Jurisdiction1 Fullcases Genprinciples

G.R. No. 189950.*April 24, 2017.
**
BERNADETTE S. BILAG, ERLINDA BILAG-SANTILLAN,

DIXON BILAG, REYNALDO B. SUELLO, HEIRS OF LOURDES
S. BILAG, HEIRS OF LETICIA BILAG-HANAOKA, and HEIRS
OF NELLIE BILAG, petitioners, vs. ESTELA AY-AY, ANDRES
ACOP, JR., FELICITAS AP-AP, SERGIO AP-AP, JOHN
NAPOLEON A. RAMIREZ, JR., and MA. TERESA A. RAMIREZ,
respondents.
Remedial Law; Civil Procedure; Jurisdiction; Words and Phrases; Jurisprudence has
consistently held that jurisdiction is defined as the power and authority of a court to hear,
try, and decide a case.—Jurisprudence has consistently held that “[j]urisdiction is defined
as the power and authority of a court to hear, try, and decide a case. In order for the court
or an adjudicative body to have author-
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* Part of the Court’s Decongestion Program.

** FIRST DIVISION.
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Bilag vs. Ay-Ay
ity to dispose of the case on the merits, it must acquire, among others, jurisdiction over
the subject matter. It is axiomatic that jurisdiction over the subject matter is the power to
hear and determine the general class to which the proceedings in question belong; it is
conferred by law and not by the consent or acquiescence of any or all of the parties or by
erroneous belief of the court that it exists. Thus, when a court has no jurisdiction over the
subject matter, the only power it has is to dismiss the action.” Perforce, it is important that
a court or tribunal should first determine whether or not it has jurisdiction over the subject
matter presented before it, considering that any act that it performs without jurisdiction
shall be null and void, and without any binding legal effects.
Civil Law; Land Registration; Director of Lands; Since the subject lands are untitled
and unregistered public lands, then petitioners correctly argued that it is the Director of
Lands who has the authority to award their ownership.—Since the subject lands are
untitled and unregistered public lands, then petitioners correctly argued that it is the
Director of Lands who has the authority to award their ownership. Thus, the RTC Br. 61
correctly recognized its lack of power or authority to hear and resolve respondents’ action
for quieting of title. In Heirs of Pocdo v. Avila, 719 SCRA 552 (2014), the Court ruled that
the trial court therein correctly dismissed an action to quiet title on the ground of lack of
jurisdiction for lack of authority to determine who among the parties have better right over
the disputed property, which is admittedly still part of public domain for being within the
Baguio Townsite Reservation.
Remedial Law; Civil Procedure; Jurisdiction; When a court has no jurisdiction over the
subject matter, the only power it has is to dismiss the action, as any act it performs without
jurisdiction is null and void, and without any binding legal effects.—RTC Br. 61 has no
jurisdiction over Civil Case No. 5881-R as the plaintiffs therein (herein respondents) seek to
quiet title over lands which belong to the public domain. Necessarily, Civil Case No. 5881-R
must be dismissed on this ground. It should be stressed that the court a quo’s lack of
subject matter jurisdiction over the case renders it without authority and necessarily
obviates the resolution of the merits of the case. To reiterate, when a court has no
jurisdiction over the subject matter, the only power it has is to dismiss the action, as any
act it performs without jurisdiction is null and void, and without any
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Bilag vs. Ay-Ay
binding legal effects. In this light, the Court finds no further need to discuss the other
grounds relied upon by petitioners in this case.
PETITION for review on certiorari of the decision and resolution of

the Court of Appeals.
The facts are stated in the opinion of the Court.
Oracion, Barlis and Associates for petitioners.
J.R. Simbillo & Associates for respondents.
PERLAS-BERNABE,J.:
Assailed in this petition for review on certiorari1 are the

Decision2 dated March 19, 2009 and the Resolution3 dated
September 3, 2009 of the Court of Appeals (CA) in C.A.-G.R. CV
No. 86266, which set aside the Order4 dated October 10, 2005 of the
Regional Trial Court of Baguio City, Branch 61 (RTC Br. 61), and
consequently, remanded the case to the latter court for trial.
The Facts
The instant case stemmed from a Complaint5 dated August 12,

2004 for Quieting of Title with Prayer for Preliminary Injunction
filed by respondents Estela Ay-Ay, Andres Acop, Jr., Felicitas Ap-
Ap, Sergio Ap-Ap, John Napoleon A. Ramirez, Jr., and Ma. Teresa
A. Ramirez (respondents) against petitioners Bernadette S. Bilag,
Erlinda Bilag-Santillan,
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1 Rollo, pp. 13-52.

2 Id., at pp. 54-64. Penned by Associate Justice Romeo F. Barza, with Associate Justices Josefina
Guevara-Salonga and Arcangelita M. Romilla-Lontok, concurring.
3 Id., at pp. 65-66.
4 Records, pp. 413-423. Penned by Presiding Judge Antonio C. Reyes.
5 Rollo, pp. 108-121.
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Bilag vs. Ay-Ay
Dixon Bilag, Reynaldo B. Suello, Heirs of Lourdes S. Bilag, Heirs of
Leticia Bilag-Hanaoka, and Heirs of Nellie Bilag before the RTC
Br. 61, docketed as Civil Case No. 5881-R. Essentially, respondents
alleged that Iloc Bilag, petitioners’ predecessor-in-interest, sold to
them separately various portions of a 159,496-square-meter parcel
of land designated by the Bureau of Lands as Approved Plan No.
544367, Psu 189147 situated at Sitio Benin, Baguio City (subject
lands), and that they registered the corresponding Deeds of
Sale6 with the Register of Deeds of Baguio City. According to
respondents, Iloc Bilag not only acknowledged full payment and
guaranteed that his heirs, successors-in-interest, and executors are
to be bound by such sales, but he also caused the subject lands to
be removed from the Ancestral Land Claims. Respondents further
alleged that they have been in continuous possession of the said
lands since 1976 when they were delivered to them and that they
have already introduced various improvements thereon. Despite
the foregoing, petitioners refused to honor the foregoing sales by
asserting their adverse rights on the subject lands. Worse, they
continued to harass respondents, and even threatened to demolish
their improvements and dispossess them thereof. Hence, they filed
the instant complaint to quiet their respective titles over the
subject lands and remove the cloud cast upon their ownership as a
result of petitioners’ refusal to recognize the sales.7
For their part, petitioners filed a Motion to Dismiss8dated
November 4, 2004 on the grounds of lack of jurisdiction,
prescription/laches/estoppel, and res judicata. Anent the first
ground, petitioners averred that the subject lands are untitled,
unregistered, and form part of the Baguio Townsite Reservation
which were long classified as lands of the public domain. As such,
the RTC has no jurisdiction over the case as it is the Land
Management Bureau (formerly the Bureau of
_______________
6 Id., at pp. 97-105.

7 Id., at pp. 108-121. See also id., at pp. 56-58.
8 Id., at pp. 122-141.
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Bilag vs. Ay-Ay
Lands) which is vested with the authority to determine issues of
ownership over unregistered public lands.9
As to the second ground, petitioners argued that it is only now,
or more than 27 years from the execution of the Deeds of Sale, that
respondents seek to enforce said Deeds; thus, the present action is
already barred by prescription and/or laches.10
Regarding the final ground, petitioners pointed out that on
January 27, 1998, respondents had already filed a complaint
against them for injunction and damages, docketed as Civil Case
No. 3934-R before the Regional Trial Court of Baguio City, Branch
5 (RTC Br. 5), wherein they principally asserted their ownership
over the subject lands. However, RTC Br. 5 dismissed Civil Case
No. 3934-R for lack of merit on the ground of respondents’ failure
to show convincing proof of ownership over the same,11 which Order
of dismissal was then affirmed by the CA on appeal.12Eventually,
the Court issued a Resolution dated January 21, 2004 13 declaring
the case closed and terminated for failure to file the intended
petition subject of the Motion for Extension to file the same. In
view of the foregoing, petitioners contended that due to the final
and executory ruling in Civil Case No. 3934-R, the filing of Civil
Case No. 5881-R seeking to establish the ownership thereof is
already barred by res judicata.14
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9 Id., at pp. 122-124.

10 Id., at pp. 125-128.
11 See Order dated September 22, 1999 penned by Judge Antonio M. Esteves;
Records, pp. 381-384.
12 See Decision dated October 29, 2002 (Rollo, pp. 77-83) and Resolution dated
September 8, 2003 (Rollo, pp. 85-86).
13 The January 21, 2004 Resolution was not attached to the Rollo. However, the
Court issued a Resolution dated July 19, 2004 and clarified their ruling, declaring
the case closed and terminated. Id., at pp. 87-88.
14 Id., at pp. 128-140.
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The RTC Br. 61’s Ruling
In an Order15 dated October 10, 2005, the RTC Br. 61 ruled in

petitioners’ favor, and consequently, ordered the dismissal of Civil
Case No. 5881-R on the following grounds: (a) it had no authority
to do so; (b) the Deeds of Sale in respondents’ favor could not as yet
be considered title to the subject lands, noting the failure of
respondents to perfect their title or assert ownership and
possession thereof for the past 27 years; and (c) the filing of the
instant case is barred by res judicata considering the final and
executory Decision dismissing the earlier filed Civil Case No. 3934-
R where respondents similarly sought to be declared the owners of
the subject lands.16
The CA’s Ruling
In a Decision18 dated March 19, 2009, the CA set aside the

dismissal of Civil Case No. 5881-R, and accordingly, remanded the
case to the court a quo for trial.19 It held that Civil Case No. 3934-R
was an action for injunction where respondents sought to enjoin
petitioners’ alleged entry into the subject lands and their
introduction of improvements thereat; whereas Civil Case No.
5881-R is an action to quiet title where respondents specifically
prayed, inter alia, for the removal of the cloud upon their
ownership and possession of the subject lands. In this light, the CA
concluded that while these cases may involve the same properties,
the nature of the action differs; hence, res judicata is not a bar to
the present suit. On the issue of laches, prescription or estoppel,
the CA pointed out that in view of respondents’ allegation that
they
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15 Records, pp. 413-423.

16 Id., at pp. 421-423.
Aggrieved, respondents appealed to the CA.17
17 See Notice of Appeal dated October 27, 2005; id., at pp. 425-426.
18 Rollo, pp. 54-64.
19 Id., at p. 63.
20 Id., at pp. 60-63.
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Bilag vs. Ay-Ay
have been in possession of the subject lands since 1976, their
action to quiet title is imprescriptible.20
Dissatisfied, petitioners moved for reconsideration21which was,
however, denied in a Resolution22 dated September 3, 2009; hence,
this petition.
The Issue Before the Court

The issue for the Court’s resolution is whether or not the CA
correctly set aside the dismissal of Civil Case No. 5881-R, and
accordingly, remanded the case to the court a quofor trial.
The Court’s Ruling
The petition is meritorious.

At the outset, it must be stressed that in setting aside the Order
of dismissal of Civil Case No. 5881-R due to the inapplicability of
the grounds of res judicata and prescription/laches, the CA notably
omitted from its discussion the first ground relied upon by
petitioners, which is lack of jurisdiction.
Jurisprudence has consistently held that “[j]urisdiction is
defined as the power and authority of a court to hear, try, and
decide a case. In order for the court or an adjudicative body to have
authority to dispose of the case on the merits, it must acquire,
among others, jurisdiction over the subject matter. It is axiomatic
that jurisdiction over the subject matter is the power to hear and
determine the general class to which the proceedings in question
belong; it is conferred by law and not by the consent or
acquiescence of any or all of the parties or by erroneous belief of
the court that it exists. Thus, when a court has no jurisdiction over
the subject matter, the only
_______________
20 Id., at pp. 60-63.

21 CA Rollo, pp. 235-254.
22 Rollo, pp. 65-66.
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power it has is to dismiss the action.”23 Perforce, it is important
that a court or tribunal should first determine whether or not it
has jurisdiction over the subject matter presented before it,
considering that any act that it performs without jurisdiction shall
be null and void, and without any binding legal effects. The Court’s
pronouncement in Tan v. Cinco,24 is instructive on this matter, to
wit:
A judgment rendered by a court without jurisdiction is null and void and may be
attacked anytime. It creates no rights and produces no effect. It remains a basic fact in law
that the choice of the proper forum is crucial, as the decision of a court or tribunal without
jurisdiction is a total nullity. A void judgment for want of jurisdiction is no judgment at all.
All acts performed pursuant to it and all claims emanating from it have no legal effect.25
Now, on the issue of jurisdiction, a review of the records shows

that the subject lands form part of a 159,496-square-meter parcel
of land designated by the Bureau of Lands as Approved Plan No.
544367, Psu 189147 situated at Sitio Benin, Baguio City. Notably,
such parcel of land forms part of the Baguio Townsite Reservation,
a portion of which, or 146, 428 square meters, was awarded to Iloc
Bilag due to the reopening of Civil Reservation Case No. 1, GLRO
Record No. 211, as evidenced by a Decision26 dated April 22, 1968
promulgated by the then — Court of First Instance of Baguio City.
_______________
23 Mitsubishi Motors Philippines Corporation v. Bureau of Customs, G.R. No. 209830, June 17, 2015,
759 SCRA 306, 311-312. Citations omitted.
24 See G.R. No. 213054, June 15, 2016, 793 SCRA 610.
25 Id., citing Tiu v. First Plywood Corporation, 629 Phil. 120, 133; 615 SCRA 117, 129 (2010).
26 CA Rollo, pp. 91-94. Penned by Judge Pio R. Marcos.
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Bilag vs. Ay-Ay
In a catena of cases,27 and more importantly, in Presidential
Decree No. (PD) 1271,28 it was expressly declared that all orders
and decisions issued by the Court of First Instance of Baguio and
Benguet in connection with the proceedings for the reopening of
Civil Reservation Case No. 1, GLRO Record 211, covering lands
within the Baguio Townsite Reservation are null and void and
without force and effect. While PD 1271 provides for a means to
validate ownership over lands forming part of the Baguio Townsite
Reservation, it requires, among others, that a Certificate of Title be
issued on such lands on or before July 31, 1973.29In this case,
records reveal
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27 See Presidential Decree No. 1271 Committee v. De Guzman, G.R. No. 187291, December 5, 2016,
811 SCRA 579; Residents of Lower Atab & Teacher’s Village, Barangay Sto. Tomas Proper, Baguio City v.
Sta. Monica Industrial & Development Corporation, 745 Phil. 554; 738 SCRA 450 (2014); Heirs of Pacifico
Pocdo v. Avila, 730 Phil. 215; 719 SCRA 552 (2014); Republic v. Sangalang, 243 Phil. 46; 159 SCRA 515
(1988); Republic v. Fañgonil, 218 Phil. 484; 133 SCRA 513 (1984); Republic v. Marcos, 152 Phil. 204; 52
SCRA 238 (1973); Republic v. Marcos, 140 Phil. 241; 29 SCRA 517 (1969).
28 Entitled “AN ACT NULLIFYING DECREES OF REGISTRATION AND CERTIFICATES OF TITLE COVERING
LANDS WITHIN THE BAGUIO TOWNSITE RESERVATION ISSUED IN CIVIL REGISTRATION CASE NO. 1,
GLRO RECORD NO. 211 PURSUANT TO REPUBLIC ACT NO. 931, AS AMENDED, BUT CONSIDERING AS VALID
CERTAIN TITLES OF SUCH LANDS THAT ARE ALIENABLE AND DISPOSABLE UNDER CERTAIN CONDITIONS AND FOR
OTHER PURPOSES,” approved on December 22, 1977.
29 See Section 1, PD 1271 which reads:
All orders and decisions issued by the Court of First Instance of Baguio and Benguet in
connection with the proceedings for the reopening of Civil Reservation Case No. 1, GLRO Record
No. 211, covering lands within the Baguio Townsite Reservation, and decreeing such lands in
favor of private individuals or entities, are hereby declared null and void and without force and
effect; 1. SECTION PROVIDED, HOWEVER, that all certificates of titles issued on or before
July 31, 1973 shall be considered valid and the lands covered by them shall be
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that the subject lands are unregistered and untitled, as petitioners’
assertion to that effect was not seriously disputed by respondents.
Clearly, the award of lots 2 and 3 of the 159,496-square-meter
parcel of land designated by the Bureau of Lands as Approved Plan
No. 544367, Psu 189147 — which includes the subject lands — to
Iloc Bilag by virtue of the reopening of Civil Reservation Case No.
1, GLRO Record 211, is covered by the blanket nullification
provided under PD 1271, and consistently affirmed by the
prevailing case law. In view of the foregoing, it is only reasonable
to conclude that the subject lands should be properly classified as
lands of the public domain as well.
Therefore, since the subject lands are untitled and unregistered
public lands, then petitioners correctly argued that it is the
Director of Lands who has the authority to award their
ownership.30 Thus, the RTC Br. 61 correctly recognized its
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deemed to have been conveyed in fee simple to the registered owners upon a
showing of, and compliance with, the following conditions:
The lands covered by the titles are not within any government, public or
quasi-public reservation, forest, military or otherwise, as certified by
appropriating government agencies; (a)
Payment by the present title holder to the Republic of the Philippines of an
amount equivalent to fifteen (b) per centum (15%) of the assessed value of
the land whose title is voided as of revision period 1973 (P.D. 76), the amount
payable as follows: Within ninety (90) days of the effectivity of this Decree,
the holders of the titles affected shall manifest their desire to avail of the
benefits of this provision and shall pay ten per centum (10%) of the above
amount and the balance in two equal installments, the first installment to be
paid within the first year of the effectivity of this Decree and the second
installment within a year thereafter.
30 See People v. Pareja, 267 Phil. 172; 189 SCRA 143 (1990). See also Section 4
of Commonwealth Act No. 141, entitled “AN ACT TO
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Bilag vs. Ay-Ay
lack of power or authority to hear and resolve respondents’ action
for quieting of title.31 In Heirs of Pocdo v. Avila,32the Court ruled
that the trial court therein correctly dismissed an action to quiet
title on the ground of lack of jurisdiction for lack of authority to
determine who among the parties have better right over the
disputed property, which is admittedly still part of public domain
for being within the Baguio Townsite Reservation, viz.:
The DENR Decision was affirmed by the Office of the President which held that lands
within the Baguio Townsite Reservation belong to the public domain and are no
longer registrable under the Land Registration Act. The Office of the President
ordered the disposition of the disputed property in accordance with the applicable rules of
procedure for the disposition of alienable public lands within the Baguio Townsite
Reservation, particularly Chapter X of Commonwealth Act No. 141 on Townsite
Reservations and other applicable rules.
Having established that the disputed property is public land, the trial court
was therefore correct in dismissing the complaint to quiet title for lack of
jurisdiction. The trial court had no jurisdiction to determine who among the
parties have better right over the disputed property which is admittedly still part
of the public domain. As held in Dajunos v. Tandayag:
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AMEND AND COMPILE THE LAWS RELATIVE TO LANDS OF THE PUBLIC DOMAIN,” otherwise known as the
“PUBLIC LAND ACt,” (approved on November 7, 1936) which reads:
Subject to said control, the Director of Lands shall have direct executive control of the survey,
classification, lease, sale or any other form of concession or disposition and management of the
lands of the public domain, and his decisions as to questions of fact shall be conclusive when
approved by the Secretary of Agriculture and Commerce. 4. Section
31 See Records, p. 421.
32 Heirs of Pacifico Pocdo v. Avila, supra note 27.
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x x x The Tarucs’ action was for “quieting of title” and necessitated determination
of the respective rights of the litigants, both claimants to a free patent title, over a
piece of property, admittedly public land. The law, as relied upon by jurisprudence,
lodges “the power of executive control, administration, disposition and alienation of
public lands with the Director of Lands subject, of course, to the control of the
Secretary of Agriculture and Natural Resources.”
In sum, the decision rendered in Civil Case 1218 on October 28, 1968 is a patent
nullity. The court below did not have power to determine who (the Firmalos
or the Tarucs) were entitled to an award of free patent title over that piece
of property that yet belonged to the public domain. Neither did it have power
to adjudge the Tarucs as entitled to the “true equitable ownership” thereof, the
latter’s effect being the same: the exclusion of the Firmalos in favor of the Tarucs.
In an action for quieting of title, the complainant is seeking for “an adjudication that a
claim of title or interest in property adverse to the claimant is invalid, to free him from the
danger of hostile claim, and to remove a cloud upon or quiet title to land where stale or
unenforceable claims or demands exist.” Under Articles 476 and 477 of the Civil Code, the
two indispensable requisites in an action to quiet title are: (1) that the plaintiff has a legal
or equitable title to or interest in the real property subject of the action; and (2) that there
is a cloud on his title by reason of any instrument, record, deed, claim, encumbrance or
proceeding, which must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity.
In this case, petitioners, claiming to be owners of the disputed property, allege that
respondents are unlawfully claiming the disputed property by using void
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Bilag vs. Ay-Ay
documents, namely the “Catulagan” and the Deed of Waiver of Rights. However, the
records reveal that petitioners do not have legal or equitable title over the
disputed property, which forms part of Lot 43, a public land within the Baguio
Townsite Reservation. It is clear from the facts of the case that petitioners’
predecessors-in-interest, the heirs of Pocdo Pool, were not even granted a
Certificate of Ancestral Land Claim over Lot 43, which remains public land. Thus,
the trial court had no other recourse but to dismiss the case.33 (Emphases and
underscoring supplied)
In conclusion, RTC Br. 61 has no jurisdiction over Civil Case No.

5881-R as the plaintiffs therein (herein respondents) seek to quiet
title over lands which belong to the public domain. Necessarily,
Civil Case No. 5881-R must be dismissed on this ground. It should
be stressed that the court a quo’s lack of subject matter jurisdiction
over the case renders it without authority and necessarily obviates
the resolution of the merits of the case. To reiterate, when a court
has no jurisdiction over the subject matter, the only power it has is
to dismiss the action, as any act it performs without jurisdiction is
null and void, and without any binding legal effects. In this light,
the Court finds no further need to discuss the other grounds relied
upon by petitioners in this case.
WHEREFORE, the petition is GRANTED. The Decision dated
March 19, 2009 and the Resolution dated September 3, 2009 of the
Court of Appeals in C.A.-G.R. CV No. 86266 are
hereby REVERSED and SET ASIDE. Accordingly, Civil Case No.
5881-R is DISMISSED on the ground of lack of jurisdiction on the
part of the Regional Trial Court of Baguio City, Branch 61.
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33 Id., at pp. 223-225; pp. 559-561.
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SO ORDERED.
DEPARTMENT OF AGRARIAN REFORM, now
represented by OIC-SEC. NASSER PANGANDAMAN,
petitioner, vs. TRINIDAD VALLEY REALTY & DEVELOPMENT
CORPORATION, FRANNIE GREENMEADOWS PASTURES,
INC., ISABEL GREENLAND AGRI-BASED RESOURCES, INC.,
ISABEL GREENMEADOWS QUALITY PRODUCTS, INC.,
ERNESTO BARICUATRO, CLAUDIO VILLO and EFREN
NUEVO, respondents.
February 11, 2014. G.R. No. 174162.*
GRACE B. FUA, in her capacity as the PROVINCIAL AGRARIAN
REFORM OFFICER OF NEGROS ORIENTAL, JOSELIDO S.
DAYOHA, JESUS S. DAYOHA and RODRIGO S. LICANDA,
petitioners, vs. TRINIDAD VALLEY REALTY AND
DEVELOPMENT CORPORATION, FRANNIE GREEN-
MEADOWS PASTURES, INC., ISABEL GREENLAND
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* EN BANC.
651AGRI-BASEDRESOURCES, INC., ISABEL EVERGREEN

PLANTATIONS INC., MICHELLE FARMS, INC., ISABEL
GREENMEADOWS QUALITY PRODUCTS, INC., ERNESTO
BARICUATRO, CLAUDIO VILLO and EFREN NUEVO,
respondents.
February 11, 2014. G.R. No. 183191.*
TRINIDAD VALLEY REALTY & DEVELOPMENT
CORPORATION, FRANNIE GREENMEADOWS PASTURES,
INC., ISABEL GREENLAND AGRI-BASED RESOURCES, INC.,
ISABEL GREENMEADOWS QUALITY PRODUCTS, INC.,
ERNESTO BARICUATRO, CLAUDIO VILLO and EFREN
NUEVO, petitioners, vs. THE REPUBLIC OF THE PHILIPPINES
and THE LAND REGISTRATION AUTHORITY, respondents.
Remedial Law; Civil Procedure; Jurisdiction; It is a cardinal principle in remedial law
that the jurisdiction of a court over the subject matter of an action is determined by the law
in force at the time of the filing of the complaint and the allegations of the complaint.—It is a
cardinal principle in remedial law that the jurisdiction of a court over the subject matter of
an action is determined by the law in force at the time of the filing of the complaint and the
allegations of the complaint. Jurisdiction is determined exclusively by the Constitution and
the law and cannot be conferred by the voluntary act or agreement of the parties. It cannot
also be acquired through or waived, enlarged or diminished by their act or omission, nor
conferred by the acquiescence of the court. It is neither for the court nor the parties to
violate or disregard the rule, this matter being legislative in character. The nature of an
action, as well as which court or body has jurisdiction over it, is determined based on the
allegations contained in the complaint of the plaintiff, irrespective of whether or not the
plaintiff is entitled to recover upon all or some of the claims asserted therein. The
averments in the complaint and the character of the relief sought are the ones to be
consulted. Once vested by the allegations in the complaint, jurisdiction also remains vested
irrespective of whether or not the plaintiff is entitled to recover upon all or some of the
claims asserted therein.
652
Agrarian Reform; Jurisdiction; Comprehensive Agrarian Reform Program (CARP); All
controversies on the implementation of the Comprehensive Agrarian Reform Program
(CARP) fall under the jurisdiction of the Department of Agrarian Reform (DAR), even
though they raise questions that are also legal or constitutional in nature.—The Court
likewise ruled in the similar case of DAR v. Cuenca, 439 SCRA 15 (2004), that “[a]ll
controversies on the implementation of the Comprehensive Agrarian Reform Program
(CARP) fall under the jurisdiction of the Department of Agrarian Reform (DAR), even
though they raise questions that are also legal or constitutional in nature.” In said case, it
was noted that the main thrust of the allegations in the Complaint was the propriety of the
Notice of Coverage and “not x x x the ‘pure question of law’ spawned by the alleged
unconstitutionality of EO 405 — but x x x the annulment of the DAR’s Notice of Coverage.”
The Court thus held that: To be sure, the issuance of the Notice of Coverage constitutes the
first necessary step towards the acquisition of private land under the CARP. Plainly then,
the propriety of the Notice relates to the implementation of the CARP, which is under the
quasi-judicial jurisdiction of the DAR. Thus, the DAR could not be ousted from its
authority by the simple expediency of appending an allegedly constitutional or
legal dimension to an issue that is clearly agrarian.
Same; Same; In case of doubt, the jurisprudential trend is for courts to refrain from
resolving a controversy involving matters that demand the special competence of
administrative agencies, even if the questions involved are also judicial in character.—The
Court further stated in Cuenca that “in case of doubt, the jurisprudential trend is for
courts to refrain from resolving a controversy involving matters that demand the
special competence of administrative agencies, ‘even if the question[s] involved
[are] also judicial in character.’” In the instant case, however, there is hardly any doubt
that the RTC had no jurisdiction over the subject matter of the case. Consequently, it did
not have authority to perform any of the following: order the admission of the amended
petition of Trinidad Valley Realty and Development Corporation, et al., decide the amended
petition on the merits, or issue a permanent prohibitory injunction. In any case, such
injunction issued by the RTC is a nullity in view of the express prohibitory provisions of the
CARP and this Court’s Administrative Circular Nos. 29-2002 and 382002 enjoining all trial
judges to strictly observe Section 68 of RA
6536657, viz.: SECTION 68. Immunity of Government Agencies from Undue
Interference.—No injunction, restraining order, prohibition or mandamus shall be issued by
the lower courts against the Department of Agrarian Reform (DAR), the Department of
Agriculture (DA), the Department of Environment and Natural Resources (DENR), and the
Department of Justice (DOJ) in their implementation of the program.
PETITIONS for review on certiorari of the decision and resolution

of the Court of Appeals and an order of the Regional Trial Court
of Guihulngan, Negros Oriental, Br. 64.
Louie L. Naranjo for petitioners in G.R. No. 174162.
Bejamin R. Militar for Trinidad Valley Realty & Development
Corporation, et al. in G.R. No. 183191.
Delfin B. Samson for petitioner DAR in G.R. No. 173386.
VILLARAMA, JR.,J.:
The consolidated petitions before us raise intertwined issues of
jurisdiction over cases involving the implementation of Republic
Act No. 6657, otherwise known as the “Comprehensive Agrarian
Reform Law of 1988” (hereinafter, RA 6657). The petitions likewise
question whether a regional trial court may exercise jurisdiction if
the case also assails the constitutionality of administrative orders,
regulations and other related issuances implementing the said law.
The following facts are common to the three cases under
consolidation:
Trinidad Valley Realty and Development Corporation, Frannie
Greenmeadows Pastures, Inc., Isabel Greenland Agri-based
Resources, Inc., Isabel Evergreen Plantations, Inc., Michelle
Farms, Inc., Isabel Greenmeadows Quality
654Products, Inc., Ernesto Baricuatro, Claudio Villo, and Efren
Nuevo (hereinafter, Trinidad Valley Realty and Development
Corporation, et al.) are the registered owners of a parcel of land in
Vallehermoso,[1] Negros Oriental. The landholding consists of a
total area of 641.7895 hectares — about 200 hectares thereof are
devoted to the cultivation of sugar cane. The Department of
Agrarian Reform (DAR) placed 479.8905 hectares of the said
landholding under the coverage of RA 6657 between March 1995
and July 2000. Certificates of Land Ownership Award (CLOAs)
and Transfer Certificates of Title (TCTs) were subsequently issued
in favor of the agrarian reform beneficiaries.[2]
On June 10, 2004, Trinidad Valley Realty and Development
Corporation, et al., filed before the Regional Trial Court (RTC),
Branch 64, Guihulngan, Negros Oriental, a Petition for
Declaration of Unconstitutionality Through Certiorari, Prohibition
and Mandamus with Prayer for Preliminary Prohibitory Injunction
and Restraining Order[3] against the Land Registration Authority
(LRA), the DAR, and the beneficiaries under the Comprehensive
Agrarian Reform Program (CARP), docketed as Special Civil
Action No. 04-02-V. In their Petition, Trinidad Valley Realty and
Development Corporation, et al. made the following main
allegations:
1. That the DAR committed grave abuse of discretion amounting
to lack of jurisdiction when it committed the following acts: it
passed Administrative Order No. 12, Series of 1989 and other
related issuances which allowed the DAR to unilaterally
choose beneficiaries other than those intended by the
Constitution as beneficiaries; it subjected Trinidad Valley
Realty and Development Corporation, et al.’s properties to
compulsory acquisition, when it ordered the Land Bank to
_______________
[1] Also referred to as Villahermoso in some parts of the records.
[2] Rollo (G.R. No. 183191), p. 121.
[3] Records, Vol. 1, pp. 7-77.
655determine the valuation of Trinidad Valley Realty and

Development Corporation, et al.’s land without any judicial
pronouncement on just compensation; and, it unilaterally
ordered the cancellation of petitioner’s title without court
intervention when it issued final CLOAs to beneficiaries who
are not yet owners of the land and without any court
proceeding.
2. The valuation by Land Bank is not just compensation.
3. The Register of Deeds cannot cancel Trinidad Valley Realty
and Development Corporation, et al.’s title without a court
order.
4. The Land Bank, the LRA and the Register of Deeds also
committed grave abuse of discretion when they cooperated to
commit the aforementioned acts.[4]
The DAR[5] filed its Answer[6] asserting that (a) jurisdiction over
all agrarian reform matters is exclusively vested in the DAR; (b)
the Department of Agrarian Reform Adjudication Board (DARAB)
Rules provides that the power to cancel or annul CLOAs is vested
in the DARAB; and the jurisdiction of the RTC in agrarian reform
matters is limited only to the determination of just compensation
and prosecution of all criminal offenses under RA 6657; (c) the RTC
has no jurisdiction over petitions for certiorari, prohibition
and mandamus in agrarian reform cases, which is vested by
Section 54 of RA 6657, in the Court of Appeals (CA); (d) the
transfer of ownership and physical installation of the beneficiaries
is authorized by RA 6657 as laid down in Association of Small
Landowners in the Phils., Inc. v. Hon. Secretary of Agrarian
Reform;[7] (e) the petition is defective in form and substance; and
_______________
[4] Id., at pp. 42-43.
[5] Joined by private respondents.
[6] Answer with Affirmative Defenses of Lack of Jurisdiction, Etc., records, Vol. 2, pp. 452-463.
[7] 256 Phil. 777; 175 SCRA 343 (1989).
656(f) the CLOAs partake of the nature of a Torrens Title and their
validity cannot be collaterally attacked.
Subsequently, Trinidad Valley Realty and Development
Corporation, et al. filed a Motion for Leave to Amend Petition and
for Admission of the Amended Petition[8] in order to change the
nature of the action from a special civil action of certiorari,
prohibition and mandamus to an ordinary action of annulment of
land titles. The DAR, et al. opposed the motion in its
Opposition[9] dated July 28, 2004.
On August 13, 2004, the RTC conducted a hearing on the
propriety of admitting the amended petition. On October 26, 2004,
it issued the assailed Order[10] admitting the amended petition and
ruling that it had jurisdiction over the case, viz.:
WHEREFORE, this Court rules and so holds that:
1. This Court has jurisdiction over the instant case;
2. The Amended Petition is admitted and defendants may file responsive pleadings or
amendments to their original answers within ten [10] days from receipt hereof; and
3. The plaintiffs have not made out a case for the issuance of a temporary restraining order
and/or the writ of preliminary prohibitory injunction, and therefore the plaintiffs’ prayer
for its issuance is denied.
SO ORDERED.[11]
In an Urgent Omnibus Motion[12] dated December 2, 2004,

LRA, et al. moved for reconsideration on the ground of lack of
_______________
[8] Records, Vol. 2, pp. 508-587. Received by DAR, et al. on July 26, 2004.
[9] Records, Vol. 3, pp. 942-945.
[10] Id., at pp. 1232-1244. Penned by Presiding Judge Mario O. Trinidad.
[11] Id., at p. 244.
657merit and jurisdiction. The DAR similarly filed a Motion for

Reconsideration[13] dated December 8, 2004 on the same ground of
lack of jurisdiction. Both motions were denied by the RTC in its
Order[14] dated January 7, 2005.
In a petition for certiorari[15] filed with the CA, the Republic of
the Philippines, represented by the Solicitor General, and the LRA
sought to annul the subject Order of the RTC on the following
grounds: (1) the RTC does not have jurisdiction over the petition
and amended petition of Trinidad Valley Realty and Development
Corporation, et al. in view of Section 54 of RA 6657; (2) the RTC
committed grave abuse of discretion in admitting the amended
petition; and (3) the RTC did not acquire jurisdiction over the
amended petition as the correct docket and other legal fees had not
been paid.
By Decision[16] and Resolution[17] dated June 28, 2007 and May
21, 2008, respectively, the CA reversed and set aside the Order of
the RTC, viz.:
WHEREFORE, in view of all the foregoing, the instant Petition is
hereby GRANTED and the assailed Order of the court a quo is hereby ANNULLED AND
SET ASIDE. The court a quo is hereby directed to DISMISS Civil Action No. 04-02-V,
entitled “Trinidad Valley Realty and Development Corporation, et al. vs. The Honorable
Jose Mari B. Ponce, et al.” for lack of jurisdiction over the subject matter.
SO ORDERED.[18]
The CA ratiocinated that the RTC did not have jurisdiction over
both the petition and amended petition filed by Trinidad
_______________
[12] Id., at pp. 1332-1343.
[13] Id., at pp. 1346-1358.
[14] Records, Vol. 4, pp. 1573-1574.
[15] Rollo (G.R. No. 183191), pp. 355-388.
[16] Id., at pp. 120-132.
[17] Id., at pp. 24-27.
[18] Id., at p. 131.
658Valley Realty and Development Corporation, et al. in view of

