of its
contractual obligation to pay in full the commission due to Cordero and unceremonious termination of
Cordero's appointment as exclusive distributor. Following our pronouncement in Gilchrist v. Cuddy (supra),
such act may not be deemed malicious if impelled by a proper business interest rather than in wrongful
motives. The attendant circumstances, however, demonstrated that respondents transgressed the bounds
of permissible financial interest to benefit themselves at the expense of Cordero. Respondents furtively
went directly to Robinson after Cordero had worked hard to close the deal for them to purchase from AFFA
two (2) SEACAT 25, closely monitored the progress of building the first vessel sold, attended to their
concerns and spent no measly sum for the trip to Australia with Go, Landicho and Go's family members. But
what is appalling is the fact that even as Go, Landicho and Tecson secretly negotiated with Robinson for the
purchase of a second vessel, Landicho and Tecson continued to demand and receive from Cordero their
"commission" or "cut" from Cordero's earned commission from the sale of the first SEACAT 25.

Cordero was practically excluded from the transaction when Go, Robinson, Tecson and Landicho suddenly
ceased communicating with him, without giving him any explanation. While there was nothing
objectionable in negotiating for a lower price in the second purchase of SEACAT 25, which is not prohibited
by the Memorandum of Agreement, Go, Robinson, Tecson and Landicho clearly connived not only in
ensuring that Cordero would have no participation in the contract for sale of the second SEACAT 25, but
also that Cordero would not be paid the balance of his commission from the sale of the first SEACAT 25.
This, despite their knowledge that it was commission already earned by and due to Cordero. Thus, the trial
and appellate courts correctly ruled that the actuations of Go, Robinson, Tecson and Landicho were
without legal justification and intended solely to prejudice Cordero.
The existence of malice, ill will or bad faith is a factual matter. As a rule, findings of fact of the trial court,
when affirmed by the appellate court, are conclusive on this Court.[63] We see no compelling reason to
reverse the findings of the RTC and the CA that respondents acted in bad faith and in utter disregard of the
rights of Cordero under the exclusive distributorship agreement.
The failure of Robinson, Go, Tecson and Landico to act with fairness, honesty and good faith in securing
better terms for the purchase of high-speed catamarans from AFFA, to the prejudice of Cordero as the duly
appointed exclusive distributor, is further proscribed by Article 19 of the Civil Code:
Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith.

As we have expounded in another case:

Elsewhere, we explained that when "a right is exercised in a manner which does not conform with the
norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for
which the wrongdoer must be responsible." The object of this article, therefore, is to set certain standards
which must be observed not only in the exercise of one's rights but also in the performance of one's duties.
These standards are the following: act with justice, give everyone his due and observe honesty and good
faith. Its antithesis, necessarily, is any act evincing bad faith or intent to injure. Its elements are the
following: (1) There is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of
prejudicing or injuring another. When Article 19 is violated, an action for damages is proper under Articles
20 or 21 of the Civil Code. Article 20 pertains to damages arising from a violation of law x x x. Article 21, on
the other hand, states:
Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals,
good customs or public policy shall compensate the latter for the damage.
Article 21 refers to acts contra bonus mores and has the following elements: (1) There is an act which is
legal; (2) but which is contrary to morals, good custom, public order, or public policy; and (3) it is done with
intent to injure.
A common theme runs through Articles 19 and 21, and that is, the act complained of must be
intentional.[64]

Petitioner Go's argument that he, Landicho and Tecson cannot be held liable solidarily with Robinson for
actual, moral and exemplary damages, as well as attorney's fees awarded to Cordero since no law or
contract provided for solidary obligation in these cases, is equally bereft of merit. Conformably with Article
2194 of the Civil Code, the responsibility of two or more persons who are liable for the quasi-delict is
solidary.[65] In Lafarge Cement Philippines, Inc. v. Continental Cement Corporation,[66] we held:
[O]bligations arising from tort are, by their nature, always solidary. We have assiduously maintained this
legal principle as early as 1912 in Worcester v. Ocampo, in which we held:
x x x The difficulty in the contention of the appellants is that they fail to recognize that the basis of the
present action is tort. They fail to recognize the universal doctrine that each joint tort feasor is not only
individually liable for the tort in which he participates, but is also jointly liable with his tort feasors. x x x
It may be stated as a general rule that joint tort feasors are all the persons who command, instigate,
promote, encourage, advise, countenance, cooperate in, aid or abet the commission of a tort, or who
approve of it after it is done, if done for their benefit. They are each liable as principals, to the same extent
and in the same manner as if they had performed the wrongful act themselves. x x x
Joint tort feasors are jointly and severally liable for the tort which they commit. The persons injured may
sue all of them or any number less than all. Each is liable for the whole damages caused by all, and all
together are jointly liable for the whole damage. It is no defense for one sued alone, that the others who
participated in the wrongful act are not joined with him as defendants; nor is it any excuse for him that his
participation in the tort was insignificant as compared to that of the others. x x x
Joint tort feasors are not liable pro rata. The damages can not be apportioned among them, except among
themselves. They cannot insist upon an apportionment, for the purpose of each paying an aliquot part.
They are jointly and severally liable for the whole amount. x x x
A payment in full for the damage done, by one of the joint tort feasors, of course satisfies any claim which
might exist against the others. There can be but satisfaction. The release of one of the joint tort feasors by
agreement generally operates to discharge all. x x x
Of course, the court during trial may find that some of the alleged tort feasors are liable and that others are
not liable. The courts may release some for lack of evidence while condemning others of the alleged tort
feasors. And this is true even though they are charged jointly and severally.[67] [emphasis supplied.]

The rule is that the defendant found guilty of interference with contractual relations cannot be held liable
for more than the amount for which the party who was inducted to break the contract can be held liable.[68]
Respondents Go, Landicho and Tecson were therefore correctly held liable for the balance of petitioner
Cordero's commission from the sale of the first SEACAT 25, in the amount of US$31,522.09 or its peso
equivalent, which AFFA/Robinson did not pay in violation of the exclusive distributorship agreement, with
interest at the rate of 6% per annum from June 24, 1998 until the same is fully paid.
Respondents having acted in bad faith, moral damages may be recovered under Article 2219 of the Civil
Code.[69] On the other hand, the requirements of an award of exemplary damages are: (1) they may be

imposed by way of example in addition to compensatory damages, and only after the claimant's right to
them has been established; (2) that they cannot be recovered as a matter of right, their determination
depending upon the amount of compensatory damages that may be awarded to the claimant; and (3) the
act must be accompanied by bad faith or done in a wanton, fraudulent, oppressive or malevolent
manner.[70] The award of exemplary damages is thus in order. However, we find the sums awarded by the
trial court as moral and exemplary damages as reduced by the CA, still excessive under the circumstances.
Moral damages are meant to compensate and alleviate the physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar
injuries unjustly caused. Although incapable of pecuniary estimation, the amount must somehow be
proportional to and in approximation of the suffering inflicted. Moral damages are not punitive in nature
and were never intended to enrich the claimant at the expense of the defendant. There is no hard-and-fast
rule in determining what would be a fair and reasonable amount of moral damages, since each case must
be governed by its own peculiar facts. Trial courts are given discretion in determining the amount, with the
limitation that it "should not be palpably and scandalously excessive." Indeed, it must be commensurate to
the loss or injury suffered.[71]
We believe that the amounts of P300,000.00 and P200,000.00 as moral and exemplary damages,
respectively, would be sufficient and reasonable. Because exemplary damages are awarded, attorney's fees
may also be awarded in consonance with Article 2208 (1).[72] We affirm the appellate court's award of
attorney's fees in the amount of P50,000.00.
WHEREFORE, the petitions are DENIED. The Decision dated March 16, 2004 as modified by the Resolution
dated July 22, 2004 of the Court of Appeals in CA-G.R. CV No. 69113 are hereby AFFIRMED with
MODIFICATION in that the awards of moral and exemplary damages are hereby reduced to P300,000.00
and P200,000.00, respectively.
With costs against the petitioner in G.R. No. 164703.
SO ORDERED.

