Civil Procedure

Full Text of Cases

Volume I

Ordinary Civil Action

Based on the Syllabus of Dean Monteclar

Compiled by Rehne Gibb N. Larena | JD-2 | AY 2018-19 | University of San Carlos 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

Civil Procedure 32 Arcilla v Arcilla, 138 SCRA 560 75

33 DBP v CA, 169 SCRA 409 77
Rules 1 - 56 34 Young v CA, 204 SCRA 584 79

Ordinary Civil Action IX. Execution, Satisfaction and Effect of Judgments (RULE 39)83
35 Republic v Daisy Yahon, 201043, 16 Jun 2014 84

Full Text of Cases X. Modes of Appeal 88

RULE 41 Appeal From The Regional Trial Courts 88
36 Neypes v CA, 14 Sep 2005 88
TABLE OF CONTENTS
RULE 43 Appeals From the Court of Tax Appeals and
Quasi-Judicial Agencies to the Court of Appeals 91
I. General Principles 3 37 St Martin Funeral Homes v NLRC, 16 Sep 1998 91
Classi ication of Courts in the Philippines 3
01 Tijam v Sibonghanoy, L-21450, Apr 15, 1968 3
02 Ignacio v CFI of Bulacan, L-27897, Oct 29, 1971 5
03 Mindanao Rapid Co v Omandam, L-23058, Nov 27,
1971 7

II. Preliminary Considerations 11

Jurisdiction of Courts 11
04 Estacion v Sec of DAR, et al, 163361, Mar 12, 2014 11
05 City of Manila v Grecia-Cuerdo, et al, 175723, Feb 4,
2014 14
06 Tumpag v Tumpag, 199133, Sep 29, 2014 18
07 Indophil Textile Mills v Adviento, 171212, Aug 4, 2014
20
RULE 1 General Provisions 24
08 Manchester Dev Corp v CA, 149 SCRA 562 24
09 Sun Insurance Of ice Ltd v CA, 170 SCRA 274 26
10 Tacay v RTC of Tagum, 180 SCRA 433 29
11 Ayala Corp v Madayag, L-88421, 30 Jan 1990 31

III. Ordinary Civil Actions 32

RULE 4 Venue of Actions 32
12 Polytrade v Blanco, L-27033, 31 Oct 1969 32
13 Pilipino Telephone Corp v Tecson, 156966, 7 May 2004
33

IV. Procedure in RTC 34

RULE 9 Effect of Failure to Plead 34
14 Pascua v Florendo, L-39047, 30 Apr 1985 34
15 Viacrusis v Estenzo, L-18457, 30 Jun 1962 37
16 Malipol v Tan, L-27730, 21 Jan 1974 39
17 Trajano et al v Cruz, L-47070, 29 Dec 1977 42
18 Ponio v IAC, L-66782, 20 Dec 1984 43
RULE 13 Filing and Service of Pleadings, Judgments and Other
Papers 44
19 Industrial Timber v NLRC, 233 SCRA 597 44
RULE 14 Summons 45
20 Laus v CA, 214 SCRA 688 45
21 Montalban v Maximo, 22 SCRA 1070 50
22 Pantaleon v Asuncion, 105 Phil 755 53
23 Citizens Insurance Surety v Melencio-Herrera, 38 SCRA
369 55
24 Pedro Santos, Jr v PNOC, 170943, 28 Sep 2008 56
25 Carriaga v Malaya, 143 SCRA 441 58
26 Baltazar v CA, 168 SCRA 354 60
RULE 16 Motion to Dismiss 65
27 Lingner and Fisher v IAC, 125 SCRA 522 65
28 De Midgely v Ferandos, L-34314, 13 May 1975 66
29 La Naval Drug Corp v CA, 236 SCRA 78 70
30 Tijam v Sibonghanoy, supra (1) 73
31 Seafdec-Aquaculture Dept v NLRC, 206 SCRA 283 73

V. Pre-Trial (RULE 18) 75

 

Based on Syllabus of Dean Monteclar  By RGL  2 of 95 

 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

I. General Principles 
Principles  “I. That the Honorable Court a quo erred in issuing its order
dated November 2, 1957, by holding the incident as submitted for
Classification of Courts in the Philippines resolution, without a summary hearing and compliance with the
01 Tijam v Sibonghanoy, L-21450, Apr 15, 1968  other mandatory requirements provided for in Section 17, Rule 59
131 Phil. 556 of the Rules of Court.
“II. That the Honorable Court a quo erred in ordering the issuance
of execution against the herein bonding company-appellant.
G.R. No. L-21450, April 15, 1968 
“III. That the Honorable Court a quo erred in denying the motion to
SERAFIN  TIJAM,  ET  AL.,  PLAINTIFFS-APPELLEES,  VS. 
quash the writ of execution iled by the herein bonding
MAGDALENO  SIBONGHANOY  ALIAS  GAVINO  company-appellant as well as its subsequent motion for
SIBONGHANOY,  ET  AL.,  DEFENDANTS,  MANILA  SURETY  reconsideration, and/or in not quashing or setting aside the writ of
AND  FIDELITY  CO.,  INC.  (CEBU  BRANCH)  BONDING  execution."
COMPANY AND DEFENDANT-APPELLANT.  Not one of the assignment of errors - it is obvious -raises the
  question of lack of jurisdiction, neither directly nor indirectly.

D E C I S I O N  Although the appellees failed to ile their brief, the Court of Appeals,
DIZON, J.:
On July 19, 1948 - barely one month after the effectivity of Republic
Act No. 296 known as the Judiciary Act of 1948 the spouses Sera in
Tijam and Felicitas Tagalog commenced Civil Case No. R-660 in the
Court of First Instance of Cebu against the spouses Magdaleno
Sibonghanoy and Lucia Baguio to recover from them the sum of
P1,908.00, with legal interest thereon from the date of the iling of
the complaint until the whole obligation is paid, plus costs. As
prayed for in the complaint, a writ of attachment was issued by the
court against defendants' properties, but the same was soon
dissolved upon the iling of a counter-bond by defendants and the
Manila Surety and Fidelity Co., Inc. hereinafter referred to as the
Surety, on the 31st of the same month.
After being duly served with summons the defendants iled their
answer in which, after making some admissions and denials of the
material averments of the complaint, they interposed a
counterclaim. This counterclaim was answered by the plaintiffs.
After trial upon the issues thus joined, the Court rendered judgment
in favor of the plaintiffs and, after the same had become inal and
executory, upon motion of the latter, the Court issued a writ of
execution against the defendants. The writ having been returned
unsatis ied, the plaintiffs moved for the issuance of a writ of
execution against the Surety's bond (Rec. on Appeal pp. 46-49),
against which the Surety iled a written opposition (Id. pp. 49) upon
two grounds, namely, (1) Failure to prosecute and (2) Absence of a
demand upon the Surety for the payment of the amount due under
the judgment. Upon these grounds the Surety prayed the Court not
only to deny the motion for execution against its counter-bond but
also the following af irmative relief: "to relieve the herein bonding
company of its liability, if any, under the bond in question" (Id. p.
54) The Court denied this motion on the ground solely that no
previous demand had been made on the Surety for the satisfaction
of the judgment. Thereafter the necessary demand was made, and
upon failure of the Surety to satisfy the judgment, the plaintiffs iled
a second motion for execution against the counter-bond. On the
date set for the hearing thereon, the Court, upon motion of the
Surety's counsel, granted the latter a period of ive days within
which to answer the motion. Upon its failure to ile such answer, the
Court granted the motion for execution and the corresponding writ
was issued.
Subsequently, the Surety moved to quash the writ on the ground
that the same was issued without the required summary hearing
provided for in Section 17 of Rule 59 of the Rules of Court. As the
Court denied the motion, the Surety appealed to the Court of
Appeals from such order of denial and from the one denying its
motion for reconsideration (Id. pp. 97). Its record on appeal was
then printed as required by the Rules, and in due time it iled its
brief raising therein no other question but the ones covered by the
following assignment of errors:
on December 11, 1962, decided the case af irming the orders
appealed from.
On January 8, 1963 - ive days after the Surety received notice of the
decision, it iled a motion asking for extension of time within which
to ile a motion for reconsideration. The Court of Appeals granted
the motion in its resolution of January 10 of the same year. Two
days later the Surety iled a pleading entitled MOTION TO DISMISS,
alleging substantially that appellees' action was iled in the Court of
First Instance of Cebu on July 19, 1948 for the recovery of the sum
of P1,908.00 only; that a month before that date Republic Act No.
296, otherwise known as the Judiciary Act of 1948, had already
become effective, Section 88 of which placed within the original
exclusive jurisdiction of inferior courts all civil actions where the
value of the subject matter or the amount of the demand does not
exceed P2,000.00, exclusive of interest and costs; that the Court of
First Instance therefore had no jurisdiction to try and decide the
case. Upon these premises the Surety's motion prayed the Court of
Appeals to set aside its decision and to dismiss the case. By
resolution of January 16, 1963 the Court of Appeals required the
appellees to answer the motion to dismiss, but they failed to do so.
Whereupon, on May 20 of the same year, the Court resolved to set
aside its decision and to certify the case to Us. The pertinent
portions of its resolution read as follows:
"It would indeed appear from the record that the action at bar,
which is a suit for collection of money in the sum of exactly
P1,908.00 exclusive of interest, was originally instituted in the Court
of First Instance of Cebu on July 19, 1948. But about a month prior
to the iling of the complaint, more speci ically on June 17, 1948, the
Judiciary Act of 1948 took effect, depriving the Court of First
Instance of original jurisdiction over cases in which the demand,
exclusive of interest, is not more than P2,000.00. (Secs. 44[c] and
86[b] R.A. No. 296.)
"We believe, therefore, that the point raised in appellant's motion is
an important one which merits serious consideration. As stated, the
complaint was iled on July 19, 1948. This case therefore has been
pending now for almost 15 years, and throughout the entire
proceeding appellant never raised the question of jurisdiction until
after receipt of this Court's adverse decision.
"There are three cases decided by the Honorable Supreme Court
which may be worthy of consideration in connection with this case,
namely: Tyson Tan, et al. vs. Filipinas Compañ ia de Seguros, et al.,
G.R. No. L-10096, March 23, 1956; Pindangan Agricultural Co., Inc.
vs. Jose P. Dans, etc., et al., G. R. No. L-14591, September 26, 1962;
and Alfredo Montelibano et al. vs. Bacolod-Murcia Milling Co., Inc.,
G. R. No. L-15092, September 29, 1962, wherein the Honorable
Supreme Court frowned upon the 'undesirable practice' of
appellants submitting their case for decision and then accepting the
judgment, if favorable, but attacking it for lack of jurisdiction when
adverse.
"Considering, however, that the Supreme Court has the 'exclusive'
appellate jurisdiction over 'all cases in which the jurisdiction of any

Based on Syllabus of Dean Monteclar  By RGL  3 of 95 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
inferior court is in issue' (Sec. 1, Par. 3[3], Judiciary Act of 1948, as
amended), we have no choice but to certify, as we hereby do certify,
this case to the Supreme Court.
"ACCORDINGLY, pursuant to Section 31 of the Judiciary Act of 1948
as amended, let the record of this case be forwarded to the Supreme
Court."
It is an undisputed fact that the action commenced by appellees in
the Court of First Instance of Cebu against the Sibunghanoy spouses
was for the recovery of the sum of P1,908.00 only - an amount
within the original exclusive jurisdiction of inferior courts in
accordance with the provisions of the Judiciary Act of 1948 which
had taken effect about a month prior to the date when the action
was commenced. True also is the rule that jurisdiction over the
subject matter is conferred upon the courts exclusively by law, and
as the lack of it affects the very authority of the court to take
cognizance of the case, the objection may be raised at any stage of
the proceedings. However, considering the facts and circumstances
of the present case - which shall forthwith be set forth - We are of
the opinion that the Surety is now barred by laches from invoking
this plea at this late hour for the purpose of annuling everything
done heretofore in the case with its active participation.
As already stated, the action was commenced in the Court of First
Instance of Cebu on July 19, 1948, that is, almost ifteen years before
the Surety iled its motion to dismiss on January 12, 1963 raising
the question of lack of jurisdiction for the irst time.
It must be remembered that although the action, originally, was
exclusively against the Sibunghanoy spouses, the Surety became a
quasi-party therein since July 31, 1948 when it iled a counter-bond
for the dissolution of the writ of attachment issued by the court of
origin (Record on Appeal, pp. 15-19). Since then, it acquired certain
rights and assumed speci ic obligations in connection with the
pending case, in accordance with Sections 12 and 17, Rule 57, Rules
of Court (Bautista vs. Joaquin 46 Phil. 885; Kimpang & Co. vs. Javier
65 Phil. 170).
Upon the iling of the irst motion for execution against the
counter-bond the Surety not only iled a written opposition thereto
praying for its denial but also asked for an additional af irmative
relief - that it be relieved of its liability under the counter-bond
upon the grounds relied upon in support of its opposition - lack of
jurisdiction of the court a quo not being one of them.
Then, at the hearing on the second motion for execution against the
counter-bond, the Surety appeared, through counsel, to ask for time
within which to ile an answer or opposition thereto. This motion
was granted, but instead of such answer or opposition, the Surety
iled the motion to dismiss mentioned heretofore.
A party may be estopped or barred from raising a question in
different ways and for different reasons. Thus we speak of estoppel
in pais, of estoppel by deed or by record, and of estoppel by laches.
Laches, in a general sense, is failure or neglect, for an unreasonable
and unexplained length of time, to do that which, by exercising due
diligence, could or should have been done earlier; it is negligence or
omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has
abandoned it or declined to assert it.
The doctrine of laches or of "stale demands" is based upon grounds
of public policy which requires, for the peace of society, the
discouragement of stale claims and, unlike the statute of limitations,
is not a mere question of time but is principally a question of the
inequity or unfairness of permitting a right or claim to be enforced
or asserted.
It has been held that a party can not invoke the jurisdiction of a
court to secure af irmative relief against his opponent and, after
obtaining or failing to obtain such relief, repudiate or question that
same jurisdiction (Dean vs. Dean, 136 Or. 694, 86 A.L.R. 79). In the
case just cited, by way of explaining the rule, it was further said that
the question whether the court had jurisdiction either of the subject
Based on Syllabus of Dean Monteclar  By RGL  4 of 95
 
matter of the action or of the parties was not important in such
cases because the party is barred from such conduct not because
the judgment or order of the court is valid and conclusive as an
adjudication, but for, the reason that such a practice can not be
tolerated - obviously for reasons of public policy.
Furthermore, it has also been held that after voluntarily submitting
a cause and encountering an adverse decision on the merits, it is too
late for the looser to question the jurisdiction or power of the court
(Pease vs. Rathbun-Jones etc. 243 U.S. 273, 61 L.Ed. 715, 37 S.Ct.
283; St. Louis etc. vs. McBride, 141 U.S. 127, 35 L. Ed. 659). And in
Littleton vs. Burgess, 16 Wyo. 58, the Court said that it is not right
for a party who has af irmed and invoked the jurisdiction of a court
in a particular matter to secure an af irmative relief, to afterwards
deny that same jurisdiction to escape a penalty.
Upon this same principle is what We said in the three cases
mentioned in the resolution of the Court of Appeals of May 20, 1963
(supra) - to the effect that we frown upon the "undesirable practice"
of a party submitting his case for decision and then accepting the
judgment, only if favorable, and attacking it for lack of jurisdiction,
when adverse -as well as in Pindañ gan etc. vs. Dans et al., G. R.
L-14591, September 26, 1962; Montelibano et al., vs.
Bacolod-Murcia Milling Co., Inc., G.R. L-15092; Young Men Labor
Union etc. vs. the Court of Industrial Relations et al., G.R. L-20307,
Feb. 26, 1965, and Mejia vs. Lucas 100 Phil. p. 277.
The facts of this case show that from the time the Surety became a
quasi-party on July 31, 1948, it could have raised the question of the
lack of jurisdiction of the Court of First Instance of Cebu to take
cognizance of the present action by reason of the sum of money
involved which, according to the law then in force, was within the
original exclusive jurisdiction of inferior courts. It failed to do so.
Instead, at several stages of the proceedings in the court a quo as
well as in the Court of Appeals, it invoked the jurisdiction of said
courts to obtain af irmative relief and submitted its case for a inal
adjudication on the merits. It was only after an adverse decision
was rendered by the Court of Appeals that it inally woke up to raise
the question of jurisdiction. Were We to sanction such conduct on
its part, We would in effect be declaring as useless all the
proceedings had in the present case since it was commenced on July
19, 1948 and compel the judgment creditors to go up their Calvary
once more. The inequity and unfairness of this is not only patent
but revolting.
Coming now to the merits of the appeal: after going over the entire
record, We have become persuaded that We can do nothing better
than to quote in toto, with approval, the decision rendered by the
Court of Appeals on December 11, 1962 as follows:
"In Civil Case No. R-660 of the Court of First Instance of Cebu, which
was a suit for collection of a sum of money, a writ of attachment was
issued against defendants’ properties. The attachment, however,
was subsequently discharged under Section 12 of Rule 59 upon the
iling by defendants of a bond subscribed by Manila Surety &
Fidelity Co., Inc.
"After trial, judgment was rendered in favor of plaintiffs.
"The writ of execution against defendants having been returned
totally unsatis ied, plaintiffs moved, under Section 17 of Rule 59, for
issuance of writ of execution against Manila Surety & Fidelity Co.,
Inc. to enforce the obligation of the bond. But the motion was, upon
the surety's opposition, denied on the ground that there was 'no
showing that a demand had been made by the plaintiffs to the
bonding company for payment of the amount due under the
judgment' (Record on Appeal, p. 60).
"Hence, plaintiffs made the necessary demand upon the surety for
satisfaction of the judgment, and upon the latter's failure to pay the
amount due, plaintiffs again iled a motion dated October 31, 1957,
for issuance of writ of execution against the surety, with notice of
hearing on November 2, 1957. On October 31, 1957, the surety
received copy of said motion and notice of hearing.
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
"It appears that when the motion was called on November 2, 1957,
the surety's counsel asked that he be given time within which to
answer the motion, and so an order was issued in open court, as
follows:
'As prayed for, Atty. Jose P. Soberano, Jr., counsel for the Manila
Surety & Fidelity Co., Inc., Cebu Branch, is given until Wednesday,
November 6, 1957, to ile his answer to the motion for the issuance
of a writ of execution dated October 30, 1957 of the plaintiffs, after
which this incident shall be deemed submitted for resolution.
'SO ORDERED.
'Given in open court, this 2nd day of November, 1957, at Cebu City,
Philippines.
‘(Sgd.) JOSE M. MENDOZA
Judge' (Record on Appeal, pp. 64-65, underscoring ours).
"Since the surety's counsel failed to ile any answer or objection
within the period given him, the court, on December 7, 1957, issued
an order granting plaintiffs' motion for execution against the surety;
and on December 12, 1957, the corresponding writ of execution
was issued.
"On December 24, 1957, the surety iled a motion to quash the writ
of execution on the ground that the same was 'issued without the
requirements of Section 17, Rule 59 of the Rules of Court having
been complied with,’ more speci ically, that the same was issued
without the required 'summary hearing'. This notion was denied by
order of February 10, 1958.
"On February 25, 1958, the surety iled a motion for reconsideration
of the above-stated order of denial; which motion was likewise
denied by order of March 26, 1958.
"From the above-stated orders of February 10, 1958 and March 26,
1958---denying the surety's motion to quash the writ of execution
and motion for reconsideration, respectively---the surety has
interposed the appeal on hand.
"The surety insists that the lower court should have granted its
motion to quash the writ of execution because the same was issued
without the summary hearing required by Section 17 of Rule 59,
which reads:
'SEC. 17. When execution returned unsatis ied, recovery had upon
bond. ? If the execution be returned unsatis ied in whole or in part,
the surety or sureties on any bond given pursuant to the provisions
of this role to secure the payment of the judgment shall become
inally charged on such bond, and bound to pay to the plaintiff upon
demand the amount due under the judgment, which amount may be
recovered from such surety or sureties after notice and summary
hearing in the same action.' (Underscoring ours)
"Summary hearing is 'not intended to be carried on in the formal
manner in which ordinary actions are prosecuted' (83 C.J.S. 792). It
is, rather, a procedure by which a question is resolved with dispatch,
with the least possible delay, and in preference to ordinary legal and
regular judicial proceedings' (Ibid, p. 790). What is essential is that
'the defendant is noti ied or summoned to appear and is given an
opportunity to hear what is urged upon him, and to interpose a
defense, after which follows an adjudication of the rights of the
parties' (Ibid., pp. 793-794); and as to the extent and latitude of the
hearing, the same will naturally lie upon the discretion of the court,
depending upon the attending circumstances and the nature of the
incident up for consideration.
"In the case at bar, the surety had been noti ied of the plaintiffs'
motion for execution and of the date when the same would be
submitted for consideration. In fact, the surety's counsel was
present in court when the motion was called, and it was upon his
request that the court a quo gave him a period of four days within
which to ile an answer. Yet he allowed that period to lapse without
iling an answer or objection. The surety cannot now, therefore,
complain that it was deprived of its day in court.
Based on Syllabus of Dean Monteclar  By RGL  5 of 95
 
"It is argued that the surety's counsel did not ile an answer to the
motion 'for the simple reason that all its defenses can be set up
during the hearing of the motion even if the same are not reduced to
writing' (Appellant's brief, p. 4). There is obviously no merit in this
pretense because, as stated above, the record will show that when
the motion was called, what the surety's counsel did was to ask that
he be allowed and given time to ile an answer. Moreover, it was
stated in the order given in open court upon request of the surety's
counsel that after the four-day period within which to ile an
answer, 'the incident shall be deemed submitted for resolution'; and
counsel apparently agreed, as the order was issued upon his
instance and he interposed no objection thereto.
"It is also urged that although according to Section 17 of Rule 59,
supra, there is no need for a separate action, there must, however,
be a separate judgment against the surety in order to hold it liable
on the bond (Appellant's Brief, p. 15). Not so, in our opinion, A
bond iled for discharge of attachment is, per Section 12 of Rule 59,
"to secure the payment to the plaintiff of any judgment he may
recover in the action,' and stands 'in place of the property so
released'. Hence, after the judgment for the plaintiff has become
executory and the execution is 'returned unsatis ied' (Sec. 17, Rule
59), as in this case, the liability of the bond automatically attaches
and, in failure of the surety to satisfy the judgment against the
defendant despite demand therefor, writ of execution may issue
against the surety to enforce the obligation of the bond."
UPON ALL THE FOREGOING, the orders appealed from are hereby
af irmed, with costs against the appellant Manila Surety and Fidelity
Company, Inc.
Reyes, J.B.L., (Acting C.J.), Makalintal, Bengzon, J.P., Zaldivar, Sanchez,
Ruiz Castro, Angeles, and Fernando, JJ., concur.
02 Ignacio v CFI of Bulacan, L-27897, Oct 29, 1971 
149 Phil. 137
G.R. Nos. L-27897-98, October 29, 1971 
LORENZO  IGNACIO  AND  MAGDALENA  DELA  CRUZ, 
PETITIONERS,  VS.  THE  HONORABLE  COURT  OF  FIRST 
INSTANCE  OF  BULACAN  AND  FELIZARDO  LIPANA, 
RESPONDENTS. 
D E C I S I O N 
MAKALINTAL, J.:
Petition for certiorari and prohibition in forma pauperis
questioning the jurisdiction of the Municipal Court of Plaridel,
Bulacan, in an ejectment case against petitioners, which case was
subsequently appealed to the Court of First Instance, where it was
shown that another case had been iled ahead in the Court of
Agrarian Relations wherein petitioners asked that they be declared
the lawful tenants of the disputed landholding. Upon motion of
petitioners, alleging that private respondent had moved in the Court
of First Instance for the execution of its decision af irming an order
of the Municipal Court which found them guilty of contempt of court
and ordering them to vacate the landholding in question, We
ordered the issuance of a writ of preliminary injunction upon the
iling of a bond in the sum of P200.00.
The said landholding consists of two hectares, more or less,
included in a larger tract owned by Felizardo Lipana and tenanted
by Alipio Marcelo until his death on December 3, 1962. Two cases
involving the land were pending in the Court of Agrarian Relations
at the time of his death, namely: CAR Case No. 750-Bulacan '62,
entitled "Alipio Marcelo vs. Felizardo Lipana"; and CAR Case No.
827-Bulacan ‘62, entitled "Felizardo Lipana vs. Alipio Marcelo."[1] In
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
both cases the deceased was subsequently substituted by Maximo
Marcelo and Emilia Tabol Vda. de Marcelo, surviving son and wife,
respectively. A third case - CAR Case No. 895 - was iled on
December 20, 1962 by Maximo Marcelo against Felizardo Lipana
and Magdalena dela Cruz (the latter having been the alleged
common-law wife of Alipio Marcelo), praying that he, Maximo, be
declared as entitled to succeed to the tenancy right and status of the
deceased. One of the allegations of Lipana in his answer to the
complaint was that he "signi ied his intention to recognize as his
tenant Magdalena dela Cruz, who is the widow of Alipio Marcelo."
This is an admission that as far as Lipana was concerned it was
Magdalena who had the right to succeed the deceased Alipio as
tenant.
On July 23, 1963, acting on a motion of Maximo Marcelo to enjoin
Magdalena dela Cruz from interfering with his peaceful cultivation
of the landholding, as well as on an urgent motion of Felizardo
Lipana for leave to cultivate the same land, the CAR issued the
following order:
"For this Court to be able to resolve the above prayer and motion
intelligently and judiciously, there is necessity for formal hearing to
determine the following questions of fact:
(1) Since the demise of the former tenant, Alipio Marcelo, who has
been and is in actual possession and cultivation of the holding in
question?
(2) Did the deceased voluntarily surrender the holding to
respondent in November 1962?
(3) Is Maximo Marcelo the natural son of the late Alipio Marcelo?
It appears, however, that these are the factual issues directly
involved in CAR Case No. 895-Bulacan '62 where petitioner therein
has already presented three (3) witnesses and several exhibits.
Respondents have not yet presented any evidence. The cause of
action indicated, therefore, is for this Court to withhold action on
Maximo Marcelo's prayer for interlocutory order and Felizardo
Lipana's urgent motion for leave to cultivate the holding.
In the meanwhile, to forestall any untoward incidents and in order
not to disturb the productivity of the land, this Court shall
undertake the cultivation thereof by administration through an
impartial third-party. All the parties in the above-entitled cases
shall be restricted from doing any act of cultivation or planting on
the land and reaping, harvesting or threshing of crops thereon.
WHEREFORE, Maximo Marcelo, Emilia Tabol de Marcelo, Magdalena
dela Cruz, Felizardo Lipana and/or their agents are directed to
desist from performing any act of cultivation or planting on the
landholding formerly tenanted by Alipio Marcelo at Lalangan,
Plaridel, Bulacan, with a seedling capacity of 30 gantas of palay, or
from reaping, harvesting or threshing any crops thereon until
further orders from this court.
Pursuant to: Section 9, Rep. Act No. 1267, as amended, Mr. Severino
Madronio, Agricultural Extension Of icer, Bureau of Agricultural
Extension, Bulacan, is hereby directed to repair to the landholding
in question, take possession of the same and undertake the
cultivation thereof and/or planting thereon according to his best
judgment and to proven farm practices. If the hiring of laborers for
the purpose of complying with this Order is called for, the
afore-named Agricultural Extension Of icer shall give preference of
employment to Maximo Marcelo and Magdalena dela Cruz at the
prevailing wage for agricultural laborers in the locality but in no
case shall the wage be less than P2.50 per day, with no allowance
for board and lodging."
Thereafter, a compromise agreement in the three CAR cases was
entered into by Maximo Marcelo and Felizardo Lipana, wherein the
former surrendered all his rights over the landholding in favor of
the latter. A judgment in accordance with the terms and conditions
of said compromise was thereupon rendered by the trial Judge on
November 5, 1964, declaring that CAR Cases Nos. 750, 895 and 827
Based on Syllabus of Dean Monteclar  By RGL  6 of 95
 
were deemed closed and terminated as between Maximo Marcelo
and Felizardo Lipana.
On January 27, 1965 the CAR ordered the issuance of a writ of
execution in the three cases. On the same date another order was
issued, discharging the administration of the landholding by the
Agricultural Extension Of icer. On February 5, 1965 the
corresponding writ of execution was issued, commanding the
provincial sheriff of Bulacan to place Felizardo Lipana in
possession; and on the following February 25 the provincial sheriff
submitted to the court his return of service.
On July 15, 1965 Magdalena dela Cruz iled a complaint against
Lipana (Case No. 1221), asking the CAR to declare her the lawful
tenant of the landholding, to ix the annual rentals thereof during
the past three years and to award damages in her favor by way of
attorney's fees and consequential expenses. In her complaint she
alleged that Alipio Marcelo, the former tenant, surrendered the
landholding to Lipana on November 21, 1962, whereupon she
succeeded as such tenant upon agreement with the latter; that on
November 13, 1964 the CAR issued an order stating that the
dismissal of CAR Case No. 895 was without prejudice to her right to
ile an independent action to assert her claim against Lipana, her
co-defendant therein; that together with her husband[2] she
continued to work on the land during the agricultural year 1964-65,
but that after they had plowed the land in preparation for the
agricultural year 1965-66 defendant's henchmen created some
disturbance at the place for the purpose of ejecting her forcibly
therefrom. Plaintiff was allowed to litigate as pauper, and notice of
the iling of the complaint was served upon Lipana on July 31, 1965.
On July 29, 1965 Lipana in turn went to the Municipal Court of
Plaridel, Bulacan on an action for "Ejectment and Forcible Entry"
(Civil Case No. 235), with a prayer for the issuance of a writ of
preliminary injunction against Magdalena dela Cruz and her
husband Lorenzo Ignacio, alleging that he, Lipana, had been placed
in possession of the landholding by the provincial sheriff of Bulacan
by virtue of the order of the CAR dated January 27, 1965 in CAR
Cases Nos. 750, 827 and 895.
Defendants iled their answer with counterclaim on August 11,
1965, denying the substantial averments of the complaint and
alleging as af irmative defense the pendency of CAR Case No. 1221.
In their counterclaim for damages, defendants alleged that
Magdalena dela Cruz was the tenant of Felizardo Lipana but that the
latter wanted to eject her because she married her co-defendant
Lorenzo Ignacio, who was a member of a farmers' organization in
the locality.
On August 2, 1965 the Municipal Court of Plaridel ordered
defendants, pending the hearing of the case on the merits, to desist
from plowing, harrowing, and/or planting the land in question upon
the iling by plaintiff of a bond of P2,000.00.
On October 7, 1965 plaintiff iled a motion to declare defendants in
contempt of court for having plowed, harrowed and planted the
land in question in spite of the existence of the injunctive order. In
their opposition dated October 18, 1965 defendants pointed out
that they did so as tenants of the land subject of CAR Case No. 1221
and that if they observed the injunctive order of the Municipal Court
they would in effect be violating their rights and obligations in said
CAR case.
On November 25, 1965 the Municipal Court found defendants guilty
of contempt and sentenced them to pay a ine of P50.00 each or
suffer imprisonment for ten days. This order was appealed by
defendants, in forma pauperis, to the Court of First Instance, where
the case was docketed as Civil Case No. 3280-M.
On May 31, 1966 a decision in Civil Case No. 235 was rendered by
the Municipal Court, ordering defendants to vacate the land and to
remove their house therefrom. This decision was likewise appealed
to the Court of First Instance, where the case was docketed as Civil
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
Case No. 3363-M. Again, defendants were allowed to appeal as
paupers.
In due time the trial in CAR Case No. 1221 was terminated and the
trial Judge, in an order dated September 13, 1966, gave both parties
ifteen days from notice that the stenographic notes had been
transcribed within which to submit their memoranda, after which
period the case would be deemed submitted for decision. The CAR,
however, held its decision in abeyance for the reason that "it is
powerless to modify or set aside the decision rendered by the
Municipal Court in Civil Case No. 235, now on appeal with the Court
of First Instance of Bulacan."
In Civil Cases Nos. 3280-M and 3363-M before the Court of First
Instance, defendants (petitioners herein), in a motion dated April
28, 1967, asked for the postponement of the hearing scheduled on
May 2, 1967. The court denied the motion on May 2, 1967 and
allowed plaintiff to present his evidence ex parte before the Deputy
Clerk of Court.
On May 16, 1967 defendants iled a motion for reconsideration,
pleading that the evidence presented by plaintiff be disregarded
and the hearing of the case reset for another date. This motion was
also denied.
On July 27, 1967 the Court of First Instance rendered judgment in
Civil Cases Nos. 3280-M and 3363-M, which reads as follows:
"Wherefore, judgment is hereby rendered:
1. With respect to Civil Case No. 3280, inding the defendants
guilty of contempt of court and sentencing them each to pay a ine
in the sum of P50.00 or to suffer an imprisonment of 10 days;
2. With respect to Civil Case No. 3363, ordering the
defendants and/or anybody acting under them, to vacate the
premises in question and remove their house therefrom within 30
days from notice hereof."
The facts show clearly that these cases proceed from and involve
essentially a tenancy dispute. Before Civil Case No. 235 was iled in
the Municipal Court of Plaridel, three cases involving the same
landholding had already been iled with the Court of Agrarian
Relations. The issue as to who had been in actual possession of the
land since the death of the tenant Alipio Marcelo was before the
CAR in Case No. 895, a suit brought by Maximo Marcelo against
Lipana and Magdalena dela Cruz, wherein he sought to be declared
as the tenant by right of succession to Alipio Marcelo. The case,
however, was dismissed together with CAR Cases Nos. 725 and 827
originally brought by Alipio Marcelo, without the issue of actual
possession having been resolved, by virtue of the compromise
agreement entered into between Maximo and Lipana. Magdalena
dela Cruz thereafter iled her complaint - CAR Case No. 1221 - to
have herself declared the lawful tenant of the landholding.
While it is true that the jurisdiction of the court in a suit for
ejectment or forcible entry is determined by the allegations in the
complaint, yet where tenancy is averred as a defense and, upon
hearing, is shown to be the real issue, the court should dismiss the
case for want of jurisdiction.[3] The decision of the CAR, it should be
remembered, was rendered upon a compromise agreement
between Maximo Marcelo and Felizardo Lipana. The right of
Magdalena dela Cruz, who was a co-defendant in CAR Case No. 895,
was not touched upon in said agreement. There the decision simply
stated that CAR Cases Nos. 750, 827 and 895 were "deemed closed
and terminated as between Maximo Marcelo and Felizardo Lipana;"
and the writ of execution was limited to "placing Mr. Felizardo
Lipana immediately in possession of the landholding formerly
cultivated by Maximo Marcelo or any person, agent, and/or
representative acting in behalf of Maximo Marcelo."
It was therefore incorrect for respondent court to conclude from the
decision and writ of execution in the CAR cases that Lipana had
actual possession, as against Magdalena dela Cruz, over the
landholding prior to the alleged unlawful detainer and/or forcible
entry. While both Maximo and Magdalena asserted the right to
Based on Syllabus of Dean Monteclar  By RGL  7 of 95
 
succeed to the tenancy of the same landholding after the death of
Alipio Marcelo, the CAR did not adjudicate that right to either of
them nor did it resolve the question as to who had actual possession
of the landholding after the death of Alipio. What it did, in order to
prevent further trouble between Maximo and Magdalena was to
place the landholding under the administration of the Agricultural
Extension Of icer, with instruction that Maximo and Magdalena
should be given preference in working on the land as laborers. The
allegations in the complaint in CAR Case No. 1221 reveal that they
worked on different portions of the land in accordance with the
CAR's order. This was how things stood when Maximo entered into
a compromise agreement with Lipana surrendering his rights over
the landholding in favor of the latter. For all intents and purposes,
therefore, the decision and writ of execution affected only the claim
of Maximo Marcelo as tenant and his actual possession of the
portion of the land on which he was working by virtue of the
provisional arrangement ordered by the CAR. Since the tenancy
dispute remained unresolved with respect to Magdalena dela Cruz
and was actually the subject of litigation in CAR Case No. 1221, the
iling of the ejectment case was an intrusion upon the jurisdiction of
said court.
WHEREFORE, the writ prayed for is granted and the decision of
respondent court in Civil Cases Nos. 3280-M and 3363-M is set
aside. No costs.
Concepcion, C.J., Reyes, Zaldivar, Castro, Fernando, Teehankee,
Barredo, Villamor, and Makasiar, JJ., concur.
03 Mindanao Rapid Co v Omandam, L-23058, Nov 
27, 1971 
149 Phil. 358
G.R. No. L-23058, November 27, 1971 
MINDANAO  RAPID CO., INC. (MINRAPCO), REPRESENTED 
BY  ITS  MANAGER,  DALMACIO  S.  ENRIQUE, 
PLAINTIFF-APPELLANT,  VS.  CRESENCIO  OMANDAM, 
LABOR LEADER, ET AL., DEFENDANTS-APPELLEES. 
[G.R. NO. L-23473. NOVEMBER 27, 1971] 
RUDY  DOMINGUEZ,  PLAINTIFF-APPELLEE,  VS. 
PEPSI-COLA  BOTTLING  CO.,  INC., 
DEFENDANT-APPELLANT. 
[G.R. NO. L-23871. NOVEMBER 27, 1971] 
JUAN  GLIPO,  PLAINTIFF-APPELLANT,  VS.  A.  L.  AMMEN 
TRANSPORTATION CO., INC., DEFENDANT-APPELLEE. 
[G.R. NO. L-24232. NOVEMBER 27, 1971] 
DEMOCRATIC  LABOR  ASSOCIATION  (DLA)  AND/OR  ITS 
PRESIDENT,  DELFIN  N.  MERCADER,  PETITIONERS,  VS. 
JUDGE  GUILLERMO  VILLASOR,  OF  THE  COURT  OF  FIRST 
INSTANCE  OF  CEBU,  CEBU  STEVEDORING  CO.,  INC.,  THE 
PROVINCIAL  COMMANDER  &  CHIEF  OF  POLICE  OF CEBU 
CITY, RESPONDENTS. 
[G.R. NO. L-24718. NOVEMBER 27, 1971] 
MANILA  CORDAGE  WORKERS'  UNION-PAFLU, 
PETITIONER,  VS.  HON.  SAMUEL  F. REYES, AS PRESIDING 
JUDGE  OF  THE  COURT  OF  FIRST  INSTANCE  OF  RIZAL, 
 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

7TH  JUDICIAL  DISTRICT,  BRANCH  X,  AND  THE  MANILA  ground that, as night watchman of defendant A. L. Ammen
CORDAGE COMPANY, RESPONDENTS.  Transportation Co., working from 6 p.m. to 6 a.m., since May 13,
1960, he had been receiving P90.00 less, every month, than the
minimum provided for in the Minimum Wage Law, and had not been
[G.R. NO. L-24956. NOVEMBER 27, 1971] 
given the prescribed overtime pay. On motion of the company, the
lower court dismissed the case, upon the ground that it is within the
NATIONAL  MINES  AND  ALLIED  WORKERS'  UNION  exclusive jurisdiction of the Court of Industrial Relations. A
(NAMAWU-MIF),  PETITIONER,  VS.  HON.  PERFECTO  reconsideration of the order to this effect having been denied,
QUICHO,  JUDGE  OF  THE  COURT  OF  FIRST  INSTANCE  OF  plaintiff interposed the present appeal.
ALBAY,  LEGASPI  OIL  COMPANY,  INC.,  AND  ELDRED  L-24232. Petitioner Democratic Labor Association having staged a
FEWKES, RESPONDENTS.  strike against respondent Cebu Stevedoring Co., for alleged unfair
labor practices thereof, the company iled with the Court of First
D E C I S I O N  Instance of Cebu a complaint - docketed as Civil Case No. 8725
CONCEPCION, C.J.: thereof - to restrain the Association from preventing, through force,
intimidation and coercion, the ingress and egress of non-striking
A common basic issue in these six (6) cases - which court has employees into and from the compound of the company. The latter,
jurisdiction over the same, the Court of First Instance or the Court likewise, sought to recover damages, for unearned income during
of Industrial Relations - has prompted the rendition of this joint the strike, and prayed for a writ of preliminary injunction, which
decision. was granted ex parte by respondent Judge Guillermo Villasor.
L-23058. Plaintiff, Mindanao Rapid Co., Inc. (MINRAPCO), iled with The Association moved to dismiss, assailing the jurisdiction of the
the Court of First Instance of Cotabato a complaint - docketed as lower court, upon the theory that the damages claimed by the
Civil Case No. 1920 - for the recovery of actual and moral damages, company and the picketing it sought to restrain had arisen out of a
as well as attorney's fees, owing to the following acts, allegedly labor dispute between the parties owing to unfair labor practices of
committed by defendants Cresencio Omandam, Angel Matondo, the company, which are within the exclusive jurisdiction of the
Arturo Tero, Feliciano Carreon, and other persons whose names do Court of Industrial Relations. The court of irst instance having
not appear in the records before Us, namely: (1) leaving or denied the motion and thereafter made the injunction permanent,
abandoning "their respective jobs or works" as employees of the Association commenced the present original action for
MINRAPCO and dumping eleven (11) passenger buses thereof at certiorari and prohibition, with preliminary injunction - which We
Bangkal, Davao City, "thereby exposing them to the elements and to issued - upon the ground that the main case is within the exclusive
the hazards of being damaged or lost"; (2) coercing and jurisdiction of the Court of Industrial Relations, the issue in the
intimidating MINRAPCO of icials thereby exposing them to court of irst instance being an integral part of a labor dispute
"humiliation, public ridicule and mental anguish"; and (3) thereby between the parties, arising from an unfair labor practice of the
compelling MINRAPCO to engage the services of counsel. company.
The defendants iled a motion to dismiss, alleging that the court has L-24718. Petitioner Manila Cordage Workers' Union-PAFLU having
no jurisdiction over the subject-matter of the complaint, the acts given a notice of strike, respondent Manila Cordage Company iled
complained of by MINRAPCO having arisen from a labor dispute with the Court of First Instance of Rizal a petition - docketed as Civil
between their, and that the defendants, who are members of the Case No. 8617 of said court - "for declaratory relief and injunction"
Cotabato Employees and Laborers' Union (CELU), had participated against the union and its of icers, to restrain them "from demanding
in a strike declared by CELU against MINRAPCO and picketed its and insisting on their demand and from threatening to enforce their
garage at Bangkal, Davao City, "where the eleven buses in question demand," as well as from compelling the company to "negotiate
are found." The lower court granted the motion and dismissed the with the respondents on bargainable matters x x x." The trial court
complaint. Hence, this appeal by MINRAPCO, upon the theory that, issued the writ of preliminary injunction prayed for by the
in inding that the aforementioned labor dispute existed, the lower Company, and later refused to lift said writ. Soon, thereafter, the
court had indulged in "a mere conjecture," unsupported by any of union and several members thereof iled, with the Court of
the allegations in the complaint, which must be assumed to be true Industrial Relations, an unfair labor practice charge against the
and are exclusively determinative of the merits of the motion to Company for having dismissed the "individual complainants
dismiss and of the order of dismissal appealed from. discriminatorily" on account of their union activities. Thereafter,
L-23473. Plaintiff Rudy Dominguez iled with the Court of First the union went on strike. On motion of the Company, the court of
Instance of Negros Occidental - where it was docketed as Civil Case irst instance required the respondents in case No. 8617 to show
No. 6912 - a complaint for reinstatement and damages owing to his cause why they should not be punished for contempt of court for
dismissal by defendant Pepsi-Cola Bottling Co., Inc., as truck driver having allegedly violated the injunction. Thereupon, the Union
thereof, "without due warning and without possible cause or initiated in the Supreme Court the present special civil action for
causes." The company moved to dismiss for lack of jurisdiction of "certiorari with injunction," alleging lack of jurisdiction of the court
said court over the subject-matter of the case, the same being of irst instance to hear and decide said case No. 8617, the issue
within the exclusive original jurisdiction of the Court of Industrial therein being inextricably connected with a labor dispute arising
Relations owing to plaintiff's prayer for reinstatement. The motion from the Company's unfair labor practices, which are within the
having been denied, the case was, after the iling of defendant's exclusive jurisdiction of the Court of Industrial Relations.
answer, subsequently heard on the merits. Judgment was later L-24956. Petitioner National Mines and Allied Workers' Union
rendered directing plaintiff's reinstatement without back wages, for, (NAMAWU-MIF) preferred an unfair labor practice charge against
although he had, without just cause, assaulted the of icer-in-charge respondent Legaspi Oil Company, Inc. in view of the dismissal, due
of defendant's motorpool, such act is - in the lower court's opinion - allegedly to union activities, of a number of its employees, who are
insuf icient to warrant plaintiff's dismissal, this being his " irst Union members. Soon later, the Union struck against the Company
offense." In its appeal, the defendant insists, inter alia, that the case and established a picket line along its premises in Arimbay, Legaspi
is within the exclusive jurisdiction of the Court of Industrial City. The Company, in turn, iled with the Court of First Instance of
Relations. Albay a complaint for injunction and damages - docketed as Civil
L-23871. In his complaint iled with the Court of First Instance of Case No. 2772 of said court - alleging that, despite the absence of a
Sorsogon, plaintiff Juan Glipo seeks to recover P3,969.00, plus moral collective bargaining agreement between the parties, the Union had
and exemplary damages apart from attorney's fees, upon the declared a strike and picketed the Company premises; that, by

Based on Syllabus of Dean Monteclar  By RGL  8 of 95 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
means of threat and violence, the Union had thus prevented
laborers, employees and customers of the Company from going in
and out of said premises; and that, in consequence thereof, the
Company stood to lose P10,000 daily. As prayed for by the
Company, the court of irst instance issued ex parte a writ of
preliminary injunction. The Union moved to dismiss said case No.
2772, alleging, inter alia, lack of jurisdiction over its subject-matter,
upon the theory that the case had arisen out of a labor dispute
already pending in the Court of Industrial Relations. Judge Perfecto
Quicho, who presided over the court of irst instance, denied the
motion and ordered the issuance of an injunction pursuant to
section 9(d) of Rep. Act 875. Hence, this original petition for
certiorari and prohibition against Judge Quicho, the Company and
its plant superintendent, Eldred Fewkes.
As above indicated, the common issue in these cases is whether the
same are within the jurisdiction of the Court of Industrial Relations
or that of the court of irst instance. In this connection, speaking
through Mr. Justice Sanchez, We had occasion to postulate, in
Bay-view Hotel, Inc. v. Manila Hotel Workers' Union[1]:
"1. Petitioner's case is planted upon the averment that respondent's
causes of action are not covered by any one of those enumerated in
the 1956 case of PAFLU vs. Tan, 99 Phil. 854, 862. There, this Court
con ined the CIR's jurisdiction to the following cases:
"'x x x (1) when the labor dispute affects an industry which is
indispensable to the national interest and is so certi ied by the
President to the industrial court (Section 10, Republic Act No. 875);
(2) when the controversy refers to minimum wage under the
Minimum Wage Law (Republic Act No. 602); (3) when it involves
hours of employment under the Eight-Hour Labor Law
(Commonwealth Act No. 444); and (4) when it involves an unfair
labor practice [Section 5, (a), Republic Act No. 875].'
"But the court below asserted jurisdiction on the authority of
PRISCO vs. CIR, et al., L-13806, May 23, 1960. In that case, this
Court reviewed the cases decided since PAFLU and then stated:
'Analyzing these cases, the underlying principle, it will be noted in
all of them, though not stated in express terms, is that where the
employer-employee relationship is still existing or is sought to be
reestablished because of its wrongful severance (as where the
employee seeks reinstatement), the Court of Industrial Relations
has jurisdiction over all claims arising out of or in connection with
employment, such as those related to the Minimum Wage Law and
the Eight-Hour Labor Law. After the termination of the relationship
and no reinstatement is sought, such claims become mere money
claims, and come within the jurisdiction of the regular courts.
'We are aware that in 2 cases [Mindanao Bus Employees Labor
Union (PLUM) vs. Mindanao Bus Co., et al., L-9795, December 28,
1957; Gomez vs. North Camarines Lumber Co., L-11945, August 18,
1958] some statements implying a different view have been made,
but we now hold and declare the principles set forth in the next
preceding paragraph as the one governing all cases of this nature.'
"Then, amongst the many cases thereafter, restatements were made
in Sy Huan vs. Bautista, et al., L-16115, August 29, 1961, and
Campos, et al. vs. Manila Railroad Co., et al., L-17905, May 25, 1962.
In Sy Huan, we said:
'The jurisdiction of the Court of Industrial Relations, under the law
and the jurisprudence, extends only to cases involving (a) labor
disputes affecting an industry which is indispensable to the national
interest and so certi ied by the President to the Court, Section 10,
Republic Act No. 875; b) controversy about the minimum wage
under the Minimum Wage Law, Republic Act No. 602; (c) hours of
employment under the Eight-Hour Labor Law, Commonwealth Act
No. 444; and (d) unfair labor practice, Section 5 (a), Republic Act
No. 875. PAFLU vs. Tan, 52 O.G. 5836. x x x. And such disputes and
controversies, in order that they may fall under the jurisdiction of
the Court of Industrial Relations, must arise while the
employer-employee relationship between the parties exists, or the
employee seeks reinstatement. When such relationship is over and
Based on Syllabus of Dean Monteclar  By RGL  9 of 95
 
the employee does not seek reinstatement, all claims become
money claims that fall under the jurisdiction of the regular courts.
Price Stabilization Corporation vs. Court of Industrial Relations, et
al., x x x.'
And in Campos, the language we employed was:
'We may, therefore, restate, for the bene it of the bench and the bar,
that in order that the Court of Industrial Relations may acquire
jurisdiction over a controversy in the light of Republic Act No. 875,
the following circumstances must be present: (a) there must exist
between the parties an employer-employee relationship, or the
claimant must seek his reinstatement; and (b) the controversy must
relate to a case certi ied by the President to the CIR as one involving
national interest, or must have a bearing on an unfair labor practice
charge, or must arise either under the Eight-Hour Labor Law, or
under the Minimum Wage Law. In default of any of these
circumstances the claim becomes a mere money claim that comes
under the jurisdiction of the regular courts.'
"Later pronouncements reiterate the Campos case. As matters now
stand, the doctrine enunciated in Campos still prevails."2
This view was reiterated in Lakas ng Manggagawang Makabayan v.
Abiera,3 from which We quote:
"Under the next section of the Industrial Peace Act,4 the jurisdiction
over an unfair labor practice case, whether on the part of
management or of a labor union, is vested with the Court of
Industrial Relations. Thus: 'The Court shall have jurisdiction over
the prevention of unfair labor practices and is empowered to
prevent any person from engaging in any unfair labor practice. This
power shall be exclusive and shall not be affected by any other
means of adjustment or prevention that has been or may be
established by an agreement, code, law or otherwise.' This Court
then ever since the effectivity of such Act has no choice but to
adhere to the view that the Court of Industrial Relations and not a
court of irst instance, is vested with jurisdiction over every kind of
an unfair labor practice case. x x x."
To the long list of cases cited in support of the foregoing statement,5
We must add the recent decision in Rustan Supervisory Union v.
Dalisay6 stressing the exclusive jurisdiction of the Court of
Industrial Relations over unfair labor practice cases.
Referring now to cases L-23058, L-24232, L-24718 and L-24956, it
will be noted that the acts therein complained of by the employer
were directly interwoven with a labor dispute arising out of certain
acts thereof claimed by the employees and/or the union to which
they are af iliated to constitute unfair labor practices. The issue
between the parties is, accordingly, within the exclusive jurisdiction
of the Court of Industrial Relations and beyond that of courts of irst
instance, even if no unfair labor practice case had as yet been iled
with the irst court, it being "enough that unfair labor practice is
involved."7
Appellant in L-23058 and private respondent in L-24718 maintain
that jurisdiction is determined solely by the allegations of their
respective complaints, and that, tested by such allegations, the
subject-matter of said complaints in the court of irst instance are
within the jurisdiction thereof. The rule to this effect, established,
in connection with demurrers under our old Code of Civil
Procedure8 is no longer adhered to - except, perhaps, where the
ground invoked is the failure of the complaint to state a cause of
action - inasmuch as the Rules of Court9 now permit a motion to
dismiss based upon facts not alleged in the complaint, such as, inter
alia, pendency of another action between the same parties for the
same cause, res adjudicata, the statute of limitations.
This is specially true in cases involving a con lict of jurisdiction
between the Court of Industrial Relations and a court of irst
instance. To be sure, counsel have, at times, drafted their pleadings
so adroitly as to refrain from even suggesting that the issue between
the parties is due to a labor dispute between them. This
notwithstanding, whenever the existence of such dispute and of
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
other facts placing the issue within the exclusive jurisdiction of the
Court of Industrial Relations has been duly established, this Court
has not hesitated to declare that the court of irst instance has no
authority to hear and decide the case.10 Thus, in Rustan
Supervisory Union v. Dalisay,11 it was held:
"x x x For while in regular civil actions, the question of jurisdiction
is determined by the allegations of the complaint, the rule differs in
labor disputes in that the Court has set the criterion that 'whether
the acts complained of in the petition for injunction arose out of, or
are connected or interwoven with, the unfair labor practice case
[presents] a question of fact that should be brought to the attention
of the court a quo to enable it to pass upon the issue whether it has
jurisdiction or not over the case,’ and 'the court is duty bound to
ind out if there really is a labor dispute by reception of evidence.' x
x x.”
As this Court had earlier said, in Leoquinco v. Canada Dry Bottling
Co. of the Philippines, Inc. Employees Association12:
"x x x, We see no abuse of discretion by the court a quo in taking
into account the related facts disclosed in respondent labor
organization's opposition to the issuance of the injunction, and in
the annexes thereto, specially since they were merely clari icatory
of the averments of the appellants' complaint that was so artfully
drafted as to conceal the fact that the acts sought to be enjoined
originated or were the consequence of a strike against the common
employer."
It having been satisfactorily shown that the facts alleged in the
complaints in L-23058, L-24232, L-24718 and L-24956 are directly
interwoven with unfair labor practices, courts of irst instance are
bereft of authority to restrain said acts, the power to determine
whether the same should be enjoined being vested exclusively in
the Court of Industrial Relations.
"It has likewise long been settled that where the acts complained of
by the company are directly interwoven with the unfair labor
practice charged against it by the union, 'the main case does not
come under the jurisdiction of the [regular] trial court, even if it
involves violence, intimidation and coercion as averred in the
complaint,' as in the case below, for the industrial court's
jurisdiction is exclusive. If the purpose of the action is to obtain
some injunctive relief against certain acts of the union members, the
same can be obtained from the industrial court which is given
ample powers to act thereon."13
What is more, the issuance of labor injunctions demand strict
adherence to the provisions of section 9 of the Industrial Peace Act.
As postulated in the Rustan case14:
"x x x. The issuance of injunctions in connection with labor disputes
is governed by the statutory restrictions therein provided and not
by the Rules of Court. And injunctions in labor disputes are not
favored and may issue only after a strict and rigorous compliance
with the statutory requisites. It will be readily seen that the
injunction order and writ of respondent court must be overturned
for the same failure to comply with the statutory restrictions as in
the Philippine Communications Workers case, viz: 'For one, there is
the absence of a showing that the court heard the testimony of
witnesses required in Section 9 (d) to support the allegations of the
complaint and testimony in opposition thereto. Then, the court did
not make any ' inding of fact' as to the existence or non-existence of
the facts required to be shown under the afore-quoted Section 9 (d)
and also under Section 9 (f) of the Industrial Peace Act. Nor was
notice given 'to the chief of those public of icials of the * * * city * * *
charged with the duty to protect complainant's property,' also a
pre-requisite in said Section 9 (d) heretofore mentioned. And
inally, the record is barren as to whether or not complainant
exerted 'every reasonable effort to settle such dispute by
negotiation or with the aid of any available governmental
machinery of mediation or by voluntary arbitration,' another
condition exacted by law - this time Section 9 (c) of the Industrial
Peace Act - before a restraining order or injunction may be granted.
Based on Syllabus of Dean Monteclar  By RGL  10 of 95
 