Section 54 of RA 6657 which clearly provides that it is the CA, and
not the RTC, which has jurisdiction over the case.[19] The CA also
reiterated the ruling of this Court in the landmark case
of Association of Small Landowners in the Phils., Inc. v. Hon.
Secretary of Agrarian Reform[20]declaring the “Comprehensive
Agrarian Reform Law” constitutional. Quoting the following
portion of the landmark decision, the CA stressed that the ruling
therein has, in effect, foreclosed any possible attack on the
constitutionality of the law, viz.:
By the decision we reach today, all major legal obstacles to the comprehensive agrarian
reform program are removed, to clear the way for the true freedom of the farmer. We may
now glimpse the day he will be released not only from want but also from the exploitation
and disdain of the past and from his own feelings of inadequacy and helplessness. At last
his servitude will be ended forever. At last the farm on which he toils will be his
farm. It will be his portion of the Mother Earth that will give him not only the staff of life
but also the joy of living. And where once it bred for him only deep despair, now can he see
in it the fruition of his hopes for a more fulfilling future. Now at last can he banish from his
small plot of earth his insecurities and dark resentments and ‘rebuild in it the music and
the dream.’[21]
On the issue of whether the RTC committed grave abuse of

discretion in admitting the amended petition, the CA declared that
while the Rules of Court allow amendments which substantially
alter the nature of the cause of action in order to serve the higher
interest of substantial justice, prevent delay and promote the
objective of the Rules to secure a just, speedy and inexpensive
disposition of every action and proceeding,
_______________
[19] Id., at pp. 124-129.
[20] Supra note 7.
[21] Rollo (G.R. No. 183191), p. 124.
659the admission by the RTC of the amended petition was not

proper and should have been denied.[22] Prescinding from its ruling
that the RTC did not have jurisdiction over the original petition,
the CA held that the RTC consequently did not have authority to
order the admission of Trinidad Valley Realty and Development
Corporation, et al.’s amended complaint in order for it to acquire
jurisdiction over the subject matter.[23] In view of these
dispositions, the CA deemed it unnecessary to discuss the third
issue.
Trinidad Valley Realty and Development Corporation, et al.
moved for reconsideration[24] and reiterated that judicial review
was within the jurisdiction of the lower court and that the
requirements for raising the constitutionality issues had been
complied with. It also stressed that the amendment of the
complaint did not change the cause of the action of
unconstitutionality and that the case was already pending before
this Court.
The CA denied the motion for reconsideration on the ground that
no new arguments were raised to warrant a reexamination of its
ruling on the issue of the lack of jurisdiction of the RTC.[25] As to
the averment of Trinidad Valley Realty and Development
Corporation, et al. that the CA’s assailed June 28, 2007 Decision
was already rendered moot and academic by a judgment of the
RTC dated October 17, 2005 in Civil Case No. 04-013-V,
entitled “Trinidad Valley Realty and Development Corporation, et
al. v. The Honorable Rene Villa, in his capacity as Secretary of
DAR, et al.,” the CA pointed out that what was challenged in the
petition filed before it was Special Civil Action No. 04-02-V,
entitled “Trinidad Valley Realty and Development Corporation, et
al. v. Jose Mari B.
_______________
[22] Id., at pp. 129-130.
[23] Id., at p. 130.
[24] Id., at pp. 462-491.
[25] Id., at pp. 24-27.
660Ponce, in his capacity as Secretary of DAR, et al.”[26] The CA

further stated in its assailed Resolution, viz.:
Be that as it may, it must be emphasized that the subject matter of the instant petition
is the jurisdiction of the court a quo to try and hear [Special Civil Action] No. 04-02-V.
Accordingly, this Court ruled that the court a quo does not have jurisdiction to try the case.
Granting arguendo that Civil Case No. 04-013-V and [Special Civil Action] No. 04-02-V
are the same, the June 28, 2007 Decision of this Court cannot be rendered moot and
academic by the judgment of the court a quo in Civil Case No. 04-013-V. As correctly
pointed out by the Office of the Solicitor General, a decision rendered by a court or tribunal
without jurisdiction is null and void; hence, it’s as if no decision was ever rendered by the
court a quo.
Accordingly, the instant Motion for Reconsideration is hereby DENIED.[27]
Trinidad Valley Realty and Development Corporation, et al. now
appeals to this Court by way of Petition for Review
on Certiorari[28] raising substantially the principal issue of whether
the RTC has jurisdiction over the original and amended petitions.
We shall resolve this issue in consolidation with two other
petitions filed before this Court — G.R. No. 173386 (DAR, et al. v.
Trinidad Valley Realty & Development Corporation, et al.) and
G.R. No. 174162 (Grace B. Fua, in her capacity as Provincial
Reform Officer of Negros Oriental, et al. v. Trinidad Valley
Realty & Development Corporation, et al.). Both petitions stemmed
from the assailed Decision[29] later issued by the RTC dated
October 17, 2005 — the same RTC Decision
_______________
[26] Id., at pp. 25-26.
[27] Id., at p. 26.
[28] Id., at pp. 33-106.
[29] Id., at pp. 492-605.
661that Trinidad Valley Realty and Development Corporation, et

al. had brought to the attention of the CA in their motion for
reconsideration. The RTC Decision was reached after it issued its
assailed Order in Special Civil Action No. 04-02-V — ruling that it
had jurisdiction over the original petition (special civil action
of certiorari, prohibition and mandamus) and therefore had the
authority to admit the amended petition (ordinary action of
annulment of land titles). Pre-trial proceeded in the ordinary
action which was re-docketed as Civil Case No. 04-013-V. There
being no factual issue involved, the case was submitted for
judgment based on the pleadings. The resulting assailed judgment
on the pleadings declared as unconstitutional and void the
following administrative issuances of the DAR and the LRA,
Executive Order No. 405, and other related issuances, viz.:
i. Administrative Order No. 10, Series of 1989 —Registration/Selection of Beneficiaries —
DAR chooses beneficiaries under A.O. No. 10, Series of 1989 using as its basis, Section
22 of RA 6657 allowing farmers, farmworkers, or any person who is landless to become a
beneficiary of any private agricultural land. Under this Administrative Order, not only
farmworkers or farmers working on a particular land are entitled to become
beneficiaries, but any person who is landless, in short a non-tiller of the land, as long as
he is capable and willing to become such a beneficiary.
ii. Administrative Orders No. 12, Series of 1989, No. 9, Series of 1990 and No. 2, Series of
1996 allows DAR to place under compulsory coverage all private agricultural land by
merely sending a notice of coverage; these administrative orders covering the same
subjects, supersede one another from its earliest which is A.O. 12, Series of 1989,
through Administrative Order No. 9, and polished into its last reincarnation,
Administrative Order No 2, Series of 1996. Under these Orders, DAR granted itself the
following powers which it has enforced: [1] to com-
662pulsorily acquire all private agricultural lands; [2] to order Land Bank to determine just
compensation; and [3] to cancel the landowner’s title and transfer the land to the
Republic of the Philippines [RP];
iii. Administrative Order No. 10, Series of 1990 authorizes DAR to cancel the RP title and
issue final titles called Certificate of Land Ownership Award [CLOAs] which in turn it
uses as basis to distribute private agricultural lands covered to beneficiaries;
iv. Joint DAR-LRA Memorandum Circular No. 20, Series of 1997 and all other previous
DAR-LRA Memorandum Circulars are a series of agreements whereby DAR and the
LRA agreed that the Registers of Deeds under LRA shall cancel landowners’ titles upon
the request or directive of DAR and thereafter register final titles to beneficiaries called
Certificates of Land Ownership Award;
v. Executive Order No. 405 promulgated by President Aquino which is interpreted by DAR
as authorizing Land Bank to determine just compensation;
vi. All other Administrative Orders and related issuances that prescribe substantially the
same procedure as the above-foregoing Orders and Regulations existing or to be issued
by the DAR with the same intent and effect in prescribing a non-judicial process of land
acquisition.[30]
The RTC also annulled the CLOAs issued by the DAR and issued
a permanent prohibitory injunction[31]restraining private
defendant beneficiaries, DAR defendants and other entities from
exercising acts of possession, dispossession or own-
_______________
[30] Id., at pp. 603-604.
[31] In an Order dated April 18, 2006, the RTC granted an Ex-ParteMotion for Enforcement of Writ of
Permanent Injunction filed by Trinidad Valley Realty and Development Corporation, et al. Original
Records, Vol. 1, pp. 1-5.
663ership over any portion of the subject property, and preventing

the DAR from subjecting the landholdings of Trinidad Valley
Realty and Development Corporation, et al. under the coverage of
agrarian reform through the implementation of the administrative
orders and issuances.[32]
Hence, the Petitions for Review on Certiorari filed in G.R. Nos.
173386[33] and 174162[34] posing the same intersecting
jurisdictional question in these consolidated cases: Whether the
RTC had jurisdiction over the original and amended petitions filed
by Trinidad Valley Realty and Development Corporation, et al.
It is a cardinal principle in remedial law that the jurisdiction of a
court over the subject matter of an action is determined by the law
in force at the time of the filing of the complaint and the
allegations of the complaint.[35]Jurisdiction is determined
exclusively by the Constitution and the law and cannot be
conferred by the voluntary act or agreement of the
parties. It cannot also be acquired through or waived, enlarged or
diminished by their act or omission, nor conferred by the
acquiescence of the court. It is neither for the court nor the parties
to violate or disregard the rule, this matter being
_______________
[32] Rollo (G.R. No. 183191), pp. 600-605.
[33] In G.R. No. 173386, petitioners raised two main issues: that the RTC has no jurisdiction over
petitions for certiorari involving acts of the DAR; and, that the RTC erred in ruling that Trinidad Valley
Realty and Development Corporation, et al. did not resort to forum shopping.
[34] In G.R. No. 174162, petitioners raised the same issues posited in G.R. No. 173386.
[35] DAR v. Paramount Holdings Equities, Inc., et al., G.R. No. 176838, June 13, 2013, 698 SCRA
324; Padlan v. Dinglasan, G.R. No. 180321, March 20, 2013, 694 SCRA 91, 98-99; Bank of Commerce v.
Planters Development Bank, G.R. Nos. 154470-71 and G.R. Nos. 154589-90, September 24, 2012, 681
SCRA 521, 548-549; Mendoza v. Germino, G.R. No. 165676, November 22, 2010, 635 SCRA 537, 544.
Citations omitted.
664legislative in character.[36] The nature of an action, as well as

which court or body has jurisdiction over it, is determined based on
the allegations contained in the complaint of the plaintiff,
irrespective of whether or not the plaintiff is entitled to recover
upon all or some of the claims asserted therein. The averments in
the complaint and the character of the relief sought are the ones to
be consulted. Once vested by the allegations in the complaint,
jurisdiction also remains vested irrespective of whether or not the
plaintiff is entitled to recover upon all or some of the claims
asserted therein.[37]
In the case at bar, the CA has correctly and succinctly
synthesized that both the original petition for the “Declaration of
Unconstitutionality Through Certiorari, Prohibition
and Mandamus with Prayer for Preliminary Prohibitory Injunction
and Restraining Order” and the amended petition for “Judicial
Review Through an Action to Annul Titles, and Mandatory and
Prohibitory Injunctions with Prayer for Preliminary Prohibitory
Injunction and Restraining Order” contain the same
allegations, viz.:
x x x that beneficiaries are not those intended by the Constitution as beneficiaries; that
subject properties cannot be subjected to compulsory acquisition because its farm
operations are under labor administration; that the valuation of the land was not judicially
determined; that the cancellation of petitioners’ title over the subject properties and the
issuance of Certificates of Land Ownership Award were effected without any court
intervention; that a case for expropriation should have been filed in court; and that certain
DAR Administrative Orders are unconstitutional.[38]
_______________
[36] Mendoza v. Germino and Germino, id., citing Oca v. Court of Appeals, 428 Phil. 696, 701-702; 378
SCRA 642, 647 (2002).
[37] Padlan v. Dinglasan, supra note 35, citing City of Dumaguete v. Philippine Ports Authority, G.R.
No. 168973, August 24, 2011, 656 SCRA 102, 119.
[38] Rollo (G.R. No. 183191), p. 125.
665
We also agree with the assessment of the appellate court that
these allegations assail the acts of the DAR in awarding the
CLOAs to the beneficiaries and question the procedure in fixing
the compensation — acts which pertain to the very “application,
implementation, enforcement or interpretation”[39] of RA 6657 or
the agrarian reform law and other pertinent laws on agrarian
reform.
Section 54 of RA 6657 leaves no room for doubt that decisions,
orders, awards or rulings of the DAR may be brought to the CA
by certiorari and not with the RTC through an ordinary action for
cancellation of title, as in the instant case:
54. SECTIONCertiorari.—Any decision, order, award or ruling of the
DAR on any agrarian dispute or on any matter pertaining to the application,
implementation, enforcement, or interpretation of this Act and other pertinent
laws on agrarian reform may be brought to the Court of Appeals
by certiorari except as otherwise provided in this Act within fifteen (15) days from the
receipt of a copy thereof.
The findings of fact of the DAR shall be final and conclusive if based on substantial
evidence. (Emphasis and underscoring supplied.)
An examination of the records[40] in the instant case would show

that Trinidad Valley Realty and Development Corporation had
actually brought the matter to the DAR prior to its filing of the
original and amended petitions with the RTC. The following
incidents on record reveal an acknowledgment by Trinidad Valley
Realty and Development Corporation that the case indeed involves
issues relating to the application, implementation, enforcement or
interpretation of RA 6657, viz.:
_______________
[39] Sec. 54, RA 6657.
[40] See Order dated March 17, 2004, issued by then OIC-Secretary Jose Mari B. Ponce, Rollo (G.R.
No. 174162), Vol. I, pp. 297-302.
666
1. Trinidad Valley Realty and Development Corporation had
originally filed a case with the DARAB for Cancellation of
CLOA, Injunction and Damages with prayer for the issuance
of a Temporary Restraining Order. The subject property
covered the same landholding in the instant case covering the
same area of 641.7895 hectares. The case was dismissed by
the DAR Provincial Adjudicator in an Order dated March 31,
1997 on the ground that the matters raised by Trinidad
Valley Realty and Development Corporation involved the
administrative implementation of RA 6657. The case was
then treated as a protest against CARP coverage. It was
again dismissed in an Order dated November 19, 1997 for
lack of merit.[41]
2. A Motion for Reconsideration dated December 15, 1997 was
filed seeking for a reversal and exemption of those areas with
a slope of 18% and above from CARP coverage.
An addendum to the Motion for Reconsideration dated
February 2, 1998 was also filed wherein Trinidad Valley
Realty and Development Corporation manifested, among
others, its voluntary offer to sell to the government a one
hundred-hectare portion of the subject land. For utter lack of
merit, both motions were dismissed by the DAR Regional
Director on August 7, 1998 and the order dated November 19,
1997 was affirmed.[42]
3. On September 25, 1998, an appeal was filed before the Office
of the Secretary. An Appeal Memorandum later filed on
November 10, 1998 raised the following issue on whether the
subject landholding was properly subjected to CARP coverage.
The Office of the Secretary denied the appeal for lack of merit
in an Order dated March 17, 2004. The Order stated that the
subject
_______________
[41] Id., at p. 298.
[42] Id., at pp. 298-299.
667lands have a slope of 18% and were already developed as of

June 15, 1988. Furthermore, the Order also stated that at the
time of the resolution of the Appeal therein, the subject land
was already being occupied by farmer-beneficiaries with their
respective CLOAs which cannot be attacked collaterally. The
Order also held that Trinidad Valley Realty and Development
Corporation failed to prove, by substantial evidence, that the
areas that it wanted to be exempted from CARP coverage due
to the 18% slope limitation are nonproductive and less
suitable for agricultural use.[43]
This Order which was issued by the then DAR OIC-Secretary
was not appealed by protestant Trinidad Valley Realty and
Development Corporation to the CA. This Order is exactly in the
nature of any such “decision, order, award or ruling” of the DAR on
any agrarian dispute or on any matter pertaining to the
application, implementation, enforcement, or interpretation of this
Act and other pertinent laws on agrarian reform which may be
brought to the CA by certiorari, except as otherwise provided in RA
6657, within fifteen (15) days from receipt thereof — and not to the
RTC. It is also significant to note that in the proceedings before the
DAR involving the protest of Trinidad Valley Realty and
Development Corporation, the issue on the unconstitutionality of
the subject administrative issuances promulgated to implement RA
6657 was never raised — an issue that must have been raised at
the earliest possible opportunity.
The jurisdictional shifts on the authority to hear and decide
agrarian reform matters is instructive:
x x x in 1980, upon the passage of Batas Pambansa Blg. 129, otherwise known as the
Judiciary Reorganization Act, the Courts of Agrarian Relations were inte-
_______________
[43] Id., at pp. 299-301.
668grated into the Regional Trial Courts and the jurisdiction of the former was vested in
the latter courts.
However, with the enactment of Executive Order No. 229, which took effect on August
29, 1987, the Regional Trial Courts were divested of their general jurisdiction to try
agrarian reform matters. The said jurisdiction is now vested in the Department of Agrarian
Reform.
Republic Act No. 6657, the Comprehensive Agrarian Reform Law, which took effect on
June 15, 1988, contains provisions which evince and support the intention of the legislature
to vest in the Department of Agrarian Reform exclusive jurisdiction over all agrarian
reform matters.
Section 50, of said law substantially reiterates Section 17, of Executive Order No. 229,
vesting in the Department of Agrarian Reform exclusive and original jurisdiction over all
matters involving the implementation of agrarian reform, to wit:
50. “SECTIONQuasi-Judicial Powers of the DAR.—The DAR is hereby vested
with primary jurisdiction to determine and adjudicate agrarian reform matters and
shall have exclusive original jurisdiction over all matters involving the
implementation of agrarian reform, except those falling under the exclusive
jurisdiction of the Department of Agriculture (DA) and the Department of
Environment and Natural Resources (DENR).”
In addition, Sections 56 and 57, thereof provide for the designation by the Supreme
Court of at least one (1) branch of the Regional Trial Court within each province to act as a
special agrarian court. The said special court shall have original and exclusive jurisdiction
only over petitions for the determination of just compensation to landowners and the
prosecution of criminal offenses under said Act. Said provisions thus delimit the jurisdiction
of the Regional Trial Courts in agrarian cases only to these two instances. Thus:
669
56. “SEC.Special Agrarian Court.—The Supreme Court shall designate at
least one (1) branch of the Regional Trial Court (RTC) within each province to act as
a Special Agrarian Court.
“The Supreme Court may designate more branches to constitute such additional
Special Agrarian Courts as may be necessary to cope with the number of agrarian
cases in each province. In the designation, the Supreme Court shall give preference
to the Regional Trial Courts which have been assigned to handle agrarian cases or
whose presiding judges were former judges of the defunct Court of Agrarian
Relations. x x x.”
57. “SEC.Special Jurisdiction.—The Special Agrarian Courts shall have
original and exclusive jurisdiction over all petitions for the determination of just
compensation to landowners, and the prosecution of all criminal offenses under this
Act. The Rules of Court shall apply to all proceedings before the Special Agrarian
Courts unless modified by this Act.
“The Special Agrarian Courts shall decide all appropriate cases under their
special jurisdiction within thirty (30) days from submission of the case for
decision.”[44]
The case at bar deals with acts of the DAR and the application,
implementation, enforcement, or interpretation of RA 6657 —
issues which do not involve the “special jurisdiction” of the RTC
acting as a Special Agrarian Court. Hence, when the court a
quo heard and decided the instant case, it did so without
jurisdiction.
_______________
[44] Rollo (G.R. No. 183191), pp. 127-128.
670
The Court likewise ruled in the similar case of DAR v.
Cuenca[45] that “[a]ll controversies on the implementation of the
Comprehensive Agrarian Reform Program (CARP) fall under the
jurisdiction of the Department of Agrarian Reform (DAR), even
though they raise questions that are also legal or constitutional in
nature.” In said case, it was noted that the main thrust of the
allegations in the Complaint was the propriety of the Notice of
Coverage and “not x x x the ‘pure question of law’ spawned by the
alleged unconstitutionality of EO 405 —but x x x the annulment of
the DAR’s Notice of Coverage.”[46] The Court thus held that:
To be sure, the issuance of the Notice of Coverage constitutes the first necessary step
towards the acquisition of private land under the CARP. Plainly then, the propriety of the
Notice relates to the implementation of the CARP, which is under the quasi-judicial
jurisdiction of the DAR. Thus, the DAR could not be ousted from its authority by the
simple expediency of appending an allegedly constitutional or legal dimension to
an issue that is clearly agrarian.[47] (Emphasis supplied)
The legal recourse undertaken by Trinidad Valley Realty and

Development Corporation, et al. is on all-fours with the remedy
adopted by the private respondents in Cuenca. In this case,
Trinidad Valley Realty and Development Corporation, et al.
cloaked the issue as a constitutional question — assailing the
constitutionality of administrative issuances promulgated to
implement the agrarian reform law — in order to annul the titles
issued therein. In Cuenca, private respondents assailed the
constitutionality of EO 45 in order to annul the Notice of Coverage
issued therein. The only difference is that in Cuenca, private
respondents directly filed with the RTC their
_______________
[45] 482 Phil. 208, 211; 439 SCRA 15, 17 (2004).
[46] Id., at p. 223; p. 30.
[47] Id., at p. 226; pp. 32-33.
671complaint to obtain the aforesaid reliefs while in this case,
Trinidad Valley Realty and Development Corporation, et al. filed
their original petition for certiorari with the RTC after the protest
of Trinidad Valley Realty and Development Corporation against
the coverage of its landholding under CARP was dismissed by the
DAR Regional Director and such dismissal was affirmed by DAR
OIC Secretary Jose Mari B. Ponce. But in both cases, it is evident
that the constitutional angle was an attempt to exclude the cases
from the ambit of the jurisdictional prescriptions under RA 6657.
The Court further stated in Cuenca that “in case of doubt, the
jurisprudential trend is for courts to refrain from resolving
a controversy involving matters that demand the special
competence of administrative agencies, ‘even if the
question[s] involved [are] also judicial in character.’”[48] In
the instant case, however, there is hardly any doubt that the RTC
had no jurisdiction over the subject matter of the case.
Consequently, it did not have authority to perform any of the
following: order the admission of the amended petition of Trinidad
Valley Realty and Development Corporation, et al., decide the
amended petition on the merits, or issue a permanent prohibitory
injunction. In any case, such injunction issued by the RTC is a
nullity in view of the express prohibitory provisions of the CARP
and this Court’s Administrative Circular Nos. 29-2002 and 38-2002
enjoining all trial judges to strictly observe Section 68 of RA
6657, viz.:
68. SECTIONImmunity of Government Agencies from Undue Interference.—No
injunction, restraining order, prohibition or mandamus shall be issued by the lower courts
against the Department of Agrarian Reform (DAR), the Department of Agriculture (DA),
the Department of Environment and Natural Resources (DENR), and the Department of
Justice (DOJ) in their implementation of the program.
_______________
[48] Id.
672
Given our ruling that the RTC lacked jurisdiction over the
instant case, we find no necessity to address the other issues raised
in the three consolidated petitions.
WHEREFORE, the Petition in G.R. No. 183191 is DENIED for
lack of merit. The assailed Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 88512 dated June 28, 2007 and May 21,
2008, respectively, are hereby AFFIRMED. The Petitions in G.R.
Nos. 173386 and 174162 are hereby GRANTED. The challenged
Order in Special Civil Action No. 04-02-V, entitled Trinidad Valley
Realty and Development Corporation, et al. v. Jose Mari B. Ponce,
in his capacity as Secretary of DAR, et al. dated October 26, 2004
and the Decision in Civil Case No. 04-013-V, entitled Trinidad
Valley Realty and Development Corporation, et al. v. The Honorable
Rene Villa, in his capacity as Secretary of DAR, et al. dated October
17, 2005 of the Regional Trial Court, Branch 64, Guihulngan,
Negros Oriental are hereby ANNULLED and SET ASIDE for
lack of jurisdiction. The Regional Trial Court, Branch 64,
Guihulngan, Negros Oriental is likewise ordered
to DISMISS herein Special Civil Action No. 04-02-V and Civil
Case No. 04-013-V for lack of jurisdiction. The Writ of Permanent
Prohibitory Injunction dated April 18, 2006 issued by the said
court by virtue of its Order on even date is
hereby LIFTED and SET ASIDE.
With costs against the petitioners in G.R. No. 183191.
SO ORDERED.
Sereno (CJ.), Carpio, Velasco, Jr., Leonardo-De Castro, Brion,
Peralta, Bersamin, Del Castillo, Abad, Perez, Mendoza, Reyes,
Perlas-Bernabe and Leonen, JJ., concur.
Petition in G.R. No. 183191 denied, judgment and resolution
affirmed; while petitions in G.R. Nos. 173386 and 174162 granted,
order of Regional Trial Court of Guihulngan, Negros Oriental, Br.
64 annulled and set aside.
November 27, 2012. G.R. No. 180705.*
EDUARDO M. COJUANGCO, JR., petitioner, vs.REPUBLIC OF
THE PHILIPPINES, respondent.
Remedial Law; Civil Procedure; Jurisdiction; Subject matter jurisdiction is conferred by
law, not by the consent or acquiescence of any or all of the parties.―The issue of jurisdiction
over the subject matter of the subdivided amended complaints has peremptorily been put to
rest by the Court in its January 24, 2012 Decision in COCOFED v. Republic, 663 SCRA 514
(2012). There, the Court, citing Regalado and settled jurisprudence, stressed the following
interlocking precepts: Subject matter jurisdiction is conferred by law, not by the consent or
acquiescence of any or all of the parties. In turn, the issue on whether a suit comes within
the penumbra of a statutory conferment is determined by the allegations in the complaint,
regardless of whether or not the suitor will be entitled to recover upon all or part of the
claims asserted.
Statutes; Publication; It is well-settled that laws must be published to be valid.―It
bears to stress at this point that the PCA-Cojuangco Agreement referred to above in Section
1 of P.D. 755 was not reproduced or attached as an annex to the same law. And it is well-
settled that laws must be published to be valid. In fact, publication is an indispensable
condition for the effectivity of a law. Tañada v. Tuvera, 146 SCRA 446 (1986), said as much:
Publication [of the law] is indispensable in every case x x x. x x x x We note at this point the
conclusive presumption that every person knows the law, which of course presupposes that
the law has been published if the presumption is to have any legal justification at all. It is
no less important to remember that Section 6 of the Bill of Rights recognizes “the right of
the people to information on matters of public concern,” and this certainly applies to, among
others, and indeed especially, the legislative enactments of the government. x x x x We hold
therefore that all statutes, including those of local application and private laws, shall be
published as a condition for their effectivity, which shall begin fifteen days after publication
unless a different effectivity
_______________
* EN BANC.
473
VOL. 686, NOVEMBER 27, 2012 473

Cojuangco, Jr. vs. Republic
date is fixed by the legislature. Covered by this rule are presidential decrees and
executive orders promulgated by the President in the exercise of legislative powers
whenever the same are validly delegated by the legislature, or, at present, directly
conferred by the Constitution. Administrative rules and regulations must also be published
if their purpose is to enforce or implement existing law pursuant also to a valid delegation.
Same; Same; The publication must be of the full text of the law since the purpose of
publication is to inform the public of the contents of the law.―The publication, as further
held in Tañada, must be of the full text of the law since the purpose of publication is to
inform the public of the contents of the law. Mere referencing the number of the
presidential decree, its title or whereabouts and its supposed date of effectivity would not
satisfy the publication requirement. In this case, while it incorporated the PCA-Cojuangco
Agreement by reference, Section 1 of P.D. 755 did not in any way reproduce the exact terms
of the contract in the decree. Neither was a copy thereof attached to the decree when
published. We cannot, therefore, extend to the said Agreement the status of a law.
Consequently, We join the Sandiganbayan in its holding that the PCA-Cojuangco
Agreement shall be treated as an ordinary transaction between agreeing minds to be
governed by contract law under the Civil Code.
Civil Law; Contracts; Consideration; Under Article 1354 of the Civil Code, it is
presumed that consideration exists and is lawful unless the debtor proves the contrary.―The
assumption that ample consideration is present in a contract is further elucidated
in Pentacapital Investment Corporation v. Mahinay, 623 SCRA 284 (2010): Under Article
1354 of the Civil Code, it is presumed that consideration exists and is lawful
unless the debtor proves the contrary. Moreover, under Section 3, Rule 131 of the
Rules of Court, the following are disputable presumptions: (1) private transactions
have been fair and regular; (2) the ordinary course of business has been followed; and (3)
there was sufficient consideration for a contract. A presumption may operate against
an adversary who has not introduced proof to rebut it. The effect of a legal presumption
upon a burden of proof is to create the necessity of presenting evidence to meet the legal
presumption or the prima facie case created thereby, and which, if no proof to the contrary
is presented and offered, will prevail. The burden of proof remains where
474

74
it is, but by the presumption, the one who has that burden is relieved for the time
being from introducing evidence in support of the averment, because the presumption
stands in the place of evidence unless rebutted. (Emphasis supplied.)
Same; Same; Same; Inadequacy of consideration does not vitiate a contract unless it is
proven that there was fraud, mistake or undue influence.―Inadequacy of the consideration,
however, does not render a contract void under Article 1355 of the Civil Code: Art. 1355.
Except in cases specified by law, lesion or inadequacy of cause shall not invalidate a
contract, unless there has been fraud, mistake or undue influence. (Emphasis
supplied.) Alsua-Betts v. Court of Appeals, 92 SCRA 332 (1979), is instructive that lack of
ample consideration does not nullify the contract: Inadequacy of consideration does
not vitiate a contract unless it is proven which in the case at bar was not, that
there was fraud, mistake or undue influence. (Article 1355, New Civil Code). We do
not find the stipulated price as so inadequate to shock the court’s conscience, considering
that the price paid was much higher than the assessed value of the subject properties and
considering that the sales were effected by a father to her daughter in which case filial love
must be taken into account. (Emphasis supplied.)
Same; Same; A government agency, like the Philippine Coconut Authority (PCA), stoops
down to level of an ordinary citizen when it enters into a private transaction with private
individuals.―A government agency, like the PCA, stoops down to level of an ordinary
citizen when it enters into a private transaction with private individuals. In this setting,
PCA is bound by the law on contracts and is bound to comply with the terms of the PCA-
Cojuangco Agreement which is the law between the parties. With the silence of PCA not to
challenge the validity of the PCA-Cojuangco Agreement and the inability of government to
demonstrate the lack of ample consideration in the transaction, the Court is left with no
other choice but to uphold the validity of said agreements.
Coconut Levy Funds; Any property acquired by means of the coconut levy funds, such as
the subject United Coconut Planters Bank (UCPB) shares, should be treated as public funds
or public property, subject to the burdens and restrictions attached by law to such
property.―Any property acquired by means of the coconut levy funds,
475
VOL. 686, NOVEMBER 27, 2012 475

such as the subject UCPB shares, should be treated as public funds or public property,
subject to the burdens and restrictions attached by law to such property. COCOFED v.
Republic, 663 SCRA 514 (2012), delved into such limitations, thusly: We have ruled time
and again that taxes are imposed only for a public purpose. “They cannot be used
for purely private purposes or for the exclusive benefit of private persons.” When
a law imposes taxes or levies from the public, with the intent to give undue
benefit or advantage to private persons, or the promotion of private enterprises,
that law cannot be said to satisfy the requirement of public purpose.
Same; Taxation; As the coconut levy funds partake of the nature of taxes and can only
be used for public purpose, and importantly, for the purpose for which it was exacted, i.e.,
the development, rehabilitation and stabilization of the coconut industry, they cannot be
used to benefit―whether directly or indirectly―private individuals, be it by way of a
commission, or as the subject Agreement interestingly words it, compensation.―As the
coconut levy funds partake of the nature of taxes and can only be used for public purpose,
and importantly, for the purpose for which it was exacted, i.e., the development,
rehabilitation and stabilization of the coconut industry, they cannot be used to
benefit―whether directly or indirectly―private individuals, be it by way of a commission, or
as the subject Agreement interestingly words it, compensation. Consequently, Cojuangco
cannot stand to benefit by receiving, in his private capacity, 7.22% of the FUB shares
without violating the constitutional caveat that public funds can only be used for public
purpose. Accordingly, the 7.22% FUB (UCPB) shares that were given to Cojuangco shall be
returned to the Government, to be used “only for the benefit of all coconut farmers and for
the development of the coconut industry.”
PETITION for review on certiorari of the partial summary decision