SECOND DIVISION
[ G.R. No. 192877, March 23, 2011 ]
SPOUSES HERMES P. OCHOA AND ARACELI D. OCHOA, PETITIONERS, VS. CHINA BANKING CORPORATION,
RESPONDENT.
RESOLUTION

NACHURA, J.:
For resolution is petitioners' motion for reconsideration[1] of our January 17, 2011 Resolution[2] denying
their petition for review on certiorari[3] for failing to sufficiently show any reversible error in the assailed
judgment[4] of the Court of Appeals (CA).
Petitioners insist that it was error for the CA to rule that the stipulated exclusive venue of Makati City is
binding only on petitioners' complaint for Annulment of Foreclosure, Sale, and Damages filed before the
Regional Trial Court of Paraaque City, but not on respondent bank's Petition for Extrajudicial Foreclosure
of Mortgage, which was filed with the same court.
We disagree.
The extrajudicial foreclosure sale of a real estate mortgage is governed by Act No. 3135, as amended by Act
No. 4118, otherwise known as "An Act to Regulate the Sale of Property Under Special Powers Inserted In or
Annexed to Real-Estate Mortgages." Sections 1 and 2 thereof clearly state:
Section 1. When a sale is made under a special power inserted in or attached to any real-estate mortgage
hereafter made as security for the payment of money or the fulfillment of any other obligation, the
provisions of the following sections shall govern as to the manner in which the sale and redemption shall be
effected, whether or not provision for the same is made in the power.
Sec. 2. Said sale cannot be made legally outside of the province in which the property sold is situated; and in
case the place within said province in which the sale is to be made is the subject of stipulation, such sale
shall be made in said place or in the municipal building of the municipality in which the property or part
thereof is situated.[5]

The case at bar involves petitioners' mortgaged real property located in Paraaque City over which
respondent bank was granted a special power to foreclose extra-judicially. Thus, by express provision of
Section 2, the sale can only be made in Paraaque City.
The exclusive venue of Makati City, as stipulated by the parties[6] and sanctioned by Section 4, Rule 4 of the
Rules of Court,[7] cannot be made to apply to the Petition for Extrajudicial Foreclosure filed by respondent
bank because the provisions of Rule 4 pertain to venue of actions, which an extrajudicial foreclosure is not.
Pertinent are the following disquisitions in Supena v. De la Rosa:[8]

Section 1, Rule 2 [of the Rules of Court] defines an action in this wise:
"Action means an ordinary suit in a court of justice, by which one party prosecutes another for the
enforcement or protection of a right, or the prevention or redress of a wrong."

Hagans v. Wislizenus does not depart from this definition when it states that "[A]n action is a formal
demand of one's legal rights in a court of justice in the manner prescribed by the court or by the law. x x x."
It is clear that the determinative or operative fact which converts a claim into an "action or suit" is the filing
of the same with a "court of justice." Filed elsewhere, as with some other body or office not a court of
justice, the claim may not be categorized under either term. Unlike an action, an extrajudicial foreclosure of
real estate mortgage is initiated by filing a petition not with any court of justice but with the office of the
sheriff of the province where the sale is to be made. By no stretch of the imagination can the office of the
sheriff come under the category of a court of justice. And as aptly observed by the complainant, if ever the
executive judge comes into the picture, it is only because he exercises administrative supervision over the
sheriff. But this administrative supervision, however, does not change the fact that extrajudicial
foreclosures are not judicial proceedings, actions or suits.[9]

These pronouncements were confirmed on August 7, 2001 through A.M. No. 99-10-05-0, entitled
"Procedure in Extra-Judicial Foreclosure of Mortgage," the significant portions of which provide:
In line with the responsibility of an Executive Judge under Administrative Order No. 6, date[d] June 30,
1975, for the management of courts within his administrative area, included in which is the task of
supervising directly the work of the Clerk of Court, who is also the Ex-Office Sheriff, and his staff, and the
issuance of commissions to notaries public and enforcement of their duties under the law, the following
procedures are hereby prescribed in extra-judicial foreclosure of mortgages:
1. All applications for extrajudicial foreclosure of mortgage whether under the direction of the sheriff or a
notary public, pursuant to Act 3135, as amended by Act 4118, and Act 1508, as amended, shall be filed with
the Executive Judge, through the Clerk of Court who is also the Ex-Officio Sheriff.

Verily then, with respect to the venue of extrajudicial foreclosure sales, Act No. 3135, as amended, applies,
it being a special law dealing particularly with extrajudicial foreclosure sales of real estate mortgages, and
not the general provisions of the Rules of Court on Venue of Actions.
Consequently, the stipulated exclusive venue of Makati City is relevant only to actions arising from or
related to the mortgage, such as petitioners' complaint for Annulment of Foreclosure, Sale, and Damages.
The other arguments raised in the motion are a mere reiteration of those already raised in the petition for
review. As declared in this Court's Resolution on January 17, 2011, the same failed to show any sufficient
ground to warrant the exercise of our appellate jurisdiction.
WHEREFORE, premises considered, the motion for reconsideration is hereby DENIED.
SO ORDERED.

FIRST DIVISION
[ G.R. No. 153829, August 17, 2011 ]
ROMAN CATHOLIC ARCHBISHOP OF SAN FERNANDO, PAMPANGA REPRESENTED HEREIN BY THE
INCUMBENT ARCHBISHOP, PETITIONER, VS. EDUARDO SORIANO, JR., EDNA YALUN, EVANGELINA
ABLAZA, FELICIDAD Y. URBINA, FELIX SALENGA, REYNALDO I. MALLARI, MARCIANA B. BARCOMA,
BIENVENIDO PANGANIBAN, BRIGIDA NAVARRO, EUFRANCIA T. FLORES, VICTORIA B. SUDSOD, EUFRONIO
CAPARAS, CRISANTO MANANSALA, LILY MASANGCAY, BENJAMIN GUINTO, JR., MARTHA G. CASTRO AND
LINO TOLENTINO, RESPONDENTS.
[G.R. NO. 160909]
BENJAMIN GUINTO, JR.,[1] PETITIONER, VS. ROMAN CATHOLIC ARCHBISHOP OF SAN FERNANDO,
PAMPANGA REPRESENTED HEREIN BY THE INCUMBENT ARCHBISHOP, RESPONDENT.
DECISION

VILLARAMA, JR., J.:

Before this Court are two petitions for resolution: the first, a Petition for Review on Certiorari under Rule 45
of the 1997 Rules of Civil Procedure, as amended, filed bythe Roman Catholic Archbishop (RCA) of San
Fernando, Pampanga, assailing the March 18, 2002 Decision[2] and the May 30, 2002 Resolution[3] of the
Court of Appeals (CA) in CA-G.R. SP No. 66974; and the second, a Petition for Injunction under Rule 58, filed
by Benjamin Guinto, Jr. (Guinto), seeking to enjoin the implementation of the Writ of Execution[4] dated
October 14, 2003, issued by the Municipal Circuit Trial Court (MCTC) of Macabebe-Masantol, Pampanga in
Civil Case No. 2000(23).
The facts follow:
The RCA of San Fernando, Pampanga, represented by Most Rev. Paciano B. Aniceto, D.D., claimed that it is
the owner of a vast tract of land located near the Catholic Church at Poblacion, Macabebe, Pampanga and
covered by Original Certificate of Title (OCT) No. 17629 issued by the Registry of Deeds of San Fernando on
February 21, 1929.[5] The RCA alleged that several individuals unlawfully occupied the subject land and
refused to vacate despite repeated demands. Having no other recourse, the RCA filed an ejectment case,
docketed as Civil Case No. 2000(23), before the MCTC of Macabebe-Masantol, Pampanga against the
alleged intruders, namely, Leocadio and Rufina Reyes, Jose Balagtas, Marcial and Victoria Balagtas, Levita
Naluz, Dionisio Barcoma, Felicidad Urbina, Justiniano Reyes, Lawrence Muniz, Eduardo Soriano, 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 Esguerra,
Gloria Manansala, Bienvenido and Felicisima Panganiban, Ofroneo Caparas, Tino Enriquez, Elizabeth and
Benjamin Guinto, Felix Salenga, Eleno and Rosala Salenga, Luisa and Domingo Sison, Francia Flores,
Eduardo and Rosita Gutierrez, Zosima and Ener Basilio, Andy and Loreto Bonifacio, Peter and Felicisima
Villajuan.[6]
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 subject land belonged to the State, but they have already acquired the
same by acquisitive prescription as they and their predecessors-in-interest have been in continuous
possession of the land for more than thirty (30) years.
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
binding against the whole world until it is declared void by a court of competent jurisdiction. Thus,
defendants were ordered to vacate the premises and to pay reasonable monthly rentals from August 15,
2000 until they shall have finally vacated the premises.[7]
Defendants appealed to the Regional Trial Court (RTC). However, the appeal was dismissed because of their
failure to file the appeal memorandum. When defendants elevated the case to the CA, their petition for
certiorari was not given due course for failure to file the same within the extended period. Hence, the
decision ejecting the defendants from the premises became final.
Pursuant to Section 21,[8] Rule 70 of the 1997 Rules of Civil Procedure, as amended, the RCA filed an Urgent
Motion for Immediate Issuance of a Writ of Execution, which the MCTC granted in an Order[9] dated
February 10, 2003, as follows:
WHEREFORE, on the basis of the rules and jurisprudence aforecited, the Motion for Execution filed by
plaintiff is hereby granted. Let a writ of execution be issued in connection with this case which is a
ministerial duty of the Court.
Defendants' Motion for Inhibition is denied for lack of merit.
SO ORDERED.[10]

Thereafter, the MCTC issued another Order dated October 6, 2003, the pertinent portion of which states:
Let a writ of execution be issued to implement the Decision dated September 28, 2001.
No further defendants' motion to stay execution shall be entertained.
SO ORDERED.[11]

Accordingly, a writ of execution[12] was issued commanding the sheriff or his deputies to implement the
MCTC Decision. Thus, Sheriff Edgar Joseph C. David sent the defendants a Notice to Vacate[13] dated
December 8, 2003.
Seeking to enjoin the implementation of the writ of execution and the notice to vacate, Guinto filed the
instant Petition for Injunction with Prayer for Issuance of a Temporary Restraining Order (TRO),[14] docketed
as G.R. No. 160909.
Meanwhile, during the pendency of the ejectment case at the MCTC, some of the defendants therein,
namely, Eduardo Soriano, Jr., Edna Yalun, Evangelina Ablaza, Felicidad Y. Urbina, Felix Salenga, Reynaldo I.

Mallari, Marciana B. Barcoma, Bienvenido Panganiban, Brigida Navarro, Eufrancia T. Flores, Victoria B.
Sodsod, Eufronio Caparas, Crisanto Manansala, Lily Masangcay, Benjamin Guinto, Jr., Martha G. Castro and
Lino Tolentino filed Civil Case No. 01-1046(M) against the 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 possession
of the land in the concept of owners and alleged that OCT No. 17629 in the name of RCA is spurious and
fake.
Before filing its Answer, the RCA moved to dismiss the case on grounds of noncompliance with a condition
precedent, laches, and for being a collateral attack on its title. The RCA likewise later filed a supplement to
its motion to dismiss.
In an Order[16] dated June 4, 2001, the RTC denied the motion to dismiss reasoning that when the rules
speak of noncompliance with a condition precedent, it could refer only to the failure of a party to secure
the appropriate certificate to file action under the Local Government Code, or the failure to exert earnest
efforts towards an amicable settlement when the suit involves members of the same family. The RTC also
found that plaintiffs have a cause of action. Furthermore, the trial court held that 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.
Aggrieved, the RCA filed a motion for reconsideration, which the trial court denied in an Order[17] dated July
24, 2001. Thereafter, the RCA filed with the CA a petition for certiorari with prayer for preliminary
injunction.[18]
On March 18, 2002, the CA promulgated the assailed Decision,[19] the dispositive portion of which reads:
WHEREFORE, for lack of merit, the petition is hereby DISMISSED.
SO ORDERED.[20]

A motion for reconsideration[21] of the Decision was filed by the RCA. However, in the Resolution[22] dated
May 30, 2002, the CA denied the motion for lack of merit. Hence, the RCA filed the present petition for
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 reconsideration.
On January 14, 2004, we resolved to consolidate G.R. Nos. 160909 and 153829.[24] Subsequently, the Court
resolved to treat the petition for injunction with prayer for the issuance of a TRO in G.R. No. 160909 as a
motion for the issuance of a TRO and/or writ of preliminary injunction in G.R. No. 153829.[25]
The RCA raises the following issues:
(A) WHETHER OR NOT CIVIL CASE NO. 01-1046(M) FOR QUIETING OF TITLE AND DECLARATION OF NULLITY
OF TITLE IS LEGALLY DISMISSIBLE FOR VIOLATION OF THE VARIOUS PROVISIONS OF THE RULES OF COURT;
and

(B) WHETHER OR NOT THE CIVIL ACTION (THE ABOVE MENTIONED CIVIL CASE NO. 01-1046[M]) FILED BY
PRIVATE RESPONDENTS CONSTITUTES A COLLATERAL ATTACK ON PETITIONER'S TITLE.[26]

Essentially, the issue before us is whether the CA erred in not holding that the RTC committed grave abuse
of discretion in denying the motion to dismiss filed by the RCA.
We affirm the ruling of the CA.
Well-entrenched in our jurisdiction is the rule that the trial court's denial of a motion to dismiss cannot be
questioned in a certiorari proceeding under 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 of the movant in such event is to file an answer and interpose as
affirmative defenses the objections raised in the motion to dismiss. If, later, the decision of the trial judge is
adverse, the movant may then elevate on appeal the same issues raised in the motion.[27]
The only exception to this rule is when the trial court gravely abused its discretion in denying the motion.[28]
This exception is, nevertheless, applied sparingly, and only in instances when there is a clear showing that
the trial court exercised its judicial power in an arbitrary or despotic manner by reason of passion or
personal hostility.[29] Further, the abuse of the court's discretion must be so patent and gross as to amount
to an 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]
Here, in dismissing the petition for certiorari, the CA did not find grave abuse of discretion on the part of
the RTC. The appellate court was not convinced with the RCA's argument that plaintiffs failed to comply
with the condition precedent provided in Article 477[31] of the Civil Code because they allegedly did not
have legal or equitable title to, or interest in the real property. The CA explained that the requirement
stated in Article 477 is not a condition precedent before one can file an action for quieting of title. Rather, it
is a requisite for an action to quiet title to prosper and the existence or nonexistence of the requisite should
be 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 ground that the complaint is already barred by laches for it still
remains to be established during trial how long the plaintiffs have slept on their rights, if such be the case.
Evidently, the CA is correct in finding that the denial by the RTC of the RCA's motion to dismiss is not
tainted with grave abuse of discretion.
Next, the RCA submits that an action for quieting of title is a special civil 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 have been dismissed for violation of the rule on joinder of actions under Section 5, Rule 2 of the
1997 Rules of Civil Procedure, as amended, which requires that the joinder shall not include special civil
actions governed by special rules. Such contention, however, is utterly bereft of 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.
The RCA likewise asserts that the case for quieting of title is a collateral attack on its title which is
prohibited by law. However, we agree with the 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.
An action is deemed an attack on a title when its objective is to nullify the title, thereby challenging the
judgment pursuant to which the title was decreed. The attack is direct when the objective is to annul or set
aside such judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when,
in an action to obtain a different relief, an attack on the judgment is nevertheless made as an incident
thereof.[32]
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. 17629, is fake for the following reasons: (1) that the erasures are very
apparent and the title itself is fake; (2) it was made to appear under Memorandum of Encumbrance Entry
No. 1007 that the title is a reconstituted title when in truth, it is not; and (3) the verification reveals that
there was no petition filed before any court where an order was issued for the reconstitution and reissuance of an owner's duplicate copy.[33] It is thus clear from the foregoing that the case filed questioning
the genuineness of OCT No. 17629 is a direct attack on the title of the RCA.
As regards the petition docketed as G.R. No. 160909 which this Court treated as motion for the issuance of
a TRO and/or writ of preliminary injunction, Guinto insists that there is a need to enjoin the sheriff from
enforcing the writ of execution as it would cause grave and irreparable damage to Guinto, while the RCA
would not suffer any damage if it would later be proved that indeed its title is genuine.
We disagree.
Section 3, Rule 58 of the 1997 Rules of Civil Procedure, as amended, enumerates the grounds for the
issuance of preliminary injunction, viz:
SEC. 3. Grounds for issuance of preliminary injunction. - A preliminary injunction may be granted when it is
established:
(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
performance of an act or acts, either for a limited period or perpetually;
(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, 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 respecting the
subject of the action or proceeding, and tending to render the judgment ineffectual.