Failure to comply with even one of these requirements will suf ice
to deny the issuance of the writ.'"15
The jurisdictional issue heretofore dealt with has in L-23473 and
L-23871 certain peculiar aspects. Although the plaintiff in L-23473
seeks reinstatement with back wages, upon the theory that he had
been dismissed without just cause, no other fact has been alleged to
make out a case within the jurisdiction of the Court of Industrial
Relations. An analogous situation obtained in Administrator of Hda.
Luisita Estate vs. Alberto,16 involving employees who had allegedly
been removed summarily or without just cause. Inasmuch as no
additional fact had been alleged that might bring the dispute within
the jurisdiction of the Court of Industrial Relations, and there being
not even a hint of unfair labor practice or violation of either the
Minimum Wage Law or the Eight-Hour Labor Law, We held that said
Court had no jurisdiction over the case, for:
"At any rate, and as a practical consideration, these ex-employees
never invoked in the Industrial Court any of the possible
circumstances that might bring the dispute within the category of
suits included in its jurisdiction. Therein they submitted several
pleadings; and in maintaining the Court's authority, they never
hinted at any unfair labor practice, or Wage Law or Eight-Hour
Labor Law violation. Even here, fully apprised of the Industrial
Court's position, they failed to take their cue, and advanced no
proposition to con irm the respondent court's conjectures or
foreseen contingencies. In other words, even after the Industrial
Court had indicated three lines of approach, three roads leading to
its jurisdictional territory, Alberto et al. refused to walk any one of
them or to express their intention to follow the lead. Obviously,
because their counsel knows they can't.
"Wherefore, there is no use compelling the Hacienda to spend time
and money resisting their claims before the Industrial Court."
The Court of First Instance of Negros Occidental, accordingly, had
jurisdiction over the subject-matter of plaintiff's complaint in
L-23473, so that the issue before Us boils down to whether his
dismissal by the plaintiff-appellee was capricious or justi ied. It
appears that plaintiff had in licted physical injuries, within the
company compound, upon Gerardo Gareza, who was in charge of
the company motor-pool. Considering that an employer is entitled
to ire employees for just cause17 and that challenging a superior
of icer to a ight has been held to be a suf icient ground for
dismissal, as a measure of self-protection of the employer whose
interest is jeopardized thereby,18 We ind that defendant company
was justi ied in dismissing plaintiff Rudy Dominguez.
Opining that his dismissal was too harsh a measure inasmuch as
plaintiff's misdeed was his " irst offense," and that his suspension
since October 30, 1962, is more than suf icient penalty for the
wrong done by him, the lower court ordered his reinstatement
without back wages. We do not share this view. In Manila Trading
and Supply Co. vs. Zulueta,19 this Court adverted to the fact that
even economic orthodoxy cannot be expanded to compel an
employer to continue employing a person guilty of misfeasance
against the former and whose interest is endangered by the
continued service of said employee. In the words of Mr. Justice
Laurel,
"The whole controversy is centered around the right of the Court of
Industrial Relations to order the readmission of a laborer who, it is
admitted, had been found derelict in the performance of his duties
towards his employer. We concede that the right of an employer to
freely select or discharge his employees, is subject to regulation by
the State basically in the exercise of its paramount police power.
(Commonwealth Acts. Nos. 103 and 213.) But much as we should
expand beyond economic orthodoxy, we hold that an employer
cannot legally be compelled to continue with the employment of a
person who admittedly was guilty of misfeasance or malfeasance
towards his employer, and whose continuance in the service of the
latter is patently inimical to his interests. The law, in protecting the
rights of the laborer, authorizes neither oppression nor
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
self-destruction of the employer. There may, of course, be cases
where the suspension or dismissal of an employee is whimsical or
unjusti ied or otherwise illegal in which case he will be protected.
Each case will be scrutinized carefully and the proper authorities
will go to the core of the controversy and not close their eyes to the
real situation. This is not however the case here."
Plaintiff's dismissal by the defendant being justi ied, the former's
reinstatement as directed by the lower court cannot be sustained.
In L-23871, plaintiff Juan Glipo seeks to recover a sum of money
allegedly due to him by way of underpayment of wages. However,
he has neither prayed for reinstatement nor alleged the existence of
an employer-employee relationship between him and the Company.
Thus, the case is limited to one simply for the recovery of a sum of
money, which is within the competence of the court of irst instance.
In Magdalena Estate, Inc. vs. Bangilan,20 We held:
"Is an action (1) for recovery of underpayment under the Minimum
Wage Law, and (2) for the recovery of separation pay under
Republic Act 1052, as amended by Republic Act 1787, within the
jurisdiction of the Court of Industrial Relations? With respect to the
irst item, we are of the opinion that the proper court before which
the claim should be presented is the Court of First Instance and not
the Industrial Court, particularly where, as in this case, there is no
labor dispute involved and the claim pertains exclusively to the past
and has nothing to do with current wages. In Teodora Donato vs.
Philippine Marine Of icers Association& Court of Industrial
Relations, G.R. No. L-12506, May 18, 1959, it is stated:
'Underpayment of the minimum wage or violation of the Minimum
Wage Law is not one of the acts of unfair labor practice enumerated
in Republic Act No. 875, particularly Section 4 thereof, and the
jurisdiction of the Industrial Court under Section 5 thereof
exclusively refers to the prevention of unfair labor practice, not of
having allegedly underpaid Morales by giving him a salary below
the minimum wage ixed by Republic Act 602; so that in our
opinion, it is clear that the Industrial Court decided and resolved a
point absolutely outside the question and case presented before it
and over which it had no jurisdiction.
'Moreover, only the Courts of First Instance have jurisdiction over
cases arising from the Minimum Wage Law. Section 16 of said law,
Republic Act 602, provides that the Court of First Instance shall
have jurisdiction to restrain violations of said act. In the case of
Isidoro Cebrero vs. Jose Talaman, G.R. No. L-11924, decided on May
16, 1958, involving among other things underpayment by an
employer to an employee, we said, through Mr. Justice Alex Reyes
that under Republic Act 602, known as the Minimum Wage Law, an
employee is authorized to bring an action in the regular courts for
the recovery of unpaid wages. The Industrial Court with its limited
jurisdiction does not come under the category of regular courts.’
"Section 16 (a) of Republic Act No. 602, referred to in the decision
just cited, provided:
'SEC. 16. JURISDICTION OF THE COURTS. - (a) The Court of First
Instance shall have jurisdiction to restrain violations of this Act;
action by the Secretary or by the employees affected to recover
UNDERPAYMENT may be brought in any COMPETENT Court, which
shall render its decision on such cases within ifteen days from the
time the case has been submitted for decision; in appropriate
instances, appeal from the decisions of those courts on any action
under this Act shall be in accordance with applicable law.'"21
Since the lower court has jurisdiction over the case, the appealed
order dismissing the complaint should be set aside and the case
remanded to said court for further proceedings.
IN VIEW OF THE FOREGOING, judgment should be, as it is hereby,
rendered:
(a) In L-24232, L-24718 and L-24956, granting the writ of
certiorari therein prayed for and making permanent the writs of
preliminary injunction therein issued. Respondent courts and/or
judges should, moreover, be, as they are hereby, ordered to dismiss
Based on Syllabus of Dean Monteclar  By RGL  11 of 95
 
Civil Case No. 8725 in L-24232, Civil Case No. 8617 in L-24718, and
Civil Case No. 2772 in L-24956, with costs against the private
respondents therein;
(b) In L-23058, af irming the order appealed from, with costs
against plaintiff-appellant Mindanao Rapid Co., Inc.;
(c) In L-23871, reversing the order appealed from and remanding
the case to the trial court for further proceedings, with the costs of
this instance against defendant A.L. Ammen Transportation Co.; and
(d) In L-23473, modifying the decision appealed from in the
manner above indicated and dismissing the case, without special
pronouncement as to costs.
IT IS SO ORDERED.
Reyes,J.B.L., Makalintal, Zaldivar, Ruiz Castro, Fernando, Teehankee,
Barredo, Villamor, and Makasiar, JJ., concur.
II. Preliminary Considerations 
Considerations 
Jurisdiction of Courts
04 Estacion v Sec of DAR, et al, 163361, Mar 12, 2014 
FIRST DIVISION 
G.R. No. 163361, March 12, 2014 
SPOUSES  JOSE  M.  ESTACION,  JR.  AND  ANGELINA  T. 
ESTACION,  PETITIONERS,  VS.  THE  HONORABLE 
SECRETARY,  DEPARTMENT  OF  AGRARIAN  REFORM, 
REGIONAL  DIRECTOR,  DAR,  REGION  7,  PROVINCIAL 
AGRARIAN  REFORM  OFFICER  OF  NEGROS  ORIENTAL, 
MUNICIPAL  AGRARIAN  REFORM  OFFICER,  DAR, 
GUIHULNGAN,  NEGROS  ORIENTAL,  PRESIDENT,  LAND 
BANK  OF  THE  PHILIPPINES,  AND  PHILIPPINE NATIONAL 
BANK, DUMAGUETE BRANCH, RESPONDENTS. 
D E C I S I O N 
REYES, J.:
In September 1995, spouses Jose M. Estacion, Jr.[1] and Angelina T.
Estacion (petitioners) initially iled a petition for just compensation
with the Regional Trial Court (RTC) of Negros Oriental, Branch 30,
acting as a Special Agrarian Court (SAC). In their petition, they
alleged that they are the owners of two parcels of adjacent land in
Guihulngan, Negros Oriental, with an aggregate area of 986,932
square meters. The irst parcel (Lot No. 1-A) has 793,954 sq m,
while the second parcel (Lot No. 4810) has 192,978 sq m, both
covered by Transfer Certi icate of Title (TCT) No. T-9096. According
to the petitioners, sometime in February 1974, they were informed
that their properties were placed under the coverage of the
Operation Land Transfer program of Presidential Decree (P.D.) No.
27.[2] They contested the coverage, claiming that it was untenanted
and primarily devoted to crops other than rice and corn. Despite
their protest, their properties were forcibly covered for agrarian
purposes, and that the tenants to whom the properties were
awarded were enjoying the bene its thereof, without the petitioners
having been duly compensated for the value of said properties.
Thus, the petitioners prayed for the determination of just
compensation or in the alternative, to restore to them possession of
the properties, with damages.[3]
Instead of iling an answer, public respondents Department of
Agrarian Reform (DAR) and Land Bank of the Philippines (LBP)
iled a Motion to Dismiss, which, according to the petitioners, is a
prohibited pleading under Section 16[4] of P.D. No. 946.[5] In their
Motion to Dismiss, public respondents claimed that: (1) the RTC has
no jurisdiction over the case; (2) the petitioners have no legal
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
personality to sue the public respondents; (3) the petitioners have
no cause of action against the public respondents; and (4) the case
is barred by the statute of limitations, among others.[6] The
petitioners iled a Comment on the Motion to Dismiss.[7]
On May 12, 1998, the petitioners iled an Amended Petition[8] and
included the Philippine National Bank (PNB) as respondent. It
appears that sometime in October 1974, the petitioners mortgaged
the properties covered by TCT No. T-9096 as security for a
P449,200.00-loan they obtained from PNB. The mortgage was
foreclosed on December 10, 1984 and title was already transferred
to the name of PNB. In including PNB as respondent, the petitioners
contended that its foreclosure of the mortgaged properties was
done in violation of P.D. No. 27 and subsequently, Republic Act (R.A.)
No. 6657,[9] which prohibits the foreclosure of properties covered by
the agrarian laws.
PNB iled a motion to dismiss the amended petition, alleging lack of
cause of action and prescription.[10]
On July 23, 1999, the SAC issued an Order[11] dismissing the case for
lack of jurisdiction and lack of cause of action. The SAC sustained
PNB’s claim that it has already acquired the rights over the property
by virtue of the extrajudicial foreclosure of the mortgage. The SAC
also ruled that the petitioners failed to exhaust administrative
remedies when they failed to secure prior determination of just
compensation by the DAR. The SAC further ruled that being a SAC of
limited jurisdiction, it does not have jurisdiction to nullify the
extrajudicial foreclosure proceedings as indirectly sought by the
petitioners. The dispositive portion of the SAC order reads:
Accordingly, the Order dated March 11, 1999 is modi ied and the
above-entitled case is dismissed for lack of jurisdiction and lack of
cause of action.
Petitioners’ Motion for Reconsideration dated March 23, 1999 is
denied for lack of merit.
[12]
SO ORDERED.
Thus, the petitioners appealed to the Court of Appeals (CA), which
in the assailed Decision[13] dated September 26, 2003, dismissed the
appeal for lack of merit. Their motion for reconsideration was
denied by the CA in the assailed Resolution dated March 22,
2004.[14]
Hence, this petition for review, where the petitioners argue that: (1)
the motions to dismiss iled by the respondents with the SAC are
prohibited pleadings and should not have been given cognizance by
the SAC; (2) they are the absolute owners of the properties as
evidenced by TCT No. T-9096 (for Lot 1-A) and Tax Declaration No.
90-02-007 (for Lot No. 4810) issued in their names; and (3) the SAC
has jurisdiction to (a) determine just compensation and there is no
need to pass through the DAR, and (b) annul the sheriff’s sale of the
properties.[15]
The DAR iled a comment to the petition, maintaining that the SAC
correctly dismissed the case for lack of jurisdiction as it does not
have any power to nullify the foreclosure order, and that such issue
was vested in the RTC in the exercise of its general jurisdiction. The
DAR also argued that the petitioners do not have any personality to
ile the case since the properties have already been foreclosed by
the PNB and the title was consolidated in its name. Finally, the DAR
Based on Syllabus of Dean Monteclar  By RGL  12 of 95
 
contended that the petitioners failed to exhaust their administrative
remedies when they failed to seek initial determination of just
compensation with the DAR.[16]
PNB, meanwhile, justi ied the foreclosure of the properties
mortgaged by the petitioners. According to PNB, since the
petitioners admitted that the properties were untenanted, P.D. No.
27—which applies only to tenanted lands devoted to rice and corn,
and which prohibits foreclosure of land covered by said act—does
not apply. PNB also argued that it had every right to foreclose the
mortgage on the properties due to the petitioners’ failure to pay
their agricultural crop loan; and that the latter’s failure to redeem
the properties justi ies the consolidation of the title in PNB’s name.
Consequently, the petitioners are no longer owners of the
properties and have no legal standing or cause of action to seek just
compensation. PNB also maintained that the SAC does not have
jurisdiction to nullify the foreclosure sale of the properties, and that
the period to ile such action has already prescribed.[17]
Ruling of the Court
The petition is DENIED for lack of merit.
P.D. No. 946 is not applicable
The basis for the petitioners’ objection to the motions to dismiss
iled by the respondents with the SAC is Section 17 of P.D. No. 946,
which states:
Sec. 17. Pleadings; Hearings; Limitation on Postponements. The
defendant shall ile his answer to the complaint (not a motion to
dismiss), within a non-extendible period of ten (10) days from
service of summons, and the plaintiff shall ile his answer to the
counterclaim, if there be any, within a non-extendible period of ive
(5) days. x x x.
The petitioners’ reliance on P.D. No. 946, however, is misplaced.
First, the petitioners are correct in pointing out that P.D. No. 946
prohibits the iling of a motion to dismiss. P.D. No. 946, however, is
not applicable.
It is settled that jurisdiction over the subject matter is determined
by the law in force at the time of the commencement of the
action.[18] At the time the petitioners iled their case for just
compensation in 1995, P.D. No. 946, which reorganized the Court of
Agrarian Relations (CAR) and streamlined its procedure, has
already been superseded by R.A. No. 6657, which created, among
others, the SACs.[19] Section 57 of R.A. No. 6657 expressly provides
that the SACs shall exercise original and exclusive jurisdiction over
all petitions for the determination of just compensation to
landowners, and the prosecution of all criminal offenses under said
Act.[20] More importantly, Section 57 further provides that “[t]he
Rules of Court shall apply to all proceedings before the [SACs],
unless modi ied by this Act.”
In this case, the RTC of Negros Oriental, Branch 30, was acting as a
SAC. The Rules of Court,[21] therefore, was the rule of procedure
applicable to the cases iled before it. Under Rule 16 of the Rules of
Court, and even under the present 1997 Rules of Civil Procedure, as
amended, a motion to dismiss is not a prohibited pleading.
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
Consequently, the SAC had every right to admit and resolve the
motions to dismiss iled by respondents LBP and PNB.
Even assuming, for argument’s sake, that P.D. No. 946 is applicable,
the rule prohibiting a motion to dismiss is not in lexible and admits
of exception. The rule is that technicalities may be disregarded in
order to resolve the case on its merits.[22] It should be borne in mind
that the prohibition on the iling of a motion to dismiss under P.D.
No. 946 was meant to achieve a just, expeditious and inexpensive
disposition of agrarian cases.[23] In this case, the iling of the motions
to dismiss did not unduly delay the disposition of the case. In fact,
said motions brought into light the laws in the appropriateness of
the petition for just compensation iled by the petitioners and
readily provided the SAC reasonable basis for its dismissal. In
Tanpingco v. Intermediate Appellate Court,[24] the Court took
exception to the literal interpretation of Section 17 of P.D. No. 946
and sustained the grant of a motion to dismiss, viz:
We, therefore, take exception to the literal application of Section 17
of P.D. No. 946 for as stated in Salonga v. Warner Barnes and Co., Ltd.
(88 Phil. 125 [1951], an action is brought for a practical purpose, nay
to obtain actual and positive relief. If the party sued upon is not the
proper party, any decision that may be rendered against him would
be futile, for it cannot be enforced or executed. The effort that may
be employed will be wasted.[25]
Moreover, Section 16 of P.D. No. 946 explicitly required the CAR to
“utilize and employ every and all reasonable means to ascertain the
facts of every case in accordance with justice and equity and the
merits of the case, without regard to technicalities of law and
procedure.” Certainly, it would be more dilatory if the SAC were to
deny the motions to dismiss iled by LBP and PNB, require them to
ile an answer and proceed with the trial of the case, only to
subsequently dismiss the case based on the palpable grounds
alleged in the motions to dismiss.
The petitioners have no personality to
file the petition for the determination
of just compensation
Records bear out the fact that at the time the petitioners iled the
Amended Petition in 1998, ownership of the properties sought to be
compensated for was already transferred to respondent PNB. As
early as 1969, the petitioners already mortgaged the properties as
security for the sugar crop loan they originally obtained from
respondent PNB,[26] and as admitted by the petitioners, respondent
PNB foreclosed the mortgage on the property in 1982.[27] As a result,
title to the properties was consolidated in the name of PNB.
Moreover, as disclosed by PNB,[28] the properties were already
transferred to the government pursuant to the mandate of
Executive Order No. 407,[29] which directed all government-owned
and -controlled corporations to surrender to the DAR all
landholdings suitable for agriculture.[30] Clearly, the petitioners have
no personality to seek determination of just compensation given
that ownership of and title to the properties have already passed on
to PNB and eventually, the State.
In Government Service Insurance System v. Court of Appeals,[31] a case
similar to the case at bench, the Court held that the private
respondent therein had no personality to sue for the determination
and payment of just compensation of the subject lots because
whatever right he may have had over said lots was defeated by the
consolidation of ownership in the name of petitioner GSIS. Thus –
Based on Syllabus of Dean Monteclar  By RGL  13 of 95
 
It is not disputed that the subject lots were not redeemed from
petitioner. When the one (1) year redemption period expired
without private respondent exercising the right of redemption,
ownership over the foreclosed properties was consolidated in
the name of petitioner. Hence, the latter can legally transfer
ownership therein to the DAR in compliance with Executive Order
No. 407. Clearly, private respondent had no personality to sue for
the determination and payment of just compensation of said lots
because he failed to show that his offer was accepted by the DAR,
and more importantly, because whatever right he may have had
over said lots was defeated by the consolidation of ownership
in the name of petitioner who turned over the subject lots to
the DAR. x x x Private respondent x x x has no right to sell what
never became his, much more, ask that he be compensated for that
which was never bought from him.[32] (Emphasis ours)
The petitioners cannot solely rely on TCT No. T-9096 to assert
ownership over the properties since it is merely an evidence of
ownership or title over the particular property described therein.[33]
Ownership is not the same as a certi icate of title.[34]
Exclusive and original jurisdiction of the
SAC to determine just compensation
In upholding the SAC’s dismissal of the case below, the CA sustained
the SAC’s ruling that the petitioners failed to exhaust their
administrative remedies when they iled the case for just
compensation directly with the SAC instead of going through the
DAR summary administrative proceedings to determine
compensation as provided in Section 16 of R.A. No. 6657.[35]
Contrary to the CA’s position, however, the RTC, acting as a SAC, has
jurisdiction to determine just compensation at the very irst
instance, and the petitioners need not pass through the DAR for
initial valuation.
Section 57 of R.A. No. 6657 provides:
Sec. 57. 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 modi ied 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. (Emphasis ours)
The determination of just compensation is essentially a judicial
function, which is vested in the RTC acting as SAC. It cannot be
lodged with administrative agencies such as the DAR.[36] The Court
has already settled the rule that the SAC is not an appellate reviewer
of the DAR decision in administrative cases involving
compensation.[37] In Land Bank of the Philippines v. Wycoco,[38] the
Court upheld the jurisdiction of the SAC over the complaint for the
determination of just compensation, despite the absence of
summary administrative proceedings before the DARAB.
Meanwhile, in Landbank of the Philippines v. Honeycomb Farms
Corporation,[39] the Court ruled that the SAC properly acquired
jurisdiction over the complaint for the determination of just
compensation despite the pendency of the DARAB proceedings.
According to the Court:
 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

To reiterate, the taking of property under RA 6657 is an exercise of
the State’s power of eminent domain. “The valuation of property or
determination of just compensation in eminent domain proceedings
is essentially a judicial function which is vested with the courts and
not with administrative agencies.” Speci ically, “[w]hen the parties
cannot agree on the amount of just compensation, only the exercise
of judicial power can settle the dispute with binding effect on the
winning and losing parties.”[40] (Citations omitted)
Nevertheless, as correctly pointed out by the SAC, it does not have
the power to determine the validity of the extrajudicial foreclosure
of the mortgage conducted by PNB over the properties, as prayed
for by the petitioners. The jurisdiction of the SAC vested by Section
57 of R.A. No. 6657, while original and exclusive, is limited only to
petitions for the determination of just compensation to landowners,
and the prosecution of all criminal offenses under this Act. In
Quismundo v. Court of Appeals,[41] the Court expressly ruled that
Sections 56 and 57 delimit the jurisdiction of the RTCs in agrarian
cases only to these two instances. And as correctly ruled by the SAC,
“[w]hile a [SAC] has powers inherent to the [RTC] under Sec. 56 (3)
of [R.A. No.] 6657 it should not be construed to refer to the power to
exercise general jurisdiction which is vested in the [RTC].”[42] Given
these, it is no longer necessary to resolve respondent PNB’s
argument that the petitioners’ cause of action for the declaration of
the nullity of the extrajudicial foreclosure has already prescribed.
WHEREFORE, the petition for review is DENIED for lack of merit.
The Decision dated September 26, 2003 and Resolution dated
March 22, 2004 of the Court of Appeals in CA-G.R. CV No. 65086,
insofar as it af irmed the Order dated July 23, 1999 of the Regional
Trial Court of Negros Oriental, Branch 30, acting as a Special
Agrarian Court, are AFFIRMED.
SO ORDERED.
Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and
Villarama, Jr., JJ., concur.
Before the Court is a special civil action for certiorari under Rule 65
of the Rules of Court seeking to reverse and set aside the
Resolutions[1] dated April 6, 2006 and November 29, 2006 of the
Court of Appeals (CA) in CA-G.R. SP No. 87948.
The antecedents of the case, as summarized by the CA, are as
follows:
The record shows that petitioner City of Manila, through its
treasurer, petitioner Liberty Toledo, assessed taxes for the taxable
period from January to December 2002 against private respondents
SM Mart, Inc., SM Prime Holdings, Inc., Star Appliances Center,
Supervalue, Inc., Ace Hardware Philippines, Inc., Watsons Personal
Care Stores Phils., Inc., Jollimart Philippines Corp., Surplus
Marketing Corp. and Signature Lines. In addition to the taxes
purportedly due from private respondents pursuant to Section 14,
15, 16, 17 of the Revised Revenue Code of Manila (RRCM), said
assessment covered the local business taxes petitioners were
authorized to collect under Section 21 of the same Code. Because
payment of the taxes assessed was a precondition for the issuance
of their business permits, private respondents were constrained to
pay the P 19,316,458.77 assessment under protest.
On January 24, 2004, private respondents iled [with the Regional
Trial Court of Pasay City] the complaint denominated as one for
“Refund or Recovery of Illegally and/or Erroneously-Collected Local
Business Tax, Prohibition with Prayer to Issue TRO and Writ of
Preliminary Injunction” which was docketed as Civil Case No.
04-0019-CFM before public respondent's sala [at Branch 112]. In
the amended complaint they iled on February 16, 2004, private
respondents alleged that, in relation to Section 21 thereof, Sections
14, 15, 16, 17, 18, 19 and 20 of the RRCM were violative of the
limitations and guidelines under Section 143 (h) of Republic Act.
No. 7160 [Local Government Code] on double taxation. They further
averred that petitioner city's Ordinance No. 8011 which amended
pertinent portions of the RRCM had already been declared to be
illegal and unconstitutional by the Department of Justice.[2]
In its Order[3] dated July 9, 2004, the RTC granted private
respondents' application for a writ of preliminary injunction.

Petitioners iled a Motion for Reconsideration[4] but the RTC denied

05 City of Manila v Grecia-Cuerdo, et al, 175723,  it in its Order[5] dated October 15, 2004.
Feb 4, 2014 
EN BANC 
Petitioners then iled a special civil action for certiorari with the CA
G.R. No. 175723, February 04, 2014  assailing the July 9, 2004 and October 15, 2004 Orders of the RTC.[6]

THE  CITY OF MANILA, REPRESENTED BY MAYOR JOSE L. 
In its Resolution promulgated on April 6, 2006, the CA dismissed
ATIENZA,  JR.,  AND  MS.  LIBERTY  M.  TOLEDO,  IN  HER 
petitioners' petition for certiorari holding that it has no jurisdiction
CAPACITY  AS  THE  CITY  TREASURER  OF  MANILA,  over the said petition. The CA ruled that since appellate jurisdiction
PETITIONERS, VS. HON. CARIDAD H. GRECIA-CUERDO, IN  over private respondents' complaint for tax refund, which was iled
HER  CAPACITY  AS  PRESIDING  JUDGE OF THE REGIONAL  with the RTC, is vested in the Court of Tax Appeals (CTA), pursuant
TRIAL  COURT,  BRANCH  112,  PASAY  CITY;  SM  MART,  to its expanded jurisdiction under Republic Act No. 9282 (RA 9282),
INC.;  SM  PRIME  HOLDINGS,  INC.;  STAR  APPLIANCES  it follows that a petition for certiorari seeking nulli ication of an
CENTER;  SUPERVALUE,  INC.;  ACE  HARDWARE  interlocutory order issued in the said case should, likewise, be iled
with the CTA.
PHILIPPINES,  INC.;  WATSON  PERSONAL  CARE  STORES, 
PHILS.,  INC.;  JOLLIMART  PHILS.,  CORP.;  SURPLUS 
MARKETING  CORPORATION  AND  SIGNATURE  LINES,  Petitioners iled a Motion for Reconsideration,[7] but the CA denied
RESPONDENTS.  it in its Resolution dated November 29, 2006.

 
Hence, the present petition raising the following issues:
I- Whether or not the Honorable Court of Appeals gravely erred
D E C I S I O N 
in dismissing the case for lack of jurisdiction.
PERALTA, J.:

Based on Syllabus of Dean Monteclar  By RGL  14 of 95 

 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

II- Whether or not the Honorable Regional Trial Court gravely

To plaintiff Signature - 94,906.34
abuse[d] its discretion amounting to lack or excess of
Mktg. Corp.
jurisdiction in enjoining by issuing a Writ of Injunction the
petitioners[,] their agents and/or authorized representatives
from implementing Section 21 of the Revised Revenue Code of
Manila, as amended, against private respondents.
TOTAL: P
19,316,458.
III- Whether or not the Honorable Regional Trial Court gravely 77
abuse[d] its discretion amounting to lack or excess of
jurisdiction in issuing the Writ of Injunction despite failure of Defendants are further enjoined from collecting taxes under Section
private respondents to make a written claim for tax credit or 21, Revenue Code of Manila from herein plaintiff.
refund with the City Treasurer of Manila.

SO ORDERED.[10]
IV- Whether or not the Honorable Regional Trial Court gravely
The parties did not inform the Court but based on the records, the
abuse[d] its discretion amounting to lack or excess of
above Decision had already become inal and executory per the
jurisdiction considering that under Section 21 of the Manila
Certi icate of Finality[11] issued by the same trial court on October
Revenue Code, as amended, they are mere collecting agents of
20, 2008. In fact, a Writ of Execution[12] was issued by the RTC on
the City Government.
November 25, 2009.

V- Whether or not the Honorable Regional Trial Court gravely

In view of the foregoing, it clearly appears that the issues raised in
abuse[d] its discretion amounting to lack or excess of
the present petition, which merely involve the incident on the
jurisdiction in issuing the Writ of Injunction because petitioner
preliminary injunction issued by the RTC, have already become
City of Manila and its constituents would result to greater
moot and academic considering that the trial court, in its decision
damage and prejudice thereof. (sic)[8]
on the merits in the main case, has already ruled in favor of
Without irst resolving the above issues, this Court inds that the respondents and that the same decision is now inal and executory.
instant petition should be denied for being moot and academic. Well entrenched is the rule that where the issues have become moot
and academic, there is no justiciable controversy, thereby rendering
the resolution of the same of no practical use or value.[13]
U pon perusal of the original records of the instant case, this Court
discovered that a Decision[9] in the main case had already been
rendered by the RTC on August 13, 2007, the dispositive portion of In any case , the Court inds it necessary to resolve the issue on
which reads as follows: jurisdiction raised by petitioners owing to its signi icance and for
future guidance of both bench and bar. It is a settled principle that
WHEREFORE, in view of the foregoing, this Court hereby renders
courts will decide a question otherwise moot and academic if it is
JUDGMENT in favor of the plaintiff and against the defendant to
grant a tax refund or credit for taxes paid pursuant to Section 21 of capable of repetition, yet evading review.[14]
the Revenue Code of the City of Manila as amended for the year
2002 in the following amounts: However, before proceeding, to resolve the question on jurisdiction,
the Court deems it proper to likewise address a procedural error
To plaintiff SM Mart, Inc. - P
which petitioners committed.
11,462,525.0
2
Petitioners availed of the wrong remedy when they iled the instant
To plaintiff SM Prime - 3,118,104.63 special civil action for certiorari under Rule 65 of the Rules of Court
Holdings, Inc. in assailing the Resolutions of the CA which dismissed their petition
iled with the said court and their motion for reconsideration of
To plaintiff Star - 2,152,316.54 such dismissal. There is no dispute that the assailed Resolutions of
Appliances Center the CA are in the nature of a inal order as they disposed of the
petition completely. It is settled that in cases where an assailed
judgment or order is considered inal, the remedy of the aggrieved
To plaintiff Supervalue, - 1,362,750.34
party is appeal. Hence, in the instant case, petitioner should have
Inc.
iled a petition for review on certiorari under Rule 45, which is a
continuation of the appellate process over the original case.[15]
To plaintiff Ace - 419,689.04
Hardware Phils., Inc.
Petitioners should be reminded of the equally-settled rule that a
To plaintiff Watsons - 231,453.62 special civil action for certiorari under Rule 65 is an original or
Personal Care Health independent action based on grave abuse of discretion amounting
Stores Phils., Inc. to lack or excess of jurisdiction and it will lie only if there is no
appeal or any other plain, speedy, and adequate remedy in the
ordinary course of law.[16] As such, it cannot be a substitute for a lost
To plaintiff Jollimart - 140,908.54
appeal.[17]
Phils., Corp.

To plaintiff Surplus - 220,204.70 Nonetheless, in accordance with the liberal spirit pervading the
Marketing Corp. Rules of Court and in the interest of substantial justice, this Court
has, before, treated a petition for certiorari as a petition for review
on certiorari, particularly (1) if the petition for certiorari was iled

Based on Syllabus of Dean Monteclar  By RGL  15 of 95 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
within the reglementary period within which to ile a petition for
review on certiorari; (2) when errors of judgment are averred; and
(3) when there is suf icient reason to justify the relaxation of the
rules.[18] Considering that the present petition was iled within the
15-day reglementary period for iling a petition for review on
certiorari under Rule 45, that an error of judgment is averred, and
because of the signi icance of the issue on jurisdiction, the Court
deems it proper and justi ied to relax the rules and, thus, treat the
instant petition for certiorari as a petition for review on certiorari.
Having disposed of the procedural aspect, we now turn to the
central issue in this case. The basic question posed before this Court
is whether or not the CTA has jurisdiction over a special civil action
for certiorari assailing an interlocutory order issued by the RTC in a
local tax case.
This Court rules in the af irmative.
On June 16, 1954, Congress enacted Republic Act No. 1125 (RA
1125) creating the CTA and giving to the said court jurisdiction over
the following:
(1) Decisions of the Collector of Internal Revenue in cases involving
disputed assessments, refunds of internal revenue taxes, fees or
other charges, penalties imposed in relation thereto, or other
matters arising under the National Internal Revenue Code or other
law or part of law administered by the Bureau of Internal Revenue;
(2) Decisions of the Commissioner of Customs in cases involving
liability for customs duties, fees or other money charges; seizure,
detention or release of property affected ines, forfeitures or other
penalties imposed in relation thereto; or other matters arising
under the Customs Law or other law or part of law administered by
the Bureau of Customs; and
(3) Decisions of provincial or City Boards of Assessment Appeals in
cases involving the assessment and taxation of real property or
other matters arising under the Assessment Law, including rules
and regulations relative thereto.
On March 30, 2004, the Legislature passed into law Republic Act No.
9282 (RA 9282) amending RA 1125 by expanding the jurisdiction of
the CTA, enlarging its membership and elevating its rank to the level
of a collegiate court with special jurisdiction. Pertinent portions of
the amendatory act provides thus:
Sec. 7. Jurisdiction. - The CTA shall exercise:
a. Exclusive appellate jurisdiction to review by appeal, as herein
provided:
1. Decisions of the Commissioner of Internal Revenue in cases
involving disputed assessments, refunds of internal revenue taxes,
fees or other charges, penalties in relation thereto, or other matters
arising under the National Internal Revenue or other laws
administered by the Bureau of Internal Revenue;
2. Inaction by the Commissioner of Internal Revenue in cases
involving disputed assessments, refunds of internal revenue taxes,
fees or other charges, penalties in relations thereto, or other
matters arising under the National Internal Revenue Code or other
laws administered by the Bureau of Internal Revenue, where the
National Internal Revenue Code provides a speci ic period of action,
in which case the inaction shall be deemed a denial;
Based on Syllabus of Dean Monteclar  By RGL  16 of 95
 
3. Decisions, orders or resolutions of the Regional Trial Courts
in local tax cases originally decided or resolved by them in the
exercise of their original or appellate jurisdiction;
4. Decisions of the Commissioner of Customs in cases involving
liability for customs duties, fees or other money charges, seizure,
detention or release of property affected, ines, forfeitures or other
penalties in relation thereto, or other matters arising under the
Customs Law or other laws administered by the Bureau of Customs;
5. Decisions of the Central Board of Assessment Appeals in the
exercise of its appellate jurisdiction over cases involving the
assessment and taxation of real property originally decided by the
provincial or city board of assessment appeals;
6. Decisions of the Secretary of Finance on customs cases elevated
to him automatically for review from decisions of the Commissioner
of Customs which are adverse to the Government under Section
2315 of the Tariff and Customs Code;
7. Decisions of the Secretary of Trade and Industry, in the case of
nonagricultural product, commodity or article, and the Secretary of
Agriculture in the case of agricultural product, commodity or
article, involving dumping and countervailing duties under Section
301 and 302, respectively, of the Tariff and Customs Code, and
safeguard measures under Republic Act No. 8800, where either
party may appeal the decision to impose or not to impose said
duties.
b. Jurisdiction over cases involving criminal offenses as herein
provided:
1. Exclusive original jurisdiction over all criminal offenses arising
from violations of the National Internal Revenue Code or Tariff and
Customs Code and other laws administered by the Bureau of
Internal Revenue or the Bureau of Customs: Provided, however,
That offenses or felonies mentioned in this paragraph where the
principal amount of taxes and fees, exclusive of charges and
penalties, claimed is less than One million pesos ( P 1,000,000.00)
or where there is no speci ied amount claimed shall be tried by the
regular Courts and the jurisdiction of the CTA shall be appellate.
Any provision of law or the Rules of Court to the contrary
notwithstanding, the criminal action and the corresponding civil
action for the recovery of civil liability for taxes and penalties shall
at all times be simultaneously instituted with, and jointly
determined in the same proceeding by the CTA, the iling of the
criminal action being deemed to necessarily carry with it the iling
of the civil action, and no right to reserve the iling of such civil
action separately from the criminal action will be recognized.
2. Exclusive appellate jurisdiction in criminal offenses:
a. Over appeals from the judgments, resolutions or orders of the
Regional Trial Courts in tax cases originally decided by them, in
their respected territorial jurisdiction.
b. Over petitions for review of the judgments, resolutions or orders
of the Regional Trial Courts in the exercise of their appellate
jurisdiction over tax cases originally decided by the Metropolitan
Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
Courts in their respective jurisdiction.
c. Jurisdiction over tax collection cases as herein provided:
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
1. Exclusive original jurisdiction in tax collection cases involving
inal and executory assessments for taxes, fees, charges and
penalties: Provides, however, that collection cases where the
principal amount of taxes and fees, exclusive of charges and
penalties, claimed is less than One million pesos ( P 1,000,000.00)
shall be tried by the proper Municipal Trial Court, Metropolitan
Trial Court and Regional Trial Court.
2. Exclusive appellate jurisdiction in tax collection cases:
a. Over appeals from the judgments, resolutions or orders of the
Regional Trial Courts in tax collection cases originally decided by
them, in their respective territorial jurisdiction.
b. Over petitions for review of the judgments, resolutions or orders
of the Regional Trial Courts in the Exercise of their appellate
jurisdiction over tax collection cases originally decided by the
Metropolitan Trial Courts, Municipal Trial Courts and Municipal
Circuit Trial Courts, in their respective jurisdiction.[19]
A perusal of the above provisions would show that, while it is
clearly stated that the CTA has exclusive appellate jurisdiction over
decisions, orders or resolutions of the RTCs in local tax cases
originally decided or resolved by them in the exercise of their
original or appellate jurisdiction,there is no categorical statement
under RA 1125 as well as the amendatory RA 9282, which provides
that the CTA has jurisdiction over petitions for certiorari assailing
interlocutory orders issued by the RTC in local tax cases iled before
it.
The prevailing doctrine is that the authority to issue writs of
certiorari involves the exercise of original jurisdiction which must
be expressly conferred by the Constitution or by law and cannot be
implied from the mere
existence of appellate jurisdiction.[20] Thus, in the cases of Pimentel
v. COMELEC,[21] Garcia v. De Jesus,[22] Veloria v. COMELEC,[23]
Department of Agrarian Reform Adjudication Board v. Lubrica,[24] and
Garcia v. Sandiganbayan,[25] this Court has ruled against the
jurisdiction of courts or tribunals over petitions for certiorari on the
ground that there is no law which expressly gives these tribunals
such power.[26] It must be observed, however, that with the
exception of Garcia v. Sandiganbayan,[27] these rulings pertain not to
regular courts but to tribunals exercising quasi-judicial powers.
With respect to the Sandiganbayan, Republic Act No. 8249[28] now
provides that the special criminal court has exclusive original
jurisdiction over petitions for the issuance of the writs of
mandamus, prohibition, certiorari,habeas corpus, injunctions, and
other ancillary writs and processes in aid of its appellate
jurisdiction.
In the same manner, Section 5 (1), Article VIII of the 1987
Constitution grants power to the Supreme Court, in the exercise of
its original jurisdiction, to issue writs of certiorari, prohibition and
mandamus. With respect to the Court of Appeals, Section 9 (1) of
Batas Pambansa Blg. 129 (BP 129) gives the appellate court, also in
the exercise of its original jurisdiction, the power to issue, among
others, a writ of certiorari,whether or not in aid of its appellate
jurisdiction. As to Regional Trial Courts, the power to issue a writ of
certiorari, in the exercise of their original jurisdiction, is provided
under Section 21 of BP 129.
The foregoing notwithstanding, while there is no express grant of
such power, with respect to the CTA, Section 1, Article VIII of the
1987 Constitution provides, nonetheless, that judicial power shall
be vested in one Supreme Court and in such lower courts as may be
Based on Syllabus of Dean Monteclar  By RGL  17 of 95
 
established by law and that judicial power includes the duty of the
courts of justice to settle actual controversies involving rights which
are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government.
On the strength of the above constitutional provisions, it can be
fairly interpreted that the power of the CTA includes that of
determining whether or not there has been grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of
the RTC in issuing an interlocutory order in cases falling within the
exclusive appellate jurisdiction of the tax court. It, thus, follows that
the CTA, by constitutional mandate, is vested with jurisdiction to
issue writs of certiorari in these cases.
Indeed, in order for any appellate court to effectively exercise its
appellate jurisdiction, it must have the authority to issue, among
others, a writ of certiorari. In transferring exclusive jurisdiction over
appealed tax cases to the CTA, it can reasonably be assumed that the
law intended to transfer also such power as is deemed necessary, if
not indispensable, in aid of such appellate jurisdiction. There is no
perceivable reason why the transfer should only be considered as
partial, not total.
Consistent with the above pronouncement, this Court has held as
early as the case of J.M. Tuason & Co., Inc. v. Jaramillo, et al.[29] that “if
a case may be appealed to a particular court or judicial tribunal or
body, then said court or judicial tribunal or body has jurisdiction to
issue the extraordinary writ of certiorari, in aid of its appellate
jurisdiction.”[30] This principle was af irmed in De Jesus v. Court of
Appeals,[31] where the Court stated that “a court may issue a writ of
certiorari in aid of its appellate jurisdiction if said court has
jurisdiction to review, by appeal or writ of error, the inal orders or
decisions of the lower court.”[32] The rulings in J.M. Tuason and De
Jesus were reiterated in the more recent cases of Galang, Jr. v.
Geronimo[33] and Bulilis v. Nuez.[34]
Furthermore, Section 6, Rule 135 of the present Rules of Court
provides that when by law, jurisdiction is conferred on a court or
judicial of icer, all auxiliary writs, processes and other means
necessary to carry it into effect may be employed by such court or
of icer.
If this Court were to sustain petitioners' contention that jurisdiction
over their certiorari petition lies with the CA, this Court would be
con irming the exercise by two judicial bodies, the CA and the CTA,
of jurisdiction over basically the same subject matter – precisely the
split-jurisdiction situation which is anathema to the orderly
administration of justice.[35] The Court cannot accept that such was
the legislative motive, especially considering that the law expressly
confers on the CTA, the tribunal with the specialized competence
over tax and tariff matters, the role of judicial review over local tax
cases without mention of any other court that may exercise such
power. Thus, the Court agrees with the ruling of the CA that since
appellate jurisdiction over private respondents' complaint for tax
refund is vested in the CTA, it follows that a petition for certiorari
seeking nulli ication of an interlocutory order issued in the said
case should, likewise, be iled with the same court. To rule
otherwise would lead to an absurd situation where one court
decides an appeal in the main case while another court rules on an
incident in the very same case.
Stated differently, it would be somewhat incongruent with the
pronounced judicial abhorrence to split jurisdiction to conclude
 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

that the intention of the law is to divide the authority over a local
tax case iled with the RTC by giving to the CA or this Court
jurisdiction to issue a writ of certiorari against interlocutory orders
of the RTC but giving to the CTA the jurisdiction over the appeal
from the decision of the trial court in the same case. It is more in
consonance with logic and legal soundness to conclude that the
grant of appellate jurisdiction to the CTA over tax cases iled in and
decided by the RTC carries with it the power to issue a writ of
certiorari when necessary in aid of such appellate jurisdiction. The
supervisory power or jurisdiction of the CTA to issue a writ of
certiorari in aid of its appellate jurisdiction should co-exist with,
and be a complement to, its appellate jurisdiction to review, by
appeal, the inal orders and decisions of the RTC, in order to have
complete supervision over the acts of the latter.[36]
Based on the foregoing disquisitions, it can be reasonably concluded
that the authority of the CTA to take cognizance of petitions for
certiorari questioning interlocutory orders issued by the RTC in a
local tax case is included in the powers granted by the Constitution
as well as inherent in the exercise of its appellate jurisdiction.
Finally, it would bear to point out that this Court is not abandoning
the rule that, insofar as quasi-judicial tribunals are concerned, the
authority to issue writs of certiorari must still be expressly
conferred by the Constitution or by law and cannot be implied from
the mere existence of their appellate jurisdiction. This doctrine
remains as it applies only to quasi-judicial bodies.

A grant of appellate jurisdiction implies that there is included in it WHEREFORE, the petition is DENIED.
the power necessary to exercise it effectively, to make all orders that
will preserve the subject of the action, and to give effect to the inal
determination of the appeal. It carries with it the power to protect SO ORDERED.
that jurisdiction and to make the decisions of the court thereunder
effective. The court, in aid of its appellate jurisdiction, has authority
Sereno, C.J., Carpio, Velasco, Jr., Leonardo-De Castro, Brion, Bersamin,
to control all auxiliary and incidental matters necessary to the
Abad, Villarama, Jr., Perez, Mendoza, Reyes, Perlas-Bernabe, and
ef icient and proper exercise of that jurisdiction. For this purpose, it
may, when necessary, prohibit or restrain the performance of any Leonen, JJ., concur.
act which might interfere with the proper exercise of its rightful
jurisdiction in cases pending before it.[37]
Del Castillo, J., no part.

Lastly, it would not be amiss to point out that a court which is
endowed with a particular jurisdiction should have powers which
are necessary to enable it to act effectively within such jurisdiction.
These should be regarded as powers which are inherent in its
jurisdiction and the court must possess them in order to enforce its
rules of practice and to suppress any abuses of its process and to
defeat any attempted thwarting of such process.
In this regard, Section 1 of RA 9282 states that the CTA shall be of
the same level as the CA and shall possess all the inherent powers of
a court of justice.
Indeed, courts possess certain inherent powers which may be said
to be implied from a general grant of jurisdiction, in addition to
those expressly conferred on them. These inherent powers are such
powers as are necessary for the ordinary and ef icient exercise of
jurisdiction; or are essential to the existence, dignity and functions
of the courts, as well as to the due administration of justice; or are
directly appropriate, convenient and suitable to the execution of
their granted powers; and include the power to maintain the court's
jurisdiction and render it effective in behalf of the litigants.[38]
06 Tumpag v Tumpag, 199133, Sep 29, 2014 
SECOND DIVISION 
G.R. No. 199133, September 29, 2014 
ESPERANZA  TUMPAG,  SUBSTITUTED  BY  HER  SON, 
PABLITO  TUMPAG  BELNAS,  JR.,  PETITIONER,  VS. 
SAMUEL TUMPAG, RESPONDENT. 
 
D E C I S I O N 
BRION, J.:
We resolve the petition for review on certiorari[1] assailing the
November 30, 2010 decision[2] and the September 28, 2011
resolution[3] of the Court of Appeals (CA), Cebu City in CA-G.R. CV
No. 78155. The CA dismissed, without prejudice, the complaint for
recovery of possession and damages that the petitioner iled before
the Regional Trial Court (RTC) because the complaint failed to allege
the assessed value of the disputed property in the case.