and resolution of the Sandiganbayan.
Estelito P. Mendoza and Hyacinth E. Rafael for petitioner
Eduardo M. Cojuangco, Jr. in G.R. No. 180705.476
Angara, Abello, Concepcion, Regala and Cruz for COCOFED, et
al.
The Solicitor General for respondent.
Cesar G. David and Francisco B.A. Saavedra for UCPB.
Sycip, Salazar, Hernandez & Gatmaitan for San Miguel
Corporation.
VELASCO, JR.,J.:
The Case
Of the several coconut levy appealed cases that stemmed from
certain issuances of the Sandiganbayan in its Civil Case No. 0033,
the present recourse proves to be one of the most difficult.
In particular, the instant petition for review under Rule 45 of the
Rules of Court assails and seeks to annul a portion of the Partial
Summary Judgment dated July 11, 2003, as affirmed in a
Resolution of December 28, 2004, both rendered by the
Sandiganbayan in its Civil Case (“CC”) No. 0033-A (the
judgment shall hereinafter be referred to as “PSJ-A”), entitled
“Republic of the Philippines, Plaintiff, v. Eduardo M. Cojuangco,
Jr., et al., Defendants, COCOFED, et al., BALLARES, et al., Class
Action Movants.” CC No. 0033-A is the result of the splitting into
eight (8) amended complaints of CC No. 0033 entitled, “Republic of
the Philippines v. Eduardo Cojuangco, Jr., et al.,” a suit for
recovery of ill-gotten wealth commenced by the Presidential
Commission on Good Government (“PCGG”), for the Republic of
the Philippines (“Republic”), against Eduardo M. Cojuangco, Jr.
(“Cojuangco”) and several individuals, among them, Ferdinand E.
Marcos, Maria Clara Lobregat (“Lobregat”), and Danilo S. Ursua
(“Ursua”). Each of the eight (8) subdivided complaints, CC No.
0033-A to CC No. 0033-H, correspondingly impleaded as
defendants
477
VOL. 686, NOVEMBER 27, 2012 477
only the alleged participants in the transaction/s subject of the
suit, or who are averred as owner/s of the assets involved.
Apart from this recourse, We clarify right off that PSJ-A was
challenged in two other separate but consolidated petitions for
review, one commenced by COCOFED et al., docketed as G.R. Nos.
177857-58, and the other, interposed by Danilo S. Ursua, and
docketed as G.R. No. 178193.
By Decision dated January 24, 2012, in the aforesaid G.R. Nos.
177857-58 (COCOFED et al. v. Republic) and G.R. No. 178193
(Ursua v. Republic) consolidated cases1(hereinafter collectively
referred to as “COCOFED v. Republic”), the Court addressed and
resolved all key matters elevated to it in relation to PSJ-A, except
for the issues raised in the instant petition which have not yet been
resolved therein. In the same decision, We made clear that: (1)
PSJ-A is subject of another petition for review interposed by
Eduardo Cojuangco, Jr., in G.R. No. 180705, entitled Eduardo M.
Cojuangco, Jr. v. Republic of the Philippines, which shall be
decided separately by the Court,2 and (2) the issues raised in the
instant petition should not be affected by the earlier decision “save
for determinatively legal issues directly addressed [t]herein.”3
For a better perspective, the instant recourse seeks to reverse
the Partial Summary Judgment4 of the anti-graft court dated July
11, 2003, as reiterated in a Resolution5 of December 28, 2004,
denying COCOFED’s motion for reconsideration, and the May 11,
2007 Resolution6 denying COCOFED’s mo-
_______________
1 G.R. Nos. 177857-58 & 178193, January 24, 2012, 663 SCRA 514.
2 Id.
3 Id.
4 Penned by Associate Justice Teresita Leonardo-De Castro (now a member of this Court), concurred
in by Associate Justices Diosdado M. Peralta (now also a member of this Court) and Francisco H. Villaruz,
Jr.; Rollo, pp. 179-261.
5 Rollo, pp. 361-400.
6 Id., at pp. 1043-53.
478
tion to set case for trial and declaring the partial summary
judgment final and appealable, all issued in PSJ-A. In our
adverted January 24, 2012 Decision in COCOFED v. Republic, we
affirmed with modification PSJ-A of the Sandiganbayan, and its
Partial Summary Judgment in Civil Case No. 0033-F, dated May
7, 2004 (hereinafter referred to as “PSJ-F’).7
_______________
7 COCOFED v. Republic, G.R. Nos. 177857-58 & 178193, January 24, 2012, 663 SCRA 514.
The dispositive portion of the Our modificatory decision reads:
WHEREFORE, the petitions in G.R. Nos. 177857-58 and 178793 are hereby DENIED. The Partial
Summary Judgment dated July 11, 2003 in Civil Case No. 0033-A as reiterated with modification in
Resolution dated June 5, 2007, as well as the Partial Summary Judgment dated May 7, 2004 in Civil Case
No. 0033-F, which was effectively amended in Resolution dated May 11, 2007, are AFFIRMED with
MODIFICATION, only with respect to those issues subject of the petitions in G.R. Nos. 177857-58 and
178193. However, the issues raised in G.R. No. 180705 in relation to Partial Summary Judgment dated
July 11, 2003 and Resolution dated June 5, 2007 in Civil Case No. 0033-A, shall be decided by this Court
in a separate decision.
The Partial Summary Judgment in Civil Case No. 0033-A dated July 11, 2003, is hereby MODIFIED,
and shall read as follows:
WHEREFORE, in view of the foregoing, We rule as follows:
SUMMARY OF THE COURT’S RULING.
Re: CLASS ACTION MOTION FOR A SEPARATE SUMMARY JUDGMENT dated April 11,
2001 filed by Defendant Maria Clara L. Lobregat, COCOFED, A. et al., and Ballares, et al.
The Class Action Motion for Separate Summary Judgment dated April 11, 2001 filed by
defendant Maria Clara L. Lobregat, COCOFED, et al. and Ballares, et al., is hereby DENIED for
lack of merit.
479
VOL. 686, NOVEMBER 27, 2012 479
More specifically, We upheld the Sandiganbayan’s ruling
thatA the coconut levy funds are special public funds of the
_______________
Re: MOTION FOR PARTIAL SUMMARY JUDGMENT (RE: COCOFED, B. ET AL. AND
BALLARES, ET AL.) dated April 22, 2002 filed by Plaintiff.
The portion of Section 1 of P.D. No. 755, which reads: 1. a.
…and that the Philippine Coconut Authority is hereby authorized to distribute, for
free, the shares of stock of the bank it acquired to the coconut farmers under such rules
and regulations it may promulgate.
taken in relation to Section 2 of the same P.D., is unconstitutional: (i) for having
allowed the use of the CCSF to benefit directly private interest by the outright and
unconditional grant of absolute ownership of the FUB/UCPB shares paid for by PCA
entirely with the CCSF to the undefined “coconut farmers”, which negated or
circumvented the national policy or public purpose declared by P.D. No. 755 to accelerate
the growth and development of the coconut industry and achieve its vertical integration;
and (ii) for having unduly delegated legislative power to the PCA.
The implementing regulations issued by PCA, namely, Administrative Order No. 1,
Series of 1975 and Resolution No. 074-78 are likewise invalid for their failure to see to it
that the distribution of shares serve exclusively or at least primarily or directly the
aforementioned public purpose or national policy declared by P.D. No. 755. b.
Section 2 of P.D. No. 755 which mandated that the coconut levy funds shall not be considered
special and/or fiduciary funds nor part of the general funds of the national government and
similar provisions of Sec. 5, Art. III, P.D. No. 961 and Sec. 5, Art. III, P.D. No. 1468 contravene
the provisions of the Constitution, particularly, Art. IX (D), Sec. 2; and Article VI, Sec. 29 (3). 2.
Lobregat, COCOFED, 3. et al. and Ballares, et al. have not legally and validly obtained title
of ownership over the subject UCPB shares by virtue of P.D. No. 755, the Agreement dated May
25, 1975 between the PCA and de-
480
Government. Consequently, We affirmed the Sandiganbayan’s
declaration that Sections 1 and 2 of Presidential Decree
_______________
fendant Cojuangco, and PCA implementing rules, namely, Adm. Order No. 1, s. 1975 and
Resolution No. 074-78.
The so-called “Farmers’ UCPB shares” covered by 64.98% of the UCPB shares of stock, which
formed part of the 72.2% of the shares of stock of the former FUB and now of the UCPB, the
entire consideration of which was charged by PCA to the CCSF, are hereby declared conclusively
owned by, the Plaintiff Republic of the Philippines. 4.
… … …
SO ORDERED.
The Partial Summary Judgment in Civil Case No. 0033-F dated May 7, 2004, is hereby MODIFIED,
and shall read as follows:
WHEREFORE, the MOTION FOR EXECUTION OF PARTIAL SUMMARY
JUDGMENT (RE: CIIF BLOCK OF SMC SHARES OF STOCK) dated August 8, 2005 of the
plaintiff is hereby denied for lack of merit. However, this Court orders the severance of this
particular claim of Plaintiff. The Partial Summary Judgment dated May 7, 2004 is now
considered a separate final and appealable judgment with respect to the said CIIF Block of SMC
shares of stock.
The Partial Summary Judgment rendered on May 7, 2004 is modified by deleting the last
paragraph of the dispositive portion, which will now read, as follows:
WHEREFORE, in view of the foregoing, we hold that:
The Motion for Partial Summary Judgment (Re: Defendants CIIF Companies, 14 Holding
Companies and Cocofed, et al.) filed by Plaintiff is hereby GRANTED. ACCORDINGLY, THE
CIIF COMPANIES, NAMELY:
Southern Luzon Coconut Oil Mills (SOLCOM); 1.
Cagayan de Oro Oil Co., Inc. (CAGOIL); 2.
Iligan Coconut Industries, Inc. (ILICOCO); 3.
San Pablo Manufacturing Corp. (SPMC); 4.
Granexport Manufacturing Corp. (GRANEX); and 5.
Legaspi Oil Co., Inc. (LEGOIL), 6.
481
VOL. 686, NOVEMBER 27, 2012 481
(“P.D.”) 755, Section 3, Article III of P.D. 961 and Section 3,
_______________
AS WELL AS THE 14 HOLDING COMPANIES, NAMELY:
Soriano Shares, Inc.; 1.
ACS Investors, Inc.; 2.
Roxas Shares, Inc.; 3.
Arc Investors; Inc.; 4.
Toda Holdings, Inc.; 5.
AP Holdings, Inc.; 6.
Fernandez Holdings, Inc.; 7.
SMC Officers Corps, Inc.; 8.
Te Deum Resources, Inc.; 9.
Anglo Ventures, Inc.; 10.
Randy Allied Ventures, Inc.; 11.
Rock Steel Resources, Inc.; 12.
Valhalla Properties Ltd., Inc.; and 13.
First Meridian Development, Inc. 14.
AND THE CIIF BLOCK OF SAN MIGUEL CORPORATION (SMC) SHARES OF STOCK
TOTALING 33,133,266 SHARES AS OF 1983 TOGETHER WITH ALL DIVIDENDS DECLARED,
PAID AND ISSUED THEREON AS WELL AS ANY INCREMENTS THERETO ARISING FROM,
BUT NOT LIMITED TO, EXERCISE OF PRE-EMPTIVE RIGHTS ARE DECLARED OWNED BY
THE GOVERNMENT TO BE USED ONLY FOR THE BENEFIT OF ALL COCONUT FARMERS
AND FOR THE DEVELOPMENT OF THE COCONUT INDUSTRY, AND ORDERED
RECONVEYED TO THE GOVERNMENT.
THE COURT AFFIRMS THE RESOLUTIONS ISSUED BY THE SANDIGANBAYAN ON JUNE
5, 2007 IN CIVIL CASE NO. 0033-A AND ON MAY 11, 2007 IN CIVIL CASE NO. 0033-F, THAT
THERE IS NO MORE NECESSITY OF FURTHER TRIAL WITH RESPECT TO THE ISSUE OF
OWNERSHIP OF (1) THE SEQUESTERED UCPB SHARES, (2) THE CIIF BLOCK OF SMC
SHARES, AND (3) THE CIIF COMPANIES. AS THEY HAVE FINALLY BEEN ADJUDICATED IN
THE AFOREMENTIONED PARTIAL SUMMARY JUDGMENTS DATED JULY 11, 2003 AND
MAY 7, 2004.
SO ORDERED.
…. (Emphasis and underlining in the original)
482
Article III of P.D. 1468, as well as the pertinent implementing
regulations of the Philippine Coconut Authority (“PCA”), are
unconstitutional for allowing the use and/or the distribution of
properties acquired through the coconut levy funds to private
individuals for their own direct benefit and absolute ownership.
The Decision also affirmed the Government’s ownership of the six
CIIF companies, the fourteen holding companies, and the CIIF
block of San Miguel Corporation shares of stock, for having
likewise been acquired using the coconut levy funds. Accordingly,
the properties subject of the January 24, 2012 Decision were
declared owned by and ordered reconveyed to the Government, to
be used only for the benefit of all coconut farmers and for the
development of the coconut industry.
By Resolution of September 4, 2012,8 the Court affirmed the
abovestated Decision promulgated on January 24, 2012.
It bears to stress at this juncture that the only portion of the
appealed Partial Summary Judgment dated July 11, 2003 (“PSJ-
A”) which remains at issue revolves around the following decretal
holdings of that court relating to the “compensation” paid to
petitioner for exercising his personal and exclusive option to
acquire the FUB/UCPB shares.9 It will be recalled that the
Sandiganbayan declared the Agreement between the PCA and
Cojuangco containing the assailed “compensation” null and void for
not having the required valuable consideration. Consequently, the
UCPB shares of stocks that are subject of the Agreement were
declared conclusively owned by the Government. It also held that
the Agreement did not have the effect of law as it was not
published as part of P.D. 755, even if Section 1 thereof made
reference to the same.
_______________
8 Resolution, COCOFED v. Republic, G.R. Nos. 177857-58 & 178193, September 4, 2012, 679 SCRA
604.
9 Rollo, pp. 259-260.
483
VOL. 686, NOVEMBER 27, 2012 483
Facts
We reproduce, below, portions of the statement of facts
in COCOFED v. Republic relevant to the present case:10
In 1971, Republic Act No. (“R.A.”) 6260 was enacted creating the Coconut Investment
Company (“CIC”) to administer the Coconut Investment Fund (“CIF”), which, under
Section 8 thereof, was to be sourced from a PhP 0.55 levy on the sale of every 100 kg. of
copra. Of the PhP 0.55 levy of which the copra seller was―or ought to
be―issued COCOFUND receipts, PhP 0.02 was placed at the disposition of COCOFED, the
national association of coconut producers declared by the Philippine Coconut
Administration (“PHILCOA” now “PCA”) as having the largest membership.
The declaration of martial law in September 1972 saw the issuance of several
presidential decrees (“P.D.”) purportedly designed to improve the coconut industry through
the collection and use of the coconut levy fund. While coming generally from impositions on
the first sale of copra, the coconut levy fund came under various names x x x. Charged with
the duty of collecting and administering the Fund was PCA. Like COCOFED with which it
had a legal linkage, the PCA, by statutory provisions scattered in different coco levy
decrees, had its share of the coco levy.
The following were some of the issuances on the coco levy, its collection and utilization,
how the proceeds of the levy will be managed and by whom and the purpose it was
supposed to serve:
1.P.D. No. 276 established the Coconut Consumers Stabilization Fund (“CCSF”) and
declared the proceeds of the CCSF levy as trust fund, to be utilized to subsidize the sale of
coconut-based products, thus stabilizing the price of edible oil.
2.P.D. No. 582 created the Coconut Industry Development Fund (“CIDF”) to finance
the operation of a hybrid coconut seed farm.
Then came 3. P.D. No. 755 providing under its Section 1 the following:
_______________
484

It is hereby declared that the policy of the State is to provide readily available credit
facilities to the coconut farmers at preferential rates; that this policy can be expeditiously
and efficiently realized by the implementation of the “Agreement for the Acquisition of a
Commercial Bank for the benefit of Coconut Farmers” executed by the [PCA]…; and that
the [PCA] is hereby authorized to distribute, for free, the shares of stock of the bank it
acquired to the coconut farmers….
Towards achieving the policy thus declared, P.D. No. 755, under its Section 2,
authorized PCA to utilize the CCSF and the CIDF collections to acquire a commercial bank
and deposit the CCSF levy collections in said bank interest free, the deposit
withdrawable only when the bank has attained a certain level of sufficiency in its equity
capital. The same section also decreed that all levies PCA is authorized to collect shall not
be considered as special and/or fiduciary funds or form part of the general funds of the
government within the contemplation of P.D. No. 711.
4.P.D. No. 961 codified the various laws relating to the development of coconut/palm
oil industries.
The relevant provisions of P.D. No. 961, as later amended by 5. P.D. No. 1468 (Revised
Coconut Industry Code), read:
ARTICLE III
Levies
1. Section Coconut Consumers Stabilization Fund Levy.―The [PCA] is hereby
empowered to impose and collect … the Coconut Consumers Stabilization Fund
Levy, ….
….
5. Section Exemption .―The [CCSF] and the [CIDF]as well as all
disbursements as herein authorized, shall not be construed … as special and/or
fiduciary funds, or as part of the general funds of the national government
within the contemplation of PD 711; … the intention being that said Fund and
the disbursements thereof as herein authorized for the benefit of the
coconut farmers shall be owned by them in their private capacities: ….
(Emphasis supplied)
6.Letter of Instructions No. (“LOI”) 926, s. of 1979, made reference to the creation,
out of other coco levy funds, of the Coconut
485
VOL. 686, NOVEMBER 27, 2012 485

Industry Investment Fund (“CIIF”) in P.D. No. 1468 and entrusted a portion of the CIIF
levy to UCPB for investment, on behalf of coconut farmers, in oil mills and other private
corporations, with the following equity ownership structure:
2. SectionOrganization of the Cooperative Endeavor.―The [UCPB], in its
capacity as the investment arm of the coconut farmers thru the [CIIF] … is hereby
directed to invest, on behalf of the coconut farmers, such portion of the CIIF … in
private corporations … under the following guidelines:
The coconut farmers shall own or control at least … (50%) of the outstanding
voting capital stock of the private corporation [acquired] thru the CIIF and/or
corporation owned or controlled by the farmers thru the CIIF …. (Words in bracket
added.) a)
Through the years, a part of the coconut levy funds went directly or indirectly to
[finance] various projects and/or was converted into various assets or
investments.11 Relevant to the present petition is the acquisition of the First United
Bank(“FUB”), which was subsequently renamed as United Coconut Planters
Bank (“UCPB”).12
Apropos the intended acquisition of a commercial bank for the purpose stated earlier, it
would appear that FUB was the bank of choice which Pedro Cojuangco’s group (collectively,
“Pedro Cojuangco”) had control of. The plan, then, was for PCA to buy all of Pedro
Cojuangco’s shares in FUB. However, as later events unfolded, a simple direct sale from the
seller (Pedro) to PCA did not ensue as it was made to appear that Cojuangco had the
exclusive option to acquire the former’s FUB controlling interests. Emerging from this
elaborate, circuitous arrangement were two deeds. The first one was simply denominated
as Agreement, dated May 1975, entered into by and between Cojuangco for and in his behalf
and in behalf of “certain other buyers”, and Pedro Cojuangco in which the former was
purportedly accorded the option to buy 72.2% of FUB’s outstanding capital stock, or
137,866 shares (the “option shares,” for brevity), at PhP 200 per share. On its face, this
agreement does not mention the word “option.”
_______________
11 Id.; citing Republic v. Sandiganbayan, G.R. No. 118661, January 22, 2007, 512 SCRA 25.
12 Id.
486

The second but related contract, dated May 25, 1975, was denominated as Agreement for
the Acquisition of a Commercial Bank for the Benefit of the Coconut Farmers of the
Philippines. It had PCA, for itself and for the benefit of the coconut farmers, purchase from
Cojuangco the shares of stock subject of the First Agreement for PhP200.00 per share. As
additional consideration for PCA’s buy-out of what Cojuangco would later claim to be his
exclusive and personal option, it was stipulated that, from PCA, Cojuangco shall receive
equity in FUB amounting to 10%, or 7.22%, of the 72.2%, or fully paid shares. And so as not
to dilute Cojuangco’s equity position in FUB, later UCPB, the PCA agreed under paragraph
6 (b) of the second agreement to cede over to the former a number of fully paid FUB shares
out of the shares it (PCA) undertakes to eventually subscribe. It was further stipulated that
Cojuangco would act as bank president for an extendible period of 5 years.
Apart from the aforementioned 72.2%, PCA purchased from other FUB shareholders
6,534 shares [of which Cojuangco, as may be gathered from the records, got 10%.].
While the 64.98% portion of the option shares (72.2% – 7.22% = 64.98%) ostensibly
pertained to the farmers, the corresponding stock certificates supposedly representing the
farmers’ equity were in the name of and delivered to PCA. There were, however, shares
forming part of the aforesaid 64.98% portion, which ended up in the hands of non-farmers.
The remaining 27.8% of the FUB capital stock were not covered by any of the agreements.
Under paragraph #8 of the second agreement, PCA agreed to expeditiously distribute
the FUB shares purchased to such “coconut farmers holding registered COCOFUND
receipts” on equitable basis.
As found by the Sandiganbayan, the PCA appropriated, out of its own fund, an amount
for the purchase of the said 72.2% equity, albeit it would later reimburse itself from
the coconut levy fund.
And per Cojuangco’s own admission, PCA paid, out of the CCSF,
the entire acquisition price for the 72.2% option shares.13
_______________
13 Republic v. COCOFED, G.R. Nos. 147062-64, December 14, 2001, 372 SCRA 462, 477.
487
VOL. 686, NOVEMBER 27, 2012 487
As of June 30, 1975, the list of FUB stockholders included
Cojuangco with 14,440 shares and PCA with 129,955 shares.14 It
would appear later that, pursuant to the stipulation on
maintaining Cojuangco’s equity position in the bank, PCA would
cede to him 10% of its subscriptions to (a) the authorized but
unissued shares of FUB and (b) the increase in FUB’s capital stock
(the equivalent of 158,840 and 649,800 shares, respectively). In all,
from the “mother” PCA shares, Cojuangco would receive a total of
95,304 FUB (UCPB) shares broken down as follows: 14,440 shares
+ 10% (158,840 shares) + 10% (649,800 shares) = 95,304.15
We further quote, from COCOFED v. Republic, facts relevant to
the instant case:16
Shortly after the execution of the PCA―Cojuangco Agreement, President Marcos
issued, on July 29, 1975, P.D. No. 755 directing x x x as narrated, PCA to use the
CCSF and CIDF to acquire a commercial bank to provide coco farmers with “readily
available credit facilities at preferential rate” x x x.
Then came the 1986 EDSA event. One of the priorities of then President Corazon
C. Aquino’s revolutionary government was the recovery of ill-gotten wealth
reportedly amassed by the Marcos family and close relatives, their nominees and
associates. Apropos thereto, she issued Executive Order Nos. (EO) 1, 2 and 14, as
amended by E.O. 14-A, all series of 1986. E.O. 1 created the PCGG and provided it
with the tools and processes it may avail of in the recovery efforts; 17 E.O. No. 2
asserted that the ill-gotten assets and properties come in the form of shares of
stocks, etc., while E.O. No. 14 conferred on the Sandiganbayan exclusive and
original jurisdic-
_______________
14 Republic v. Sandiganbayan, G.R. No. 118661, January 22, 2007, 512 SCRA
25.
15 Rollo, p. 263.
16 COCOFED v. Republic, G.R. Nos. 177857-58 & 178193, January 24, 2012, 663
SCRA 514.
17 The validity and propriety of these processes were sustained by the Court
in BASECO v. PCGG, No. L-75885, May 27, 1987, 150 SCRA 181.
488

tion over ill-gotten wealth cases, with the proviso that “technical rules of procedure
and evidence shall not be applied strictly” to the civil cases filed under the EO.
Pursuant to these issuances, the PCGG issued numerous orders of sequestration,
among which were those handed out x x x against shares of stock in UCPB
purportedly owned by or registered in the names of (a) the more than a million
coconut farmers, (b) the CIIF companies and (c) Cojuangco, Jr., including the SMC
shares held by the CIIF companies. On July 31, 1987, the PCGG instituted before
the Sandiganbayan a recovery suit docketed thereat as CC No. 0033.
xxxx
Civil Case 0033 x x x would be subdivided into eight complaints, docketed as CC
0033-A to CC 0033-H. 3.
xxxx
By Decision of 5. December 14, 2001, in G.R. Nos. 147062-64(Republic v.
COCOFED),18 the Court declared the coco levy funds as prima facie public funds.
And purchased as the sequestered UCPB shares were by such funds, beneficial
ownership thereon and the corollary voting rights prima facie pertain, according to
the Court, to the government.
xxxx
Correlatively, the Republic, on the strength of the December 14, 2001 ruling
in Republic v. COCOFED and on the argument, among others, that the claim of
COCOFED and Ballares et al., over the subject UCPB shares is based solely on the
supposed COCOFUND receipts issued for payment of the RA 6260 CIF levy, filed
a Motion for Partial Summary Judgment [RE: COCOFED, et al. and Ballares, et al.]
dated April 22, 2002, praying that a summary judgment be rendered declaring:
That Section 2 of [PD] 755, Section 5, Article III of P.D. 961 and Section 5,
Article III of P.D. No. 1468 are unconstitutional; a.
That x x x (CIF) payments under x x x (R.A.) No. 6260 are not valid and legal
bases for ownership claims over UCPB shares; and b.
_______________
18 Reported in 372 SCRA 462 (2001).
489
VOL. 686, NOVEMBER 27, 2012 489

That COCOFED, c. et al., and Ballares, et al. have not legally and validly
obtained title over the subject UCPB shares.
Right after it filed the Motion for Partial Summary

Judgment [RE: COCOFED, et al. and Ballares, et al., the Republic
interposed a Motion for Partial Summary Judgment [Re: Eduardo
M. Cojuangco, Jr.], praying that a summary judgment be rendered:
Declaring that Section 1 of P.D. No. 755 is unconstitutional insofar as it validates the provisions in the
“[PCA-Cojuangco] Agreement x x x” dated May 25, 1975 providing payment of ten percent (10%)
commission to defendant Cojuangco with respect to the [FUB], now [UCPB] shares subject
matter thereof; a.
Declaring that x x x Cojuangco, Jr. and his fronts, nominees and dummies, including x x x and Danilo
S. Ursua, have not legally and validly obtained title over the subject UCPB shares; and b.
Declaring that the government is the lawful and true owner of the subject UCPB shares registered in
the names of … Cojuangco, Jr. and the entities and persons above-enumerated, for the benefit of
all coconut farmers. x x x c.
Following an exchange of pleadings, the Republic filed its

surrejoinder praying that it be conclusively declared the true and
absolute owner of the coconut levy funds and the UCPB shares
acquired therefrom.19 We quote from COCOFED v. Republic:20
A joint hearing on the separate motions for summary judgment to determine what
material facts exist with or without controversy
_______________
19 Rollo (G.R. Nos. 177857-58), pp. 830-871.
20 G.R. Nos. 177857-58 & 178193, January 24, 2012, 663 SCRA 514.
490

then ensued. By Order of March 11, 2003, the Sandiganbayan detailed, based on this
Court’s ruling in related ill-gotten cases, the parties’ manifestations made in open court and
the pleadings and evidence on record, the facts it found to be without substantial
controversy, together with the admissions and/or extent of the admission made by the
parties respecting relevant facts, as follows:
As culled from the exhaustive discussions and manifestations of the parties in open
court of their respective pleadings and evidence on record, the facts which exist
without any substantial controversy are set forth hereunder, together with the
admissions and/or the extent or scope of the admissions made by the parties relating
to the relevant facts:
The late President Ferdinand E. Marcos was President x x x for two terms under the
1935 Constitution and, during the second term, he declared Martial Law through
Proclamation No. 1081 dated September 21, 1972. 1.
On January 17, 1973, [he] issued Proclamation No. 1102 announcing the ratification
of the 1973 Constitution. 2.
From January 17, 1973 to April 7, 1981, [he] x x x exercised the powers and
prerogative of President under the 1935 Constitution and the powers and
prerogative of President x x x the 1973 Constitution. 3.
[He] x x x promulgated various [P.D.s], among which were P.D. No. 232, P.D. No.
276, P.D. No. 414, P.D. No. 755, P.D. No. 961 and P.D. No. 1468.
On April 17, 1981, amendments to the 1973 Constitution were effected and, on June
30, 1981, [he], after being elected President, “reassumed the title and exercised the
powers of the President until 25 February 1986.” 4.
Defendants Maria Clara Lobregat and Jose R. Eleazar, Jr. were [PCA] Directors
x x x during the period 1970 to 1986 x x x. 5.
Plaintiff admits the existence of the following agreements which are attached as
Annexes “A” and “B” to the Opposition dated October 10, 2002 of defendant Eduardo
M. Cojuangco, Jr. to the above-cited Motion for Partial Summary Judgment: 6. 491
VOL. 686, NOVEMBER 27, 2012 491

“This Agreement made and entered into this ______ day of May, 1975 at Makati,
Rizal, Philippines, by and between: a)
PEDRO COJUANGCO, Filipino, of legal age and with residence at 1575
Princeton St., Mandaluyong, Rizal, for and in his own behalf and in behalf of certain
other stockholders of First United Bank listed in Annex “A” attached hereto
(hereinafter collectively called the SELLERS);
– and –
EDUARDO COJUANGCO, JR., Filipino, of legal age and with residence at 136
9th Street corner Balete Drive, Quezon City, represented in this act by his duly
authorized attorney-in-fact, EDGARDO J. ANGARA, for and in his own behalf and
in behalf of certain other buyers, (hereinafter collectively called the BUYERS)”;
WITNESSETH: That
WHEREAS, the SELLERS own of record and beneficially a total of 137,866
shares of stock, with a par value of P100.00 each, of the common stock of the First
United Bank (the “Bank”), a commercial banking corporation existing under the
laws of the Philippines;
WHEREAS, the BUYERS desire to purchase, and the SELLERS are willing to
sell, the aforementioned shares of stock totaling 137,866 shares (hereinafter called
the “Contract Shares”) owned by the SELLERS due to their special relationship to
EDUARDO COJUANGCO, JR.;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
1.Sale and Purchase of Contract Shares
Subject to the terms and conditions of this Agreement, the SELLERS hereby sell,
assign, transfer and convey unto the BUYERS, and the BUYERS hereby purchase
and acquire, the Contract Shares free and clear of all liens and encumbrances
thereon.
2.Contract Price
The purchase price per share of the Contract Shares payable by the BUYERS is
P200.00 or an aggregate price of P27,573,200.00 (the “Contract Price”).492

3.Delivery of, and payment for, stock certificates
Upon the execution of this Agreement, (i) the SELLERS shall deliver to
the BUYERS the stock certificates representing the Contract Shares, free
and clear of all liens, encumbrances, obligations, liabilities and other
burdens in favor of the Bank or third parties, duly endorsed in blank or
with stock powers sufficient to transfer the shares to bearer; and (ii)
BUYERS shall deliver to the SELLERS P27,511,295.50 representing the
Contract Price less the amount of stock transfer taxes payable by the
SELLERS, which the BUYERS undertake to remit to the appropriate
authorities. (Emphasis added.)
4.Representation and Warranties of Sellers
The SELLERS respectively and independently of each other represent and
warrant that:
The SELLERS are the lawful owners of, with good marketable title to, the
Contract Shares and that (i) the certificates to be delivered pursuant thereto have
been validly issued and are fully paid and non-assessable; (ii) the Contract Shares
are free and clear of all liens, encumbrances, obligations, liabilities and other
burdens in favor of the Bank or third parties x x x. (a)
This representation shall survive the execution and delivery of this Agreement
and the consummation or transfer hereby contemplated.
The execution, delivery and performance of this Agreement by the SELLERS
does not conflict with or constitute any breach of any provision in any agreement to
which they are a party or by which they may be bound. (b)
They have complied with the condition set forth in Article X of the Amended
Articles of Incorporation of the Bank. (c)
5.Representation of BUYERS
xxxx
6.Implementation
The parties hereto hereby agree to execute or cause to be executed such documents
and instruments as may be required in order to carry out the intent and purpose of
this Agreement.
7.Notices
x x x x493
VOL. 686, NOVEMBER 27, 2012 493

IN WITNESS WHEREOF, the parties hereto have hereunto set their hands at the
place and on the date first above written.
PEDRO COJUANGCO EDUARDO COJUANGCO, JR.

(on his own behalf and in behalf of the other (on his own behalf and in behalf
Sellers listed in Annex “A” hereof) of the other Buyers)
(SELLERS) (BUYERS)
By:
EDGARDO J. ANGARA
Attorney-in-Fact
xxxx
”Agreement for the Acquisition of a Commercial Bank for the Benefit of the Coconut
Farmers of the Philippines, made and entered into this 25th day of May 1975 at
Makati, Rizal, Philippines, by and between: b)
EDUARDO M. COJUANGCO, JR., Filipino, of legal age, with business address
at 10th Floor, Sikatuna Building, Ayala Avenue, Makati, Rizal, hereinafter referred
to as the SELLER;
– and –
PHILIPPINE COCONUT AUTHORITY, a public corporation created by
Presidential Decree No. 232, as amended, for itself and for the benefit of the coconut
farmers of the Philippines, (hereinafter called the BUYER)”
WITNESSETH: That
WHEREAS, on May 17, 1975, the Philippine Coconut Producers Federation
(“PCPF”), through its Board of Directors, expressed the desire of the coconut farmers
to own a commercial bank which will be an effective instrument to solve the
perennial credit problems and, for that purpose, passed a resolution requesting the
PCA to negotiate with the SELLER for the transfer to the coconut farmers of the
SELLER’s option to buy the First United Bank (the “Bank”) under such terms and
conditions as BUYER may deem to be in the best interest of the coconut farmers and
instructed Mrs. Maria Clara Lobregat to convey such request to the BUYER;
WHEREAS, the PCPF further instructed Mrs. Maria Clara Lobregat to make
representations with the BUYER to utilize its funds to finance the purchase of the
Bank;494

WHEREAS, the SELLER has the exclusive and personal option to buy 144,400
shares (the “Option Shares”) of the Bank, constituting 72.2% of the present
outstanding shares of stock of the Bank, at the price of P200.00 per share, which
option only the SELLER can validly exercise;
WHEREAS, in response to the representations made by the coconut farmers, the
BUYER has requested the SELLER to exercise his personal option for the benefit of
the coconut farmers;
WHEREAS, the SELLER is willing to transfer the Option Shares to the BUYER
at a price equal to his option price of P200 per share;
WHEREAS, recognizing that ownership by the coconut farmers of a commercial
bank is a permanent solution to their perennial credit problems, that it will
accelerate the growth and development of the coconut industry and that the policy of
the state which the BUYER is required to implement is to achieve vertical
integration thereof so that coconut farmers will become participants in, and
beneficiaries of the development and growth of the coconut industry, the BUYER
approved the request of PCPF that it acquire a commercial bank to be owned by the
coconut farmers and, appropriated, for that purpose, the sum of P150 Million to
enable the farmers to buy the Bank and capitalize the Bank to such an extension as
to be in a position to adopt a credit policy for the coconut farmers at preferential
rates;
WHEREAS, x x x the BUYER is willing to subscribe to additional shares
(“Subscribed Shares”) and place the Bank in a more favorable financial position to
extend loans and credit facilities to coconut farmers at preferential rates;
NOW, THEREFORE, for and in consideration of the foregoing premises and the
other terms and conditions hereinafter contained, the parties hereby declare and
affirm that their principal contractual intent is (1) to ensure that the coconut
farmers own at least 60% of the outstanding capital stock of the Bank; and (2) that
the SELLER shall receive compensation for exercising his personal and exclusive
option to acquire the Option Shares, for transferring such shares to the coconut
farmers at the option price of P200 per share, and for performing the management
services required of him hereunder.
To ensure that the transfer to the coconut farmers of the Option Shares is
effected with the least possible delay and to provide for the faithful performance of
the obligations of the par- 1.
495
VOL. 686, NOVEMBER 27, 2012 495
ties hereunder, the parties hereby appoint the Philippine National Bank as their
escrow agent (the “Escrow Agent”).
Upon execution of this Agreement, the BUYER shall deposit with the Escrow
Agent such amount as may be necessary to implement the terms of this Agreement
x x x.
As promptly as practicable after execution of this Agreement, the SELLER shall
exercise his option to acquire the Option Share and SELLER shall immediately
thereafter deliver and turn over to the Escrow Agent such stock certificates as are
herein provided to be received from the existing stockholders of the Bank by virtue
of the exercise on the aforementioned option x x x. 2.
To ensure the stability of the Bank and continuity of management and credit
policies to be adopted for the benefit of the coconut farmers, the parties undertake to
cause the stockholders and the Board of Directors of the Bank to authorize and
approve a management contract between the Bank and the SELLER under the
following terms: 3.
The management contract shall be for a period of five (5) years, renewable
for another five (5) years by mutual agreement of the SELLER and the
Bank; (a)
The SELLER shall be elected President and shall hold office at the pleasure
of the Board of Directors. While serving in such capacity, he shall be entitled
to such salaries and emoluments as the Board of Directors may determine;
(b)
The SELLER shall recruit and develop a professional management team to
manage and operate the Bank under the control and supervision of the
Board of Directors of the Bank; (c)
The BUYER undertakes to cause three (3) persons designated by the
SELLER to be elected to the Board of Directors of the Bank; (d)
The SELLER shall receive no compensation for managing the Bank, other
than such salaries or emoluments to which he may be entitled by virtue of
the discharge of his function and duties as President, provided x x x and (e)
The management contract may be assigned to a management company
owned and controlled by the SELLER. (f)
As compensation for exercising his personal and exclusive option to acquire the
Option Shares and for transferring 4.
496

such shares to the coconut farmers, as well as for performing the management
services required of him, SELLER shall receive equity in the Bank amounting, in
the aggregate, to 95,304 fully paid shares in accordance with the procedure set forth
in paragraph 6 below;
In order to comply with the Central Bank program for increased capitalization of
banks and to ensure that the Bank will be in a more favorable financial position to
attain its objective to extend to the coconut farmers loans and credit facilities, the
BUYER undertakes to subscribe to shares with an aggregate par value of
P80,864,000 (the “Subscribed Shares”). The obligation of the BUYER with respect to
the Subscribed Shares shall be as follows: 5.
The BUYER undertakes to subscribe, for the benefit of the coconut farmers,
to shares with an aggregate par value of P15,884,000 from the present
authorized but unissued shares of the Bank; and (a)
The BUYER undertakes to subscribe, for the benefit of the coconut farmers,
to shares with an aggregate par value of P64,980,000 from the increased
capital stock of the Bank, which subscriptions shall be deemed made upon
the approval by the stockholders of the increase of the authorized capital
stock of the Bank from P50 Million to P140 Million. (b)
The parties undertake to declare stock dividends of P8 Million out of the present
authorized but unissued capital stock of P30 Million.
To carry into effect the agreement of the parties that the SELLER shall receive
as his compensation 95,304 shares: 6.
The Escrow Agent shall, upon receipt from the SELLER of the stock
certificates representing the Option Shares, duly endorsed in blank or with
stock powers sufficient to transfer the same to bearer, present such stock
certificates to the Transfer Agent of the Bank and shall cause such Transfer
Agent to issue stock certificates of the Bank in the following ratio: one share
in the name of the SELLER for every nine shares in the name of the
BUYER. (a)
With respect to the Subscribed Shares, the BUYER undertakes, in order to
prevent the dilution of SELLER’s equity position, that it shall cede over to
the SELLER 64,980 fully-paid shares out of the Subscribed Shares. Such
undertaking shall be complied with in the following (b)
497
VOL. 686, NOVEMBER 27, 2012 497

manner: upon receipt of advice that the BUYER has subscribed to the
Subscribed Shares upon approval by the stockholders of the increase of the
authorized capital stock of the Bank, the Escrow Agent shall thereupon issue
a check in favor of the Bank covering the total payment for the Subscribed
Shares. The Escrow Agent shall thereafter cause the Transfer Agent to issue
a stock certificates of the Bank in the following ratio: one share in the name
of the SELLER for every nine shares in the name of the BUYER.
The parties further undertake that the Board of Directors and management of
the Bank shall establish and implement a loan policy for the Bank of making
available for loans at preferential rates of interest to the coconut farmers x x x. 7.
The BUYER shall expeditiously distribute from time to time the shares of the
Bank, that shall be held by it for the benefit of the coconut farmers of the
Philippines under the provisions of this Agreement, to such, coconut farmers holding
registered COCOFUND receipts on such equitable basis as may be determine by the
BUYER in its sound discretion. 8.
x x x x 9.
To ensure that not only existing but future coconut farmers shall be participants
in and beneficiaries of the credit policies, and shall be entitled to the benefit of loans
and credit facilities to be extended by the Bank to coconut farmers at preferential
rates, the shares held by the coconut farmers shall not be entitled to pre-emptive
rights with respect to the unissued portion of the authorized capital stock or any
increase thereof. 10.
After the parties shall have acquired two-thirds (2/3) of the outstanding shares of
the Bank, the parties shall call a special stockholders’ meeting of the Bank: 11.
To classify the present authorized capital stock of P50,000,000
divided into 500,000 shares, with a par value of P100.00 per share
into: 361,000 Class A shares, with an aggregate par value of
P36,100,000 and 139,000 Class B shares, with an aggregate par value
of P13,900,000. All of the Option Shares constituting 72.2% of the
outstanding shares, shall be classified as Class A shares and the
balance of the outstanding shares, constituting 27.8% of the
outstanding shares, as Class B shares; (a)
To amend the articles of incorporation of the Bank to effect the
following changes: (b)198

change of corporate name to First United Coconut Bank; (i)
replace the present provision restricting the transferability of the
shares with a limitation on ownership by any individual or entity to
not more than 10% of the outstanding shares of the Bank; (ii)
provide that the holders of Class A shares shall not be entitled to pre-
emptive rights with respect to the unissued portion of the authorized
capital stock or any increase thereof; and (iii)
provide that the holders of Class B shares shall be absolutely entitled
to pre-emptive rights, with respect to the unissued portion of Class B
shares comprising part of the authorized capital stock or any increase
thereof, to subscribe to Class B shares in proportion to the
subscriptions of Class A shares, and to pay for their subscriptions to
Class B shares within a period of five (5) years from the call of the
Board of Directors. (iv)
To increase the authorized capital stock of the Bank from P50 Million to
P140 Million, divided into 1,010,800 Class A shares and 389,200 Class B
shares, each with a par value of P100 per share; (c)
To declare a stock dividend of P8 Million payable to the SELLER, the
BUYER and other stockholders of the Bank out of the present authorized but
unissued capital stock of P30 Million; (d)
To amend the by-laws of the Bank accordingly; and (e)
To authorize and approve the management contract provided in paragraph 2
above. (f)
The parties agree that they shall vote their shares and take all the necessary
corporate action in order to carry into effect the foregoing provisions of this
paragraph 11, including such other amendments of the articles of incorporation and
by-laws of the Bank as are necessary in order to implement the intention of the
parties with respect thereto.
It is the contemplation of the parties that the Bank shall achieve a financial and
equity position to be able to lend to the coconut farmers at preferential rates. 12.
In order to achieve such objective, the parties shall cause the Bank to adopt a policy
of reinvestment, by way of stock divi-
499
VOL. 686, NOVEMBER 27, 2012 499

dends, of such percentage of the profits of the Bank as may be necessary.
The parties agree to execute or cause to be executed such documents and
instruments as may be required in order to carry out the intent and purpose of this
Agreement. 13.
IN WITNESS WHEREOF x x x
PHILIPPINE COCONUT AUTHORITY