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 discretion. Where the applicant's right
or title is doubtful or disputed, injunction is not proper. The possibility of irreparable damage without proof
of an actual existing right is not a ground for injunction.
A clear and positive right especially calling for judicial protection must be shown. Injunction is not a remedy
to protect or enforce contingent, 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 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 the acts against which the writ is to be directed are violative of said right.

In this case, the defendants in the ejectment case possess no such legal rights that merit the protection of
the courts through the writ of preliminary injunction. The MCTC has already rendered a decision in favor of
the RCA and ordered the defendants therein to vacate the premises. Their appeal to the RTC was dismissed
and the decision has become final. Evidently, their right to possess the property in question has already
been declared inferior or inexistent in relation to the right of the RCA in the MCTC decision which has
already become final and executory.[35]
WHEREFORE, the petition in G.R. No. 153829 is DENIED. The Decision dated March 18, 2002 and the
Resolution dated May 30, 2002 of the Court of Appeals in CA-G.R. SP No. 66974 are AFFIRMED. The motion
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) is likewise DENIED for lack of merit.
No costs.
SO ORDERED.

FIRST DIVISION
[ G.R. No. 156185, September 12, 2011 ]
CATALINA B. CHU, THEANLYN B. CHU, THEAN CHING LEE B. CHU, THEAN LEEWN B. CHU, AND MARTIN
LAWRENCE B. CHU, PETITIONERS, VS. SPOUSES FERNANDO C. CUNANAN AND TRINIDAD N. CUNANAN,
BENELDA ESTATE DEVELOPMENT CORPORATION, AND SPOUSES AMADO E. CARLOS AND GLORIA A.
CARLOS, RESPONDENTS.
DECISION

BERSAMIN, J.:
If two or more suits are instituted on the basis of the same cause of action, the filing of one or a judgment
upon the merits in any one is available as a ground for the dismissal of the others.[1]
We review the decision promulgated on November 19, 2002,[2] whereby the Court of Appeals (CA)
dismissed the petitioners' amended complaint in Civil Case No. 12251 of the Regional Trial Court, Branch
41, in San Fernando City, Pampanga (RTC) for being barred by res judicata.
Antecedents

On September 30, 1986, Spouses Manuel and Catalina Chu (Chus) executed a deed of sale with assumption
of mortgage[3] involving their five parcels of land situated in Saguin, San Fernando City, Pampanga,
registered under Transfer Certificate of Title (TCT) No. 198470-R, TCT No. 198471-R, TCT No. 198472-R, TCT
No. 198473-R, and TCT No. 199556-R, all of the Office of the Registry of Deeds of the Province of
Pampanga, in favor of Trinidad N. Cunanan (Cunanan) for the consideration ofP5,161,090.00. They also
executed a so-called side agreement, whereby they clarified that Cunanan had paid only P1,000,000.00 to
the Chus despite the Chus, as vendors, having acknowledged receiving P5,161,090.00; that the amount of
P1,600,000.00 was to be paid directly to Benito Co and to Security Bank and Trust Company (SBTC) in
whose favor the five lots had been mortgaged; and that Cunanan would pay the balance of P2,561.90.00
within three months, with a grace period of one month subject to 3%/month interest on any remaining
unpaid amount. The parties further stipulated that the ownership of the lots would remain with the Chus as
the vendors and would be transferred to Cunanan only upon complete payment of the total consideration
and compliance with the terms of the deed of sale with assumption of mortgage.[4]
Thereafter, the Chus executed a special power of attorney authorizing Cunanan to borrow P5,161,090.00
from any banking institution and to mortgage the five lots as security, and then to deliver the proceeds to
the Chus net of the balance of the mortgage obligation and the downpayment.[5]
Cunanan was able to transfer the title of the five lots to her name without the knowledge of the Chus, and
to borrow money with the lots as security without paying the balance of the purchase price to the Chus.
She later transferred two of the lots to Spouses Amado and Gloria Carlos (Carloses) on July 29, 1987. As a
result, on March 18, 1988, the Chus caused the annotation of an unpaid vendor's lien on three of the lots.
Nonetheless, Cunanan still assigned the remaining three lots to Cool Town Realty on May 25, 1989 despite
the annotation.[6]

In February 1988, the Chus commenced Civil Case No. G-1936 in the RTC to recover the unpaid balance
from Spouses Fernando and Trinidad Cunanan (Cunanans). Five years later, on April 19, 1993, the Chus
amended the complaint to seek the annulment of the deed of sale with assumption of mortgage and of the
TCTs issued pursuant to the deed, and to recover damages. They impleaded Cool Town Realty and
Development Corporation (Cool Town Realty), and the Office of the Registry of Deeds of Pampanga as
defendants in addition to the Cunanans.[7]
Considering that the Carloses had meanwhile sold the two lots to Benelda Estate Development Corporation
(Benelda Estate) in 1995, the Chus further amended the complaint in Civil Case No. G-1936 to implead
Benelda Estate as additional defendant. In due course, Benelda Estate filed its answer with a motion to
dismiss, claiming, among others, that the amended complaint stated no cause of action because it had
acted in good faith in buying the affected lots, exerting all efforts to verify the authenticity of the titles, and
had found no defect in them. After the RTC denied its motion to dismiss, Benelda Estate assailed the denial
on certiorari in the CA, which annulled the RTC's denial for being tainted with grave abuse of discretion and
dismissed Civil Case No. G-1936 as against Benelda Estate. On March 1, 2001, the Court upheld the
dismissal of Civil Case No. G-1936 in G.R. No. 142313 entitled Chu, Sr. v. Benelda Estate Development
Corporation.[8]
On December 2, 1999, the Chus, the Cunanans, and Cool Town Realty entered into a compromise
agreement,[9] whereby the Cunanans transferred to the Chus their 50% share in "all the parcels of land
situated in Saguin, San Fernando, Pampanga" registered in the name of Cool Town Realty "for and in
consideration of the full settlement of their case." The RTC approved the compromise agreement in a
partial decision dated January 25, 2000.[10]
Thereafter, on April 30, 2001, the petitioners herein (i.e., Catalina Chu and her children) brought another
suit, Civil Case No. 12251, against the Carloses and Benelda Estate,[11] seeking the cancellation of the TCTs
of the two lots in the name of Benelda Estate, and the issuance of new TCTs in their favor, plus damages.
The petitioners amended their complaint in Civil Case No. 12251 on February 4, 2002 to implead the
Cunanans as additional defendants.[12]
The Cunanans moved to dismiss the amended complaint based on two grounds, namely: (a) bar by prior
judgment, and (b) the claim or demand had been paid, waived, and abandoned. Benelda Estate likewise
moved to dismiss the amended complaint, citing as grounds: (a) forum shopping; (b) bar by prior judgment,
and (c) failure to state a cause of action. On their part, the Carloses raised affirmative defenses in their
answer, namely: (a) the failure to state a cause of action; (b) res judicata or bar by prior judgment; and (c)
bar by statute of limitations.
On April 25, 2002, the RTC denied both motions to dismiss,[13] holding that the amended complaint stated a
cause of action against all the defendants; that the action was not barred by res judicata because there was
no identity of parties and subject matter between Civil Case No.12251 and Civil Case No. G-1936; and that
the Cunanans did not establish that the petitioners had waived and abandoned their claim or that their
claim had been paid by virtue of the compromise agreement, pointing out that the compromise agreement
involved only the three parcels of land registered in the name of Cool Town Realty.[14]