Brief Statement of Facts

Thus, this Court has held that “while a court may be expressly
granted the incidental powers necessary to effectuate its
jurisdiction, a grant of jurisdiction, in the absence of prohibitive On March 13, 1995, Esperanza Tumpag (petitioner) iled a
legislation, implies the necessary and usual incidental powers complaint for recovery of possession with damages (docketed as
essential to effectuate it, and, subject to existing laws and Civil Case No. 666) against Samuel Tumpag (respondent) before the
constitutional provisions, every regularly constituted court has RTC, Branch 61, Kabankalan City, Negros Occidental. The complaint
power to do all things that are reasonably necessary for the alleged that:
administration of justice within the scope of its jurisdiction and for
the enforcement of its judgments and mandates.”[39] Hence,
1) Plaintiff (referring to the petitioner) is of legal age, widow,
demands, matters or questions ancillary or incidental to, or growing
Filipino citizen and a resident of Barangay Tuyom, Cauayan, Negros
out of, the main action, and coming within the above principles, may
Occidental, while Defendant (referring to the respondent) is also of
be taken cognizance of by the court and determined, since such
legal age, married, Filipino and a resident of Barangay Tuyom,
jurisdiction is in aid of its authority over the principal matter, even
Cauayan, Negros Occidental, where he maybe served with summons
though the court may thus be called on to consider and decide
and other processes of this Honorable Court;
matters which, as original causes of action, would not be within its
cognizance.[40]

Based on Syllabus of Dean Monteclar  By RGL  18 of 95 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
2) Plaintiff is the absolute owner of a parcel of land, identi ied as Lot
No. 1880-A, Cauayan Cadastre, containing an area of TWELVE
THOUSAND NINE HUNDRED NINETY TWO (12,992) SQUARE
METERS, more or less, situated in Barangay Tuyom, Cauayan,
Negros Occidental, more particularly bounded and described in
Transfer Certi icate of Title No. T-70184, dated April 27, 1983,
issued by the Register of Deeds of Negros Occidental in favor of
Plaintiff, xerox copy of which is hereto attached as ANNEX “A” and
made an integral part hereof;
3) Defendant has been occupying a portion of not less than ONE
THOUSAND (1,000) SQUARE METERS of the above-described parcel
of land of the Plaintiff for more than TEN (10) years, at the
tolerance of Plaintiff;
4) Sometime in 1987, Plaintiff wanted to recover the portion
occupied by Defendant but Defendant refused to return to Plaintiff
or vacate said portion he has occupied inspite of repeated demands
from Plaintiff. And, to prevent Plaintiff from recovering the portion
he has occupied, Defendant instigated his other relatives to ile a
case against the herein Plaintiff, and, in 1988, herein Defendant
Samuel Tumpag, together with Luz Tagle Vda. De Tumpag and other
relatives, iled a civil case, number 400, before this court against
herein Plaintiff, Esperanza Tumpag, for cancellation of her title with
damages;
5) Said Civil Case No. 400 was dismissed by this Honorable Court
through its Resolution, dated October 11, 1989, penned by the
Presiding Judge, the late Artemio L. Balinas, prompting the Plaintiffs
in said case to elevate the said resolution of this Honorable Court to
the Court of Appeals, and their appeal is identi ied as C.A. G.R. No.
CV-25699;
6) On June 28, 1991, the Court of Appeals rendered a decision in the
said appealed case, the dispositive portion of which read:
“PREMISES CONSIDERED, the appealed Resolution dated October
11, 1989 is hereby AFFIRMED.”
and, that the same has become inal on March 11, 1994 and was
entered, on August 26, 1994, in the Book of Entries of Judgment,
xerox copy of said Entry of Judgment of the Court of Appeals is
hereto attached as ANNEX “B” and made part hereof;
7) Herein Plaintiff needs the portion occupied by Defendant and she
has orally demanded from Defendant of the return of the same, but
Defendant refused and still refuses to do so. Hence, Plaintiff brought
the matter before the Of ice of the Barangay Captain of Barangay
Tuyom, Cauayan, Negros Occidental, for conciliation, on March 3,
1995. But, unfortunately, Defendant refused to vacate or return the
portion he occupies to Plaintiff. Attached hereto as ANNEX “C,” and
made part hereof, is the Certi ication of the Barangay Captain of
Barangay Tuyom, Cauayan, Negros Occidental, certifying that this
matter was brought to his attention for conciliation;
8) Defendant’s refusal to return the portion he occupies to Plaintiff
has caused Plaintiff to suffer actual damages in the amount of not
less than TEN THOUSAND PESOS (P10,000.00), per annum;
9) Defendant’s unjusti iable refusal to return the portion he
occupies to Plaintiff has caused Plaintiff to suffer mental anguish,
embarrassment, untold worries, sleepless nights, fright and similar
injuries, entitling her to moral damages moderately assessed at not
less than FIFTY THOUSAND PESOS (P50,000.00);
Based on Syllabus of Dean Monteclar  By RGL  19 of 95
 
10) To serve as deterrent (sic) to other persons similarly inclined
and by way of example for the public good, Defendant should be
made to pay exemplary damages in the amount of not less than
TWENTY FIVE THOUSAND PESOS (P25,000.00);
11) The unjusti iable refusal of Defendant to return the property to
the Plaintiff leaves Plaintiff no other alternative but to ile this
present action, forcing her to incur litigation expenses amounting to
not less than ONE THOUSAND PESOS (P1,000.00), attorney’s fees in
the amount of TWENTY THOUSAND PESOS (P20,000.00) plus ONE
THOUSAND PESOS (P1,000.00) for every court appearance.[4]
xxxx
Together with his answer (which was later amended), the
respondent moved to dismiss the complaint on the following
grounds: failure to state a cause of action; that the action was
barred by prior judgment; and lack of jurisdiction.[5]
The RTC, in an order dated January 16, 1996, denied the
respondent’s motion to dismiss and proceeded with pre-trial and
trial.[6]
During the pendency of the case, the petitioner died and was
substituted by her son Pablito Tumpag Belnas, Jr.[7]
In a decision[8] dated June 3, 2002, the RTC ordered the respondent
to return possession of the subject portion of the property to the
petitioner and to pay the petitioner P10,000.00 as actual damages,
P20,000.00 as moral damages, and P10,000.00 as attorney’s fees.
In his appeal to the CA, among the grounds the respondent raised
was the issue of the RTC’s lack of jurisdiction over the case.[9]
In its assailed decision,[10] the CA agreed with the respondent and
nulli ied the RTC’s June 3, 2002 decision and all proceedings before
the trial court. It held that the petitioner’s failure to allege in her
complaint the assessed value of the disputed property warranted
the complaint’s dismissal, although without prejudice, because the
court’s jurisdiction over the case should be “determined by the
material allegations of the complaint”[11] and “cannot be made to
depend upon the defenses set up in court or upon a motion to
dismiss for, otherwise, the question of jurisdiction would depend
almost entirely on the defendant.”[12] The petitioner moved to
reconsider but the CA denied her motion in its resolution[13] dated
September 28, 2011. The CA’s ruling and denial of the motion for
reconsideration gave rise to the present petition for review on
certiorari iled with this Court.
The petitioner now argues that the respondent, after having actively
participated in all stages of the proceedings in Civil Case No. 666, is
now estopped from assailing the RTC’s jurisdiction; that the subject
case had been litigated before the RTC for more than seven (7) years
and was pending before the CA for almost eight (8) years. Further,
she argues that the dismissal of her complaint was not warranted
considering that she had a meritorious case as attached to her
complaint was a copy of a Declaration of Real Property
indicating that the assessed value of the disputed property is
P20,790.00.
Our Ruling
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
We find MERIT in the present petition. The CA’s dismissal of the
petitioner’s complaint for recovery of possession is erroneous and
unwarranted.
It is well-settled that jurisdiction over a subject matter is conferred
by law, not by the parties’ action or conduct,[14] and is, likewise,
determined from the allegations in the complaint.[15]
Under Batas Pambansa Blg. 129,[16] as amended by Republic Act No.
7691,[17] the jurisdiction of Regional Trial Courts over civil actions
involving title to, or possession of, real property, or any interest
therein, is limited to cases where the assessed value of the property
involved exceeds Twenty thousand pesos (P20,000.00) or, for civil
actions in Metro Manila, where such value exceeds Fifty thousand
pesos (P50,000.00), except actions for forcible entry into and
unlawful detainer of lands or buildings.[18]
Here, the petitioner iled a complaint for recovery of possession of
real property before the RTC but failed to allege in her complaint
the property’s assessed value. Attached, however, to the petitioner’s
complaint was a copy of a Declaration of Real Property showing that
the subject property has a market value of P51,965.00 and assessed
value of P20,790.00. The CA was fully aware of this attachment
but still proceeded to dismiss the petitioner’s complaint:
Record shows that the complaint was iled with the Regional Trial
Court on December 13, 1995. There is no allegation whatsoever in
the complaint for accion publiciana concerning the assessed value of
the property involved. Attached however to the complaint is a
copy of the Declaration of Real Property of subject land which
was signed by the owner stating that its market value is
P51,965 and its assessed value is P20,790.00. (Emphasis
ours)[19]
Generally, the court should only look into the facts alleged in the
complaint to determine whether a suit is within its jurisdiction.[20]
There may be instances, however, when a rigid application of this
rule may result in defeating substantial justice or in prejudice to a
party’s substantial right.[21] In Marcopper Mining Corp. v. Garcia, [22]
we allowed the RTC to consider, in addition to the complaint, other
pleadings submitted by the parties in deciding whether or not the
complaint should be dismissed for lack of cause of action. In
Guaranteed Homes, Inc. v. Heirs of Valdez, et al., [23] we held that the
factual allegations in a complaint should be considered in tandem
with the statements and inscriptions on the documents attached to
it as annexes or integral parts.
In the present case, we ind reason not to strictly apply the
above-mentioned general rule, and to consider the facts contained
in the Declaration of Real Property attached to the complaint in
determining whether the RTC had jurisdiction over the petitioner’s
case. A mere reference to the attached document could facially
resolve the question on jurisdiction and would have rendered
lengthy litigation on this point unnecessary.
In his comment[24] to the present petition, the respondent contends
that the assessed value of the property subject of the case is actually
much below than the value stated in the attached Declaration of
Real Property. However, the test of the suf iciency of the facts
alleged in the complaint is whether, admitting the facts alleged, the
court can render a valid judgment upon the complaint in
accordance with the plaintiff’s prayer.[25] The defendant, in iling a
motion to dismiss, hypothetically admits the truth of the factual and
Based on Syllabus of Dean Monteclar  By RGL  20 of 95
 
material allegations in the complaint,[26] as well as the documents
attached to a complaint whose due execution and genuineness are
not denied under oath by the defendant; these attachments must be
considered as part of the complaint without need of introducing
evidence thereon.[27]
Lastly, we note that the present petitioner's situation comes close
with those of the respondents in Honorio Bernardo v. Heirs of
Eusebio Villegas,[28] where the Villegas heirs, in iling their complaint
for accion publiciana before the RTC, failed to allege the assessed
value of the subject property. On the complaint’s omission, the
defendant questioned the RTC’s jurisdiction in his answer to the
complaint and, again, in his appeal before the CA.
In Bernardo v. Heirs of Villegas,[29] we af irmed the CA ruling that
upheld the RTC’s jurisdiction over the case despite the complaint’s
failure to allege the assessed value of the property because the
defendant-petitioner was found to have actively participated in the
proceedings before the trial court and was already estopped from
assailing the jurisdiction of the RTC. While we mention this case
and its result, we cannot, however, apply the principle of
estoppel (on the question of jurisdiction) to the present
respondent.
We rule that the respondent is not estopped from assailing the
RTC’s jurisdiction over the subject civil case. Records show that
the respondent has consistently brought the issue of the court’s
lack of jurisdiction in his motions, pleadings and submissions
throughout the proceedings, until the CA dismissed the
petitioner’s complaint, not on the basis of a inding of lack of
jurisdiction, but due to the insuf iciency of the petitioner’s
complaint, i.e. failure to allege the assessed value of the subject
property. Even in his comment iled before this Court, the
respondent maintains that the RTC has no jurisdiction over the
subject matter of the case.
Lack of jurisdiction over the subject matter of the case can always
be raised anytime, even for the irst time on appeal,[30] since
jurisdictional issues, as a rule, cannot be acquired through a waiver
or enlarged by the omission of the parties or conferred by the
acquiescence of the court.[31] Thus, the respondent is not prevented
from raising the question on the court’s jurisdiction in his appeal, if
any, to the June 3, 2002 decision of the RTC in Civil Case No. 666.
WHEREFORE, premised considered, we GRANT the present
petition for review on certiorari and SET ASIDE the decision dated
November 30, 2010 and resolution dated September 28, 2011 of the
Court of Appeals, Cebu City in CA-G.R. CV No. 78155.
Accordingly, we REINSTATE the decision dated June 3, 2002 of the
Regional Trial Court, Branch 61, Kabankalan City, Negros Occidental
in Civil Case No. 666.
SO ORDERED.
Carpio, (Chairperson), Del Castillo, Mendoza, and Leonen, JJ., concur.
07 Indophil Textile Mills v Adviento, 171212, Aug 4, 
2014 
THIRD DIVISION 
G.R. No. 171212, August 20, 2014 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
INDOPHIL  TEXTILE  MILLS,  INC.,  PETITIONER,  VS.  ENGR. 
SALVADOR ADVIENTO, RESPONDENTS.  persistent complaints of most, if not all, workers of petitioner.[17]
 
D E C I S I O N 
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45
of the Revised Rules of Court which seeks to review, reverse and
set-aside the Decision[1] of the Court of Appeals (CA), dated May 30,
2005, and its Resolution[2] dated January 10, 2006 in the case
entitled Indophil Textile Mills, Inc. v. Hon. Rolando R. Velasco and
Engr. Salvador Adviento, docketed as CA-G.R. SP No. 83099.
The facts are not disputed.
Petitioner Indophil Textile Mills, Inc. is a domestic corporation
engaged in the business of manufacturing thread for weaving.[3] On
August 21, 1990, petitioner hired respondent Engr. Salvador
Adviento as Civil Engineer to maintain its facilities in Lambakin,
Marilao, Bulacan.[4]
On August 7, 2002, respondent consulted a physician due to
recurring weakness and dizziness.[5] Few days later, he was
diagnosed with Chronic Poly Sinusitis, and thereafter, with
moderate, severe and persistent Allergic Rhinitis.[6] Accordingly,
respondent was advised by his doctor to totally avoid house dust
mite and textile dust as it will transmute into health problems.[7]
Distressed, respondent iled a complaint against petitioner with the
National Labor Relations Commission (NLRC), San Fernando,
Pampanga, for alleged illegal dismissal and for the payment of
backwages, separation pay, actual damages and attorney’s fees. The
said case, docketed as NLRC Case No. RAB-III-05-5834-03, is still
pending resolution with the NLRC at the time the instant petition
was iled.[8]
Subsequently, respondent iled another Complaint[9] with the
Regional Trial Court (RTC) of Aparri, Cagayan, alleging that he
contracted such occupational disease by reason of the gross
negligence of petitioner to provide him with a safe, healthy and
workable environment.
In his Complaint, respondent alleged that as part of his job
description, he conducts regular maintenance check on petitioner’s
facilities including its dye house area, which is very hot and emits
foul chemical odor with no adequate safety measures introduced by
petitioner.[10] According to respondent, the air washer dampers and
all roof exhaust vests are blown into open air, carrying dust
thereto.[11] Concerned, respondent recommended to management to
place roof insulation to minimize, if not, eradicate the health
hazards attendant in the work place.[12] However, said
recommendation was turned down by management due to high
cost.[13]
Respondent further suggested to petitioner’s management that the
engineering of ice be relocated because of its dent prone location,
such that even if the door of the of ice is sealed, accumulated dust
creeps in outside the of ice.[14] This was further aggravated by the
installation of new ilters fronting the of ice.[15] However, no action
was taken by management.[16]
Based on Syllabus of Dean Monteclar  By RGL  21 of 95
 
According to respondent, these health hazards have been the
Nevertheless, said complaints fell on deaf ears as petitioner
callously ignored the health problems of its workers and even
tended to be apathetic to their plight, including respondent.[18]
Respondent averred that, being the only breadwinner in the family,
he made several attempts to apply for a new job, but to his dismay
and frustration, employers who knew of his present health
condition discriminated against him and turned down his
application.[19] By reason thereof, respondent suffered intense
moral suffering, mental anguish, serious anxiety and wounded
feelings, praying for the recovery of the following: (1) Five Million
Pesos (P5,000,000.00) as moral damages; (2) Two Million Pesos
(P2,000,000.00) as exemplary damages; and (3) Seven Million
Three Thousand and Eight Pesos (P7,003,008.00) as compensatory
damages.[20] Claiming to be a pauper litigant, respondent was not
required to pay any iling fee.[21]
In reply, petitioner iled a Motion to Dismiss[22] on the ground that:
(1) the RTC has no jurisdiction over the subject matter of the
complaint because the same falls under the original and exclusive
jurisdiction of the Labor Arbiter (LA) under Article 217(a)(4) of the
Labor Code; and (2) there is another action pending with the
Regional Arbitration Branch III of the NLRC in San Fernando City,
Pampanga, involving the same parties for the same cause.
On December 29, 2003, the RTC issued a Resolution[23] denying the
aforesaid Motion and sustaining its jurisdiction over the instant
case. It held that petitioner’s alleged failure to provide its employees
with a safe, healthy and workable environment is an act of
negligence, a case of quasi-delict. As such, it is not within the
jurisdiction of the LA under Article 217 of the Labor Code. On the
matter of dismissal based on lis pendencia, the RTC ruled that the
complaint before the NLRC has a different cause of action which is
for illegal dismissal and prayer for backwages, actual damages,
attorney’s fees and separation pay due to illegal dismissal while in
the present case, the cause of action is for quasi-delict.[24] The fallo
of the Resolution is quoted below:
WHEREFORE, inding the motion to dismiss to be without merit,
the Court denies the motion to dismiss.
SO ORDERED.[25]
On February 9, 2004, petitioner iled a motion for reconsideration
thereto, which was likewise denied in an Order issued on even date.
Expectedly, petitioner then iled a Petition for Certiorari with the CA
on the ground that the RTC committed grave abuse of discretion
amounting to lack or excess of jurisdiction in upholding that it has
jurisdiction over the subject matter of the complaint despite the
broad and clear terms of Article 217 of the Labor Code, as
amended.[26]
After the submission by the parties of their respective Memoranda,
the CA rendered a Decision[27] dated May 30, 2005 dismissing
petitioner’s Petition for lack of merit, the dispositive portion of
which states:
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
WHEREFORE, premises considered, petition for certiorari is hereby
DISMISSED for lack of merit.
SO ORDERED.[28]
From the aforesaid Decision, petitioner iled a Motion for
Reconsideration which was nevertheless denied for lack of merit in
the CA’s Resolution[29] dated January 10, 2006.
Hence, petitioner interposed the instant petition upon the solitary
ground that “THE HONORABLE COURT OF APPEALS HAS DECIDED
A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH LAW
AND WITH APPLICABLE DECISIONS OF THE HONORABLE
SUPREME COURT.”[30] Simply, the issue presented before us is
whether or not the RTC has jurisdiction over the subject matter of
respondent’s complaint praying for moral damages, exemplary
damages, compensatory damages, anchored on petitioner’s alleged
gross negligence in failing to provide a safe and healthy working
environment for respondent.
The delineation between the jurisdiction of regular courts and labor
courts over cases involving workers and their employers has always
been a matter of dispute.[31] It is up to the Courts to lay the line after
careful scrutiny of the factual milieu of each case. Here, we ind that
jurisdiction rests on the regular courts.
In its attempt to overturn the assailed Decision and Resolution of
the CA, petitioner argues that respondent’s claim for damages is
anchored on the alleged gross negligence of petitioner as an
employer to provide its employees, including herein respondent,
with a safe, healthy and workable environment; hence, it arose from
an employer-employee relationship.[32] The fact of respondent’s
employment with petitioner as a civil engineer is a necessary
element of his cause of action because without the same,
respondent cannot claim to have a right to a safe, healthy and
workable environment.[33] Thus, exclusive jurisdiction over the
same should be vested in the Labor Arbiter and the NLRC pursuant
to Article 217(a)(4) of the Labor Code of the Philippines (Labor
Code), as amended.[34]
We are not convinced.
The jurisdiction of the LA and the NLRC is outlined in Article 217 of
the Labor Code, as amended by Section 9 of Republic Act (R.A.) No.
6715, to wit:
ART. 217. Jurisdiction of Labor Arbiters and the Commission --
(a) Except as otherwise provided under this Code the Labor Arbiter
shall have original and exclusive jurisdiction to hear and decide,
within thirty (30) calendar days after the submission of the case by
the parties for decision without extension, even in the absence of
stenographic notes, the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those
cases that workers may file involving wages, rates of pay,
hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of
damages arising from employer-employee relations;
Based on Syllabus of Dean Monteclar  By RGL  22 of 95
 
5. Cases arising from any violation of Article 264 of this Code
including questions involving the legality of strikes and
lockouts; and
6. Except claims for Employees Compensation, Social
Security, Medicare and maternity bene its, all other claims,
arising from employer-employee relations, including those
of persons in domestic or household service, involving an
amount exceeding ive thousand pesos (P5,000.00)
regardless of whether accompanied with a claim for
reinstatement.
x x x.[35]
While we have upheld the present trend to refer worker-employer
controversies to labor courts in light of the aforequoted provision,
we have also recognized that not all claims involving employees can
be resolved solely by our labor courts, speci ically when the law
provides otherwise.[36] For this reason, we have formulated the
“reasonable causal connection rule,” wherein if there is a reasonable
causal connection between the claim asserted and the
employer-employee relations, then the case is within the
jurisdiction of the labor courts; and in the absence thereof, it is the
regular courts that have jurisdiction.[37] Such distinction is apt since
it cannot be presumed that money claims of workers which do not
arise out of or in connection with their employer-employee
relationship, and which would therefore fall within the general
jurisdiction of the regular courts of justice, were intended by the
legislative authority to be taken away from the jurisdiction of the
courts and lodged with Labor Arbiters on an exclusive basis.[38]
In fact, as early as Medina vs. Hon. Castro-Bartolome,[39] in negating
the jurisdiction of the LA, although the parties involved were an
employer and two employees, the Court succinctly held that:
The pivotal question to Our mind is whether or not the Labor Code
has any relevance to the reliefs sought by the plaintiffs. For if the
Labor Code has no relevance, any discussion concerning the
statutes amending it and whether or not they have retroactive
effect is unnecessary.
It is obvious from the complaint that the plaintiffs have not alleged
any unfair labor practice. Theirs is a simple action for damages
for tortious acts allegedly committed by the defendants. Such
being the case, the governing statute is the Civil Code and not the
Labor Code. It results that the orders under review are based on a
wrong premise.[40]
Similarly, we ruled in the recent case of Portillo v. Rudolf Lietz, Inc.[41]
that not all disputes between an employer and his employees fall
within the jurisdiction of the labor tribunals such that when the
claim for damages is grounded on the "wanton failure and refusal"
without just cause of an employee to report for duty despite
repeated notices served upon him of the disapproval of his
application for leave of absence, the same falls within the purview
of Civil Law, to wit:
As early as Singapore Airlines Limited v. Paño, we established that
not all disputes between an employer and his employee(s) fall
within the jurisdiction of the labor tribunals. We differentiated
between abandonment per se and the manner and consequent
effects of such abandonment and ruled that the irst, is a labor case,
while the second, is a civil law case.
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
Upon the facts and issues involved, jurisdiction over the present
controversy must be held to belong to the civil Courts. While
seemingly petitioner's claim for damages arises from
employer-employee relations, and the latest amendment to Article
217 of the Labor Code under PD No. 1691 and BP Blg. 130 provides
that all other claims arising from employer-employee relationship
are cognizable by Labor Arbiters [citation omitted], in essence,
petitioner's claim for damages is grounded on the "wanton
failure and refusal" without just cause of private respondent
Cruz to report for duty despite repeated notices served upon him
of the disapproval of his application for leave of absence without
pay. This, coupled with the further averment that Cruz
"maliciously and with bad faith" violated the terms and
conditions of the conversion training course agreement to the
damage of petitioner removes the present controversy from the
coverage of the Labor Code and brings it within the purview of
Civil Law.
Clearly, the complaint was anchored not on the abandonment per se
by private respondent Cruz of his job—as the latter was not
required in the Complaint to report back to work—but on the
manner and consequent effects of such abandonment of work
translated in terms of the damages which petitioner had to
suffer. x x x.[42]
Indeed, jurisprudence has evolved the rule that claims for damages
under Article 217(a)(4) of the Labor Code, to be cognizable by the
LA, must have a reasonable causal connection with any of the claims
provided for in that article.[43] Only if there is such a connection
with the other claims can a claim for damages be considered as
arising from employer-employee relations.[44]
In the case at bench, we ind that such connection is nil.
True, the maintenance of a safe and healthy workplace is ordinarily
a subject of labor cases. More, the acts complained of appear to
constitute matters involving employee-employer relations since
respondent used to be the Civil Engineer of petitioner. However, it
should be stressed that respondent’s claim for damages is
speci ically grounded on petitioner’s gross negligence to provide a
safe, healthy and workable environment for its employees - a case of
quasi-delict. This is easily ascertained from a plain and cursory
reading of the Complaint,[45] which enumerates the acts and/or
omissions of petitioner relative to the conditions in the workplace,
to wit:
1. Petitioner’s textile mills have excessive lying textile dust
and waste in its operations and no effort was exerted by
petitioner to minimize or totally eradicate it;
2. Petitioner failed to provide adequate and suf icient dust
suction facilities;
3. Textile machines are cleaned with air compressors
aggravating the dusty work place;
4. Petitioner has no physician specializing in
respiratory-related illness considering it is a textile
company;
5. Petitioner has no device to detect the presence or density
of dust which is airborne;
6. The chemical and color room are not equipped with
proper safety chemical nose mask; and
7. The power and boiler plant emit too much smoke with
solid particles blown to the air from the smoke stack of the
power plant emitting a brown rust color which engulfs the
entire compound.[46]
Based on Syllabus of Dean Monteclar  By RGL  23 of 95
 
In addition, respondent alleged that despite his earnest efforts to
suggest to management to place roof insulation to minimize, if not,
eradicate the health hazards attendant in the workplace, the same
was not heeded.[47]
It is a basic tenet that jurisdiction over the subject matter is
determined upon the allegations made in the complaint,
irrespective of whether or not the plaintiff is entitled to recover
upon the claim asserted therein, which is a matter resolved only
after and as a result of a trial.[48] Neither can jurisdiction of a court
be made to depend upon the defenses made by a defendant in his
answer or motion to dismiss.[49] In this case, a perusal of the
complaint would reveal that the subject matter is one of claim for
damages arising from quasi-delict, which is within the ambit of the
regular court's jurisdiction.
The pertinent provision of Article 2176 of the Civil Code which
governs quasi-delict provides that:
Whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done. Such
fault or negligence, if there is no pre-existing contractual relation
between the parties, is called quasi-delict.[50]
Thus, to sustain a claim liability under quasi-delict, the following
requisites must concur: (a) damages suffered by the plaintiff; (b)
fault or negligence of the defendant, or some other person for
whose acts he must respond; and (c) the connection of cause and
effect between the fault or negligence of the defendant and the
damages incurred by the plaintiff.[51]
In the case at bar, respondent alleges that due to the continued and
prolonged exposure to textile dust seriously inimical to his health,
he suffered work-contracted disease which is now irreversible and
incurable, and deprived him of job opportunities.[52] Clearly, injury
and damages were allegedly suffered by respondent, an element of
quasi-delict. Secondly, the previous contract of employment
between petitioner and respondent cannot be used to counter the
element of “no pre-existing contractual relation” since petitioner’s
alleged gross negligence in maintaining a hazardous work
environment cannot be considered a mere breach of such contract
of employment, but falls squarely within the elements of quasi-delict
under Article 2176 of the Civil Code since the negligence is direct,
substantive and independent.[53] Hence, we ruled in Yusen Air and
Sea Services Phils., Inc. v. Villamor[54] that:
When, as here, the cause of action is based on a quasi-delict or tort,
which has no reasonable causal connection with any of the claims
provided for in Article 217, jurisdiction over the action is with the
regular courts.[55]
It also bears stressing that respondent is not praying for any relief
under the Labor Code of the Philippines. He neither claims for
reinstatement nor backwages or separation pay resulting from an
illegal termination. The cause of action herein pertains to the
consequence of petitioner’s omission which led to a work-related
disease suffered by respondent, causing harm or damage to his
person. Such cause of action is within the realm of Civil Law, and
jurisdiction over the controversy belongs to the regular courts.[56]
Our ruling in Portillo, is instructive, thus:
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
There is no causal connection between private respondent’s claim
for damages and the respondent employers’ claim for damages for
the alleged “Goodwill Clause” violation. Portillo’s claim for unpaid
salaries did not have anything to do with her alleged violation of the
employment contract as, in fact, her separation from employment is
not “rooted” in the alleged contractual violation. She resigned from
her employment. She was not dismissed. Portillo’s entitlement to
the unpaid salaries is not even contested. Indeed, Lietz Inc.’s
argument about legal compensation necessarily admits that it owes
the money claimed by Portillo.[57]
Further, it cannot be gainsaid that the claim for damages occurred
after the employer-employee relationship of petitioner and
respondent has ceased. Given that respondent no longer demands
for any relief under the Labor Code as well as the rules and
regulations pertinent thereto, Article 217(a)(4) of the Labor Code is
inapplicable to the instant case, as emphatically held in Portillo, to
wit:
It is clear, therefore, that while Portillo’s claim for unpaid salaries is
a money claim that arises out of or in connection with an
employer-employee relationship, Lietz Inc.’s claim against Portillo
for violation of the goodwill clause is a money claim based on an
act done after the cessation of the employment relationship. And,
while the jurisdiction over Portillo’s claim is vested in the labor
arbiter, the jurisdiction over Lietz Inc.’s claim rests on the
regular courts. Thus:
As it is, petitioner does not ask for any relief under the Labor
Code. It merely seeks to recover damages based on the parties'
contract of employment as redress for respondent's breach
thereof. Such cause of action is within the realm of Civil Law, and
jurisdiction over the controversy belongs to the regular courts.
More so must this be in the present case, what with the reality
that the stipulation refers to the post-employment relations of
the parties.[58]
Where the resolution of the dispute requires expertise, not in labor
management relations nor in wage structures and other terms and
conditions of employment, but rather in the application of the
general civil law, such claim falls outside the area of competence of
expertise ordinarily ascribed to the LA and the NLRC.[59]
Guided by the aforequoted doctrines, we ind no reason to reverse
the indings of the CA. The RTC has jurisdiction over the subject
matter of respondent’s complaint praying for moral damages,
exemplary damages, compensatory damages, anchored on
petitioner’s alleged gross negligence in failing to provide a safe and
healthy working environment for respondent.
WHEREFORE, the petition is DENIED. The Decision of the Court of
Appeals, dated May 30, 2005, and its Resolution dated January 10,
2006 in CA-G.R. SP No. 83099 are hereby AFFIRMED.
SO ORDERED.
Velasco, Jr., (Chairperson) Villarama, Jr.,* Mendoza, and Leonen, JJ.,
concur.
RULE 1 General Provisions
08 Manchester Dev Corp v CA, 149 SCRA 562  ownership and possession of a parcel of land. The damages stated
233 Phil. 579
Based on Syllabus of Dean Monteclar  By RGL  24 of 95
 
EN BANC 
G.R. No. 75919, May 07, 1987 
MANCHESTER  DEVELOPMENT  CORPORATION,  ET  AL., 
PETITIONERS,  VS.  COURT  OF  APPEALS,  CITYLAND 
DEVELOPMENT  CORPORATION,  STEPHEN  ROXAS, 
ANDREW  LUISON,  GRACE  LUISON  AND  JOSE  DE  MAISIP, 
RESPONDENTS. 
 
R E S O L U T I O N 
GANCAYCO, J.:
Acting on the motion for reconsideration of the resolution of the
Second Division of January 28, 1987 and another motion to refer
the case to and to be heard in oral argument by the Court En Banc
iled by petitioners, the motion to refer the case to the Court en banc
is granted but the motion to set the case for oral argument is
denied.
Petitioners in support of their contention that the iling fee must be
assessed on the basis of the amended complaint cite the case of
Magaspi vs. Ramolete.[1] They contend that the Court of Appeals
erred in ruling that the iling fee should be levied by considering the
amount of damages sought in the original complaint.
The environmental facts of said case differ from the present in that
—
1. The Magaspi case was an action for recovery of ownership and
possession of a parcel of land with damages,[2] while the present
case is an action for torts and damages and speci ic performance
with prayer for temporary restraining order, etc.[3]
2. In the Magaspi case, the prayer in the complaint seeks not only
the annulment of title of the defendant to the property, the
declaration of ownership and delivery of possession thereof to
plaintiffs but also asks for the payment of actual, moral, exemplary
damages and attorney's fees arising therefrom in the amounts
speci ied therein.[4] However, in the present case, the prayer is for
the issuance of a writ of preliminary prohibitory injunction during
the pendency of the action against the defendants announced
forfeiture of the sum of P3 Million paid by the plaintiffs for the
property in question, to attach such property of defendants that
maybe suf icient to satisfy any judgment that maybe rendered, and
after hearing, to order defendants to execute a contract of purchase
and sale of the subject property and annul defendants' illegal
forfeiture of the money of plaintiff, ordering defendants jointly and
severally to pay plaintiff actual, compensatory and exemplary
damages as well as 25% of said amounts as maybe proved during
the trial as attorney's fees and declaring the tender of payment of
the purchase price of plaintiff valid and producing the effect of
payment and to make the injunction permanent. The amount of
damages sought is not speci ied in the prayer although the body of
the complaint alleges the total amount of over P78 Million as
damages suffered by plaintiff.[5]
3. Upon the iling of the complaint there was an honest difference of
opinion as to the nature of the action in the Magaspi case. The
complaint was considered as primarily an action for recovery of
were treated as merely ancillary to the main cause of action. Thus,
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
the docket fee of only P60.00 and P10.00 for the sheriff's fee were
paid.[6]
In the present case there can be no such honest difference of
opinion. As maybe gleaned from the allegations of the complaint as
well as the designation thereof, it is both an action for damages and
speci ic performance. The docket fee paid upon iling of complaint
in the amount only of P410.00 by considering the action to be
merely one for speci ic performance where the amount involved is
not capable of pecuniary estimation 1 obviously erroneous.
Although the total amount of damages sought is not stated in the
prayer of the complaint yet it is spelled out in the body of the
complaint totalling in the amount of P78,750,000.00 which should
be the basis of assessment of the iling fee.
4. When this under-assessment of the iling fee in this case was
brought to the attention of this Court together with similar other
cases an investigation was immediately ordered by the Court.
Meanwhile plaintiff through another counsel with leave of court
iled an amended complaint on September 12, 1985 for the
inclusion of Philips Wire and Cable Corporation as co-plaintiff and
by eliminating any mention of the amount of damages in the body of
the complaint. The prayer in the original complaint was
maintained. After this Court issued an order on October 15, 1985
ordering the re-assessment of the docket fee in the present case and
other cases that were investigated, on November 12, 1985 the trial
court directed plaintiffs to rectify the amended complaint by stating
the amounts which they are asking for. It was only then that
plaintiffs speci ied the amount of damages in the body of the
complaint in the reduced amount of P10,000,000.00.[7] Still no
amount of damages were speci ied in the prayer. Said amended
complaint was admitted.
On the other hand, in the Magaspi case, the trial court ordered the
plaintiffs to pay the amount of P3,104.00 as iling fee covering the
damages alleged in the original complaint as it did not consider the
damages to be merely ancillary or incidental to the action for
recovery of ownership and possession of real property.[8] An
amended complaint was iled by plaintiff with leave of court to
include the government of the Republic as defendant and reducing
the amount of damages, and attorney's fees prayed for to
P100,000.00. Said amended complaint was also admitted.[9]
In the Magaspi case, the action was considered not only one for
recovery of ownership but also for damages, so that the iling fee for
the damages should be the basis of assessment. Although the
payment of the docketing fee of P60.00 was found to be insuf icient,
nevertheless, it was held that since the payment was the result of an
"honest difference of opinion as to the correct amount to be paid as
docket fee" the court "had acquired jurisdiction over the case and
the proceedings thereafter had were proper and regular."[10] Hence,
as the amended complaint superseded the original complaint, the
allegations of damages in the amended complaint should be the
basis of the computation of the iling fee.[11]
In the present case no such honest difference of opinion was
possible as the allegations of the complaint, the designation and the
prayer show clearly that it is an action for damages and speci ic
performance. The docketing fee should be assessed by considering
the amount of damages as alleged in the original complaint.
As reiterated in the Magaspi case the rule is well-settled "that a case
is deemed iled only upon payment of the docket fee regardless of
the actual date of iling in court."[12] Thus, in the present case the
trial court did not acquire jurisdiction over the case by the payment
Based on Syllabus of Dean Monteclar  By RGL  25 of 95
 
of only P410.00 as docket fee. Neither can the amendment of the
complaint thereby vest jurisdiction upon the Court.[13] For all legal
purposes there is no such original complaint that was duly iled
which could be amended. Consequently, the order admitting the
amended complaint and all subsequent proceedings and actions
taken by the trial court are null and void.
The Court of Appeals therefore, aptly ruled in the present case that
the basis of assessment of the docket fee should be the amount of
damages sought in the original complaint and not in the amended
complaint.
The Court cannot close this case without making the observation
that it frowns at the practice of counsel who iled the original
complaint in this case of omitting any speci ication of the amount of
damages in the prayer although the amount of over P78 million is
alleged in the body of the complaint. This is clearly intended for no
other purpose than to evade the payment of the correct iling fees if
not to mislead the docket clerk in the assessment of the iling fee.
This fraudulent practice was compounded when, even as this Court
had taken cognizance of the anomaly and ordered an investigation,
petitioner through another counsel iled an amended complaint,
deleting all mention of the amount of damages being asked for in
the body of the complaint. It was only when in obedience to the
order of this Court of October 18, 1985, the trial court directed that
the amount of damage be speci ied in the amended complaint, that
petitioners' counsel wrote the damages sought in the much reduced
amount of P10,000,000.00 in the body of the complaint but not in
the prayer thereof. The design to avoid payment of the required
docket fee is obvious.
The Court serves warning that it will take drastic action upon a
repetition of this unethical practice.
To put a stop to this irregularity, henceforth all complaints,
petitions, answers and other similar pleadings should specify the
amount of damages being prayed for not only in the body of the
pleading but also in the prayer, and said damages shall be
considered in the asessment of the iling fees in any case. Any
pleading that fails to comply with this requirement shall not be
accepted nor admitted, or shall otherwise be expunged from the
record.
The Court acquires jurisdiction over any case only upon the
payment of the prescribed docket fee. An amendment of the
complaint or similar pleading will not thereby vest jurisdiction in
the Court, much less the payment of the docket fee based on the
amounts sought in the amended pleading. The ruling in the
Magaspi case[14] in so far as it is inconsistent with this
pronouncement is overturned and reversed.
WHEPEFORE, the motion for reconsideration is denied for lack of
merit.
SO ORDERED.
Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr.,
Cruz, Paras, Feliciano, Bidin, Sarmiento, and Cortes, JJ., concur.
Padilla, J., no part; I was retained counsel of respondent Cityland
Development Corporation.
 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

09 Sun Insurance O ce Ltd v CA, 170 SCRA 274 

252 Phil. 280 On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil
Case No. Q-41177 was temporarily assigned, issued an order to the
Clerk of Court instructing him to issue a certi icate of assessment of
EN BANC  the docket fee paid by private respondent and, in case of de iciency,
G.R. Nos. 79937-38, February 13, 1989  to include the same in said certi icate.

SUN  INSURANCE  OFFICE,  LTD.,  (SIOL),  E.B.  PHILIPPS  On January 7, 1984, to forestall a default, a cautionary answer was
AND  D.J.  WARBY,  PETITIONERS,  VS.  HON.  MAXIMIANO  iled by petitioners. On August 30, 1984, an amended complaint
C.  ASUNCION,  PRESIDING  JUDGE,  BRANCH  104,  was iled by private respondent including the two additional
REGIONAL  TRIAL  COURT,  QUEZON  CITY  AND  MANUEL  defendants aforestated.
CHUA UY PO TIONG, RESPONDENTS. 
 
D E C I S I O N  to comment on the Clerk of Court's letter-report signifying her
GANCAYCO, J.:
Again the Court is asked to resolve the issue of whether or not a
court acquires jurisdiction aver a case when the correct and proper
docket fee has not been paid.
On February 28, 1984, petitioner Sun Insurance Of ice, Ltd. (SIOL
for brevity) iled a complaint with the Regional Trial Court of
Makati, Metro Manila for the consignation of a premium refund on a
ire insurance policy with a prayer for the judicial declaration of its
nullity against private respondent Manuel Uy Po Tiong. Private
respondent was declared in default for failure to ile the required
answer within the reglementary period.
On the other hand, on March 28, 1984, private respondent iled a
complaint in the Regional Trial Court of Quezon City for the refund
of premiums and the issuance of a writ of preliminary attachment
which was docketed as Civil Case No. Q-41177, initially against
petitioner SIOL, and thereafter including E.B. Philips and D.J. Warby
as additional defendants. The complaint sought, among others, the
payment of actual, compensatory, moral, exemplary and liquidated
damages, attorney's fees, expenses of litigation and costs of the suit.
Although the prayer in the complaint did not quantify the amount of
damages sought said amount may be inferred from the body of the
complaint to be about Fifty Million Pesos (P50,000,000.00).
Only the amount of P210.00 was paid by private respondent as
docket fee which prompted petitioners’ counsel to raise his
objection. Said objection was disregarded by respondent Judge Jose
P. Castro who was then presiding over said case.
Judge Maximiano C. Asuncion, to whom Civil Case No. Q-41177 was
thereafter assigned, after his assumption into of ice on January 16,
1986, issued a Supplemental Order requiring the parties in the case
dif iculty in complying with the Resolution of this Court of October
15, 1985 since the pleadings iled by private respondent did not
indicate the exact amount sought to be recovered. On January 23,
1986, private respondent iled a "Compliance" and a "Re-Amended
Complaint" stating therein a claim of "not less than P10,000,000.00
as actual and compensatory damages" in the prayer. In the body of
the said second amended complaint however, private respondent
alleges actual and compensatory damages and attorney's fees in the
total amount of about P44,601,623.70.
On January 24, 1986, Judge Asuncion issued another Order
admitting the second amended complaint and stating therein that
the same constituted proper compliance with the Resolution of this
Court and that a copy thereof should be furnished the Clerk of Court
for the reassessment of the docket fees. The reassessment by the
Clerk of Court based on private respondent's claim of "not less than
P10,000,000.00 as actual and compensatory damages" amounted to
P39,786.00 as docket fee. This was subsequently paid by private
respondent.
Petitioners then iled a petition for certiorari with the Court of
Appeals questioning the said order of Judge Asuncion dated January
24, 1986.
On April 24, 1986, private respondent iled a supplemental
complaint alleging an additional claim of P20,000,000.00 as
damages so the total claim amounts to about P64,601,623.70. On
October 16, 1986, or some seven months after iling the
supplemental complaint, the private respondent paid the additional
docket fee of P80,396.00.[1]

Upon the order of this Court, the records of said case together with
On August 13, 1987, the Court of Appeals rendered a decision
twenty-two other cases assigned to different branches of the
ruling, among others, as follows:
Regional Trial Court of Quezon City which were under investigation
for under-assessment of docket fees were transmitted to this Court. "WHEREFORE, judgment is hereby rendered:
The Court thereafter returned the said records to the trial court
with the directive that they be re-raf led to the other judges in
1. Denying due course to the petition in CA-G.R. SP No. 09715
Quezon City, to the exclusion of Judge Castro. Civil Case No.
insofar as it seeks annulment of the order
Q-41177 was re-raf led to Branch 104, a sala which was then
vacant.
(a) denying petitioners' motion to dismiss the complaint, as
amended, and
On October 15, 1985, the Court en banc issued a Resolution in
Administrative Case No. 85-10-8752-RTC directing the judges in
said cases to reassess the docket fees and that in case of de iciency, (b) granting the writ of preliminary attachment, but giving due
to order its payment. The Resolution also requires all clerks of course to the portion thereof questioning the reassessment of the
court to issue certi icates of re-assessment of docket fees. All docketing fee, and requiring the Honorable respondent Court to
litigants were likewise required to specify in their pleadings the reassess the docketing fee to be paid by private respondent on the
amount sought to be recovered in their complaints. basis of the amount of P25,401,707.00."[2]

Based on Syllabus of Dean Monteclar  By RGL  26 of 95 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
Hence, the instant petition.
During the pendency of this petition and in conformity with the said
judgment of respondent court, private respondent paid the
additional docket fee of P62,432.90 on April 28, 1988.[3]
The main thrust of the petition is that the Court of Appeals erred in
not inding that the lower court did not acquire jurisdiction over
Civil Case No. Q-41177 on the ground of non-payment of the correct
and proper docket fee. Petitioners allege that while it may be true
that private respondent had paid the amount of P182,824.90 as
docket fee as herein-above related, and considering that the total
amount sought to be recovered in the amended and supplemental
complaint is P64,601,623.70, the docket fee that should be paid by
private respondent is P257,810.49, more or less. Not having paid
the same, petitioners contend that the complaint should be
dismissed and all incidents arising therefrom should be annulled.
In support of their theory, petitioners cite the latest ruling of the
Court in Manchester Development Corporation vs. CA,[4] as follows:
"The Court acquires jurisdiction over any case only upon the
payment of the prescribed docket fee. An amendment of the
complaint or similar pleading will not thereby vest jurisdiction in
the Court, much less the payment of the docket fee based on the
amounts sought in the amended pleading. The ruling in the
Magaspi Case in so far as it is inconsistent with this pronouncement
is overturned and reversed."
On the other hand, private respondent claims that the ruling in
Manchester cannot apply retroactively to Civil Case No. Q-41177 for
at the time said civil case was iled in court there was no such
Manchester ruling as yet. Further, private respondent avers that
what is applicable is the ruling of this Court in Magaspi v.
Ramolete,[5] wherein this Court held that the trial court acquired
jurisdiction over the case even if the docket fee paid was
insuf icient.
The contention that Manchester cannot apply retroactively to this
case is untenable. Statutes regulating the procedure of the courts
will be construed as applicable to actions pending and
undetermined at the time of their passage. Procedural laws are
retrospective in that sense and to that extent.[6]
In Lazaro vs. Endencia and Andres,[7] this Court held that the
payment of the full amount of the docket fee is an indispensable
step for the perfection of an appeal. In a forcible entry and detainer
case before the justice of the peace court of Manaoag, Pangasinan,
after notice of a judgment dismissing the case, the plaintiff iled a
notice of appeal with said court but he deposited only P8.00 for the
docket fee, instead of P16.00 as required, within the reglementary
period of appeal of ive (5) days after receiving notice of judgment.
Plaintiff deposited the additional P8.00 to complete the amount of
the docket fee only fourteen (14) days later. On the basis of these
facts, this Court held that the Court of First Instance did not acquire
jurisdiction to hear and determine the appeal as the appeal was not
thereby perfected.
In Lee vs. Republic,[8] the petitioner iled a veri ied declaration of
intention to become a Filipino citizen by sending it through
registered mail to the Of ice of the Solicitor General in 1953 but the
required iling fee was paid only in 1956, barely 5-1/2 months prior
to the iling of the petition for citizenship. This Court ruled that the
declaration was not iled in accordance with the legal requirement
that such declaration should be iled at least one year before the
iling of the petition for citizenship. Citing Lazaro, this Court
concluded that the iling of petitioner's declaration of intention on
Based on Syllabus of Dean Monteclar  By RGL  27 of 95
 
October 23, 1953 produced no legal effect until the required iling
fee was paid on May 23, 1956.
In Malimit vs. Degamo,[9] the same principles enunciated in Lazaro
and Lee were applied. It was an original petition for quo warranto
contesting the right to of ice of proclaimed candidates which was
mailed, addressed to the clerk of the Court of First Instance, within
the one-week period after the proclamation as provided therefor by
law.[10] However, the required docket fees were paid only after the
expiration of said period. Consequently, this Court held that the
date of such payment must be deemed to be the real date of iling of
aforesaid petition and not the date when it was mailed.
Again, in Garcia vs. Vasquez,[11] this Court reiterated the rule that the
docket fee must be paid before a court will act on a petition or
complaint. However, We also held that said rule is not applicable
when petitioner seeks the probate of several wills of the same
decedent as he is not required to ile a separate action for each will
but instead he may have the other wills probated in the same
special proceeding then pending before the same court.
Then in Magaspi,[12] this Court reiterated the ruling in Malimit and
Lee that a case is deemed iled only upon payment of the docket fee
regardless of the actual date of its iling in court. Said case involved
a complaint for recovery of ownership and possession of a parcel of
land with damages iled in the Court of First Instance of Cebu. Upon
the payment of P60.00 for the docket fee and P10.00 for the
sheriff's fee, the complaint was docketed as Civil Case No. R-11882.
The prayer of the complaint sought that the Transfer Certi icate of
Title issued in the name of the defendant be declared as null and
void. It was also prayed that plaintiff be declared as owner thereof
to whom the proper title should be issued, and that defendant be
made to pay monthly rentals of P3,500.00 from June 2, 1948 up to
the time the property is delivered to plaintiff, P500,000.00 as moral
damages, attorney's fees in the amount of P250,000.00, the costs of
the action and exemplary damages in the amount of P500,000.00.
The defendant then iled a motion to compel the plaintiff to pay the
correct amount of the docket fee to which an opposition was iled
by the plaintiff alleging that the action was for the recovery of a
parcel of land so the docket fee must be based on its assessed value
and that the amount of P60.00 was the correct docketing fee. The
trial court ordered the plaintiff to pay P3,104.00 as iling fee.
The plaintiff then iled a motion to admit the amended complaint to
include the Republic as the defendant. In the prayer of the amended
complaint the exemplary damages earlier sought was eliminated.
The amended prayer merely sought moral damages as the court
may determine, attorney's fees of P100,000.00 and the costs of the
action. The defendant iled an opposition to the amended
complaint. The opposition notwithstanding, the amended
complaint was admitted by the trial court. The trial court reiterated
its order for the payment of the additional docket fee which plaintiff
assailed and then challenged before this Court. Plaintiff alleged that
he paid the total docket fee in the amount of P60.00 and that if he
has to pay the additional fee it must be based on the amended
complaint.
The question posed, therefore, was whether or not the plaintiff may
be considered to have iled the case even if the docketing fee paid
was not suf icient. In Magaspi, We reiterated the rule that the case
was deemed iled only upon the payment of the correct amount for
the docket fee regardless of the actual date of the iling of the
complaint; that there was an honest difference of opinion as to the
correct amount to be paid as docket fee in that as the action appears
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
to be one for the recovery of property the docket fee of P60.00 was
correct; and that as the action is also one for damages, We upheld
the assessment of the additional docket fee based on the damages
alleged in the amended complaint as against the assessment of the
trial court which was based on the damages alleged in the original
complaint.
However, as aforecited, this Court overturned Magaspi in
Manchester. Manchester involves an action for torts and damages
and speci ic performance with a prayer for the issuance of a
temporary restraining order, etc. The prayer in said case is for the
issuance of a writ of preliminary prohibitory injunction during the
pendency of the action against the defendants' announced forfeiture
of the sum of P3 Million paid by the plaintiffs for the property in
question, the attachment of such property of defendants that may
be suf icient to satisfy any judgment that may be rendered, and,
after hearing, the issuance of an order requiring defendants to
execute a contract of purchase and sale of the subject property and
annul defendants' illegal forfeiture of the money of plaintiff. It was
also prayed that the defendants be made to pay the plaintiff, jointly
and severally, actual, compensatory and exemplary damages as well
as 25% of said amounts as may be proved during the trial for
attorney's fees. The plaintiff also asked the trial court to declare the
tender of payment of the purchase price of plaintiff valid and
suf icient for purposes of payment, and to make the injunction
permanent. The amount of damages sought is not speci ied in the
prayer although the body of the complaint alleges the total amount
of over P78 Million allegedly suffered by plaintiff.
Upon the iling of the complaint, the plaintiff paid the amount of
only P410.00 for the docket fee based on the nature of the action for
speci ic performance where the amount involved is not capable of
pecuniary estimation. However, it was obvious from the allegations
of the complaint as well as its designation that the action was one
for damages and speci ic performance. Thus, this Court held that
plaintiff must be assessed the correct docket fee computed against
the amount of damages of about P78 Million, although the same was
not spelled out in the prayer of the complaint.
Meanwhile, plaintiff through another counsel, with leave of court,
iled an amended complaint on September 12, 1985 by the inclusion
of another co-plaintiff and eliminating any mention of the amount of
damages in the body of the complaint. The prayer in the original
complaint was maintained.
On October 15, 1985, this Court ordered the re-assessment of the
docket fee in the said case and other cases that were investigated.
On November 12, 1985, the trial court directed the plaintiff to
rectify the amended complaint by stating the amounts which they
were asking for. This plaintiff did as instructed. In the body of the
complaint the amount of damages alleged was reduced to
P10,000,000.00 but still no amount of damages was speci ied in the
prayer. Said amended complaint was admitted.
Applying the principle in Magaspi that "the case is deemed iled
only upon payment of the docket fee regardless of the actual date of
iling in court," this Court held that the trial court did not acquire
jurisdiction over the case by payment of only P410.00 for the docket
fee. Neither can the amendment of the complaint thereby vest
jurisdiction upon the Court. For all legal purposes there was no
such original complaint duly iled which could be amended.
Consequently, the order admitting the amended complaint and all
subsequent proceedings and actions taken by the trial court were
declared null and void.[13]
Based on Syllabus of Dean Monteclar  By RGL  28 of 95
 
The present case, as above discussed, is among the several cases of
under-assessment of docket fee which were investigated by this
Court together with Manchester. The facts and circumstances of this
case are similar to Manchester. In the body of the original
complaint, the total amount of damages sought amounted to about
P50 Million. In the prayer, the amount of damages asked for was
not stated. The action was for the refund of premium and the
issuance of the writ of preliminary attachment with damages. The
amount of only P210.00 was paid for the docket fee. On January 23,
1986, private respondent iled an amended complaint wherein in
the prayer it is asked that he be awarded no less than
P10,000,000.00 as actual and exemplary damages but in the body of
the complaint the amount of his pecuniary claim is approximately
P44,601,623.70. Said amended complaint was admitted and the
private respondent was reassessed the additional docket fee of
P39,786.00 based on his prayer of not less than P10,000,000.00 in
damages, which he paid.
On April 24, 1986, private respondent iled a supplemental
complaint alleging an additional claim of P20,000,000.00 in
damages so that his total claim is approximately P64,601,620.70.
On October 16, 1986, private respondent paid an additional docket
fee of P80,396.00. After the promulgation of the decision of the
respondent court on August 31, 1987 wherein private respondent
was ordered to be reassessed for additional docket fee, and during
the pendency of this petition, and after the promulgation of
Manchester, on April 28, 1988, private respondent paid an
additional docket fee of P62,132.92. Although private respondent
appears to have paid a total amount of P182,824.90 for the docket
fee considering the total amount of his claim in the amended and
supplemental complaint amounting to about P64,601,620.70,
petitioner insists that private respondent must pay a docket fee of
P257,810.49.
The principle in Manchester could very well be applied in the
present case. The pattern and the intent to defraud the government
of the docket fee due it is obvious not only in the iling of the
original complaint but also in the iling of the second amended
complaint.
However, in Manchester, petitioner did not pay any additional
docket fee until the case was decided by this Court on May 7, 1987.
Thus, in Manchester, due to the fraud committed on the
government, this Court held that the court a quo did not acquire
jurisdiction over the case and that the amended complaint could not
have been admitted inasmuch as the original complaint was null
and void.
In the present case, a more liberal interpretation of the rules is
called for considering that, unlike Manchester, private respondent
demonstrated his willingness to abide by the rules by paying the
additional docket fees as required. The promulgation of the
decision in Manchester must have had that sobering in luence on
private respondent who thus paid the additional docket fee as
ordered by the respondent court. It triggered his change of stance
by manifesting his willingness to pay such additional docket fee as
may be ordered.
Nevertheless, petitioners contend that the docket fee that was paid
is still insuf icient considering the total amount of the claim. This is
a matter which the clerk of court of the lower court and/or his duly
authorized docket clerk or clerk in-charge should determine and,
thereafter, if any amount is found due, he must require the private
respondent to pay the same.
 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

Thus, the Court rules as follows: separately instituted by Godofredo Pineda against three (3)
defendants, docketed as follows:

1. It is not simply the iling of the complaint or appropriate 1) vs. Antonia Noel Civil Case No. 2209
initiatory pleading, but the payment of the prescribed docket fee,
that vests a trial court with jurisdiction over the subject-matter or
nature of the action. Where the iling of the initiatory pleading is 2) vs. Ponciano Panes Civil Case No. 2210
not accompanied by payment of the docket fee, the court may allow
payment of the fee within a reasonable time but in no case beyond
the applicable prescriptive or reglementary period. 3) vs. Maximo Tacay Civil Case No. 2211.