(BUYER)
By:
EDUARDO COJUANGCO, JR. MARIA CLARA L. LOBREGAT
(SELLER)
xxxx
Defendants Lobregat, 7. et al. and COCOFED, et al. and Ballares, et al.admit that
the x x x (PCA) was the “other buyers” represented by defendant Eduardo M.
Cojuangco, Jr. in the May 1975 Agreement entered into between Pedro Cojuangco
(on his own behalf and in behalf of other sellers listed in Annex “A”of the
agreement) and defendant Eduardo M. Cojuangco, Jr. (on his own behalf and in
behalf of the other buyers). Defendant Cojuangco insists he was the “only buyer”
under the aforesaid Agreement.
Defendant Eduardo M. Cojuangco, Jr. did not own any share in the x x x (FUB)
prior to the execution of the two Agreements x x x. 8.
Defendants Lobregat, 9. et al., and COCOFED, et al., and Ballares, et al. admit
that in addition to the 137,866 FUB shares of Pedro Cojuangco, et al. covered by the
Agreement, other FUB stockholders sold their shares to PCA such that the total
number of FUB shares purchased by PCA … increased from 137,866 shares to
144,400 shares, the OPTION SHARES referred to in the Agreement of May 25,
1975. Defendant Cojuangco did not make said admission as to the said 6,534 shares
in excess of the 137,866 shares covered by the Agreement with Pedro Cojuangco.
Defendants Lobregat, 10. et al. and COCOFED, et al. and Ballares, et al. admit
that the Agreement, described in Section 1 of Presidential Decree (P.D.) No. 755
dated July 29, 1975 as the “Agreement for the Acquisition of a Commercial Bank for
the Benefit of Coconut Farmers” executed by the Philippine
500

Coconut Authority” and incorporated in Section 1 of P.D. No. 755 by reference,
refers to the “AGREEMENT FOR THE ACQUISITION OF A COMMERCIAL
BANK FOR THE BENEFIT OF THE COCONUT FARMERS OF THE
PHILIPPINES” dated May 25, 1975 between defendant Eduardo M. Cojuangco, Jr.
and the [PCA] (Annex “B” for defendant Cojuangco’s OPPOSITION TO
PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT [RE: EDUARDO
M. COJUANGCO, JR.] dated September 18, 2002).
Plaintiff refused to make the same admission.
As to whether P.D. No. 755 and the text of the agreement described therein was
published, the Court takes judicial notice that P.D. No. 755 was published [in] x x x
volume 71 of the Official Gazette but the text of the agreement x x x was not so
published with P.D. No. 755. 11.
that the PCA used public funds x x x in the total amount of P150 million, to
purchase the FUB shares amounting to 72.2% of the authorized capital stock of the
FUB, although the PCA was later reimbursed from the coconut levy
funds and that the PCA subscription in the increased capitalization of the FUB,
which was later renamed the x x x (UCPB), came from the said coconut levy funds
x x x.
Pursuant to the May 25, 1975 Agreement, out of the 72.2% shares of the authorized
and the increased capital stock of the FUB (later UCPB), entirely paid for by PCA,
64.98% of the shares were placed in the name of the “PCA for the benefit of the
coconut farmers” and 7.22% were given to defendant Cojuangco. The remaining
27.8% shares of stock in the FUB which later became the UCPB were not covered by
the two (2) agreements referred to in item no. 6, par. (a) and (b) above. 13.
“There were shares forming part of the aforementioned 64.98% which were later
sold or transferred to non-coconut farmers.
Under the May 27, 1975 Agreement, defendant Cojuangco’s equity in the FUB (now
UCPB) was ten percent (10%) of the shares of stock acquired by the PCA for the
benefit of the coconut farmers. 14.501
VOL. 686, NOVEMBER 27, 2012 501

That the fully paid 95.304 shares of the FUB, later the UCPB, acquired by
defendant x x x Cojuangco, Jr. pursuant to the May 25, 1975 Agreement were paid
for by the PCA in accordance with the terms and conditions provided in the said
Agreement. 15.
that the affidavits of the coconut farmers (specifically, Exhibit “1-Farmer” to “70-
Farmer”) uniformly state that:
they are coconut farmers who sold coconut products; a.
in the sale thereof, they received COCOFUND receipts pursuant to R.A. No.
6260; b.
they registered the said COCOFUND receipts; and c.
by virtue thereof, and under R.A. No. 6260, P.D. Nos. 755, 961 and 1468, they
are allegedly entitled to the subject UCPB shares. d.
but subject to the following qualifications:
there were other coconut farmers who received UCPB shares although they did
not present said COCOFUND receipt because the PCA distributed the
unclaimed UCPB shares not only to those who already received their UCPB
shares in exchange for their COCOFUND receipts but also to the coconut
farmers determined by a national census conducted pursuant to PCA
administrative issuances; a.
[t]here were other affidavits executed by Lobregat, Eleazar, Ballares and
Aldeguer relative to the said distribution of the unclaimed UCPB shares; and
b.
the coconut farmers claim the UCPB shares by virtue of their compliance not
only with the laws mentioned in item (d) above but also with the relevant
issuances of the PCA such as, PCA Administrative Order No. 1, dated August
20, 1975 (Exh. “298-Farmer”); PCA Resolution No. 033-78 dated February 16,
1978…. c.
The plaintiff did not make any admission as to the foregoing qualifications. 502

Defendants Lobregat, 17. et al. and COCOFED, et al. and Ballares, et
al. claim that the UCPB shares in question have legitimately become the
private properties of the 1,405,366 coconut farmers solely on the basis of
their having acquired said shares in compliance with R.A. No. 6260, P.D.
Nos. 755, 961 and 1468 and the administrative issuances of the PCA cited
above.
On the other hand, defendant … Cojuangco, Jr. claims ownership of the
UCPB shares, which he holds, solely on the basis of the two Agreements….
(Emphasis and words in brackets added.) 18.
On July 11, 2003, the Sandiganbayan issued the assailed PSJ-A,

ruling in favor of the Republic, disposing insofar as pertinent as
follows:21
WHEREFORE, in view of the foregoing, we rule as follows:
xxxx
Re: MOTION FOR PARTIAL SUMMARY JUDGMENT (RE: EDUARDO M.
COJUANGCO, JR.) dated September 18, 2002 filed by plaintiff. C.
Sec. 1 of P.D. No. 755 did not validate the Agreement between PCA and
defendant Eduardo M. Cojuangco, Jr. dated May 25, 1975 nor did it
give the Agreement the binding force of a law because of the non-
publication of the said Agreement. 1.
Regarding the questioned transfer of the shares of stock of FUB (later
UCPB) by PCA to defendant Cojuangco or the so-called “Cojuangco
UCPB shares” which cost the PCA more than Ten Million Pesos in
CCSF in 1975, we declare, that the transfer of the following
FUB/UCPB shares to defendant Eduardo M. Cojuangco, Jr. was not
supported by valuable consideration, and therefore null and void: 2.
The 14,400 shares from the “Option Shares”; a.
_______________
21 PSJ-A, pp. 15, 54-55, 80-83; Rollo, pp. 193, 231-232, 257-60.
503
VOL. 686, NOVEMBER 27, 2012 503

Additional Bank Shares Subscribed and Paid by PCA, consisting
of: b.
Fifteen Thousand Eight Hundred Eighty-Four (15,884) shares
out of the authorized but unissued shares of the bank,
subscribed and paid by PCA; 1.
Sixty Four Thousand Nine Hundred Eighty (64,980) shares of
the increased capital stock subscribed and paid by PCA; and
2.
Stock dividends declared pursuant to paragraph 5 and
paragraph 11 (iv) (d) of the Agreement. 3.
3.The above-mentioned shares of stock of the FUB/UCPB
transferred to defendant Cojuangco are hereby
declared conclusively owned by the plaintiff Republic of the
Philippines.
The UCPB shares of stock of the alleged fronts, nominees and dummies
of defendant Eduardo M. Cojuangco, Jr. 4. which form part of the
72.2% shares of the FUB/UCPB paid for by the PCA with public funds
later charged to the coconut levy funds, particularly the CCSF, belong
to the plaintiff Republic of the Philippines as their true and beneficial
owner.
Let trial of this Civil Case proceed with respect to the issues which have not
been disposed of in this Partial Summary Judgment. For this purpose, the
plaintiff’s Motion Ad Cautelam to Present Additional Evidence dated March
28, 2001 is hereby GRANTED.22 (Emphasis and underlining added.)
As earlier explained, the core issue in this instant petition is

Part C of the dispositive portion in PSJ-A declaring the 7.22% FUB
(now UCPB) shares transferred to Cojuangco, plus the other shares
paid by the PCA as “conclusively” owned by the Republic. Parts A
and B of the same dispositive portion have already been finally
resolved and adjudicated by this Court in COCOFED v.
Republic on January 24, 2012.23
_______________
22 PSJ-A, pp. 15, 54-55, 80-83; Rollo, pp. 193, 231-32, 257-60.
504
From PSJ-A, Cojuangco moved for partial reconsideration but
the Sandiganbayan, by Resolution24 of December 28, 2004, denied
the motion.
Hence, the instant petition.
The Issues
Cojuangco’s petition formulates the issues in question form, as

follows:25
Is the acquisition of the [so-called Cojuangco, Jr. UCPB shares] by petitioner Cojuangco
x x x “not supported by valuable consideration and, therefore, null and void”? a.
Did the Sandiganbayan have jurisdiction, in Civil Case No. 0033-A, an “ill-gotten
wealth” case brought under [EO] Nos. 1 and 2, to declare the [Cojuangco UCPB shares]
acquired by virtue of the Pedro Cojuangco, b. et al. Agreement and/or the PCA Agreement
null and void because “not supported by valuable consideration”?
Was the claim that the acquisition by petitioner Cojuangco of shares representing 7.2%
of the outstanding capital stock of FUB (later UCPB) “not supported by valuable
consideration”, a “claim” pleaded in the complaint and may therefore be the basis of a
“summary judgment” under Section 1, Rule 35 of the Rules of Court? c.
By declaring the [Cojuangco UCPB shares] as “not supported by valuable consideration,
and therefore, null and void”, did the Sandiganbayan effectively nullify the PCA
Agreement? May the Sandiganbayan nullify the PCA Agreement when the parties to the
Agreement, namely: x x x concede its validity? If the PCA Agreement be deemed “null and
void”, should not the FUB (later UCPB) shares revert to petitioner Cojuangco (under the
PCA Agreement) or to Pedro Cojuangco, d. et al. x x x? Would there be a basis then, even
assuming the absence of consideration x x x, to declare 7.2% UCPB shares of petitioner
Cojuangco as “conclusively owned by the plaintiff Republic of the Philippines”?26
_______________
24 Rollo, pp. 361-400.
25 Id., at pp. 42-43.
26 Id.
505
VOL. 686, NOVEMBER 27, 2012 505
I
THE SANDIGANBAYAN HAS JURISDICTION OVER THE
SUBJECT MATTER OF THE SUBDIVIDED AMENDED
COMPLAINTS,
INCLUDING THE SHARES ALLEGEDLY ACQUIRED BY
COJUANGCO BY VIRTUE OF THE PCA AGREEMENTS.
The issue of jurisdiction over the subject matter of the
subdivided amended complaints has peremptorily been put to rest
by the Court in its January 24, 2012 Decision in COCOFED v.
Republic. There, the Court, citing Regalado27and settled
jurisprudence, stressed the following interlocking precepts: Subject
matter jurisdiction is conferred by law, not by the consent or
acquiescence of any or all of the parties. In turn, the issue on
whether a suit comes within the penumbra of a statutory
conferment is determined by the allegations in the complaint,
regardless of whether or not the suitor will be entitled to recover
upon all or part of the claims asserted.
The Republic’s material averments in its complaint subdivided
in CC No. 0033-A included the following:
CC No. 0033-A
Defendant Eduardo M. Cojuangco, Jr. served as a public officer during the

Marcos administration. During the period of his incumbency as a public officer, he
acquired assets, funds and other property grossly and manifestly disproportionate
to his salaries, lawful income and income from legitimately acquired property. 12.
Defendant Eduardo M. Cojuangco, Jr., taking undue advantage of his
association, influence, connection, and acting in unlawful concert with Defendants
Ferdinand E. Marcos and Imelda 13.
_______________
27 1 Regalado, REMEDIAL LAW COMPENDIUM 11 (6th revised ed., 1997).
506

R. Marcos, AND THE INDIVIDUAL DEFENDANTS, embarked
upon devices, schemes and stratagems, to unjustly enrich
themselves at the expense of Plaintiff and the Filipino people, such
as when he—
manipulated, beginning the year 1975 with the active collaboration of
Defendants x x x Maria Clara Lobregat, Danilo Ursua [etc.], the purchase by . . .
(PCA) of 72.2% of the outstanding capital stock of the x x x (FUB) which was
subsequently converted into a universal bank named x x x (UCPB) through the use
of the Coconut Consumers Stabilization Fund (CCSF) being initially in the amount
of P85,773,100.00 in a manner contrary to law and to the specific purposes for
which said coconut levy funds were imposed and collected under P.D. 276, and with
sinister designs and under anomalous circumstances, to wit: a)
Defendant Eduardo Cojuangco, Jr. coveted the coconut levy funds as a cheap,
lucrative and risk-free source of funds with which to exercise his private
option to buy the controlling interest in FUB; thus, claiming that the 72.2%
of the outstanding capital stock of FUB could only be purchased and
transferred through the exercise of his “personal and exclusive action [option]
to acquire the 144,000 shares” of the bank, Defendant Eduardo M.
Cojuangco, Jr. and PCA, x x x executed on May 26, 1975 a purchase
agreement which provides, among others, for the payment to him in fully
paid shares as compensation thereof 95,384 shares worth P1,444,000.00 with
the further condition that he shall manage and control the bank as Director
and President for a term of five (5) years renewable for another five (5) years
and to designate three (3) persons of his choice who shall be elected as
members of the Board of Directors of the Bank; (i)
to legitimize a (ii) posteriori his highly anomalous and irregular use and
diversion of government funds to advance his own private and commercial
interests, Defendant Eduardo Cojuangco, Jr. caused the issuance by
Defendant Ferdinand E. Marcos of PD 755 (a) declaring that the coconut levy
funds shall not be considered special and fiduciary and trust funds and do
not form part of the general funds of the National Government, conveniently
repealing for that purpose a series of previous de-
507
VOL. 686, NOVEMBER 27, 2012 507

crees, PDs 276 and 414, establishing the character of the coconut
levy funds as special, fiduciary, trust and governmental funds; (b)
confirming the agreement between Defendant Eduardo Cojuangco,
Jr. and PCA on the purchase of FUB by incorporating by reference
said private commercial agreement in PD 755;
To further consolidate his hold on UCPB, Defendant Eduardo Cojuangco, Jr.
imposed as consideration and conditions for the purchase that (a) he gets one
out of every nine shares given to PCA, and (b) he gets to manage and control
UCPB as president for a term of five (5) years renewable for another five (5)
years; (iii)
To perpetuate his opportunity to deal with and make use of the coconut levy
funds x x x Cojuangco, Jr. caused the issuance by Defendant Ferdinand E.
Marcos of an unconstitutional decree (PD 1468) requiring the deposit of all
coconut levy funds with UCPB, interest free to the prejudice of the
government. (iv)
(v)In gross violation of their fiduciary positions and in contravention of the
goal to create a bank for the coconut farmers of the country, the capital stock
of UCPB as of February 25, 1986 was actually held by the defendants, their
lawyers, factotum and business associates, thereby finally gaining control of
the UCPB by misusing the names and identities of the so-called “more than
one million coconut farmers.”
The acts of Defendants, singly or collectively, and/or in unlawful concert with one
another, constitute gross abuse of official position and authority, flagrant breach of
public trust and fiduciary obligations, brazen abuse of right and power, and unjust
enrichment, violation of the constitution and laws of the Republic of the Philippines,
to the grave and irreparable damage of Plaintiff and the Filipino people. 14.28
_______________
28 Rollo, pp. 488-493.
508
In no uncertain terms, the Court has upheld the
Sandiganbayan’s assumption of jurisdiction over the subject
matter of Civil Case Nos. 0033-A and 0033-F.29 The Court wrote:
Judging from the allegations of the defendants’ illegal acts thereat made, it is
fairly obvious that both CC Nos. 0033-A and CC 0033-F partake, in the context of
EO Nos. 1, 2 and 14, series of 1986, the nature of ill-gotten wealth suits. Both deal
with the recovery of sequestered shares, property or business enterprises claimed,
as alleged in the corresponding basic complaints, to be ill-gotten assets of President
Marcos, his cronies and nominees and acquired by taking undue advantage of
relationships or influence and/or through or as a result of improper use, conversion
or diversion of government funds or property. Recovery of these
assets―determined as shall hereinafter be discussed as prima facie ill-gotten―falls
within the unquestionable jurisdiction of the Sandiganbayan.30
P.D. No. 1606, as amended by R.A. 7975 and E.O. No. 14, Series of 1986, vests
the Sandiganbayan with, among others, original jurisdiction over civil and criminal
cases instituted pursuant to and in connection with E.O. Nos. 1, 2, 14 and 14-A.
Correlatively, the PCGG Rules and Regulations defines the term “Ill-Gotten Wealth”
as “any asset, property, business enterprise or material possession of persons within
the purview of [E.O.] Nos. 1 and 2, acquired by them directly, or indirectly
thru dummies, nominees, agents, subordinates and/or business associates by
any of the following means or similar schemes”:
Through misappropriation, conversion, misuse or malversation of public
funds or raids on the public treasury; (1)
x x x x (2)
By the illegal or fraudulent conveyance or disposition of assets belonging
to the government or any of its subdivisions, agencies or instrumentalities or
government-owned or controlled corporations; (3)
_______________
29 COCOFED v. Republic, G.R. Nos. 177857-58 & 178193, January 24, 2012, 663
SCRA 514.
30 Id.; citing San Miguel Corporation v. Sandiganbayan, G.R. Nos. 104637-38,
September 14, 2000, 340 SCRA 289.
509
VOL. 686, NOVEMBER 27, 2012 509

By obtaining, receiving or accepting directly or indirectly any shares of
stock, equity or any other form of interest or participation in any business
enterprise or undertaking; (4)
Through the establishment of agricultural, industrial or commercial
monopolies or other combination and/or by the issuance, promulgation and/or
implementation of decrees and orders intended to benefit particular persons
or special interests; and (5)
By taking undue advantage of official position, authority, relationship or
influence for personal gain or benefit. (Emphasis supplied) (6)
Section 2(a) of E.O. No. 1 charged the PCGG with the task of assisting the
President in “[T]he recovery of all ill-gotten wealth accumulated by former …
[President] Marcos, his immediate family, relatives, subordinates and close
associates … including the takeover or sequestration of all business enterprises and
entities owned or controlled by them, during his administration, directly or
through nominees, by taking undue advantage of their public office and/or using
their powers, authority, influence, connections or relationship.” Complementing the
aforesaid Section 2(a) is Section 1 of E.O. No. 2 decreeing the freezing of all assets
“in which the [Marcoses] their close relatives, subordinates, business associates,
dummies, agents or nominees have any interest or participation.”
The Republic’s averments in the amended complaints, particularly those
detailing the alleged wrongful acts of the defendants, sufficiently reveal that the
subject matter thereof comprises the recovery by the Government of ill-gotten
wealth acquired by then President Marcos, his cronies or their associates and
dummies through the unlawful, improper utilization or diversion of coconut levy
funds aided by P.D. No. 755 and other sister decrees. President Marcos himself
issued these decrees in a brazen bid to legalize what amounts to private taking of
the said public funds.
xxxx
There was no actual need for Republic, as plaintiff a quo, to adduce evidence to
show that the Sandiganbayan has jurisdiction over the subject matter of the
complaints as it leaned on the averments in the initiatory pleadings to make visible
the jurisdiction of the Sandiganbayan over the ill-gotten wealth complaints. As
previ-
510

ously discussed, a perusal of the allegations easily reveals the
sufficiency of the statement of matters disclosing the claim of the
government against the coco levy funds and the assets acquired
directly or indirectly through said funds as ill-gotten wealth.
Moreover, the Court finds no rule that directs the plaintiff to first
prove the subject matter jurisdiction of the court before which the
complaint is filed. Rather, such burden falls on the shoulders of
defendant in the hearing of a motion to dismiss anchored on said
ground or a preliminary hearing thereon when such ground is
alleged in the answer.
xxxx
Lest it be overlooked, this Court has already decided that the sequestered shares
are prima facie ill-gotten wealth rendering the issue of the validity of their
sequestration and of the jurisdiction of the Sandiganbayan over the case beyond
doubt. In the case of COCOFED v. PCGG, We stated that:
It is of course not for this Court to pass upon the factual issues thus
raised. That function pertains to the Sandiganbayan in the first instance. For
purposes of this proceeding, all that the Court needs to determine is whether
or not there is prima faciejustification for the sequestration ordered by the
PCGG. The Court is satisfied that there is. The cited incidents, given the
public character of the coconut levy funds, place petitioners
COCOFED and its leaders and officials, at least prima facie, squarely
within the purview of Executive Orders Nos. 1, 2 and 14, as construed
and applied in BASECO, to wit:
that ill-gotten properties (were) amassed by the leaders and supporters of the previous
regime; “1.
more particularly, that ‘(i) Ill-gotten wealth was accumulated by x x x Marcos, his
immediate family, relatives, subordinates and close associates, x x x (and) business
enterprises and entities (came to be) owned or controlled by them, during x x x (the Marcos)
administration, directly or through nominees, “a. by taking undue advantage of their public
office and using their powers, authority, influence, connections or relationships’;
otherwise stated, that ‘ “b.there are assets and properties purportedly pertaining to [the
Marcoses], their close relatives, subordinates, business associates, dummies, agents or
nominees which had been or were acquired by them directly or indirectly, through or as a
result of the improper or illegal use of funds or properties owned by the Government x x x or
any of its branches, instrumentalities, enterprises, banks or financial institutions, or by
taking undue advantage of their office,
511
VOL. 686, NOVEMBER 27, 2012 511
authority, influence, connections or relationship, resulting in their unjust enrichment x x x;
xxxx
The petitioners’ claim that the assets acquired with the coconut levy funds are privately
owned by the coconut farmers is founded on certain provisions of law, to wit [Sec. 7, RA 6260
and Sec. 5, Art. III, PD 1468]… (Words in bracket added; italics in the original). 2.
xxxx
E.O. 1, 2, 14 and 14-A, it bears to stress, were issued precisely to effect the
recovery of ill-gotten assets amassed by the Marcoses, their associates, subordinates
and cronies, or through their nominees. Be that as it may, it stands to reason that
persons listed as associated with the Marcoses refer to those in possession of such
ill-gotten wealth but holding the same in behalf of the actual, albeit undisclosed
owner, to prevent discovery and consequently recovery. Certainly, it is well-nigh
inconceivable that ill-gotten assets would be distributed to and left in the hands of
individuals or entities with obvious traceable connections to Mr. Marcos and his
cronies. The Court can take, as it has in fact taken, judicial notice of schemes and
machinations that have been put in place to keep ill-gotten assets under wraps.
These would include the setting up of layers after layers of shell or dummy, but
controlled, corporations31 or manipulated instruments calculated to confuse if not
altogether mislead would-be investigators from recovering wealth deceitfully
amassed at the expense of the people or simply the fruits thereof. Transferring the
illegal assets to third parties not readily perceived as Marcos cronies would be
another. So it was that in PCGG v. Pena, the Court, describing the rule of Marcos as
a “well entrenched plundering regime of twenty years,” noted the magnitude of the
past regime’s organized pillage and the ingenuity of the plunderers and pillagers
with the assistance of experts and the best legal minds in the market.32
Prescinding from the foregoing premises, there can no longer be

any serious challenge as to the Sandiganbayan’s
_______________
31 Id.; citing Yuchengco v. Sandiganbayan, G.R. No. 149802, January 20, 2006, 479 SCRA 1.
32 Id.
512
subject matter jurisdiction. And in connection therewith, the Court
wrote in COCOFED v. Republic, that the instant petition shall be
decided separately and should not be affected by the January 24,
2012 Decision, “save for determinatively legal issues directly
addressed” therein.33Thus:
We clarify that PSJ-A is subject of another petition for review interposed by Eduardo
Cojuangco, Jr., in G.R. No. 180705 entitled, Eduardo M. Cojuangco, Jr. v. Republic of the
Philippines, which shall be decided separately by this Court. Said petition should
accordingly not be affected by this Decision save for determinatively legal issues
directly addressed herein.34 (Emphasis Ours.)
We, therefore, reiterate our holding in COCOFED v.

Republic respecting the Sandiganbayan’s jurisdiction over the
subject matter of Civil Case No. 0033-A, including those matters
whose adjudication We shall resolve in the present case.
II
PRELIMINARILY, THE AGREEMENT BETWEEN THE
PCAAND EDUARDO M. COJUANGCO, JR. DATED MAY 25,
1975 CANNOT BE ACCORDED THE STATUS OF A LAW
FOR THE LACK OF THE REQUISITE PUBLICATION.
It will be recalled that Cojuangco’s claim of ownership over the
UCPB shares is hinged on two contract documents the respective
contents of which formed part of and reproduced in their entirety
in the aforecited Order35 of the Sandiganbayan dated March 11,
2003. The first contract refers to the agreement entered into by
and between Pedro Cojuangco and his group, on one hand, and
Eduardo M. Cojuangco, Jr., on the other, bearing date “May
1975”36(hereinafter referred to as
_______________
33 Id.
34 Id.
35 Rollo, pp. 956-961.
36 The date of the agreement was left blank.
513
VOL. 686, NOVEMBER 27, 2012 513
“PC-ECJ Agreement”), while the second relates to the accord
between the PCA and Eduardo M. Cojuangco, Jr. dated May 25,
1975 (hereinafter referred to as “PCA-Cojuangco Agreement”). The
PC-ECJ Agreement allegedly contains, inter alia, Cojuangco’s
personal and exclusive option to acquire the FUB (“UCPB”) shares
from Pedro and his group. The PCA-Cojuangco Agreement shows
PCA’s acquisition of the said option from Eduardo M. Cojuangco,
Jr.
Section 1 of P.D. No. 755 incorporated, by reference, the
“Agreement for the Acquisition of a Commercial Bank for the
Benefit of the Coconut Farmers” executed by the PCA.
Particularly, Section 1 states:
1. Section Declaration of National Policy.—It is hereby declared that the policy of the
State is to provide readily available credit facilities to the coconut farmers at preferential
rates; that this policy can be expeditiously and efficiently realized by the implementation of
the “Agreement for the Acquisition of a Commercial Bank for the benefit of the
Coconut Farmers” executed by the Philippine Coconut Authority, the terms of
which “Agreement” are hereby incorporated by reference; and that the Philippine
Coconut Authority is hereby authorized to distribute, for free, the shares of stock of the
bank it acquired to the coconut farmers under such rules and regulations it may
promulgate. (Emphasis Ours.)
It bears to stress at this point that the PCA-Cojuangco

Agreement referred to above in Section 1 of P.D. 755 was not
reproduced or attached as an annex to the same law. And it is well-
settled that laws must be published to be valid. In fact, publication
is an indispensable condition for the effectivity of a law. Tañada v.
Tuvera37 said as much:
Publication [of the law] is indispensable in every case x x x.
xxxx
_______________
37 No. L-63915, December 29, 1986, 146 SCRA 446, 452-454.
514

We note at this point the conclusive presumption that every person knows the law,
which of course presupposes that the law has been published if the presumption is to have
any legal justification at all. It is no less important to remember that Section 6 of the Bill of
Rights recognizes “the right of the people to information on matters of public concern,” and
this certainly applies to, among others, and indeed especially, the legislative enactments of
the government.
xxxx
We hold therefore that all statutes, including those of local application and private laws,
shall be published as a condition for their effectivity, which shall begin fifteen days after
publication unless a different effectivity date is fixed by the legislature.
Covered by this rule are presidential decrees and executive orders promulgated by the
President in the exercise of legislative powers whenever the same are validly delegated by
the legislature, or, at present, directly conferred by the Constitution. Administrative rules
and regulations must also be published if their purpose is to enforce or implement existing
law pursuant also to a valid delegation.38
We even went further in Tañada to say that:

Laws must come out in the open in the clear light of the sun instead of skulking in the
shadows with their dark, deep secrets. Mysterious pronouncements and rumored rules
cannot be recognized as binding unless their existence and contents are confirmed by a
valid publication intended to make full disclosure and give proper notice to the people. The
furtive law is like a scabbarded saber that cannot feint, parry or cut unless the naked blade
is drawn.39
The publication, as further held in Tañada, must be of the full

text of the law since the purpose of publication is to inform the
public of the contents of the law. Mere referencing the number of
the presidential decree, its title or whereabouts
_______________
38 Id.
39 Id.
515
VOL. 686, NOVEMBER 27, 2012 515
and its supposed date of effectivity would not satisfy the
publication requirement.40
In this case, while it incorporated the PCA-Cojuangco Agreement
by reference, Section 1 of P.D. 755 did not in any way reproduce
the exact terms of the contract in the decree. Neither was a copy
thereof attached to the decree when published. We cannot,
therefore, extend to the said Agreement the status of a law.
Consequently, We join the Sandiganbayan in its holding that the
PCA-Cojuangco Agreement shall be treated as an ordinary
transaction between agreeing minds to be governed by contract law
under the Civil Code.
III
THE PCA-COJUANGCO AGREEMENT IS A VALID
CONTRACT FOR HAVING THE REQUISITE
CONSIDERATION.
In PSJ-A, the Sandiganbayan struck down the PCA-Cojuangco

Agreement as void for lack of consideration/cause as required
under Article 1318, paragraph 3 in relation to Article 1409,
paragraph 3 of the Civil Code. The Sandiganbayan stated:
In sum, the evidence on record relied upon by defendant Cojuangco negates the presence
of: (1) his claimed personal and exclusive option to buy the 137,866 FUB shares; and (2) any
pecuniary advantage to the government of the said option, which could compensate for
generous payment to him by PCA of valuable shares of stock, as stipulated in the May 25,
1975 Agreement between him and the PCA.41
On the other hand, the aforementioned provisions of the Civil

Code state:
_______________
40 Id.
41 PSJ-A, p. 74; Rollo, p. 251.
516
There is no contract unless the following requisites concur: 1318. Art.
Consent of the contracting parties; (1)
Object certain which is the subject matter of the contract; (2)
(3)Cause of the obligation which is established. (Emphasis supplied)42
The following contracts are inexistent and void from the beginning: 1409. Art
xxxx
Those whose cause or object did not exist at the time of the transaction; (3)43
The Sandiganbayan found and so tagged the alleged cause for

the agreement in question, i.e., Cojuangco’s “personal and exclusive
option to acquire the Option Shares,” as fictitious. A reading of the
purchase agreement between Cojuangco and PCA, so the
Sandiganbayan ruled, would show that Cojuangco was not the only
seller; thus, the option was, as to him, neither personal nor
exclusive as he claimed it to be. Moreover, as the Sandiganbayan
deduced, that option was inexistent on the day of execution of the
PCA-Cojuangco Agreement as the Special Power of Attorney
executed by Cojuangco in favor of now Senator Edgardo J. Angara,
for the latter to sign the PC-ECJ Agreement, was dated May 25,
1975 while the PCA-Cojuangco Agreement was also signed on May
25, 1975. Thus, the Sandiganbayan believed that when the parties
affixed their signatures on the second Agreement, Cojuangco’s
option to purchase the FUB shares of stock did not yet exist. The
Sandiganbayan further ruled that there was no justification in the
second Agreement for the compen-
_______________
42 An Act to Ordain and Institute the Civil Code of the Philippines [CIVIL CODE], Republic Act No. 386,
Art. 1318 (1950).
43 CIVIL CODE, Art. 1409; see also 4 Arturo M. Tolentino, COMMENTARIES AND JURISPRUDENCE ON THE
CIVIL CODE OF THE PHILIPPINES 629 (2002).
517
VOL. 686, NOVEMBER 27, 2012 517
sation of Cojuangco of 14,400 shares, which it viewed as exorbitant.
Additionally, the Sandiganbayan ruled that PCA could not validly
enter, in behalf of FUB/UCPB, into a veritable bank management
contract with Cojuangco, PCA having a personality separate and
distinct from that of FUB. As such, the Sandiganbayan concluded
that the PCA-Cojuangco Agreement was null and void.
Correspondingly, the Sandiganbayan also ruled that the
sequestered FUB (UCPB) shares of stock in the name of Cojuangco
are conclusively owned by the Republic.
After a circumspect study, the Court finds as inconclusive the
evidence relied upon by Sandiganbayan to support its ruling that
the PCA-Cojuangco Agreement is devoid of sufficient consideration.
We shall explain.
Rule 131, Section 3(r) of the Rules of Court states:
3. Sec.Disputable presumptions.―The following presumptions are satisfactory if
uncontradicted, but may be contradicted and overcome by other evidence:
xxxx
That there was a sufficient consideration for a contract; (r)
The Court had the occasion to explain the reach of the above
provision in Surtida v. Rural Bank of Malinao (Albay), Inc.,44 to
wit:
Under Section 3, Rule 131 of the Rules of Court, the following are disputable
presumptions: (1) private transactions have been fair and regular; (2) the ordinary course of
business has been followed; and (3) there was sufficient consideration for a contract. A
presumption may operate against an adversary who has not introduced proof to rebut it.
The effect of a legal presumption upon a burden of proof is to create the necessity of
presenting evidence to meet the legal presumption or the prima facie case created thereby,
and which if no proof to the contrary is presented and offered, will prevail. The bur-
_______________
44 G.R. No. 170563, December 20, 2006, 511 SCRA 507.
518

den of proof remains where it is, but by the presumption, the one who has that burden is
relieved for the time being from introducing evidence in support of the averment,
because the presumption stands in the place of evidence unless rebutted.
The presumption that a contract has sufficient consideration cannot be
overthrown by the bare uncorroborated and self-serving assertion of
petitioners that it has no consideration. To overcome the presumption of
consideration, the alleged lack of consideration must be shown by preponderance
of evidence. Petitioners failed to discharge this burden x x x. (Emphasis Ours.)
The assumption that ample consideration is present in a

contract is further elucidated in Pentacapital Investment
Corporation v. Mahinay:45
Under Article 1354 of the Civil Code, it is presumed that consideration exists
and is lawful unless the debtor proves the contrary. Moreover, under Section 3,
Rule 131 of the Rules of Court, the following are disputable presumptions: (1)
private transactions have been fair and regular; (2) the ordinary course of business has
been followed; and (3) there was sufficient consideration for a contract. A
presumption may operate against an adversary who has not introduced proof to rebut it.
The effect of a legal presumption upon a burden of proof is to create the necessity of
presenting evidence to meet the legal presumption or the prima facie case created thereby,
and which, if no proof to the contrary is presented and offered, will prevail. The burden of
proof remains where it is, but by the presumption, the one who has that burden is relieved
for the time being from introducing evidence in support of the averment, because the
presumption stands in the place of evidence unless rebutted.46(Emphasis supplied.)
_______________
45 G.R. Nos. 171736 & 181482, July 5, 2010, 623 SCRA 284, 303.
46 See also Union Bank of the Philippines v. Spouses Tiu, G.R. Nos. 173090-91, September 7, 2011,
657 SCRA 86; Great Asian Sales Center v. Court of Appeals, 431 Phil. 293; 381 SCRA 557
(2002); Fernandez v. Fernandez, 416 Phil. 322; 363 SCRA 811 (2001); Gevero
519
VOL. 686, NOVEMBER 27, 2012 519
The rule then is that the party who stands to profit from a
declaration of the nullity of a contract on the ground of
insufficiency of consideration―which would necessarily refer to one
who asserts such nullity―has the burden of overthrowing the
presumption offered by the aforequoted Section 3(r). Obviously
then, the presumption contextually operates in favor of Cojuangco
and against the Republic, as plaintiff a quo, which then had the
burden to prove that indeed there was no sufficient consideration
for the Second Agreement. The Sandiganbayan’s stated
observation, therefore, that based on the wordings of the Second
Agreement, Cojuangco had no personal and exclusive option to
purchase the FUB shares from Pedro Cojuangco had really little to
commend itself for acceptance. This, as opposed to the fact that
such sale and purchase agreement is memorialized in a notarized
document whereby both Eduardo Cojuangco, Jr. and Pedro
Cojuangco attested to the correctness of the provisions thereof,
among which was that Eduardo had such option to purchase. A
notarized document, Lazaro v. Agustin47 teaches, “generally carries
the evidentiary weight conferred upon it with respect to its due
execution, and documents acknowledged before a notary public
have in their favor the disputable presumption of regularity.”
In Samanilla v. Cajucom,48 the Court clarified that the
presumption of a valid consideration cannot be discarded on a
simple claim of absence of consideration, especially when the
contract itself states that consideration was given:
x x x This presumption appellants cannot overcome by a simple assertion of
lack of consideration. Especially may not the presumption be so lightly set aside
when the contract
_______________
v. Intermediate Appellate Court, G.R. No. 77029, August 30, 1990, 189 SCRA 201; Spouses Nuguid v. Court
of Appeals, 253 Phil. 207; 171 SCRA 213 (1989).
47 G.R. No. 152364, April 15, 2010, 618 SCRA 298.
48 107 Phil. 432 (1960).
520

itself states that consideration was given, and the same has been reduced into a
public instrument will all due formalities and solemnities as in this
case. (Emphasis ours.)
A perusal of the PCA-Cojuangco Agreement disclosed an express

statement of consideration for the transaction:
NOW, THEREFORE, for and in consideration of the foregoing premises and the other
terms and conditions hereinafter contained, the parties hereby declare and affirm that
their principal contractual intent is (1) to ensure that the coconut farmers own at
least 60% of the outstanding capital stock of the Bank, and (2) that the SELLER
shall receive compensation for exercising his personal and exclusive option to
acquire the Option Shares, for transferring such shares to the coconut farmers at
the option price of P200 per share, and for performing the management services
required of him hereunder.
xxxx
4.As compensation for exercising his personal and exclusive option to
acquire the Option Shares and for transferring such shares to the coconut
farmers, as well as for performing the management services required of him,
SELLER shall receive equity in the Bank amounting, in the aggregate, to 95,304 fully paid
shares in accordance with the procedure set forth in paragraph 6 below. (Emphasis
supplied.)
Applying Samanilla to the case at bar, the express and positive

declaration by the parties of the presence of adequate
consideration in the contract makes conclusive the presumption of
sufficient consideration in the PCA Agreement. Moreover, the
option to purchase shares and management services for UCPB was
already availed of by petitioner Cojuangco for the benefit of the
PCA. The exercise of such right resulted in the execution of the PC-
ECJ Agreement, which fact is not disputed. The document itself is
incontrovertible proof and hard evidence that petitioner Cojuangco
had the right to purchase the subject FUB (now UCPB) shares. Res
ipsa loquitur.
521
VOL. 686, NOVEMBER 27, 2012 521
The Sandiganbayan, however, pointed to the perceived “lack of
any pecuniary value or advantage to the government of the said
option, which could compensate for the generous payment to him
by PCA of valuable shares of stock, as stipulated in the May 25,
1975 Agreement between him and the PCA.”49
Inadequacy of the consideration, however, does not render a
contract void under Article 1355 of the Civil Code:
Except in cases specified by law, lesion or 1355. Art. inadequacy of cause shall not
invalidate a contract, unless there has been fraud, mistake or undue influence.
(Emphasis supplied.)
Alsua-Betts v. Court of Appeals50 is instructive that lack of ample

consideration does not nullify the contract:
Inadequacy of consideration does not vitiate a contract unless it is proven
which in the case at bar was not, that there was fraud, mistake or undue
influence. (Article 1355, New Civil Code). We do not find the stipulated price as so
inadequate to shock the court’s conscience, considering that the price paid was much higher
than the assessed value of the subject properties and considering that the sales were
effected by a father to her daughter in which case filial love must be taken into account.
Vales v. Villa51 elucidates why a bad transaction cannot serve as

basis for voiding a contract:
x x x Courts cannot follow one every step of his life and extricate him from bad bargains,
protect him from unwise investments, relieve him from one-sided contracts, or annul the
effects of foolish
_______________
49 PSJ-A, pp. 73-74.
50 Nos. L-46430-31, July 30, 1979, 92 SCRA 332; Morales Development Company, Inc. v. Court of Appeals,
No. L-26572, March 28, 1969, 27 SCRA 484.
51 35 Phil. 769, 788 (1916).
522

acts. x x x Men may do foolish things, make ridiculous contracts, use miserable
judgment, and lose money by them―indeed, all they have in the world; but not for
that alone can the law intervene and restore. There must be, in addition,
a violation of law, the commission of what the law knows as an actionable wrong,
before the courts are authorized to lay hold of the situation and remedy
it. (Emphasis ours.)
While one may posit that the PCA-Cojuangco Agreement puts