The Cunanans sought reconsideration, but their motion was denied on May 31, 2002.[15]
On September 2, 2002, the Cunanans filed a petition for certiorari in the CA (SP-72558), assailing the RTC's
denial of their motion to dismiss and motion for reconsideration.[16]
On November 19, 2002, the CA promulgated its decision,[17] granting the petition for certiorari and
nullifying the challenged orders of the RTC. The CA ruled that the compromise agreement had ended the
legal controversy between the parties with respect to the cause of action arising from the deed of sale with
assumption of mortgage covering all the five parcels of land; that Civil Case No. G-1936 and Civil Case
No.12251 involved the violation by the Cunanans of the same legal right under the deed of sale with
assumption of mortgage; and that the filing of Civil Case No.12251 contravened the rule against splitting of
a cause of action, and rendered Civil Case No.12251 subject of a motion to dismiss based on bar by res
judicata. The CA disposed thusly:
WHEREFORE, premises considered, the present petition for certiorari is hereby GIVEN DUE COURSE and the
writ prayed for, accordingly GRANTED. Consequently, the challenged Orders of the respondent court
denying the motions to dismiss are hereby ANNULLED and SET ASIDE and a new one is hereby rendered
DISMISSING the Amended Complaint in Civil Case No. 12251.
No costs.
SO ORDERED.[18]

Hence, this appeal.

Issue

Was Civil Case No. 12251 barred by res judicata although the compromise agreement did not expressly
include Benelda Estate as a party and although the compromise agreement made no reference to the lots
now registered in Benelda Estate's name?
Ruling

We deny the petition for review.

I

The petitioners contend that the compromise agreement did not apply or extend to the Carloses and
Benelda Estate; hence, their Civil Case No. 12251 was not barred by res judicata.
We disagree.
A compromise agreement is a contract whereby the parties, by making reciprocal concessions, avoid a
litigation or put an end to one already commenced.[19] It encompasses the objects specifically stated
therein, although it may include other objects by necessary implication,[20] and is binding on the contracting

parties, being expressly acknowledged as a juridical agreement between them.[21] It has the effect and
authority of res judicata upon the parties.[22]
In the construction or interpretation of a compromise agreement, the intention of the parties is to be
ascertained from the agreement itself, and effect should be given to that intention.[23] Thus, the
compromise agreement must be read as a whole.
The following pertinent portions of the compromise agreement indicate that the parties intended to
thereby settle all their claims against each other, to wit:
1. That the defendants SPOUSES TRINIDAD N.CUNANAN and FERNANDO C.CUNANAN for and in
consideration of the full settlement of their case in the above-entitled case, hereby TRANSFER, DELIVER,
and CONVEY unto the plaintiffs all their rights, interest, benefits, participation, possession and ownership
which consists of FIFTY (50%) percent share on all the parcels of land situated in Saguin, San Fernando
Pampanga now registered in the name of defendant, COOL TOWN REALTY & DEVELOPMENT
CORPORATION, as particularly evidenced by the corresponding Transfer Certificates of Titles xxx
xxxx

6. That the plaintiffs and the defendant herein are waiving, abandoning, surrendering, quitclaiming,
releasing, relinquishing any and all their respective claims against each other as alleged in the pleadings
they respectively filed in connection with this case.[24] (bold emphasis supplied)

The intent of the parties to settle all their claims against each other is expressed in the phrase any and all
their respective claims against each other as alleged in the pleadings they respectively filed in connection
with this case, which was broad enough to cover whatever claims the petitioners might assert based on the
deed of sale with assumption of mortgage.
There is no question that the deed of sale with assumption of mortgage covered all the five lots, to wit:
WHEREAS, the VENDORS are willing to sell the above-described properties and the VENDEE is willing to buy
the same at FIFTY FIVE (P55.00) PESOS, Philippine Currency, per square meter, or a total consideration of
FIVE MILLION ONE HUNDRED SIXTY ONE THOUSAND and NINETY (P5,161,090.00) PESOS, Philippine
Currency.[25]

To limit the compromise agreement only to the three lots mentioned therein would contravene the avowed
objective of Civil Case No. G-1936 to enforce or to rescind the entire deed of sale with assumption of
mortgage. Such interpretation is akin to saying that the Cunanans separately sold the five lots, which is not
the truth. For one, Civil Case No. G-1936 did not demand separate amounts for each of the purchased lots.
Also, the compromise agreement did not state that the value being thereby transferred to the petitioners
by the Cunanans corresponded only to that of the three lots.
Apparently, the petitioners were guilty of splitting their single cause of action to enforce or rescind the
deed of sale with assumption of mortgage. Splitting a single cause of action is the act of dividing a single or
indivisible cause of action into several parts or claims and instituting two or more actions upon them.[26] A

single cause of action or entire claim or demand cannot be split up or divided in order to be made the
subject of two or more different actions.[27] Thus, Section 4, Rule 2 of the Rules of Court expressly prohibits
splitting of a single cause of action, viz:
Section 4. Splitting a single cause of action; effect of. -- If two or more suits are instituted on the basis of the
same cause of action, the filing of one or a judgment upon the merits in any one is available as a ground for
the dismissal of the others. (4a)

The petitioners were not at liberty to split their demand to enforce or rescind the deed of sale with
assumption of mortgage and to prosecute piecemeal or present only a portion of the grounds upon which a
special relief was sought under the deed of sale with assumption of mortgage, and then to leave the rest to
be presented in another suit; otherwise, there would be no end to litigation.[28] Their splitting violated the
policy against multiplicity of suits, whose primary objective was to avoid unduly burdening the dockets of
the courts. Their contravention of the policy merited the dismissal of Civil Case No. 12251 on the ground of
bar by res judicata.
Res judicata means a matter adjudged, a thing judicially acted upon or decided; a thing or matter settled by
judgment.[29] The doctrine of res judicata is an old axiom of law, dictated by wisdom and sanctified by age,
and founded on the broad principle that it is to the interest of the public that there should be an end to
litigation by the same parties over a subject once fully and fairly adjudicated. It has been appropriately said
that the doctrine is a rule pervading every well-regulated system of jurisprudence, and is put upon two
grounds embodied in various maxims of the common law: the one, public policy and necessity, which
makes it to the interest of the State that there should be an end to litigation -interest reipublicae ut sit finis
litium; the other, the hardship on the individual that he should be vexed twice for one and the same cause nemo debet bis vexari pro una et eadem causa. A contrary doctrine would subject the public peace and
quiet to the will and neglect of individuals and prefer the gratification of the litigious disposition on the part
of suitors to the preservation of the public tranquillity and happiness.[30]
Under the doctrine of res judicata, a final judgment or decree on the merits rendered by a court of
competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits and on all
points and matters determined in the previous suit.[31] The foundation principle upon which the doctrine
rests is that the parties ought not to be permitted to litigate the same issue more than once; that when a
right or fact has been judicially tried and determined by a court of competent jurisdiction, so long as it
remains unreversed, should be conclusive upon the parties and those in privity with them in law or
estate.[32]
Yet, in order that res judicata may bar the institution of a subsequent action, the following requisites must
concur:- (a) the former judgment must be final; (b) it must have been rendered by a court having
jurisdiction of the subject matter and the parties; (c) it must be a judgment on the merits; and (d) there
must be between the first and second actions (i) identity of parties, (ii) identity of the subject matter, and
(iii) identity of cause of action.[33]
The first requisite was attendant. Civil Case No. G-1936 was already terminated under the compromise
agreement, for the judgment, being upon a compromise, was immediately final and unappealable. As to
the second requisite, the RTC had jurisdiction over the cause of action in Civil Case No. G-1936 for the
enforcement or rescission of the deed of sale with assumption of mortgage, which was an action whose