2. The same rule applies to permissive counterclaims, third-party
claims and similar pleadings, which shall not be considered iled
until and unless the iling fee prescribed therefor is paid. The court
may also allow payment of said fee within a reasonable time but
also in no case beyond its applicable prescriptive or reglementary
period.
3. Where the trial court acquires jurisdiction over a claim by the
iling of the appropriate pleading and payment of the prescribed
iling fee but, subsequently, the judgment awards a claim not
speci ied in the pleading, or if speci ied the same has been left for
determination by the court, the additional iling fee therefor shall
constitute a lien on the judgment. It shall be the responsibility of
the Clerk of Court or his duly authorized deputy to enforce said lien
and assess and collect the additional fee.
WHEREFORE, the petition is DISMISSED for lack of merit. The
Clerk of Court of the court a quo is hereby instructed to reassess
and determine the additional iling fee that should be paid by
private respondent considering the total amount of the claim sought
in the original complaint and the supplemental complaint as may be
gleaned from the allegations and the prayer thereof and to require
private respondent to pay the de iciency, if any, without
pronouncement as to costs.
Civil Cases Numbered 2209 and 2211 were raf led to Branch I of the
Trial Court, presided over by Judge Marcial Hernandez. Civil Case
No. 2210 was assigned to Branch 2, presided over by Judge Jesus
Matas.
The complaints1 all alleged the same essential facts: (1) Pineda was
the owner of a parcel of land measuring 790 square meters, his
ownership being evidenced by TCT No. T-46560; (2) the previous
owner had allowed the defendants to occupy portions of the land by
mere tolerance; (3) having himself need to use the property, Pineda
had made demands on the defendants to vacate the property and
pay reasonable rentals therefor, but these demands had been
refused; and (4) the last demand had been made more than a year
prior to the commencement of suit. The complaints prayed for the
same reliefs, to wit:
1) that plaintiff be declared owner of the areas occupied by the
defendants;
2) that defendants and their "privies and allies" be ordered to
vacate and deliver the portions of the land usurped by them;
3) that each defendant be ordered to pay:
1) P2,000 as monthly rents from February, 1987;
2) "Actual damages, as proven;"
3) "Moral and nominal damages as the Honorable Court may fix;"2
4) "P30,000.00, "as attorney's fees, and representation fees of
P5,000.00 per day of appearance;”

SO ORDERED. and
4) that he (Pineda) be granted such "further relief and remedies **
just and equitable in the premises."
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
Feliciano, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea, The prayer of each complaint contained a handwritten notation
and Regalado, JJ., concur. (evidently made by plaintiff's counsel) reading, "P5,000.00 as and
for," immediately above the typewritten words, "Actual damages, as
proven," the intention apparently being to make the entire phrase
10 Tacay v RTC of Tagum, 180 SCRA 433  read, "5,000.00 as and for actual damages as proven."3
259 Phil. 927
Motions to dismiss were iled in behalf of each of the defendants by
common counsel.4 Every motion alleged that the Trial Court had not
EN BANC  acquired jurisdiction of the case -

G.R. Nos. 88075-77, December 20, 1989  " . . . for the reason that the ** complaint violates the mandatory and
clear provision of Circular No. 7 of the ** Supreme Court dated
March 24, 1988, by failing to specify all the amounts of damages
MAXIMO TACAY, PONCIANO PANES AND ANTONIA NOEL,  which plaintiff is claiming from defendant;" and
PETITIONERS,  VS.  REGIONAL  TRIAL  COURT  OF  TAGUM, 
" . . . for ** failure (of the complaint) to even allege the basic
DAVAO  DEL  NORTE,  BRANCHES  1  AND  2,  PRESIDED  BY  requirement as to the assessed value of the subject lot in dispute."
HON.  MARCIAL  FERNANDEZ  AND  HON.  JESUS  MATAS, 
Judge Matas denied the motion to dismiss iled in Civil Case No.
RESPECTIVELY,  PATSITA  GAMUTAN,  CLERK  OF  COURT, 
2210 but ordered the expunction of the "allegations in paragraph
AND GODOFREDO PINEDA, RESPONDENTS.  11 of the ** complaint regarding moral as well as nominal
damages."5 On motion of defendant Panes, Judge Matas later
  ordered the striking out, too, of the "handwritten amount of
‘P5,000.00 as and for,’ including the typewritten words ‘actual
R E S O L U T I O N  damages as proven' ** in sub-paragraph b of paragraph 4 in the
NARVASA, J.: conclusion and prayer of the complaint **."1

In the Regional Trial Court at Tagum, Davao del Norte,1 three (3) The motions to dismiss submitted in Civil Cases Numbered 2211
actions for recovery of possession (acciones publicianas2) were and 2209 were also denied in separate orders promulgated by
Judge Marcial Fernandez.2 His Order in Case No. 2209 dated March

Based on Syllabus of Dean Monteclar  By RGL  29 of 95 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
15, 1989 (a) declared that since the "action at bar is for
Reivindicatoria, Damages and Attorney's fees ** (d)e initely this
Court has the exclusive jurisdiction," (b) that the claims for actual,
moral and nominal damages "are only one aspect of the cause of
action," and (c) because of absence of speci ication of the amounts
claimed as moral, nominal and actual damages, they should be
"expunged from the records."
Ascribing grave abuse of discretion to both Judges Matas and
Fernandez in the rendition of the Orders above described, the
defendants in all three (3) actions have iled with this Court a "Joint
Petition" for certiorari, prohibition and mandamus, with prayer for
temporary restraining order and/or writ of preliminary prohibitory
injunction," praying essentially that said orders be annulled and
respondent judges directed to dismiss all the complaints "without
prejudice to private respondent Pineda's re- iling a similar
complaint that complies with Circular No. 7." The joint petition (a)
re-asserted the proposition that because the complaints had failed
to state the amounts being claimed as actual, moral and nominal
damages, the Trial Courts a quo had not acquired jurisdiction over
the three (3) actions in question -- indeed, the respondent Clerk of
Court should not have accepted the complaints which initiated said
suits, and (b) it was not proper merely to expunge the claims for
damages and allow "the so-called cause of action for
'reivindicatoria' to remain for trial" by itself.3
The joint petition should be, as it is hereby, dismissed.
It should be dismissed for failure to comply with this Court's
Circular No. 1-88 (effective January 1, 1989). The copies of the
challenged Orders thereto attached4 were not certi ied by the
proper Clerk of Court or his duly authorized representative.
Certi ication was made by the petitioners' counsel, which is not
allowed.
The petition should be dismissed, too, for another equally
important reason. It fails to demonstrate any grave abuse of
discretion on the part of the respondent Judges in rendering the
Orders complained of or, for that matter, the existence of any proper
cause for the issuance of the writ of mandamus. On the contrary, the
orders appear to have correctly applied the law to the admitted
facts.
It is true that the complaints do not state the amounts being
claimed as actual, moral and nominal damages. It is also true,
however, that the actions are not basically for the recovery of sums
of money. They are principally for recovery of possession of real
property, in the nature of an accion publiciana. Determinative of the
court's jurisdiction in this type of actions is the nature thereof, not
the amount of the damages allegedly arising from or connected with
the issue of title or possession, and regardless of the value of the
property. Quite obviously, an action for recovery of possession of
real property (such as an accion plenaria de posesion) or the title
thereof,1 or for partition or condemnation of, or the foreclosure of a
mortgage on, said real property2 -- in other words, a real action --
may be commenced and prosecuted without an accompanying
claim for actual, moral, nominal or exemplary damages; and such an
action would fall within the exclusive, original jurisdiction of the
Regional Trial Court.
Batas Pambansa Bilang 129 provides that Regional Trial Courts
shall exercise exclusive original jurisdiction inter alia over "all civil
actions which involve the title to, or possession of, real property, or
any interest therein, except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over
which is conferred upon Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts."3 The rule applies
regardless of the value of the real property involved, whether it be
worth more than P20,000.00 or not, infra. The rule also applies
even where the complaint involving realty also prays for an award
of damages; the amount of those damages would be immaterial to
the question of the Court's jurisdiction. The rule is unlike that in
other cases -- e.g., actions simply for recovery of money or of
Based on Syllabus of Dean Monteclar  By RGL  30 of 95
 
personal property,4 or actions in admiralty and maritime
jurisdiction5 -- in which the amount claimed,6 or the value of the
personal property, is determinative of jurisdiction; i.e., the value of
the personal property or the amount claimed should exceed twenty
thousand pesos (P20,000.00) in order to be cognizable by the
Regional Trial Court.
Circular No. 7 of this Court, dated March 24, 1988, cannot thus be
invoked, as the petitioner does, as authority for the dismissal of the
actions at bar. That circular, avowedly inspired by the doctrine laid
down in Manchester Development Corporation v. Court of Appeals,
149 SCRA 562 (May 7, 1987), has but limited application to said
actions, as shall presently be discussed. Moreover, the rules therein
laid down have since been clari ied and ampli ied by the Court's
subsequent decision in Sun Insurance Office, Ltd. (SIOL) v. Asuncion,
et al., G.R. Nos. 79937-38, February 13, 1989.
Circular No. 7 was aimed at the practice of certain parties who omit
from the prayer of their complaints "any speci ication of the amount
of damages," the omission being "clearly intended for no other
purpose than to evade the payment of the correct iling fees if not to
mislead the docket clerk, in the assessment of the iling fee." The
following rules were therefore set down:
1) All complaints, petitions, answers, and similar pleadings should
specify the amount of damages being prayed for not only in the
body of the pleading but also in the prayer, and said damages shall
be considered in the assessment of the iling fees in any case.
2) Any pleading that fails to comply with this requirement shall not
be accepted nor admitted, or shall otherwise be expunged from the
record.
3. The Court acquires jurisdiction over any case only upon the
payment of the prescribed docket fee. An amendment of the
complaint or similar pleading will not thereby vest jurisdiction in
the Court, much less the payment of the docket fee based on the
amount sought in the amended pleading.
The clari icatory and additional rules laid down in Sun Insurance
Office, Ltd. v. Asuncion, supra, read as follows:
1. It is not simply the iling of the complaint or appropriate
initiatory pleading, but (also) the payment of the prescribed docket
fee that vests a trial court with jurisdiction over the subject-matter
or nature of the action. Where the iling of the initiatory pleading is
not accompanied by payment of the docket fee, the court may allow
payment of the fee within a reasonable time but in no case beyond
the applicable prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third-party
claims and similar pleadings, which shall not be considered iled
until and unless the iling fee prescribed therefor is paid. The court
may also allow payment of said fee within a reasonable time but
also in no case beyond its applicable prescriptive or reglementary
period.
3. Where the trial court acquires jurisdiction over a claim by the
iling of the appropriate pleading and payment of the prescribed
iling fee but, subsequently, the judgment awards a claim not
speci ied in the pleading, or if speci ied, the same has been left for
determination by the court, the additional iling fee therefor shall
constitute a lien on the judgment. It shall be the responsibility of
the Clerk of Court or his duly authorized deputy to enforce said lien
and assess and collect the additional fee."
As will be noted, the requirement in Circular No. 7 that complaints,
petitions, answers, and similar pleadings should specify the amount
of damages being prayed for not only in the body of the pleading but
also in the prayer, has not been altered. What has been revised is the
rule that subsequent "amendment of the complaint or similar
pleading will not thereby vest jurisdiction in the Court, much less the
payment of the docket fee based on the amount sought in the
amended pleading," the trial court now being authorized to allow
payment of the fee within a reasonable time but in no case beyond the
applicable prescriptive or reglementary period. Moreover, a new rule
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
has been added, governing awards of claims not specified in the
pleading -- i.e., damages arising after the filing of the complaint or
similar pleading -- as to which the additional filing fee therefor shall
constitute a lien on the judgment.
Now, under the Rules of Court, docket or iling fees are assessed on
the basis of the "sum claimed," on the one hand, or the "value of the
property in litigation or the value of the estate," on the other.1 There
are, in other words, as already above intimated, actions or
proceedings involving real property, in which the value of the
property is immaterial to the court's jurisdiction, account thereof
being taken merely for assessment of the legal fees; and there are
actions or proceedings, involving personal property or the recovery
of money and/or damages, in which the value of the property or the
amount of the demand is decisive of the trial court's competence
(aside from being the basis for ixing the corresponding docket
fees).2
Where the action is purely for the recovery of money or damages,
the docket fees are assessed on the basis of the aggregate amount
claimed, exclusive only of interests and costs. In this case, the
complaint or similar pleading should, according to Circular No. 7 of
this Court, "specify the amount of damages being prayed for not
only in the body of the pleading but also in the prayer, and said
damages shall be considered in the assessment of the iling fees in
any case."
Two situations may arise. One is where the complaint or similar
pleading sets out a claim purely for money or damages and there is
no precise statement of the amounts being claimed. In this event
the rule is that the pleading will "not be accepted nor admitted, or
shall otherwise be expunged from the record." In other words, the
complaint or pleading may be dismissed, or the claims as to which
the amounts are unspeci ied may be expunged, although as
aforestated the Court may, on motion, permit amendment of the
complaint and payment of the fees provided the claim has not in the
meantime become time-barred. The other is where the pleading
does specify the amount of every claim, but the fees paid are
insuf icient; and here again, the rule now is that the court may allow
a reasonable time for the payment of the prescribed fees, or the
balance thereof, and upon such payment, the defect is cured and the
court may properly take cognizance of the action, unless in the
meantime prescription has set in and consequently barred the right
of action.
Where the action involves real property and a related claim for
damages as well, the legal fees shall be assessed on the basis of both
(a) the value of the property and (b) the total amount of related
damages sought. The Court acquires jurisdiction over the action if
the iling of the initiatory pleading is accompanied by the payment
of the requisite fees, or, if the fees are not paid at the time of the
iling of the pleading, as of the time of full payment of the fees
within such reasonable time as the court may grant, unless, of
course, prescription has set in in the meantime. But where -- as in
the case at bar -- the fees prescribed for an action involving real
property have been paid, but the amounts of certain of the related
damages (actual, moral and nominal) being demanded are
unspeci ied, the action may not be dismissed. The Court undeniably
has jurisdiction over the action involving the real property,
acquiring it upon the iling of the complaint or similar pleading and
payment of the prescribed fee. And it is not divested of that
authority by the circumstance that it may not have acquired
jurisdiction over the accompanying claims for damages because of
lack of speci ication thereof. What should be done is simply to
expunge those claims for damages as to which no amounts are
stated, which is what the respondent Courts did, or allow, on
motion, a reasonable time for the amendment of the complaints so
as to allege the precise amount of each item of damages and accept
payment of the requisite fees therefor within relevant prescriptive
period.
Based on Syllabus of Dean Monteclar  By RGL  31 of 95
 
WHEREFORE, the petition is DISMISSED, without pronouncement
as to costs.
Fernan, C.J., Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,
Gancayco, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea,
and Regalado, JJ., concur.
11 Ayala Corp v Madayag, L-88421, 30 Jan 1990 
260 Phil. 741
FIRST DIVISION 
G.R. No. 88421, January 30, 1990 
AYALA  CORPORATION,  LAS PIÑAS VENTURES, INC., AND 
FILIPINAS  LIFE  ASSURANCE  COMPANY,  INC., 
PETITIONERS,  VS.  THE  HONORABLE  JOB  B.  MADAYAG, 
PRESIDING  JUDGE,  REGIONAL  TRIAL  COURT,  NATIONAL 
CAPITAL  JUDICIAL  REGION,  BRANCH  145  AND  THE 
SPOUSES  CAMILO  AND  MA.  MARLENE  SABIO, 
RESPONDENTS. 
 
D E C I S I O N 
GANCAYCO, J.:
Once more the issue relating to the payment of iling fees in an
action for speci ic performance with damages is presented by this
petition for prohibition.
Private respondents iled against petitioners an action for speci ic
performance with damages in the Regional Trial Court of Makati.
Petitioners iled a motion to dismiss on the ground that the lower
court has not acquired jurisdiction over the case as private
respondents failed to pay the prescribed docket fee and to specify
the amount of exemplary damages both in the body and prayer of
the amended and supplemental complaint. The trial court denied
the motion in an order dated April 5, 1989. A motion for
reconsideration iled by petitioners was likewise denied in an order
dated May 18, 1989. Hence this petition.
The main thrust of the petition is that private respondent paid only
the total amount of P1,616.00 as docket fees instead of the amount
of P13,061.35 based on the assessed value of the real properties
involved as evidenced by its tax declaration. Further, petitioners
contend that private respondents failed to specify the amount of
exemplary damages sought both in the body and the prayer of the
amended and supplemental complaint.
In Manchester Development Corporation vs. Court of Appeals[1] a
similar case involving an action for speci ic performance with
damages, this Court held that the docket fee should be assessed by
considering the amount of damages as alleged in the original
complaint.
However, the contention of petitioners is that since the action
concerns real estate, the assessed value thereof should be
considered in computing the fees pursuant to Section 5, Rule 141 of
the Rules of Court. Such rule cannot apply to this case which is an
action for speci ic performance with damages although it is in
relation to a transaction involving real estate. Pursuant to
Manchester, the amount of the docket fees to be paid should be
computed on the basis of the amount of damages stated in the
complaint.
Petitioners also allege that because of the failure of the private
respondents to state the amount of exemplary damages being
sought, the complaint must nevertheless be dismissed in
accordance to Manchester. The trial court denied the motion stating
that the determination of the exemplary damages is within the
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
sound discretion of the court and that it would be unwarrantedly
presumptuous on the part of the private respondents to ix the
amount of exemplary damages being prayed for. The trial court
cited the subsequent case of Sun Insurance vs. Judge Asuncion[2] in
support of its ruling.
The clari icatory and additional rules laid down in Sun Insurance are
as follows:
1. It is not simply the iling of the complaint or appropriate
initiatory pleading, but (also) the payment of the prescribed docket
fee that vests a trial court with jurisdiction over the subject-matter
or nature of the action. Where the iling of the initiatory pleading is
not accompanied by payment of the docket fee, the court may allow
payment of the fee within a reasonable time but in no case beyond
the applicable prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third-party
claims and similar pleadings, which shall not be considered iled
until and unless the iling fee prescribed therefor is paid. The court
may also allow payment of said fee within a reasonable time but
also in no case beyond its applicable prescriptive or reglementary
period.
3. Where the trial court acquires jurisdiction over a claim by the
iling of the appropriate pleading and payment of the prescribed
iling fee but, subsequently, the judgment awards a claim not
speci ied in the pleading, or if speci ied, the same has been left for
determination by the court, the additional iling fee therefor shall
constitute a lien on the judgment. It shall be the responsibility of the
Clerk of Court or his duly authorized deputy to enforce said lien and
assess and collect the additional fee."
Apparently, the trial court misinterpreted paragraph 3 of the above
ruling of this Court wherein it is stated that "where the judgment
awards a claim not speci ied in the pleading, or if speci ied, the
same has been left for the determination of the court, the additional
iling fee therefor shall constitute a lien on the judgment" by
considering it to mean that where in the body and prayer of the
complaint there is a prayer, say for exemplary or corrective
damages, the amount of which is left to the discretion of the Court,
there is no need to specify the amount being sought, and that any
award thereafter shall constitute a lien on the judgment.
In the latest case of Tacay vs. Regional Trial Court of Tagum,[3] this
Court had occasion to make the clari ication that the phrase
"awards of claims not speci ied in the pleading" refers only to
"damages arising after the iling of the complaint or similar
pleading x x x x as to which the additional iling fee therefor shall
constitute a lien on the judgment." The amount of any claim for
damages, therefore, arising on or before the iling of the complaint
or any pleading should be speci ied. While it is true that the
determination of certain damages as exemplary or corrective
damages is left to the sound discretion of the court, it is the duty of
the parties claiming such damages to specify the amount sought on
the basis of which the court may make a proper determination, and
for the proper assessment of the appropriate docket fees. The
exception contemplated as to claims not speci ied or to claims
although speci ied are left for determination of the court is limited
only to any damages that may arise after the iling of the complaint
or similar pleading for then it will not be possible for the claimant
to specify nor speculate as to the amount thereof.
The amended and supplemental complaint in the present case,
therefore, suffers from the material defect in failing to state the
amount of exemplary damages prayed for.
As ruled in Tacay the trial court may either order said claim to be
expunged from the record as it did not acquire jurisdiction over the
same or on motion, it may allow, within a reasonable time, the
amendment of the amended and supplemental complaint so as to
state the precise amount of the exemplary damages sought and
require the payment of the requisite fees therefor within the
relevant prescriptive period.[4]
Based on Syllabus of Dean Monteclar  By RGL  32 of 95
 
WHEREFORE, the petition is GRANTED. The trial court is directed
either to expunge from the record the claim for exemplary damages
in the amended and supplemental complaint, the amount of which
is not speci ied, or it may otherwise, upon motion, give reasonable
time to private respondents to amend their pleading by specifying
its amount and paying the corresponding docketing fees within the
appropriate reglementary or prescriptive period. No costs.
SO ORDERED.
Narvasa, (Chairman), Cruz, Griño-Aquino, and Medialdea, JJ., concur.
III. Ordinary Civil Actions 
Actions 
RULE 2 Cause of Action 
RULE 3 Parties to Civil Actions 
RULE 4 Venue of Actions
12 Polytrade v Blanco, L-27033, 31 Oct 1969 
140 Phil. 604
G.R. No. L-27033, October 31, 1969 
POLYTRADE  CORPORATION,  PLAINTIFF-APPELLEE,  VS. 
VICTORIANO BLANCO, DEFENDANT-APPELLANT. 
 
D E C I S I O N 
SANCHEZ, J.:
Suit before the Court of First Instance of Bulacan on four causes of
action to recover the purchase price of raw hide delivered by
plaintiff to defendant.[1] Plaintiff corporation has its principal of ice
and place of business in Makati, Rizal. Defendant is a resident of
Meycauayan, Bulacan. Defendant moved to dismiss upon the
ground of improper venue. He claims that by contract suit may only
be lodged in the courts of Manila. The Bulacan court overruled him.
He did not answer the complaint. In consequence, a default
judgment was rendered against him on September 21, 1966, thus:
"WHEREFORE, judgment is hereby rendered in favor of plaintiff and
against defendant ordering defendant to pay plaintiff the following
amounts:
First Cause of Action - P60,845.67, with interest thereon at 1% a
month from May 9, 1965 until the full amount is paid.
Second Cause of Action - P51,952.55, with interest thereon at 1% a
month from March 30, 1965 until the full amount is paid.
Third Cause of Action - P53,973.07, with interest thereon at 1% a
month from July 3, 1965 until the full amount is paid.
Fourth Cause of Action - P41,075.22, with interest thereon at 1% a
month[2] until the full amount is paid.
In addition, defendant shall pay plaintiff attorney's fees amounting
to 25% of the principal amount due in each cause of action, and the
costs of the suit. The amount of P400.00 shall be deducted from the
total amount due plaintiff in accordance with this judgment."
Defendant appealed.
1. The forefront question is whether or not venue was properly laid
in the province of Bulacan where defendant is a resident.
Section 2(b), Rule 4 of the Rules of Court on venue of personal
actions triable by courts of irst instance - and this is one - provides
that such "actions may be commenced and tried where the
defendant or any of the defendants resides or may be found, or
where the plaintiff or any of the plaintiffs resides, at the election of
the plaintiff." Qualifying this provision is Section 3 of the same Rule
which states that venue may be stipulated by written agreement -
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
"By written agreement of the parties the venue of an action may be
changed or transferred from one province to another."
Defendant places his case upon Section 3 of Rule 4 just quoted.
According to defendant, plaintiff and defendant, by written
contracts covering the four causes of action, stipulated that: "The
parties agree to sue and be sued in the Courts of Manila." This
agreement is valid.[3] Defendant says that because of such covenant
he can only be sued in the courts of Manila. We are thus called upon
to shake meaning from the terms of the agreement just quoted.
But irst to the facts. No such stipulation appears in the contracts
covering the irst two causes of action. The general rule set forth in
Section 2(b), Rule 4, governs, and as to said two causes of action,
venue was properly laid in Bulacan, the province of defendant's
residence.
The stipulation adverted to is only found in the agreements
covering the third and fourth causes of action, An accurate reading,
however, of the stipulation, "The parties agree to sue and be sued in
the Courts of Manila", does not preclude the iling of suits in the
residence of plaintiff or defendant. The plain meaning is that the
parties merely consented to be sued in Manila, Qualifying or
restrictive words which would indicate that Manila and Manila
alone is the venue are totally absent therefrom. We cannot read into
that clause that plaintiff and defendant bound themselves to ile
suits with respect to the last two transactions in question only or
exclusively in Manila. For, that agreement did not change or transfer
venue. It simply is permissive. The parties solely agreed to add the
courts of Manila as tribunals to which they may resort. They did not
waive their right to pursue remedy in the courts speci ically
mentioned in Section 2(b) of Rule 4. Renuntiatio non praesumitur.
Illuminating on this point is Engel vs. Shubert Theatrical Co., 151
N.Y.S. 593, 594. And this, because there the stipulation as to venue
is along lines similar to the present. Said stipulation reads: "In case
of dispute, both contracting parties agree to submit to the
jurisdiction of the Vienna courts." And the ruling is: "By the clause
in question the parties do not agree to submit their disputes to the
jurisdiction of the Viennese courts, and to those courts only. There
is nothing exclusive in the language used. They do agree to submit
to the Viennese jurisdiction, but they say not a word in restriction of
the jurisdiction of courts elsewhere; and whatever may be said on
the subject of the legality of contracts to submit controversies to
courts of certain jurisdictions exclusively, it is entirely plain that
such agreements should be strictly construed, and should not be
extended by implication."
Venue here was properly laid.
2. Defendant next challenges the lower court's grant to plaintiff of
interest at the rate of one per centum per month. Defendant says
that no such stipulation as to right of interest appears in the sales
con irmation orders which provided: "TERMS - 60 days after
delivery with interest accruing on postdated cheques beyond 30
days." The law in this argument lies in that the interest and the rate
thereof are expressly covenanted in the covering trust receipts
executed by defendant in favor of plaintiff, as follows: "All
obligations of the undersigned under this agreement of trust shall
bear interest at the rate of one per centum (1%) per month from the
date due until paid."
On this score, we ind no error.
3. Defendant protests the award of attorneys' fees which totals
P51,961.63, i.e., 25% of the total principal indebtedness of
P207,846.51 (exclusive of interest). Defendant's thesis is that the
foregoing sum is "exhorbitant and unconscionable."
To be borne in mind is that the attorneys' fees here provided is not,
strictly speaking, the attorneys' fees recoverable as between
attorney and client spoken of and regulated by the Rules of Court.
Rather, the attorneys' fees here are in the nature of liquidated
damages and the stipulation therefor is aptly called a penal clause.[4]
It has been said that so long as such stipulation does not contravene
Based on Syllabus of Dean Monteclar  By RGL  33 of 95
 
law, morals, or public order, it is strictly binding upon defendant.[5]
The attorneys' fees so provided are awarded in favor of the litigant,
not his counsel. It is the litigant, not counsel, who is the judgment
creditor entitled to enforce the judgment by execution.[6]
The governing law then is Article 2227 of the Civil Code, viz:
"Liquidated damages, whether intended as an indemnity or a
penalty, shall be equitably reduced if they are iniquitous or
unconscionable." For this reason, we do not really have to strictly
view the reasonableness of the attorneys' fees in the light of such
factors as the amount and character of the services rendered, the
nature and importance of the litigation, and the professional
character and the social standing of the attorney. We do concede,
however, that these factors may be an aid in the determination of
the iniquity or unconscionableness of attorneys' fees as liquidated
damages.
May the attorneys' fees (P51,961.63) here granted be tagged as
iniquitous or unconscionable? Upon the circumstances, our answer
is in the negative. Plaintiff's lawyers concededly are of high
standing. More important is that this case should not have gone to
court. It could have been easily avoided had defendant been faithful
in complying with his obligations. It is not denied that the raw hide
was converted into leather and sold by defendant. He raises no
defense. In fact, he did not even answer the complaint in the lower
court, and was thus declared in default. Nor does he deny the
principal liability. Add to all these the fact that the writ of
attachment issued below upon defendant's properties yielded no
more than P400 and the picture is complete. The continued
maintenance by defendant of the suit is plainly intended for delay.
The attorneys' fees awarded cannot be called iniquitous or
unconscionable.
In the very recent case of Universal Motors Corporation vs. Dy Hian
Tat (1969), 28 SCRA 161, 170, we allowed attorneys' fees in the
form of liquidated damages at the rate of 25% of the total amount of
the indebtedness. Here, the trial court has already reduced the
attorneys' fees from the stipulated 25% "of the total amount
involved, principal and interest, then unpaid" to only 25% of the
principal amount due. There is no reason why such judgment
should be disturbed.
For the reasons given, the appealed judgment is hereby af irmed,
except that interest granted, in reference to the fourth cause of
action, should start from March 24, 1965.
Costs against defendant-appellant.
SO ORDERED.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro,
Fernando, Teehankee, and Barredo, JJ., concur.
13 Pilipino Telephone Corp v Tecson, 156966, 7 May 
2004 
THIRD DIVISION 
G.R. No. 156966, May 07, 2004 
PILIPINO  TELEPHONE  CORPORATION,  petitioner,  vs. 
DELFINO TECSON, respondent. 
 
D E C I S I O N 
VITUG, J.:
The facts, by and large, are undisputed.
On various dates in 1996, Del ino C. Tecson applied for six (6)
cellular phone subscriptions with petitioner Pilipino Telephone
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
Corporation (PILTEL), a company engaged in the
telecommunications business, which applications were each
approved and covered, respectively, by six mobiline service
agreements.
On 05 April 2001, respondent iled with the Regional Trial Court of
Iligan City, Lanao Del Norte, a complaint against petitioner for a
“Sum of Money and Damages.” Petitioner moved for the dismissal of
the complaint on the ground of improper venue, citing a common
provision in the mobiline service agreements to the effect that -
“Venue of all suits arising from this Agreement or any other suit
directly or indirectly arising from the relationship between PILTEL
and subscriber shall be in the proper courts of Makati, Metro
Manila. Subscriber hereby expressly waives any other venues.”[1]
In an order, dated 15 August 2001, the Regional Trial Court of Iligan
City, Lanao del Norte, denied petitioner’s motion to dismiss and
required it to ile an answer within 15 days from receipt thereof.
Petitioner PILTEL iled a motion for the reconsideration, through
registered mail, of the order of the trial court. In its subsequent
order, dated 08 October 2001, the trial court denied the motion for
reconsideration.
Petitioner iled a petition for certiorari under Rule 65 of the Revised
Rules of Civil Procedure before the Court of Appeals.
The Court of Appeals, in its decision of 30 April 2002, saw no merit
in the petition and af irmed the assailed orders of the trial court.
Petitioner moved for a reconsideration, but the appellate court, in
its order of 21 January 2003, denied the motion.
There is merit in the instant petition.
Section 4, Rule 4, of the Revised Rules of Civil Procedure[2] allows
the parties to agree and stipulate in writing, before the iling of an
action, on the exclusive venue of any litigation between them. Such
an agreement would be valid and binding provided that the
stipulation on the chosen venue is exclusive in nature or in intent,
that it is expressed in writing by the parties thereto, and that it is
entered into before the iling of the suit. The provision contained in
paragraph 22 of the “Mobile Service Agreement,” a standard
contract made out by petitioner PILTEL to its subscribers,
apparently accepted and signed by respondent, states that the
venue of all suits arising from the agreement, or any other suit
directly or indirectly arising from the relationship between PILTEL
and subscriber, “shall be in the proper courts of Makati, Metro
Manila.” The added stipulation that the subscriber “expressly waives
any other venue”[3] should indicate, clearly enough, the intent of the
parties to consider the venue stipulation as being preclusive in
character.
The appellate court, however, would appear to anchor its decision
on the thesis that the subscription agreement, being a mere
contract of adhesion, does not bind respondent on the venue
stipulation.
Indeed, the contract herein involved is a contract of adhesion. But
such an agreement is not per se inef icacious. The rule instead is
that, should there be ambiguities in a contract of adhesion, such
ambiguities are to be construed against the party that prepared it.
If, however, the stipulations are not obscure, but are clear and leave
Based on Syllabus of Dean Monteclar  By RGL  34 of 95
 
no doubt on the intention of the parties, the literal meaning of its
stipulations must be held controlling.[4]
A contract of adhesion is just as binding as ordinary contracts. It is
true that this Court has, on occasion, struck down such contracts as
being assailable when the weaker party is left with no choice by the
dominant bargaining party and is thus completely deprived of an
opportunity to bargain effectively. Nevertheless, contracts of
adhesion are not prohibited even as the courts remain careful in
scrutinizing the factual circumstances underlying each case to
determine the respective claims of contending parties on their
ef icacy.
In the case at bar, respondent secured six (6) subscription contracts
for cellular phones on various dates. It would be dif icult to assume
that, during each of those times, respondent had no suf icient
opportunity to read and go over the terms and conditions embodied
in the agreements. Respondent continued, in fact, to acquire in the
pursuit of his business subsequent subscriptions and remained a
subscriber of petitioner for quite sometime.
In Development Bank of the Philippines vs. National Merchandising
Corporation,[5] the contracting parties, being of age and
businessmen of experience, were presumed to have acted with due
care and to have signed the assailed documents with full knowledge
of their import. The situation would be no less true than that which
obtains in the instant suit. The circumstances in Sweet Lines, Inc. vs.
Teves,[6] wherein this Court invalidated the venue stipulation
contained in the passage ticket, would appear to be rather peculiar
to that case. There, the Court took note of an acute shortage in
inter-island vessels that left passengers literally scrambling to
secure accommodations and tickets from crowded and congested
counters. Hardly, therefore, were the passengers accorded a real
opportunity to examine the ine prints contained in the tickets, let
alone reject them.
A contract duly executed is the law between the parties, and they
are obliged to comply fully and not selectively with its terms. A
contract of adhesion is no exception.[7]
WHEREFORE, the instant petition is GRANTED, and the questioned
decision and resolution of the Court of Appeals in CA-G.R. SP No.
68104 are REVERSED and SET ASIDE. Civil Case No. 5572 pending
before the Regional Trial Court of Iligan City, Branch 4, is
DISMISSED without prejudice to the iling of an appropriate
complaint by respondent against petitioner with the court of proper
venue. No costs.
SO ORDERED.
Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.
RULE 5 Uniform Procedures in Trial Courts 
IV. Procedure in RTC 
RTC 
RULE 6 Pleadings 
RULE 7 Parts of a Pleading 
RULE 8 Manner of Making Allegations in Pleadings 
RULE 9 Effect of Failure to Plead
14 Pascua v Florendo, L-39047, 30 Apr 1985 
220 Phil. 588
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
FIRST DIVISION  war and defendants know that the land sold to them and subject
G. R. No. L-39047, April 30, 1985 
ALBERTO PASCUA, CRISPINA PASCUA, SOTERA PASCUA,  thirty to forty sacks of palay valued at P30.00 each; and that
AND  EDUARDO  MOLINA,  PETITIONERS,  VS.  HON.  plaintiffs agreed to pay their counsel the amount of P1,200.00 out of
ALFREDO  C.  FLORENDO,  CFI  OF  CAGAYAN,  CLEMENTE  which they have already paid P200.00.
CASTRO, AND JULIANA O. CASTRO, RESPONDENTS. 
 
D E C I S I O N  Sotera Pascua testi ied that lately they came to know that this land
GUTIERREZ, JR., J.:
This is a petition for review on certiorari, seeking to annul the
decision of the Court of First Instance of Cagayan which dismissed
the petitioners' action for reconveyance with damages on the
ground that the period within which to ile the same had already
prescribed.
Petitioners, as plaintiffs, iled a complaint for reconveyance with
damages against the private respondents, spouses Clementc and
Juliana Castro. The latter, as defendants, in lieu of iling an answer,
iled a motion to dismiss the complaint on the grounds that the
complaint states no cause of action and that the same is already
barred by the statute of limitations.
The trial court denied the respondents' motion after inding that the
grounds relied upon by them did not appear on the face of the
complaint. The court subsequently declared the respondents in
default for their having failed to ile an answer within the
reglementary period. Thus, the petitioners proceeded to present
their evidence ex-parte.
After receiving the petitioners' evidence, the trial court made the
following indings:
"From the evidence adduced during the presentation of evidence by
plaintiffs, it was shown that Alberto Pascua is one of the plaintiffs in
this case; that he knows his co-plaintiffs Crispina, Solera, surnamed
Pascua, and Eduardo Molina, the irst two being his sisters while the
last is his nephew being the son of his sister Alejandra: that his
father is Jordan Pascua while his mother is Magdalena Dumadag;
that both his parents are already dead (Exhibits A, B, and C); that
Alejandra Pascua is also dead; that during the lifetime of Jordan and
Magdalena Dumadag, they begot ive children, namely Alberto,
Alejandra, Crispina, Martin and Sotera; that Jordan Pascua and
Magdalena Dumadag acquired a parcel of land located at
Dacalafugo, Camalaniugan, Cagayan, consisting of 1.02.20 hectares
and described in paragraph 3 of the complaint; that lately they came
to know that their brother Martin Pascua sold the property to
Clemente Castro, a resident of Camalaniugan, Cagayan; that when
they went to complain to the Agrarian of ice in Tuguegarao.
Qemente Castro showed them the deed of sale which they xerox
copied (Exhibit D); that the signature Alberto Pascua appearing in
Exhibit D is not his signature; that the genuine signature of Alberto
Pascua appears in Exhibit E; that he and his co-plaintiffs did not give
consent to the sale of the land subject matter of this case; that the
signature Sotera Pascua, appearing in Exhibit D is not also the
signature of Sotera Pascua; that he and his co-plaintiffs did not
appear before the Notary Public; that the land subject matter of this
case was never given to Martin Pascua by their deceased father, that
Martin Pascua is already dead; that the land is now titled in the
name of the defendant Juliana O. Castro (Exhibits F and F-1) while
the deed of sale was executed in favor of Qemente Castro (Exhibit
D); that the land is declared for taxation purposes under Tax
Declaration No. 157 (Exhibit G) in the name of Juliana Castro; that
plaintiffs and the defendants have been neighbors since before the
Based on Syllabus of Dean Monteclar  By RGL  35 of 95
 
matter of this suit was inherited by the plaintiffs from their
deceased father; that they (plaintiffs) have been deprived of the
fruits of the land for more than 20 years; that the land yields from
"From Exhibit D of the plaintiffs, it appears that the deed of sale was
executed in favor of the defendant Clemente Castro married to
Juliana Orteza by Martin Pascua on May 8, 1951. Alberto Pascua and
was conveyed by Martin Pascua to the defendants and that said
defendants have been in possession of the land in question for more
than 20 years. They testi ied further, however, that they have been
deprived of the fruits of the land for more than twenty years. If such
is the case, it is clear that the defendants have entered and occupied
the property for more than twenty years and it is inconceivable that
the plaintiffs did not come to know that the defendants bought the
property from their brother Martin Pascua when they admitted that
they have suffered damages by virtue of the dispossession for more
man twenty years. The conclusion is obvious that the plaintiffs had
knowledge of the transaction made by their brother about twenty
years ago.
"From the evidence of the plaintiffs, the Court inds that there was
really fraud committed by Martin Pascua in selling the entire
property which said Martin Pascua and plaintiffs inherited from
their parents thus excluding the shares of the plaintiffs. Certainly,
Martin Pascua could only sell one- ifth of the property and that the
four- ifths were fraudulently conveyed by him. It is clear that there
was fraud on the part of Martin Pascua in selling the shares of his
brother and sisters. The action for relief on the ground of fraud,
however, may be brought only within four years from the discovery
of the fraud, (Article 1391, New Civil Code; Section 43(c) Act 190).
XXX XXX XXX
"In view of the fact that the deed of sale was executed on May 8,
1951, or over twenty years before the iling of the complaint on May
31, 1973, it is hard to believe that plaintiffs did not come to know of
this deed of sale executed by their brother. The Court, therefore,
comes to the inevitable conclusion that this action, having been iled
22 years after the execution of the deed of sale, has long
prescribed."
Not satis ied with the trial court's decision, petitioners elevated the
case to this Court through this petition. The petitioners ask us to
examine the following alleged errors of the respondent court:
1. THE TRIAL COURT ERRED IN DISMISSING THE CASE ON
GROUND OF PRESCRIPTION ALTHOUGH IT HAS PREVIOUSLY
DENIED A MOTION TO DISMISS BASED ON THE SAME GROUND.
2. THE TRIAL COURT ERRED IN NOT GRANTING RELIEF TO
PLAINTIFFS ALTHOUGH THE DEFENDANTS WERE DECLARED IN
DEFAULT.
The petitioners contend that the trial court acted with grave abuse
of discretion when, after hearing their evidence presented ex-parte,
the respondents having been declared in default, it dismissed the
case on the ground that the action had already prescribed. When
the same ground was earlier raised, the court denied the motion to
dismiss iled by the respondents. The petitioners argue that because
of its denying the motion to dismiss, the trial court is estopped from
dismissing the case on the same ground. Petitioners further
contend that the court's conclusion that they had knowledge of the
sale executed by their deceased brother, Martin Pascua about
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
twenty years ago is based merely on surmises and conjectures
because, in reality, it was only in 1973 when they came to learn of
the deed of sale executed by their deceased brother in 1951. In
1973, the deed was shown to them by respondent Clemente Castro
at the Agrarian Of ice. Therefore, the period of prescription should
be counted from the knowledge of the petitioners of the deed of sale
and not from the date it was executed.
Petitioners' contentions are without merit.
The trial court denied the motion to dismiss because the grounds
relied upon by the respondents for their motion did not appear on
the face of the complaint. There was no inding that the allegation of
prescription had no merit. It cannot be said, therefore, that the trial
court was already estopped from passing upon the issue of
prescription. The issue was not adjudicated on its merits and the
doctrine of res judicata had not set in yet.
We likewise ind the petitioners' contention, that they came to know
of the deed of sale by Martin Pascua in favor of the respondents only
in 1973, highly improbable. As the trial court correctly observed, it
is inconceivable that the petitioners did not come to know about the
purchase by the respondents of the property from Martin Pascua.
They admitted that they have been neighbors of the respondents
since before the war or for a period of about 30 years and that the
latter had deprived them of the fruits of the land in question for
more than 20 years. Alberto Pascua, one of the petitioners testi ied
that his parents from whom they inherited the property died more
than 25 years ago yet the children never exerted any effort so have
the property partitioned. This fact indicates that petitioners had
knowledge of the sale, which explains why they had no interest at
all in any project of partition. More important is the fact that after
the respondents purchased the land they worked to secure an
Original Certi icate of Title on the basis of a free patent application.
This was way back in 1958, 15 years before the petitioners decided
to ile the action below. Clearly, the petitioners' action is now barred
by the statute of limitations.
In the case of Iglesia ni Cristo v. Hon. Judge, Court of First Instance of
Nueva Ecija, Br. I(123 SCRA 523), quoting the case of Labora v.
Dayang-hirang (37 SCRA 346), we ruled:
"The rule in this jurisdiction, regarding public patents and the
character of the certi icate of title that may be issued by virtue
thereof, is that where land is granted by the government to a private
individual, the corresponding patent therefor, is recorded, and the
certi icate of title is issued to the grantee; thereafter, the land is
automatically brought within the operation of the Land Registration
Act, the title issued to the grantee becoming entitled to all the
safeguards provided in Section 38 of said Act. In other words, upon
the expiration of one year from its issuance, the certi icate of title
becomes irrevocable and indefeasible like a certi icate issued in a
registration proceeding."
It is quite obvious, therefore, that the respondents' title has already
become indefeasible and irrevocable, the one-year period provided
by law having expired in 1959.
Moreover, even if we add the lower court's inding that there was
fraud on the part of Martin Pascua when he effected the sale of the
disputed lot in favor of the respondents, the petitioners are still
barred from recovering the lot because their action should have
been iled within four (4) years from their discovery of the fraud,
which in turn, is deemed at the latest to have taken place in 1958,
when the respondents were issued an original certi icate of title.
This was our ruling in the case of Balbin v. Medalla (108 SCRA 666)
where we stated:
Based on Syllabus of Dean Monteclar  By RGL  36 of 95
 
"An action for reconveyance of real property resulting from fraud
my be barred by the statute of limitations, which requires that the
action shall be iled within four (4) years from the discovery of the
fraud. Such discovery is deemed to have taken place when the
petitioners herein were issued original certi icates of title through
either homestead or free patent grants, for the registration of said
patents constitutes constructive notice to the whole world. (Gerona
v. de Guzman, 11 SCRA 153, and cited cases thereof).
"In the case at bar, the latest patent was issued on October 14. 1959.
There is, therefore, merit in petitioner's contention that if any action
for reconveyance should be commenced, the same should be iled
on or before October 14, 1963. But private respondents' complaint
for reconveyance and annulment of titles with damages was iled
only on August 30, 1973 or more than 14 years had already elapsed
from the date of the issuance of the respective titles of the
defendants. Consequently, the action for reconveyance of land titled
in the names of defendants (petitioners herein) had already
prescribed."
The petitioners raise as a second issue that the respondent court
had no alternative but to grant the relief prayed for in their
complaint as this was evident in the tenor of the summons issued by
said court which in part stated:
"x x x if you fail to appear within the time aforesaid, the plaintiff will
take judgment against you by default and demand from this Court
the relief applied for in said complaint x x x."
Petitioners also anchor their contention on Rule 18, Section 1 of the
Rules of Court which provides:
"Judgment by default.- If the defendant fails to answer within the
time speci ied in these rules, the court shall, upon motion of the
plaintiff and proof of such failure, declare the defendant in default.
Thereupon the court shall proceed to receive the plaintiff's
evidence and render judgment granting him such relief as the
complaint and the facts proven may warrant. This provision applies
where no answer is made to counter-claim, cross-claim or
third-party complaint within the period provided in this Rule."
Nowhere in the aforequoted provision nor in the summons issued
by the respondent court is it stated that the petitioners are
automatically entitled to the relief prayed for, once the respondents
are declared in default.
Favorable relief can be granted only after the court has ascertained
that the evidence offered and the facts proven by the presenting
party, petitioners in this case, warrant the grant of the same.
Otherwise, it would be meaningless to require presentation of
evidence if everytime the other party is declared in default, a
decision would automatically be rendered in favor of the
non-defaulting party and exactly according to the tenor of his
prayer. This is not contemplated by the Rules nor is it sanctioned by
the due process clause.
to the case of Lint Tanhu v. Ramolete (66 SCRA 452-453), we had
occasion to elaborate on this point. We ruled:
"The Rules of Court contain a separate rule on the subject of default,
Rule 18. But said rule is concerned solely with default resulting
from failure of the defendant or defendants to answer within the
reglementary period. Referring to the simplest form of default, that
is, where there is only one defendant in the action and he fails to
answer on time, Section 1 of the rule provides that upon 'proof of
such failure, (the court shall) declare the defendant in default.
Thereupon the court shall proceed to receive the plaintiffs evidence
and render judgment granting him such relief as the complaint and
 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

the facts proven may warrant.' This last clause is clari ied by Section
5 which says that 'a judgment entered against a party in default
shall not exceed the amount or be different in kind from that prayed
for.'
"Unequivocal, in the Literal sense, as these provisions are, they do
not readily convey the full import of what they contemplate. To
begin with, contrary to the immediate notion that can be drawn
from their language, these provisions are not to be understood as
meaning that default or the failure of the defendant to answer
should be 'interpreted as an admission by the said defendant that
the plaintiff's cause of action ind support in the law or that plaintiff
is entitled to the relief prayed for.' (Moran, supra, p. 535 citing
Macondray & Co. v. Eustaquio, 64 Phil. 466, citing with approval
Chaf in v, McFadden, 41 Ark. 42; Johnson v. Pierce, 12 Ark. 599;
Mayden v. Johnson, 59 Ga. 105; People v. Rust, 292 IJJ. 328; Ken v.
Leopold, 21 111. A. 163; Chicago, etc. Electric R. Co. v. Krempel, 116
111. A. 253).
XXX XXX XXX
"In other words, a defaulted defendant is not actually thrown out of
court. While in a sense it may be said that by defaulting he leaves
himself at the mercy of the court, the rules see to it that any
judgment against him must be in accordance with law. The evidence
to support the plaintiffs cause is, of course, presented in his
absence, but the court is not supposed to admit that which is
basically incompetent. Although the defendant would not be in a
position to object, elementary justice requires that only legal
evidence should be considered against him. If the evidence
presented should not be suf icient to justify a judgment for the
plaintiff, the complaint must be dismissed. And if an unfavorable
judgment should be justi iable, it cannot exceed in amount or be
different in kind from what is prayed for in the complaint."
In the instant case, from the evidence presented ex-parte by the
petitioners and from their very own allegations, the only judgment
that is warranted is the dismissal of the complaint. It is barred by
the statute of limitations.
WHEREFORE, the petition is hereby DISMISSED for lack of merit.
No costs.
SO ORDERED.
Teehankee (Chairman), Melencio-Herrera, Plana, Relova, de la
Fuente, and Alampay, JJ., concur.
15 Viacrusis v Estenzo, L-18457, 30 Jun 1962  defendants."
115 Phil. 556
G. R. No. L-18457, June 30, 1962 
GUILLERMO  VIACRUCIS,  AND  LUISA  DE  VIACRUCIS, 
PETITIONERS,  VS.  HON.  NUMERIANO  G.  ESTENZO,  Court dated December 28, 1960, the defendants were given ten (10)
JUDGE  OF  THE  COURT  OF  FIRST  INSTANCE  OF  LEYTE,  days from the receipt of the copy of the manifestation of the
ANASTACIO  ORAIS,  AND  CELESTINA  MALAZARTE,  plaintiffs' counsel together with the copy of Annex 'A', the Deed of
RESPONDENTS  sale alleged in the complaint.
 
D E C I S I O N  by the undersigned on February 6, 1961. Defendants therefore have
BARRERA, J.:
On November 15, 1960, respondents Anastacio Orais and Celestina
Malazarte iled with the Court of First Instance of Leyte a complaint
(Civil Case No. 444-0) against petitioners Guillermo Viacrucis and
Luisa de Viacrucis, for recovery of possession of a parcel of land
allegedly acquired by plaintiffs by virtue of a deed of sale in their
favor, with damages. On December 15, 1960, petitioners were
served with summons and a copy of the complaint. On December
21,1960, due to respondents' failure to attach to the complaint a
copy of the deed of sale, referred to Annex "A," petitioners, as
defendants below, iled a motion seeking an extension pf time for
them to answer the complaint until after receipt of said document.
Acting on said motion, the court, on December 28, 1960, issued an
order giving petitioners 10 days from receipt of said document
within which to ile their answer to the complaint. Said order,
together with the copy of said document, was actually received by
petitioners' former counsel: on February 6, 1961, the notices issued
by the postmaster of Davao City to said counsel having been issued
as follows: First notice: January 24, 1961; Second notice: February
1, 1961; and Third notice: February 6, 1961.
On January 31, 1961, however, presumably on motion of
respondents' counsel, the court issued an order declaring
petitioners in default, to wit:
"ORDER
"For failure on the part of the defendants to ile their answer; the
said defendants are hereby declared in default.
"On motion of Attorney Leonardo C. Dejano, the hearing of this case
for the reception of the evidence for the plaintiffs is hereby set on
February' 13, 1961 at 7:30 o'clock in the morning, with notice to
Attorney Dejano in open court. "So Ordered."
On February 14, 1961, petitioners iled their answer, with
counterclaim, asserting that the deed relied upon by the plaintiffs
was but a simulated sale to enable plaintiffs to obtain a loan which
was never carried out.
On February 15, 1961, the court received the evidence ,for
respondents ex parte and thereafter, on the same date, rendered a
decision in favor of respondents the dispositive part of which reads:
"WHEREFORE, the Court hereby declares the plaintiffs to be the
lawful owner of all the parcel of land described as follows: * * * The
Court hereby orders the defendants to jointly and severally pay the
plaintiffs the sum of P400.00 representing damages from 1956 up
to December, 1960, and another sum at the rate of P10.00 a month
from January, 1961 up to the time the four-hectares northern
portion of the aforesaid land shall have been delivered to the
plaintiffs and to pay the plaintiffs the sum of P150.00 for as
attorney's fees.
"The defendants are hereby ordered to vacate the four-hectare
northern portion of land aforesaid and restore the plaintiffs to the
possession thereof, and that costs is hereby adjudged against the
" On February 16, 1961, herein petitioners received notice of the
order of the court of January 31, 1961, declaring them in default
and setting tbe case for reception of evidence ex parte on February
13, 1961. Thereupon, petitioners iled a motion for reconsideration
of the said order of default stating partly:
"1. The record of this case shows that by order of this Honorable
"2. The said order of this Honorable Court dated December 28,
1960, together with the copy of the Manifestation of plaintiffs'
counsel and also a copy of the deed of sale (Annex 'A'), was received
up to February 16, 1961 within which period of ten (10) days said

Based on Syllabus of Dean Monteclar  By RGL  37 of 95 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
defendants should ile their answer under and by virtue of said
order of this Honorable Court dated December 28, 1960 referred
above. The mail received was by ordinary registered mail.
"3. That it may also be mentioned herein that an order of this
Honorable Court dated January 24, 1961, was received on the said
date of February 6, 1961 setting the hearing of this case on January
31, 1961 at 7:80 A.M., with the notice to Atty. Dejano in open court.
It is herein alleged that the envelope containing this order was
postmarked at Ormoc City Post Of ice January 27, 1961 and as
already said, received on February 6, 1961. It was sent by ordinary
mail.
"4. That defendants iled their answer by registered airmail on
February 14, 1961 as per registry of ice receipt No. 14189 issued by
Davao City Post Of ice and clearly within the ten-day period granted
to the defendants in the said order of this Honorable Court on
December 28, 1960 which wa3 received on February 6. 1961.
"5. That considering these incontrovertible facts appearing in the
record of this case, the undersigned counsel cannot imagine how
the defendants could be declared in default; and furthermore the
undersigned counsel entertain the belief that plaintiffs were
permitted to present their evidence on February 13,1961 by and
under the virtue of the order herein sought to be reconsidered.
"6. That under the above set of incontrovertible facts, there is
absolutely no justi ication that defendants be declared in default
and therefore whatever proceedings had on February 13, 1961 will
have no binding effect upon the defendants.
"WHEREFORE, it is respectfully prayed of this Honorable. Court that
the order dated January 31, 1961 be reconsidered, lifting same; and
that whatever proceedings had on February 13, 1961, having no
binding effect upon the defendants, be set aside."
Said motion was denied by respondent Judge on April 21, 1961, in
an order of this tenor:
"ORDER
"It appears from the certi icate issued by the Postmaster of Davao
City that as early as January 24, 1961, the irst registry notice was
sent to Attorney Bonifacio Tamayo representing the defendants.
"The said registered letter No. 3789 contains the order of this Court
giving the defendant ten (10) days within which to present his
answer to the complaint.
"Under Section 8, Rule 27, of the Rules of Court that service on this
letter is deemed complete on January 29, 1961, and that on
February 9, 1961, as the defendants have not iled any answer, this
Court is well grounded in proceeding with the hearing of this case
as the defendants, since then, have already been in default.
"This Court has waited until February 15, 1961, for this Court to
receive an answer, but as no answer was iled, the hearing
proceeded and a corresponding decision was rendered.
"WHEREFORE, for lack of suf icient merits, the motion for
reconsideration iled by the defendants is hereby denied, with
notice to Attorneys Dejano and Payos, in open court. "So ordered."
Noti ied of this order of denial on April 26, 1961, petitioners iled
with this Court the present petition for certiorari (with prayer for
preliminary injunction) and mandamus.
Petitioners claim that respondent Judge acted with grave abuse of
discretion and in excess of his jurisdiction in declaring them in
default on January 31, 1961. Respondents on their part urge the
dismissal of the present petition, on the ground that appeal from
the order of April 21, 1961 denying petitioners' motion for
reconsideration of the default order, is the proper remedy.
Petitioners admit that the irst notice of the registered mail
containing the order of the trial court dated December 28, 1960
(giving them 10 days from receipt thereof within which to ile their
answer to the complaint) was sent by the Davao City Postmaster to
petitioners' counsel on January 24, 1961. Having failed to claim said
Based on Syllabus of Dean Monteclar  By RGL  38 of 95
 
mail from the post of ice within 5 days from said date of irst notice,
or speci ically on January 29, 1961, service thereof was, pursuant to
Section 8, Rule 27, of the Rules of Court, deemed completed at the
expiration of the latter date. Nonetheless, petitioners had until
February 8, 1961 (1Q days from January 29) within which to ile
their answer to the complaint. In the circumstances, the trial court
could not have legally declared them in default before such date.
Hence, the order of default made on January 31, 1961, Le., 8 days
prior to the expiration of the time expressly granted petitioners to
answer, was premature and, therefore, null and void.
It is, however, contended that petitioners' remedy properly should
have been an appeal from the order denying their motion to set
aside the order of default, citing the case of Madrigal Shipping Co.
vs. Ogilvie, et al., (104 Phil., 748; 55 Off. Gaz. [35] 7331), wherein
this Court said:
"Counsel argue that an order of default being interlocutory, the
petitioner could not appeal therefrom. True, but from a denial of a
motion to set aside an order of default, as the petitioner's 'urgent
motion to set aside order of default' (Annex F), which may be
deemed to fall under section 2, Rule 38, the petitioner could have
appealed. Instead of taking an appeal from such denial, the
petitioner chose to bring the matter to this Court by a petition for
certiorari with preliminary injunction which was correctly
dismissed for the remedy was an appeal from the order denying the
motion to set aside the order of default entered against the
petitioner because of mistake or excusable neglect. * * *." (Italics
supplied.)
Note, however, that in the above-mentioned case, the motion to set
aside the default order, being predicated on the movant's own
alleged mistake and excusable neglect, was treated, and .properly
so, as one for relief under Rule 38. In other words, the order of
default issued therein was not being assailed as inherently
defective, but as one resulting from the mistake or excusable neglect
of the party seeking the relief. 'It is evident that upon denial of the
motion to set aside such order of default, appeal is in order.
Upon the other hand, we have the case of Luz vs. Court of First
Instance of Tacloban, et al. (77 Phil., 454, 44 Off. Gaz. 42) wherein
this Court, inding that—
"When the motion to declare defendant in default was iled on
February 24, * * * and when the decision was rendered on March 24,
1944, defendant's petition to dismiss sent from Docos Sur since
January 31 was in transit and must have been received between the
date of the decision and April 1, 1944, when the order denying it
was issued",
held that the lower court acted prematurely in pronouncing
defendant (petitioner) in default, and the decision rendered therein,
without giving said defendant her day in court, was declared null
and void.
In another case[1] we granted the writ of certiorari prayed for where
it was established that the defendant was prematurely declared in
default through misinterpretation by the lower court of the
provisions of section 5 of Rule 13, of the Rules of Court. Such
premature declaration of default of defendant or the rendering of
judgment before the expiration of the time for the iling of an
answer, we held therein, deprives the defendant of his day in court
and the judgment so rendered may, consequently, be vacated.
Conformably with the foregoing pronouncements, the declaration of
default by the court in this case, before petitioners' period to ile
their answer had expired, clearly is in excess of and/or without
jurisdiction and, therefore, properly correctable by a writ of
certiorari.
Respondents also argue that since petitioners actually iled their
answer only on February 14, 1961, i.e., 6 days after the expiration of
the period to ile the answer (on February 8), the trial court
correctly proceeded ex parte with the case on February 15.
Differently stated, it is respondents' contention that petitioners'
 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

failure to ile their answer on time cured the previous premature
declaration of default and validated the otherwise defective
proceedings had on February 15.
Such argument can not be sustained. Firstly, under Section 6, Rule
35, of the Rules of Court, a defendant who fails to timely ile his
answer can only be declared in default "upon motion of the
plaintiff" (not motu proprio by the court). There is no question that
after the premature, and hence void, declaration of default on
January 31, 1961, no other motion to the same effect was iled by
respondents-plaintiffs and granted by the court. Petitioners,
therefore, were never legally in default. Secondly, petitioners'
subsequent failure to ile their answer within the extension period
could not produce the retroactive effect of supplying the de iciency
or lack of legal basis of the declaration of default issued on January
31. A null and void order can not be revived or rati ied. Thirdly, the
proceeding on February 15, that is, the reception of plaintiffs'
evidence ex parte and the decision rendered thereon, having been
predicated on a void order of default, is by itself also a nullity which
is reviewable by certiorari (Luna vs. Abaya, etc., et al., supra.)
The records before us containing the pleadings of the parties
indicate that there are genuine issues raised by the
defendants-petitioners which would seem to entitle them to a due
hearing on the merits.
Wherefore, the writ of certiorari prayed for by petitioners is
granted, the order of January 31, 1961, as well as the decision
rendered on February 15, 1961, and the order of denial of the
motion for reconsideration issued on April 21, 1961, are set aside,
and the case ordered remanded to the court of origin for further
proceedings, upon the complaint and answer iled therein, without
costs.
So ordered.
Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Paredes, Dizon,
Regala and Makalintal, JJ., concur.
16 Malipol v Tan, L-27730, 21 Jan 1974  the sum of P5,000.00 for moral damages ; (5) to pay to the plaintiffs
154 Phil. 193
SECOND DIVISION  be paid for by defendant Lily Lim Tan, who by law, being the owner
G.R. NO. L-27730, January 21, 1974  and operator of the gasoline tanker that featured in the accident, is
tanker's right wheel that got detached from its axle. Malijan's
companion, with the aid of the barrio captain, brought Malijan to
the San Pablo City Hospital where he died that same night, the cause
of death being "possible traumatic cerebral hemorrhage due to
vehicular accident."
The gasoline tanker with Plate No. T-52573, series of 1964, driven
at the time of the accident by herein appellant Ernesto Labsan, was
being used in connection with the gasoline business of the owner,
the herein appellant Lily Lim Tan.
Representations and demands for payment of damages having been
ignored by appellants, appellees iled on May 18, 1966 a complaint
in the Court of First Instance of Batangas praying that appellants be
condemned to pay, jointly and severally, the damages as speci ied in
said complaint. The appellees are the mother and the minor
brothers and sisters of the deceased Pantaleon Malijan.
Appellants were duly served with summons on May 19, 1966, but
they failed to ile their answer within the reglementary period.
Upon appellees' motion of June 8, 1966, the trial court, in an order
dated June 10, 1966, declared the appellants in default, and
appellees were permitted to present their evidence in the absence
of the appellants. The trial court rendered a decision, dated July 1,
1966, the dispositive portion of which reads as follows:
"WHEREFORE, inding the averments in the complaint as supported
by the evidence to be reasonable and justi ied, judgment is hereby
rendered in favor of the plaintiffs and against the defendants. The
defendant driver, Ernesto Labsan, is ordered (1) to pay the sum of
P2,100.00 to the plaintiffs for expenses for hospitalization, medical
treatment, vigil and burial of Pantaleon Malejan; (2) to pay to the
plaintiffs the sum of P6,000.00 for the death of said victim; (3) to
pay to the plaintiffs the sum of P20,000.00 for the loss of earnings of
said deceased for a period of ive years; (4) to pay to the plaintiffs
the sum of P2,000.00 for attorney's fees and P500.00 for incidental
and litigation expenses; and (6) to pay the costs of the suit. Should
Ernesto Labsan not be able to pay the foregoing damages, they shall
subsidiarily liable."