PCA and the coconut farmers at a disadvantage, the facts do not
make out a clear case of violation of any law that will necessitate
the recall of said contract. Indeed, the anti-graft court has not put
forward any specific stipulation therein that is at war with any
law, or the Constitution, for that matter. It is even clear as day
that none of the parties who entered into the two agreements with
petitioner Cojuangco contested nor sought the nullification of said
agreements, more particularly the PCA who is always provided
legal advice in said transactions by the Government corporate
counsel, and a battery of lawyers and presumably the COA auditor
assigned to said agency. A government agency, like the PCA,
stoops down to level of an ordinary citizen when it enters into a
private transaction with private individuals. In this setting, PCA is
bound by the law on contracts and is bound to comply with the
terms of the PCA-Cojuangco Agreement which is the law between
the parties. With the silence of PCA not to challenge the validity of
the PCA-Cojuangco Agreement and the inability of government to
demonstrate the lack of ample consideration in the transaction, the
Court is left with no other choice but to uphold the validity of said
agreements.
While consideration is usually in the form of money or property,
it need not be monetary. This is clear from Article 1350 which
reads:
In onerous contracts the cause is understood to be, for each contracting party, 1350.
Art. the prestation or promise of a thing
523
VOL. 686, NOVEMBER 27, 2012 523

or service by the other; in remuneratory ones, the service or benefit which is
remunerated; and in contracts of pure beneficence, the mere liability of the benefactor.
Gabriel v. Monte de Piedad y Caja de Ahorros52 tells us of the

meaning of consideration:
x x x A consideration, in the legal sense of the word, is some right, interest, benefit, or
advantage conferred upon the promisor, to which he is otherwise not lawfully entitled, or
any detriment, prejudice, loss, or disadvantage suffered or undertaken by the
promisee other than to such as he is at the time of consent bound to suffer. (Emphasis
Ours.)
The Court rules that the transfer of the subject UCPB shares is
clearly supported by valuable consideration.
To justify the nullification of the PCA-Cojuangco Agreement, the
Sandiganbayan centered on the alleged imaginary option claimed
by petitioner to buy the FUB shares from the Pedro Cojuangco
group. It relied on the phrase “in behalf of certain other buyers”
mentioned in the PC-ECJ Agreement as basis for the finding that
petitioner’s option is neither personal nor exclusive. The pertinent
portion of said agreement reads:
EDUARDO COJUANGCO, JR., Filipino, of legal age and with residence at 136 9th
Street corner Balete Drive, Quezon City, represented in this act by his duly authorized
attorney-in-fact, EDGARDO J. ANGARA, for and in his own behalf and in behalf of
certain other buyers, (hereinafter collectively called the “BUYERS”); x x x.
A plain reading of the aforequoted description of petitioner as a

party to the PC-ECJ Agreement reveals that petitioner is not only
the buyer. He is the named buyer and there are other buyers who
were unnamed. This is clear from the word
_______________
52 71 Phil. 497, 501 (1941).
524
“BUYERS.” If petitioner is the only buyer, then his description as a
party to the sale would only be “BUYER.” It may be true that
petitioner intended to include other buyers. The fact remains,
however, that the identities of the unnamed buyers were not
revealed up to the present day. While one can conjure or speculate
that PCA may be one of the buyers, the fact that PCA entered into
an agreement to purchase the FUB shares with petitioner militates
against such conjecture since there would be no need at all to enter
into the second agreement if PCA was already a buyer of the
shares in the first contract. It is only the parties to the PC-ECJ
Agreement that can plausibly shed light on the import of the
phrase “certain other buyers” but, unfortunately, petitioner was no
longer allowed to testify on the matter and was precluded from
explaining the transactions because of the motion for partial
summary judgment and the eventual promulgation of the July 11,
2003 Partial Summary Judgment.
Even if conceding for the sake of argument that PCA is one of
the buyers of the FUB shares in the PC-ECJ Agreement, still it
does not necessarily follow that petitioner had no option to buy
said shares from the group of Pedro Cojuangco. In fact, the very
execution of the first agreement undeniably shows that he had the
rights or option to buy said shares from the Pedro Cojuangco
group. Otherwise, the PC-ECJ Agreement could not have been
consummated and enforced. The conclusion is incontestable that
petitioner indeed had the right or option to buy the FUB shares as
buttressed by the execution and enforcement of the very document
itself.
We can opt to treat the PC-ECJ Agreement as a totally separate
agreement from the PCA-Cojuangco Agreement but it will not
detract from the fact that petitioner actually acquired the rights to
the ownership of the FUB shares from the Pedro Cojuangco group.
The consequence is he can legally sell the shares to PCA. In this
scenario, he would resell the shares to PCA for a profit and PCA
would still end up paying a higher price for the FUB shares. The
“profit” that will accrue
525
VOL. 686, NOVEMBER 27, 2012 525
to petitioner may just be equal to the value of the shares that were
given to petitioner as commission. Still we can only speculate as to
the true intentions of the parties. Without any evidence adduced
on this issue, the Court will not venture on any unproven
conclusion or finding which should be avoided in judicial
adjudication.
The anti-graft court also inferred from the date of execution of
the special power of attorney in favor of now Senator Edgardo J.
Angara, which is May 25, 1975, that the PC-ECJ Agreement
appears to have been executed on the same day as the PCA-
Cojuangco Agreement (dated May 25, 1975). The coincidence on
the dates casts “doubts as to the existence of defendant Cojuangco’s
prior ‘personal and exclusive’ option to the FUB shares.”
The fact that the execution of the SPA and the PCA-Cojuangco
Agreement occurred sequentially on the same day cannot, without
more, be the basis for the conclusion as to the non-existence of the
option of petitioner. Such conjecture cannot prevail over the fact
that without petitioner Cojuangco, none of the two agreements in
question would have been executed and implemented and the FUB
shares could not have been successfully conveyed to PCA.
Again, only the parties can explain the reasons behind the
execution of the two agreements and the SPA on the same day.
They were, however, precluded from elucidating the reasons
behind such occurrence. In the absence of such illuminating proof,
the proposition that the option does not exist has no leg to stand
on.
More importantly, the fact that the PC-ECJ Agreement was
executed not earlier than May 25, 1975 proves that petitioner
Cojuangco had an option to buy the FUB shares prior to that date.
Again, it must be emphasized that from its terms, the first
Agreement did not create the option. It, however, proved the
exercise of the option by petitioner.526
The execution of the PC-ECJ Agreement on the same day as the
PCA-Cojuangco Agreement more than satisfies paragraph 2
thereof which requires petitioner to exercise his option to purchase
the FUB shares as promptly as practicable after, and not before,
the execution of the second agreement, thus:
2.As promptly as practicable after execution of this Agreement, the SELLER
shall exercise his option to acquire the Option Shares and SELLER shall
immediately thereafter deliver and turn over to the Escrow Agent such stock certificates as
are herein provided to be received from the existing stockholders of the bank by virtue of
the exercise on the aforementioned option. The Escrow Agent shall thereupon issue its
check in favor of the SELLER covering the purchase price for the shares delivered.
The Sandiganbayan viewed the compensation of petitioner of

14,400 FUB shares as exorbitant. In the absence of proof to the
contrary and considering the absence of any complaint of illegality
or fraud from any of the contracting parties, then the presumption
that “private transactions have been fair and regular”53 must apply.
Lastly, respondent interjects the thesis that PCA could not
validly enter into a bank management agreement with petitioner
since PCA has a personality separate and distinct from that of
FUB. Evidently, it is PCA which has the right to challenge the
stipulations on the management contract as unenforceable.
However, PCA chose not to assail said stipulations and instead
even complied with and implemented its prestations contained in
said stipulations by installing petitioner as Chairman of UCPB.
Thus, PCA has waived and forfeited its right to nullify said
stipulations and is now estopped from questioning the same.
_______________
53 RULES OF COURT, Rule 131(p).
527
VOL. 686, NOVEMBER 27, 2012 527
In view of the foregoing, the Court is left with no option but to
uphold the validity of the two agreements in question.
IV
COJUANGCO IS NOT ENTITLED TO THE UCPB SHARES
WHICH WERE BOUGHT WITH PUBLIC FUNDS AND
HENCE, ARE PUBLIC PROPERTY.
The coconut levy funds were exacted
for a special public purpose. Conse-
quently, any use or transfer of the
funds that directly benefits private
individuals should be invalidated.
The issue of whether or not taxpayers’ money, or funds and
property acquired through the imposition of taxes may be used to
benefit a private individual is once again posed. Preliminarily, the
instant case inquires whether the coconut levy funds, and
accordingly, the UCPB shares acquired using the coconut levy
funds are public funds. Indeed, the very same issue took center
stage, discussed and was directly addressed in COCOFED v.
Republic. And there is hardly any question about the subject funds’
public and special character. The following excerpts
from COCOFED v. Republic,54 citing Republic v. COCOFED and
related cases, settle once and for all this core, determinative issue:
Indeed, We have hitherto discussed, the coconut levy was imposed in the exercise of the
State’s inherent power of taxation. As We wrote in Republic v. COCOFED:
Indeed, coconut levy funds partake of the nature of taxes, which, in
general, are enforced proportional contribu-
_______________
54 COCOFED v. Republic, G.R. Nos. 177857-58 & 178193, January 24, 2012, 663 SCRA 514; citing Republic
v. COCOFED, G.R. Nos. 147062-64, December 14, 2001, 372 SCRA 462, 482-484.
528

tions from persons and properties, exacted by the State by virtue of its sovereignty
for the support of government and for all public needs.
Based on its definition, a tax has three elements, namely: a) it is an enforced
proportional contribution from persons and properties; b) it is imposed by the State
by virtue of its sovereignty; and c) it is levied for the support of the government. The
coconut levy funds fall squarely into these elements for the following reasons:
They were generated by virtue of statutory enactments imposed on the coconut
farmers requiring the payment of prescribed amounts. Thus, PD No. 276, which
created the … (CCSF), mandated the following: (a)
A levy, initially, of P15.00 per 100 kilograms of copra resecada or its
equivalent in other coconut products, shall be imposed on every first sale, in
accordance with the mechanics established under RA 6260, effective at the
start of business hours on August 10, 1973. “a.
“The proceeds from the levy shall be deposited with the Philippine
National Bank or any other government bank to the account of the Coconut
Consumers Stabilization Fund, as a separate trust fund which shall not form
part of the general fund of the government.”
The coco levies were further clarified in amendatory laws, specifically PD No. 961
and PD No. 1468―in this wise:
“The Authority (PCA) is hereby empowered to impose and collect a levy,
to be known as the Coconut Consumers Stabilization Fund Levy, on every
one hundred kilos of copra resecada, or its equivalent … delivered to, and/or
purchased by, copra exporters, oil millers, desiccators and other end-users of
copra or its equivalent in other coconut products. The levy shall be paid
by such copra exporters, oil millers, desiccators and other end-users
of copra or its equivalent in other coconut products under such rules
and regulations as the Authority may prescribe. Until otherwise prescribed
by the Authority, the current levy being collected shall be continued.”529
VOL. 686, NOVEMBER 27, 2012 529

Like other tax measures, they were not voluntary payments or donations by the
people. They were enforced contributions exacted on pain of penal sanctions, as
provided under PD No. 276:
Any person or firm who violates any provision of this Decree or the rules
and regulations promulgated thereunder, shall, in addition to penalties
already prescribed under existing administrative and special law, pay a fine
of not less than P2,500 or more than P10,000, or suffer cancellation of
licenses to operate, or both, at the discretion of the Court.” “3.
Such penalties were later amended thus: ….
The coconut levies were imposed pursuant to the laws enacted by the proper
legislative authorities of the State. Indeed, the CCSF was collected under PD No.
276, ….” (b)
They were clearly imposed for a (c) public purpose. There is absolutely no
question that they were collected to advance the government’s avowed
policy of protecting the coconut industry. This Court takes judicial notice of
the fact that the coconut industry is one of the great economic pillars of our
nation, and coconuts and their byproducts occupy a leading position among the
country’s export products; ….
Taxation is done not merely to raise revenues to support the government, but
also to provide means for the rehabilitation and the stabilization of a
threatened industry, which is so affected with public interest as to be within
the police power of the State ….
Even if the money is allocated for a special purposeand raised by special
means, it is still public in character…. In Cocofed v. PCGG, the Court observed
that certain agencies or enterprises “were organized and financed with revenues
derived from coconut levies imposed under a succession of law of the late
dictatorship … with deposed Ferdinand Marcos and his cronies as the suspected
authors and chief beneficiaries of the resulting coconut industry monopoly.” The
Court continued: “…. It cannot be denied that the coconut industry is one of
the major industries supporting the national
530

economy. It is, therefore, the State’s concern to make it a strong and secure
source not only of the livelihood of a significant segment of the population, but
also of export earnings the sustained growth of which is one of the
imperatives of economic stability. (Emphasis Ours.)
The following parallel doctrinal lines from Pambansang

Koalisyon ng mga Samahang Magsasaka at Manggagawa sa
Niyugan (PKSMMN) v. Executive Secretary55 came next:
The Court was satisfied that the coco-levy funds were raised pursuant to law to support
a proper governmental purpose. They were raised with the use of the police and taxing
powers of the State for the benefit of the coconut industry and its farmers in general. The
COA reviewed the use of the funds. The Bureau of Internal Revenue (BIR) treated them as
public funds and the very laws governing coconut levies recognize their public character.
The Court has also recently declared that the coco-levy funds are in the nature of taxes
and can only be used for public purpose. Taxes are enforced proportional contributions from
persons and property, levied by the State by virtue of its sovereignty for the support of the
government and for all its public needs. Here, the coco-levy funds were imposed pursuant to
law, namely, R.A. 6260 and P.D. 276. The funds were collected and managed by the PCA,
an independent government corporation directly under the President. And, as the
respondent public officials pointed out, the pertinent laws used the term levy, which means
to tax, in describing the exaction.
Of course, unlike ordinary revenue laws, R.A. 6260 and P.D. 276 did not raise money to
boost the government’s general funds but to provide means for the rehabilitation and
stabilization of a threatened industry, the coconut industry, which is so affected with public
interest as to be within the police power of the State. The funds sought to support the
coconut industry, one of the main economic backbones of the country, and to secure
economic benefits for the coconut farmers and far workers. The subject laws are akin to the
_______________
55 G.R. Nos. 147036-37 & 147811, April 10, 2012, 669 SCRA 49.
531
VOL. 686, NOVEMBER 27, 2012 531

sugar liens imposed by Sec. 7(b) of P.D. 388, and the oil price stabilization funds under P.D.
1956, as amended by E.O. 137.
From the foregoing, it is at once apparent that any property

acquired by means of the coconut levy funds, such as the subject
UCPB shares, should be treated as public funds or public property,
subject to the burdens and restrictions attached by law to such
property. COCOFED v. Republic, delved into such limitations,
thusly:
We have ruled time and again that taxes are imposed only for a public
purpose. “They cannot be used for purely private purposes or for the exclusive
benefit of private persons.” When a law imposes taxes or levies from the public,
with the intent to give undue benefit or advantage to private persons, or the
promotion of private enterprises, that law cannot be said to satisfy the
requirement of public purpose. In Gaston v. Republic Planters Bank, the petitioning
sugar producers, sugarcane planters and millers sought the distribution of the shares of
stock of the Republic Planters Bank (RPB), alleging that they are the true beneficial owners
thereof. In that case, the investment, i.e., the purchase of RPB, was funded by the
deduction of PhP 1.00 per picul from the sugar proceeds of the sugar producers pursuant to
P.D. No. 388. In ruling against the petitioners, the Court held that to rule in their favor
would contravene the general principle that revenues received from the imposition of taxes
or levies “cannot be used for purely private purposes or for the exclusive benefit of private
persons.” The Court amply reasoned that the sugar stabilization fund is to “be utilized for
the benefit of the entire sugar industry, and all its components, stabilization of the
domestic market including foreign market, the industry being of vital importance
to the country’s economy and to national interest.”
Similarly in this case, the coconut levy funds were sourced from forced exactions decreed
under P.D. Nos. 232, 276 and 582, among others, with the end-goal of developing the entire
coconut industry. Clearly, to hold therefore, even by law, that the revenues
received from the imposition of the coconut levies be used purely for private
purposes to be owned by private individuals in their private capacity and for
their benefit,
532

would contravene the rationale behind the imposition of taxes or levies.
Needless to stress, courts do not, as they cannot, allow by judicial fiat the
conversion of special funds into a private fund for the benefit of private
individuals. In the same vein, We cannot subscribe to the idea of what appears to
be an indirect―if not exactly direct―conversion of special funds into private
funds, i.e., by using special funds to purchase shares of stocks, which in turn
would be distributed for free to private individuals. Even if these private
individuals belong to, or are a part of the coconut industry, the free distribution
of shares of stocks purchased with special public funds to them, nevertheless
cannot be justified. The ratio in Gaston, as articulated below, applies mutatis
mutandis to this case:
The stabilization fees in question are levied by the State … for a special
purpose―that of “financing the growth and development of the sugar industry and
all its components, stabilization of the domestic market including the foreign
market.” The fact that the State has taken possession of moneys pursuant to
law is sufficient to constitute them as state funds even though they are
held for a special purpose….
That the fees were collected from sugar producers [etc.], and that the
funds were channeled to the purchase of shares of stock in respondent Bank
do not convert the funds into a trust fund for their benefit nor make them
the beneficial owners of the shares so purchased. It is but rational that the
fees be collected from them since it is also they who are benefited from the
expenditure of the funds derived from it. …. 56
In this case, the coconut levy funds were being exacted from copra exporters, oil millers,
desiccators and other end-users of copra
_______________
56 COCOFED v. Republic, G.R. Nos. 177857-58 & 178193, January 24, 2012, 663 SCRA 514; citing Gaston
v. Republic Planters Bank, No. L-77194, March 15, 1988, 158 SCRA 626, 633-34; see also Republic v.
COCOFED, G.R. Nos. 147062-64, December 14, 2001, 372 SCRA 462, 485-486.
533
VOL. 686, NOVEMBER 27, 2012 533

or its equivalent in other coconut products.57 Likewise so, the funds here were channeled to
the purchase of the shares of stock in UCPB. Drawing a clear parallelism between Gaston
and this case, the fact that the coconut levy funds were collected from the persons or
entities in the coconut industry, among others, does not and cannot entitle them to be
beneficial owners of the subject funds―or more bluntly, owners thereof in their private
capacity. Parenthetically, the said private individuals cannot own the UCPB shares
of stocks so purchased using the said special funds of the government.58 (Emphasis
Ours.)
As the coconut levy funds partake of the nature of taxes and can
only be used for public purpose, and importantly, for the purpose
for which it was exacted, i.e., the development, rehabilitation and
stabilization of the coconut industry, they cannot be used to
benefit―whether directly or indirectly―private individuals, be it by
way of a commission, or as the subject Agreement interestingly
words it, compensation. Consequently, Cojuangco cannot stand to
benefit by receiving, in his private capacity, 7.22% of the FUB
shares without violating the constitutional caveat that public funds
can only be used for public purpose. Accordingly, the 7.22% FUB
(UCPB) shares that were given to Cojuangco shall be returned to
the Government, to be used “only for the benefit of all coconut
farmers and for the development of the coconut industry.”59
The ensuing are the underlying rationale for declaring, as
unconstitutional, provisions that convert public property into
private funds to be used ultimately for personal benefit:
_______________
57 Republic v. COCOFED, G.R. Nos. 147062-64, December 14, 2001, 372 SCRA 462, 483; citing P.D.
No. 961, 1976, Art. III, Sec. 1; P.D. No. 1468, 1978, Art. III, Sec. 1.
59 Id.
534
… not only were the laws unconstitutional for decreeing the distribution of the shares of
stock for free to the coconut farmers and therefore negating the public purposed declared by
P.D. No. 276, i.e., to stabilize the price of edible oil and to protect the coconut industry.
They likewise reclassified the coconut levy fund as private fund, to be owned by private
individuals in their private capacities, contrary to the original purpose for the creation of
such fund. To compound the situation, the offending provisions effectively removed the
coconut levy fund away from the cavil of public funds which normally can be paid out only
pursuant to an appropriation made by law. The conversion of public funds into private
assets was illegally allowed, in fact mandated, by these provisions. Clearly therefore, the
pertinent provisions of P.D. Nos. 755, 961 and 1468 are unconstitutional for violating
Article VI, Section 29 (3) of the Constitution. In this context, the distribution by PCA of the
UCPB shares purchased by means of the coconut levy fund―a special fund of the
government―to the coconut farmers is, therefore, void.60
It is precisely for the foregoing that impels the Court to strike

down as unconstitutional the provisions of the PCA-Cojuangco
Agreement that allow petitioner Cojuangco to personally and
exclusively own public funds or property, the disbursement of
which We so greatly protect if only to give light and meaning to the
mandates of the Constitution.
As heretofore amply discussed, taxes are imposed only for a
public purpose.61 They must, therefore, be used for the benefit of
the public and not for the exclusive profit or gain of private
persons.62 Otherwise, grave injustice is inflicted not only upon the
Government but most especially upon the citizenry―the
taxpayers―to whom We owe a great deal of accountability.
In this case, out of the 72.2% FUB (now UCPB) shares of stocks
PCA purchased using the coconut levy funds, the May 25, 1975
Agreement between the PCA and Cojuangco pro-
_______________
60 Id.
61 Id.; citing Republic v. Sandiganbayan, G.R. No. 118661, January 22, 2007, 512 SCRA 25.
62 Id.
535
VOL. 686, NOVEMBER 27, 2012 535
vided for the transfer to the latter, by way of compensation, of 10%
of the shares subject of the agreement, or a total of 7.22% fully paid
shares. In sum, Cojuangco received public assets―in the form of
FUB (UCPB) shares with a value then of ten million eight hundred
eighty-six thousand pesos (PhP 10,886,000) in 1975, paid by
coconut levy funds. In effect, Cojuangco received the
aforementioned asset as a result of the PCA-Cojuangco Agreement,
and exclusively benefited himself by owning property acquired
using solely public funds. Cojuangco, no less, admitted that the
PCA paid, out of the CCSF, the entire acquisition price for the
72.2% option shares.63 This is in clear violation of the prohibition,
which the Court seeks to uphold.
_______________
63 Republic v. COCOFED, G.R. Nos. 147062-64, Dec. 14, 2001, 372 SCRA 462, 477.
In the present case before the Court, it is not disputed that the money used to purchase the
sequestered UCPB shares came from the Coconut Consumer Stabilization Fund (CCSF), otherwise
known, as the coconut levy funds.
This fact was plainly admitted by private respondent’s counsel, Atty. Teresita J. Hebosa, during the
Oral Arguments held on April 17, 2001 in Baguio City, as follows:
“Justice Panganiban:
“In regard to the theory of the Solicitor General that the funds used to purchase [both] the original 28
million and the subsequent 80 million came from the CCSF, Coconut Consumers Stabilization Fund, do
you agree with that?
“Atty. Herbosa:
“Yes, Your Honor.
… … …
“Justice Panganiban:
“So it seems that the parties [have] agreed up to that point that the funds used to purchase 72% of the
former First United Bank came from the Coconut Consumer Stabilization Fund?
“Atty. Herbosa:
“Yes, Your Honor.”
536
We, therefore, affirm, on this ground, the decision of the
Sandiganbayan nullifying the shares of stock transfer to
Cojuangco. Accordingly, the UCPB shares of stock representing the
7.22% fully paid shares subject of the instant petition, with all
dividends declared, paid or issued thereon, as well as any
increments thereto arising from, but not limited to, the exercise of
pre-emptive rights, shall be reconveyed to the Government of the
Republic of the Philippines, which as We previously clarified, shall
“be used only for the benefit of all coconut farmers and for the
development of the coconut industry.”64
But apart from the stipulation in the PCA-Cojuangco
Agreement, more specifically paragraph 4 in relation to paragraph
6 thereof, providing for the transfer to Cojuangco for the UCPB
shares adverted to immediately above, other provisions are valid
and shall be enforced, or shall be respected, if the corresponding
prestation had already been performed. Invalid stipulations that
are independent of, and divisible from, the rest of the agreement
and which can easily be separated therefrom without doing
violence to the manifest intention of the contracting minds do not
nullify the entire contract.65
WHEREFORE, Part C of the appealed Partial Summary
Judgment in Sandiganbayan Civil Case No. 0033-A is AFFIRMED
with modification. As MODIFIED, the dispositive
_______________
FN40. Transcript of Oral Arguments, April 17, 2001, pp. 171, 173. During the same Oral Argument,
Private Respondent Cojuangco similarly admitted that the “entire amount” paid for the shares had come
from the Philippine Coconut Authority. TSN,
p. 115.
65 CIVIL CODE, Art. 1420 specifically provides, “[I]n case of a divisible contract, if the illegal terms can
be separated from the legal ones, the latter may be enforced.”
537
VOL. 686, NOVEMBER 27, 2012 537
portion in Part C of the Sandiganbayan’s Partial Summary
Judgment in Civil Case No. 0033-A, shall read as follows:
Re: MOTION FOR PARTIAL SUMMARY JUDGMENT (RE: EDUARDO M. COJUANGCO, JR.) dated
September 18, 2002 filed by Plaintiff. C.
Sec. 1 of P.D. No. 755 did not validate the Agreement between PCA and defendant Eduardo
M. Cojuangco, Jr. dated May 25, 1975 nor did it give the Agreement the binding force of
a law because of the non-publication of the said Agreement. 1.
The Agreement between PCA and defendant Eduardo M. Cojuangco, Jr. dated May 25, 1975 is
a valid contract for having the requisite consideration under Article 1318 of the Civil
Code. 2.
3. The transfer by PCA to defendant Eduardo M. Cojuangco, Jr. of 14,400 shares of stock of
FUB (later UCPB) from the “Option Shares” and the additional FUB shares subscribed
and paid by PCA, consisting of
Fifteen Thousand Eight Hundred Eighty-Four (15,884) shares out of the authorized
but unissued shares of the bank, subscribed and paid by PCA; a.
Sixty Four Thousand Nine Hundred Eighty (64,980) shares of the increased capital
stock subscribed and paid by PCA; and b.
Stock dividends declared pursuant to paragraph 5 and paragraph 11 (iv) (d) of the
PCA-Cojuangco Agreement dated May 25, 1975 or the so-called “Cojuangco-
UCPB shares” c.
is declared unconstitutional, hence null and void.
The above-mentioned shares of stock of the FUB/UCPB transferred to defendant Cojuangco
are hereby declared conclusively owned by the Republic of the Philippines to be used
only for the benefit of all coconut farmers and for the development of the 4.
538

coconut industry, and ordered reconveyed to the Government.
5. The UCPB shares of stock of the alleged fronts, nominees and dummies of defendant
Eduardo M. Cojuangco, Jr. which form part of the 72.2% shares of the FUB/UCPB paid
for by the PCA with public funds later charged to the coconut levy funds, particularly
the CCSF, belong to the plaintiff Republic of the Philippines as their true and beneficial
owner.
Accordingly, the instant petition is hereby DENIED.

Costs against petitioner Cojuangco.
SO ORDERED.
Sereno (C.J.), Bersamin, Del Castillo, Abad, Vill
OPTIMUM DEVELOPMENT BANK, petitioner, vs.SPOUSES

BENIGNO V. JOVELLANOS and LOURDES R. JOVELLANOS,
respondents.
Remedial Law; Civil Procedure; Actions; Pleadings and Practice; What is determinative
of the nature of the action and the court with jurisdiction over it are the allegations in the
complaint and the character of the relief sought, not the defenses set up in an answer.—What
is determinative of the nature of the action and the court with jurisdiction over it are the
allegations in the complaint and the character of the relief sought, not the defenses set up
in an answer. A complaint sufficiently alleges a cause of action for unlawful detainer if it
recites that: (a) initially, possession of the property by the defendant was by contract with
or by tolerance of the plaintiff; (b) eventually, such possession became illegal upon notice by
plaintiff to defendant of the termination of the latter’s right of possession; (c) thereafter,
defendant remained in possession of the property and
_______________
* SECOND DIVISION.
549deprived plaintiff of the enjoyment thereof; and (d) within one year from the last
demand on defendant to vacate the property, plaintiff instituted the complaint for
ejectment. Corollarily, the only issue to be resolved in an unlawful detainer case is physical
or material possession of the property involved, independent of any claim of ownership by
any of the parties involved.
Same; Same; Courts; Metropolitan Trial Courts; Jurisdiction; Ejectment; Metropolitan

Trial Courts are conditionally vested with authority to resolve the question of ownership
raised as an incident in an ejectment case where the determination is essential to a complete
adjudication of the issue of possession.—Metropolitan Trial Courts are conditionally
vested with authority to resolve the question of ownership raised as an incident in an
ejectment case where the determination is essential to a complete adjudication of the
issue of possession. Concomitant to the ejectment court’s authority to look into the claim
of ownership for purposes of resolving the issue of possession is its authority to
interpret the contract or agreement upon which the claim is premised. Thus, in the case
of Oronce v. CA, 298 SCRA 133 (1998), wherein the litigants’ opposing claims for possession
was hinged on whether their written agreement reflected the intention to enter into a sale
or merely an equitable mortgage, the Court affirmed the propriety of the ejectment court’s
examination of the terms of the agreement in question by holding that,
“because metropolitan trial courts are authorized to look into the ownership of the
property in controversy in ejectment cases, it behooved MTC Branch 41 to examine
the bases for petitioners’ claim of ownership that entailed interpretation of the Deed of Sale
with Assumption of Mortgage.”
Civil Law; Contracts; Contract to Sell; In a contract to sell, the prospective seller binds
himself to sell the property subject of the agreement exclusively to the prospective buyer upon
fulfillment of the condition agreed upon which is the full payment of the purchase price but
reserving to himself the ownership of the subject property despite delivery thereof to the
prospective buyer.—In the case at bar, the unlawful detainer suit filed by Optimum against
Sps. Jovellanos for illegally withholding possession of the subject property is similarly
premised upon the cancellation or termination of the Contract to Sell between them.
Indeed, it was well within the jurisdiction of the MeTC to consider the terms of the parties’
agreement in order to
550ultimately determine the factual bases of Optimum’s possessory claims over the
subject property. Proceeding accordingly, the MeTC held that Sps. Jovellanos’s nonpayment
of the installments due had rendered the Contract to Sell without force and effect, thus
depriving the latter of their right to possess the property subject of said contract. The
foregoing disposition aptly squares with existing jurisprudence. As the Court similarly held
in the Union Bank case, the seller’s cancellation of the contract to sell necessarily
extinguished the buyer’s right of possession over the property that was the subject of the
terminated agreement. Verily, in a contract to sell, the prospective seller binds himself to
sell the property subject of the agreement exclusively to the prospective buyer upon
fulfillment of the condition agreed upon which is the full payment of the purchase price but
reserving to himself the ownership of the subject property despite delivery thereof to the
prospective buyer. The full payment of the purchase price in a contract to sell is
a suspensive condition, the nonfulfillment of which prevents the prospective seller’s
obligation to convey title from becoming effective, as in this case.
Same; Same; Same; Maceda Law; Realty Installment Buyer Protection Act (R.A. No.
6552); It is significant to note that given that the Contract to Sell in this case is one which
has for its object real property to be sold on an installment basis, the said contract is
especially governed by — and thus, must be examined under the provisions of — RA 6552, or
the “Realty Installment Buyer Protection Act”, which provides for the rights of the buyer in
case of his default in the payment of succeeding installments.—It is significant to note that
given that the Contract to Sell in this case is one which has for its object real property to be
sold on an installment basis, the said contract is especially governed by — and thus, must
be examined under the provisions of — RA 6552, or the “Realty Installment Buyer
Protection Act”, which provides for the rights of the buyer in case of his default in the
payment of succeeding installments. Breaking down the provisions of the law, the Court, in
the case of Rillo v. CA, 274 SCRA 461 (1997), explained the mechanics of cancellation under
RA 6552 which are based mainly on the amount of installments already paid by the buyer
under the subject contract.
Same; Same; Same; Same; Three Requisites Before the Seller May Actually Cancel the
Contract to Sell.—Pertinently, since Sps. Jovellanos failed to pay their stipulated monthly
installments as
551found by the MeTC, the Court examines Optimum’s compliance with Section 4 of
RA 6552, as above-quoted and highlighted, which is the provision applicable to buyers who
have paid less than two (2) years-worth of installments. Essentially, the said provision
provides for three (3) requisites before the seller may actually cancel the subject
contract: first, the seller shall give the buyer a 60-day grace period to be reckoned from
the date the installment became due; second, the seller must give the buyer a notice of
cancellation/demand for rescission by notarial act if the buyer fails to pay the
installments due at the expiration of the said grace period; and third, the seller may
actually cancel the contract only after thirty (30) days from the buyer’s receipt of the said
notice of cancellation/demand for rescission by notarial act.