subject matter was not capable of pecuniary estimation. That the compromise agreement explicitly settled
the entirety of Civil Case No. G-1936 by resolving all the claims of the parties against each other indicated
that the third requisite was also satisfied.[34]
But was there an identity of parties, of subject matter, and of causes of action between Civil Case No.G1936 and Civil Case No. 12251?
There is identity of parties when the parties in both actions are the same, or there is privity between them,
or they are successors-in-interest by title subsequent to the commencement of the action litigating for the
same thing and under the same title and in the same capacity.[35] The requirement of the identity of parties
was fully met, because the Chus, on the one hand, and the Cunanans, on the other hand, were the parties
in both cases along with their respective privies. The fact that the Carloses and Benelda Estate, defendants
in Civil Case No. 12251, were not parties in the compromise agreement was inconsequential, for they were
also the privies of the Cunanans as transferees and successors-in-interest. It is settled that the absolute
identity of parties was not a condition sine qua non for res judicata to apply, because a shared identity of
interest sufficed.[36] Mere substantial identity of parties, or even community of interests between parties in
the prior and subsequent cases, even if the latter were not impleaded in the first case, was sufficient.[37]
As to identity of the subject matter, both actions dealt with the properties involved in the deed of sale with
assumption of mortgage. Identity of the causes of action was also met, because Case No. G-1936 and Civil
Case No. 12251 were rooted in one and the same cause of action - the failure of Cunanan to pay in full the
purchase price of the five lots subject of the deed of sale with assumption of mortgage. In other words, Civil
Case No. 12251 reprised Civil Case No. G-1936, the only difference between them being that the petitioners
alleged in the former that Benelda Estate was "not also a purchaser for value and in good faith."[38]
In fine, the rights and obligations of the parties vis--vis the five lots were all defined and governed by the
deed of sale with assumption of mortgage, the only contract between them. That contract was single and
indivisible, as far as they were concerned. Consequently, the Chus could not properly proceed against the
respondents in Civil Case No. 12251, despite the silence of the compromise agreement as to the Carloses
and Benelda Estate, because there can only be one action where the contract is entire, and the breach
total, and the petitioners must therein recover all their claims and damages.[39] The Chus could not be
permitted to split up a single cause of action and make that single cause of action the basis of several
suits.[40]
WHEREFORE, we deny the petition for review on certiorari, and affirm the decision promulgated in CA-G.R.
SP No. 72558.
The petitioners shall pay the costs of suit.
SO ORDERED.

EN BANC
[ G.R. No. 174697, July 08, 2010 ]
CHAMBER OF REAL ESTATE AND BUILDERS' ASSOCIATIONS, INC. (CREBA), PETITIONER, VS. ENERGY
REGULATORY COMMISSION (ERC) AND MANILA ELECTRIC COMPANY (MERALCO), RESPONDENTS.
DECISION

BRION, J.:
This is a Petition for Certiorari with Prayer for the Issuance of a Temporary Restraining Order and/or Writ of
Preliminary Injunction[1] to nullify Section 2.6 of the Distribution Services and Open Access Rules (DSOAR),
promulgated by respondent Energy Regulatory Commission (ERC) on January 18, 2006. Petitioner Chamber
of Real Estate and Builders' Associations, Inc. asserts that Section 2.6 of the DSOAR, which obligates certain
customers to advance the amount needed to cover the expenses of extending lines and installing additional
facilities, is unconstitutional and contrary to Republic Act No. 9136, otherwise known as "The Electric
Power Industry Reform Act of 2001 (EPIRA)."
The Background Facts

The petitioner is a non-stock, non-profit corporation, organized under the laws of the Republic of the
Philippines, with principal office at 3/F CREBA Center, Don Alejandro Roces Avenue cor. South "A" Street,
Quezon City. It has almost 4,500 members, comprising of developers, brokers, appraisers, contractors,
manufacturers, suppliers, engineers, architects, and other persons or entities engaged in the housing and
real estate business.[2]
The ERC is a quasi-judicial and quasi-legislative regulatory body created under Section 38 of the EPIRA, with
office address at the Pacific Center Building, San Miguel Avenue, Ortigas Center, Pasig City. It is an
administrative agency vested with broad regulatory and monitoring functions over the Philippine electric
industry to ensure its successful restructuring and modernization, while, at the same time, promoting
consumer interest.[3]
Respondent Manila Electric Company (MERALCO) is a corporation organized under the laws of the Republic
of the Philippines, with principal office at Lopez Building, Ortigas Avenue, Pasig City. It is engaged primarily
in the business of power production, transmission, and distribution. It is the largest distributor of electricity
in the Philippines.[4]
Pursuant to its rule-making powers under the EPIRA, the ERC promulgated the Magna Carta for Residential
Electricity Consumers (Magna Carta), which establishes residential consumers' rights to have access to
electricity and electric service, subject to the requirements set by local government units and distribution
utilities (DUs).[5] Article 14 of the Magna Carta pertains to the rights of consumers to avail of extension lines
or additional facilities. It also distinguishes between consumers located within 30 meters from existing lines
and those who are located beyond 30 meters; the latter have the obligation to advance the costs of the
requested lines and facilities, to wit:

Article 14. Right to Extension of Lines and Facilities.--A consumer located within thirty (30) meters from the
distribution utilities' existing secondary low voltage lines, has the right to an extension of lines or
installation of additional facilities, other than a service drop, at the expense of the utility inasmuch as said
assets will eventually form part of the rate base of the private distribution utilities, or will be sourced from
the reinvestment funds of the electric cooperatives. However, if a prospective customer is beyond the said
distance, or his demand load requires that the utility extend lines and facilities, the customer may initially
fund the necessary expenditures.

Article 14 of the Magna Carta continues with a provision on how the costs advanced by the residential enduser can be recovered:
To recover his aforementioned expenditures, the customer may either demand the issuance of a notes
payable from the distribution utility or refund at the rate of twenty-five (25) percent of the gross
distribution revenue derived for the calendar year, or, if available, the purchase of preferred shares.
Revenue derived from additional customers tapped directly to the poles and facilities so extended shall be
considered in determining the revenues derived from the extension of facilities.

The same article specifies that if a developer initially pays the cost of the extension lines but passes it to the
registered customer, the customer would still be entitled to recover the cost in the manner provided under
this article:
When a developer initially paid the cost of the extension of lines to provide electric service to a specific
property and incorporated these expenses in the cost thereof, and that property was purchased and
transferred in the name of the registered customer, the latter shall be entitled to the refund of the cost of
the extension of lines, and exercise the options for refund provided in this article.