PRIMA  MALIPOL,  IN  HER  OWN  BEHALF  AND  AS  Copy of the decision was received by the appellees on August 23,
GUARDIAN  AD  LITEM  OF  HER  MINOR  CHILDREN,  LYDIA  1966.
MALIJAN,  JOSEFINA  MALIJAN,  TEODORA  MALIJAN, 
AND  SEBASTIAN MALIJAN, PLAINTIFFS-APPELLEES, VS.  A motion for execution was iled on August 26, 1966 by appellees
LILY  LIM  TAN  AND  ERNESTO  LABSAN,  but the trial court held its resolution in abeyance until September
DEFENDANTS-APPELLANTS.  22, 1966 when the judgment would become inal.

 
On September 21, 1966 appellants iled a veri ied motion to lift the
order of default and for a new trial, alleging that they were deprived
D E C I S I O N  of their day in court when the order of default was issued and a
ZALDIVAR, J.: decision rendered thereafter; that they had good and valid defenses,
Appeal on questions of law from the decision dated July 1, 1966, a namely: (a) that the accident which gave rise to the case was due to
judgment by default, and from the order dated October 10, 1966, of force majeure; (b) that appellant Ernesto Labsan was without fault
in the accident that gave rise to the case; and (c) that appellant Lily
the Court of First Instance of Batangas in its Civil Case No. 1732
which denied defendants-appellants' motion to lift the order of Lim Tan had exercised the due diligence required of a good father of
a family to prevent damage. Finding said motion to be without
default and for a new trial and which considered the judgment by
default as standing with full force and effect. merit, the trial court denied the same on October 10, 1966. Hence,
this appeal wherein appellants made assignment of errors, as
follows:
In the evening of February 6, 1965, at about 8:35 o'clock, Pantaleon
Malijan, who was walking with his companion Leonardo Amante on
the shoulder of the road in Barrio San Felix, Sto. Tomas, Batangas,
was hit by a gasoline tanker and was thrown to the ground. While
he was sprawling on the ground Malijan was run over by the

Based on Syllabus of Dean Monteclar  By RGL  39 of 95 

 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

from not iling the answer within the reglementary period as

(a) The trial court erred in inding that appellants took the
provided by the Rules of Court, otherwise these guidelines for an
complaint for granted by reason of the fact that appellants
orderly and expeditious procedure would be rendered
referred to their lawyer the complaint for answer only after the
meaningless.[1] Unless it is shown clearly that a party has justi iable
lapse of eleven (11) days from receipt thereof;
reason for the delay the court will not ordinarily exercise its
discretion in his favor.[2]

In the instant case, We agree with the trial court that appellants
have not shown that they exercised such diligence as an ordinary
(b) The trial court erred in not holding that the mistake committed
prudent person would exercise, to have the answer iled within the
by the late Atty. Daniel Chavez in giving the wrong date of receipt
reglementary period. Appellant Lily Lim Tan admitted in her
by appellants of the summons and the complaint to Atty. Romulo
af idavit[3] that she received the summons and copy of the complaint
R. de Castro on June 10, 1966 due to the abnormal mental
on May 19, 1966, and that having read the complaint she found out
condition of the late Atty. Daniel Chavez on June 10, 1966 which
that she was being sued, together with her driver, for damages in
thereafter resulted in the commission of suicide by the latter on
connection with the accident of February 6, 1965 at Sto. Tomas,
June 17, 1966, constitutes the mistake and accident in law which
Batangas. The damages asked in the complaint amounts to
warrant the relief from default and the granting of the new trial;
P36,600.00. The summons required them to answer the complaint
within 15 days from receipt thereof, and warned them that should
they fail to answer within said period the plaintiffs would take
judgment against them for the relief demanded in the complaint.
The damages demanded was not a negligible sum, and appellant
Lily Lim Tan, who is a business woman, should have considered the
(c) The trial court erred in not holding that the fact that appellants,
matter a serious one. Ordinary prudence would dictate that she
through Atty. Romulo R. de Castro, iled on June 10, 1966should a concern herself about the matter, that she should refer said
motion for extension of time to ile answer, and thereafter complaint with the least possible delay to her lawyer. But, for
actually did ile their answer to the complaint on June 20, 1966 reasons she did not explain, she referred the complaint to her
wherein they alleged good, valid and meritorious defenses lawyer only after the lapse of ten (10) days from receipt thereof, i.e.,
against the claim of plaintiffs in the complaint, should warranton May 30, 1966. She should have considered that four days might
favorable consideration of appellants' motion to lift ordernot of be suf icient time for her lawyer to prepare and ile the answer.
default and for new trial; and

Appellants, however, contend that their lawyer, Atty. Chavez, could

(d) The trial court erred in not granting appellants' motion
order of default and for new trial.
1. In support of their irst assignment of error, counsel for
appellants contends that the inding of the trial court, that the
appellants took the complaint for granted when they referred the
complaint to their lawyer only on the eleventh day after receipt
thereof, was unwarranted, because appellants had 15 days from
receipt of the summons and complaint to answer and their lawyer,
the late Atty. Daniel Chavez, after the complaint was referred to him
on the eleventh day, had still four days to ile the answer, which he
could very well do inasmuch as he was well acquainted with the
facts because he was the lawyer of appellant Ernesto Labsan in
Criminal Case No. 2200 of the Court of First Instance of Batangas for
homicide thru reckless imprudence — which case arose from the
very accident subject of appellees' complaint; that appellant Lily
Lim Tan, furthermore, had instructed her employee, Eleuterio
Dizon, to handcarry the summons and to deliver it to nobody except
to Atty. Chavez; that Atty. Chavez, in a long distance telephone
conversation with appellant Lily Lim Tan, assured the latter that he
would attend to the complaint.
We do not ind merit in the contention of counsel for appellants. It is
within the sound discretion of the court to set aside an order of
default and to permit a defendant to ile his answer and to be heard
on the merits even after the reglementary period for the iling of the
answer has expired, but it is not error, or an abuse of discretion, on
the part of the court to refuse to set aside its order of default and to
refuse to accept the answer where it inds no justi iable reason for
the delay in the iling of the answer. In the motions for
reconsideration of an order of default, the moving party has the
burden of showing such diligence as would justify his being excused
very well prepare the answer within the remaining four days of the
reglementary period, for he was conversant with the facts of the
case. Be that as it may, the fact was that Atty. Chavez failed to ile
to the
lift answer. Because Atty. Chavez assured her, in their long distance
telephone conversation that he would take care of the complaint,
appellant Lily Lim Tan took for granted that the answer would be
iled on time. Said appellant should have checked before the
expiration of the period for iling the answer whether the complaint
was really taken care of, or not. But this, appellant Lily Lim Tan
failed to do, and this is another instance showing her lack of
concern over the complaint. There was, therefore, no showing of
due diligence on the part of appellants which would excuse their
failure to ile their answer on time. There is no showing either that
the other appellant, Ernesto Labsan, had taken any step to have an
answer iled in his behalf — evidently he was relying on his
employer.
2. In support of the second assignment of error, appellants contend
that the facts show that on June 10, 1966, Atty. Chavez, who was
then acting strangely, endorsed the summons and complaint to Atty.
Romulo R. de Castro; that upon inquiry by Atty. de Castro from Atty.
Chavez the latter informed him that the summons was served on
appellants on May 30, 1966; that appellant Lily Lim Tan, who was
assured by Atty. Chavez in their long distance telephone
conversation that the complaint would be attended to, could not, by
the exercise of ordinary diligence, have foreseen, and avoided, the
circumstance that at the time she referred the summons to Atty.
Chavez, the latter was already in an abnormal condition which later
resulted in his committing suicide on June 17, 1966; that it was Atty.
Chavez's abnormal condition and his having given to Atty. de Castro
the wrong date of the receipt of the summons by the appellees that
caused the delay in the iling of the answer; that said circumstances
constituted mistake and accident which entitled appellants to relief
from default and a grant of new trial.

Based on Syllabus of Dean Monteclar  By RGL  40 of 95 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
Appellants' contention that the delay in iling the answer was due to
mistake and accident is untenable.
The mistake, according to appellants, consisted in Atty. Chavez'
having told Atty. de Castro on June 10, 1966 that appellants received
the summons and complaint on May 30, 1966. Even if Atty. Chavez
had told Atty. de Castro the correct date, that is, that appellants
received the summons on May 19, 1966, the answer could not have
been iled on time by Atty. de Castro, because the reglementary
period for iling the answer expired on June 3, 1966, and it was
already June 10, 1966, when the complaint was endorsed by Atty.
Chavez to Atty. de Castro.
The accident, according to appellants' counsel, consisted in Atty.
Chavez's being in an abnormal condition at the time the complaint
was given to him on May 30, 1966. This claim of appellants is not
supported by the record.
The record does not show that Atty. Chavez was suffering from an
abnormal mind on May 30, 1966. His actuations on May 30 were
those that could be expected of a normal person. Atty. Chavez asked
the employee of appellant Lily Lim Tan about the date when his
employer received the summons and complaint, and because the
employee could not give him the desired information Atty. Chavez
placed a long distance telephone call to appellant Lily Lim Tan to
ask about said date. This action of Atty. Chavez showed that he was
very much aware that the reglementary period within which the
answer should be iled was to be computed from the date of the
receipt of the summons and the complaint. It also showed that Atty.
Chavez knew the easiest and the most practical means to get the
information that he needed - that was by a long distance telephone
call to his client, Lily Lim Tan. These actuations of Atty. Chavez
showed that he knew the importance of the matter at hand, and he
was exercising the ordinary and reasonable care over the interests
of his client. These speci ic actions of Atty. Chavez indicated that as
of May 30, 1966 he had a sound mind.
It is claimed by appellants that on June 10, 1966 Atty. Chavez
endorsed the complaint to Atty. de Castro, and told the latter that
the summons and complaint were received by the appellants on
May 30, 1966. It is further claimed by appellants that this
information given by Atty. Chavez - that the summons and
complaint were received by the appellants on May 30, 1966 - was
the mistake that caused the delay of the iling of the answer. But it
should be noted that on June 10, 1966 when Atty. Chavez endorsed
the complaint to Atty. de Castro and informed the latter that the
summons and complaint were received by the appellants on May
30, 1966, the period within which the answer should be iled had
already expired - the expiry date being June 3, 1966. There is no
showing that between May 30, when Atty. Chavez received the
summons and complaint from the employee of Lily Lim Tan, and
June 3, 1973 Atty. Chavez was incapacitated to ile the answer. And
so it is clear that before the case was endorsed to Atty. de Castro, the
appellants were already in default. The failure to ile the answer on
time may well be attributed to the mistake or negligence of Atty.
Chavez. The appellees are bound by the mistakes, and may suffer by
the negligence, of their lawyer. In fact, on June 8, 1966, or two days
before Atty. Chavez endorsed the case to Atty. de Castro, the
appellees had iled a motion in court to declare the defendants (now
the appellants) in default. The moves taken by Atty. de Castro - in
iling a motion for extension of time to ile an answer on June 10,
1966, and inally iling an answer on June 20, 1966 - were already
late.
The fact that Atty. Chavez committed suicide on June 17, 1966 does
not necessarily prove that he was abnormal, incompetent or insane
Based on Syllabus of Dean Monteclar  By RGL  41 of 95
 
on May 30, 1966. Although there is a judicial declaration that a sane
man would not commit suicide, cognizance is nevertheless taken of
the fact that circumstances at some given time may impel a person
to commit suicide.[4] The probative value of suicide in determining
the sanity of a person is dependent on the factual situation in each
case. Such matters as the reasons for the act of self-destruction, the
circumstances indicating the person's state of mind at the time, and
other pertinent facts must be considered. The appellants had not
indicated to the trial court any circumstance from which the trial
court could form an opinion of the mental condition of Atty. Chavez
before he committed suicide. The trial court, therefore, did not err
when it did not favorably consider the claim of the appellant that
their failure to ile their answer to the complaint was due to
accident or mistake, as contemplated in Section 3 of Rule 18 of the
Rules of Court.
3. In support of the third assignment of error, appellants argue that
acting on the wrong information given by Atty. Chavez, Atty. Romulo
de Castro iled on June 10, 1966 a motion for an extension of 20
days within which to ile an answer and that he did ile the answer
with good, valid and meritorious defenses on June 20, 1966; that on
June 27, 1966 when appellees were allowed to present their
evidence ex-parte, the motion for extension of time and the answer
already formed part of the records of the case; that inasmuch as the
late iling of the answer was due to accident and mistake, and
appellants had good, valid, and meritorious defenses, the motion to
lift the order of default and for new trial should have been favorably
considered by the court.[5]
Let it be noted that the lower court rendered its decision on July 1,
1966, and the appellees received notice of said decision on August
23, 1966. The decision would have become inal on September 22,
1966. On September 21, 1966 the appellants iled their motion to
lift the order of default and for new trial. The motion of the
appellants therefore, was in the nature of a motion for a new trial
based on fraud, accident, mistake or excusable negligence under
paragraph (a) of Section 1 of Rule 37 of the Rules of Court. Under
Section 2 of said Rule 37 the moving party must show that he has a
meritorious defense. The facts constituting the movant's good and
substantial defense, which he may prove if the petition were
granted, must be shown in the af idavit which should accompany
the motion for a new trial[6]. In the instant case, the motion to lift the
order of default and for new trial as well as the af idavit of merits
accompanying the motion did not contain clear statements of the
facts constituting a good and valid defense which the appellants
might prove if they were given a chance to introduce evidence. The
allegations in the motion that defendants have good and valid
defenses, namely: that the accident which gave rise to the case was
force majeure; that defendant Ernesto Labsan is absolutely without
fault in the accident that gave rise to the case; and that defendant
Lily Lim Tan has exercised due diligence required of a good father of
a family to prevent damage[7], are mere conclusions which did not
provide the court with any basis for determining the nature and
merit of the probable defense. An af idavit of merit should state
facts, and not mere opinion or conclusions of law.[8]
Hence the trial court correctly denied the motion to set aside order
of default and for new trial.
We must, however, point out a law in the decision of the lower
court. It is stated in the decision appealed from that the driver,
Ernesto Labsan, was primarily liable for the payment of damages
adjudged therein, and the appellant Lily Lim Tan, being the owner
and operator of the gasoline tanker that igured in the accident, is
subsidiarily liable, that is, liable only in case Ernesto Labsan was not
able to pay. This is not correct. The action in the instant case was
brought not to demand civil liability arising from a crime. The
 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

complaint makes no mention of a crime having been committed, poured concrete (buhos) worth P6,000.00 each ….. P12,000.00; (2)
much less of the driver Ernesto Labsan having been convicted of a Steelmatting gate and fences with adobe/concrete bases …..
crime. But there is an allegation in the complaint that Ernesto P12,000.00; (3) One toilet bowl with water closet ….. P650.00, all
Labsan was the authorized driver of the truck that igured in the totalling P24,650.00.
accident, which truck was operated by appellant Lily Lim Tam in
Petitioners, as defendants below, were served summons through
connection with her gasoline business. The prayer in the complaint, one Helen Avendañ o, an employee in petitioners' factory and not
furthermore, sought to hold appellants jointly and solidarily liable
the person-in-charge, on August 12, 1976. They allegedly found the
for damages. The instant action, therefore, was based, as the said summons after the expiration of the reglementary period for
complaint shows, on quasi delict. Under Article 2180 of the Civil
iling the answer, as said Helen Avendañ o did not deliver the same
Code, which treats of quasi delicts, the liability of the owners and to the defendants but merely placed it in one of the tables in the
managers of an establishment or enterprise for damages caused by
of ice.
their employees is primary and direct, not subsidiary.[9] The
employer, however, can demand from his employee reimbursement On September 22, 1976, petitioners iled their "Motion for
of the amount which he paid under his liability.[10] The employer, Admission of Answer" and attached thereto their "Answer" to the
appellant Lily Lim Tan, must be held primarily and directly, not complaint but failed to attach the proof of service of the
subsidiarily, liable for damages awarded in the decision of the lower aforementioned pleadings to the adverse parties. This motion was
court. This is, of course, without prejudice to the right of appellant set for hearing on October 6, 1976 by petitioners' counsel but since
Lily Lim Tan to demand from her co-appellant Ernesto Labsan the respondent Presiding Judge of the trial court was on vacation
reimbursement of the damages that she would have to pay to leave on that date, the Acting Branch Clerk of Court issued a notice
appellees. to the parties resetting the hearing of said motion to October 27,
1976.
In the meantime, on October 13, 1976, respondents' counsel iled an
Wherefore, the decision of the Court of First Instance of Batangas, "Ex-Parte Motion to Declare Defendants in Default" and set the
dated July 1, 1966, as modi ied in accordance with the observations same for hearing on October 20, 1976. In resolving said motion, the
We made in the preceding paragraph, and the order, dated October trial court issued an order on October 26, 1976 declaring the
10, 1966, denying appellants' motion for the lifting of the order of petitioners in default.
default and for new trial, in Civil Case No. 1732, are af irmed. Costs
against defendants-appellants. At the hearing of the "Motion for Admission of Answer" of
petitioners on October 27, 1976, the trial court dictated an order in
open court denying the same. However, upon discovery that said
IT IS SO ORDERED. motion was iled earlier than the "Ex-Parte Motion to Declare
Defendants in Default" of respondents, the trial court changed the
order of denial and instead considered the said "Motion for
Fernando, Barredo, Antonio, and Aquino, JJ., concur. Admission of Answer" submitted for resolution of the court. Then
Fernandez, J., concurs in a separate opinion. on November 4, 1976, the trial court issued an order granting the
same "it appearing that said motion was iled before the plaintiffs
asked that defendants be declared in default, for reasons stated
17 Trajano et al v Cruz, L-47070, 29 Dec 1977  therein and in the interest of justice."
170 Phil. 728
Seeking a reconsideration of the order dated November 4, 1976,
respondents iled the corresponding pleading which was set for
FIRST DIVISION  hearing on December 1, 1976. At the said hearing, the trial court,
on prayer of petitioners' counsel, gave said counsel ive (5) days
G.R. No. L-47070, December 29, 1977  from said date to ile his opposition to the motion. But said counsel
mailed his opposition only on December 13, 1976, or seven (7) days
PEDRO  TRAJANO  AND  FRANK  TRAJANO,  PETITIONERS,  after the expiration of the period granted to him by the trial court.
VS.  THE  HON.  FERNANDO  A.  CRUZ,  JUDGE  OF  THE  CFI  In resolving the aforementioned "Motion for Reconsideration" of
OF  RIZAL,  BRANCH  XII,  AND  SEGUNDINA  VDA.  DE  respondents and the opposition of petitioners, the trial court noted
FERRER,  RUFINA  F.  LAGERA,  DAMASO  FERRER,  JR.,  three (3) failures and/or omissions on the part of petitioners, to
BENJAMIN FERRER AND JESUS FERRER, RESPONDENTS.  wit: (a) failure to ile answer within the period provided by the
Rules; (b) failure to furnish plaintiffs' counsel a copy of the "Motion
for Admission of Answer"; and (c) failure to ile opposition to the
 
"Motion for Reconsideration" within the period prayed for by
defendants' counsel and granted by the court.
D E C I S I O N 
Consequently, the trial court, on January 21, 1977 granted the
GUERRERO, J.:
"Motion for Reconsideration" of plaintiffs, lifted and set aside the
In this petition for review on certiorari, petitioners seek the order of November 4, 1976 and reinstated the order of October 26,
reinstatement of the order dated November 4, 1976 of the Court of 1976.
First Instance of Rizal, Branch XII, at Caloocan City, in Civil Case No.
Upon the iling of a "Motion for Reconsideration of the Order Dated
C-4032 granting their "Motion for Admission of Answer" and
January 21, 1977" by petitioners, the trial court stood irm on the
admitting their "Answer", it appearing that said order had been
order of default. Hence, this petition for review on certiorari.
lifted and set aside in a subsequent order dated January 21, 1977
reviving a previous order of default, which the court reiterated in its We ind the petition meritorious and accordingly give due course to
order dated March 21, 1977 denying their motion for the same.
reconsideration. It appears from the facts aforestated that at the time of the iling of
Petitioners herein are the defendants in a complaint iled by private the "Motion for Admission of Answer" and the "Answer" by
respondents as the lessors of the premises occupied by the former petitioners on September 22, 1976, they were not yet legally in
at 12 E. Alonzo Street, Daang Hari, Navotas, Rizal, for the recovery of default for failure to answer on time. Section 1, Rule 11 of the Rules
the value of certain improvements allegedly destroyed, demolished of Court ordains that a party shall be declared in default "upon
and/or damaged by them, namely: (1) Two giant patis tanks of motion of the plaintiff and proof of such failure." As held in Viacrusis

Based on Syllabus of Dean Monteclar  By RGL  42 of 95 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
vs. Estenzo, et al., L-18457, June 30, 1962, 5 SCRA 560, the court
cannot motu proprio declare a party in default.
Respondents iled their "Ex-Parte Motion to Declare Defendants in
Default" only on October 13, 1976 and due to circumstances not
attributable to the fault of petitioners, the trial court heard the
"Ex-Parte Motion to Declare Defendants in Default" on an earlier
date although the "Motion for Admission of Answer" of petitioners
was iled ahead. But upon discovery of said fact, the trial court
granted the "Motion for Admission of Answer" of petitioners "for
reasons stated therein and in the interest of justice."
The conclusion that becomes inescapable from the fact that
petitioners iled their answer before respondents asked for a
declaration of default is that respondents were not particularly
diligent in the exercise of their rights and that they were not in any
way prejudiced by the late iling of the answer by petitioners.
Further, there was no evidence showing that petitioners intended to
unduly delay the case. On the contrary, petitioners even attached
their "Answer" to the complaint upon the iling of their "Motion for
Admission of Answer" and did not even ile an extension of time to
ile the same of any other dilatory motion.
Most importantly, petitioners set forth in their "Answer" facts which
when duly proved may constitute good and substantial defenses
against the complaint of respondents. They alleged therein that
they were not the original lessees of the premises and at the time
they entered into possession of the same, the toilet bowl and the
water closet were no longer in place. They further alleged that they
replaced the steelmatting gate and the steelmatting fences since
they were already rotting due to the passage of time and the
elements. At any rate, they assured respondents that the discarded
steelmatting materials and the toilet bowl and its complements are
still in the premises. As regards the two giant patis tanks, they
alleged that they are intact and in place in exactly the same
condition as they were when petitioners became the lessees of the
premises.
Consequently, We hold that the trial court erred in issuing the order
dated January 21, 1977 setting aside the order of November 4, 1976
and in maintaining its stand in the order dated March 21, 1977. In
the case of Bañ ares vs. Flordeliza and Gavito, No. 29355, July 20,
1928, 51 Phil. 786, this Court held that "when a motion to set aside
the order of default is made without loss of time and before a date is
set for the hearing of the case on the merits and is accompanied by
a sworn statement of merits and copies of documents which
constitute prima facie a just and valid defense, such failure is
insuf icient to deprive a defendant of his rights, as in the present
case, and the refusal to set aside the order of default constitutes an
abuse of discretion, and especially when such setting aside of the
order of default will in no way prejudice the plaintiff."
In the same vein, this Court held in the case of Ladislao vs. Pestano,
L-7623, April 29, 1955, 96 Phil. 890, that "no prejudice could have
been caused to plaintiff by the admission of defendant's answer,
since the latter had not yet been declared in default and plaintiff
had not yet presented her evidence on the merits. The lower court,
therefore, in the exercise of its discretion, should have admitted
defendant's answer instead of declaring her in default." These cases
were reiterated in the recent ruling of this Court in Tumambing vs.
Ganzon, L-17456, October 22, 1966, 18 SCRA 411.
It should be noted that it was only upon the resolution of a "Motion
for Reconsideration" by respondents of the order dated November
4, 1976 that the trial court considered two other failures and/or
omissions of petitioners, namely: (a) failure to furnish plaintiffs'
counsel a copy of the "Motion for Admission of Answer"; and (b)
failure to ile the opposition to the "Motion for Reconsideration"
within the period prayed for by defendants' counsel and granted by
the court.
However, such fact of non-service was alleged by respondents for
the irst time in their "Motion for Reconsideration" of the order of
November 4, 1976 since at the hearing of the "Motion for Admission
Based on Syllabus of Dean Monteclar  By RGL  43 of 95
 
of Answer" by petitioners, respondents' counsel merely manifested
that he was submitting the motion for the resolution of the court.
Besides, petitioners' counsel offered copies of the aforementioned
pleadings. Therefore, on a second count, respondents failed to
assert their rights at the irst opportunity to do so. Moreover,
petitioners' counsel offered copies of the aforementioned pleadings
to respondents' counsel who, however, refused to accept the same.
So petitioners' counsel just sent the copies by registered mail before
the "Motion for Reconsideration" of respondents could even be
resolved.
Anent the failure of petitioners' counsel to ile his opposition to the
"Motion for Reconsideration" of respondents within the period
granted to him by the trial court, suf ice it to say that such failure
does not warrant the declaration of default of petitioners. At any
rate, petitioners' counsel satisfactorily explained his failure as due
to physical weakness as a result of in luenza.
We must stress here again that it is the policy of the law to have
every litigated case tried on the merits. It is for this reason that
judgments by defaults are generally looked upon with disfavor. As
aptly held in the leading case of Coombs vs. Santos, 24 Phil. 446, "a
default judgment does not pretend to be based upon the merits of
the controversy. Its existence is justi ied on the ground that it is the
one inal expedient to induce defendant to join issue upon the
allegations tendered by the plaintiff, and to do so without
unnecessary delay. A judgment by default may amount to a positive
and considerable injustice to the defendant; and the possibility of
such serious consequences necessitates a careful examination of the
grounds upon which the defendant asks that it be set aside."
WHEREFORE, the questioned orders dated January 21, 1977 and
March 21, 1977 are hereby lifted and set aside, the order dated
November 4, 1976 reinstated and the case remanded to the trial
court for trial on the merits. No pronouncement as to costs.
SO ORDERED.
Teehankee, (Chairman), Makasiar, Muñoz Palma, and Fernandez, JJ.,
concur.
Martin, J., no part.
18 Ponio v IAC, L-66782, 20 Dec 1984 
218 Phil. 548
SECOND DIVISION 
G.R. No. L-66782, December 20, 1984 
ELIODORO  PONIO  AND  WECONS  CONSTRUCTION 
SERVICES,  INC.,  PETITIONERS,  VS.  THE  HONORABLE 
INTERMEDIATE  APPELLATE  COURT,  HONORABLE 
NICANOR  E.  SILVANO  AS  PRESIDING  JUDGE  OF  THE 
REGIONAL  TRIAL  COURT,  BRANCH  115,  PASAY  CITY, 
CARLOS  G.  TADEO  AS  DEPUTY  SHERIFF  OF  PASAY  CITY 
AND BIENVENIDO T. SANTIAGO, RESPONDENTS. 
 
D E C I S I O N 
ABAD SANTOS, J.:
This is a petition to review a decision of the Intermediate Appellate
Court.
On October 24, 1984, this Court resolved to dismiss the petition for
lack of merit. The petitioners iled a timely motion for
reconsideration which is impressed with merit.
The petitioners were sued in the Regional Trial Court at Pasay City
for the payment of a sum of money - P27,611.65 plus damages and
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
expenses of litigation. For failure to ile their answer within the
reglementary period they were declared in default, evidence
ex-parte was introduced and judgment was rendered against them.
A MOTION TO LIFT ORDER OF DEFAULT AND TO SET ASIDE
DECISION WITH PRAYER TO ADMIT DEFENDANTS' ANSWER was
denied by the trial court and the denial was sustained by the
Intermediate Appellate Court which is the reason for the instant
petition.
The petitioners (defendants below) state that there was no valid
service of summons upon them so that the trial court never
acquired jurisdiction over them and could not have declared them
in default.
The Intermediate Appellate Court held that the substituted service
upon petitioner Eliodoro Ponio was not valid; and that the service
upon petitioner Wecons Construction Services was likewise not
valid. This is what the Intermediate Appellate Court said:
"Petitioners' aforesaid submission appeared well supported by and
deeply anchored on the jurisprudence on this point. In so far as the
defendant, now petitioner corporation, is concerned, service of
summons upon said defendant can be effected only upon any of the
of icers enumerated under Section 13, Rule 14 of the Rules of Court.
The enumeration provided by the aforesaid rule is not successive
but exclusive and it is of no moment whether said summons actually
reached the defendant corporation (Delta Motor Sales vs.
Mangosing, 70 SCRA 598; AM Trucking vs. Buencamino, G. R. No.
62445, August 3, 1983).
"With respect to the substituted service upon defendant Ponio, We
likewise agree with the petitioners that the same does not
constitute a valid service suf icient enough to confer jurisdiction
over defendant (now petitioner) Ponio. Substituted service may be
effected only when personal service cannot be effected within a
reasonable time (Section 8, Rule 14 of the Rules of Court; Litonjua
vs. Court of Appeals, et al., 80 SCRA 245)." (Rollo, p. 135.)
However, the Intermediate Appellate Court also held that the trial
court did not commit a grave abuse of discretion in denying the
motion to lift the order of default because the motion was not
accompanied by an af idavit of merit. This is error.
We hold that where a motion to lift an order of default is grounded
on the very root of the proceedings an af idavit of merit is not
necessary nor essential. This is so where the court has not acquired
jurisdiction over the defendants. Thus this Court has ruled:
"Courts acquire jurisdiction over the person of a party defendant
and of the subject-matter of the action by virtue of the service of
summons in the manner required by law. Where there is no service
of summons or a voluntary general appearance by the defendant,
the court acquires no jurisdiction to pronounce a judgment in the
cause. (Syllabi, Salmon and Paci ic Commercial Co. vs. Tan Cueco, 36
Phil. 556).
"Consequently, the order of default, the judgment by default and the
execution in x x x x x are void and should be set aside." (Delta Motor
Sales Corp. vs. Mangosing, L-41667, April 30, 1976, 70 SCRA 598,
603.)
WHEREFORE, the petition is granted; the decision of the
Intermediate Appellate Court is set aside as well as the order of
default issued by the trial court which is ordered to admit the
answer iled by the petitioners. Costs against the private
respondent.
SO ORDERED.
Makasiar (Chairman), Aquino, Concepcion, Jr., and Escolin, JJ., concur.
Cuevas, J., no part.
RULE 10 Amended and Supplemental Pleadings  The Commission, on appeal of the computation, only made a slight
RULE 11 When to File Responsive Pleadings 
RULE 12 Bill of Particulars 
Based on Syllabus of Dean Monteclar  By RGL  44 of 95
 
RULE 13 Filing and Service of Pleadings,
Judgments and Other Papers
19 Industrial Timber v NLRC, 233 SCRA 597 
FIRST DIVISION 
G.R. No. 111985, June 30, 1994 
INDUSTRIAL  TIMBER  CORP.  AND/OR  LORENZO 
TANGSOC,  PETITIONERS,  VS.  NATIONAL  LABOR 
RELATIONS  COMMISSION,  CONCORDIA  DOS  PUEBLOS 
AND LOLITA SANCHEZ, RESPONDENTS. 
 
D E C I S I O N 
CRUZ, J.:
In the earlier case of Industrial Timber Corporation v. NLRC, G.R.
No. 83616,[1] this Court af irmed the inding of the NLRC that the
petitioners are the employers of private respondents and remanded
the case for a determination of the validity of the quitclaim allegedly
signed by the latter.
In its resolution dated February 3, 1992,[2] the NLRC af irmed in toto
the decision of Labor Arbiter Amado M. Solamo on February 26,
1987, ordering the petitioners to reinstate the private respondents
(complainants therein) without loss of seniority rights and
privileges, and to pay them back wages, ECOLA, 13th month pay,
holiday pay, vacation and sick leave pay in the amount of P24,300
each, moral and exemplary damages of P10,000 each, and attorney's
fees equivalent to 10% of the total award.
In view of the lapse of time since the promulgation of the decision,
the NLRC likewise directed the petitioners to pay the private
respondents severance bene its equivalent to one month pay for
every year of service computed from the date of their employment
up to the promulgation of the resolution should reinstatement of
the private respondents to their former position be no longer
possible.[3]
This resolution became inal and executory on March 9, 1992, and
entry of judgment was made on March 25, 1992.
The private respondents meanwhile had iled on March 20, 1992, an
ex parte motion for issuance of a writ of execution with
manifestation that from February 26, 1987, up to the present, they
have not been reinstated and thus were entitled to back salaries for
the said period and until actual reinstatement shall have been made.
Executive Labor Arbiter Benjamin E. Pelaez thereupon directed the
Fiscal Examiner of the Arbitration Branch to compute the actual
amount that the private respondents should receive. In a report
dated March 22, 1992,[4] Fiscal Examiner Renrico N. Pacamo found
that each of them was entitled to P175,964.84, representing three
years back wages, ECOLA under Wage Order No. 6, 13th month pay,
legal holiday pay, vacation and sick leave pay and other privileges
under the collective bargaining agreement likewise for a period of
three years. In addition, the private respondents should also be
awarded moral and exemplary damages of P10,000 each and
attorney's fees equivalent to 10% of the total monetary award. In
sum, the petitioners were held liable to the private respondents for
the total amount of P387,122.65.
Both the petitioners and the private respondents iled their
respective objections to this computation. Meanwhile, the Executive
Labor Arbiter transferred the case to Labor Arbiter Leon P. Murillo,
who thereafter issued an order dated November 19, 1992,[5]
concurring with the computation of the Fiscal Examiner Pacamo.
modi ication of the amount of the award and directed the
petitioners to pay the private respondents the sum of
P375,795.20.[6] The motion for reconsideration iled by the
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
petitioners through JRS-Butuan, a private letter-forwarding
company, reached the NLRC a day late and was denied on August 31,
1993, mainly for tardiness.[7]
In this petition now before us, the NLRC is faulted with grave abuse
of discretion for merely modifying the award of damages and
denying the motion for reconsideration.
On the irst issue, the petitioners submit that the NLRC decision of
February 3, 1992, which af irmed in toto the order of Arbiter
Solamo and remanded the case for immediate execution need not
be recomputed because the monetary awards due the private
respondents had already been determined and ixed in the said
order. It is argued that to allow the decision of Arbiter Murillo to
prevail and sizably increase the monetary award to the private
respondents would in effect allow an arbiter to change a decision of
the Commission that has become inal and executory. Arbiter
Murillo's duty, it is stressed, is limited to the ministerial act of
executing the NLRC decision.
We disagree.
It is true that after a judgment has become inal and executory, it
can no longer be modi ied or otherwise disturbed. However, this
principle admits of exceptions, as where facts and circumstances
transpire which render its execution impossible or unjust and it
therefore becomes necessary, "in the interest of justice, to direct its
modi ication in order to harmonize the disposition with the
prevailing circumstances."[8]
The general rule is indeed, that once a judgment becomes inal and
executory, said judgment can no longer be disturbed, altered or
modi ied. That principle, however, admits of exceptions as in cases
where, because of supervening events, it becomes imperative, in the
higher interest of justice, to direct its modi ication in order to
harmonize the disposition with the prevailing circumstances
(Seavan Carrier Inc. vs. GTI Sportswear Corp., 137 SCRA 580) or
whenever it is necessary to accomplish the aims of justice (Pascual
vs. Tan, 85 Phil 164; Central Textile Mills vs. United Textile Workers
Union, 94 SCRA 883). In the case at bar, the modi ication of the
judgment, rendered by the Labor Arbiter on 4 May 1993, is
warranted by the fact that the Bank had been placed under
liquidation thereby permanently foreclosing the possibility for the
Bank to resume its business. Reinstatement of Galindez, as Cashier,
therefore was rendered inappropriate considering the Bank's
eventual closure. (Emphasis supplied).[9]
Applying this exception to the case at bar, we note with approval the
following observations of the Solicitor General:[10]
It may be true that the amount of backwages and other bene its due
to the private respondents as recomputed, is not in harmony with
the literal import of the dispositive portion of the decision subject of
execution. However, sight must not be lost of the fact that at the
time the recomputation was made in 1992, ive (5) years had
already elapsed from the time the Labor Arbiter rendered his
Decision on February 26, 1987. Thus, a recomputation was
necessary to arrive at a just and proper determination of the
monetary awards due the private respondents.
Indeed, the back wages and other bene its awarded by Arbiter
Solamo to each of the private respondents in the amount of
P24,300.00 correspond merely to the period between their illegal
dismissal on April 26, 1986, up to the time of the rendition of the
decision on February 26, 1987. There is no dispute that from April
26, 1986, to this date, the private respondents have not been
reinstated nor has payment of the monetary awards decreed by the
NLRC been made to them.
A similar action was taken in the recent case of Sampaguita
Garments Corporation v. NLRC,[11] where this Court upheld the
nulli ication of a decision of the NLRC ordering the reinstatement of
an employee after her conviction of the same offense of which she
was absolved in the administrative case.
Based on Syllabus of Dean Monteclar  By RGL  45 of 95
 
On the issue of the timeliness of the petitioners' motion for
reconsideration, we ind that the NLRC correctly applied the rule
that where a pleading is iled by ordinary mail or by private
messengerial service, it is deemed iled on the day it is actually
received by the court, not on the day it was mailed or delivered to
the messengerial service.
As this Court held in Benguet Electric Cooperative, Inc. v. NLRC:[12]
The established rule is that the date of delivery of pleadings to a
private letter-forwarding agency is not to be considered as the date
of iling thereof in court, and that in such cases, the date of actual
receipt by the court, and not the date of delivery to the private
carrier, is deemed the date of iling of that pleading.
The 10th day for iling the motion for reconsideration was June 26,
1993, which fell on a Saturday. The last day for iling would have
been the following business day, June 28, 1993, which was a
Monday. The petitioners' counsel claims he was able to deliver the
pleading to JRS-Butuan on June 26, 1993, but the motion for
reconsideration reached the Commission on June 29, 1993, or a day
late.
At any rate, the respondent Commission noted that the motion
contained no substantial matters to warrant the reconsideration
sought and could have been denied just the same on that ground.
WHEREFORE, the petition is DISMISSED. The resolutions of the
respondent NLRC dated May 31, 1993, and August 31, 1993, are
AFFIRMED, with costs against the petitioners. It is so ordered.
Davide, Jr., Bellosillo, Quiason, and Kapunan, JJ., concur.
RULE 14 Summons
20 Laus v CA, 214 SCRA 688 
THIRD DIVISION* 
G.R. No. 101256, March 08, 1993 
SPOUSES  PEPITO  AND  LORETO LAUS, PETITIONERS, VS. 
HON.  COURT  OF  APPEALS,  HON.  SALVADOR  C. 
CEGUERA,  IN  HIS  CAPACITY  AS  PRESIDING  JUDGE  OF 
THE  REGIONAL  TRIAL COURT OF QUEZON CITY, BRANCH 
82;  NILO  SM.  CABANG,  IN  HIS  CAPACITY  AS  DEPUTY 
SHERIFF  OF  QUEZON  CITY  AND  CONSUELO  P.  TORRES, 
RESPONDENTS. 
D E C I S I O N 
DAVIDE, JR., J.:
Petitioners seek the review and reversal of the 30 May 1991
Decision[1] of respondent Court of Appeals in CA-G.R. SP No. 22232[2]
and the 30 July 1991 Resolution denying their motion to reconsider
the said decision. The challenged decision dismissed, for lack of
merit, their petition for certiorari, prohibition and injunction to
annul the Orders dated 5 March 1990 and 9 July 1990 of Branch 82
of the Regional Trial Court (RTC) of Quezon City in Civil Case No.
Q-89-3327 which, respectively, declared them in default and denied
their motion to reconsider such declaration.
The antecedents of this case are not controverted.
On 24 August 1989, private respondent Consuelo P. Torres iled
against "Loredo (sic) Alfaro-Laus and John Doe" a complaint,
docketed as Civil Case No. Q-89-3327, for the collection of a sum of
money. The defendants in the said case are the petitioners in the
instant petition. The complaint alleges that petitioner Loreto
Alfaro-Laus executed a promissory note in favor of the private
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
respondent under which the former undertook to pay the latter the
amount of Sixty-Six Thousand Pesos (P66,000.00) after three (3)
months from the date thereof. Upon maturity of the said promissory
note, however, only Eleven Thousand Pesos (P11,000.00) was paid;
despite the receipt of a demand letter from the private respondent,
petitioners made no further payments. Thus, the former iled the
aforementioned complaint praying for the payment of the unpaid
balance of P55,000.00 "plus interest at the rate of ten per cent
(10%), compounded monthly beginning February 21, 1989, and
twenty- ive per cent (25%) of the entire amount due for and as
attorney's fees, such being in a accordance with the terms and
conditions set forth in the promissory note.[3]
On 10 October 1989, Deputy Sheriff Romero S. Cruz proceeded to
the petitioners' address at 122 Molave Park Subdivision, Parañ aque,
Metro Manila to serve the summons and a copy of the complaint.
Failing to serve the summons personally upon the petitioners after
waiting for ten (10) minutes, he resorted to a substituted service
through one Josephine Areola, who purportedly represented herself
to be the maid of the said petitioners.[4] On the same date, Deputy
Sheriff Cruz executed and iled a return[5] which reads:
"Respectfully returned to the REGIONAL TRIAL COURT Branch 82,
QUEZON CITY, the attached original copy of the summons issued in
connection with Civil Case No. 89-3327 entitled CONSUELO P.
TORRES versus LOREDO (sic) LAUS & JOHN DOE with the
information that duplicate copy of the same together with the
complaint and its annexes was duly served upon defendant Loredo
(sic) Laus of 122 Molave Park Subd. Parañ aque M.M. thru
JOSEPHINE AREOLA, maid of Loredo Daus (sic) of same address,
received as evidenced by her signature appearing thereon."
The petitioners did not ile any answer. Consequently, upon motion
of the private respondent, the trial court[6] issued on 29 December
1989 an order declaring the former in default and setting the
ex-parte presentation of the private respondent's evidence for 16
January 1990.[7] The petitioners claim that they received this 29
December 1989 Order only on 22 January 1990.
On 24 January 1990, the trial court rendered a judgment by default
against the petitioners; it ordered the latter "[T]o pay the plaintiff
(private respondent) the amount of FIFTY-FIVE Thousand Pesos
(P55,000.00) at the rate of ten per cent (10%), compounded
monthly beginning February 21, 1989 up to the present; and … [T]o
pay attorney's fees equivalent to twenty- ive percent (25%) of the
entire amount due" to the private respondent.[8]
On 2 February 1990, before receiving a copy of the 22 January 1990
decision, petitioners, by way of a special appearance, iled a motion
to dismiss the case for lack of jurisdiction over their persons. They
allege that the service of summons was ineffective because it was
not indicated in the return that the sheriff had irst exerted efforts
to serve the same personally before resorting to substituted
service.[9]
In its Order of 5 March 1990, the trial court denied the motion to
dismiss for lack of merit on the ground that it had already rendered
a judgment by default on 24 January 1990.[10] Petitioners received a
copy of this order on 24 March 1990. In the meantime, the trial
court issued a writ of execution.
On 30 March 1990, public respondent Deputy Sheriff Nilo Cabang,
pursuant to a writ of execution issued by the trial court, levied upon
petitioners' properties consisting of a 1983 Mitsubishi Galant Sedan
and a men's ring.
Based on Syllabus of Dean Monteclar  By RGL  46 of 95
 
On 3 April 1990, petitioners iled a motion to reconsider the Order
of 5 March 1990;[11] they reiterated therein the contention that the
trial court did not acquire jurisdiction over their persons because of
the defective service of summons, and further aver that:
"Josephine Areola, the person who supposedly received the
summons is not even known to the defendants. It turned out from
their investigation that said Josephine Areola was just a guest of one
of their maid (sic) who stayed for only about a week. Furthermore
Josephine Areola was just a child of about ten to eleven years old
and would not be expected to know what to do with the documents
handed to her. With all due respect it would not be fair for the
defendant if the summons would be served upon the defendants
through a person who is not of suf icient age and discretion at the
time the summons was served, and a transcient (sic) at that."[12]
A hearing on the motion for reconsideration was held and the
parties presented evidence on the issue of service of summons.
Petitioner Loreto Alfaro-Laus testi ied that Josephine Areola, who
was 11 to 12 years old at that time, was just a guest of her maid and
thus stayed in the house for a week. Private respondent, on the
other hand, presented evidence to show that Josephine had been
staying in the petitioners' house since July 1990 for she was the
person who received the demand letter sent to the petitioners on 3
July 1989.[13] Deputy Sheriff Cruz also took the witness stand,
identi ied the af idavit he executed on 27 April 1990[14] and further
asserted that he found no one in the house of the petitioners when
he arrived on 10 October 1989; he claimed that he waited for ten
(10) minutes. Thereupon, two (2) women arrived; the said women
told him, upon his inquiry, that the petitioners were not around. He
then served the summons through one of them, Josephine Areola.[15]
In its Order of 9 July 1990,[16] the trial court denied the petitioners'
motion for reconsideration and held that there was a proper service
of summons because contrary to Loreto Alfaro-Laus' statement that
Areola was a guest of their maid for a week, it was proven that
Areola was in fact the very person who, on 3 July 1989, received the
demand letter sent by the private respondent.
On 17 July 1990, petitioners iled with the Court of Appeals a
petition for certiorari, prohibition and injunction with application
for a restraining order[17] to set aside the trial court's Orders of 5
March 1990 and 9 July 1990, and to dismiss Civil Case No.
Q-89-3327. The petition was docketed as CA-G.R. SP No. 22232.
Petitioners insisted therein that the trial court committed grave
abuse of discretion and a grave error in denying their motion to
dismiss and the motion to reconsider said denial despite the lack of
jurisdiction over their persons. They likewise challenged the denial
of such motion to dismiss which was based solely on the ground
that a judgment by default had already been rendered.[18]
On 30 May 1991, the respondent Court of Appeals promulgated its
decision[19] denying the petition for lack of merit. It made the
following disquisitions:
"x x x it was the defendants-petitioners who erred in iling a motion
to dismiss at that late stage of the proceedings. A motion to dismiss
on the ground that the Court has no jurisdiction over the person of
the defendants is proper only when made within the reglementary
period for iling a responsive pleading and before such responsive
pleading is iled (Rule 16, Sec. 1[a]). In this case, the
defendants-petitioners' motion to dismiss was iled ive (5) months
after the complaint was iled and only after a default judgment had
already been rendered by the respondent Court. Thus, it was rather
too late in the day for the defendants-petitioners' motion to dismiss
to be considered by the respondent Court. In the proper exercise of
its sound judicial discretion, the respondent Court did not err in
denying the motion to dismiss on the ground that a judgment by
default had already been rendered.
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
Besides, even if the motion to dismiss was iled on time, and yet,
was still denied by the respondent Court, the order of the court
denying the motion to dismiss is interlocutory and cannot be the
subject of a petition for certiorari, such as this instant petition
(National Investment and Development Corp. vs. Aquino, 163 SCRA
153). The denial of a motion to dismiss cannot be questioned in a
petition for certiorari, which is an extra-ordinary writ that is not
allowed as a substitute for ordinary appeal (Tan vs. Intermediate
Appellate Court, 164 SCRA 130).
Be that as it may, the defendants-petitioners had other remedies
available to them, but which they failed to avail of. In a long line of
cases decided by the Supreme Court, it has been repeatedly
provided that the remedies of a defaulted defendant are:
(a) The defendant in default may, at any time after discovery
thereof and before judgment, ile a motion, under oath, to set aside
the order of default on the ground that his failure to answer was due
to fraud, accident, mistake, excusable negligence, and that he has a
meritorious defense;
(b) If the judgment has already been rendered when the defendant
discovered the default, but before the same has become inal and
executory, he may ile a Motion for New Trial under Section 1[a] of
Rule 37;
(c) If the defendant discovered the default after the judgment has
become inal and executory, he may ile a petition for relief under
Sec. 2 of Rule 38; and
(d) He may also appeal from the judgment rendered against him as
contrary to the evidence or to law, even if no petition to set aside
the order of default has been presented by him (Sec. 2, Rule 41).
(Lina vs. Court of Appeals, 135 SCRA 637; Tiburcio vs. Castro, 161
SCRA 583).
As it is, the defendants-petitioners failed, after they received notice
of the order declaring them in default and before the default
judgment was rendered, to ile a motion, under oath, to set aside the
order of default on the ground that they failed to ile a timely
answer due to fraud, accident, mistake, or excusable negligence, and
showing (sic) that they had a meritorious defense.
The other applicable remedy which they failed to employ is the
remedy of appeal from the judgment rendered against them as
contrary to the evidence or the law, even in the absence of a
motion/petition to set aside the order of default. This instant
petition for certiorari cannot be a substitute for the remedy of
appeal, which the defendants-petitioners did not pursue, as they
must irst exhaust the remedies available to them (Lina vs. Court of
Appeals, supra.). That the judgment by default had already become
inal and is about to be executed is the result of the
defendants-petitioners' failure to ile a timely appeal. As such, the
default judgment may no longer be challenged (Tiburcio vs. Castro,
supra.).
Lastly, We ind that the respondent Court was liberal enough in
hearing the defendants-petitioners' motion for reconsideration of
the denial of their motion to dismiss. As the pivotal issue therein,
the defendants-petitioners were given their day in court to prove
that the service of summons to them was both improper and
invalid. After weighing the evidence and testimonies of the parties
Based on Syllabus of Dean Monteclar  By RGL  47 of 95
 
and other persons involved, the respondent Court ruled that there
was valid service of summons. We ind no compelling reason to rule
otherwise.
There is such a presumption of regularity in the performance of
of icial functions by the sheriff, and it was up to the
defendants-petitioners to convince the respondent Court that there
was, indeed, invalid service of summons. This they failed to do. They
could not substantiate their claim that Josephine Areola was a child
of 10 to 11 years who would not know what to do with the court
documents received by her. The defendants-petitioners' contention
that Josephine Areola stayed with them for only a few days
back ired when the private respondent presented documentary
evidence to show that Josephine Areola was already residing in the
defendants-petitioners' house at least three (3) months before the
summons was served. No other proof was presented by the
defendants-petitioners to bolster their allegations apart from their
self-serving, and sometimes con licting, testimonies. Thus, We ind
no error or grave abuse of discretion on the part of the respondent
Court in denying the defendants-petitioners’ motion for
reconsideration."[20]
Meanwhile, on 13 June 1991, respondent sheriff Nilo Cabang sold at
a public auction the levied men's ring -- an oval diamond set in
yellow gold -- to the private respondent for P140,000.00, and the
Galant car to Atty. Leonardo Perez, Jr., counsel for the latter, for
P180,000.00. Both were the highest bidders.[21]
Their motion for the reconsideration of the aforesaid decision
having been denied in the respondent Court's Resolution of 30 July
1991,[22] petitioners availed of this recourse under Rule 45 of the
Revised Rules of Court and raise the following issues:
"1. WHETHER OR NOT THE COURT A QUO ACQUIRED
JURISDICTION OVER THE PERSONS OF THE PETITIONERS BY
VIRTUE OF THE SUBSTITUTED SERVICE OF SUMMONS EFFECTED
BY DEPUTY SHERIFF ROMEO CRUZ;
2. WHETHER OR NOT THE REMEDY OF CERTIORARI CAN BE
AVAILED OF BY A PARTY IMPROVIDENTLY DECLARED IN DEFAULT
TO CHALLENGE THE ORDER OF DEFAULT AND THE SUBSEQUENT
JUDGMENT BY DEFAULT."[23]
On 10 February 1992, after the iling of the private respondent's
comment and the petitioners' reply thereto, We resolved to give due
course to the petition and required the parties to ile their
respective memoranda which they subsequently complied with.
We ind merit in this petition.
The focal issue is whether or not the trial court acquired
jurisdiction over the persons of the petitioners by virtue of the
substituted service of summons effected by Deputy Sheriff Cruz.
Since the petitioners did not voluntarily submit to the jurisdiction of
the trial court, proper service of summons became imperative. If the
service effected in the case at bar was, as claimed by the petitioners,
invalid, the trial court acquired no jurisdiction over their persons.[24]
In such an instance, the order of default, judgment by default and
writ of execution issued by the trial court would be null and void.[25]
The general rule in this jurisdiction is that summons must be
personally served; pursuant to Section 7, Rule 14 of the Revised
Rules of Court, such personal service is to be accomplished by
"handing a copy thereof to the defendant in person, or, if he refuses
to receive it, by tendering it to him." However, if this mode of service
cannot be effected within a reasonable time, substituted service
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
may be resorted to under Section 8 of the same Rule. Section 8
provides:
"SEC. 8. Substituted Service. -- If the defendant cannot be served
within a reasonable time as provided in the preceding section,
service may be effected (a) by leaving copies of the summons at the
defendant's dwelling house or residence with some person of
suitable age and discretion then residing therein, or (b) by leaving
the copies at defendant's of ice or regular place of business with
some competent person in charge thereof."
This provision is a reproduction of Section 8, Rule 7 of the 1940
Rules of Court except that inter alia, "promptly" in the latter was
changed to "within a reasonable time" in the former. "Within a
reasonable time" contemplates a period of time longer than that
demarcated by the word "prompt," and presupposes that a prior
attempt at personal service, within a justi iable time frame as would
be necessary to bring the defendant within the jurisdiction of the
court, had failed.[26] Since substituted service is in derogation of
the common law and is extraordinary in character, it must be used
only as prescribed and in the circumstances authorized by
statute.[27] Statutes prescribing modes other than personal service
of summons must be strictly complied with to give the court
jurisdiction, and such compliance must appear af irmatively in the
return.[28]
In Keister vs. Navarro,[29] this Court described how the impossibility
of personal service should be shown:
"Impossibility of prompt service should be shown by stating the
efforts made to ind the defendant personally and the fact that such
efforts failed. This statement should be made in the proof of service
(I Moran, Comments on the Rules of Court, 1970 Ed., p. 444). This is
necessary because substituted service is in derogation of the usual
method of service. It has been held that this
method of service is 'in derogation of the common law; it is a
method extraordinary in character, and hence may be used only as
prescribed and in the circumstances authorized by statute.' x x x (72
C.J.S. 1053)."
Emphasizing the need for strict compliance with the requirements
of substituted service, this Court issued Administrative Circular No.
59, the pertinent portions of which read as follows:
"SUBJECT: Service of Summons.
Delays in court proceedings have been caused by faulty and
erroneous implementation of Section 8, Rule 14, Rules of Court on
Substituted Service of Summons.
The Trial Judges of all lower courts, as well as the Clerks of Court in
their capacity as Ex-Of icio Sheriffs together with the Deputy
Sheriffs are reminded of the provision of Section 8, Rule 14, Rules of
Court on substituted service as follows:
xxx
The manner of effecting substituted service as prescribed in
Venturanza v. Court of Appeals, 156 SCRA 305, must be strictly
complied with, thus:
‘The substituted service should be availed only when the defendant
cannot be served promptly in person. Impossibility of prompt
service should be shown by stating the efforts made to ind the
defendant personally and the failure of such efforts. The statement
Based on Syllabus of Dean Monteclar  By RGL  48 of 95
 
should be made in the proof of service. This is necessary because
substituted service is in derogation of the usual method of service.
Substituted service is a method extraordinary in character, and
hence may be used only as prescribed in the circumstances
authorized by statute. Thus, the statutory requirements of
substituted service must be followed strictly, faithfully, and any
substituted service other than that authorized by the statute is
considered ineffective.'
For immediate compliance.”
A perusal of the sheriff's return in the case at bar readily reveals
that it does not (a) indicate the impossibility of service of summons
within a reasonable time, (b) specify the efforts exerted to locate the
petitioners and (c) state that it was served on a person of suf icient
age and discretion residing therein. The fact of the matter is that as
disclosed in his testimony taken in connection with the motion for
reconsideration, and the af idavit he prepared in conjunction with
such hearing, Deputy Sheriff Cruz resorted to a substituted service
on his irst -- and only -- attempt to effect a personal service. Upon
being informed that the petitioners were not around at that time, he
immediately resorted to a substituted service through Josephine
Areola, a person whose age he did not even know or attempt to
discover. He did not even inquire about the whereabouts of the
petitioners, the time they were expected to return home, the hours
of the day they could be contacted at their house or the location of
their of ices, if any, in order that he could faithfully comply with the
requirement of personal service. Thus, he declared and admitted:
"Q: In this case, you went to the residence of the defendant once as
you stated on paragraph 3[30] on October 10, 1989?
A: Yes, sir.
Q: And you did not wait the (sic) defendant to come because
according to you in paragraph 4, you were informed that the
defendant was not around, is that correct?
A: According to the maid.
Q: So upon being informed that the defendant was not around you
served the summons, according to paragraph 4 to one Josephine
Ariola, is that correct?
A: Yes, sir.
Q: In other words, you relied on the information given to you by
somebody that the defendant was not around?
A: I waited there for around ten (10) minutes and then two (2)
women arrived in the tricycle and I waited them (sic) to get
inside and I asked them if Mr. and Mrs. Laus will be coming.
Q: And they answered they were not around at that time?
A: Yes, sir.
Q: So, you immediately served the summons upon the persons
arriving (sic)?
A: Yes, sir.
Q: And who were these persons who arrived?
 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

copy of the same together with the complaint and its annexes was
A: Josephine Ariola.
duly served upon defendant Loredo (sic) Laus of 122 Molave Park
Subd. Parañ aque M.M. thru JOSEPHINE AREOLA, maid of Loredo
Q: And who is her companion? Daus (sic) of same address, x x x.”[34]

A: I did not ask anymore.