Mendoza and Monzon Law Offices for petitioner.
Maricris A. Tagle-Montero for respondents.
PERLAS-BERNABE,J.:
Assailed in this petition for review on certiorari[1] are the
Decision[2] dated May 29, 2009 and Resolution[3] dated August 10,
2009 of the Court of Appeals (CA) in CA-G.R. SP No. 104487 which
reversed the Decision[4] dated December 27, 2007 of the Regional
Trial Court of Caloocan City, Branch 128 (RTC) in Civil Case No.
C-21867 that, in turn, affirmed the Decision[5] dated June 8, 2007
of the Metropolitan Trial Court,
_______________
[1] Rollo, pp. 24-40.
[2] Id., at pp. 171-177. Penned by Associate Justice Juan Q. Enriquez, Jr., with Associate Justices
Celia C. Librea-Leagogo and Antonio L. Villamor, concurring.
[3] Id., at pp. 205-206.
[4] Id., at pp. 107-111. Penned by Presiding Judge Eleanor R. Kwong.
[5] Id., at pp. 73-74. Penned by Judge Mariam G. Bien.
552Branch 53 of that same city (MeTC) in Civil Case No. 06-28830

ordering respondents-spouses Benigno and Lourdes Jovellanos
(Sps. Jovellanos) to, inter alia, vacate the premises of the property
subject of this case.
The Facts
On April 26, 2005, Sps. Jovellanos entered into a Contract to
Sell[6] with Palmera Homes, Inc. (Palmera Homes) for the purchase
of a residential house and lot situated in Block 3, Lot 14, Villa
Alegria Subdivision, Caloocan City (subject property) for a total
consideration of P1,015,000.00. Pursuant to the contract, Sps.
Jovellanos took possession of the subject property upon a down
payment of P91,500.00, undertaking to pay the remaining balance
of the contract price in equal monthly installments of P13,107.00
for a period of 10 years starting June 12, 2005.[7]
On August 22, 2006, Palmera Homes assigned all its rights, title
and interest in the Contract to Sell in favor of petitioner Optimum
Development Bank (Optimum) through a Deed of Assignment of
even date.[8]
On April 10, 2006, Optimum issued a Notice of Delinquency and
Cancellation of Contract to Sell[9] for Sps. Jovellanos’s failure to
pay their monthly installments despite several written and verbal
notices.[10] In a final Demand Letter dated May 25,
2006,[11] Optimum required Sps. Jovellanos to vacate and deliver
possession of the subject property within seven (7) days which,
however, remained unheeded. Hence, Optimum filed, on November
3, 2006, a complaint for unlaw-
_______________
[6] Id., at pp. 45-50.
[7] Id., at pp. 45, 108, and 172.
[8] Id., at pp. 26 and 51-54.
[9] Id., at p. 55.
[10] Id., at p. 58.
[11] Id., at p. 56.
553ful detainer[12] before the MeTC, docketed as Civil Case No. 06-
28830.
Despite having been served with summons, together with a copy
of the complaint,[13] Sps. Jovellanos failed to file their answer
within the prescribed reglementary period, thus prompting
Optimum to move for the rendition of judgment.[14] Thereafter, Sps.
Jovellanos filed their opposition with motion to admit answer,
questioning the jurisdiction of the court, among others. Further,
they filed a Motion to Reopen and Set the Case for Preliminary
Conference, which the MeTC denied.
The MeTC Ruling
In a Decision[15] dated June 8, 2007, the MeTC ordered Sps.
Jovellanos to vacate the subject property and pay Optimum
reasonable compensation in the amount of P5,000.00 for its use
and occupation until possession has been surrendered. It held that
Sps. Jovellanos’s possession of the said property was by virtue of a
Contract to Sell which had already been cancelled for nonpayment
of the stipulated monthly installment payments. As such, their
“rights of possession over the subject property necessarily
terminated or expired and hence, their continued possession
thereof constitute[d] unlawful detainer.”[16]
Dissatisfied, Sps. Jovellanos appealed to the RTC, claiming that
Optimum counsel made them believe that a compromise agreement
was being prepared, thus their decision not to engage the services
of counsel and their concomitant failure to file an answer. [17] They
also assailed the jurisdiction of the MeTC, claiming that the case
did not merely involve the issue
_______________
[12] Id., at pp. 57-60. Dated October 11, 2006.
[13] Id., at p. 62.
[14] Id., at pp. 63-65.
[15] Id., at pp. 73-74.
[16] Id., at p. 74.
[17] Id., at pp. 80-81.
554of physical possession but rather, questions arising from their

rights under a contract to sell which is a matter that is incapable of
pecuniary estimation and, therefore, within the jurisdiction of the
RTC.[18]
The RTC Ruling
In a Decision[19] dated December 27, 2007, the RTC affirmed the
MeTC’s judgment, holding that the latter did not err in refusing to
admit Sps. Jovellanos’s belatedly filed answer considering the
mandatory period for its filing. It also affirmed the MeTC’s finding
that the action does not involve the rights of the respective parties
under the contract but merely the recovery of possession by
Optimum of the subject property after the spouses’ default.[20]
Aggrieved, Sps. Jovellanos moved for reconsideration which was,
however, denied in a Resolution[21] dated June 27, 2008. Hence, the
petition before the CA reiterating that the RTC erred in affirming
the decision of the MeTC with respect to: (a) the nonadmission of
their answer to the complaint; and (b) the jurisdiction of the MeTC
over the complaint for unlawful detainer.[22]
The CA Ruling
In an Amended Decision[23] dated May 29, 2009, the CA reversed
and set aside the RTC’s decision, ruling to dismiss the complaint
for lack of jurisdiction. It found that the controversy does not only
involve the issue of possession but also the validity of the
cancellation of the Contract to Sell and the
_______________
[18] Id., at pp. 85-86.
[19] Id., at pp. 107-111.
[20] Id., at p. 111.
[21] Id., at pp. 140-141.
[22] Id., at pp. 142-157. See Memorandum for the Petitioners dated December 21, 2008.
[23] Id., at pp. 171-177.
555determination of the rights of the parties thereunder as well as

the governing law, among others, Republic Act No. (RA)
6552.[24] Accordingly, it concluded that the subject matter is one
which is incapable of pecuniary estimation and thus, within the
jurisdiction of the RTC.[25]
Undaunted, Optimum moved for reconsideration which was
denied in a Resolution[26] dated August 10, 2009. Hence, the
instant petition, submitting that the case is one for unlawful
detainer, which falls within the exclusive original jurisdiction of
the municipal trial courts, and not a case incapable of pecuniary
estimation cognizable solely by the regional trial courts.
The petition is meritorious.
What is determinative of the nature of the action and the court
with jurisdiction over it are the allegations in the complaint and
the character of the relief sought, not the defenses set up in an
answer.[27] A complaint sufficiently alleges a cause of action for
unlawful detainer if it recites that: (a) initially, possession of the
property by the defendant was by contract with or by tolerance of
the plaintiff; (b) eventually, such possession became illegal upon
notice by plaintiff to defendant of the termination of the latter’s
right of possession; (c) thereafter, defendant remained in
possession of the property and deprived plaintiff of the enjoyment
thereof; and (d) within one year from the last demand on defendant
to vacate the property, plaintiff instituted the complaint for
ejectment.[28] Corol-
_______________
[24] Id., at p. 175. RA 6552 is entitled “AN ACT TO PROVIDE PROTECTION TO BUYER OF REAL ESTATE ON
INSTALLMENT PAYMENTS.”
[25] Id., at p. 176.
[26] Id., at pp. 205-206.
[27] Fernando v. Spouses Lim, 585 Phil. 141, 155; 563 SCRA 147, 159 (2008).
[28] Id., at pp. 155-156; pp. 159-160.
556larily, the only issue to be resolved in an unlawful detainer case

is physical or material possession of the property involved,
independent of any claim of ownership by any of the parties
involved.[29]
In its complaint, Optimum alleged that it was by virtue of the
April 26, 2005 Contract to Sell that Sps. Jovellanos were allowed to
take possession of the subject property. However, since the latter
failed to pay the stipulated monthly installments, notwithstanding
several written and verbal notices made upon them, it cancelled
the said contract as per the Notice of Delinquency and Cancellation
dated April 10, 2006. When Sps. Jovellanos refused to vacate the
subject property despite repeated demands, Optimum instituted
the present action for unlawful detainer on November 3, 2006, or
within one year from the final demand made on May 25, 2006.
While the RTC upheld the MeTC’s ruling in favor of Optimum,
the CA, on the other hand, declared that the MeTC had no
jurisdiction over the complaint for unlawful detainer, reasoning
that the case involves a matter which is incapable of pecuniary
estimation — i.e., the validity of the cancellation of the Contract to
Sell and the determination of the rights of the parties under the
contract and law — and hence, within the jurisdiction of the RTC.
The Court disagrees.
Metropolitan Trial Courts are conditionally vested with
authority to resolve the question of ownership raised as an
incident in an ejectment case where the determination
is essential to a complete adjudication of the issue of
possession.[30] Concomitant to the ejectment court’s authority
_______________
[29] Manila Electric Company v. Heirs of Spouses Dionisio Deloy and Praxedes Martonito, G.R. No.
192893, June 5, 2013, 697 SCRA 486.
[30] Section 33 of Batas Pambansa Blg. 129, as amended by RA 7691, provides:
557to look into the claim of ownership for purposes of resolving

the issue of possession is its authority to interpret the contract
or agreement upon which the claim is premised. Thus, in the case
of Oronce v. CA,[31] wherein the litigants’ opposing claims for
possession was hinged on whether their written agreement
reflected the intention to enter into a sale or merely an equitable
mortgage, the Court affirmed the propriety of the ejectment court’s
examination of the terms of the agreement in question by holding
that, “because metropolitan trial courts are authorized to
look into the ownership of the property in controversy in
ejectment cases, it behooved MTC Branch 41 to examine the
bases for petitioners’ claim of ownership that entailed
interpretation of the Deed of Sale with Assumption of
Mortgage.”[32] Also, in Union Bank of the Philippines v. Maunlad
Homes, Inc.[33] (Union Bank), citing Sps. Refugia v. CA,[34] the
Court declared that MeTCs have authority to interpret contracts in
unlawful detainer cases, viz.:[35]
_______________
33. Sec.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
Exclusive original jurisdiction over cases of forcible entry and unlawful detainer: (2) Provided, That
when, in such cases, the defendant raises the questions of ownership in his pleadings and the question of
possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be
resolved only to determine the issue of possession; x x x
xxxx
[31] 358 Phil. 616; 298 SCRA 133 (1998).
[32] Id., at p. 636; pp. 154-155.
[33] G.R. No. 190071, August 15, 2012, 678 SCRA 539.
[34] 327 Phil. 982, 1006; 258 SCRA 347, 370 (1996).
[35] Union Bank of the Philippines v. Maunlad Homes, Inc., supra note 33, at pp. 547-548.
558
The authority granted to the MeTC to preliminarily resolve the issue of
ownership to determine the issue of possession ultimately allows it to interpret
and enforce the contract or agreement between the plaintiff and the
defendant. To deny the MeTC jurisdiction over a complaint merely because the issue of
possession requires the interpretation of a contract will effectively rule out unlawful
detainer as a remedy. As stated, in an action for unlawful detainer, the defendant’s right to
possess the property may be by virtue of a contract, express or implied; corollarily, the
termination of the defendant’s right to possess would be governed by the terms of the same
contract. Interpretation of the contract between the plaintiff and the defendant is
inevitable because it is the contract that initially granted the defendant the right
to possess the property; it is this same contract that the plaintiff subsequently
claims was violated or extinguished, terminating the defendant’s right to possess.
We ruled in Sps. Refugia v. CA that –
where the resolution of the issue of possession hinges on a
determination of the validity and interpretation of the document
of title or any other contract on which the claim of possession is
premised, the inferior court may likewise pass upon these issues.
The MeTC’s ruling on the rights of the parties based on its interpretation of their
contract is, of course, not conclusive, but is merely provisional and is binding only
with respect to the issue of possession. (Emphases supplied; citations omitted)
In the case at bar, the unlawful detainer suit filed by Optimum

against Sps. Jovellanos for illegally withholding possession of the
subject property is similarly premised upon the cancellation or
termination of the Contract to Sell between them. Indeed, it was
well within the jurisdiction of the MeTC to consider the terms of
the parties’ agreement in order to ultimately determine the factual
bases of Optimum’s posses-
559sory claims over the subject property. Proceeding accordingly,
the MeTC held that Sps. Jovellanos’s nonpayment of the
installments due had rendered the Contract to Sell without force
and effect, thus depriving the latter of their right to possess the
property subject of said contract.[36] The foregoing disposition aptly
squares with existing jurisprudence. As the Court similarly held in
the Union Bank case, the seller’s cancellation of the contract to sell
necessarily extinguished the buyer’s right of possession over the
property that was the subject of the terminated
agreement.[37] Verily, in a contract to sell, the prospective seller
binds himself to sell the property subject of the agreement
exclusively to the prospective buyer upon fulfillment of the
condition agreed upon which is the full payment of the purchase
price but reserving to himself the ownership of the subject property
despite delivery thereof to the prospective buyer.[38] The full
payment of the purchase price in a contract to sell is
a suspensive condition, the nonfulfillment of which prevents
the prospective seller’s obligation to convey title from
becoming effective,[39] as in this case.
Further, it is significant to note that given that the Contract to
Sell in this case is one which has for its object real property to be
sold on an installment basis, the said contract is especially
governed by — and thus, must be examined under the provisions of
— RA 6552, or the “Realty Installment Buyer Protection Act”,
which provides for the rights of the buyer in case of his default in
the payment of succeeding installments. Breaking down the
provisions of the law, the
_______________
[36] See Pagtalunan v. Dela Cruz Vda. de Manzano, 559 Phil. 658, 668; 533 SCRA 242, 253 (2007).
[37] See Union Bank of the Philippines v. Maunlad Homes, Inc., supranote 33, at pp. 548-549.
[38] See Coronel v. Court of Appeals, 331 Phil. 294, 309; 263 SCRA 15, 27 (1996).
[39] See Montecalvo v. Heirs of Eugenia T. Primero, G.R. No. 165168, July 9, 2010, 624 SCRA 575, 587.
560Court, in the case of Rillo v. CA,[40] explained the mechanics of

cancellation under RA 6552 which are based mainly on the amount
of installments already paid by the buyer under the subject
contract, to wit:[41]
Given the nature of the contract of the parties, the respondent court correctly applied
Republic Act No. 6552. Known as the Maceda Law, R.A. No. 6552 recognizes in conditional
sales of all kinds of real estate (industrial, commercial, residential) the right of the seller to
cancel the contract upon nonpayment of an installment by the buyer, which is simply an
event that prevents the obligation of the vendor to convey title from acquiring binding force.
It also provides the right of the buyer on installments in case he defaults in the payment of
succeeding installments, viz.:
(1)Where he has paid at least two years of installments,
To pay, without additional interest, the unpaid installments due within the total grace
period earned by him, which is hereby fixed at the rate of one month grace period for every
one year of installment payments made: (a) Provided, That this right shall be exercised by
the buyer only once in every five years of the life of the contract and its extensions, if any.
If the contract is cancelled, the seller shall refund to the buyer the cash surrender value
of the payments on the property equivalent to fifty percent of the total payments made and,
after five years of installments, an additional five percent every year but not to exceed
ninety percent of the total payments made: (b) Provided, That the actual cancellation of
the contract shall take place after cancellation or the demand for rescission of the contract
by a notarial act and upon full payment of the cash surrender value to the buyer.
_______________
[40] G.R. No. 125347, June 19, 1997, 274 SCRA 461.
[41] Id., at pp. 467-468.
561
Down payments, deposits or options on the contract shall be included in the computation
of the total number of installments made.
(2)Where he has paid less than two years in installments,
x x x the seller shall give the buyer a grace period of not less than sixty days
from the date the installment became due. If the buyer fails to pay the
installments due at the expiration of the grace period, the seller may cancel the
contract after thirty days from receipt by the buyer of the notice of cancellation
or the demand for rescission of the contract by a notarial act 4. Sec.. (Emphasis
and underscoring supplied)
Pertinently, since Sps. Jovellanos failed to pay their stipulated

monthly installments as found by the MeTC, the Court examines
Optimum’s compliance with Section 4 of RA 6552, as above-quoted
and highlighted, which is the provision applicable to buyers who
have paid less than two (2) years-worth of installments.
Essentially, the said provision provides for three (3) requisites
before the seller may actually cancel the subject contract: first, the
seller shall give the buyer a 60-day grace period to be reckoned
from the date the installment became due; second, the seller must
give the buyer a notice of cancellation/demand for rescission
by notarial act if the buyer fails to pay the installments due at
the expiration of the said grace period; and third, the seller may
actually cancel the contract only after thirty (30) days from the
buyer’s receipt of the said notice of cancellation/demand for
rescission by notarial act.
In the present case, the 60-day grace period automatically
operated[42] in favor of the buyers, Sps. Jovellanos, and took
_______________
[42] The automatic operation of the aforesaid grace period in favor of Sps. Jovellanos is in accord
with Bricktown Dev’t. Corp. v. Amor Tierra Dev’t. Corp. (G.R. No. 112182, December 12, 1994, 239 SCRA
126, 131-132) wherein the Court held that:
562effect from the time that the maturity dates of the installment
payments lapsed. With the said grace period having expired bereft
of any installment payment on the part of Sps.
Jovellanos,[43] Optimum then issued a notarized Notice of
Delinquency and Cancellation of Contract on April 10, 2006.
Finally, in proceeding with the actual cancellation of the contract
to sell, Optimum gave Sps. Jovellanos an additional thirty (30)
days within which to settle their arrears and reinstate the
contract, or sell or assign their rights to another.[44] It
_______________
A grace period is a right, not an obligation, of the debtor. When unconditionally conferred,
such as in this case, the grace period is effective without further need of demand either
calling for the payment of the obligation or for honoring the right. The grace period must
not be likened to an obligation, the nonpayment of which, under Article 1169 of the Civil Code,
would generally still require judicial or extrajudicial demand before “default” can be said to arise.
Verily, in the case at bench, the sixty-day grace period under the terms of the contracts to
sell became ipso facto operative from the moment the due payments were not met at their
stated maturities. On this score, the provisions of Article 1169 of the Civil Code would find no
relevance whatsoever. (Emphases supplied; citations omitted)
[43] Records disclose that Sps. Jovellanos had only paid the P91,500.00 down payment and not the
equal monthly installments due on the Contract to Sell for the remaining balance, the first of which
started on June 12, 2005. (See Contract to Sell, Rollo, p. 45; see CA Decision, Id., at p. 172; see RTC
Decision, Id., at p. 108; see MeTC Decision, Id., at pp. 73-74.) Records also disclose that Sps. Jovellanos
did not, in any of its pleadings attached thereto, claim that they have paid any monthly installment due
on the Contract to Sell outside from the P91,500.00 down payment. (SeeDefendants-Appellants’ Appeal
Memorandum dated August 1, 2007, Id., at pp. 77-78; Memorandum for Petitioners dated December 21,
2008, Id., at pp. 151-152.)
[44] Section 5 of RA 6552 states:
Under Sections 3 and 4, the buyer shall have the right to sell his rights or assign the same to
another person or to reinstate the contract by updating the ac- 5. Sec.
563wasonly after the expiration of the thirty (30) day period did
Optimum treat the contract to sell as effectively cancelled —
making as it did a final demand upon Sps. Jovellanos to vacate the
subject property only on May 25, 2006.
Thus, based on the foregoing, the Court finds that there was a
valid and effective cancellation of the Contract to Sell in
accordance with Section 4 of RA 6552 and since Sps. Jovellanos
had already lost their right to retain possession of the subject
property as a consequence of such cancellation, their refusal to
vacate and turn over possession to Optimum makes out a valid
case for unlawful detainer as properly adjudged by the MeTC.
WHEREFORE, the petition is GRANTED. The Decision dated
May 29, 2009 and Resolution dated August 10, 2009 of the Court of
Appeals in CA-G.R. SP No. 104487 are SET ASIDE. The Decision
dated June 8, 2007 of the Metropolitan Trial Court, Branch 53,
Caloocan City in Civil Case No. 06-28830 is
hereby REINSTATED.
SO ORDERED.
April 15, 2013. G.R. No. 171298.*
SPOUSES OSCAR and THELMA CACAYORIN,
petitioners, vs. ARMED FORCES AND POLICE MUTUAL
BENEFIT ASSOCIATION, INC., respondent.
Remedial Law; Courts; Jurisdiction; The settled principle is that the allegations of the
complaint determine the nature of the action and consequently the jurisdiction of the
courts.―The settled principle is that “the allegations of the [C]omplaint determine the
nature of the action and consequently the jurisdiction of the courts. This rule applies
whether or not the plaintiff is entitled to recover upon all or some of the claims asserted
therein as this is a matter that can be resolved only after and as a result of the trial.”
Civil Law; Consignation; Under Article 1256 of the Civil Code, the debtor shall be
released from responsibility by the consignation of the thing or sum due, without need of
prior tender of payment, when the creditor is absent or unknown, or when he is incapacitated
to receive the payment at the time it is due, or when two or more persons claim the same
right to collect, or when the title to the obligation has been lost.―Under Article 1256 of the
Civil Code, the debtor shall be released from responsibility by the consignation of the thing
or sum due, without need of prior tender of payment, when the creditor is absent or
unknown, or when he is incapacitated to receive the payment at the time it is due, or when
two or more persons claim the same right to collect, or when the title to the obligation has
been lost. Applying Article 1256 to the petitioners’ case as shaped by the allegations in their
Complaint, the Court finds that a case for consignation has been made out, as it now
appears that there are two entities which petitioners must deal with in order to fully secure
their title to the property: 1) the Rural Bank (through PDIC), which is the apparent
creditor under the July 4, 1994 Loan and Mortgage Agreement; and 2) AFPMBAI, which is
currently in possession of the loan documents and the certificate of title, and the one
making demands upon petitioners to pay. Clearly, the allegations in the Complaint present
a situation where the creditor is unknown, or that two or more enti-
_______________
* SECOND DIVISION.
412

12
Cacayorin vs. Armed Forces and Police Mutual Benefit Assocaition, Inc.
ties appear to possess the same right to collect from petitioners. Whatever transpired
between the Rural Bank or PDIC and AFPMBAI in respect of petitioners’ loan account, if
any, such that AFPMBAI came into possession of the loan documents and TCT No. 37017,
it appears that petitioners were not informed thereof, nor made privy thereto.
Same; Same; Article 1256 authorizes consignation alone, without need of prior tender of
payment, where the ground for consignation is that the creditor is unknown, or does not
appear at the place of payment; or is incapacitated to receive the payment at the time it is
due; or when, without just cause, he refuses to give a receipt; or when two or more persons
claim the same right to collect; or when the title of the obligation has been lost.―The lack of
prior tender of payment by the petitioners is not fatal to their consignation case. They filed
the case for the exact reason that they were at a loss as to which between the two―the
Rural Bank or AFPMBAI―was entitled to such a tender of payment. Besides, as earlier
stated, Article 1256 authorizes consignation alone, without need of prior tender of payment,
where the ground for consignation is that the creditor is unknown, or does not appear at the
place of payment; or is incapacitated to receive the payment at the time it is due; or when,
without just cause, he refuses to give a receipt; or when two or more persons claim the same
right to collect; or when the title of the obligation has been lost.

Robert Y. Peneyra for petitioners.
Rodrigo G. Artuz and Randy F. Pablo for respondent.
DEL CASTILLO,J.:
Consignation is necessarily judicial. Article 1258 of the Civil
Code specifically provides that consignation shall be made by
depositing the thing or things due at the disposal of
313
VOL. 696, APRIL 15, 2013 313
judicial authority. The said provision clearly precludes
consignation in venues other than the courts.
Assailed in this Petition for Review on Certiorari1 are the
September 29, 2005 Decision2 of the Court of Appeals (CA) which
granted the Petition for Certiorari in CA-G.R. SP No. 84446 and its
January 12, 2006 Resolution3 denying petitioners’ Motion for
Reconsideration.4
Factual Antecedents
Petitioner Oscar Cacayorin (Oscar) is a member of respondent
Armed Forces and Police Mutual Benefit Association, Inc.
(AFPMBAI), a mutual benefit association duly organized and
existing under Philippine laws and engaged in the business of
developing low-cost housing projects for personnel of the Armed
Forces of the Philippines, Philippine National Police, Bureau of
Fire Protection, Bureau of Jail Management and Penology, and
Philippine Coast Guard. He filed an application with AFPMBAI to
purchase a piece of property which the latter owned, specifically
Lot 5, Block 8, Phase I, Kalikasan Mutual Homes, San Pedro,
Puerto Princesa City (the property), through a loan facility.
On July 4, 1994, Oscar and his wife and co-petitioner herein,
Thelma, on one hand, and the Rural Bank of San Teodoro (the
Rural Bank) on the other, executed a Loan and Mortgage
Agreement5 with the former as borrowers and the Rural Bank as
lender, under the auspices of Pag-IBIG or Home Development
Mutual Fund’s Home Financing Program.
_______________
1 Rollo, pp. 9-30.
2 Id., at pp. 95-103; penned by Associate Justice Andres B. Reyes, Jr. and concurred in by Associate
Justices Rosmari D. Carandang and Monina Arevalo-Zenarosa.
3 Id., at p. 111.
4 Id., at pp. 204-109.
5 Id., at pp. 149-151.
314
The Rural Bank issued an August 22, 1994 letter of
guaranty6 informing AFPMBAI that the proceeds of petitioners’
approved loan in the amount of P77,418.00 shall be released to
AFPMBAI after title to the property is transferred in petitioners’
name and after the registration and annotation of the parties’
mortgage agreement.
On the basis of the Rural Bank’s letter of guaranty, AFPMBAI
executed in petitioners’ favor a Deed of Absolute Sale, 7 and a new
title―Transfer Certificate of Title No. 370178 (TCT No. 37017)―was
issued in their name, with the corresponding annotation of their
mortgage agreement with the Rural Bank, under Entry No. 3364.9
Unfortunately, the Pag-IBIG loan facility did not push through
and the Rural Bank closed and was placed under receivership by
the Philippine Deposit Insurance Corporation (PDIC). Meanwhile,
AFPMBAI somehow was able to take possession of petitioners’ loan
documents and TCT No. 37017, while petitioners were unable to
pay the loan/consideration for the property.
AFPMBAI made oral and written demands for petitioners to pay
the loan/consideration for the property.10In July 2003, petitioners
filed a Complaint11 for consignation of loan payment, recovery of
title and cancellation of mortgage annotation against AFPMBAI,
PDIC and the Register of Deeds of Puerto Princesa City. The case
was docketed as Civil Case No. 3812 and raffled to Branch 47 of
the Regional Trial Court (RTC) of Puerto Princesa City (Puerto
Princesa RTC). Petitioners alleged in their Complaint that as a
result of the Rural Bank’s closure and PDIC’s claim that
_______________
6 CA Rollo, p. 26.
7 Id., at pp. 27-28.
8 Id., at p. 29.
9 Id. (dorsal).
10 Rollo, p. 119.
11 Id., at pp. 45-51.
315
VOL. 696, APRIL 15, 2013 315
their loan papers could not be located, they were left in a quandary
as to where they should tender full payment of the loan and how to
secure cancellation of the mortgage annotation on TCT No. 37017.
Petitioners prayed, thus:
That after the filing of this complaint an order be made allowing the consignation x x x
of Php77,418.00. a.
For the court to compute and declare the amount of interest to be paid by the plaintiffs
and thereafter to allow the consignation of the interest payments in order to give way for
the full discharge of the loan. b.
To order the AFPMBAI to turn over to the custody of the court the loan records and title
(T.C.T. No. 37017) of the plaintiffs if the same are in their possession. c.
To declare the full payment of the principal loan and interest and ordering the full
discharge from mortgage of the property covered by T.C.T. No. 37017. d.
To order the Register of Deeds of Puerto Princesa City to cancel the annotation of real
estate mortgage under Entry No. 3364 at the back of T.C.T. No. 37017. e.
Thereafter, to turn over to the plaintiffs their title free from the aforesaid mortgage loan.
f.12
AFPMBAI filed a Motion to Dismiss13 claiming that petitioners’

Complaint falls within the jurisdiction of the Housing and Land
Use Regulatory Board (HLURB) and not the Puerto Princesa RTC,
as it was filed by petitioners in their capacity as buyers of a
subdivision lot and it prays for specific performance of contractual
and legal obligations decreed under Presidential Decree No.
95714 (PD 957). It added that since no prior valid tender of payment
was made by petitioners, the
_______________
12 Id., at pp. 48-49.
13 Id., at pp. 52-57.
14 The Subdivision and Condominium Buyers’ Protective Decree.
316
consignation case was fatally defective and susceptible to
dismissal.
Ruling of the Regional Trial Court
In an October 16, 2003 Order,15 the trial court denied
AFPMBAI’s Motion to Dismiss, declaring that since title has been
transferred in the name of petitioners and the action involves
consignation of loan payments, it possessed jurisdiction to continue
with the case. It further held that the only remaining unsettled
transaction is between petitioners and PDIC as the appointed
receiver of the Rural Bank.
AFPMBAI filed a Motion for Reconsideration,16 which the trial
court denied in its March 19, 2004 Order.17
Ruling of the Court of Appeals
AFPMBAI thus instituted CA-G.R. SP No. 84446, which is a
Petition for Certiorari18 raising the issue of jurisdiction. On
September 29, 2005, the CA rendered the assailed Decision
decreeing as follows:
WHEREFORE, premises considered, this Petition is GRANTED. The Assailed 16
October 2003 and 19 March 2004 Orders of the public respondent judge are hereby
ordered VACATED and SET ASIDE.
_______________
15 Rollo, pp. 66-68; penned by Judge Perfecto E. Pe. The Order decreed as follows:
ALL THE FOREGOING CONSIDERED, the Court hereby denies the motion filed by the plaintiffs thru
Counsel only as against the defendant AFPMBAI, but declared [sic] in default the other defendant PDIC. The
Court hereby orders the defendant AFPMBAI to file its necessary pleading within fifteen (15) days from receipt
of this order.
16 CA Rollo, pp. 54-58.
17 Id., at p. 23.
18 Id., at pp. 2-19.
317
VOL. 696, APRIL 15, 2013 317

SO ORDERED.19
The CA held that Civil Case No. 3812 is a case for specific
performance of AFPMBAI’s contractual and statutory obligations
as owner/developer of Kalikasan Mutual Homes, which makes PD
957 applicable and thus places the case within the jurisdiction of
the HLURB. It said that since one of the remedies prayed for is the
delivery to petitioners of TCT No. 37017, the case is cognizable
exclusively by the HLURB.
Petitioners moved for reconsideration which was denied by the
CA in its January 12, 2006 Resolution.
Hence, the instant Petition.
Issue
The sole issue that must be resolved in this Petition is: Does the
Complaint in Civil Case No. 3812 fall within the exclusive
jurisdiction of the HLURB?
Petitioners’ Arguments
Petitioners assert that the elements which make up a valid case
for consignation are present in their Complaint. They add that
since a deed of absolute sale has been issued in their favor, and
possession of the property has been surrendered to them, not to
mention that title has been placed in their name, the HLURB lost
jurisdiction over their case. And for this same reason, petitioners
argue that their case may not be said to be one for specific
performance of contractual and legal obligations under PD 957 as
nothing more was left to be done in order to perfect or consolidate
their title.
Petitioners thus pray that the herein assailed Decision and
Resolution of the CA be set aside, and that the trial court be
ordered to continue with the proceedings in Civil Case No. 3812.
_______________
19 Rollo, pp. 102-103.
318
Respondent’s Arguments
Respondent, on the other hand, insists in its Comment20that
jurisdiction over petitioners’ case lies with the HLURB, as it
springs from their contractual relation as seller and buyer,
respectively, of a subdivision lot. The prayer in petitioners’
Complaint involves the surrender or delivery of the title after full
payment of the purchase price, which respondent claims are
reciprocal obligations in a sale transaction covered by PD 957.
Respondent adds that in effect, petitioners are exacting specific
performance from it, which places their case within the jurisdiction
of the HLURB.
Our Ruling
The Court grants the Petition.
The Complaint makes out a case
for consignation.
The settled principle is that “the allegations of the [C]omplaint
determine the nature of the action and consequently the
jurisdiction of the courts. This rule applies whether or not the
plaintiff is entitled to recover upon all or some of the claims
asserted therein as this is a matter that can be resolved only after
and as a result of the trial.”21
Does the Complaint in Civil Case No. 3812 make out a case for
consignation? It alleges that:
6.0 – Not long after however, RBST22 closed shop and defendant Philippine Deposit
Insurance Corporation (PDIC) was appointed as its receiver. The plaintiffs, through a
representative,
_______________
20 Id., at pp. 114-130.
21 Bulao v. Court of Appeals, G.R. No. 101983, February 1, 1993, 218 SCRA 321, 323, citing Magay v.
Estiandan, 161 Phil. 586, 590; 69 SCRA 456, 458 (1976).
22 The Rural Bank of San Teodoro.
319
VOL. 696, APRIL 15, 2013 319

made a verbal inquiry to the PDIC regarding the payment of their loan but were told that it
has no information or record of the said loan. This made [sic] the plaintiffs in quandary as
to where or whom they will pay their loan, which they intend to pay in full, so as to cancel
the annotation of mortgage in their title.
7.0 – It was discovered that the loan papers of the plaintiffs, including the duplicate
original of their title, were in the possession of defendant AFPMBAI. It was unclear though
why the said documents including the title were in the possession of AFPMBAI. These
papers should have been in RBST’s possession and given to PDIC after its closure in the
latter’s capacity as receiver.
8.0 – Plaintiffs are now intending to pay in full their real estate loan but could not
decide where to pay the same because of RBST [sic] closure and PDIC’s failure to locate the
loan records and title. This court’s intervention is now needed in order to determine to [sic]
where or whom the loan should be paid.
9.0 – Plaintiffs hereby respectfully prays [sic] for this court to allow the deposit of the
amount of Php77,418.00 as full payment of their principal loan, excluding interest,
pursuant to the Loan and Mortgage Agreement on 4 July 1994.23
From the above allegations, it appears that the petitioners’ debt

is outstanding; that the Rural Bank’s receiver, PDIC, informed
petitioners that it has no record of their loan even as it took over
the affairs of the Rural Bank, which on record is the petitioners’
creditor as per the July 4, 1994 Loan and Mortgage Agreement;
that one way or another, AFPMBAI came into possession of the
loan documents as well as TCT No. 37017; that petitioners are
ready to pay the loan in full; however, under the circumstances,
they do not know which of the two―the Rural Bank or
AFPMBAI―should receive full payment of the purchase price, or to
whom tender of payment must validly be made.
_______________
23 Rollo, pp. 47-48.
320
Under Article 1256 of the Civil Code,24 the debtor shall be
released from responsibility by the consignation of the thing or
sum due, without need of prior tender of payment, when the
creditor is absent or unknown, or when he is incapacitated to
receive the payment at the time it is due, or when two or more
persons claim the same right to collect, or when the title to the
obligation has been lost. Applying Article 1256 to the petitioners’
case as shaped by the allegations in their Complaint, the Court
finds that a case for consignation has been made out, as it now
appears that there are two entities which petitioners must deal
with in order to fully secure their title to the property: 1) the Rural
Bank (through PDIC), which is the apparent creditor under the
July 4, 1994 Loan and Mortgage Agreement; and 2) AFPMBAI,
which is currently in possession of the loan documents and the
certificate of title, and the one making demands upon petitioners to
pay. Clearly, the allegations in the Complaint present a situation
where the creditor is unknown, or that two or more entities appear
to possess the same right to collect from petitioners. Whatever
transpired between the Rural Bank or PDIC and AFPMBAI in
respect of petitioners’ loan account, if any, such that AFPMBAI
came into possession of the loan documents
_______________
24If the creditor to whom tender of payment has been made refuses without just cause to accept it, the
debtor shall be released from responsibility by the consignation of the thing or sum due. 1256. Art.
Consignation alone shall produce the same effect in the following cases:
When the creditor is absent or unknown, or does not appear at the place of payment; (1)
When he is incapacitated to receive the payment at the time it is due; (2)
When, without just cause, he refuses to give a receipt; (3)
When two or more persons claim the same right to collect; (4)
When the title of the obligation has been lost. (5)
321
VOL. 696, APRIL 15, 2013 321
and TCT No. 37017, it appears that petitioners were not informed
thereof, nor made privy thereto.
Indeed, the instant case presents a unique situation where the
buyer, through no fault of his own, was able to obtain title to real
property in his name even before he could pay the purchase price
in full. There appears to be no vitiated consent, nor is there any
other impediment to the consummation of their agreement, just as
it appears that it would be to the best interests of all parties to the
sale that it be once and for all completed and terminated. For this
reason, Civil Case No. 3812 should at this juncture be allowed to
proceed.
Moreover, petitioners’ position is buttressed by AFPMBAI’s own
admission in its Comment25 that it made oral and written demands
upon the former, which naturally aggravated their confusion as to
who was their rightful creditor to whom payment should be
made―the Rural Bank or AFPMBAI. Its subsequent filing of the
Motion to Dismiss runs counter to its demands to pay. If it wanted
to be paid with alacrity, then it should not have moved to dismiss
Civil Case No. 3812, which was brought precisely by the
petitioners in order to be able to finally settle their obligation in
full.
Finally, the lack of prior tender of payment by the petitioners is
not fatal to their consignation case. They filed the case for the
exact reason that they were at a loss as to which between the
two―the Rural Bank or AFPMBAI―was entitled to such a tender of
payment. Besides, as earlier stated, Article 1256 authorizes
consignation alone, without need of prior tender of payment, where
the ground for consignation is that the creditor is unknown, or does
not appear at the place of payment; or is incapacitated to receive
the payment at the time it is due; or when, without just cause, he
refuses to give a receipt; or when two or more persons claim the
same right to collect; or when the title of the obligation has been
lost.
_______________
25 Rollo, p. 119.
322
Consignation is necessarily judicial;
hence, jurisdiction lies with the RTC,
not with the HLURB.
On the question of jurisdiction, petitioners’ case should be tried
in the Puerto Princesa RTC, and not the HLURB. Consignation is
necessarily judicial,26 as the Civil Code itself provides that
consignation shall be made by depositing the thing or things due at
the disposal ofjudicial authority, thus:
1258. Art.Consignation shall be made by depositing the things due at the
disposal of judicial authority, before whom the tender of payment shall be
proved, in a proper case, and the announcement of the consignation in other cases.
The consignation having been made, the interested parties shall also be notified thereof.
(Emphasis and underscoring supplied)
The above provision clearly precludes consignation in venues

other than the courts. Elsewhere, what may be made is a valid
tender of payment, but not consignation. The two, however, are to
be distinguished.
Tender of payment must be distinguished from consignation. Tender is the antecedent of
consignation, that is, an act preparatory to the consignation, which is the principal, and
from which are derived the immediate consequences which the debtor desires or seeks to
obtain. Tender of payment may be extrajudicial, while consignation is necessarily judicial,
and the priority of the first is the attempt to make a private settlement before proceeding to
the solemnities of consignation. (8 Manresa 325).27
_______________
26 Soco v. Hon. Militante, 208 Phil. 151, 159; 123 SCRA 160, 173 (1983); Mclaughlin v. Court of
Appeals, 229 Phil. 8, 18; 144 SCRA 693, 702 (1986); Meat Packing Corporation of the Philippines v.
Sandiganbayan, 411 Phil. 959, 973; 359 SCRA 409, 421 (2001); B.E. San Diego, Inc. v. Alzul, G.R. No.
169501, June 8, 2007, 524 SCRA 402, 426, 428-429.
27 Soco v. Hon. Militante, supra at pp. 160-161; p. 173.
323
VOL. 696, APRIL 15, 2013 323
While it may be true that petitioners’ claim relates to the terms
and conditions of the sale of AFPMBAI’s subdivision lot, this is
overshadowed by the fact that since the Complaint in Civil Case
No. 3812 pleads a case for consignation, the HLURB is without
jurisdiction to try it, as such case may only be tried by the regular
courts.
WHEREFORE, premises considered, the Petition is GRANTED.
The September 29, 2005 Decision and January 12, 2006 Resolution
of the Court of Appeals in CA-G.R. SP No. 84446 are ANNULLED
and SET ASIDE. The October 16, 2003 and March 19, 2004 Orders
of the Regional Trial Court of Puerto Princesa City, Branch 47, are
REINSTATED, and the case is REMANDED to the said court for
continuation of the proceedings.
SO ORDERED.
January 19, 2011. G.R. No. 165423.*
NILO PADRE, petitioner, vs. FRUCTOSA BADILLO, FEDILA
BADILLO, PRESENTACION CABALLES, EDWINA VICARIO (d)
represented by MARY JOY VICARIO-ORBETA and NELSON
BADILLO, respondents.
Remedial Law; Pleadings and Practice; Filing of Pleadings; If the pleading filed was
not done personally, the date of mailing, as stamped on the envelope or the registry receipt, is
considered as the date of filing; Under the Rules, should the last day of the period to file a
pleading fall on a Saturday, a Sunday, or a legal holiday, a litigant is allowed to file his or
her pleading on the next working day.—The petition for certiorari before the RTC was
timely filed. If the pleading filed was not done personally, the date of mailing, as stamped
on the
_______________
** Per Raffle dated January 10, 2011.