On January 18, 2006, the ERC modified this provision when it issued the DSOAR. Section 2.6.1 reiterates the
old rule requiring consumers located beyond 30 meters from existing lines to advance the costs of the
requested lines and facilities. Section 2.6.2 likewise provides that the costs advanced by consumers may be
refunded at the rate of 25% of the annual gross distribution revenue derived from all customers connected
to the line extension. However, Section 2.6.2 amends Article 14 of the Magna Carta by limiting the period
for the refund to five years, whether or not the amount advanced by the consumer is fully paid. Section 2.6
of the DSOAR decrees that:
2.6. MODIFICATIONS AND NEW PHYSICAL CONNECTIONS: RESIDENTIAL
2.6.1 RIGHT TO EXTENSION OF LINES AND FACILITIES - In accordance with the Magna Carta, a residential
End-user located within thirty (30) meters from the distribution utilities' existing secondary low voltage
lines has the right to an extension of lines or installation of additional facilities, other than a service drop, at
the expense of the utility. However, if a prospective customer is beyond the said distance, the customer
shall advance the amounts necessary to cover the expenditures on the facilities beyond thirty (30) meters.
2.6.2 REFUND--To recover the aforementioned advanced payment, the customer may either demand the
issuance of a notes payable from the distribution utility or a refund at the rate of twenty-five (25) percent

of the gross distribution revenue derived from all customers connected to the line extension for the
calendar year until such amounts are fully refunded or for five (5) years whichever period is shorter, or, if
available, the purchase of preferred shares. Revenue derived from additional customers tapped directly to
the poles and facilities so extended shall be considered in determining the revenues derived from the
extension of facilities.
Distribution Connection Assets paid for through advances from residential End-users shall be deemed plant
in service in the accounts of the DU. Unpaid advances shall be a reduction to plant in service. If
replacement becomes necessary at any time for any Distribution Connection Assets paid for by residential
End-users, the DU shall be solely responsible for the cost of such replacement which shall become plant in
service in the accounts of the DU, and shall not require another advanced payment from the connected
residential End-users unless the replacement is due to End-user fault.

The petitioner alleged that the entities it represented applied for electrical power service, and MERALCO
required them to sign pro forma contracts that (1) obligated them to advance the cost of the construction
of new lines and other facilities and (2) allowed annual refunds at 25% of the gross distribution revenue
derived from the customer's electric service, until the amount advanced is fully paid, pursuant to Section
2.6 of the DSOAR.[6]
The petitioner seeks to nullify Section 2.6 of the DSOAR, on the following grounds: (1) it is unconstitutional
since it is oppressive and it violates the due process and equal protection clauses; (2) it contravenes the
provisions of the EPIRA; and (3) it violates the principle of unjust enrichment.[7]
Petitioner claims that Section 2.6 of the DSOAR is unconstitutional as it is oppressive to the affected endusers who must advance the amount for the installation of additional facilities. Burdening residential endusers with the installation costs of additional facilities defeats the objective of the law - the electrification
of residential areas - and contradicts the provisions of the legislative franchise, requiring DUs to be
financially capable of providing the distribution service. Moreover, the questioned provision violates the
equal protection clause since the difference in treatment between end-users residing within 30 meters of
the existing lines and those beyond 30 meters does not rest on substantial distinctions.[8]
In addition, the petitioner alleges that the assailed provision contravenes Sections 2, 23, 41 and 43 of the
EPIRA[9] which are geared towards ensuring the affordability of electric power and the protection of
consumers.[10] Lastly, requiring consumers to provide the huge capital for the installation of the facilities,
which will be owned by distribution utilities such as MERALCO, results in unjust enrichment.[11]
THE RESPONDENTS' CASE

a. The ERC Position

Contradicting the petitioner's arguments, the ERC avers that it issued Section 2.6 of the DSOAR as an
exercise of police power directed at promoting the general welfare. The rule seeks to address the
inequitable situation where the cost of an extension facility benefiting one or a few consumers is equally
shared by them.[12]

The ERC likewise asserts that the equal protection clause is observed since the distinction between endusers residing within 30 meters of the existing lines and those beyond 30 meters is based on real and
substantial differences, namely: (1) proximity of end-user service drop to the main distribution lines; (2)
manner of checking status service; (3) system loss risk; (4) cost in installing the facilities; and (5) additional
risk posed by the possibility of the customer defaulting in his electric service with the DU.[13]
The ERC also maintains that Section 2 of the DSOAR is consistent with Sections 2, 23, 41 and 43 of the
EPIRA. By not subjecting most consumers to the payment of installation costs benefitting customers located
beyond a reasonably-set boundary, the provision in question gives effect to the EPIRA policy to ensure that
the prices of electricity remain affordable, transparent, and reasonable to the majority. The policy of
accelerating the total electrification of the country is also served when the residents of far-flung areas are
given the option to apply for extension lines. This option is subject only to the condition that the cost of the
extension of existing lines is advanced by the end-user, who will eventually be reimbursed; without such
condition, businesses will be reluctant to provide service connection in remote areas.[14]
Additionally, the ERC points out that the DSOAR provisions do not result in unjust enrichment since the DUs
do not stand to be materially benefited by the customers' advances. The DUs have the obligation to
reimburse the customers the advances within five years, and whatever advances are unpaid during the fiveyear period are recorded as reductions in "plant in service."[15]
Finally, it argues that petitioner lacks the standing to file the present suit since the petitioner is not an enduser who will sustain a direct injury as a result of the issuance and implementation of the DSOAR. The ERC
likewise maintains the petition for certiorari must fail since petitioner fails to impute grave abuse of
discretion to the ERC.[16]
b. The MERALCO Position
MERALCO reiterates the defenses raised by the ERC. It also contends that the present petition does not
involve the ERC's judicial and quasi-judicial functions so that a petition for certiorari is an improper remedy.
MERALCO likewise argues that the petition for certiorari, assuming it to be a correct remedy, should be
dismissed since the petitioner failed to observe the doctrine of hierarchy of courts by filing an original
petition with this Court.
On the merits, MERALCO points out that even if Section 2.6 of the DSOAR is struck down, the provision in
the Magna Carta, on the same point, would nevertheless require end-users located beyond 30 meters from
existing lines to advance the cost. The petitioner's members are not also end-users, but subdivision
developers, brokers, and various entities who are not affected by the questioned provision; if a developer
would apply for electric service, the terms and conditions of the service will not be governed by Section 2.6
of the DSOAR.[17]
MERALCO also elaborates on why the provision does not result in unjust enrichment and justifies the
distinction between end-users within the 30-meter limit and those located outside of this limit. The DSOAR
provides that the unpaid amounts that the end-users advanced for the electrical facilities are not included
in "plant in service." The total "plant in service" is the basis in fixing the rates collected by the DU from all
its customers. By having the end-users, located 30 meters away from existing lines, advance the amount,
this amount is no longer included in the rates passed on to regular consumers. The DSOAR further limits the

subsidies by regular consumers, by limiting the amount to be recovered to 25% and to five years. Thus, if
the costs of the lines are too great and the revenues are too small, it is the end-user who would bear the
cost and not the regular customers.[18]
THE ISSUES

The petitioner summarizes the issues as follows:

Procedural Issues:
A. Whether petitioner can challenge the constitutionality of a quasi-legislative act (i.e., the Rules) in a
petition for certiorari under Rule 65 of the Rules of Court.
B. Whether the Honorable Supreme [Court] has original jurisdiction over this case.
C. Whether petitioner has legal standing to sue.
D. Whether petitioner is authorized to file this suit.
Substantive issues:
A. Whether Section 2.6 of the Rules violates the due process and equal protection clause of the
Constitution.
B. Whether Section 2.6 of the Rules violates R.A. No. 9136.
C. Whether Section 2.6 of the Rules violates the rule against unjust enrichment.
D. Whether Section 2.6 of the Rules is a valid exercise of police power.[19]