Neither Deputy Sheriff Cruz nor the private respondent had
volunteered additional information to the effect that at some other
xxx
time, summons was in fact served on Pepito Laus. Accordingly, the
trial court never acquired jurisdiction over his person. And yet,
Q: Who is older, is this Josephine Ariola or her companion? while it concedes in its 29 December 1989 Order that the
substituted service of summons was valid only for Loreto, it
A: Josephine Ariola, she was the one who signed the summons. declared the defendants -- and not only her -- in default. The court
could have easily avoided this misdoing if it only examined the
Q: Did you ask her age? records before issuing the order. On this score alone, the judgment
by default is fatally lawed.
A: I did not ask anymore because she look already (sic) of suf icient
age. There is still another fact which betrays the trial court's unusual
haste in rendering the judgment by default. In the dispositive
Q: That's your conclusion? portion of the decision, the defendants were ordered, inter alia:
"1. To pay the plaintiff the amount of FIFTY-FIVE Thousand Pesos
A: Yes because she was the maid there and she was the older (P55,000.00) at the rate of ten per cent (10%), compounded
one."[31] monthly beginning February 21, 1989 up to the present;"[35]

As it turns out, the unrebutted evidence for the petitioners
establishes that Areola (or Ariola) was only 11 to 12 years old at the
time substituted service was attempted.[32]
It is all too obvious that no earnest efforts were exerted by Deputy
Sheriff Cruz to effect the personal service of summons. His
testimony thus attests to an undue, if not indecent, haste to serve
the summons at the irst attempt without making sure that personal
service was, by then and even thereafter, an impossibility because
either the petitioners had left for a foreign country or an unknown
destination with no de inite date of returning within a reasonable
period or had gone into hiding to avoid service of any process from
the courts. If he had only made the inquiries suggested above, he
could have returned in the evening of 10 October 1989 or on any of
the succeeding days -- including the following Saturday and Sunday.
Service of summons may be made at night as well as during the day,
or even on a Sunday or holiday because of its ministerial
character.[33]
Since the substituted service of summons in this case was not
validly effected, the trial court did not acquire jurisdiction over the
persons of the petitioners. The order of default, the judgment by
default, the writ of execution issued by it, as well as the auction sale
of the petitioners' properties levied on execution are, therefore, all
null and void.
There is more in this case which further unmasks the nullity of the
decision of the trial court. Both parties agree that the petitioners
were the defendants in Civil Case No. Q-89-3327. However,
petitioner Loreto Alfaro-Laus is erroneously mentioned in the
complaint as Loredo. On the other hand, petitioner Pepito Laus, the
husband of Loreto, is merely designated as JOHN DOE. The latter
was impleaded as a co-defendant presumably on the theory that the
liability sought to be enforced is a conjugal partnership liability. In
short, Loreto's husband was sued as an indispensable party; it is
clear that the trial court treated him as such when in its decision, it
ordered the defendants, not just Loreto, to pay the adjudged
amounts.
The sheriff's return of service indisputably discloses that no
summons was even attempted to be served on petitioner Pepito
Laus. Sheriff Cruz unequivocally states therein that the "duplicate
While this rate of ten per cent (10%) could only refer to the
imposable interest, the court failed to state whether its application
shall be on a monthly or yearly basis. The body of the decision,
however, speaks of ten per cent (10%) interest PER MONTH;[36] this
seems to have been the basis relied on by respondent sheriff Cabang
in computing for the petitioners' alleged liability for purposes of
execution.[37] This award of interest -- in effect amounting to one
hundred twenty per cent (120%) per annum -- and the additional
twenty- ive per cent (25%) of the total amount due ordered paid as
attorney's fees, are unreasonable and unconscionable.
Since the trial court's default order and judgment by default are null
and void, the respondent Court gravely erred in af irming them.
Some further comments, en passant, on the ratiocination of the
respondent Court are in order. It is not accurate for the latter to
have said that the petitioners' motion to dismiss was not iled
seasonably because it was iled beyond the reglementary period
provided in the Revised Rules of Court. Such a conclusion would
doubtless he correct if there was a valid service of summons. If,
however, a defendant had not been properly summoned, the period
to ile a motion to dismiss for lack of jurisdiction over his person
does not commence to run until he voluntarily submits to the
jurisdiction of the court, since the court has no jurisdiction to
adjudicate the controversy as to him until such time.[38] In this case,
petitioners did not voluntarily submit to the jurisdiction of the trial
court. Consequently, the period to ile a responsive pleading did not
even commence to run.
Nor are We persuaded by the respondent Court's declaration that
even if the motion to dismiss had been iled on time, the trial court's
order denying the same, being interlocutory, still cannot be the
subject of a petition for certiorari. To be sure, this rule admits of an
exception, as when the trial court clearly acted outside of its
jurisdiction or with grave abuse of discretion in denying the motion
to dismiss.[39] This is exactly what happened in the case while it was
pending before the trial court; the denial of the motion to dismiss
was based solely on the ground that a judgment by default had
already been entered. Certainly, this does not constitute a valid
ground for the denial because the motion raises a fundamental and
prejudicial issue affecting the validity of the decision by default.

Based on Syllabus of Dean Monteclar  By RGL  49 of 95 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
Equally unmeritorious is the respondent Court's statement that the
failure of the petitioners to appeal from the judgment by default
rendered such judgment inal and unassailable. In the irst place, it
is axiomatic that a void judgment can never become inal and
executory and may even be assailed or impugned at any time.[40] An
action to declare the nullity of a void judgment does not
prescribe.[41] Secondly, the motion to dismiss in this case was iled
before the petitioners received a copy of the decision by default.
Since the said motion is based on the lack of jurisdiction over the
persons of the petitioners which, if true -- in fact, We have found it
to be so -- would result in the nulli ication not only of the default
order but of the decision as well, then for all legal intents and
purposes, the latter was covered by the motion. This was precisely
the orientation of the trial court when it allowed the parties to
submit evidence to support the motion to reconsider the Order of 5
March 1990 denying the motion to dismiss. It would certainly not
have gone that far if it thought otherwise for by then, the decision
had already become inal.
Its suggestion that the petitioners should have iled a motion to set
aside the order of default on the ground that they had failed to ile
the answer on grounds of fraud, accident, mistake or excusable
negligence or a motion for new trial or a petition for relief from
judgment, is untenable for it begs the question. Besides, as shown
above, petitioners' failure to ile the answer was not based on any of
these grounds, but stood on the void service of summons.
Finally, respondent Court's reliance on the presumption of
regularity in the performance of of icial functions is misplaced. We
have held that such a presumption does not apply where it is patent
that the sheriff's return is defective.[42]
WHEREFORE, the Decision of the respondent Court of Appeals of
30 May 1991 and the Resolution dated 30 July 1991 in CA-G.R. SP
No. 22232 are hereby REVERSED and SET ASIDE. The Order of
Branch 82 of the Regional Trial Court of Quezon City of 29
December 1989 (Civil Case No. Q-89-3327) declaring petitioners in
default, its Decision of 24 January 1990, Orders of 5 March 1990
and 9 July 1990 and the writ of execution issued therein, as well as
all proceedings had pursuant to the writ of execution, are declared
NULL and VOID. The case is hereby remanded to the court of origin
for further proceedings which shall include the valid service of
summons.
SO ORDERED.
Feliciano, (Acting Chairman), Bidin, Romero, and Melo, JJ., concur.
21 Montalban v Maximo, 22 SCRA 1070  January 14 1960. Deputy Sheriff Liberato C. Manalo of Rizal noti ied
131 Phil. 154
G.R. No. L-22997, March 15, 1968  defendant alleged that he was then " inancially hard up,"[4] and that
PABLO  C.  MONTALBAN, ET AL., PLAINTIFFS-APPELLEES,  January 30, 1962. An alias writ of execution was issued. Copy
VS. GERARDO MAXIMO, DEFENDANT-APPELLANT.  thereof was received by defendant on February 9, 1962.
 
D E C I S I O N  February 20, 1962. Two years and two months after defendant
SANCHEZ, J.:
Chronologically, following are the events that spawned the present
case:
August 15, 1958. Plaintiffs commenced suit[1] against Fr. Gerardo
Maximo who, according to the complaint, was residing at the parish
Based on Syllabus of Dean Monteclar  By RGL  50 of 95
 
church at Concepcion, Malabon, Rizal. Plaintiffs' cause of action for
damages sprang from a motor vehicle accident which occurred at
Padre Faura St., Manila, on December 16, 1957. Paul Hershell
Montalban, son of plaintiffs, suffered injuries.
August 15, 1958. On this same day that the complaint was iled,
summons was served on defendant Fr. Gerardo Maximo at the
parish church of Concepcion, Malabon, Rizal, through Fr. Arsenio
Bautista - a priest in the same parish church.
August 23, 1958. Fr. Arsenio Bautista sent a letter (dated August
21) to Macario M. O ilada, Clerk of Court of the Court of First
Instance of Manila, informing him that defendant Fr. Gerardo
Maximo left for Europe on August 7, and "will be back on the irst
week of November." Actually, Fr. Maximo returned from abroad
"about the second week of October, 1958."[2]
September 20, 1958. The lower court declared defendant in default,
on plaintiffs' motion of September 13, 1958.
June 8, 1959. Upon plaintiffs' evidence, the court rendered
judgment sentencing defendant to:
"1. Pay plaintiff Paul Hershell Montalban the amount of P10,000.00
as actual damages for loss of his spleen;
“2. Pay plaintiff Paul Hershell Montalban the amount of P10,000.00
for loss or impairment of earning capacity, talents and physical
strength;
“3. Pay plaintiff Paul Hershell Montalban the amount of P5,000.00
as moral damages;
“4. Pay plaintiffs Pablo C. Montalban and Regina Barretto the
amount of P5,000.00 as moral damages;
“5. Pay plaintiffs the amount of P1,000.00 as exemplary damages;
and
“6. Pay plaintiffs attorney's fees [in] the amount of P3,000.00 and
the cost of litigation."
December 16, 1959. Plaintiffs themselves wrote defendant Fr.
Gerardo Maximo, at the Malabon Catholic Church, informing the
latter of the lower court's decision, giving the data: "Re Civil Case
No. 37202 (in which the foregoing judgment was rendered)
Montalban vs. Maximo," quoting therein the dispositive part of the
decision just transcribed, requesting prompt compliance therewith
and suggesting that he communicate with or personally see their
lawyer, Jose W. Diokno, at the latter's address, 332 Regina Building,
Escolta, Manila.
December 20, 1959. Defendant, through his legal counsel, Dr.
Nicanor T. Santos, answered the foregoing letter expressing regret
that he could not comply with plaintiffs' request, because he
(defendant) was not aware of the said civil case, and that, in the
criminal action arising out of the same incident, said defendant was
acquitted by the Municipal Court of Manila.[3]
defendant of the issuance of the writ of execution dated January 7,
1960, and demanded payment of the amount set forth therein. The
Sheriff's return to the writ shows that in response to such demand,
the Sheriff found no property that could be subject to execution.
February 1, 1962. The Deputy Sheriff attached and levied on a
residential house located in Caloocan City and purportedly
belonging to defendant.
admittedly learned of the lower court's decision from counsel for
plaintiffs herein, said defendant, by counsel, iled a veri ied motion
in the same case praying for the annulment of the entire
proceedings. His ground is this: Summons was not duly served
upon him "as provided under Sec. 7, Rule 7 of the Rules of Court";[5]
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
accordingly, the lower court "did not acquire jurisdiction over his
person"; and "the trial and decision by default" are "null and void."[6]
March 3 1962. The court denied this motion.
March 24 1962. Defendant's move to reconsider was rejected by
the court.
Hence, this appeal from the orders of March 3 and March 24, 1962,
duly certi ied to this Court by the Court of Appeals.
September 2, 1965. After the case was submitted for decision,
defendant's lawyer informed this Court of the death of defendant on
August 1, 1965.
October 18, 1967. Following extensive efforts to have the deceased
defendant substituted by any of his heirs or the executor or
administrator of his estate, which were to no avail, this Court
appointed the Clerk of Court of the Court of First Instance of Manila,
representative of the deceased defendant.
1. A question of transcendental importance which necessarily
involves an inquiry into procedural due process is whether
summons in a suit in personam against a resident of the Philippines
temporarily absent therefrom may be validly effected by substituted
service under Section 8, Rule 14 (formerly Section 8, Rule 7) of the
Rules of Court. A head-on collision of views becomes inevitable
considering the diametrically opposing positions taken by plaintiffs,
on the one hand, and defendant, on the other. For, plaintiffs make
the point that even with defendant temporarily abroad, substituted
service is valid under Section 8 by leaving a copy of the summons
"at the defendant's dwelling house or residence with some person
of suitable age and discretion then residing therein."
Plaintiffs argue that if the ordinary method prescribed by the rules,
that is, personal service under Section 7, Rule 14, is not feasible,
then the substituted service in Section 8 aforesaid comes into play.
Section 8 says:
"SEC. 8. Substituted service. - If the defendant cannot be served
within a reasonable time as provided in the preceding section,
service may be effected (a) by leaving copies of the summons at the
defendant's dwelling house or residence with some person of
suitable age and discretion then residing therein, or (b) by leaving
the copies at defendant's of ice or regular place of business with
some competent person in charge thereof."
Upon the other hand, defendant advances the theory that in a
situation like the present, where defendant was temporarily abroad,
the sole and exclusive method of service of summons in a case in
personam is that set forth in Section 18, Rule 14 of the Rules (for
merely Section 18, Rule 7), which reads:
"SEC. 18. Residents temporarily out of the Philippines. - When an
action is commenced against a defendant who ordinarily resides
within the Philippines, but who is temporarily out of it, service may,
by leave of court, be effected out of the Philippines, as under the
preceding section."[7]
Section 17 referred to in Section 18 (Section 17, Rule 7 in the old
Rules) in turn states:
"SEC. 17. Extraterritorial service. - When the defendant does not
reside and is not found in the Philippines and the action affects the
personal status of the plaintiff or relates to, or the subject of which
is, property within the Philippines, in which the defendant has or
claims a lien or interest, actual or contingent, or in which the relief
demanded consists, wholly or in part, in excluding the defendant
from any interest therein, or the property of the defendant has been
attached within the Philippines, service may, by leave of court, be
effected out of the Philippines by personal service as under section
7; or by publication in a newspaper of general circulation in such
places and for such time as the court may order, in which case a
copy of the summons and order of the court shall be sent by
registered mail to the last known address of the defendant, or in any
other manner the court may deem suf icient. Any order granting
such leave shall specify a reasonable time which, shall not be less
Based on Syllabus of Dean Monteclar  By RGL  51 of 95
 
than sixty (60) days after notice, within which the defendant must
answer."
Historically, in its common-law origin, the jurisdiction of courts to
render judgments in personam was grounded on their de facto
power over defendant's person. Jurisdiction was based on the
power to seize and imprison defendant.[8] If a defendant was absent
from the territory, the fact that he was a citizen would not enable
the court's of icers to seize him and service could not represent this
power.[9] Hence, his presence within the territorial jurisdiction was a
prerequisite to the rendition of a judgment personally binding
against him. Anglo-American law then emphasized the power
concept of jurisdiction.[10]
Continental law, however, was somewhat different. It had two
fundamental principles of Roman origin: (1) in suits in personam
and those relating to movables, courts of the domicile of the
defendant have general jurisdiction - actor rei forum sequitur; and
(2) in actions concerning immovables, the courts of the situs have
exclusive jurisdiction.[11]
In the development of the law, the variance between
anglo-american law and continental law became "less and less
clear-cut" because "American law has had to yield to the increasing
necessity of enlarging more and more the catalogue of forums
available to the plaintiff."[12]
Thus it is, that American cases forged the doctrine, now long
recognized, that domiciliaries of a state, though temporarily out of
its territorial jurisdiction, are always amenable to suits in personam
therein.[13] And this precept is the foundation for the American rule
that declares substituted service binding on absent residents. The
leading case of Milliken vs. Meyer,[14] furnishes the rationale:"
“x x x the authority of a state over one of its citizens is not
terminated by the mere fact of his absence from the state. The state
which accords him privileges and affords protection to him and his
property by virtue of his domicile may also exact reciprocal duties.
'Enjoyment of the privileges of residence within the state, and the
attendant right to invoke the protection of its laws, are inseparable'
from the various incidences of state citizenship. x x x The
responsibilities of that citizenship arise out of the relationship to
the state which domicile creates. That relationship is not dissolved
by mere absence from the state. The attendant duties, like the
rights and privileges incident to domicile, are not dependent on
continuous presence in the state. One such incident of domicile is
amenability to suit within the state even during sojourns without
the state, where the state has provided and employed a reasonable
method for apprising such an absent party of the proceedings
against him."
There should be no doubt, therefore, that in suits in personam,
courts have jurisdiction over residents temporarily out of the
country.
This brings us to the question of procedural due process.
Substituted service such as one contemplated in Section 8 upon a
temporarily absent resident, it has been held, is wholly adequate to
meet the requirements of due process.[15] The constitutional
requirement of due process exacts that the service be such as may
be reasonably expected to give the notice desired. Once the service
provided by the rules reasonably accomplishes that end, the
requirement of justice is answered; the traditional notions of fair
play are satis ied; due process is served.
In American jurisprudence, whether a defendant be in another state
under the federal system or is abroad in Europe,[16] substituted
service is still considered to be valid.[17] The language in Milliken vs.
Meyer, supra, is expressive: "Its adequacy so far as due process is
concerned is dependent on whether or not the form of substituted
service provided for such cases and employed is reasonably
calculated to give him actual notice of the proceedings and an
opportunity to be heard. If it is, then traditional notions of fair play
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
and substantial justice (McDonald vs. Mabee, supra) implicit in due
process are satis ied."[18]
When the framers of our Rules adapted Section 8, it is to be implied
that they intended to give the provision the same meaning shaped
out by the jurisprudence of the jurisdiction from whence it was
patterned. Section 8 is to be viewed in the same context it is
understood in the American legal system. The word "defendant" in
that provision is to be construed as including any resident of this
country. By comparative construction, Section 8 is to be applied to
all resident defendants - without distinction as to whether he is
physically present in this country or not.
Chief Justice Moran shares this view. Commenting on Section 18,
Rule 14, he states: "Since the defendant is residing in the
Philippines, jurisdiction over his person may be acquired by
Philippine courts by substituted service of summons under section
8. But extraterritorial service is allowed also by leave of court
according to the above provision [Section 18]."[19] Justice Martin
regards the word "residence" in Section 8 as "the place where the
person named in the summons is living at the time when the service
is made, even though he may be temporarily out of the state at the
time."[20]
This construction is but fair. It is in accord with substantial justice.
The burden on a plaintiff is not to be enlarged with a restrictive
construction as desired by defendant here. Under the rules, a
plaintiff, in the initial stage of suit, is merely required to know the
defendant's "dwelling house or residence" or his "of ice or regular
place of business" - and no more. He is not asked to investigate
where a resident defendant actually is, at the precise moment of
iling suit. Once defendant's dwelling house or residence or of ice
or regular place of business is known, he can expect valid service of
summons to be made on "some person of suitable age and
discretion then residing" in defendant's dwelling house or
residence, or on "some competent person in charge" of his of ice or
regular place of business. By the terms of the law, plaintiff is not
even duty-bound to see to it that the person upon whom service
was actually made delivers the summons to defendant or informs
him about it. The law presumes that for him.
It is immaterial then that defendant does not in fact receive actual
notice. This will not affect the validity of the service.[21] Accordingly,
the defendant may be charged by a judgment in personam as a
result of legal proceedings upon a method of service which is not
personal, "which in fact may not become actual notice to him," and
which may be accomplished in his lawful absence from the
country.[22] For, the rules do not require that papers be served on
defendant personally or a showing that the papers were delivered
to defendant by the person with whom they were left.[23]
Reasons for the views just expressed are not wanting. A man
temporarily absent from this country leaves a de inite place of
residence, a dwelling where he lives, a local base, so to speak, to
which any inquiry about him may be directed and where he is
bound to return. Where one temporarily absents himself, he leaves
his affairs in the hands of one who may be reasonably expected to
act in his place and stead; to do all that is necessary to protect his
interests; and to communicate with him from time to time any
incident of importance that may affect him or his business or his
affairs. It is usual for such a man to leave at his home or with his
business associates information as to where he may be contacted in
the event a question that affects him crops up. If he does not do
what is expected of him, and a case comes up in court against him,
he cannot in justice raise his voice and say that he is not subject to
the processes of our courts. He cannot stop a suit from being iled
against him upon a claim that he cannot be summoned at his
dwelling house or residence or his of ice or regular place of
business.
Not that he cannot be reached within a reasonable time to enable
him to contest a suit against him. There are now advanced facilities
Based on Syllabus of Dean Monteclar  By RGL  52 of 95
 
of communication. Long distance telephone calls and cablegrams
make it easy for one he left behind to communicate with him.
In the light of the foregoing, we ind ourselves unwilling to concede
that substituted service provided in Section 8 may be downgraded
as an ineffective means to bring temporarily absent residents within
the reach of our courts.
As we go back to the case at hand, there is the temporarily absent
defendant who was a parish priest. Summons upon him was served
upon Fr. Bautista who lived in the same convent where defendant
resided. Fr. Bautista, we must assume, is a responsible person.
Service upon him is effective.
2. The view we take of this case sweeps away defendant's argument
that Section 18 is the sole provision that governs summons upon a
defendant temporarily absent in an action in personarm, as here.
Indeed, defendant's posture strikes at the very language employed
by this reglementary provision cited by him. The word "may" - in
the statement in Section 18 that "service may, by leave of court, be
effected out of the Philippines," as under Section 17 - will not
support the deduction, without more, that Section 18 is the only
provision controlling in this case. On the contrary, the phraseology
of the rule is a recognition of the fact that substituted service - out
of the Philippines - under Section 17 is but one of the modes of
effective service to bring a defendant in court. And upon the basic
concepts under which our rules governing processes operate, the
normal method of service of summons on one temporarily absent is
by substituted service set forth in Section 8. And this, because
personal service outside the country and service by publication are
not ordinary means of summoning defendants.
In practical terms, we perceive that - in suits in personam the more
circuitous procedure delineated in Sections 17 and 18 is resorted to
by a plaintiff if defendant's dwelling house or residence or place of
business in this country is not known; or, if known, service upon
him cannot be had thereat upon the terms of Section 8. Here, since
personal service is impossible, resort to substituted service
becomes a necessity. A comparison between the service in Section
8 and that in Sections 17 and 18 is beside the point. They both
provide for substituted service. Anyway, as Goodrich observed: "[I]f
a substitute is to be made where an actual personal service is
impossible, 'the best is none too good.'"[24]
3. The judgment has long since become inal. It enjoys the
presumption of regularity. It is, unless stricken down, entitled to
respect. Non quieta movere. Because "[p]ublic policy and sound
practice demand that, at the risk of occasional errors, judgments of
courts should become inal at some de inite date ixed by law."[25]
The norm of conduct observed by defendant would not, we believe,
tilt the scales of justice in his favor. We go to the background facts.
Logic and common sense tell us that Fr. Bautista who received the
summons and who took interest in the case must have informed
defendant, one way or another of the suit, at the latest upon his
return in October, 1958. By then there was still time for him to
move to set aside the default order of September 20, 1958.
Defendant did not move. It is well to remember also that judgment
by default was not rendered against defendant until June 8, 1959, or
almost nine (9) months after the default order was issued. Again,
defendant did nothing. According to defendant, he learned of that
judgment on December 20, 1959. The full impact of the judgment
totalling P34,000 must have by then left an indelible mark in his
mind. A judgment of a court of justice is no piddling matter. It
should not be tri led with. Especially so when the amount is big, as
it is here. That same day -December 20 - his attorney took a hand
on the matter, wrote back plaintiffs refusing payment of the claim.
The irst writ of execution was served on defendant on January 14,
1960, That time he did not' pay, because according to the Sheriff's
return, defendant then stated that he was " inancially hard up."
Defendant did not bestir himself until February 20, 1962, i.e., not
less than two years and two months after he learned - by his own
admission - of the judgment. And, that was shortly after levy was
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
made on his house in Caloocan. It is in this factual environment that
then CFI Judge Magno Gatmaitan, in his order of March 24, 1962,
correctly observed that "the Court once again believes that this
solution (denial of the motion to reconsider the appealed order) is
just because of the apparent intentional inaction of defendant since
20 December, 1959."
Indeed, it was not right that defendant should have supinely sat on
the decision, and deliberately disregarded the import thereof.
Neither was it correct for him to have waited so long, slept on his
rights, and only put plaintiffs to task when his own property was
threatened because of the levy and execution thereon.
The decision below may not thus be annulled. Plaintiffs may not be
compelled to ile a fresh suit. Because, prejudice to plaintiffs, which
could have been avoided by defendant, will become a reality. The
additional expense, trouble and anxiety need not be essayed. The
accident took place on December 16, 1957. The lower court's
decision made mention of two eyewitnesses and two doctors of
medicine who testi ied as to injuries. To bring back those witnesses
to court becomes a serious problem. Plaintiffs will have to search
for them and if found, they may not be able to present to the court a
narrative as accurately as they had done before. Time has an
unfortunate tendency of obliterating occurrences from a witness'
memory. Recollections are apt to be blurred. Human memory can
even be treacherous. Lapse of time may also carry with it
dissipation of other evidence. Surely, there is great validity to the
statement that the march of time is truth in light.[26] These, in broad
outlines, give life to the salutary policy on which laches is founded.
WHEREFORE, the orders appealed from dated March 3, 1962 and
March 24, 1962 are hereby af irmed.
Costs against defendant-appellant.
SO ORDERED.
Reyes, Acting C.J., Dizon, Bengzon, Zaldivar, Castro, and Angeles, JJ.,
concur.
Makalintal, J., in the result.
Concepcion, C.J., on leave.
Fernando, J., no part.
22 Pantaleon v Asuncion, 105 Phil 755 
105 Phil. 761
G.R. No. L-13141, May 22, 1959  prepaid, directed to the defendant by ordinary mail to his last
VICENTA  PANTALEON,  PLAINTIFF  AND  APPELLEE,  VS.  summons and order of publication would have reached him, as had
HONORATO ASUNCION, DEFENDANT AND APPELLANT.  the decision appealed from. Said section 21 reads:
 
D E C I S I O N  af idavit a copy of the publication shall be attached, and by an
CONCEPCION, J.:
This is an appeal, taken by defendant Honorato Asunsion from an
order denying a petition for relief from an order declaring him in
default and a judgment by default.
On June 12, 1953, plaintiff, Vicenta Pantaleon, instituted this action,
in the Court of First Instance of Nueva Ecija, to recover, from said
Asuncion, the sum of P2,000.00, with interest thereon, in addition
to attorney's fees. The summons originally issued was returned
by the sheriff of Nueva Ecija unserved, with the statement that,
according to reliable information, Asuncion was residing in B-24
Tala Estate, Caloocan, Rizal. An alias summons was issued,
therefore, for service in the place last mentioned.
Based on Syllabus of Dean Monteclar  By RGL  53 of 95
 
However, the provincial sheriff of Rizal returned it unserved, with
the information that Asuncion had left the Tala Estate since
February 18, 1952, and that diligent efforts to locate him proved to
no avail. On plaintiff's motion, the court ordered, on March 9,
1955, that defendant be summoned by publication, and the
summons was published on March 21 and 28, and April 4, 1955, in
the "Examiner", said to be a newspaper of general circulation in
Nueva Ecija. Having failed to appear or answer the complaint
within the period stated in the summons, defendant was, by an
order dated July 12, 1955, declared in default. Subsequently, or
on September 8, 1955, after a hearing held in the absence of the
defendant and without notice to him, the court rendered judgment
for the plaintiff and against said defendant, for the sum of
P2,300.00, with interest thereon at the legal rate, from October 28,
1948, and costs.
About forty-six (46) days later, or on October 24, 1955, the
defendant iled a petition for relief from said order of July 12, 1955,
and from said judgment, dated September 8, 1955, upon the
ground of mistake and excusable negligence. Annexed to said
petition were defendant's af idavit and his veri ied answer. In the
af idavit, Asuncion stated that, on September 26, 1955, at 34
Pitimine Street, San Francisco del Monte Quezon City, which is
his residence, he received notice of a registered letter at the Post
Of ice in San Jose, Nueva Ecija, his old family residence; that he
proceeded immediately to the latter municipality to claim said
letter, which he received on September 28, 1955; that the letter
contained copy of said order of July 12, 1955, and of the judgment
of September 8, 1955, much to his surprise, for he had not been
summoned or noti ied of the hearing of this case; that had copy of
the summons and of the order for its publication been sent to him
by mail, as provided in Rule 7, section 21, of the Rules of Court said
summons and order would have reached him, "as the judgment
herein had"; and that his failure to appear before the court is
excusable it being due to the mistake of the authorities concerned
in not complying with the provisions of said section.
Upon denial of said petition for relief, defendant perfected his
present appeal, which is predicated upon the theory that the
aforementioned summons by publication had not been made in
conformity with the Rules of Court. More speci ically, defendant
maintains that copy of the summons and of the order for the
publication thereof were not deposited "in the post of ice, postage
known address", in violation of Rule 7, section 21, of the Rules of
Court, and that, had this provision been complied with, said
"If the service has been made by publication, service may be
proved by the af idavit of the printer, his foreman or principal
clerk, or of the editor, business or advertising manager, to which
af idavit showing the deposit of a copy of the summons and order
for publication in the post of ice, postage prepaid, directed to the
defendant by ordinary mail to his last known address** (Italics
supplied.)
Plaintiff alleges, however, that the provision applicable to the case
at bar is not this section 21, but section 16, of Rule 7, of the Rules
of Court, which provides:
"Whenever the defendant is designated as an unknown owner, or
the like, or whenever the address of a defendant is unknown and
cannot be ascertained by diligent inquiry, service may, by leave of
court, be effect upon him by publication in such places and for
such times as the court may order."
It is, moreover, urged by the plaintiff that the requirement, in Said
section 21, of an af idavit showing that copy of the summons and
of the order for its publication had been sent by mail to
 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

defendant's last known address, refers to the extraterritorial Lastly, from the viewpoint of substantial justice and equity, we
service of summons, provided for in section 17 of said Rule 7, are of the opinion that defendant's petition for relief should have
pursuant to which: been granted. To begin with, it was iled well within the periods
"When the defendant does not reside and is not found in the provided in the Rules of Court. Secondly, and, this is more
important, defendant's veri ied answer, which was attached to said
Philippines and the action affects the personal status of the plaintiff
or relates to, or the subject of which is, property within the petition, contains allegations which, if true, constitute a good
Philippines, in which the defendant has or claims a lien or interest, defense. Thus, for instance, in paragraph (2) of the "special
actual or contingent, or in which the relief demanded consists, denials" therein, he alleged:
wholly or in part, in excluding the defendant from any interest "That it is not true that he failed to pay the said indebtedness of his
therein, or the property of the defendant has been attached within said wife, as alleged in paragraph 3 of the complaint, for as a
the Philippines, service may, by leave of court, be effected out of matter of fact, plaintiff and defendant agreed upon a settlement of
the Philippines by personal service as under section 7; or by the said indebtedness of the latter's deceased wife on December 5,
registered mail; or by publication in such places and for such time 1948, whereby defendant was allowed to pay it out of his monthly
as the court may order, in which case a copy of the summons and salary by installment of P10.00 monthly beginning January, 1949,
order of the court shall be sent by ordinary mail to the last known and in accordance therewith, defendant paid unto plaintiff the
address of the defendant; or in any other manner the court may following sums:
deem suf icient. Any order granting such leave shall specify a
reasonable time, which shall not be less than sixty (60) days after
notice, within which the defendant must answer." Instalment for January—February, 1948
Said section 21, however, is unquali ied. It prescribes the "proof of
service by publication", regardless of whether the defendant is a March 1949 P paid
resident of the Philippines or not. Section 16 must be read in — 30.00 personally
relation to section 21, which complements it. Then, too, we
conceive of no reason, and plaintiff has suggested none, why copy April 2, 1949 10.00 by money 7483
of the summons and of the order for its publication should be — order
mailed to non-resident defendants, but not to resident defendants.
We can not even say that defendant herein, who, according to the
May 11, 1949 10.00 by money 7921
return of the Sheriff of Nueva Ecija, was reportedly residing in
— order
Rizal—where he, in fact (San Francisco del Monte and Quezon City
used to be part of Rizal), was residing—could reasonably be
expected to read the summons published in a newspaper said to June 10, 1949 10.00 by money 8230
be a general circulation in Nueva Ecija. — order

July 11, 1949 10.00 by money 8595

Considering that strict compliance with the terms of the statute is — order
necessary to confer jurisdiction through service by publication
(Bachrach Garage and Taxi Co. vs. Hotchkiss and Co., 34 Phil., 506;
August 10, 1949 10.00 by money 8943
Banco Espanol-Filipino vs. Palanca, 37 Phil., 921; Mills vs. Smiley,
— order
9 Idaho 317, 325, 76 Pac. 785; Charles vs. Marrow, 99 Mo. 638;
Sunderland, Cases on Procedure, Annotated, Trial Practice,'p. 51),
the conclusion is inescapable that the lower court had no authority September 1949 10.00 paid
whatsoever to Issue the order of July 12, 1955, declaring the — personally
defendant in default and to render the decision of September 8,
1955, and that both are null and void ab initio. October 1949 10.00 paid
— personally

Apart from the foregoing, it is a well-settled principle of

November 14, 1949 10.00 by money 9776
Constitutional Law that, in an action strictly in personam, like the
— order
one at bar, personal service of summons, within the forum, is
essential to the acquisition of jurisdiction over the person of the
defendant, who does not voluntarily submit himself to the December 13, 1949 10.00 by money 10076
authority of the court. In other words, summons by publication — order
cannot—consistently with the due process clause in the Bill of
Rights— confer upon the court jurisdiction over said defendant. January 10, 1950 10.00 by money 10445
"Due process of law requires personal service to support a personal — order
judgment, and, when the proceeding is strictly in personam brought
to determine the personal rights and obligations of the parties, February 9, 1950 10.00 by money 10731
personal service within the state or a voluntary appearance in the — order
case is essential to the acquisition of jurisdiction so as to constitute
compliance with the constitutional requirement of due process. * * * March 10, 1950 10.00 by money 1149
— order

"Although a state legislature has more control over the form of

service on its own residents than nonresidents, it has been held April 10, 1950 10.00 by money 11387
that in actions in personam * * * service by publication on resident — order
defendants, who are personally within the state and can be found
therein is not 'due process of law', and a statute allowing it is May 11, 1950 10.00 by money 11990
unconstitutional" (16A CJ.S., pp. 786, 789; Italics ours.) — order

Based on Syllabus of Dean Monteclar  By RGL  54 of 95 

 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

June 12, 1950 10.00 by money 61055 February 1953 10.00 paid
— order — personally

July 11, 1950 10.00 by money 58850 March 1953 10.00 paid
— order — personally

August 11, 1950 10.00 by money 59293 April 1953 10.00 paid
— order — personally

September 6, 1950 10.00 by money 59618 May 1953 10.00

— order —

October 10, 1950 10.00 by money 60008 Total paid

— order —P460.00"

The speci ication of the dates of payment, of the amounts paid each
November 8, 1950 10.00 by money 60369
time, of the manner in which each payment was made, and of the
— order
number of the money orders in which eighteen (18) payments had
been effected, constitutes a strong indication of the probable
December 1950 10.00 paid veracity of said allegation, fully justifying the grant of an
— personally opportunity to prove the same.

January 2, 1951 10.00 paid

— personally Wherefore, said order of July 12, 1955, and the aforementioned
decision of September 8, 1955, are hereby set aside and annulled,
and let the record of this case be remanded to the lower court
February 10, 1951 10.00 paid
for further proceedings, with costs against plaintiff-appellee. It is
— personally
so ordered.

March 12, 1951 10.00 paid

— personally Paras, C, J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo,
Labrador, and Endencia, JJ., concur.
April 1951 10.00 paid
— personally
23 Citizens Insurance Surety v Melencio-Herrera, 
38 SCRA 369 
May 1951 10.00 paid 148 Phil. 381
— personally

June 1951 10.00 paid G.R. No. L-32170, March 31, 1971 
— personally
CITIZENS'  SURETY  &  INSURANCE  COMPANY,  INC., 
July 1951 10.00 paid PETITIONER,  VS.  HON.  JUDGE  A.  MELENCIO-HERRERA, 
— personally SANTIAGO  DACANAY,  AND  JOSEFINA  DACANAY, 
RESPONDENTS. 
August 1951 10.00 paid
— personally  

September 1951 10.00 paid D E C I S I O N 

— personally
REYES, J.B.L., J.:
Petitioner Citizens' Surety & Insurance Company, Inc, seeks review
November 1951 10.00 paid
of an order of respondent Judge in Civil Case No. 77134 of the Court
— personally
of First Instance of Manila, Branch XVII, entitled "Citizens' Surety &
Insurance Co., Inc. vs. Santiago Dacanay and Jose ina Dacanay",
December 1951 10.00 paid dismissing the complaint for lack of proper service of summons
— personally upon defendants.
The record is to the effect that petitioner had iled its complaint in
September 1952 30.00 paid
the Court below, alleging that at request of defendant Santiago
— personally
Dacanay, the plaintiff Surety Company had issued its Surety Bonds
Nos. 4942 and 4944, the irst, in favor of Gregorio Fajardo to
December 1952 20.00 paid guarantee payment of a P5,000-promissory note executed by said
— personally Dacanay, and the second, in favor of Manufacturers Bank & Trust
Co., to guarantee payment of another promissory note in like
January 1953 10.00 paid amount; that in consideration of said bonds, Santiago and Jose ina
— personally Dacanay executed Indemnity Agreements, binding themselves
jointly and severally to indemnify plaintiff for any losses, costs and
expenses which it might sustain in connection with the issuance of

Based on Syllabus of Dean Monteclar  By RGL  55 of 95 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
the bonds aforesaid, with interest at 12% per annum; that as
additional security, the Dacanays mortgaged to plaintiff a parcel of
land in Baguio City, covered by Certi icate of Title No. T-8116, the
mortgage having been duly recorded; that the promissory notes
were not paid and as a result, plaintiff Surety was compelled to pay
P5,000.00 to Gregorio Fajardo and P4,081.69 to the Manufacturers'
Bank; that the Dacanays failed to reimburse the Surety for such
payments, whereupon the Surety caused the extrajudicial
foreclosure of the mortgage to pay its claim of P12,491.69
representing its payments, interest and stipulated liquidated
damages; that at the foreclosure sale, the land mortgaged was sold
to plaintiff, as highest bidder, for the sum of P2,000.00 - leaving an
unsatis ied balance of P10,491.69, that plaintiff sought to recover
from defendants Dacanay, plus 10% thereof as attorneys' fees, and
the costs.
At petitioner's request, respondent Judge caused summons to be
made by publication in the newspaper Philippines Herald. But
despite the publication and deposit of a prepaid copy of the
complaint at the Manila post of ice, defendants did not appear
within the period of 60 days from last publication, as required by
the summons.
Plaintiff then asked that defendants be declared in default; but
instead, the Judge, by order of May 16, 1970, asked it to show cause
why the action should not be dismissed, the suit being in personam
and defendants not having appeared. Then, on May 29, 1970,
respondent Judge dismissed the case, despite plaintiff Surety's
argument that the summons by publication was suf icient and valid
under section 16 of Rule 14 of the Revised Rules of Court.
We agree with respondent Judge that the action of plaintiff
petitioner, being in personam, the Court could not validly acquire
jurisdiction on a non-appearing defendant, absent a personal
service of summons within the forum. We have explicitly so ruled in
Pantaleon vs. Asuncioin, 105 Phil. 765, pointing out without such
personal service, any judgment on a non-appearing defendant
would be violative of due process. In the aforecited case this Court,
through Justice Roberto Concepcion, now Chief Justice, ruled as
follows:
"Apart from the foregoing, it is a well-settled principle of
Constitutional Law that, in an action strictly in personam, like the
one at bar, personal service of summons, within the forum, is
essential to the acquisition of jurisdiction over the person of the
defendant, who does not voluntarily submit himself to the authority
of the court. In other words, summons by publication cannot
consistently with the due process clause in the Bill of Rights - confer
upon the court jurisdiction over said defendants.
'Due process of law requires personal service to support a personal
judgment, and, when the proceeding is strictly in personam brought
to determine the personal rights and obligations of the parties,
personal service within the state or a voluntary appearance in the
case is essential to the acquisition of jurisdiction so as to constitute
compliance with the constitutional requirement of due process. * *
*.
'Although a state legislature has more control over the form of
service on its own residents than nonresidents, it has been held that
in actions in personam * * * service by publication on resident
defendants, who are personally within the state and can be found
therein is not "due process of law", and a statute allowing it is
unconstitutional.' (16A C.J.S., pp. 786, 789; Italics ours.)"
The proper recourse for a creditor in the same situation as
petitioner is to locate properties, real or personal, of the resident
defendant debtor with unknown address and cause them to be
attached under Rule 57, section 1(f), in which case, the attachment
converts the action into a proceeding in rem or quasi in rem and the
summons by publication may then accordingly be deemed valid and
effective.
But because debtors who abscond and conceal themselves are also
quite adept at concealing their properties, the dismissal of the case
Based on Syllabus of Dean Monteclar  By RGL  56 of 95
 
below by respondent Judge should be set aside and the case held
pending in the court's archives, until petitioner as plaintiff succeeds
in determining the whereabouts of the defendants' person or
properties and causes valid summons to be served personally or by
publication as the case may be. In this manner, the tolling of the
period of prescription for as long as the debtor remains in hiding
would properly be a matter of court record, and he can not emerge
after a suf icient lapse of time from the dismissal of the case to
pro it from his own misdeed and claim prescription of his just debt.
WHEREFORE, the order of dismissal of the case issued by the Court
below is hereby set aside, and in the interest of justice, the
proceedings are ordered suspended, to be held pending until the
plaintiff petitioner succeeds in ascertaining the whereabouts of the
defendants and/or locating properties of the same, to enable proper
summons to be issued conformably to this Opinion. No costs.
Concepcion, C.J., Makalintal, Zaldivar, Fernando, Teehankee, Barredo,
Villamor, and Makasiar, JJ., concur.
Dizon and Ruiz Castro, JJ., reserve their vote.
24 Pedro Santos, Jr v PNOC, 170943, 28 Sep 2008 
587 Phil. 713
FIRST DIVISION 
G.R. No. 170943, September 23, 2008 
PEDRO  T.  SANTOS,  JR.,  PETITIONER,  VS.  PNOC 
EXPLORATION CORPORATION, RESPONDENT. 
 