* FIRST DIVISION.
51
VOL. 640, JANUARY 19, 2011 5

1
Padre vs. Badillo
envelope or the registry receipt, is considered as the date of filing. By way of registered
mail, Nilo filed his petition for certiorari with the RTC on March 1, 2004, as indicated in the
date stamped on its envelope. From the time Nilo received on December 30, 2003 the MTC’s
denial of his motion for reconsideration, the last day for him to file his petition with the
RTC fell on February 28, 2004, a Saturday. Under the Rules, should the last day of the
period to file a pleading fall on a Saturday, a Sunday, or a legal holiday, a litigant is
allowed to file his or her pleading on the next working day, which in the case at bar, fell on
a Monday, i.e., March 1, 2004.
Same; Actions; Jurisdiction; What determines the nature of the action and which court
has jurisdiction over it are the allegations in the complaint and the character of the relief
sought.—“[W]hat determines the nature of the action and which court has jurisdiction over
it are the allegations in the complaint and the character of the relief sought.” In their
complaint in Civil Case No. 104, some of the allegations of the Badillo family, which
petitioner never opposed and are thus deemed admitted by him, states: x x x Under
paragraph 6 of their complaint, the Badillos alleged that judgment in Civil Case No. A-514
had become final and had been executed. Further, in paragraph 7, they alleged that in
1990, the defendants re-entered the property and despite repeated demands they refused to
vacate the same. Thus, the Badillos were not at all seeking a revival of the judgment. In
reality, they were asking the MTC to legally oust the occupants from their lots.
Same; Same; Same; Accion Publiciana; It is an ordinary civil proceeding to determine
the better right of possession of realty independently of title; It also refers to an ejectment suit
filed after the expiration of one year from the accrual of the cause of action or from the
unlawful withholding of possession of the realty.—The Badillo family would have been
correct in seeking judicial recourse from the MTC had the case been an action for
ejectment, i.e., one of forcible entry under Rule 70 of the Rules of Court wherein essential
facts constituting forcible entry have been averred and the suit filed within one year from
the time of unlawful deprivation or withholding of possession, as the MTC has exclusive
original jurisdiction over such suit. However, as the alleged dispossession occurred in 1990,
the one-year period to bring a case for forcible entry had expired since the Badillos filed
their suit only in December 1997. We thus construe that the remedy they availed of is the
plenary action of
52

2
Padre vs. Badillo
accion publiciana, which may be instituted within 10 years. “It is an ordinary civil
proceeding to determine the better right of possession of realty independently of title. It
also refers to an ejectment suit filed after the expiration of one year from the accrual of the
cause of action or from the unlawful withholding of possession of the realty.”
Same; Same; Same; Same; In civil cases involving realty or interest therein not within
Metro Manila, the Municipal Trial Court has exclusive original jurisdiction only if the
assessed value of the subject property or interest therein does not exceed Php20,000.00.—
Although the Badillo family correctly filed a case for accion publiciana, they pleaded their
case before the wrong court. In civil cases involving realty or interest therein not within
Metro Manila, the MTC has exclusive original jurisdiction only if the assessed value of the
subject property or interest therein does not exceed P20,000.00. As the assessed value of the
property subject matter of this case is P26,940.00, and since more than one year had
expired after the dispossession, jurisdiction properly belongs to the RTC. Hence, the MTC
has no judicial authority at all to try the case in the first place. “A decision of the court
without jurisdiction is null and void; hence, it could never logically become final and
executory. Such a judgment may be attacked directly or collaterally.”
PETITION for review on certiorari of the orders of the Regional

Trial Court of Allen, Northern Samar, Br. 23.
Pura Ferrer-Calleja for petitioner.
Rolando P. Dubongco for respondents.
DEL CASTILLO,J.:
“A void judgment is no judgment at all. It cannot be the source of
any right nor the creator of any obligation. All acts performed
pursuant to it and all claims emanating from it have no legal
effect.”1
_______________
1 Polystyrene Manufacturing Company, Inc. v. Privatization and Management Office, G.R. No. 171336,
October 4, 2007, 534 SCRA 640, 651.
53
VOL. 640, JANUARY 19, 2011 53
Padre vs. Badillo
This petition for review on certiorari assails the Orders dated
July 21 and September 20, 20042 issued by the Regional Trial
Court (RTC) of Allen, Northern Samar, Branch 23 in Special Civil
Action No. A-927, which affirmed the ruling of the Municipal Trial
Court (MTC) of San Isidro, Northern Samar that it has jurisdiction
to try Civil Case No. 104.
Factual Antecedents
On October 13, 1986, the RTC of Allen, Northern Samar, Branch
23, rendered judgment3 in Civil Case No. A-514 for Ownership and
Recovery of Possession with Damages in favor of therein plaintiffs
Fructosa Badillo, Fedila Badillo, Edwina Badillo, Presentacion
Badillo and Nelson Badillo and against therein defendants,
including Consesa Padre. The dispositive portion of the said
Decision reads:
“WHEREFORE, on preponderance of evidence, the Court hereby renders judgment in
favor of the plaintiffs and against the defendants, declaring and ordering as follows:
That the herein plaintiffs are the lawful owners of the five-sixth (5/6) portion of Lot No.
4080, Pls-54, registered in Original Certificate of Title No. 736, more particularly, the said
five-sixth portion is described, delineated and/or indicated in the Sketch Plan which is now
marked as Exhibit “B-1”; 1.
That the said five-sixth (5/6) portion which [is] herein adjudged as being owned by the
herein plaintiffs, include the portions of land presently being occupied by defendants x x x,
Concesa Padre, x x x; 2.
Ordering the defendants mentioned in No. 2 hereof to vacate x x x the lots respectively
occupied by them and restore to [the herein plaintiffs] the material possessions thereof; 3.
Condemning and ordering each of the same defendants herein above-named to pay
plaintiffs the amount of P100.00 per 4.
_______________
2 RTC Records, pp. 62 and 81-82, respectively; penned by Executive Judge Salvador L. Infante.
3 MTC Records, pp. 18-24.
54

Padre vs. Badillo
month, as monthly rental, starting from January 19, 1980, until the lots in question shall
have been finally restored to the plaintiffs; and
Condemning and ordering the herein defendants named above to jointly and severally
pay the plaintiffs the amount of P5,000.00 representing attorney’s fees and P2,000.00 as
litigation expenses, and to pay the costs of suit. 5.
SO ORDERED.”4
This Decision became final and executory on November 5,

1986.5On December 29, 1997, the Badillo family filed another
complaint against those who occupy their property which included
some of the defendants in Civil Case No. A-514.6 The case was filed
with the MTC of San Isidro, Northern Samar and was docketed as
Civil Case No. 104.7As Consesa Padre had already died in 1989,
her heir, Nilo Padre (Nilo), was impleaded as one of the
defendants. While some of the defendants filed their respective
answers, Nilo was one of those who were declared in default for
failure to file their answer to the complaint.8
Although denominated as one for “Ownership and Possession,”
the Badillo family alleged in their complaint in Civil Case No.
104 viz.:
That plaintiffs are the joint owners of Lot No. 4080. Pls-54, with a total area of 10,167
square meters, covered by OCT No. 736 in the name of Eutequio Badillo, deceased husband
of plaintiff “4.
_______________
4 Id., at p. 24.
5 Defendants received the copy of the Decision on October 21, 1986 and did not file any appeal within the
15-day period.
6 Defendants in Civil Case No. 104 were Leo Atiga, Nestor dela Cruz, Galileo Pilapil, Domingo Flor, Santos
Corollo, Devena Obeda, Leo Siago, Iñigo Armohila, Nilo Padre, Milagros Gelle, Egol Avila, Mag Cabahug,
Berong Albuera, Erning Sampayan and Berting Armohila.
8 Id., at p. 99.
55
VOL. 640, JANUARY 19, 2011 55

Padre vs. Badillo
Fructosa Badillo and father of the rest of the other plaintiffs, covered by Tax Declaration
No. 9160 and assessed at P26,940.00;
That plaintiffs in Civil Case No. A-514, entitled Fructosa Badillo versus Celso Castillo,
5. et al., were the prevailing parties in the aforesaid case as evidenced by the hereto
attached copy of the decision rendered by the Regional Trial Court in the above-entitled
case and marked as Annex “A” and made integral part of this complaint;
6. That after the judgment in the above-mentioned case became final, the
same was executed as evidenced by a copy of the writ of execution hereto
attached as Annex “B” and made integral part hereof;
7. That despite the service of the writ of execution and vacating the
properties x x x illegally occupied by the afore-mentioned defendants, [said
defendants] re-entered the property in 1990 after the execution and refused to
vacate the same [thereby] reasserting their claims of ownership x x x despite
repeated demands;
That all attempts towards a peaceful settlement of the matter outside of Court to avoid a
civil suit, such as referring the matter of the 8. Brgy. Captain and
the Brgy. Lupon of Brgy. Alegria, San Isidro, N. Samar were of no avail as the defendants
refused to heed lawful demands of plaintiffs to x x x vacate the premises[. I]nstead,
defendants claimed ownership of the property in question [and] refused to vacate the same
despite repeated demands [such] that having lost all peaceful remedies, plaintiffs were
constrained to file this suit. Certificate to file Action is hereby attached and marked as
Annex “C” and made integral part hereof;”9 (Emphasis supplied.)
Ruling of the Municipal Trial Court

The MTC rendered judgment10 on July 17, 2003. Interpreting the
suit of the Badillo family as an action to revive the dormant
judgment in Civil Case No. A-514, the court recognized the right of
the plaintiffs to finally have such judgment enforced. The MTC
disposed of the case as follows:
_______________
9 Id., at pp. 8-9.

10 Id., at pp. 443-449.
56
Padre vs. Badillo
“WHEREFORE, judgment is ordered reviving the previous judgment of the Regional
Trial Court there being, and still, preponderance of evidence in favor of plaintiffs, as
follows:
That the herein plaintiffs are the lawful owners of the five-sixth (5/6) portion of Lot No.
4080, Pls-54, registered in Original Certificate of Title No. 730, more particularly x x x
described, delineated and/or indicated in the Sketch Plan which is now marked as Exhibit
“B-1”; 1.
That the said five-sixth portion which is herein adjudged as being owne[d] by herein
plaintiffs, includes the portions of land presently being occupied by defendants Victor Eulin,
Consesa Padre, Celso Castillo, Leo Atiga, Santos Corollo, Iñego Armogela, Salustiano
Millano, Milagros Gile, Pusay Enting, Galeleo Pilapil, more particularly indicated in
Exhibit “B-1” and marked as Exhibits “B-3”, “B-4”, “B-5,” “B-6,” “B-7,” “B-8,” “B-9,” “B-10,”
“B-11,” “B-12,” and “B-13”, respectively; 2.
Ordering the defendants mentioned in No. 2, hereof and THOSE PRESENTLY NAMED
AS PARTY-DEFENDANTS IN THIS REVIVAL OF JUDGMENT AND THOSE ACTING IN
PRIVITY to vacate from the lots respectively occupied by them and restore [to] the herein
plaintiff x x x the material possession thereof; 3.
Condemning and ordering each of the same defendants named in the previous civil case
and those NAMED ANEW to jointly and severally pay the plaintiffs the amount of
P5,000.00, representing attorney’s fees, and P2,000.00 as litigation expenses; 4.
CONDEMNING ALL DEFENDANTS HEREIN TO PAY EXEMPLARY DAMAGES FOR
OBSTINATELY VIOLATING THE DECISION OF THE COURT JOINTLY AND
SEVERALLY X X X THE AMOUNT OF P5,000.00, and to pay the costs of the suit. 5.
SO ORDERED.”11
Nilo thereafter appeared and moved to reconsider12 the MTC

judgment. He argued that the MTC is without jurisdiction over the
case, opining that the action for revival of judg-
_______________
11 Id., at pp. 448-449. The Decision was rendered by Acting MTC Judge Jose A. Benesisto.
12 Id., at pp. 473-482.
57
VOL. 640, JANUARY 19, 2011 57
Padre vs. Badillo
ment is a real action and should be filed with the same court, i.e.,
the RTC, which rendered the decision sought to be revived. Or,
assuming arguendo that the MTC has jurisdiction over real
actions, it must be noted that the subject property is assessed at
P26,940.00, an amount beyond the P20,000.00 limit for the MTC to
have jurisdiction over real actions, in accordance with Republic Act
(RA) No. 7691.13 Nilo also contended that the action is dismissible
for a) lack of certificate of non-forum shopping in the complaint
and b) prescription, the complaint for revival of judgment having
been filed beyond the 10-year reglementary period14 from the time
the judgment sought to be revived became final and executory in
November 1986.
The MTC denied the motion for reconsideration.15 It held that the
case is an action for revival of judgment and not an action for
ownership and possession, which had already long been settled. To
the MTC, the former is a personal action
_______________
13 An Act Expanding the Jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts, Amending for that purpose Batas Pambansa Bilang 129 otherwise known
as the “Judiciary Reorganization Act of 1990.”
14 Civil Code, Article 1144 and Rules of Court, Rule 39, Section 6.
The following actions must be brought within ten years from the time the right of action accrues: Art.
1144.
Upon a written contract; (1)
Upon an obligation created by law; (2)
Upon a judgment. (3)
6. SEC.Execution by motion or by independent action.—A final and executory judgment or order
may be executed on motion within five (5) years from the date of its entry. After the lapse of such time,
and before it is barred by the statute of limitations, a judgment may be enforced by action. The revived
judgment may also be enforced by motion within five (5) years from the date of its entry and thereafter by
action before it is barred by the statute of limitations.
58
Padre vs. Badillo
under Section 2, Rule 4 of the Rules of Court which may be filed, at
the election of plaintiffs, either at the court of the place where they
reside or where the defendants reside. The court found excusable
the absence of the certification against forum shopping, justifying
that the action filed before it is merely a continuation of the
previous suit for ownership. Moreover, the counsel for the Badillo
family, a nonagenarian, may not yet have been familiar with the
rule when Civil Case No. 104 was filed. To it, this mistake should
not prejudice the Badillo family who deserve to possess and enjoy
their properties.
Ruling of the Regional Trial Court
By way of a special civil action for certiorari, Nilo elevated the
case to the RTC to question the MTC’s jurisdiction,16 reiterating the
same grounds he had raised before the MTC. The case was
docketed as Special Civil Action No. A-927.
On July 21, 2004, however, the RTC dismissed said petition17 on
the ground that it was filed late. Moreover, the RTC upheld the
MTC’s jurisdiction over the case, affirming the MTC’s ratiocination
that an action for enforcement of a dormant judgment is a personal
action, and hence may be filed either at the court of the place
where plaintiffs reside or where the defendants reside.
In his Motion for Reconsideration,18 Nilo contended that his
petition with the RTC was timely filed as shown by the registry
receipt dated March 1, 2004,19 stamped on the mailing envelope he
used in filing said petition. He argued that this date of mailing is
also the date of filing. He also contended
_______________
16 RTC Records, pp. 5-20.

17 Id., at p. 62.
18 Id., at pp. 67-74.
19 Id., at pp. 76-79. The copies of the petition for the opposing counsel, the Branch Clerk of Court of
the MTC, and the Office of the Solicitor General were mailed on the same day.
59
VOL. 640, JANUARY 19, 2011 59
Padre vs. Badillo
that the RTC’s Decision was bereft of any explanation as to why it
ruled that the case is a personal action. He further alleged that the
RTC failed to discuss the issues of prescription and non-compliance
with the rule against forum shopping.
In its Order dated September 20, 2004, the RTC denied the
motion for reconsideration. It said:
“Assuming that the date of posting was March 1, 2004, as shown in the registry receipts,
still the 60-day reglementary period had already lapsed with December 30, 2003 as the
reckoning period when petitioner received the December 9, 2003 Order of Hon. Judge Jose
A. Benesisto. With the month of February, 2004 having 29 days, it is now clear that the
petition was filed sixty one (61) days after; hence, there is no timeliness of the petition to
speak of.
Civil Case No. 104 is an ordinary action to enforce a dormant judgment filed by plaintiffs
against defendants. Being an action for the enforcement of dormant judgment for damages
is a personal one and should be brought in any province where the plaintiff or defendant
resides, at the option of the plaintiff. As regards prescription, the present rule now is, the
prescriptive period commences to run anew from the finality of the revived judgment. A
revived judgment is enforceable again by motion within five years and thereafter by
another action within ten years from the finality of the revived judgment. There is,
therefore, no prescription or beyond the statute of limitations to speak [sic] in the instant
case. Petitioner’s contention must therefore fail.
It is but proper and legal that the plaintiffs in Civil Case No. 514 of which they are the
prevailing parties to institute for the enforcement of a dormant judgment [which right] they
have failed to exercise x x x for more than a decade. Being an ordinary action to enforce a
dormant judgment, not even testimonial evidence is necessary to enforce such judgment
because the decision had long obtained its finality.
x x x x”20
_______________
20 Id., at p. 81.
60
Padre vs. Badillo
Hence, this petition.
Petitioner’s Arguments
Nilo finds the RTC’s adverse ruling as wanting in sufficient
explanation as to the factual and legal bases for upholding the
MTC. He also highlights the failure of the Badillo family to attach
to their complaint a certificate of non-forum shopping. Petitioner
also argues that the date of mailing of his petition with the RTC is
the date of his filing. He stressed that the filing of his petition on
March 1, 2004 was well within the prescriptive period. As the 60th
day from December 30, 2003 fell on a Saturday, he maintains that
the Rules of Court allows him to file his petition on the next
working day, which is March 1, 2004, a Monday.
As have already been raised in the courts below, Nilo mentions
the following grounds for the dismissal of the action against him
before the MTC:
The MTC lacks jurisdiction. Nilo reiterates that the prime
objective of the Badillo family in Civil Case No. 104 is to recover
real property, which makes it a real action. Citing the case of
a) Aldeguer v. Gemelo,21 he contends that this suit must be brought
before the RTC of Allen, Northern Samar. Besides, the assessed
value of the land in controversy, i.e., P26,940.00, divests the MTC
of jurisdiction.
Prescription. Nilo claims that the Badillo family’s suit had
already lapsed as they allowed 11 years to pass without resorting
to any legal remedy before filing the action for revival of judgment.
Although the Badillo family moved for the issuance of a writ of
execution in Civil Case No. A-514, the same did not interrupt the
running of the period to have the judgment enforced by motion or
by action. b)
_______________
21 68 Phil. 421 (1939).
61
VOL. 640, JANUARY 19, 2011 61
Padre vs. Badillo
Respondents’ Arguments
While impliedly acknowledging that Nilo seasonably filed his
petition for certiorari with the RTC, the Badillo family note that he
should have filed an appeal before the RTC. They claim that they
properly filed their case, a personal action, with the MTC of San
Isidro, Northern Samar as they are allowed under Section 2, Rule 4
of the Rules of Court to elect the venue as to where to file their
case.
Granting that their action is considered a revival of judgment,
the Badillos claim that they filed their suit within the 10-year
period. They contend that in filing Civil Case No. 104 in December
1997, the prescriptive period should not be counted from the
finality of judgment in Civil Case No. A-514, but should be
reckoned from August 22, 1989, when the RTC issued an Order
that considered as abandoned the motion to declare the defendants
in default in the contempt proceedings.
Issue
The question that should be settled is whether the RTC correctly

affirmed the MTC ruling that it has jurisdiction over Civil Case
No. 104.
Our Ruling
Indeed, “[t]he existence and availability of the right of appeal

proscribes a resort to certiorari.”22 The court a quo could have
instead dismissed Nilo’s petition on the ground that this question
should have been raised by way of an appeal.23 This rule is subject
to exceptions, such as “when the writs issued are null and void or
when the questioned order amounts to an
_______________
22 Balindong v. Dacalos, 484 Phil. 574, 579; 441 SCRA 607, 612 (2004).
23 Rules of Court, Rule 40.
62
Padre vs. Badillo
oppressive exercise of judicial authority.”24 As will be later on
discussed, the RTC, although it ultimately erred in its judgment,
was nevertheless correct in entertaining the special civil action
for certiorari. The exceptions we mentioned apply in the case at
bar, as it turns out that petitioner’s jurisdictional objection has
compelling basis.
Timeliness of the petition for certiorari
The petition for certiorari before the RTC was timely filed. If the
pleading filed was not done personally, the date of mailing, as
stamped on the envelope or the registry receipt, is considered as
the date of filing.25 By way of registered mail, Nilo filed his petition
for certiorari with the RTC on March 1, 2004, as indicated in the
date stamped on its envelope. From the time Nilo received on
December 30, 2003 the MTC’s denial of his motion for
reconsideration, the last day for him to file his petition with the
RTC fell on February 28, 2004, a Saturday. Under the Rules,
should the last day of the period to file a pleading fall on a
Saturday, a Sunday, or a legal holiday, a litigant is allowed to file
his or her pleading on the next working day,26 which in the case at
bar, fell on a Monday, i.e., March 1, 2004.
_______________
24 Iloilo La Filipina Uygongco Corporation v. Court of Appeals, G.R. No. 170244, November 28, 2007,
539 SCRA 178, 189.
25 Rules of Court, Rule 13, Section 3.Manner of filing.—The filing of pleadings, appearances,
motions, notices, orders, judgments and all other papers shall be made by presenting the original copies
thereof, plainly indicated as such, personally to the clerk of court or by sending them by registered mail.
In the first case, the clerk of court shall endorse on the pleading the date and hour of filing. In the second
case, the date of the mailing of motions, pleadings, or any other papers or payments or deposits, as shown
by the post office stamp on the envelope or the registry receipt, shall be considered as the date of their
filing, payment, or deposit in court. The envelope shall be attached to the record of the case.
26 Rules of Court, Rule 22, Section 1.How to compute time.—In computing any period of time
prescribed or allowed by these
63
VOL. 640, JANUARY 19, 2011 63
Padre vs. Badillo
Jurisdiction over Civil Case No. 104
We shall now look into the core argument of Nilo anent the
MTC’s lack of jurisdiction over the case and the alleged
prescription of the action.
“[W]hat determines the nature of the action and which court has
jurisdiction over it are the allegations in the complaint and the
character of the relief sought.”27 In their complaint in Civil Case
No. 104, some of the allegations of the Badillo family, which
petitioner never opposed and are thus deemed admitted by him,
states:
That plaintiffs are the joint owners of Lot No. 4080. Pls-54, with a total area of 10,167
square meters, covered by OCT No. 736 in the name of Eutequio Badillo, deceased husband
of plaintiff Fructosa Badillo and father of the rest of the other plaintiffs, covered by Tax
Declaration No. 9160 and assessed at P26,940.00; “4.
That plaintiffs in Civil Case No. A-514, entitled Fructosa Badillo versus Celso Castillo,
5. et al., were the prevailing parties in the aforesaid case as evidenced by the hereto
attached copy of the decision rendered by the Regional Trial Court in the above-entitled
case and marked as Annex “A” and made integral part of this complaint;
6. That after the judgment in the above-mentioned case became final, the
same was executed as evidenced by a copy of the writ of execution hereto
attached as Annex “B” and made integral part hereof;
_______________
Rules, or by order of the court, or by any applicable statute, the day of the act or event from which the
designated period of time begins to run is to be excluded and the date of performance included. If the last day of
the period, as thus computed, falls on a Saturday, a Sunday, or a legal holiday in the place where the court sits,
the time shall not run until the next working day.
27 Munsalud v. National Housing Authority, G.R. No. 167181, December 23, 2008, 575 SCRA 144,
citing Villena v. Payoyo, G.R. No. 163021, April 27, 2007, 522 SCRA 592, 597.
64

Padre vs. Badillo
7. That despite the service of the writ of execution and vacating the
properties x x x illegally occupied by the afore-mentioned defendants, the latter
re-entered the property in 1990 after the execution and refused to vacate the
same [thereby] reasserting their claims of ownership over [the disputed
properties] and refused to vacate the same despite repeated demands;
That all attempts towards a peaceful settlement of the matter outside of Court to avoid a
civil suit, such as referring the matter of the 8. Brgy. Captain and the Brgy. Lupon
of Brgy. Alegria, San Isidro, N. Samar were of no avail as the defendants refused to heed
lawful demands of plaintiffs to x x x vacate the premises[. I]nstead, defendants claimed
ownership of the property in question refused to vacate the same despite repeated demands
[such] that having lost all peaceful remedies, plaintiffs were constrained to file this suit.
Certificate to file Action is hereby attached and marked as Annex “C” and made integral
part hereof;”28 (Emphasis supplied.)
Under paragraph 6 of their complaint, the Badillos alleged that

judgment in Civil Case No. A-514 had become final and had been
executed. Further, in paragraph 7, they alleged that in 1990, the
defendants re-entered the property and despite repeated demands
they refused to vacate the same. Thus, the Badillos were not at all
seeking a revival of the judgment. In reality, they were asking the
MTC to legally oust the occupants from their lots.
The Badillo family would have been correct in seeking judicial
recourse from the MTC had the case been an action for
ejectment, i.e., one of forcible entry under Rule 70 of the Rules of
Court wherein essential facts constituting forcible entry29 have
been averred and the suit filed within one year from the time of
unlawful deprivation or withholding of possession, as
_______________
28 MTC Records, p. 4.
29 An averment of dispossession by means of force, intimidation, threat, strategy or stealth is
necessary in the complaint for forcible entry.
65
VOL. 640, JANUARY 19, 2011 65
Padre vs. Badillo
the MTC has exclusive original jurisdiction over such
suit.30 However, as the alleged dispossession occurred in 1990, the
one-year period to bring a case for forcible entry had expired since
the Badillos filed their suit only in December 1997. We thus
construe that the remedy they availed of is the plenary action
of accion publiciana, which may be instituted within 10 years.31 “It
is an ordinary civil proceeding to determine the better right of
possession of realty independently of title. It also refers to an
ejectment suit filed after the expiration of one year from the
accrual of the cause of action or from the unlawful withholding of
possession of the realty.”32
Whether the case filed by the Badillo family is a real or a
personal action is irrelevant. Determining whether an action is
real or personal is for the purpose only of determining venue. In
the case at bar, the question raised concerns jurisdiction, not
venue.
Although the Badillo family correctly filed a case for accion
publiciana, they pleaded their case before the wrong court. In civil
cases involving realty or interest therein not within
_______________
30 Batas Pambansa Bilang 129, Section 33 (2). Jurisdiction of Metropolitan Trial Courts, Municipal
Trial Courts and Municipal Circuit Trial Courts in Civil Cases—x x x
Exclusive original jurisdiction over cases of forcible entry and unlawful detainer: (2) Provided, That
when, in such cases, the defendant raises the question of ownership in his pleadings and the question of
possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be
resolved only to determine the issue of possession; x x x.
31 Civil Code, Article 555. A possessor may lose his possession:
xxxx
By the possession of another, subject to the provisions of Article 537, if the new possession has lasted
longer than one year. But the real right of possession is not lost till after the lapse of ten years. (4)
32 Encarnacion v. Amigo, G.R. No. 169793, September 15, 2006, 502 SCRA 172, 179, citing Lopez v.
David, Jr., G.R. No. 152145, March 30, 2004, 426 SCRA 535, 543.
66
Padre vs. Badillo
Metro Manila, the MTC has exclusive original jurisdiction only if
the assessed value of the subject property or interest therein does
not exceed P20,000.00.33 As the assessed value of the property
subject matter of this case is P26,940.00, and since more than one
year had expired after the dispossession, jurisdiction properly
belongs to the RTC.34Hence, the MTC has no judicial authority at
all to try the case in the first place. “A decision of the court without
jurisdiction is null and void; hence, it could never logically become
final and executory. Such a judgment may be attacked directly or
collaterally.”35
Based on the foregoing discussion, it is not anymore necessary to
discuss the issue raised concerning the failure to include a
certification of non-forum shopping.
Although we are compelled to dismiss respondents’ action before
the MTC, they are nonetheless not precluded from filing the
necessary judicial remedy with the proper court.
_______________
January 15, 2010. G.R. No. 157095.*

MA. LUISA G. DAZON, petitioner, vs. KENNETH Y. YAP and
PEOPLE OF THE PHILIPPINES, respondents.
Remedial Law; Jurisdictions; Jurisdiction is conferred by law and determined by the
material averments in the compliant as well as the character of the relief sought.—
Jurisdiction is conferred by law and determined by the material averments in the complaint
as well as the character of the relief sought. The scope and limitation of the jurisdiction of
the HLURB are well-defined. Its precusor, the National Housing Authority (NHA), was
vested under PD 957 with exclusive jurisdiction to regulate the real estate trade and
business, specifically the registration of subdivision or condominium projects and dealers,
brokers and salesmen of subdivision lots or condominium units, issuance and suspension of
license to sell; and revocation of registration certificate and license to sell. Its jurisdiction
was later expanded under PD 1344 (1973) to include adjudication of certain cases.
Same; Same; It is a settled rule of statutory construction that the express mention of one
thing in the law means the exclusion of others not expressly mentioned.—It is a settled rule
of statutory construction that the express mention of one thing in the law means the
exclusion of others not expressly mentioned. This rule is expressed in the familiar
maxim expressio unius est exclusio alteruis. Where a statute, by its terms, is expressly
limited to certain matters, it may not, by interpretation or construction, be extended to
others. The rule proceeds from the premise that the legislature
_______________
* SECOND DIVISION.
80
would not have made specified enumerations in a statute had the intention been, not
to restrict its meaning and to confine its terms to statute had the intention been not to
restrict its meaning and to confine its terms to those expressly mentioned. Noticeably, cases
that are criminal in nature are not mentioned in the enumeration quoted above.
Same; Same; Housing and Land Use Regulatory Board (HLURB) has no jurisdiction
over criminal actions arising from violations of PD 957.—Not having been specifically
conferred with power to hear and decide cases which are criminal in nature, as well as to
impose penalties therefor, we find that the HLURB has no jurisdiction over criminal
actions arising from violations of PD 957.
PETITION for review on certiorari of the orders of the Regional

Trial Court of Lapu-Lapu City, Br. 54.
Eduardo M. Pangan for petitioner.
Ploteña, Hernandez Law Offices for respondent.
DEL CASTILLO,J.:
The primordial function of the Housing and Land Use

Regulatory Board (HLURB) is the regulation of the real estate
trade and business. Though the agency’s jurisdiction has been
expanded by law, it has not grown to the extent of encompassing
the conviction and punishment of criminals.
The present Petition for Review on Certiorari assails the Orders
of the Regional Trial Court (RTC) of Lapu-Lapu City, Branch 54
dated October 2, 2002 and January 13, 2003, which granted the
Motion to Withdraw Information filed by the public prosecutor and
denied the motion for reconsideration filed by petitioner,
respectively.
Factual Antecedents
Respondent Kenneth Y. Yap was the president of Primetown

Property Group, Inc., (Primetown) the developer of Kie-
81
ner Hills Mactan Condominium, a low-rise condominium project.
In November 1996, petitioner Ma. Luisa G. Dazon entered into a
contract1 with Primetown for the purchase of Unit No. C-108 of the
said condominium project. Petitioner made a downpayment and
several installment payments, totaling P1,114,274.30.2 Primetown,
however, failed to finish the condominium project. Thus, on March
22, 1999, petitioner demanded for the refund of her payments from
Primetown, pursuant to Section 233 of Presidential Decree (PD) No.
957 (1976), otherwise known as “The Subdivision and
Condominium Buyers’ Protective Decree.” Primetown failed to
refund petitioner’s payments.
On October 26, 2000,4 petitioner filed a criminal complaint with
the Office of the City Prosecutor of Lapu-Lapu City against
respondent as president of Primetown for violation of Section 23 in
relation to Section 395 of PD 957. Subsequently,
_______________
1 Records, pp. 28-35.