THE COURT'S RULING

We resolve to dismiss the petition for its serious procedural and technical defects.
a. The Petitioner Has No Legal Standing
We do not see the petitioner as an entity with the required standing to assail the validity of Section 2.6 of
the DSOAR.
Legal standing or locus standi refers to a party's personal and substantial interest in a case, arising from the
direct injury it has sustained or will sustain as a result of the challenged governmental action. Legal
standing calls for more than just a generalized grievance. The term "interest" means a material interest, an
interest in issue affected by the governmental action, as distinguished from mere interest in the question
involved, or a mere incidental interest. Unless a person's constitutional rights are adversely affected by a

statute or governmental action, he has no legal standing to challenge the statute or governmental
action.[20]
The petitioner expressly enumerates its members to be the following: developers, brokers, appraisers,
contractors, manufacturers, suppliers, engineers, architects, and other persons or entities engaged in the
housing and real estate business.[21] It does not question the challenged DSOAR provision as a residential
end-user and it cannot because the challenged provision only refers to the rights and obligations of DUs
and residential end-users; neither the petitioner nor its members are residential end-users. In fact, the
DSOAR has separate provisions for the extension of lines or installation of additional facilities for nonresidential end-users, under its Section 2.7 entitled "Modifications and New Connections: Non-Residential."
Thus, neither the petitioner nor its members can claim any injury, as residential end-users, arising from the
challenged Section 2.6 of the DSOAR, nor cite any benefit accruing to them as residential end-users that
would result from the invalidation of the assailed provision.
The petitioner meets the objection to its capacity to bring suit through the claim that subdivision
developers are directly affected by the assailed provision because MERALCO has asked them to advance
the cost of installing additional lines and facilities, in accordance with Section 2.6 of the DSOAR.[22] This
claim is specious.
Section 1, Rule I of the Revised Rules and Regulations Implementing the Subdivision and Condominium
Buyer's Protective Decree (PD 957) and Other Related Laws provides the minimum design standards for
subdivisions. These minimum standards include an electrical power supply, described under subsection C(7)
thus:
7. Electrical Power Supply System
Mandatory individual household connection to primary and/or alternate sources of power.
xxxx

Provision of street lighting per pole is mandatory at 50-meter distance and every other pole if distance is
less than 50 meters.

Thus, subdivision developers are obligated under these rules to include in their design an electrical power
supply system that would link individual households within their subdivision to primary and/or alternate
sources of power. This requirement is intended to protect the rights of prospective subdivision
homeowners,[23] and exists regardless of the validity of Section 2.6 of the DSOAR.
In other words, the invalidation of Section 2.6 of the DSOAR would not permit subdivision developers to
renege from their duty to ensure power supply and to pass the costs of installing a proper electrical power
supply system to MERALCO. In this light, it is immaterial that MERALCO did require certain developers to
sign the Agreement for Extension of Lines And/Or Additional Facilities[24] as this was required under the
provisions of the Magna Carta, not under the assailed DSOAR provision that, in the first place, does not
govern the relationship of subdivision developers (who are not residential end-users) and MERALCO.

a. 1. No Transcendental Issue Involved

The petitioner cites instances when the Court, in the exercise of its discretion, waived the procedural rule
on standing in cases that raised issues of transcendental importance. We do not, however, view the
present case as one involving a matter of transcendental importance so that a waiver of the locus standi
rule should be recognized.
The Court, through Associate Justice Florentino P. Feliciano (now retired), provided the following
instructive guides as determinants in determining whether a matter is of transcendental importance: (1)
the character of the funds or other assets involved in the case; (2) the presence of a clear case of disregard
of a constitutional or statutory prohibition by the public respondent agency or instrumentality of the
government; and (3) the lack of any other party with a more direct and specific interest in the questions
being raised.[25]
In this case, the three determinants are glaringly absent. Public funds are not involved. The allegations of
constitutional and statutory violations of the public respondent agency are unsubstantiated by facts and
are mere challenges on the wisdom of the rules, a matter that will be further discussed in this Decision. In
addition, parties with a more direct and specific interest in the questions being raised - the residential endusers - undoubtedly exist and are not included as parties to the petition. As the Court did in Anak Mindanao
Party-List Group v. Executive Secretary,[26] we cannot waive the rule on standing where the three
determinants were not established.
b. Rule 65 is both a Wrong
and Misapplied Remedy
The petitioner's choice of remedy - a petition for certiorari under Rule 65 of the Rules of Court - is an
incorrect remedy.
Rule 65, Section 1 of the Rules of Court mandates that the remedy of certiorari is directed against a
tribunal, board, or officer exercising judicial or quasi-judicial functions:
Section 1. Petition for certiorari.--When any tribunal, board or officer exercising judicial or quasi-judicial
functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate
remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper
court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the
proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may
require.

Judicial functions are exercised by a body or officer clothed with authority to determine what the law is and
what the legal rights of the parties are with respect to the matter in controversy.[27] Quasi-judicial function
is a term that applies to the action or discretion of public administrative officers or bodies given the
authority to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from
them as a basis for their official action using discretion of a judicial nature.[28] Thus, in Philnabank
Employees Association v. Estanislao, we did not grant a petition for certiorari against the Department

Secretary who did not act in any judicial or quasi-judicial capacity but merely promulgated the questioned
implementing rules under the mandate of Republic Act No. 6971, the applicable law in this cited case.[29]
Contrary to Section 2, Rule III of the Rules of Court, the petitioner and its members are not even parties
who are aggrieved by the assailed DSOAR provision, as already discussed above. Even if they had been
properly aggrieved parties, the petition must still be dismissed for violation of yet another basic principle
applicable to Rule 65. This rule requires, for a petition for certiorari to be an appropriate remedy, that there
be no appeal or plain, speedy, and adequate remedy in the ordinary course of law.[30] Since the petitioner
assails the validity of a rule or statute and seeks our declaration that the rule is unconstitutional, a petition
for declaratory relief under Section 1, Rule 63 of the Rules of Court[31] provides a remedy more appropriate
than certiorari.
Furthermore, the Court of Appeals and the Supreme Court have original concurrent jurisdiction over
petitions for certiorari; the rule on hierarchy of courts determines the venue of recourses to these courts.
In original petitions for certiorari, the Supreme Court will not directly entertain this special civil action - as
in the present case - unless the redress desired cannot be obtained elsewhere based on exceptional and
compelling circumstances justifying immediate resort to this Court.[32]
In the present case, the petitioner alleges that the constitutionality and legality of the assailed provision are
of "immense importance to the public"[33] and are a "recipe for financial ruin of the affected parties."[34]
Moreover, it maintains that its petition raises transcendental and weighty issues that would merit the
Honorable Court's exercise of original jurisdiction.[35] To support its position, it cites the cases of the Senate
of the Philippines v. Ermita[36] and Ople v. Torres.[37]
Senate of the Philippines v. Ermita[38] was a case for certiorari and prohibition, while our Decision in Ople v.
Torres[39] did not clearly state whether the case was filed as a petition for certiorari. But granting that both
cases were filed as petitions for certiorari, they prompted the Court to suspend its rules of procedure as
they involved clear violations of the Constitution which urgently needed to be addressed. Moreover, they
were unquestionably filed by the proper parties.
The petitioners in the Ermita case included the Philippine Senate, which assailed Executive Order No. 464
for infringing on their prerogatives as legislators, to conduct inquiries in aid of legislation.[40] We had to
immediately resolve this case since the implementation of the challenged order had already resulted in the
absence of officials invited to Senate hearings.
In the Ople case, Senator Blas F. Ople sought to invalidate Administrative Order No. 308, which "establishes
a system of identification that is all-encompassing in its scope, [and that] affects the life and liberty of every
Filipino citizen and foreign resident."[41] The petition was based on two important constitutional grounds:
(1) usurpation of the power of Congress to legislate and (2) impermissible intrusion into the citizenry's
protected zone of privacy.
In the present case, the petitioner cannot come before this Court using an incorrect remedy and claim that
it was oppressed, or that its rights to due process and equal protection have been violated by an
administrative issuance that does not even affect its rights and obligations. The writ of certiorari is an
extraordinary remedy that the Court issues only under closely defined grounds and procedures that
litigants and their lawyers must scrupulously observe. They cannot seek refuge under the umbrella of this

remedy on the basis of an undemonstrated claim that they raise issues of transcendental importance, while
at the same time flouting the basic ground rules for the remedy's grant.[42]
These conclusions render any further discussion of the improperly raised substantive issues unnecessary.
WHEREFORE, premises considered, we hereby DISMISS the petition for its serious procedural and technical
defects. Costs against the petitioner.
SO ORDERED.