D E C I S I O N 
CORONA, J.:
This is a petition for review[1] of the September 22, 2005 decision[2]
and December 29, 2005 resolution[3] of the Court of Appeals in
CA-G.R. SP No. 82482.
On December 23, 2002, respondent PNOC Exploration Corporation
iled a complaint for a sum of money against petitioner Pedro T.
Santos, Jr. in the Regional Trial Court of Pasig City, Branch 167. The
complaint, docketed as Civil Case No. 69262, sought to collect the
amount of P698,502.10 representing petitioner's unpaid balance of
the car loan[4] advanced to him by respondent when he was still a
member of its board of directors.
Personal service of summons to petitioner failed because he could
not be located in his last known address despite earnest efforts to
do so. Subsequently, on respondent's motion, the trial court allowed
service of summons by publication.
Respondent caused the publication of the summons in Remate, a
newspaper of general circulation in the Philippines, on May 20,
2003. Thereafter, respondent submitted the af idavit of publication
of the advertising manager of Remate[5] and an af idavit of service of
respondent's employee[6] to the effect that he sent a copy of the
summons by registered mail to petitioner's last known address.
When petitioner failed to ile his answer within the prescribed
period, respondent moved that the case be set for the reception of
its evidence ex parte. The trial court granted the motion in an order
dated September 11, 2003.
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
Respondent proceeded with the ex parte presentation and formal
offer of its evidence. Thereafter, the case was deemed submitted for
decision on October 15, 2003.
On October 28, 2003, petitioner iled an "Omnibus Motion for
Reconsideration and to Admit Attached Answer." He sought
reconsideration of the September 11, 2003 order, alleging that the
af idavit of service submitted by respondent failed to comply with
Section 19, Rule 14 of the Rules of Court as it was not executed by
the clerk of court. He also claimed that he was denied due process
as he was not noti ied of the September 11, 2003 order. He prayed
that respondent's evidence ex parte be stricken off the records and
that his answer be admitted.
Respondent naturally opposed the motion. It insisted that it
complied with the rules on service by publication. Moreover,
pursuant to the September 11, 2003 order, petitioner was already
deemed in default for failure to ile an answer within the prescribed
period.
In an order dated February 6, 2004, the trial court denied
petitioner's motion for reconsideration of the September 11, 2003
order. It held that the rules did not require the af idavit of
complementary service by registered mail to be executed by the
clerk of court. It also ruled that due process was observed as a copy
of the September 11, 2003 order was actually mailed to petitioner
at his last known address. It also denied the motion to admit
petitioner's answer because the same was iled way beyond the
reglementary period.
Aggrieved, petitioner assailed the September 11, 2003 and
February 6, 2004 orders of the trial court in the Court of Appeals via
a petition for certiorari. He contended that the orders were issued
with grave abuse of discretion. He imputed the following errors to
the trial court: taking cognizance of the case despite lack of
jurisdiction due to improper service of summons; failing to furnish
him with copies of its orders and processes, particularly the
September 11, 2003 order, and upholding technicality over equity
and justice.
During the pendency of the petition in the Court of Appeals, the trial
court rendered its decision in Civil Case No. 69262. It ordered
petitioner to pay P698,502.10 plus legal interest and costs of suit.[7]
Meanwhile, on September 22, 2005, the Court of Appeals rendered
its decision[8] sustaining the September 11, 2003 and February 6,
2004 orders of the trial court and dismissing the petition. It denied
reconsideration.[9] Thus, this petition.
Petitioner essentially reiterates the grounds he raised in the Court
of Appeals, namely, lack of jurisdiction over his person due to
improper service of summons, failure of the trial court to furnish
him with copies of its orders and processes including the
September 11, 2003 order and preference for technicality rather
than justice and equity. In particular, he claims that the rule on
service by publication under Section 14, Rule 14 of the Rules of
Court applies only to actions in rem, not actions in personam like a
complaint for a sum of money. He also contends that the af idavit of
service of a copy of the summons should have been prepared by the
clerk of court, not respondent's messenger.
The petition lacks merit.
Based on Syllabus of Dean Monteclar  By RGL  57 of 95
 
ProprietyOf
Service By Publication
Section 14, Rule 14 (on Summons) of the Rules of Court provides:
SEC. 14. Service upon defendant whose identity or whereabouts are
unknown. - In any action where the defendant is designated as an
unknown owner, or the like, or whenever his whereabouts are
unknown and cannot be ascertained by diligent inquiry, service
may, by leave of court, be effected upon him by publication in a
newspaper of general circulation and in such places and for such
times as the court may order. (emphasis supplied)
Since petitioner could not be personally served with summons
despite diligent efforts to locate his whereabouts, respondent
sought and was granted leave of court to effect service of summons
upon him by publication in a newspaper of general circulation.
Thus, petitioner was properly served with summons by publication.
Petitioner invokes the distinction between an action in rem and an
action in personam and claims that substituted service may be
availed of only in an action in rem. Petitioner is wrong. The in
rem/in personam distinction was signi icant under the old rule
because it was silent as to the kind of action to which the rule was
applicable.[10] Because of this silence, the Court limited the
application of the old rule to in rem actions only.[11]
This has been changed. The present rule expressly states that it
applies "[i]n any action where the defendant is designated as an
unknown owner, or the like, or whenever his whereabouts are
unknown and cannot be ascertained by diligent inquiry." Thus, it
now applies to any action, whether in personam, in rem or quasi in
rem.[12]
Regarding the matter of the af idavit of service, the relevant portion
of Section 19,[13] Rule 14 of the Rules of Court simply speaks of the
following:
... an af idavit showing the deposit of a copy of the summons and
order for publication in the post of ice, postage prepaid, directed to
the defendant by registered mail to his last known address.
Service of summons by publication is proved by the af idavit of the
printer, his foreman or principal clerk, or of the editor, business or
advertising manager of the newspaper which published the
summons. The service of summons by publication is complemented
by service of summons by registered mail to the defendant's last
known address. This complementary service is evidenced by an
af idavit "showing the deposit of a copy of the summons and order
for publication in the post of ice, postage prepaid, directed to the
defendant by registered mail to his last known address."
The rules, however, do not require that the af idavit of
complementary service be executed by the clerk of court. While the
trial court ordinarily does the mailing of copies of its orders and
processes, the duty to make the complementary service by
registered mail is imposed on the party who resorts to service by
publication.
Moreover, even assuming that the service of summons was
defective, the trial court acquired jurisdiction over the person
of petitioner by his own voluntary appearance in the action
against him. In this connection, Section 20, Rule 14 of the Rules of
Court states:
SEC. 20. Voluntary appearance. - The defendant's voluntary
appearance in the action shall be equivalent to service of
summons. The inclusion in a motion to dismiss of other grounds
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
aside from lack of jurisdiction over the person of the defendant shall
not be deemed a voluntary appearance. (emphasis supplied)
Petitioner voluntarily appeared in the action when he iled the
"Omnibus Motion for Reconsideration and to Admit Attached
Answer."[14] This was equivalent to service of summons and vested
the trial court with jurisdiction over the person of petitioner.
EntitlementTo
Notice Of Proceedings
The trial court allowed respondent to present its evidence ex parte
on account of petitioner's failure to ile his answer within the
prescribed period. Petitioner assails this action on the part of the
trial court as well as the said court's failure to furnish him with
copies of orders and processes issued in the course of the
proceedings.
The effects of a defendant's failure to ile an answer within the time
allowed therefor are governed by Sections 3 and 4, Rule 9 (on Effect
of Failure to Plead) of the Rules of Court:
SEC. 3. Default; declaration of. - If the defending party fails to
answer within the time allowed therefor, the court shall, upon
motion of the claiming party with notice to the defending party,
and proof of such failure, declare the defending party in
default. Thereupon, the court shall proceed to render judgment
granting the claimant such relief as his pleading may warrant,
unless the court in its discretion requires the claimant to submit
evidence. Such reception of evidence may be delegated to the clerk
of court.
SEC. 4. Effect of order of default. - A party in default shall be
entitled to notice of subsequent proceedings but not to take part
in the trial. (emphasis supplied)
If the defendant fails to ile his answer on time, he may be declared
in default upon motion of the plaintiff with notice to the said
defendant. In case he is declared in default, the court shall proceed
to render judgment granting the plaintiff such relief as his pleading
may warrant, unless the court in its discretion requires the plaintiff
to submit evidence. The defaulting defendant may not take part in
the trial but shall be entitled to notice of subsequent proceedings.
In this case, even petitioner himself does not dispute that he failed
to ile his answer on time. That was in fact why he had to ile an
"Omnibus Motion for Reconsideration and to Admit Attached
Answer." But respondent moved only for the ex parte presentation
of evidence, not for the declaration of petitioner in default. In its
February 6, 2004 order, the trial court stated:
The disputed Order of September 11, 2003 allowing the
presentation of evidence ex-parte precisely ordered that "despite
and notwithstanding service of summons by publication, no answer
has been iled with the Court within the required period and/or
forthcoming.["] Effectively[,] that was a finding that the
defendant [that is, herein petitioner] was in default for failure
to file an answer or any responsive pleading within the period
fixed in the publication as precisely the defendant [could not] be
found and for which reason, service of summons by publication was
ordered. It is simply illogical to notify the defendant of the Order of
September 11, 2003 simply on account of the reality that he was no
longer residing and/or found on his last known address and his
whereabouts unknown - thus the publication of the summons. In
other words, it was reasonable to expect that the defendant will not
receive any notice or order in his last known address. Hence, [it
was] impractical to send any notice or order to him. Nonetheless,
the record[s] will bear out that a copy of the order of
Based on Syllabus of Dean Monteclar  By RGL  58 of 95
 
September 11, 2003 was mailed to the defendant at his last
known address but it was not claimed. (emphasis supplied)
As is readily apparent, the September 11, 2003 order did not limit
itself to permitting respondent to present its evidence ex parte but
in effect issued an order of default. But the trial court could not
validly do that as an order of default can be made only upon motion
of the claiming party.[15] Since no motion to declare petitioner in
default was iled, no default order should have been issued.
To pursue the matter to its logical conclusion, if a party declared in
default is entitled to notice of subsequent proceedings, all the more
should a party who has not been declared in default be entitled to
such notice. But what happens if the residence or whereabouts of
the defending party is not known or he cannot be located? In such a
case, there is obviously no way notice can be sent to him and the
notice requirement cannot apply to him. The law does not require
that the impossible be done.[16] Nemo tenetur ad impossibile. The law
obliges no one to perform an impossibility.[17] Laws and rules must
be interpreted in a way that they are in accordance with logic,
common sense, reason and practicality.[18]
Hence, even if petitioner was not validly declared in default, he
could not reasonably demand that copies of orders and processes
be furnished him. Be that as it may, a copy of the September 11,
2003 order was nonetheless still mailed to petitioner at his last
known address but it was unclaimed.
CorrectnessOf
Non-Admission Of Answer
Petitioner failed to ile his answer within the required period.
Indeed, he would not have moved for the admission of his answer
had he iled it on time. Considering that the answer was belatedly
iled, the trial court did not abuse its discretion in denying its
admission.
Petitioner's plea for equity must fail in the face of the clear and
express language of the rules of procedure and of the September 11,
2003 order regarding the period for iling the answer. Equity is
available only in the absence of law, not as its replacement.[19]
Equity may be applied only in the absence of rules of procedure,
never in contravention thereof.
WHEREFORE, the petition is hereby DENIED.
Costs against petitioner.
SO ORDERED
Puno, C.J., (Chairperson), Carpio, Azcuna and Leonardo-De Castro, JJ.,
concur.
25 Carriaga v Malaya, 143 SCRA 441 
227 Phil. 406
SECOND DIVISION 
G.R. L-48375, August 13, 1986 
JOSE  C.  CARIAGA,  JR.  AND  MARIETA  CARIAGA, 
PETITIONERS,  VS.  THE  HON.  ANTONIO  Q.  MALAYA, 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
CAROLINA  ALMONTE  CARIAGA-SOON  AND  ANA  "Let copies of this Order be served on the said defendants by
ALMONTE CARIAGA, RESPONDENTS.  registered mail with return cards at the instance of the plaintiffs.
 
D E C I S I O N 
PARAS, J.:
This is a petition for certiorari to review and to set aside two orders
of the respondent Judge dated January 16, 1978 and April 11, 1978
giving validity to the service of summons by registered mail upon
the defendants Jose C. Cariaga, Jr. and Marieta Cariaga-Celis
(petitioners herein), who are residing abroad. Petitioners aver that
the issuance of said orders by the respondent Judge is tantamount
to grave abuse of discretion.
The antecedent facts of the case at bar are brie ly summarized as
follows:
On October 6, 1976, plaintiffs (private respondents herein) Ana
Almonte Cariaga Soon iled in her behalf and in behalf of her minor
daughter Carolina, an action for (1) Annulment of a Deed of
Extra-Judicial Partition of Real Property, (2) Cancellation of Transfer
Certi icate of Title (TCT), (3) Recovery of Real Property with
damages, in the Court of First Instance (CFI) of Laguna, Branch IV,
now known as the Regional Trial Court (RTC), docketed as Civil Case
No. SC-1474. All defendants in said action iled their answer with
counterclaim with the exception of defendants (petitioners herein)
Jose C. Cariaga Jr. and Marieta Cariaga Celis who were both residing
abroad and were not served with summons. The lower court upon
motion of plaintiffs granted them leave to effect extra-territorial
service of summons upon said defendants pursuant to Secs. 7, 17
and 18 of Rule 14 of the New Rules of Court. (Annex "A", p. 9,
Record). Accordingly, summonses with copies of the complaint
were served to the defendants by registered mail abroad (Guam and
U.S.A.) by the Clerk of Court at the instance of plaintiffs (Annexes
"B" and "C").
On August 30, 1977, defendants, who are residents of the
Philippines iled a motion to set aside the said summons and to
declare the service of summons abroad by registered mail as null
and void, it being allegedly irregular and unauthorized under the
provisions of Rule 14 of the Rules of Court (Annex "D") to which
motion plaintiffs iled their opposition.
Acting on the issue the lower court ruled in this wise:
"O R D E R
"It appearing that but for the short period of ifteen (15) days from
date of receipt of summons within which to answer given
defendants Jose C. Cariaga, Jr, and Marietta C. Cariaga, who reside
abroad, there was substantial compliance with Section 17 as related
to Section 7 both of Rule 14 of the New Rules of Court in the service
of said summons on said defendants, for LACK OF MERIT, the
defendants' MOTION TO SET ASIDE SUMMONSES is, as it hereby
DENIED.
"Defendants Jose C. Cariaga, Jr., and Marietta C. Cariaga, having
already received copies of plaintiffs' Complaint with the service of
summons on them, said defendants are given NINETY (90) days
from receipt of this Order within which to ile responsive pleadings.
Based on Syllabus of Dean Monteclar  By RGL  59 of 95
 
"IT IS SO ORDERED.
Santa Cruz, Laguna, January 16, 1978.
Sgd. ANTONIO Q. MALAYA
ANTONIO Q. MALAYA
Judge"
(Annex F, p. 21, Record)
On March 31, 1978, defendants (petitioner herein), residing abroad,
by special appearance and of counsel iled their motion to consider
the service of summons upon them by registered mail as null and
void. On April 11, 1978, the lower court issued another order
reading as follows:
""O R D E R
"Finding no merit to defendants' motion iled on March 31, 1978,
through counsel, to consider the service of summons to them by
registered mail, to be null and void because they are residing
abroad, considering the indings of this Court as expounded in its
January 16, 1978 Order, said motion is, as it is, hereby DENIED.
"IT IS SO ORDERED.
"Santa Cruz, Laguna, April 11, 1978.
(SGD.) IRINEO V. MENDOZA
T/ IRINEO V. MENDOZA
Judge"
(Annex "H", p. 25 Record)
The main issue on appeal is whether the service of summons by
registered mail upon defendants in the case at bar is one which is
contemplated within the principles laid down in the provisions of
Secs. 17, 7 and 22, Rule 14 of the New Rules of Court to wit:
“Section 17. Extraterritorial service.- When the defendant does not
reside and is not found in the Philippines and the action affects the
personal status of the plaintiff or relates to, or the subject of which
is, property within the Philippines, in which the defendant has or
claims a lien or interest, actual or contingent, or in which the relief
demanded consists, wholly or in part, in excluding the defendant
from any interest therein, or the property of the defendant has been
attached within the Philippines, service may, by leave of court, be
effected out of the Philippines by personal service as under Section
7; or by publication in a newspaper of general circulation in such
places and for such time as the court may order, in which case a
copy of the summons and order of the court shall be sent by
registered mail to the last known address of the defendant, or in any
other manner the court may deem suf icient. Any order granting
such leave shall specify a reasonable time, which shall not be less
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
than sixty (60) days after notice, within which the defendant must
answer."
Sec. 7. Personal service of summons. - The summons shall be served
by handing a copy thereof to the defendant in person, or, if he
refuses to receive it, by tendering it to him."
Sec. 22. Proof of service by registered mail.- Service by registered
mail under this rule may be proved by a certi icate of the sheriff or
af idavit of the person especially authorized by the court, showing
that a copy of the summons and papers attached thereto, inclosed in
an envelope and addressed to the defendant, with postage prepaid,
has been mailed, to which certi icate or af idavit the registry receipt
and return card shall be attached."
Questioning the validity of the aforequoted orders dated January 16,
1978 and April 11, 1978, petitioners aver that the lower court
committed an error in allowing service of summons by registered
mail, arguing that such mode must be coupled with publication in a
newspaper of general circulation which was lacking in the case at
bar. Petitioners' contention holds no water.
Under Section 17, extraterritorial service of summons is proper: (1)
when the action affects the personal status of the plaintiff; (2) when
the action relates to, or the subject of which is, property within the
Philippines, in which the defendant has or claims a lien or interest,
actual or contingent; (3) when the relief demanded in such an
action consists, wholly or in part, in excluding the defendant from
any interest in property located in the Philippines; and (4) when
defendant nonresident's property has been attached within the
Philippines (Sec. 17, Rule 14, Rules of Court).
In any of such four cases, the service of summons may, with leave of
court, be effected out of the Philippines in three ways: (1) by
personal service; (2) by publication in a newspaper of general
circulation in such places and for such time as the court may order,
in which case a copy of the summons and order of the court should
be sent by registered mail to the last known address of the
defendant; and (3) in any other manner which the court may deem
suf icient. The third mode of extraterritorial service of summons
was substantially complied within this case. (De Midgely V.
Fernandos, 64 SCRA 23, 33, 34).
There is no question that the requirement of due process has been
met as shown by the fact that defendants actually received the
summonses and copies of the complaint and as evidenced by the
Registry Return Cards marked as Annex A-1 (page 56-Record) and
Annex B-1. Whatever defect there may have been in the service of
summons was aptly corrected by the court a quo in its assailed
order dated January 16, 1978, which gave said defendant's ninety
(90) days from receipt of order within which to ile their responsive
pleadings. Defendants have no reason to complain that they were
unaware of the action iled against them or claim that they were
denied due process.
The case of Habana V. Vamenta, et al., L-27091, June 30, 1970, or 33
SCRA 569, cited by the petitioners in support of their claim has no
bearing in the case at bar since in said case service of summons was
never made, even, if defendant knew of the case against him, while
in the case under consideration, service of summons was made
upon them (although claimed erroneously by them as defective).
WHEREFORE, premises considered, the petition for certiorari is
hereby DISMISSED with costs against the petitioners.
Based on Syllabus of Dean Monteclar  By RGL  60 of 95
 
SO ORDERED.
Feria, (Chairman), Fernan, Alampay, and Gutierrez, Jr., JJ., concur.
26 Baltazar v CA, 168 SCRA 354 
250 Phil. 349
THIRD DIVISION 
G.R. No. 78728, December 08, 1988 
ARTEMIO  BALTAZAR  AND  AURORA  GALVEZ, 
PETITIONERS, VS. THE HONORABLE COURT OF APPEALS 
AND GOOD EARTH ENTERPRISES, INC. RESPONDENTS. 
 
D E C I S I O N 
FELICIANO, J.:
This Petition for Review on Certiorari was instituted by petitioners
Artemio Baltazar and Aurora Galvez against Good Earth Enterprises,
Inc. ("Good Earth") to annul the Court of Appeals' Decision in C.A. -
G.R. CV No. 00104 dated 14 January 1987.
The facts borne out by the record are as follows:
The parcels of land involved in this case, one with an area of 873
square meters and the other with an area of 24,448 square meters,
are both located in Barrio San Isidro, Parañ aque. On 5 February
1959, they were adjudicated to one Lorenzo Molera pursuant to
Decree No. M-70457 in Land Registration Case No. N-1957 by the
Court of First Instance of Rizal acting as a cadastral court. On 8
April 1959, they were titled in the name of Lorenzo Molera, under
Original Certi icate of Title (OCT) No. 1866.
On 15 August 1965, the parcels of land were acquired by Good
Earth from successors-in-interest of Lorenzo Molera. On 19 May
1967, Transfer Certi icate of Title (TCT) No. 191048 was issued in
the name of Good Earth.
On 22 March 1977, Artemio Baltazar instituted Civil Case No.
5552-P against Good Earth for declaration of ownership and
reconveyance of the parcels of land before the Court of First
Instance of Rizal, Branch 28. Baltazar traced his claimed rights from
an alleged vast Spanish land grant to one "Don Hermogenes
Rodriguez, Governor General of Intramuros, Manila (sic)" down to a
deed of sale over the subject lots allegedly executed by one Pedro
Asedillo (for whose mother, Baltazar had been a tenant sharing in
the rice harvest from the lots) on 6 March 1976.[1]
The Deputy Sheriff of the trial court, Mr. Ernesto Pre, received on 29
March 1977 a copy of the summons and complaint for service on
Good Earth at its address set forth in the complaint -- 666 Muelle de
Binondo, Manila.[2] On 1 April 1977, Deputy Sheriff Pre certi ied in
his Sheriff's Return that:
"x x x notwithstanding three attempts made by the undersigned
Deputy Sheriff, particularly on March 25, 27 and 30, 1977, to serve
the summons and copy of the complaint upon the defendant Good
Earth Enterprises, Inc. at the given address, the same has failed as
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
according to information defendant Corporation has never held
of ice thereat and its present of ice address is unknown."[3]
On the same date, 1 April 1977, therein plaintiff Baltazar iled a
motion for leave to serve the summons and a copy of the complaint
upon therein defendant Good Earth by publication.
The trial court granted Baltazar's motion. Publication of the
summons and the complaint in the "Times Journal," a newspaper of
general circulation, for three (3) consecutive weeks was effected on
6, 13, and 20 August 1977.[4] Subsequently, the trial court, on
motion of Baltazar dated 24 October 1977 and upon inding that
Good Earth had failed to ile its answer within the sixty (60) day
period counted from the day following the last day of the
publication, declared Good Earth "as if in default" and allowed
Baltazar to present his evidence ex-parte. Ten (10) days later, on 3
November 1977, the trial court issued the questioned judgment by
default against Good Earth, the dispositive portion of which
1) declared Baltazar true and absolute owner of the
property covered by TCT No. 191048;
2) ordered Good Earth to reconvey that property to
Baltazar and should Good Earth fail so to reconvey;
3) decreed the cancellation of TCT No. 191048; and
4) required the Register of Deeds of Rizal to issue a new
TCT in the name of Baltazar.[5]
Accordingly, on 28 February 1978, TCT No. 191048 in the name of
Good Earth was cancelled and another one, TCT No. 63805, was
issued in the name of Artemio Baltazar, all without the knowledge of
Good Earth.
Baltazar lost no time at all in selling the land so titled in his name.
The parcel with an area of 873 square meters was sold on 14 March
1978 to Aurora Galvez. The parcel of 24,448 square meters was
irst subdivided into Lots 1-B-1, 1-B-2, and 1-A and thereafter, lots
1-B-1 and 1-B-2 were sold to Rizaliana Garments, Inc. and lot 1-A to
BGB Development Corporation. The successors in interest of
Baltazar were issued the following titles: Aurora Galvez - TCT No.
S-65627: Rizaliana Garments, Inc. - TCT Nos. S-72087 and S-72088;
and BGB Development Corporation - TCT Nos. S-72490 and
S-72491.
On 9 August 1979, Good Earth instituted a complaint for annulment
of the judgment in Civil Case No. 5552-P and for reconveyance,
against Artemio Baltazar and his vendees Aurora Galvez and BGB
Development Corporation, which complaint was docketed as Civil
Case No. PQ-7410-P, in the Court of First Instance of Rizal, Branch
28, the same court which had issued the judgment by default
against Good Earth. Good Earth later impleaded Baltazar’s third
vendee, Rizaliana Garments, Inc. as an additional defendant.
Good Earth assailed the judgment of 3 November 1977 as null and
void, upon the ground that the trial court had not acquired
jurisdiction over the person of Good Earth. It was urged by Good
Earth that the suit commenced by Baltazar was an action in
personam which required personal service of summons; hence,
service of summons by publication was improper and unwarranted
in this case. It was also urged by Good Earth that Land Registration
Based on Syllabus of Dean Monteclar  By RGL  61 of 95
 
Decree No. N-70457, by virtue of which OCT No. 1866 was issued to
Lorenzo Molera, predecessor-in-interest of Good Earth, became
incontrovertible one year after its registration on 5 February 1959.
The trial court in Civil Case No. PQ-7410-P rendered judgment
against Good Earth and dismissed its complaint holding, among
other things, that the trial court which issued the judgment by
default had acquired jurisdiction over the person of defendant Good
Earth through service of summons by publication; that the suit
brought by Baltazar against Good Earth was an action quasi in rem
such that service of summons by publication was appropriate; that
Lorenzo Molera, the original registered owner of the subject lands,
was not an indispensable party to the suit brought against Good
Earth; that the action instituted by Good Earth was barred by res
judicata; and that defendants Galvez, BGB Development Corporation
and Rizaliana Garments, Inc. were purchasers in good faith and for
value.
On appeal by Good Earth, the Court of Appeals, on 14 January 1987,
reversed the trial court's decision and ordered the Registry of Deeds
of Rizal to cancel the transfer certi icates of title issued in the names
of Baltazar, Galvez, Rizaliana Garments, Inc. and BGB Development
Corporation, reinstated Transfer Certi icate of Title No. 191048
which had stood in the name of Good Earth and directed the
defendants to reconvey the parcels of land in question to Good
Earth free from all liens and encumbrances.
Hence this Petition for Review instituted by Baltazar and Galvez.
Approximately nine (9) months after the iling of this Petition,
Rizaliana Garments, Inc. and BGB Development Corporation iled a
motion for leave to intervene stating that they had iled with this
Court a motion ex abundante cautela for a ifteen (15) day extension
of time within which to ile a petition for review. This Court, in a
Resolution dated 23 March 1988, denied the movants leave to
intervene because "no Petition for Review — [had] actually [been]
iled before this Court by movants. Accordingly, the decision of the
Court of Appeals dated 14 January 1987 [had] become inal and
executory a long time ago in respect of movants."[6]
Two (2) principal issues are raised in this case: the irst relates to
the propriety of the service of summons by publication upon
respondent Good Earth in Civil Case No. 5552-P; and the second
concerns the rights, if any, of the vendees of petitioner Baltazar
under the circumstances of this case.
Confronting the irst issue, we note that the regular mode of serving
summons upon a private domestic corporation -- i.e., a private
corporation organized under Philippine law and hence registered
with the Securities and Exchange Commission -- is governed by
Section 13 of Rule 14 of the Revised Rules of Court, which provides
as follows:
"Section 13. Service upon Private Domestic Corporation or
Partnership. — If the defendant is a corporation organized under
the laws of the Philippines or a partnership duly registered, service
may be made on the president, manager, secretary cashier, agent, or
any of its directors." (Underscoring supplied)
The regular mode, in other words, of serving summons upon a
private Philippine corporation is by personal service upon one of the
officers of such corporation identified in Section 13. Ordinarily, such
personal service may be expected to be made at the principal of ice
of the corporation. Section 13 does not, however, impose such
requirement, and so personal service upon the corporation may be
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
effected through service upon, for instance, the president of the
corporation at his of ice or residential address. While Section 13
states that "service may be made on the president, etc," of a
domestic corporation, in Delta Motor Sales Corporation v.
Mangosing,[7] the Court stressed the need for strict compliance with
the mode of service speci ied in Section 13 quoted above and
explained why such strict compliance is necessary:
"For the purpose of receiving service of summons and being bound by
it, a corporation is identified with its agent or officer who under the
rule is designated to accept service of process. 'The corporate power
to receive and act on such service, so far as to make it known to the
corporation, is thus vested in such of icer or agent.' (Lafayette
Insurance Co. v. French, 15 L. Ed. 451, 453).
x x x x x x x x x
A [sic] strict compliance with the mode of service is necessary to
confer jurisdiction of the court over a corporation. The officer upon
whom service is made must be one who is named in the statute;
otherwise the service is insufficient. So, where the statute requires
that in the case of a domestic corporation summons should be
served on 'the president or head of the corporation, secretary,
treasurer, cashier or managing agent thereof', service of summons
on the secretary's wife did not confer jurisdiction over the
corporation in the foreclosure proceeding against it. Hence, the
decree of foreclosure and de iciency judgment were void and should
be vacated. (Reader v. District Court, 94 Paci ic 2nd 858).
The purpose is to render it reasonably certain that the corporation
will receive prompt and proper notice in an action against it or to
insure that the summons be served on a representative so integrated
with the corporation that such person will know what to do with the
legal papers served on him. In other words, ‘to bring home to the
corporation notice of the iling of the action'. (35A C.J.S. 288 citing
Jenkins v. Lykes Bros. S.S. Co., 48 F. Supp. 848; MacCarthy v. Langston,
D.C. Fla., 23 F.R.D. 249)," (Underscoring supplied)
It is not disputed that Deputy Sheriff Pre did not comply and did not
attempt to comply with the requirement of Section 13 of Rule 14.
Since personal service of summons was clearly not effected upon
Good Earth, we come to the question of whether the substituted
service by publication purported to have been effected by the trial
court in Civil Case No. 5552-P was proper and effective to vest
jurisdiction upon such court over the person of Good Earth.
The irst point that must be made in this connection is that the
propriety of service of summons by publication is not dependent
upon the technical characterization of the action being initiated as
an action in rem or quasi in rem. The propriety of service by
publication is dependent, rather, upon compliance with the
requirements of the applicable provisions of the Rules of Court. We
note secondly, that service of summons by publication may be
allowed under Rule 14 of the Revised Rules of Court in three (3)
different situations. The irst is the situation of an "unknown
defendant" addressed by Section 16 of Rule 14:
"Sec. 16. Service upon an unknown defendant. -- Whenever the
defendant is designated as an unknown owner, or the like, or
whenever the address of a defendant is unknown and cannot be
ascertained by diligent inquiry, service' may, by leave of court, be
effected upon him by publication in a newspaper of general
Based on Syllabus of Dean Monteclar  By RGL  62 of 95
 
circulation and in such places and for such time as the court may
order." (Underscoring supplied)
The second refers to situations where "extraterritorial service" is
proper. This kind of situation is governed by Section 17 of Rule 14:
"Sec. 17. Extraterritorial service. -- When the defendant does not
reside and is not found in the Philippines and the action affects the
personal status of the plaintiff or relates to, or the subject of which
is, property within the Philippines, in which the defendant has or
claims a lien or interest, actual or contingent, or in which the relief
demanded consists, wholly or in part in excluding the defendant
from any interest therein, or the property of the defendant has been
attached within the Philippines, service may, by leave of court, be
effected out of the Philippines by personal service as under section
7; or by publication in a newspaper of general circulation in such
places and for such time as the court may order, in which case a
copy of the summons and order of the court shall be sent by
registered mail to the last known address of the defendant, or in any
other manner the court may deem suf icient. Any order granting
such leave shall specify a reasonable time, which shall not be less
than sixty (60) days after notice, within which the defendant must
answer." (Underscoring supplied)
The third situation is that of a resident of the Philippines who is
temporarily out of the Philippines and who may be served with
summons by publication under Section 18:
"Sec. 18. Residents temporarily out of the Philippines. -- When an
action is commenced against a defendant who ordinarily resides
within the Philippines, but who is temporarily out of it, service may,
by leave of court, be effected out of the Philippines, as under the
preceding section." (Underscoring supplied)
Even a cursory examination of Sections 16, 17 and 18 of Rule 14
above will at once reveal that, if at all, service of summons by
publication upon Good Earth could only be done under Section 16.
Section 17 can ind application only where the defendant is both a
non-resident and not actually found in the Philippines. Since Good
Earth is a corporation organized under the Philippine law, it cannot
be regarded as a non-resident corporation. Section 18, upon the
other hand, appears to contemplate a defendant who is a natural
person. In any case, petitioner did not pretend that Good Earth was
at any time temporarily out of the Philippines, assuming such a
condition were possible.
Section 16 itself covers two (2) distinguishable situations: where
the identity of the defendant is unknown; and where the address of
the defendant is unknown. Under Section 16, therefore, petitioner
must show that the address of Good Earth was “unknown” and that
such address "[could] not be ascertained by diligent inquiry."
In the case at bar, petitioner acted as if the address of Good Earth
was "unknown." Petitioner claimed that Good Earth could not be
found at 666 Muelle de Binondo, Manila, the address appearing in
the Transfer Certi icate of Title No. 191048 issued in the name of
Good Earth. As afore-stated, Deputy Sheriff Pre stated in his Return
that he had tried to serve summons upon Good Earth at the
mentioned address three (3) times, i.e., on March 25, 27 and 30,
1977. This Return appears to suggest that the Sheriff went to 666
Muelle de Binondo, Manila, three (3) times. The correctness of this
suggestion in the Sheriff's Return is open to serious doubt
considering that, in the allegation of Good Earth not denied by
petitioner, the Sheriff received the summons and copy of the
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
complaint only on 29 March 1977. The sum total of what the Sheriff
actually did, was to ask a security guard he found at 666 Muelle de
Binondo and this security guard apparently pointed to the building
directory where the name of Good Earth did not appear. It is argued
by Good Earth that had the Sheriff inquired at any of the of ices
actually found in the building at 666 Muelle de Binondo, he would
have found Good Earth which is a corporation owned or controlled
by the Ching family, considering that all the corporations quartered
at 666 Muelle de Binondo are Ching family corporations. Good
Earth, in other words, did not dispute that 666 Muelle de Binondo,
Manila was its correct corporate address. We do not believe,
therefore, that the address of Good Earth could be regarded as
"unknown" within the meaning of Section 16 of Rule 14.
More importantly, we do not believe that the acts of Deputy Sheriff
Pre satis ied the standard of "diligent inquiry" established by
Section 16 of Rule 14. Deputy Sheriff Pre should have known what
every law school student knows, that Good Earth being a domestic
corporation must have been registered with the Securities and
Exchange Commission and that the SEC records would, therefore,
reveal not just the correct address of the corporate headquarters of
Good Earth but also the addresses of its directors and other
of icers.[8] We believe and so hold that a litigant or process server
who has not gone through the records of the SEC cannot claim to
have carried out the "diligent inquiry" required under Section 16 of
Rule 14 of the Revised Rules of Court for valid service of summons
by publication upon a domestic corporation.
It remains to note the celerity with which petitioner Artemio
Baltazar, Deputy Sheriff Pre and the Judge of the trial court acted in
going through the motions of serving summons by publication upon
Good Earth. Deputy Sheriff Pre, as noted earlier, received the
summons for delivery on 29 March 1977. He attempted to serve the
summons on 30 March 1977. Two (2) days later, on 1 April 1977,
Deputy Sheriff Pre executed his Return of the summons. On the
same day, petitioner Baltazar iled an Ex-Parte Motion for leave to
serve summons by publication. On 4 April 1977, the trial court
granted Baltazar's Motion and ordered summons by publication.
This notable dispatch appears quite inconsistent with any claim
that petitioner and Deputy Sheriff Pre had exercised reasonable
diligence in trying to discover the address of Good Earth. It may be
noted, inally, that the record does not show that Baltazar sent a
copy of the summons and the order for publication to Good Earth by
registered mail to its last known address which was 666 Muelle de
Binondo, Manila, as required by Section 21 of Rule 14, Revised Rules
of Court.
We hold that the purported service of summons by publication
upon Good Earth in Civil Case No. 5552-P was legally and
constitutionally vitiated and hence invalid and ineffective to vest
jurisdiction over the person of Good Earth upon the trial court, and
that the judgment there rendered by that court was null and void. It
vested no rights upon Baltazar and imposed no liabilities or
burdens upon Good Earth. We agree with the respondent Court of
Appeals that the trial court in Civil Case No. PQ-7410-P fell into
profound error in not setting aside and annulling the judgment of
the trial court in Civil Case No. 5552-P.
We turn to the question of the rights, if any, of the vendees of
petitioner Baltazar. Their rights as such are, of course, dependent
upon the rights of their vendor Baltazar. Since Baltazar acquired no
rights in respect of the land here involved, he had none to transmit
to his vendees. The question then arises as to whether or not
Baltazar's vendees, who according to Baltazar were purchasers in
good faith, had acquired any rights independent of the acts of
petitioner Baltazar.
Based on Syllabus of Dean Monteclar  By RGL  63 of 95
 
We must observe, at the outset that Baltazar's vendees have not
proved their status as purchasers in good faith and for value of the
land which Baltazar had no right to sell. The burden of proving the
status of a purchaser in good faith and for value lies upon him who
asserts that status. In discharging that burden, it is not enough to
invoke the ordinary presumption of good faith i.e., that everyone is
presumed to act in good faith. The good faith that is here essential
is integral with the very status which must be proved.
The Court must stress next that whatever rights Baltazar's vendees
might have had cannot be superior to the rights of Good Earth, who
was at all relevant times lawful registered owner of the subject
parcels of land, and who had not been negligent in any manner and
indeed had not performed any act which gave rise to or any
occasion for any claim of right by third persons. Good Earth was,
moreover, itself a purchaser in good faith from the
successors-in-interest of the original title holder, Lorenzo Molera.
The case of C.N. Hodges v. Dy Buncio & Co., Inc.[9] relied upon by the
respondent Court of Appeals is particularly instructive, the facts
there being closely similar to the facts here. There, Veronica Bareza,
a former owner of Lot No. 3329 of the cadastral survey of Iloilo who
had already sold said lot, went to the Court of First Instance of Iloilo
acting as cadastral court and there wove a long and false story
about having sold and subsequently reacquired said piece of land,
about a lost deed of sale and lost certi icate of title, about the parcel
of land being foreclosed and bought at public auction by respondent
Dy Buncio & Co., Inc. without her knowledge. She asked for the
cancellation of the TCT standing in the name of Dy Buncio & Co., Inc.
and for issuance of a new transfer certi icate of title in her name.
The trial court, after publication of her petition in a newspaper of
general circulation and after ex-parte proceedings, no oppositors
having appeared, ordered cancellation of the certi icate of title in
the name of Dy Buncio & Co., Inc. and issuance of another transfer
certi icate of title instead in the name of Veronica Bareza. Upon
issuance of a TCT in her name, Veronica promptly sold the land to
Mr. Hodges who in turn obtained a certi icate of title in his name.
Four (4) years later, Dy Buncio & Co., Inc. became aware of what
Veronica had done and commenced action against both Mr. Hodges
and Veronica Bareza to set aside the certi icates of title issued to Mr.
Hodges and to revalidate, as it were, its own title. The trial court
ordered the cancellation of the TCTs in the name of Mr. Hodges and
of Veronica Bareza and declared the TCT in the name of Dy Buncio &
Co., Inc. as valid, ef icacious and subsisting. On appeal from a
decision of the Court of Appeals af irming the judgment of the trial
court, the Supreme Court, through Mr. Justice Sabino Padilla, said:
"The claim of indefeasibility of the petitioner's title under the
Torrens land title system would be correct if previous valid title to
the same parcel of land did not exist. The respondent had a valid
title (transfer certificate of title No. T-15148 later on changed to No.
T-4768) to the parcel of land (Lot No. 3329) issued to it on 10
January 1936 after purchasing the parcel of land at public auction
sale. It never parted with it; it never handed or delivered to anyone
its owner's duplicate of the transfer certificate of title; it could not be
charged with negligence in the keeping of its duplicate certificate of
title or with any act which could have brought about the issuance of
another certificate upon which a purchaser in good faith and for
value could rely. If the petitioner's contention as to indefeasibility of
his title should be upheld, then registered owners without the least
fault on their part could be divested of their title and deprived of their
property. Such disastrous results which would shake and destroy the
stability of land titles had not been foreseen by those who had
endowed with indefeasibility land titles issued under the Torrens
system. Veronica Bareza perpetrated the fraud by making false
representations in her petition and the title issued to her being the
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
product of fraud could not vest in her valid and legal title to the
parcel of land in litigation. As she had no title to the parcel of land, in
the same way that a thief does not own or have title to the stolen
goods, she could not transmit title which she did not have nor possess.
Moreover, the petitioner cannot claim not to be at fault in the
purchase of the parcel of land from his co-defendant Veronica
Bareza, to say it mildly, or he cannot be deemed to be a purchaser in
good faith and for value, because as correctly found by the Court of
Appeals he is not an innocent purchaser:
[10]
x x x x x x x x x.”
(Underscoring supplied)
Much the same position was reached in the recent case of Treasurer
of the Philippines v. Court of Appeals.[11] The private respondent
spouses bought from a person identifying himself as Lawaan Lopez
a parcel of land in Quezon City, which he claimed was his property
for P98,700.00. The purported vendor iled a petition with the
Court of First Instance of Quezon City for issuance of a duplicate
certi icate of title, alleging that his certi icate of title had been
burned in his house in Divisoria. His petition was granted after
hearing, without any opposition, and upon issuance of the new
duplicate certi icate of title, the purported vendor executed a deed
of sale in favor of respondent spouses who paid the stipulated price
in full and who thereupon obtained the corresponding TCT in their
names after cancellation of the duplicate certi icate in the name of
Lawaan Lopez. Two (2) years later, the real Lawaan Lopez appeared
and iled a petition in court to declare as null and void the transfer
of her land to private respondents upon the ground that it had been
made by an impostor. After trial, the questioned deed of sale and
the duplicate certi icate of title issued to the impostor as well as the
TCT in the names of the respondents, were cancelled and annulled
and the certi icate of title of the true Lawaan Lopez was revalidated.
Private respondents subsequently brought an action for damages
against the impostor and the Treasurer of the Philippines as
custodian of the Assurance Fund. The trial court and the Court of
Appeals ruled in their favor and held the Assurance Fund
subsidiarily liable for damages. This Court, on petition for review,
set aside the decision of the Court of Appeals and held the
Assurance Fund not liable because private respondents had
acquired no rights to the land involved as a result of the purported
sale to them by the impostor. Mr. Justice Cruz, speaking for the
Court, said —
"[R]ecovery from the Assurance Fund could be demanded [under
Section 101 of Act No. 496] by:
'x x x x x x x x x
'2) Any person who has been deprived of any land or any interest
therein under the following conditions:
“a) that there was no negligence on his part;
“b) that he was deprived as a consequence of the bringing of his
land or interest therein under the provisions of the Property
Registration Decree; or by the registration by any other persons as
owner of such land; or by mistake, omission or misdescription in
any certi icate or owner's duplicate, or in any entry or
memorandum in the register or other of icial book, or by any
cancellation; and
Based on Syllabus of Dean Monteclar  By RGL  64 of 95
 
c) that he as barred or in any way precluded from bringing an
action for the recovery of such land or interest therein, or claim
upon the same." '
A careful reading of the above provision will readily show that the
private respondents do not come under either of the two situations
above mentioned.
x x x x x x x x x
The petition correctly points out that such sale conveyed no title or
any interest at all to them for the simple reason that the supposed
vendor had no title or interest to transfer. He was not the owner of
the land. He had no right thereto he could convey. Manifestly, the
deception imposed upon them by the impostor deprived the private
respondents of the money they delivered to him as consideration of
the sale. But there is no question that the subsequent cancellation of
the sale did not deprive them of the land subject thereof, or of any
interest therein, for they never acquired ownership over it in the first
place.
The private respondents argue that from the time the new transfer
certi icate of title was issued in their name on January 28, 1965,
until it was cancelled on October 12, 1967, they were the true and
exclusive owners of the disputed property. Hence, the cancellation
of their title on the latter date had the effect of depriving them of
the said land and so entitles them now to proceed against the
Assurance Fund.
The flaw in this posture is that the real Lawaan Lopez had her own
genuine certificate of title all the time and it remained valid despite
the issuance of the new certificate of title in the name of the private
respondents. That new certificate, as the trial court correctly
declared, was null and void ab initio, which means that it had no legal
effect whatsoever and at any time. The private respondents were not
for a single moment the owner of the property in question and so
cannot claim to have been unlawfully deprived thereof when their
certi icate of title was found and declared to be a total nullity.
x x x x x x x x x.”[12]
(Underscoring supplied)
We might assume for the moment and for purposes of argument
only that Baltazars vendees had successfully proven they were
purchasers in good faith and for value. Even so, as between two
persons both of whom are in good faith and both innocent of any
negligence, the law must protect and prefer the lawful holder of
registered title over the transferee of a vendor bereft of any
transmissible rights. Under the foregoing principle derived from
the above case law, Baltazar's vendees have no rights as against
Good Earth. Their recourse is against Baltazar himself.
WHEREFORE, the Petition for Review is DENIED and the Decision
dated 14 January 1987 of the Court of Appeals in C.A. - G.R. CV No.
00104 is AFFIRMED. Costs against petitioners.
SO ORDERED.
Fernan, C.J., (Chairman), Gutierrez, Jr., Bidin, and Cortes, JJ., concur.
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
RULE 15 Motions  By letter dated February 25, 1977, through the law irm of Ozaeta,
RULE 16 Motion to Dismiss
27 Lingner and Fisher v IAC, 125 SCRA 522  was interested in continuing business relationship with PHILCHEM
210 Phil. 438
FIRST DIVISION  (6) calendar months beginning March 1, 1977 to expire
G. R. No L-63557, October 28, 1983  automatically on August 31, 1977 if no contract is entered into. The
LINGNER  &  FISHER  GMBH,  PETITIONER,  VS. 
INTERMEDIATE  APPELLATE  COURT,  HON.  RICARDO  L. 
PRONOVE,  JR.  AND  PHILIPPINE  CHEMICAL  On July 20, 1979, PHILCHEM presented a claim to LINGNER for
LABORATORIES, INC., RESPONDENTS. 
 
R E S O L U T I O N  Rizal. The summons issued could not be served on BEECHAM, the
MELENCIO-HERRERA, J.:
The factual background of this case may be stated as follows:
DEUTCHE MILCHWERKE DR. A. SAUER (DMW, for brevity) was a
irm in West Germany manufacturing PRODUCTS (probably
chemicals) under the trademarks FISSAN, etc. Private respondent
Philippine Chemical Laboratories, Inc. (PHILCHEM, for brevity) is a
local company which apparently also manufactures and sells
chemicals.
On February 28, 1963, DMW and PHILCHEM executed a so-called
Agency AGREEMENT the basic provision of which was that
PHILCHEM would be the exclusive importer of the PRODUCTS into
the Philippines. The bene it to PHILCHEM would be the pro its
realized from re-sale in this country of imported PRODUCTS. Other
relevant provisions, generally stated, were that:
(a) The term of the AGREEMENT was ive years
renewable automatically for ive years each time
unless one party gives due notice of termination to
the other.
(b) PHILCHEM could manufacture the PRODUCTS locally
with raw materials from sources other than
LINGNER, but in such case DMW will have to be paid
5% of 80% of PHILCHEM's wholesale prices.
(c) After termination of the AGREEMENT, PHILCHEM
will be entitled, for ive years, to 10% royalty on
sales of PRODUCTS in the Philippines (hereinafter to
be referred to as the ROYALTY CLAUSE).
(d) "All legal settlements within the compass of this AGREEMENT
shall fall under the jurisdiction of Philippine courts".
It appears that, subsequently, the DMW interests were acquired by
LINGNER & FISHER GMBH (LINGNER, for brevity). On the other
hand, LINGNER was a subsidiary of BEECHAM GROUP LTD. which,
through BEECHAM PRODUCTS INTERNATIONAL (BEECHAM, for
brevity), had opened an of ice in this country at Unit A, Padilla
Building, Emerald Avenue, Pasig, Metro Manila, under the
supervision or managership of one named TANNER. LINGNER and
BEECHAM can be deemed to constitute a single personality.
Subsequent reference to LINGNER will include reference to DMW
and BEECHAM.
The AGREEMENT was automatically renewed once, or up to
February 28, 1973, and inally terminated on August 31, 1977. The
events relative to the termination were as follows:
Before February 28, 1973, the parties agreed to extend the
AGREEMENT up to February 28, 1975. If it is not terminated by
prior notice six months before February 28, 1975, as it was not, it
would be extended for a further two years up to February 28, 1977.
Based on Syllabus of Dean Monteclar  By RGL  65 of 95
 
Romulo, De Leon, Mabanta, Buenaventura, Sayoc and De los Angeles
(the Law Firm, for brevity) PHILCHEM was advised that LINGNER
and will be interested in negotiating a new contract and that, prior
to the signing of a new contract, LINGNER was proposing that the
old contract be extended by mutual agreement for a period of six
proposal was accepted by PHILCHEM, and no new contract having
been signed by August 31, 1977, the AGREEMENT terminated on
that date.
P1,055,000.00 under the ROYALTY CLAUSE. The claim was
discussed between PHILCHEM and TANNER of BEECHAM with the
intervention of the Law Firm. No settlement having been arrived at,
PHILCHEM, on August 6, 1980, iled a complaint against BEECHAM
alone in Civil Case No. 38086 of the then Court of First Instance of
Sheriff having reported that BEECHAM was neither a company
registered in the Philippines, nor resident at the given address of
Unit A, Padilla Building, Emerald Avenue, Pasig, Metro Manila.
PHILCHEM then iled an amended complaint, this time making
LINGNER and BEECHAM as the defendants, and pleading that
summons could be served on the law Firm as an agent of the
defendants. The Law Firm submitted a special appearance in the
case on behalf of LINGNER, and, also on behalf of LINGNER, moved
for dismissal on the grounds (a) that LINGNER was not a foreign
corporation doing business in the Philippines and hence could not
be sued locally, and, (b) that LINGNER could not be served with
summons through the Law Firm. It will thus be noted that two
issues were being raised. The irst was whether or not LINGER was
doing business in the Philippines; and the second was whether or
not LINGNER could be validly summoned through the Law Find as
its agent. The Trial Court denied the Motion to Dismiss, assuming
that LINGNER could be sued in this jurisdiction, and holding that
LINGNER can be served with summons through the Law Firm.
LINGNER went on certiorari to the Intermediate Appellate Court
where it reiterated the plea that summons could not be validly
served on it through the Law Firm; and it also requested that a
hearing be held, conformably to the provisions of Section 9(3) of
Batas Pambansa Blg. 129, on the question of whether or not
LINGNER was doing business in this country.
The Appellate Court held that summons served through the Law
Firm was valid on the strength of Johnlo Trading Co. vs. Flores (88
Phil. 741 [1951]); and it further ruled that receiving evidence on
whether or not LINGNER was doing business in the Philippines
could not be justi ied under the cited Batas Pambansa Blg. 129.
Considering the Comment, Reply, Rejoinder and Sur-rejoinder
submitted by the parties, we resolved to give due course, without
requiring the submittal of memoranda.
The Appellate Court acted correctly in denying the request for an
evidentiary hearing. Evidence necessary in regards to factual issues
raised in cases falling within the Appellate Court's original and
appellate jurisdiction contemplates "incidental" facts which were
not touched upon, or fully heard by the trial or respondent Court.
The law could not have intended that the Appellate Court would
hold an original and full trial of a main factual issue in a case, which
properly pertains to Trial Courts.
It is our view that evidence as to whether LINGNER was doing
business in the Philippines, even before the Trial Court, is no longer
necessary view of the fact that PHILCHEM and LINGNER were
contractees in the AGREEMENT and the claim of PHILCHEM is
based on the ROYALTY CLAUSE of that AGREEMENT. Whether
LINGNER is or is not doing business in the Philippines will not
matter because the parties had expressly stipulated in the
AGREEMENT that all controversies based on the AGREEMENT "shall
 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

fall under the jurisdiction of Philippine courts". In other words,
there was a covenant on venue to the effect that LINGNER can be
sued by PHILCHEM before Philippine Courts in regards to a
controversy related to the AGREEMENT.
A case should not be dismissed simply because an original
summons was wrongfully served. It should be dif icult to conceive,
for example, that when a defendant personally appears before a
Court complaining that he had not been validly summoned, that the
case iled against him should be dismissed. An alias summons can
be actually served on said defendant.
For the expeditious determination of this controversy, therefore, in
view of the insuf iciency of evidence that LINGNER is doing
business in the Philippines, which is a sine qua non requirement
under the provision of Section 14, Rule 14[1] of the Rules before
service of process can be effected upon foreign corporation and
jurisdiction over the same may be acquired, it is best that alias
summons on LINGNER be issued, in this case under the provisions
of Section 17, Rule 14,[2] in relation to Rule 4 of the Rules of Court,
which recognizes the principle that venue agreed by the parties. If a
local plaintiff and a foreign corporation have agreed on Philippine
venue, summons by publication can be made on the foreign
corporation under the principle of liberal construction of the rules
to promote just determination of actions.
ACCORDINGLY, the judgment under review of the Intermediate
Appellate Court (Third Special Cases Division) is hereby upheld
insofar as it sustained the Orders, dated August 24, 1981 and
December 18, 1981, of the then Court of First Instance of Rizal,
Branch XI, Pasig, denying petitioner's Motion to Dismiss and the
subsequent Motion for Reconsideration, albeit on grounds different
from those relied upon by the Intermediate Appellate Court. The
now Regional Trial Court, to which the case below has been
assigned, is hereby directed to allow private respondent Philippine
Chemical Laboratories, Inc., to apply for the issuance of alias
summons on petitioner Lingner and Fischer GMBH by publication
under the provisions of Section 17, Rule 14 in relation to Rule 4 of
the Rules of Court, and after issues have been joined, to proceed to
trial and judgment accordingly.
No pronouncement as to costs.
SO ORDERED.
Teehankee, (Chairman), Plana, Relova, and Gutierrez, Jr., JJ., concur.
28 De Midgely v Ferandos, L-34314, 13 May 1975  Foreign Affairs and the Philippine Embassy in Madrid, Spain, which
159-A Phil. 314
SECOND DIVISION 
G. R. No. L-34314, May 13, 1975  Alvaro Pastor, Jr. and Mrs. Midgely, in their respective letters to the
SOFIA  PASTOR  DE  MIDGELY,  PETITIONER  VS.  THE  the service of summons but reserved the right to contest the court's
HONORABLE  PIO  B.  FERANDOS,  JUDGE  OF  THE  COURT  jurisdiction over their persons. The Minister-Counselor of the
OF  FIRST  INSTANCE OF CEBU, BRANCH IX AND LEWELYN  Embassy forwarded those letters to the Clerk of Court and apprised
BARLITO  QUEMADA,  SPECIAL  ADMINISTRATOR  OF  THE 
TESTATE  AND  INTESTATE ESTATE OF ALVARO PASTOR Y 
TATO, RESPONDENTS.  Through counsel, Mrs. Midgely and the Pastor, Jr. spouses entered a
 
D E C I S I O N 
AQUINO, J.:
So ia Pastor de Midgely, a British subject residing at Cura Planelles,
10 Cura Jardin, Alicante, Spain, iled this special civil action of
certiorari against Judge Pio B. Ferandos and Lewelyn Barlito
Quemada in order to set aside the Judge's order dated May 8, 1971
which denies her motion to dismiss based on lack of jurisdiction
and on article 222 of the Civil Code.
She prays for a declaration that the Court of First Instance of Cebu,
Toledo City, Branch IX has no jurisdiction over her person and
properties and for the dismissal of the complaint against her in Civil
Case No. 274-T of that court. The ultimate facts found in the prolix
pleadings are as follows:
Alvaro Pastor, Sr., a Spanish citizen, was allegedly the owner of
properties and rights in mining claims located in Cebu and
supposedly held in trust by his son, Alvaro Pastor, Jr., and his
daughter-in-law, Maria Elena Achaval-Pastor. Pastor, Sr. died on
June 5, 1966. He was survived by his wife, So ia Pastor y Bossio
(who died on October 21, 1966) and by his two legitimate children,
Mrs. Midgely and Alvaro Pastor, Jr. Respondent Quemada claims to
be his illegitimate child.
Alvaro Pastor, Sr. in his supposed holographic will dated July 31,
1961 devised to Lewelyn Barlito Quemada thirty percent of his
forty-two percent share in certain mining claims and real
properties. In 1970 the alleged will was presented for probate in
Special Proceedings No. 3128-R assigned to Branch I in Cebu City of
the Court of First Instance of Cebu. Quemada was appointed special
administrator of the decedent's estate.
As such administrator and as heir of Alvaro Pastor, Sr., Quemada
iled in the Court of First Instance of Cebu at Toledo City a complaint
dated December 7, 1970 against the spouses Alvaro Pastor, Jr. and
Maria Elena Achaval, Mrs. Midgely, Atlas Consolidated Mining and
Development Corporation and Caltex (Philippines), Inc. to settle the
question of ownership over certain real properties and the rights in
some mining claims, to obtain an accounting and payment of the
royalties and income thereof and for the payment of damages
amounting to P25,000. Quemada's theory is that those properties
and income belong to the estate of Alvaro Pastor, Sr.
Allegedly without complying with the requirements of Rule 14 of
the Rules of Court, Quemada caused extraterritorial service of
summons to be made in that case through the Department of
effected the service of the summons by registered mail upon Mrs.
Midgely and the Pastor, Jr. spouses at their respective addresses in
Alicante and Barcelona, Spain.
Philippine Embassy dated February 11 and 12, 1971, acknowledged
him of the manner the summons was served.
special appearance and iled a motion to dismiss on the ground of
lack of jurisdiction. They contended that as non-residents they
could be summoned only with leave of court and that the
requirements laid down in section 17 of Rule 14 should have been
observed. As additional ground, they alleged that the complaint
does not show that earnest efforts toward a compromise have been
made, as required in article 222 of the Civil Code in suits between
members of the same family (Sec sec. 1[j], Rule 16, Rules of Court).
Quemada opposed the motion to dismiss.