2 Id., at p. 36.
3 23. Sec.Non-Forfeiture of Payments.—No installment payment made by a buyer in a subdivision or
condominium project for the lot or unit he contracted to buy shall be forfeited in favor of the owner or
developer when the buyer, after due notice to the owner or developer, desists from further payment due to
the failure of the owner or developer to develop the subdivision or condominium project according to the
approved plans and within the time limit for complying with the same. Such buyer may, at his option, be
reimbursed the total amount paid including amortization interests but excluding, delinquency interests,
with interest thereon at the legal rate.
4 Records, pp. 5-9.
5 39. Sec.Penalties.—Any person who shall violate any of the provisions of this Decree and/or any
rule or regulation that may be issued pursuant to this Decree shall, upon conviction, be punished by a fine
of not more than twenty thousand (P20,000.00) pesos and/or imprisonment of not more than ten
years: Provided, that in the case of corporations, partnerships, cooperatives, or associations, the President,
Manager or Administrator or the person who has charge
82
after a finding of probable cause, an Information6 was filed with
the RTC of Lapu-Lapu City docketed as Criminal Case No. 015331-
L.
Meanwhile, respondent, in connection with the resolution
finding probable cause filed a Petition for Review7 with the
Department of Justice (DOJ). On June 14, 2002, the DOJ rendered
a Resolution8 ordering the trial prosecutor to cause the withdrawal
of the Information. Hence, the prosecutor filed a Motion to
Withdraw Information9 with the RTC.
The RTC disposed of the matter as follows:
“Wherefore, in view of the foregoing, the Motion to Withdraw Information filed by [the]
public prosecutor is hereby granted. Accordingly, the information filed against the herein
accused is ordered withdrawn and to be transmitted back to the City Prosecutor’s Office of
Lapu-Lapu City.
Furnish copies of this order to Prosecutor Rubi, Attys. Valdez and Pangan.
SO ORDERED.”10
Petitioner’s motion for reconsideration was denied.11
Issue
Hence, the present Petition for Review on Certiorari raising the

following issue: “Whether or not a regional trial court
_______________
of the administration of the business shall be criminally responsible for any violation of this Decree and/or
the rules and regulations promulgated pursuant thereto.
6 Records, pp. 1-3.
7 Id., at pp. 58-65.
8 Id., at pp. 273-276.
9 Id., at pp. 277-278.
10 Id., at pp. 326-327; penned by Judge Rumoldo R. Fernandez.
11 Id., at p. 369.
83
has jurisdiction over a criminal action arising from violation of PD
957.”12
Petitioner’s Arguments
Petitioner contends that jurisdiction is conferred by law and that

there is no law expressly vesting on the HLURB exclusive
jurisdiction over criminal actions arising from violations of PD 957.
Respondent, on the other hand, contends that there is no error of

law involved in this case and that petitioner failed to give due
regard to the hierarchy of courts by filing the present petition
directly with the Supreme Court instead of with the Court of
Appeals. He further argues that the real issue is not of jurisdiction
but the existence of probable cause. The Secretary of Justice,
according to respondent, found no probable cause to warrant the
filing of the Information, hence its directive to cause the
withdrawal of the Information.
Our Ruling
The petition has merit.
The DOJ Resolution dated June 14, 2002

which ordered the withdrawal of the
information was based, on the finding
that the HLURB, and not the regular
court, has jurisdiction over the case.
Both the respondent13 and the OSG14 agree with the petitioner
that the regular courts and not the HLURB have juris-
_______________
12 Rollo, p. 187.
13 Id., at p. 168.
14 Id., at p. 278.
84
diction over the criminal aspect of PD 957. The parties, however,
disagree on the basis of the directive of the DOJ for the withdrawal
of the Information. Was it, as argued by petitioner, lack of
jurisdiction of the RTC or was it, as argued by respondent, lack of
probable cause? We perused the DOJ Resolution dated June 14,
2002 and we find that the basis of the resolution was, not that
there was lack of probable cause but, the finding that it is the
HLURB that has jurisdiction over the case. Pertinent portions of
the said DOJ Resolution provide:
“The petition is impressed with merit.
A perusal of the allegations in the complaint-affidavit would show complainant’s
grievance against respondent was the failure of the latter’s firm to refund the payments she
made for one of the units in the aborted Mactan condominium project in the total amount of
P1,114,274.30.
As early as in the case of Solid Homes, Inc. vs. Payawal, 177 SCRA 72, the Supreme
Court had ruled that the Housing and Land Use Regulatory Board (HLURB) has exclusive
jurisdiction over cases involving real estate business and practices under PD 957. This
ruling is reiterated in several subsequent cases, to name a few of them, Union Bank of the
Philippines-versus-HLURB, G.R. No. 953364, June 29, 1992; C.T. Torres Enterprises vs.
Hilionada, 191 SCRA 286; Villaflor vs. Court of Appeals, 280 SCRA 297; Marina Properties
Corp. vs. Court of Appeals, 294 SCRA 273; and Raet vs. Court of Appeals, 295 SCRA 677. Of
significant relevance is the following pronouncement of the Supreme Court in Raet vs.
Court of Appeals (supra), as follows:
x x x The contention has merit. The decision in the ejectment suit is conclusive
only on the question of possession of the subject premises. It does not settle the
principal question involved in the present case, namely, whether there was
perfected contract of sale between petitioners and private respondent PVDHC
involving the units in question. Under 8(100) of E.O. No. 648 dated February 7,
1981, as amended by E.O. No. 90 dated December 17, 1986 this question is for the
HLURB to decide. The said provision of law gives that agency the power to—
85
Hear and decide cases of unsound real estate business practices; claims involving
refund filed against project owners, developers, dealers, brokers, or salesmen; and
cases of specific performance.
This jurisdiction of the HLURB is exclusive. It has been held to extend to the
determination of the question whether there is a perfected contract of sale between
condominium buyers and [the] developer x x x.
In fine, the Rule of Law dictates that we should yield to this judicial declaration upholding
the jurisdiction of the HLURB over cases of this nature.”
Hence, there is a need for the Court to make a definite ruling on

a question of law—the matter of jurisdiction over the criminal
aspect of PD 957.
Jurisdiction over criminal actions

arising from violations of PD 957 is
vested in the regular courts.
Jurisdiction is conferred by law and determined by the material

averments in the complaint as well as the character of the relief
sought.15 The scope and limitation of the jurisdiction of the HLURB
are well-defined.16 Its precusor, the National Housing Authority
(NHA),17 was vested under PD 957 with
_______________
15 See Saura v. Saura, Jr., 372 Phil. 337, 346; 313 SCRA 465, 472 (1999); Heirs of Florencio Adolfo
v. Cabral, G.R. No. 164934, August 14, 2007, 530 SCRA 111; Department of Agrarian Reform
v. Cuenca, 482 Phil. 208, 216; 439 SCRA 15, 22 (2004); Alemar’s (Sibal & Sons), Inc. v. Court of
Appeals, 403 Phil. 236, 242; 350 SCRA 333, 339 (2001).
16 See Delos Santos v. Sarmiento, G.R. No. 154877, March 27, 2007, 519 SCRA 62.
17 By virtue of Executive Order No. 648, the Human Settlements Regulatory Commission (HSRC) was
created to regulate zoning and land use and development and to assume the regulatory and adjudicatory
functions of the NHA. HSRC was later renamed
86
exclusive jurisdiction to regulate the real estate trade and
business,18 specifically the registration of subdivision or
condominium projects and dealers, brokers and salesmen of
subdivision lots or condominium units, issuance and suspension of
license to sell; and revocation of registration certificate and license
to sell. Its jurisdiction was later expanded under PD 1344 (1973) to
include adjudication of certain cases, to wit:
In the exercise of its functions 1. “Sec. to regulate the real estate trade and business
and in addition to its powers provided for in Presidential Decree No. 957, the National
Housing. Authority shall have the exclusive jurisdiction to hear and decide cases of the
following nature:
a)Unsound real estate business practices;
b)Claims involving refund and any other claims filed by subdivision lot or condominium
unit buyer against the project owner, developer, dealer, broker or salesman; and
c)Cases involving specific performance of contractual and statutory obligations filed by
buyers of subdivision lot or condominium.unit against the owner, developer, dealer, broker
or salesman.” (Italics supplied)
It is a settled rule of statutory construction that the express

mention of one thing in the law means the exclusion of others not
expressly mentioned. This rule is expressed in the familiar
maxim expressio unius est exclusio alteruis.19 Where a statute, by
its terms, is expressly limited to certain matters, it may not, by
interpretation or construction, be extended to others. The rule
proceeds from the premise that the legisla-
_______________
HLURB under Executive Order No. 90. See Delos Santos v. Sarmiento, supra.
18 3. Sec.National Housing Authority.—The National Housing Authority shall have exclusive
jurisdiction to regulate the real estate trade and business in accordance with the provisions of this Decree.
(Italics supplied)
19 See Delfino v. St. James Hospital, Inc., G.R. No. 166735, September 5, 2006, 501 SCRA 97, 115.
87
ture would not have made specified enumerations in a statute had
the intention been, not to restrict its meaning and to confine its
terms to statute had the intention been not to restrict its meaning
and to confine its terms to those expressly mentioned.20 Noticeably,
cases that are criminal in nature are not mentioned in the
enumeration quoted above. The primordial function of the HLURB,
after all, is the regulation of the real estate trade and business and
not the conviction and punishment of criminals. “It may be
conceded that the legislature may confer on administrative boards
or bodies quasi-judicial powers involving the exercise of judgment
and discretion, as incident to the performance of administrative
functions. But in so doing; the legislature must state its intention
in express terms that, would leave no doubt, as even such quasi-
judicial prerogatives must be limited, if they are to be valid, only to
those incidental to or in connection with the performance of
administrative duties, which do not amount to conferment of
jurisdiction over a matter exclusively vested in the courts.”21
Administrative agencies being tribunals of limited jurisdiction
can only wield such powers as are specifically granted to them by
their enabling statutes.22 PD 957 makes the following specific grant
of powers to the NHA (now HLURB) for the imposition
of administrative fines, and it also mentions penalties for criminal
cases, to wit:
38. “Sec.Administrative Fines.—The Authority may prescribe and impose fines not
exceeding ten thousand pesos for violations of the provisions of this Decree or any rate or
regulation thereunder. Fines shall be payable to the Authority and enforceable through
_______________
20 See PSDSA v. De Jesus, G.R. No. 157286, June l6, 2006, 491 SCRA 55.
21 Miller v. Mardo and Gonzales, 112 Phil. 792, 802; 2 SCRA 898, 906 (1961).
22 See Prudential Guarantee and Assurance, Inc. v. Equinox Land Corporation, 533 SCRA 257; see
also Miller v. Mardo and Gonzales, supra.
88
writs of execution in accordance with the provisions of the Rules of Court. (Italics supplied)
39. Sec.Penalties.—Any person who shall violate any of the provisions of this Decree
and/or any rule or regulation that may be issued pursuant to this Decree shall, upon
conviction, be punished by a fine of not more than twenty thousand (P20,000.00) pesos
and/or imprisonment of not more than ten years: Provided, That in the case of corporations,
partnership, cooperatives, or associations, the President, Manager or Administrator or the
person who has charge of the administration of the business shall be criminally responsible
for any violation of this Decree and/or the rules and regulations promulgated pursuant
thereto.”
Having limited, under Section 38 of PD 957, the grant of power
to the former NHA, now HLURB, over the imposition of fines to
those which do not exceed ten thousand pesos, it is clear that the
power in relation to criminal liability mentioned in the
immediately succeeding provision, to impose, upon conviction, fines
above ten thousand pesos and/or imprisonment, was not conferred
on it. Section 39, unlike Section 38, conspicuously does not state
that it is the NHA that may impose the punishment specified
therein.
Not having been specifically conferred with power to hear and
decide cases which are criminal in nature, as well as to impose
penalties therefor, we find that the HLURB has no jurisdiction
over criminal actions arising from violations of PD 957.
On the other hand, BP Blg. 129 states:
20. “Sec.Jurisdiction in Criminal Cases.—Regional Trial Courts shall exercise
exclusive original jurisdiction in all criminal cases not within the exclusive jurisdiction of
any court, tribunal or body, except those now falling under the exclusive and concurrent
jurisdiction of the Sandiganbayan which shall hereafter be exclusively taken cognizance of
by the latter.”
Based on the above-quoted provision, it is the RTC that has

jurisdiction over criminal cases arising from violations of PD 957.
89
In the present case, the affidavit-complaint23 alleges the violation
of Section 23 of PD 957 and asks for the institution of a criminal
action against respondent Yap, as President of Primetown. The
Office of the City Prosecutor found probable cause for the filing of
an Information for the subject offense. The DOJ made no reversal
of such finding of probable cause. Instead, it directed the
withdrawal of the information on the erroneous premise that it is
the HLURB which has jurisdiction over the case. However; as
above-discussed, and contrary to the resolution of the Secretary of
Justice, it is not the HLURB but the RTC that has jurisdiction to
hear the said criminal action.
WHEREFORE, the petition is GRANTED. The assailed October
2, 2002 and January 13, 2003 Orders of the Regional Trial Court of
Lapu-Lapu City, Branch 54, are REVERSED and SET ASIDE. The
said Court is DIRECTED to proceed with the arraignment of the
respondent and to hear the case with dispatch.
SO ORDERED.
Carpio (Chairperso
February 5, 2010. G.R. No. 169706.*
SPOUSES WILLIAM GENATO and REBECCA GENATO, petitioners, vs. RITA VIOLA,
respondent.
Remedial Law; Pleadings and Practice; It is not the caption of the pleading but the allegations
therein that are controlling; Inclusion of the names of all the parties in the title of a complaint is a formal
requirement under Section 3, Rule 7 of the Rules of Court.—It is not the caption of the pleading but the
allegations therein that are controlling. The inclusion of the names of all the parties in the title of a
complaint is a formal requirement under Section 3, Rule 7 of the Rules of Court. However, the rules of
pleadings require courts to pierce the form and go into the substance. The non-inclusion of one or some of
the names of all the complainants in the title of a complaint, is not fatal to the case, provided there is a
statement in the body of the complaint indicating that such complainant/s was/were made party to such
action. This is specially true before the HLURB where the proceedings are summary in nature without
regard to legal technicalities obtaining in the courts of law and where the pertinent concern is to promote
public interest and to assist the parties in obtaining just, speedy and inexpensive determination of every
action, application or other proceedings.
Same; Doctrine of Estoppel; Where a party, by his or her deed or conduct has induced another to
act in a particular manner, estoppel effectively bars the former from adopting an inconsistent position,
attitude or course of conduct that causes loss or injury to the latter.—Where a party, by his or her deed or
conduct, has induced another to act in a particular manner, estoppel effectively bars the former from
adopting an inconsistent position, attitude or course of conduct that causes loss or injury to the latter. The
doctrine of estoppel is based upon the grounds of public policy, fair dealing, good faith and justice, and its
purpose is to forbid one to speak against his own act, representations, or commitments to the injury of one
to whom they were directed and who reasonably relied thereon. After petitioners had reasonably relied on
the representations of Viola that she was a complainant and entered into the proceedings before the
HLURB,
_______________
* SECOND DIVISION.
678she cannot now be permitted to impugn her representations to the injury of the petitioners.
Same; Judgments; Finality of Judgments; A decision that has acquired finality becomes immutable
and unalterable and may no longer be modified in any respect even if the modification is meant to correct
erroneous conclusions of fact or law and whether it was made by the court that rendered it or by highest
court of the land.—The April 27, 1999 HLURB Resolution, reinstating the December 18, 1996 Decision,
has long been final and executory. Nothing is more settled in the law than that a decision that has acquired
finality becomes immutable and unalterable and may no longer be modified in any respect even if the
modification is meant to correct erroneous conclusions of fact or law and whether it was made by the
court that rendered it or by the highest court of the land. The only recognized exceptions to the general
rule are the correction of clerical errors, the so-called nunc pro tunc entries which cause no prejudice to
any party, void judgments, and whenever circumstances transpire after the finality of the decision
rendering its execution unjust and inequitable.
PETITION for review on certiorari of a decision of the Court of Appeals.

Evelina R. Tamayo-Volante for petitioner.
Fajardo Law Offices for respondent.
DEL CASTILLO,J.:
When there is a conflict between the title of the case and the allegations in the complaint, the
latter prevail in determining the parties to the action. Jurisprudence directs us to look beyond the
form and into the substance so as to render substantial justice to the parties and determine
speedily and inexpensively the actual merits of the controversy with least regard to
technicalities.679
In the present Petition for Review, petitioners assail the September 9, 2005 Decision1 of the
Court of Appeals (CA) in CA-G.R. SP No. 89466 which affirmed the Decision of the Office of
the President. The Office of the President affirmed the Decision of the Housing and Land Use
Regulatory Board (HLURB), First Division which granted the motion to quash the writ of
execution issued in HLURB Case No. REM-102491-4959 (REM-A-950426-0059).
Factual Antecedents
In October 1991, a complaint titled “VILLA REBECCA HOMEOWNERS ASSOCIATION,
INC. versus MR. WILLIAM GENATO and spouse REBECCA GENATO” was filed with the
HLURB. The said complaint was verified by 34 individuals, including the respondent herein,
who referred to themselves as the “Complainants” who “caused the preparation of the foregoing
Complaint”.2 The complaint stated that on various dates, complainants executed Contracts to Sell
and/or Lease Purchase Agreements with the Sps. Genato pertaining to housing units in Villa
Rebecca Homes Subdivision. Sometime thereafter the HLURB issued a cease and desist order
(CDO) enjoining the collection of amortization payments. This CDO was subsequently lifted.
Thereafter, complainants went to the Sps. Genato with the intention of resuming their
amortization payments. The latter however refused to accept their payments and instead
demanded for a lump sum payment of all the accrued amortizations which fell due during the
effectivity of the CDO.
From the disorganized, bordering on incomprehensible, complaint, it can be gleaned that the
following reliefs are prayed for: 1) That Sps. Genato accept the complainants’
_______________
1 CA Rollo, pp. 141-152; penned by Associate Justice Remedios A. Salazar-Fernando and concurred in by Associate
Justices Rosmari D. Carandang and Estela M. Perlas-Bernabe.
2 Rollo, pp. 47-53.
680monthly amortization payments corresponding to the period of effectivity of the

(subsequently lifted) CDO, without any penalty; 2) That the computation of interest on
delinquent payments be at 3% per month and not compounded; 3) That Sps. Genato be
responsible for correcting the deficiencies in the construction and replacement of sub-standard
materials to conform with the plans and specifications; 4) That Sps. Genato be held
answerable/liable to make good their undertaking to provide individual deep wells for the
homeowners; 5) That Sps. Genato be responsible for maintaining the street lights and payment of
the corresponding electric bills; 6) That Sps. Genato maintain the contract price of the units for
sale and not increase the prices; and 7) That Sps. Genato be made accountable for the
unregistered dwelling units.
On March 8, 1995, the Housing Arbiter rendered a Decision, the dispositive portion of which
states:
“WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered ordering
complainants to resume payment of their monthly amortization from date hereof pursuant to the
agreement. Likewise, it is hereby ordered that respondents correct the deficiencies in the construction of
the complaining occupants’ units so as to conform to that which is specified in the plans and specification
of the buildings, as well as observe proper drainage requirements pursuant to law. Likewise, respondents
are hereby directed to immediately put up commercial wells and/or water pumps or facilities in the Villa
Rebecca Subdivision and to reimburse complainants and unit occupants of their total expenditures
incurred for their water supply.”3
On appeal to the HLURB Board of Commissioners, the Decision was modified, inter alia, by
the additional directive for the complainants to pay 3% interest per month for the unpaid
amortizations due from June 29, 1991. The dispositive portion of the Decision of the HLURB
Board of Commissioners states:
_______________
3 Id., at p. 56.
681
“WHEREFORE, premises considered, the decision of the Arbiter is hereby MODIFIED to
read as follows:
Ordering complainants to pay respondent the remaining balance of the purchase price.
Complainant must pay 3% interest per month for unpaid amortizations due from June 29, 1991.
Thereafter complainant must pay its amortization in accordance with the original term of the
contract. These must be complied with upon finality of this decision. 1.
Ordering the respondent to: 2.
Accept the amortization payment; a.
Provide drainage outfall; b.
Provide the project with water facilities; and c.
Reimburse complainant the following: d.
d.1 Electric Bills in the amount of P3,146.66
d.2 Cost of construction of water supply to be
determined by an appraiser mutually acceptable
to the parties.
Number 2.d to 2.e [sic] must be complied with within thirty (30) days from finality of this
decision.
SO ORDERED.”4
This Decision, after being revised and then reinstated, subsequently became final and
executory.
On May 26, 2000, Arbiter Marino Bernardo M. Torres issued the Writ of Execution. In
connection therewith, the sheriff seized Rita Viola’s two delivery trucks and 315 sacks of rice.
Respondent Viola then filed an Urgent Motion to Quash Execution, with Prayers for Issuance of
Temporary Restraining Order, Clarification and Computation of Correct Amount of Money
Judgment and Allowance of Appeal.
After various incidents and pleadings by the opposing parties, the two trucks were ordered
released. The 315 sacks of
_______________
4 Id., at p. 59.
682rice, however, were sold at public auction to the highest bidder,5 petitioner Rebecca Genato
in the amount of P189,000.00.6
On December 15, 2000, Arbiter Torres issued an Order denying respondent Viola’s motion to
quash the writ of execution and directed her to pay the Sps. Genato the amount of P739,133.31.
The dispositive portion of the Order reads:
“WHEREFORE, premises considered, the motion to quash writ of execution is hereby DENIED.
Movant Rita Viola is hereby directed to pay to the respondents the amount of P739,133.31 in payment
of their amortizations up to August 2000.
The bond posted by the movant in compliance with the directive of this Office is likewise ordered
cancelled.
SO ORDERED.”7
Viola appealed the said Order and on January 10, 2003, the HLURB, First Division rendered
a Decision, the dispositive portion of which reads:
“WHEREFORE, premises considered, the movants’ respective Motions to Quash the Writ of
Execution are hereby GRANTED. Accordingly, the Orders dated December 15, [2000] are hereby SET
ASIDE. The respondents are directed to credit as payment the value of the 315 sacks of rice in the amount
of P318,500.00, which were seized and auctioned to the account of movant Viola.
SO ORDERED.”8
The Sps. Genato appealed the said Decision to the Office of the President. On November 8,
2004, the Office of the President affirmed in toto the Decision of the HLURB, First Division.
The motion for reconsideration filed by the Sps. Genato
_______________
5 There was one other bidder, Mr. Manuel Rigo, whose bid amounted to only P173,250.00.
6 CA Rollo, p. 64.
7 Id., at p. 71.
8 Rollo, p. 80.
683was denied. They thus elevated the case to the CA. As previously mentioned, the CA
affirmed the Decision of the Office of the President and disposed as follows:
“WHEREFORE, premises considered, the petition is DENIED and the assailed decision dated
November 4, 2004 and resolution dated March 31, 2005 of the Office of the President in O.P. Case No.
03-B-057 are hereby AFFIRMED.
SO ORDERED.”9
The Sps. Genato no longer filed a motion for reconsideration, they instead filed the present
petition for review.
Issues
Petitioners raise the following issues:

WHETHER THE HONORABLE COU 1.RT OF APPEALS ERRED IN RULING THAT
THE HLURB HAS NOT ACQUIRED JURISDICTION OVER THE PERSON OF
RESPONDENT RITA VIOLA.
WHETHER AFTER THE DECISION HAS BECOME FINAL AND EXECUTORY THE
HLURB COULD STILL RULE ON THE LACK OF JURISDICTION OVER THE
PERSON OF RITA VIOLA. 2.
WHETHER RESPONDENT VIOLA CAN CLAIM AN AMOUNT HIGHER THAN
WHAT APPEARS ON SHERIFF’S CERTIFICATE OF SALE. 3.
WHETHER THE RULE THAT FINDINGS OF FACTS AND CONCLUSIONS OF ANY
ADJUDICATIVE BODY SHOULD BE CONSIDERED AS BINDING AND
CONCLUSIVE ON THE APPELLATE COURT, IS APPLICABLE IN THE CASE AT
BAR. 4.10
_______________
9 Id., at p. 45.
10 Id., at p. 199.
684Petitioners’ Arguments
Petitioners contend that the CA erred in applying the case of Duero v. Court of
Appeals,11 which held that the lack of jurisdiction of the court over an action cannot be waived.
They submit that “jurisdiction of the court over an action” is different from “jurisdiction over the
person.” They say that the latter was what the HLURB was referring to because it stated that Rita
Viola was never impleaded. They contend that jurisdiction over the person can be conferred by
consent expressly or impliedly given, as in the case of Rita Viola.
Petitioners also assert that the HLURB Decision subject of the writ of execution has long
been final and executory, hence, said Decision can no longer be modified. They further assert
that the execution of the said Decision is a ministerial duty of the HLURB.
Petitioners further argue that the best evidence of the value of the 315 sacks of rice seized and
auctioned off is the Sheriff’s Certificate of Sale; hence the Board’s ruling crediting to the
account of Viola an amount other than that stated in the Certificate of Sale has no sound basis.
Finally, the petitioners contend that the findings and conclusions of an adjudicative body
resulting from an erroneous application of law are not binding on the appellate courts.
On the other hand, respondent contends that the HLURB did not acquire jurisdiction over her
person since she was not a party to the case; hence, the HLURB decision is a nullity as against
her and therefore never acquired finality. With a void judgment, the resultant execution was
likewise void.
_______________
11 424 Phil. 12, 25; 373 SCRA 11, 19 (2002).
685
She also argues that, since the levy and auction were illegal, the correct valuation of the 315
sacks of rice is not the price paid at the auction but its actual value of P318,500.00.
Our Ruling
The petition has merit.

At the outset, it is worth mentioning that except for respondent Rita Viola, all the other
individual members/buyers/
owners of the respective housing units have already paid and settled their obligations with Sps.
Genato.12 Hence, in the present case we only focus on the matters involving Rita Viola.
For a more orderly presentation, we address the fourth issue raised by petitioners first.
Non-applicability of the doctrine
on the binding effect of findings of
facts and conclusions of an adju-
dicative body
Indeed findings of fact and conclusions of an adjudicative body like the HLURB, which can
be considered as a trier of facts on specific matters within its field of expertise, should be
considered as binding and conclusive upon the appellate courts. This is in addition to the fact that
it was in a better position to assess and evaluate the credibility of the contending parties and the
validity of their respective evidence. However, these doctrines hold true only when such findings
and conclusions are supported by substantial evidence.13
In the present case, we find it difficult to find sufficient evidential support for the HLURB’s
conclusion that it did not
_______________
12 Rollo, p. 17.
13 Cabalan Pastulan Negrito Labor Association v. National Labor Relations Commission, 311 Phil. 744, 756; 241
SCRA 643, 650 (1995).
686acquire jurisdiction over the person of Viola. We are thus persuaded that there is ample
justification to disturb the findings of the HLURB.
The HLURB acquired jurisdiction
over Viola
It is not the caption of the pleading but the allegations therein that are controlling.14 The
inclusion of the names of all the parties in the title of a complaint is a formal requirement under
Section 3, Rule 7 of the Rules of Court. However, the rules of pleadings require courts to pierce
the form and go into the substance.15 The non-inclusion of one or some of the names of all the
complainants in the title of a complaint, is not fatal to the case, provided there is a statement in
the body of the complaint indicating that such complainant/s was/were made party to such
action. This is specially true before the HLURB where the proceedings are summary in nature
without regard to legal technicalities obtaining in the courts of law16 and where the pertinent
concern is to promote public interest and to assist the parties in obtaining just, speedy and
inexpensive determination of every action, application or other proceedings.17
_______________
14 See Almuete v. Andres, 421 Phil. 522, 531; 369 SCRA 619, 627 (2001); See also Leonardo v. Court of Appeals,
G.R. No. 125485, September 13, 2004, 438 SCRA 201, 214.
15 Vlason Enterprises Corporation v. Court of Appeals, 369 Phil. 269, 304; 310 SCRA 26, 58-59 (1999).
16 3. SectionNature of the Proceedings.—Proceedings before the Board shall be summary in nature without regard
to legal technicalities obtaining in the courts of law. The Rules of Court shall not apply in said proceedings except in
suppletory character and whenever practicable. Appearance by counsel is optional. (1987 HLURB Rules)
17 Section 4 of the 1987 HLURB Rules.
687Respondent Viola, although her name did not appear in the title as a party, was one of the
persons who caused the preparation of the complaint and who verified the same. The allegations
in the body of the complaint indicate that she is one of the complainants. She categorically
considered, and held out, herself as one of the complainants from the time of the filing of the
complaint and up to the time the decision in the HLURB case became final and executory. To
repeat, the averments in the body of the complaint, not the title, are controlling.18 Hence, having
been set forth in the body of the complaint as a complainant, Viola was a party to the case.
For clarity, the complaint should have been amended to reflect in the title the individual
complainants. There being a “defect in the designation of the parties”, its correction could be
summarily made at any stage of the action provided no prejudice is caused thereby to the adverse
party.19 In the present case, the specification of the individual complainants in the title of the case
would not constitute a change in the identity of the parties. Only their names were omitted in the
title but they were already parties to the case, most importantly, they were heard through their
counsel whom they themselves chose to prepare the complaint and represent them in the case
before the HLURB. No unfairness or surprise to the complainants, including Viola, or to the Sps.
Genato would result by allowing the amendment, the purpose of which is merely to conform to
procedural rules or to correct a technical error.20
_______________
18 Vlason Enterprises Corporation v. Court of Appeals, supra note 14.

19of the Rules of Court states: “Formal amendments.—A defect in the designation of the parties and other clearly
clerical or typographical errors may be summarily corrected by the court at any stage of the action, at its initiative or on
motion, provided no prejudice is caused thereby to the adverse party.” 4. Sec.
20 Cf. Juasing Hardware v. Mendoza, G.R. No. L-55687, July 30, 1982, 115 SCRA 783.
688It is now too late to dismiss this petition, and, in effect, nullify all proceedings had before
the HLURB on the ground that Viola does not appear to have been impleaded as a party. The
error or defect is merely formal and not substantial and an amendment to cure such defect is
expressly authorized by Sec. 4, Rule 10 of the Rules of Court.21
Moreover, it was only when the final and executory judgment of the HLURB was already
being executed against Viola that she, for the first time, reversed her position; and claimed that
she was not a party to the case and that the HLURB did not acquire jurisdiction over her. Viola is
estopped22 from taking such inconsistent positions. Where a party, by his or her deed or conduct,
has induced another to act in a particular manner, estoppel effectively bars the former from
adopting an inconsistent position, attitude or course of conduct that causes loss or injury to the
latter. The doctrine of estoppel is based upon the grounds of public policy, fair dealing, good
faith and justice, and its purpose is to forbid one to speak against his own act, representations, or
commitments to the injury of one to whom they were directed and who reasonably relied
thereon. After petitioners had reasonably relied on the representations of Viola that she was a
complainant and entered into the proceedings before the HLURB, she cannot now be permitted
to impugn her representations to the injury of the petitioners.
At this point, it may be beneficial to elaborate on the matter of jurisdiction. Jurisdiction is
defined as the power and authority of a court to hear, try and decide a case.23 In order
_______________
21 Cf. Yao Ka Sin Trading v. Court of Appeals, G.R. No. 53820, June 15, 1992, 209 SCRA 763.
22 Article 1431 of the Civil Code states: “Through estoppel an admission or representation is rendered conclusive
upon the person making it and cannot be denied or disproved as against the person relying thereon.”
23 Zamora v. Court of Appeals, G.R. No. 78206, March 19, 1990, 183 SCRA 279, 283-284.
689forthe court or an adjudicative body to have authority to dispose of the case on the merits, it
must acquire jurisdiction over the subject matter and the parties.24Elementary is the distinction
between jurisdiction over the subject matter and jurisdiction over the person. Jurisdiction over
the subject matter is conferred by the Constitution or by law. In contrast, jurisdiction over the
person is acquired by the court by virtue of the party’s voluntary submission to the authority of
the court or through the exercise of its coercive processes. Jurisdiction over the person is
waivable unlike jurisdiction over the subject matter which is neither subject to agreement nor
conferred by consent of the parties.25 In civil case, courts acquire jurisdiction over the plaintiffs
upon the filing of the complaint, while jurisdiction over the defendants 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.26
The act of filing the complaint with the HLURB is unequivocally a voluntary submission by
the complainants, including Viola, to the authority of the HLURB. Clearly, the HLURB acquired
jurisdiction over Viola, who was one of the complainants, upon the filing of their complaint.
_______________
24 See Perkin Elmer Singapore Pte Ltd. v. Dakila Trading Corporation, G.R. No. 172242, August 14, 2007, 530
SCRA 170, 186; Bank of the Philippine Islands v. Sps. Evangelista, 441 Phil. 445, 453; 393 SCRA 187, 194 (2002).
25 Arnado v. Buban, A.M. No. MTJ-04-1543, May 31, 2004, 430 SCRA 382, 386.
26 Perkin Elmer Singapore Pte Ltd. v. Dakila Trading Corporation,supra note 24; Bank of the Philippine Islands v.
Sps. Evangelista, supranote 24.
690
Final and executory judgment may
no longer be modified
The April 27, 1999 HLURB Resolution,27 reinstating the December 18, 1996 Decision,28 has
long been final and executory. Nothing is more settled in the law than that a decision that has
acquired finality becomes immutable and unalterable and may no longer be modified in any
respect even if the modification is meant to correct erroneous conclusions of fact or law and
whether it was made by the court that rendered it or by the highest court of the land.29The only
recognized exceptions to the general rule are the correction of clerical errors, the so-called nunc
pro tuncentries which cause no prejudice to any party, void judgments, and whenever
circumstances transpire after the finality of the decision rendering its execution unjust and
inequitable.30 None of the exceptions is present in this case. The HLURB decision cannot be
considered a void judgment, as it was rendered by a tribunal with jurisdiction over the subject
matter of the complaint and, as discussed above, with jurisdiction over the parties. Hence, the
same can no longer be modified.
Amount to be credited on account
of the sale of property levied upon
After a judgment has gained finality, it becomes the ministerial duty of the court or quasi-
judicial tribunal to order its execution.31 In the present case, the final and executory
_______________
27 Rollo, pp. 63-65.

28 Id., at pp. 56-59.
29 Hulst v. PR Builders, Inc., G.R. No. 156364, September 3, 2007, 532 SCRA 74, 95; Peña v. Government Service
Insurance System, G.R. No. 159520, September 19, 2006, 502 SCRA 383, 404.
30 Hulst v. PR Builders, Inc., supra.
31 De Luna v. Pascual, G.R. No. 144218, July 14, 2006, 495 SCRA 42, 58.
691HLURB decision was partially executed by the sale of the 315 sacks of rice belonging to
Viola.
In determining the amount to be credited to the account of Viola, we look at the Sheriff’s
Partial Report and the Sheriff’s Certificate of Sale. Both documents state that in the auction sale
of the 315 sacks of rice, Mrs. Rebecca Genato submitted the highest bid in the amount of
P189,000.00. Drawing from Section 19, Rule 39 of the Rules of Court which states that “all sales
of property under execution must be made at public auction, to the highest bidder,” it naturally
follows that the highest bid submitted is the amount that should be credited to the account of the
judgment debtor.
WHEREFORE, the petition is GRANTED. The assailed September 9, 2005 Decision of the
Court of Appeals is REVERSED and SET ASIDE and the December 15, 2000 Order of Arbiter
Marino Bernardo M. Torres is REINSTATED and AFFIRMED.
SO ORDERED.
Carpio (Chairperson), Brion, Abad and Perez, JJ., concur.
Petition granted, judgment reversed and set aside.
Note.—One of the exceptions to the principle of immutability of

final judgement is the existence of supervening event. (Lee vs.
Regional Trial Court of Quezon City, Br. 85, 456 SCRA 538 [2005])

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G.R. No. 189950.*April 24, 2017.

BERNADETTE S. BILAG, ERLINDA BILAG-SANTILLAN,

* Part of the Court’s Decongestion Program.

PETITION for review on certiorari of the decision and resolution of

Assailed in this petition for review on certiorari1 are the

The instant case stemmed from a Complaint5 dated August 12,

1 Rollo, pp. 13-52.

6 Id., at pp. 97-105.

9 Id., at pp. 122-124.

In an Order15 dated October 10, 2005, the RTC Br. 61 ruled in

In a Decision18 dated March 19, 2009, the CA set aside the

15 Records, pp. 413-423.

The Issue Before the Court

The Court’s Ruling

The petition is meritorious.

20 Id., at pp. 60-63.

Now, on the issue of jurisdiction, a review of the records shows

In conclusion, RTC Br. 61 has no jurisdiction over Civil Case No.

33 Id., at pp. 223-225; pp. 559-561.

651AGRI-BASEDRESOURCES, INC., ISABEL EVERGREEN

PETITIONS for review on certiorari of the decision and resolution

655determine the valuation of Trinidad Valley Realty and

In an Urgent Omnibus Motion[12] dated December 2, 2004,

657merit and jurisdiction. The DAR similarly filed a Motion for

658Valley Realty and Development Corporation, et al. in view of

On the issue of whether the RTC committed grave abuse of

659the admission by the RTC of the amended petition was not

660Ponce, in his capacity as Secretary of DAR, et al.”[26] The CA

661that Trinidad Valley Realty and Development Corporation, et

663ership over any portion of the subject property, and preventing

664legislative in character.[36] The nature of an action, as well as

An examination of the records[40] in the instant case would show

667lands have a slope of 18% and were already developed as of

The legal recourse undertaken by Trinidad Valley Realty and

VOL. 686, NOVEMBER 27, 2012 473

4 SUPREME COURT REPORTS ANNOTATED

VOL. 686, NOVEMBER 27, 2012 475

PETITION for review on certiorari of the partial summary decision

484 SUPREME COURT REPORTS ANNOTATED

VOL. 686, NOVEMBER 27, 2012 485

486 SUPREME COURT REPORTS ANNOTATED

488 SUPREME COURT REPORTS ANNOTATED

VOL. 686, NOVEMBER 27, 2012 489

Right after it filed the Motion for Partial Summary

Following an exchange of pleadings, the Republic filed its

490 SUPREME COURT REPORTS ANNOTATED

VOL. 686, NOVEMBER 27, 2012 491

492 SUPREME COURT REPORTS ANNOTATED

VOL. 686, NOVEMBER 27, 2012 493

PEDRO COJUANGCO EDUARDO COJUANGCO, JR.

494 SUPREME COURT REPORTS ANNOTATED

496 SUPREME COURT REPORTS ANNOTATED

VOL. 686, NOVEMBER 27, 2012 497

198 SUPREME COURT REPORTS ANNOTATED

VOL. 686, NOVEMBER 27, 2012 499

PHILIPPINE COCONUT AUTHORITY

500 SUPREME COURT REPORTS ANNOTATED

VOL. 686, NOVEMBER 27, 2012 501

502 SUPREME COURT REPORTS ANNOTATED

On July 11, 2003, the Sandiganbayan issued the assailed PSJ-A,

VOL. 686, NOVEMBER 27, 2012 503

As earlier explained, the core issue in this instant petition is