Based on Syllabus of Dean Monteclar  By RGL  66 of 95 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
As already stated, Judge Ferandos denied the motion. He ruled that
Mrs. Midgely and the Pastor, Jr. spouses had been properly
summoned. He opined that article 222 was inapplicable to the case
because Quemada's civil status was involved and article 2035 of the
Civil Code prohibits a compromise on a person's civil status. He
gave Mrs. Midgely and the Pastor, Jr. spouses seventy days from
February 12, 1971 within which to ile their answer, deducting from
that period the time from March 10 to May 8, 1971 when their
motion to dismiss was pending.
Mrs. Midgely's motion for reconsideration of the order denying her
motion to dismiss was denied by Judge Ferandos in his order of
September 27, 1971 wherein he ruled that the action iled by
Quemada was for the recovery of real properties and real rights. He
gave Mrs. Midgely and the Pastor, Jr. spouses sixty days from notice
within which to answer the complaint and directed that a copy of
his order be sent to them through the Philippine Embassy in
Madrid. The petition for certiorari herein was iled on November 3,
1971.
It was given due course. Respondent Quemada in his answer
alleged that inasmuch as his action against Mrs. Midgely concerns
property located here in which she claims an interest, it is not
necessary that jurisdiction over her person be acquired. The
service of summons upon her was not for the purpose of acquiring
jurisdiction over her person but merely as a matter of due process.
Quemada alleged that as administrator he has been in actual
possession of two parcels of land owned by Alvaro Pastor, Jr. located
at Biga, Toledo City with areas of 55.3 hectares and 5,225 square
meters, respectively. They were included in the inventory
submitted by him to the probate court in the testate proceeding for
his putative father's estate. His answer contains annexes attesting
to his efforts to recover possession of the other properties of the
decedent.
In the meantime the spouses Alvaro Pastor, Jr. and Maria Elena
Achaval iled a veri ied answer to the complaint in Civil Case No.
274-T dated December 5, 1971. Their answer was iled through the
same counsel who has been representing Mrs. Midgely. The said
spouses alleged that they were not waiving their defense of lack of
jurisdiction over their persons and over the subject matter of the
action. They claimed to be the owners of the properties described
in the complaint.
It should be noted that in the testate proceeding Mrs. Midgely and
Alvaro Pastor, Jr. had iled a veri ied opposition dated January 26,
1971. They prayed for the dismissal of the proceeding. (The
holographic will was probated in the lower court's order of
December 5, 1972 which was appealed to the Court of Appeals by
Mrs. Midgely and Alvaro Pastor, Jr., CA-G.R. No. 52961-R).
On May 10, 1972, this Court issued a writ of preliminary injunction
suspending all proceedings in Civil Case No. 274-T.
Contempt incident. — That writ of preliminary injunction spawned
the contempt incident in this case. Mrs. Midgely in a motion dated
March 26, 1974 charged that Quemada committed "unlawful
interference of the case under injunction" and tried to circumvent
the writ (1) by taking possession of two parcels of land in Toledo
City and (2) by asking the probate court to stop Atlas Consolidated
Mining and Development Corporation from remitting to Mrs.
Midgely and the Pastor, Jr. spouses the landowner's share of the
Based on Syllabus of Dean Monteclar  By RGL  67 of 95
 
income from the Toledo City properties, with the result that the
probate court ordered the payment of said income to Quemada.
Quemada in his opposition to the motion countered that he had
maintained the status quo in Civil Case No. 274-T, as decreed in the
writ of preliminary injunction; that the overseer delivered in 1971
the possession of the two parcels of land to him in his capacity as
administrator or before the issuance of the writ, and that the order
of Judge Juan Y. Reyes in Special Proceedings. No. 3128-R did not
constitute an interference with Civil Case No. 274T which was
assigned to Judge Ferandos.
Quemada through counsel iled a counter-charge for contempt
against Abelardo Cecilio, the counsel of Mrs. Midgely, for having
made false and malicious statements in his motion to declare
Quemada in contempt of court. Quemada was referring to Atty.
Cecilio's allegations that the writ of preliminary injunction was
intended to prevent Quemada from taking possession of the
properties involved in Civil Case No. 274-T and that,
notwithstanding the writ, he took possession of the aforementioned
two parcels of land. Quemada in his memorandum further charged
Cecilio with purporting to represent Alvaro Pastor, Jr. in this case
although the latter is not a party herein.
Quemada branded the acts of Cecilio as misbehavior of an of icer of
the court and as improper conduct tending to degrade and obstruct
the administration of justice. Quemada later manifested that he had
turned over to Atty. Cecilio the two checks for the landowner's share
of the income from the Toledo City properties.
The contempt charges were investigated by the Legal Of icer of this
Court. After going over the record, we ind that both contempt
charges are devoid of merit.
The writ issued by this Court enjoined Judge Ferandos and
Quemada "from holding hearings, trial and proceedings and/or
from further proceeding with Civil Case No. 274-T". It froze that
case. It was a preventive injunction.
The undisputed fact is that in February, 1971 Quemada as
administrator was already in possession of the two parcels of land
located in Toledo City. The fact that he continued to remain in
possession after the injunction was issued on May 10, 1972 (Exh.
16) was not a violation of the injunction which was not mandatory
in character.
As to the attempt of Quemada in Special Proceeding No. 3128-R in
his capacity as administrator to get hold of the landowner's share of
the income derived from the properties involved in Civil Case No.
274-T, it is apparent that he did so in good faith and on the advice of
his lawyer who actually iled the necessary motion.
The probate court at irst upheld his right to receive that income.
Later he complied with the court's order to turn over the checks to
the counsel of Alvaro Pastor, Jr. Inasmuch as that incident
transpired in the testamentary proceeding and as Quemada
committed the alleged contemptuous act through his counsel, the
same cannot be properly characterized as a willful interference with
the injunction issued by this Court in Civil Case No. 274-T.
On the other hand, Atty. Cecilio's free-wheeling allegations in his
motion to declare Quemada in contempt of court, which averments
were tailored to support his notion that Quemada circumvented the
 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

injunction, may be viewed simply as a manifestation of a lawyer's
propensity to slant the presentation of his client's case so that it
would appear to be meritorious. Such a tactic is generally tolerated
by understanding judges. They are not deceived by the
exaggerations and distortions in a counsel's lopsided submission of
his client's case especially where, as in this case, the alert opposing
counsel calls the court's attention to that fact.
"Contempt of court presupposes a contumacious attitude, a louting
or arrogant belligerence, a de iance of the court" (Matutina vs. Judge
Buslon and the Sheriff of Surigao, 109 Phil. 140, 142). It is an offense
against the authority and dignity of the court. That is not true in
this case. The contempt charges should be dismissed.
The certiorari case.— The petitioner injected into this case issues
which involve the merits of Quemada's action for reconveyance of
certain properties and which are not germane to the instant
certiorari action. Those issues will be resolved by the lower court in
the main case.
The only legal issue to be resolved is whether Judge Ferandos
gravely abused his discretion in denying Mrs. Midgely's motion to
dismiss based on the grounds of (a) lack of jurisdiction over her
person and (b) lack of a showing that earnest efforts were exerted
to effect a compromise.
The said order is interlocutory. It could eventually be reviewed in
the appeal in the main case. While this Court generally does not
entertain a petition for certiorari questioning the propriety of an
interlocutory order, yet when a grave abuse of discretion has been
patently committed, or the lower court has acted capriciously and
whimsically, then it devolves upon this Court to exercise its
supervisory authority and to correct the error committed (Manila
Electric Co. and Sheriff of Quezon City vs. Hon. Enriquez, etc. and
Espinosa, 110 Phil. 499, 503; Abad Santos vs. Province of Tarlac, 67
Phil. 480).
and separate purpose of objecting to the jurisdiction of the court. If
his motion is for any other purpose than to object to the jurisdiction
of the court over his person, he thereby submits himself to the
jurisdiction of the court. A special appearance by motion made for
the purpose of objecting to the jurisdiction of the court over the
person will be held to be a general appearance, if the party in said
motion should, for example, ask for a dismissal of the action upon
the further ground that the court had no jurisdiction over the
subject matter." (Syllabus, Flores vs. Zurbito, supra, at page 751. That
rule was followed in Ocampo vs. Mina and Arejola, 41 Phil. 308).
Where the defendant contended that the court did not acquire
jurisdiction over his person by means of the publication of the
corresponding summons in Hawaii, where he was residing, because
the action did not relate to personal or real properties situated in
the Philippines in which the defendant had or claimed a lien or
interest, actual or contingent, it was held that the said defendant
nevertheless submitted to the court's jurisdiction when he iled a
motion wherein he contested the court's jurisdiction over his
person and at the same time prayed that he be relieved from the
effects of the judgment by default, attaching to his motion an
af idavit of merits. "He thereby impliedly waived his special
appearance assailing the jurisdiction of the court over his person,
and voluntarily submitted to the jurisdiction of said court."
(Menghra vs. Tarachand and Rewachand, supra. See Tenchavez vs.
Escano, L-19671, September 14, 1966, 17 SCRA 684 and Sharruf vs.
Bubla, L-17029, September 30, 1964, 12 SCRA 79 where it was held
that a nonresident alien, by iling his complaint in a Philippine
court, submits thereby to its jurisdiction and the court acquires
jurisdiction over him even if as a matter of fact he had never been
able to enter the Philippines).
Having shown that Mrs. Midgely had voluntarily submitted to the
lower court's jurisdiction when she iled her motion to dismiss (see
sec. 23, Rule 14, Rules of Court), the inevitable conclusion is that it
did not commit any grave abuse of discretion in denying her motion
to dismiss.

In petitioner's lengthy memorandum and reply she con ined her

We are of the opinion that the lower court has acquired jurisdiction
arguments to the jurisdictional issue. She even argued that the
over the person of Mrs. Midgely by reason of her voluntary
lower court does not have jurisdiction over the res, a contention
appearance. The reservation in her motion to dismiss that she was
that is palpably baseless.
making a special appearance to contest the court's jurisdiction over
her person may be disregarded.
She did not discuss the second ground of her motion to dismiss,
which is noncompliance with the requirement of article 222 of the
It may be disregarded because it was nulli ied by the fact that in her
Civil Code on compromise of intra-family disputes. She was
motion to dismiss she relied not only on the ground of lack of
presumably convinced by the lower court's argument that such a
jurisdiction over her person but also on the ground that there was
compromise would violate the prohibition in article 2035 of the
no showing that earnest efforts were exerted to compromise the
Civil Code against compromise on a person's civil status (See De
case and because she prayed "for such other relief as" may be
Raquiza vs. Castellvi, L-17630, October 31, 1963, 9 SCRA 395).
deemed "appropriate and proper".

The case may be viewed from another angle. Supposing arguendo

Thus, it was held that where the defendant corporation (which was
that the lower court did not acquire jurisdiction over the person of
not properly summoned because the summons was served upon its
Mrs. Midgely, still her motion to dismiss was properly denied
lawyer) iled a motion to dismiss on the ground of lack of
because Quemada's action against her may be regarded as a quasi in
jurisdiction over its person but in the same motion it prayed for the
rem action where jurisdiction over the person of the nonresident
dismissal of the complaint on the ground of prescription, it was held
defendant is not necessary and where service of summons is
that, by invoking prescription, it necessarily admitted the court's
required only for the purpose of complying with the requirement of
jurisdiction upon its person and, therefore, it was deemed to have
due process (Perkins vs. Dizon, 69 Phil. 186; Banco Espanol-Filipino
abandoned its special appearance and voluntarily submitted itself
vs. Palanca, 37 Phil. 291; Mabanag vs. Gallemore, 81 Phil. 254).
to the court's jurisdiction (Republic vs. Ker & Co., Ltd., 64 O.G. 3761,
18 SCRA 207, 213-214 citing Flores vs. Zurbito, 37 Phil. 746 and
Menghra vs. Tarachand and Rewachand, 67 Phil. 286). An action quasi in rem is an action between parties where the direct
object is to reach and dispose of property owned by them, or of
some interest therein (1 Am Jur 2nd 574; State ex rel South Brevard
"When the appearance is by motion for the purpose of objecting to
the jurisdiction of the court over the person, it must be for the sole
 

Based on Syllabus of Dean Monteclar  By RGL  68 of 95 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
Drainage Dist. vs. Smith, 170 So. 440, 126 Fla. 72). Quemada's action
falls within that category.
With respect to the extraterritorial service of summons to a
nonresident defendant like Mrs. Midgely, Rule 14 of the Rules of
Court provides:
"SEC. 17. Extraterritorial service. — When the defendant does not
reside and is not found in the Philippines and the action affects the
personal status of the plaintiff or relates to, or the subject of which
is, property within the Philippines, in which the defendant has or
claims a lien or interest, actual or contingent, or in which the relief
demanded consists, wholly or in part, in excluding the defendant
from any interest therein, or the property of the defendant has been
attached within the Philippines, service may, by leave of court, be
effected out of the Philippines by personal service as under section
7; or by publication in a newspaper of general circulation in such
places and for such time as the court may order, in which case a
copy of the summons and order of the court shall be sent by
registered mail to the last known address of the defendant, or in any
other manner the court may deem suf icient. Any order granting
such leave shall specify a reasonable time, which shall not be less
than sixty (60) days after notice, within which the defendant must
answer."
Under section 17, extraterritorial service of summons is proper (1)
when the action affects the personal status of the plaintiff; (2) when
the action relates to, or the subject of which is, property within the
Philippines, in which the defendant has or claims a lien or interest,
actual or contingent; (3) when the relief demanded in such an
action consists, wholly or in part, in excluding the defendant from
any interest in property located in the Philippines, and (4) when
defendant nonresident's property has been attached within the
Philippines (Sec. 17, Rule 14, Rules of Court).
In any of such four cases, the service of summons may, with leave of
court, be effected out of the Philippines in three ways: (1) by
personal service; (2) by publication in a newspaper of general
circulation in such places and for such time as the court may order,
in which case a copy of the summons and order of the court should
be sent by registered mail to the last known address of the
defendant, and (3) service of summons may be effected in any other
manner which the court may deem suf icient. That third mode of
extraterritorial service of summons was substantially complied
with in this case.
In Civil Case No. 274-T the subject matter of the action for
reconveyance consists of properties of Alvaro Pastor, Sr. which are
located in Cebu. Mrs. Midgely claims an actual interest in those
properties. She has been receiving a share of the income therefrom.
Therefore, the extraterritorial service of summons upon her was
proper. As already noted, the action against her is quasi in rem.
(See Brown vs. Brown, 113 Phil. 442).
The record does not show whether Judge Ferandos was consulted
by the Clerk of Court and by Quemada's counsel when the service of
summons was effected through the Philippine Embassy in Madrid.
But although there was no court order allowing service in that
manner, that mode of service was later sanctioned or rati ied by
Judge Ferandos in his order of May 8, 1971. In another order he
corrected the defect in the summons by giving Mrs. Midgely the
sixty-day reglementary period for answering the complaint.
Based on Syllabus of Dean Monteclar  By RGL  69 of 95
 
In the Banco Español-Filipino case, supra, the failure of the clerk of
court, in a case of foreclosure of a mortgage executed by a
nonresident defendant (which is an action quasi in rem) to mail to
the defendant's last place of residence copies of the summons and
complaint, as required in section 399 of Act 190 (now section 17 of
Rule 14) was held not to have affected the court's jurisdiction over
the res.
In the Perkins case, supra, Eugene Arthur Perkins sued in the Court
of First Instance of Manila the Benguet Consolidated Mining
Company, a domestic irm, together with Idonah Slade Perkins and
George Engelhard, two nonresidents, who were summoned by
publication. The service of summons was based on section 398 of
Act 190 (from which section 17 of Rule 14 was partly taken) which
provides that service of summons by publication may be made on a
nonresident in "an action which relates to, or the subject of which is,
real or personal property within the Islands, in which such person
defendant or foreign corporation defendant, has or claims a lien or
interest, actual or contingent, or in which the relief demanded
consists wholly or in part in excluding such person or foreign
corporation from any interest therein."
Eugene Arthur Perkins in his complaint prayed that Engelhard and
Idonah Slade Perkins, "be adjudged without interest" in certain
shares of stock of the Benguet Consolidated Mining Company and
be excluded from any claim involving such shares.
Idonah Slade Perkins challenged the court's jurisdiction over her
person. Judge Arsenio P. Dizon overruled her objection. She iled in'
this Court a certiorari proceeding wherein she prayed that the
summons by publication issued against her be declared void and
that Judge Dizon be permanently prohibited from taking any action
in the case.
This Court held that the action iled by Eugene Arthur Perkins
against the two nonresidents was a quasi in rem action and not an
action in personam. In that action plaintiff Perkins sought to
exclude Idonah Slade Perkins from any interest in property located
in the Philippines consisting shares of stock in a domestic sociedad
anomina.
This Court clari ied that in a quasi in rem action jurisdiction over the
person of the nonresident defendant is not essential. The service of
summons by publication is required "merely to satisfy the
constitutional requirement of due process". The judgment of the
court in the case would settle the title to the shares of stock and to
that extent it partakes of the nature of a judgment in rem.
Consequently, the lower court had jurisdiction to try the case even if
it had not acquired jurisdiction over the person of Idonah Slade
Perkins. The judgment would be con ined to the res. No personal
judgment could be rendered against the nonresident.
Other considerations may be adduced to indicate the frivolous
character of Mrs. Midgely's petition for certiorari. There is the
circumstance that she actually received the summons and a copy of
the complaint. Thus, she cannot complain that she was unaware of
the action against her. The requirement of due process has been
satis ied. She is cognizant not only of Quemada's complaint in Civil
Case No. 274-T in Branch IX of the Court of First Instance of Cebu at
Toledo City but also of the testamentary proceeding instituted
earlier by Quemada for the settlement of the estate of Alvaro Pastor,
Sr. in the Cebu City Branch I of the Court of First Instance of Cebu.
In that proceeding she and her brother, Alvaro Pastor, Jr., through
her counsel in this case, submitted to the court's jurisdiction by
iling an opposition to Quemada's petition.
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
It should be noted that Civil Case No. 274-T is related to the
testamentary proceeding (which is a proceeding in rem par
excellence) because the former case was iled by Quemada for the
purpose of recovering the properties which, according to his
understanding belong to the estate of Alvaro Pastor, Sr. and which
are held by Mrs. Midgely and the spouses Alvaro Pastor, Jr. and
Maria Elena Achaval.
WHEREFORE, the contempt charges and the petition for certiorari
are dismissed. Costs against the petitioner. So ordered.
Fernando, (Chairman), Barredo, Antonio, and Concepcion, Jr., JJ.,
concur.
29 La Naval Drug Corp v CA, 236 SCRA 78  Drug Corporation's counterclaim
G.R. No. 103200, August 31, 1994  for damages may be entertained by
LA  NAVAL  DRUG  CORPORATION,  PETITIONER,  VS.  THE 
HONORABLE  COURT  OF  APPEALS  AND  WILSON  C.  YAO, 
RESPONDENTS. 
 
D E C I S I O N  on this issue is deferred after the
VITUG, J.:
In an effort to declog the courts of an increasing volume of work
load and, most importantly, in order to accord contending parties
with expeditious alternatives for settling disputes, the law
authorizes, indeed encourages, out of court settlements or
adjudications. Compromises and arbitration are widely known and
used as such acceptable methods of resolving adversarial claims.
Arbitrations, in particular, is governed by a special law, Republic Act
876, suppletory to which are laws and rules of general application.
This case before us concerns the jurisdiction of courts, in relation to
the provisions of Section 6 of Republic Act No. 876, and, in that
respect, the applicability of the doctrine of estoppel. The law (R.A.
876), speci ically Section 6 thereof, provides:
"SEC. 6. Hearing by court. - A party aggrieved by the failure, neglect
or refusal of another to perform under an agreement in writing
providing for arbitration may petition the court for an order
directing that such arbitration proceed in the manner provided for
in such agreement. Five days notice in writing of the hearing of such
application shall be served either personally or by registered mail
upon the party in default. The court shall hear the parties, and upon
being satis ied that the making of the agreement or such failure to
comply therewith is not in issue, shall make an order directing the
parties to proceed to arbitration in accordance with the terms of the
agreement. If the making of the agreement or default be in issue the
court shall proceed to summarily hear such issue. If the inding be
that no agreement in writing providing for arbitration was made, or
that there is no default in the proceeding thereunder, the
proceeding shall be dismissed. If the inding be that a written
provision for arbitration was made and there is a default in
proceeding thereunder, an order shall be made summarily directing
the parties to proceed with the arbitration in accordance with the
terms thereof.
"The court shall decide all motions, petitions or application iled
under the provisions of this Act, within ten days after such motions,
petitions, or applications have been heard by it."
In chronology, the events that have led to the case at bench are
detailed in the appealed decision of respondent appellate court,
which we here reproduce in toto.
Based on Syllabus of Dean Monteclar  By RGL  70 of 95
 
"Original action for Certiorari and Prohibition for Annulment of the
Orders, dated April 26, 1990 and June 22, 1990, respectively, of
Branch LXI, Regional Trial Court, Angeles City, in Special Case No.
6024 for Enforcement of ARBITRATION Agreement with Damages.
Petitioner assails that portion of subject Order of April 26, 1990,
stating as follows:
"`(1) Petitioner's claim for damages
predicated on alleged tortuous acts
of respondents La Naval Drug
corporation such as their alleged
interference and dilatory tactics,
etc. in the implementation of the
Arbitration Agreement in the
Contract of Lease, thereby
compelling among others the
petitioner to go to Court for
redress; and respondent La Naval
this Court in a hearing - not
summary - for the purpose, under
the Rules of Court.
'(2) a preliminary hearing of the special
and af irmative defense to show
that Petitioner has no cause of
action against respondent's claim
for damages is denied; a resolution
trial of the case on the merits.'
And challenges the Order of June 22, 1990 denying its motion for
reconsideration of the said earlier Order.
"From the petition below of respondent Yao, it appears that he is the
present owner of a commercial building a portion of which is leased
to petitioner under a contract of lease executed on December 23,
1983 with the former owner thereof, La Proveedora, Inc., which
contract expired on April 30, 1989. However, petitioner exercised its
option to lease the same building for another ive years. But
petitioner and respondent Yao disagreed on the rental rate, and to
resolve the controversy, the latter, thru written notices to the
former, expressed his intention to submit their disagreement to
arbitration, in accordance with Republic Act 876, otherwise known
as the Arbitration Law, and paragraph 7 of their lease contract,
providing that:
"'7. x x x Should the parties fail to agree on the rate of rentals, the
same shall be submitted to a group of Arbitrators composed of
three (3) members, one to be appointed by LESSOR, another by
LESSEE and the third one to be agreed upon by the two arbitrators
previously chosen and the parties hereto shall submit to the
decision of the arbitrators.'
"Thus, on May 6, 1989, respondent Yao appointed Domingo
Alamarez, Jr. as his arbitrator, while on June 5, 1989, petitioner
chose Atty. Casiano Sabile as its arbitrator. The con irmation of the
appointment of Aurelio Tupang, as third arbitrator, was held in
abeyance because petitioner instructed Atty. Sabile to defer the
same until its Board of Directors could convene and approve
Tupang's appointment. Respondent Yao theorizes that this was
petitioner's design to delay the arbitration proceedings, in violation
of the Arbitration Law, and the governing stipulations of their
contract of lease.
"On the basis of the aforesaid allegations, respondent Yao prayed
that after summary hearing pursuant to Section 6 of the Arbitration
Law, Atty. Casiano Sabile and Domingo Alamarez be directed to
proceed with the arbitration in accordance with Section 7 of subject
Contract of Lease and the applicable provisions of the Arbitration
Law, by appointing and con irming the appointment of the Third
Arbitrator; and that the Board of Three Arbitrators be ordered to
immediately convene and resolve the controversy before it,
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
pursuant to Section 12 and the succeeding sections of the
Arbitration Law. (Annex 'A,' Petition.)
"In its Answer with Counterclaim (Annex 'C,' Petition), petitioner
here speci ically denied the averments of the petition below;
theorizing that such petition is premature since respondent Yao has
not yet formally required arbitrators Alamarez and Sabile to agree
on the third arbitrator, within ten (10) days from notice, and that
the delay in the arbitration was due to respondent Yao's failure to
perform what is incumbent upon him, of notifying and thereafter,
requiring both arbitrators to appoint the third member of the Board
of Arbitrators. According to petitioner, it actually gave arbitrators
Sabile and Alamarez a free hand in choosing the third arbitrator;
and, therefore, respondent Yao has no cause of action against it
(petitioner). By way of Counterclaim, petitioner alleged that it
suffered actual damages of P100,000.00; and incurred attorney's
fees of P50,000.00, plus P500.00 for every court appearance of its
counsel.
"On October 20, 1989, respondent Yao iled an amended petition for
'Enforcement of Arbitration Agreement with Damages;' praying that
petitioner be ordered to pay interest on the unpaid rents, at the
prevailing rate of interest in commercial banks, and exemplary
damages of at least P250,000.00.
"On October 24, 1989, despite petitioner's opposition to the motion
to admit the amended petition, the respondent court admitted the
same.
"On October 31, 1989, petitioner answered the amended petition;
contending, among others, that the amended petition should be
dismissed on the ground of non-payment of the requisite iling fees
therefor; and it being in the nature of an ordinary civil action, a full
blown and regular trial is necessary; so that respondent Yao's
proposition for a summary hearing of the arbitration issue and
separate trial for his claim for damages is procedurally untenable
and implausible.
"Invoking Section 5, Rule 16 of the Rules of Court, petitioner
presented a ‘Motion to Set Case for Preliminary Hearing’ of its
special and af irmative defenses, which are grounds for a motion to
dismiss.
"In its Order of November 14, 1989, the respondent court
announced that the two arbitrators chose Mrs. Eloisa R. Narciso as
the third arbitrator. And on November 21, 1989, it ordered the
parties to submit their position papers on the issue as to whether or
not respondent Yao's claim for damages may be litigated upon in the
summary proceeding for enforcement of arbitration agreement. It
likewise informed the parties that petitioner's ‘Motion to Set Case
for Preliminary Hearing' of Special and Af irmative Defenses would
be resolved together with the question of damages.
"On April 26, 1990, the aforequoted assailed Order issued. In
moving for reconsideration of the said Order, petitioner argued that
in Special Case No. 6024, the respondent court sits as a special court
exercising limited jurisdiction and is not competent to act on
respondent Yao's claim for damages, which poses an issue litigable
in an ordinary civil action. But the respondent court was not
persuaded by petitioner's submission. On June 22, 1990, it denied
the motion for reconsideration." (Rollo, pp. 89-93).
While the appellate court has agreed with petitioner that, under
Section 6 of Republic Act No. 876, a court, acting within the limits of
its special jurisdiction, may in this case solely determine the issue of
whether the litigants should proceed or not to arbitration, it,
however, considered petitioner in estoppel from questioning the
competence of the court to additionally hear and decide in the
summary proceedings private respondent's claim for damages, it
(petitioner) having itself iled similarly its own counterclaim with
the court a quo.
It is hardly disputable that when a court is called upon to exercise
limited and special jurisdiction, that court cannot stray to matters
outside the area of its declared authority or beyond what has been
Based on Syllabus of Dean Monteclar  By RGL  71 of 95
 
expressly invested by law (Elumbaring vs. Elumbaring, 12 Phil. 384,
387), particularly, such as in this instance, where the proceedings
are summary in nature.
Prefatorily, recalling the distinctions, pertinent to the case, between
the court's lack of jurisdiction over the person of the defendant, on
the one hand, and its lack of jurisdiction over the subject matter or
the nature of the action, upon the other hand, should be useful.
The lack of jurisdiction over the person of the defendant may be
waived either expressly or impliedly. When a defendant voluntarily
appears, he is deemed to have submitted himself to the jurisdiction
of the court. If he so wishes not to waive this defense, he must do so
seasonably by motion for the purpose of objecting to the
jurisdiction of the court; otherwise, he shall be deemed to have
submitted himself to that jurisdiction. The decisions promulgated
heretofore by this Court would likewise seemingly apply estoppel to
bar the defendant from pursuing that defense by alleging in his
answer any other issue for dismissing the action.
A citation of a few of our decisions might be apropos.
In Wang Laboratories, Inc., vs. Mendoza (156 SCRA 44), this Court
has ruled that if the defendant, besides setting up in a motion to
dismiss his objection to the jurisdiction of the court, alleges at the
same time any other ground for dismissing the action, he is deemed
to have submitted himself to the jurisdiction of the court. In the
process, it has equated the matter to a situation where, such as in
Immaculata vs. Judge Navarro, et al. (146 SCRA 5), the defendant
invokes an af irmative relief against his opponent.
In De Midgely vs. Judge Ferandos (64 SCRA 23, 31), the Court
elaborated thusly:
"We are of the opinion that the lower court has acquired
jurisdiction over the person of Mrs. Midgely by reason of her
voluntary appearance. The reservation in her motion to dismiss that
she was making a special appearance to contest the court's
jurisdiction over her person may be disregarded.
"It may be disregarded because it was nulli ied by the fact that in
her motion to dismiss she relied not only on the ground of lack of
jurisdiction over her person but also on the ground that there was
no showing that earnest efforts were exerted to compromise the
case and because she prayed 'for such other relief as' may be
deemed 'appropriate and proper.'
"x x x xxx
x x x.
"When the appearance is by motion for the purpose of objecting to
the jurisdiction of the court over the person, it must be for the sole
and separate purpose of objecting to the jurisdiction of the court. If
his motion is for any other purpose than to object to the jurisdiction
of the court over his person, he thereby submits himself to the
jurisdiction of the court. A special appearance by motion made for
the purpose of objecting to the jurisdiction of the court over the
person will be held to be a general appearance, if the party in said
motion should, for example, ask for a dismissal of the action upon
the further ground that the court had no jurisdiction over the
subject matter. (Syllabus, Flores vs. Zurbito, supra, at page 751. That
rule was followed in Ocampo vs. Mina and Arejola, 41 Phil. 308)."
The justi ication for the rule was expressed in Republic vs. Ker and
Company, Ltd. (18 SCRA 207, 213-214), in this wise:
"We observe that the motion to dismiss iled on April 14, 1962,
aside from disputing the lower court's jurisdiction over defendant's
person, prayed for dismissal of the complaint on the ground that
plaintiff's cause of action has prescribed. By interposing such
second ground in its motion to dismiss, Ker & Co., Ltd. availed of an
af irmative defense on the basis of which it prayed the court to
resolve controversy in its favor. For the court to validly decide the
said plea of defendant Ker & Co., Ltd., it necessarily had to acquire
jurisdiction upon the latter's person, who, being the proponent of
the af irmative defense, should be deemed to have abandoned its
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
special appearance and voluntarily submitted itself to the
jurisdiction of the court.
"Voluntary appearance cures defects of summons, if any. Such
defect, if any, was further cured when defendant iled its answer to
the complaint. A defendant can not be permitted to speculate upon
the judgment of the court by objecting to the court's jurisdiction
over its person if the judgment is adverse to it, and acceding to
jurisdiction over its person if and when the judgment sustains its
defenses."
The doctrine of estoppel is predicated on, and has its origin in,
equity which, broadly de ined, is justice according to natural law
and right. It is a principle intended to avoid a clear case of injustice.
The term is hardly distinguishable from a waiver of right. Estoppel,
like its said counterpart, must be unequivocal and intentional for,
when misapplied, it can easily become a most convenient and
effective means of injustice. Estoppel is not understood to be a
principle that, as a rule, should prevalently apply but, such as it
concededly is, as a mere exception from the standard legal norms of
general application that can be invoked only in highly exceptional
and justi iable cases.
Tested by the above criteria, the Court sees it propitious to
re-examine speci ically the question of whether or not the
submission of other issues in a motion to dismiss, or of an
af irmative defense (as distinguished from an af irmative relief) in
an answer, would necessarily foreclose, and have the effect of a
waiver of, the right of a defendant to set up the court's lack of
jurisdiction over the person of the defendant.
Not inevitably.
Section 1, Rule 16, of the Rules of Court, provides that a motion to
dismiss may be made on the following grounds:
“(a) That the court has no jurisdiction over the person of the
defendant or over the subject of the action or suit;
“(b) That the court has no jurisdiction over the nature of the
action or suit;
“(c) The venue is improperly laid;
“(d) That the plaintiff has no legal capacity to sue;
“(e) That there is another action pending between the same
parties for the same cause;
“(f) That the cause of action is barred by a prior judgment or
by statute of limitations;
“(g) That the complaint states no cause of action;
“(h) That the claim or demand set forth in the plaintiff's
pleading has been paid, waived, abandoned, or otherwise
extinguished;
“(i) That the claim on which the action or suit is founded is
unenforceable under the provisions of the statute of frauds;
“(j) That the suit is between members of the same family and
no earnest efforts towards a compromise have been made."
Any ground for dismissal in a motion to dismiss, except improper
venue, may, as further set forth in Section 5 of the same rule, be
pleaded as an af irmative defense and a preliminary hearing may be
had thereon as if a motion to dismiss had been iled. An answer
itself contains the negative, as well as af irmative, defenses upon
which the defendant may rely (Section 4, Rule 6, Rules of Court). A
negative defense denies the material facts averred in the complaint
essential to establish the plaintiff's cause of action, while an
af irmative defense is an allegation of a new matter which, while
admitting the material allegations of the complaint, would,
nevertheless, prevent or bar recovery by the plaintiff. Inclusive of
these defenses are those mentioned in Rule 16 of the Rules of Court
which would permit the iling of a motion to dismiss.
In the same manner that a plaintiff may assert two or more causes
of action in a court suit, a defendant is likewise expressly allowed,
Based on Syllabus of Dean Monteclar  By RGL  72 of 95
 
under Section 2, Rule 8, of the Rules of Court, to put up his own
defenses alternatively or even hypothetically. Indeed, under Section
2, Rule 9, of the Rules of Court, defenses and objections not pleaded
either in a motion to dismiss or in an answer, except for the failure
to state a cause of action, are deemed waived. We take this to mean
that a defendant may, in fact, feel enjoined to set up, along with his
objection to the court's jurisdiction over his person, all other
possible defenses. It thus appears that it is not the invocation of any
of such defenses, but the failure to so raise them, that can result in
waiver or estoppel. By defenses, of course, we refer to the grounds
provided for in Rule 16 of the Rules of Court that must be asserted
in a motion to dismiss or by way of af irmative defenses in an
answer.
Mindful of the foregoing, in Signetics Corporation vs. Court of
Appeals and Freuhauf Electronics Phils., Inc. (225 SCRA 737, 738),
we lately ruled:
"This is not to say, however, that the petitioner's right to question
the jurisdiction of the court over its person is now to be deemed a
foreclosed matter. If it is true, as Signetics claims, that its only
involvement in the Philippines was through a passive investment in
Sig il, which it even later disposed of, and that TEAM Paci ic is not
its agent, then it cannot really be said to be doing business in the
Philippines. It is a defense, however, that requires the contravention
of the allegations of the complaint, as well as a full ventilation, in
effect, of the main merits of the case, which should not thus be
within the province of a mere motion to dismiss. So, also, the issue
posed by the petitioner as to whether a foreign corporation which
has done business in the country, but which has ceased to do
business at the time of the iling of a complaint, can still be made to
answer for a cause of action which accrued while it was doing
business, is another matter that would yet have to await the
reception and admission of evidence. Since these points have
seasonably been raised by the petitioner, there should be no real
cause for what may understandably be its apprehension, i.e., that by
its participation during the trial on the merits, it may, absent an
invocation of separate or independent reliefs of its own, be
considered to have voluntarily submitted itself to the court's
jurisdiction."
Lack of jurisdiction over the subject matter of the suit is yet another
matter. Whenever it appears that the court has no jurisdiction over
the subject matter, the action shall be dismissed (Section 2, Rule 9,
Rules of Court). This defense may be interposed at any time, during
appeal (Roxas vs. Rafferty, 37 Phil. 957) or even after inal judgment
(Cruzcosa vs. Judge Concepcion, et al., 101 Phil. 146). Such is
understandable, as this kind of jurisdiction is conferred by law and
not within the courts, let alone the parties, to themselves determine
or conveniently set aside. In People vs. Casiano (111 Phil. 73,
93?94), this Court, on the issue of estoppel, held:
"The operation of the principle of estoppel on the question of
jurisdiction seemingly depends upon whether the lower court
actually had jurisdiction or not. If it had no jurisdiction, but the case
was tried and decided upon the theory that it had jurisdiction, the
parties are not barred, on appeal, from assailing such jurisdiction,
for the same 'must exist as a matter of law, and may not be
conferred by consent of the parties or by estoppel' (5 C.J.S.,
861-863). However, if the lower court had jurisdiction, and the case
was heard and decided upon a given theory, such, for instance, as
that the court had no jurisdiction, the party who induced it to adopt
such theory will not be permitted, on appeal, to assume an
inconsistent position--that the lower court had jurisdiction. Here,
the principle of estoppel applies. The rule that jurisdiction is
conferred by law, and does not depend upon the will of the parties,
has no bearing thereon."
The rule was reiterated in Calimlim vs. Ramirez (118 SCRA 399,
406), and quite recently, in Southeast Asian Fisheries Development
Center-Aquaculture Department vs. National Labor Relations
Commission (206 SCRA 283).
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
Jurisdiction over the nature of the action, in concept, differs from
jurisdiction over the subject matter. Illustrated, lack of jurisdiction
over the nature of the action is the situation that arises when a
court, which ordinarily would have the authority and competence to
take a case, is rendered without it either because a special law has
limited the exercise of its normal jurisdiction on a particular matter
or because the type of action has been reposed by law in certain
other courts or quasi-judicial agencies for determination.
Nevertheless, it can hardly be questioned that the rules relating to
the effects of want of jurisdiction over the subject matter should
apply with equal vigor to cases where the court is similarly bereft of
jurisdiction over the nature of the action.
In summary, it is our considered view, as we now so hereby express,
that -
(1) Jurisdiction over the person must be seasonably raised, i.e., that
it is pleaded in a motion to dismiss or by way of an af irmative
defense in an answer. Voluntary appearance shall be deemed a
waiver of this defense. The assertion, however, of af irmative
defenses shall not be construed as an estoppel or as a waiver of
such defense.
(2) Where the court itself clearly has no jurisdiction over the
subject matter or the nature of the action, the invocation of this
defense may be done at any time. It is neither for the courts nor the
parties to violate or disregard that rule, let alone to confer that
jurisdiction, this matter being legislative in character. Barring highly
meritorious and exceptional circumstances, such as hereinbefore
exempli ied, neither estoppel nor waiver shall apply.
In the case at bench, the want of jurisdiction by the court is
indisputable, given the nature of the controversy. The arbitration
law explicitly con ines the court's authority only to pass upon the
issue of whether there is or there is no agreement in writing
providing for arbitration. In the af irmative, the statute ordains that
the court shall issue an order "summarily directing the parties to
proceed with the arbitration in accordance with the terms thereof."
If the court, upon the other hand, inds that no such agreement
exists, "the proceeding shall be dismissed." The proceedings are
summary in nature.
All considered, the court a quo must then refrain from taking up the
claims of the contending parties for damages, which, upon the other
hand, may be ventilated in separate regular proceedings at an
opportune time and venue. The circumstances obtaining in this case
are far, we hold, from justifying the application of estoppel against
either party.
WHEREFORE, the decision of the Court of Appeals and the orders
of the trial court in question are SET ASIDE. The court a quo, in the
instant proceedings, is ordered to DESIST from further hearing
private respondent's claim, as well as petitioner's counterclaim, for
damages. No costs.
SO ORDERED.
Narvasa, C.J., Cruz, Padilla, Bidin, Regalado, Davide, Jr., Romero,
Bellosillo, Melo, Quiason, Puno, Kapunan, and Mendoza, JJ., concur.
Feliciano, J., concur except that in respondent of penultimate
paragraph in p. 17 and reserve his vote as to compulsory
counterclaims for damages.
30 Tijam v Sibonghanoy, supra (1)  alleged that the non-issuance of the clearances by the petitioners
31 Seafdec-Aquaculture Dept v NLRC, 206 SCRA 
283 
SECOND DIVISION 
G.R. No. 86773, February 14, 1992  entitled to accrued sick leave bene its amounting to P44,000.00 due
SOUTHEAST  ASIAN  FISHERIES  DEVELOPMENT  SEAFDEC-AQD (Annex "D", Id.).
CENTER-AQUACULTURE  DEPARTMENT  (SEAFDEC-AQD), 
Based on Syllabus of Dean Monteclar  By RGL  73 of 95
 
DR.  FLOR  LACANILAO  (CHIEF),  RUFIL  CUEVAS  (HEAD, 
ADMINISTRATIVE  DIV.),  BEN  DELOS  REYES  (FINANCE 
OFFICER),  PETITIONERS,  VS.  NATIONAL  LABOR 
RELATIONS  COMMISSION  AND  JUVENAL  LAZAGA, 
RESPONDENTS. 
 
D E C I S I O N 
NOCON, J.:
This is a petition for certiorari to annul and set aside the July 26,
1988 decision of the National Labor Relations Commission
sustaining the labor arbiter, in holding herein petitioners Southeast
Asian Fisheries Development Center-Aquaculture Department
(SEAFDEC?AQD), Dr. Flor Lacanilao, Ru il Cuevas and Ben de los
Reyes liable to pay private respondent Juvenal Lazaga the amount of
P126,458.89 plus interest thereon computed from May 16, 1986
until full payment thereof is made, as separation pay and other
post-employment bene its, and the resolution denying the
petitioners' motion for reconsideration of said decision dated
January 9, 1989.
The antecedent facts of the case are as follows:
SEAFDEC-AQD is a department of an international organization, the
Southeast Asian Fisheries Development Center, organized through
an agreement entered into in Bangkok, Thailand on December 28,
1967 by the governments of Malaysia, Singapore, Thailand,
Vietnam, Indonesia and the Philippines with Japan as the
sponsoring country (Article 1, Agreement Establishing the
SEAFDEC).
On April 20, 1975, private respondent Juvenal Lazaga was employed
as a Research Associate on a probationary basis by the
SEAFDEC-AQD and was appointed Senior External Affairs Of icer on
January 5, 1983 with a monthly basic salary of P8,000.00 and a
monthly allowance of P4,000.00. Thereafter, he was appointed to
the position of Professional III and designated as Head of External
Affairs Of ice with the same pay and bene its.
On May 8, 1986, petitioner Lacanilao in his capacity as Chief of
SEAFDEC-AQD sent a notice of termination to private respondent
informing him that due to the inancial constraints being
experienced by the department, his services shall be terminated at
the close of of ice hours on May 15, 1986 and that he is entitled to
separation bene its equivalent to one (1) month of his basic salary
for every year of service plus other bene its (Rollo, p. 153).
Upon petitioner SEAFDEC-AQD's failure to pay private respondent
his separation pay, the latter iled on March 18, 1987 a complaint
against petitioners for non-payment of separation bene its plus
moral damages and attorney's fees with the Arbitration Branch of
the NLRC (Annex "C" of Petition for Certiorari).
Petitioners in their Answer with counterclaim alleged that the NLRC
has no jurisdiction over the case inasmuch as the SEAFDEC-AQD is
an international organization and that private respondent must irst
secure clearances from the proper departments for property or
money accountability before any claim for separation pay will be
paid, and which clearances had not yet been obtained by the private
respondent.
A formal hearing was conducted whereby private respondent
was politically motivated and in bad faith. On the other hand,
petitioners alleged that private respondent has property
accountability and an outstanding obligation to SEAFDEC-AQD in
the amount of P27,532.11. Furthermore, private respondent is not
to his failure to avail of the same during his employment with the
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
On January 12, 1988, the labor arbiter rendered a decision, the
dispositive portion of which reads:
"WHEREFORE, premises considered, judgment is hereby rendered
ordering respondents:
1. To pay complainant P126,458.89, plus legal interest thereon
computed from May 16, 1986 until full payment thereof is made, as
separation pay and other post-employment bene its;
2. To pay complainant actual damages in the amount of P50,000,
plus 10% attorney's fees.
All other claims are hereby dismissed.
SO ORDERED." (Rollo, p. 51, Annex "E")
On July 26, 1988, said decision was af irmed by the Fifth Division of
the NLRC except as to the award of P50,000.00 as actual damages
and attorney's fees for being baseless. (Annex "A", p. 28, id.)
On September 3, 1988, petitioners iled a Motion for
Reconsideration (Annex "G", id.) which was denied on January 9,
1989. Thereafter, petitioners instituted this petition for certiorari
alleging that the NLRC has no jurisdiction to hear and decide
respondent Lazaga's complaint since SEAFDEC-AQD is immune
from suit owing to its international character and the complaint is
in effect a suit against the State which cannot be maintained
without its consent.
The petition is impressed with merit.
Petitioner Southeast Asian Fisheries Development
Center-Aquaculture Department (SEAFDEC-AQD) is an
international agency beyond the jurisdiction of public respondent
NLRC.
It was established by the Governments of Burma, Kingdom of
Cambodia, Republic of Indonesia, Japan, Kingdom of Laos, Malaysia,
Republic of the Philippines, Republic of Singapore, Kingdom of
Thailand and Republic of Vietnam (Annex "H", Petition).
The Republic of the Philippines became a signatory to the
Agreement establishing SEAFDEC on January 16, 1968. Its purpose
is as follows:
"The purpose of the Center is to contribute to the promotion of the
isheries development in Southeast Asia by mutual cooperation
among the member governments of the Center, hereinafter called
the 'Members', and through collaboration with international
organizations and governments external to the Center. (Agreement
Establishing the SEAFDEC, Art. 1; Annex "H", Petition)" (p. 310,
Rollo)
SEAFDEC-AQD was organized during the Sixth Council Meeting of
SEAFDEC on July 3-7, 1973 in Kuala Lumpur, Malaysia as one of the
principal departments of SEAFDEC (Annex "I", id.) to be established
in Iloilo for the promotion of research in aquaculture. Paragraph 1,
Article 6 of the Agreement establishing SEAFDEC mandates:
"1. The Council shall be the supreme organ of the Center and all
powers of the Center shall be vested in the Council."
Being an intergovernmental organization, SEAFDEC including its
Departments (AQD), enjoys functional independence and freedom
from control of the state in whose territory its of ice is located.
As Senator Jovito R. Salonga and Former Chief Justice Pedro L. Yap
stated in their book, Public International Law (p. 83, 1956 ed.):
"Permanent international commissions and administrative bodies
have been created by the agreement of a considerable number of
States for a variety of international purposes, economic or social
and mainly non?political. Among the notable instances are the
International Labor Organization, the International Institute of
Agriculture, the International Danube Commission. In so far as they
are autonomous and beyond the control of any one State, they have
a distinct juridical personality independent of the municipal law of
the State where they are situated. As such, according to one leading
authority ‘they must be deemed to possess a species of
Based on Syllabus of Dean Monteclar  By RGL  74 of 95
 
international personality of their own.’ (Salonga and Yap, Public
International Law, 83 [1956 ed.])"
Pursuant to its being a signatory to the Agreement, the Republic of
the Philippines agreed to be represented by one Director in the
governing SEAFDEC Council (Agreement Establishing SEAFDEC, Art.
5, Par. 1, Annex "H", ibid) and that its national laws and regulations
shall apply only insofar as its contribution to SEAFDEC of "an
agreed amount of money, movable and immovable property and
services necessary for the establishment and operation of the
Center" are concerned (Art. 11, ibid). It expressly waived the
application of the Philippine laws on the disbursement of funds of
petitioner SEAFDEC-AQD (Section 2, P.D. No. 292).
The then Minister of Justice likewise opined that Philippine Courts
have no jurisdiction over SEAFDEC-AQD in Opinion No. 139, Series
of 1984 -
"4. One of the basic immunities of an international organization is
immunity from local jurisdiction, i.e., that it is immune from the
legal writs and processes issued by the tribunals of the country
where it is found. (See Jenks, Id., pp. 37-44) The obvious reason for
this is that the subjection of such an organization to the authority of
the local courts would afford a convenient medium thru which the
host government may interfere in their operations or even in luence
or control its policies and decisions of the organization; besides,
such subjection to local jurisdiction would impair the capacity of
such body to discharge its responsibilities impartially on behalf of
its member-states. In the case at bar, for instance, the entertainment
by the National Labor Relations Commission of Mr. Madamba's
reinstatement cases would amount to interference by the Philippine
Government in the management decisions of the SEARCA governing
board; even worse, it could compromise the desired impartiality of
the organization since it will have to suit its actuations to the
requirements of Philippine law, which may not necessarily coincide
with the interests of the other member-states. It is precisely to
forestall these possibilities that in cases where the extent of the
immunity is speci ied in the enabling instruments of international
organizations, jurisdictional immunity is speci ied in the enabling
instruments of international organizations, jurisdictional immunity
from the host country is invariably among the irst accorded. (See
Jenks, Id.; See also Bowett, The Law of International Institutions, pp.
284-1285)."
Respondent Lazaga's invocation of estoppel with respect to the
issue of jurisdiction is unavailing because estoppel does not apply to
confer jurisdiction to a tribunal that has none over a cause of action.
Jurisdiction is conferred by law. Where there is none, no agreement
of the parties can provide one. Settled is the rule that the decision of
a tribunal not vested with appropriate jurisdiction is null and void.
Thus, in Calimlim vs. Ramirez, this Court held:
"A rule that had been settled by unquestioned acceptance and
upheld in decisions so numerous to cite is that the jurisdiction of a
court over the subject matter of the action is a matter of law and
may not be conferred by consent or agreement of the parties. The
lack of jurisdiction of a court may be raised at any stage of the
proceedings, even on appeal. This doctrine has been quali ied by
recent pronouncements which stemmed principally from the ruling
in the cited case of Sibonghanoy. It is to be regretted, however, that
the holding in said case had been applied to situations which were
obviously not contemplated therein. The exceptional circumstances
involved in Sibonghanoy which justi ied the departure from the
accepted concept of non-waivability of objection to jurisdiction has
been ignored and, instead a blanket doctrine had been repeatedly
upheld that rendered the supposed ruling in Sibonghanoy not as the
exception, but rather the general rule, virtually overthrowing
altogether the time-honored principle that the issue of jurisdiction
is not lost by waiver or by estoppel." (Calimlim vs. Ramirez, G.R. No.
L-34362, 118 SCRA 399 [1982])
Respondent NLRC'S citation of the ruling of this Court in Lacanilao
v. De Leon (147 SCRA 286 [1987]) to justify its assumption of
 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

jurisdiction over SEAFDEC is misplaced. On the contrary, the court
in said case explained why it took cognizance of the case. Said the
Court:
"We would note, inally, that the present petition relates to a
controversy between two claimants to the same position; this is not
a controversy between the SEAFDEC on the one hand, and an of icer
or employee, or a person claiming to be an of icer or employee, of
the SEAFDEC, on the other hand. There is before us no question
involving immunity from the jurisdiction of the Court, there being
no plea for such immunity whether by or on behalf of SEAFDEC, or
by an of icial of SEAFDEC with the consent of SEAFDEC (Id., at 300;
underscoring supplied)."
WHEREFORE, inding SEAFDEC-AQD to be an international agency
beyond the jurisdiction of the courts or local agency of the
Philippine government, the questioned decision and resolution of
the NLRC dated July 26, 1988 and January 9, 1989, respectively, are
hereby REVERSED and SET ASIDE for having been rendered
without jurisdiction. No costs.
Laureano Arcilla's Petition for Relief from Judgment, for having
been iled beyond the period prescribed by Section 3, Rule 38 of the
Rules of Court.
Petitioner was among the several defendants in Civil Case No. 395-T,
an action for Annulment of Sale with Damages, iled by the herein
private respondents before the then Court of First Instance of Cebu
on May 28, 1973.
After the issues were joined by the iling of defendants' Answer, the
case was set for pre-trial conferences. At the scheduled pre-trial on
July 29, 1975, the lower court issued the following Order —[2]
"Let the continuation of the pretrial of this case be set to October 2,
1975 at 8:30 a.m. in Cebu City.
Attys. Duaban and Monteclaros are noti ied in open court."

SO ORDERED. On October 2, 1975, defendants (among whom is the petitioner

herein) and their counsel did not appear. Whereupon, on motion of
plaintiffs' (now private respondents) counsel, defendants were
Melencio-Herrera, (Chairman), Paras, Padilla, and Regalado, JJ., declared in default[3] pursuant to Section 2, Rule 20 of the Rules of
concur. Court and the plaintiffs were allowed to present their evidence
ex-parte.
RULE 17 Dismissal of Actions (at the instance of the 
plaintiff) 
On October 27, 1976, judgment[4] was rendered in favor of the
RULE 19 Intervention  plaintiffs, the dispositive portion of which reading as follows —
RULE 20 Calendar of Cases 
"(1) Declaring the Deed of Sale (Exh. 'E') allegedly executed by
RULE 21 Subpoena  Segunda Vda de. Arcilla in favor of defendant Laureano Arcilla as
null and void;
V. Pre-Trial (RULE 18) 
18) 
A. When conducted 
B. Nature and Purpose  (2) Declaring the eight (8) children of Segunda O. Vda. de
C. Notice and Mandatory appearance of parties  Arcilla (including defendant Laureano) as co-owners on equal
shares of the one-half (1/2) portion of that parcel of land covered
D. Effect of failure to appear 
by Tax Declaration No. 00347 which was adjudicated to her in the
E. Pre-trial brief 
Extrajudicial Partition Settlement and as co-owner in eight (8)
F. Record of Pre-trial  equal shares of the parcel of land covered by Tax Declaration No.
32 Arcilla v Arcilla, 138 SCRA 560  00349 which was intended for her full usufruct;
223 Phil. 154

(3) Dismissing the complaint as against defendant Nemesio

SECOND DIVISION  Jubay.
G.R. No. L-46674, September 16, 1985 
Although the defendants had been declared in default, let a copy of
LAUREANO  ARCILLA,  PETITIONER,  VS.  BASILISA  this decision be furnished them through their counsel.
ARCILLA,  SERAPIA  ARCILLA,  MARCELA  ARCILLA, 
DIONISIA  ARCILLA,  ZACARIAS  ARCILLA,  GAVINA  MOLO 
SO ORDERED."
VDA.  DE  ARCILLA,  CESAR  M.  ARCILLA,  GLORIA  M. 
A copy of the aforesaid decision was sent to and received by
ARCILLA,  ANTONIO  M.  ARCILLA,  POMPEY  M.  ARCILLA, 
defendants' counsel of record, Atty. Cosme D. Monteclaros, on
ERNESTO  M.  ARCILLA,  ELENA  M.  ARCILLA,  ASUNCION 
November 8, 1976.
M.  ARCILLA,  RANULFO  M.  ARCILLA,  IGLESERIA  A. 
CAÑETE,  ROSABELLA  A.  CAÑETE,  AND  HONORABLE 
FRANCIS  J.  MILITANTE,  PRESIDING  JUDGE  OF  BRANCH  On March 25, 1977, herein petitioner, as one of the defendants in
IX  OF  THE  COURT  OF  FIRST  INSTANCE  OF  CEBU,  said Civil Case No. 395-T, through his new counsel, iled a Motion to
Lift Order of Default and to Set Aside the Decision dated October 27,
RESPONDENTS. 
1976,[5] which was denied by respondent Judge in his Order dated
April 12, 1977.
 

D E C I S I O N  On April 16, 1977, petitioner iled a Petition for Relief from

CUEVAS, J.: Judgment,[6] alleging mainly —

The instant special civil action for CERTIORARI and PROHIBITION
assails the Order[1] dated May 18, 1977 issued by respondent Judge
Francis J. Militante, presiding Judge of the then Court of First
Instance of Cebu, Branch IX in Civil Case No. 395-T, denying
"That on July 29, 1975, a Court Order was issued setting the
pre-trial of the above-entitled case to October 2, 1975; however, on
October 2, 1975, the then Hon. Presiding Judge of this Court,
without previous examination of the records as to whether or not

Based on Syllabus of Dean Monteclar  By RGL  75 of 95 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
said defendants were duly noti ied of the setting for pre-trial on that
same date (October 2nd) and upon oral motion by counsel for the
plaintiffs, declared defendants in default based and in accordance
with the supposed provisions of Sec. 2 of Rule 20 of the Revised
Rules of Court….the declaration of default under said Sec. 2 of Rule
20 is with supposition that the defendants sought to be declared as
such should be shown that they actually know of such setting, but
the records of the case disclose that no notice was ever served upon
said defendants;
xxx xxx xxx
That, defendants, particularly the principal defendant Laureano
Arcilla, learned of the decision of October 27, 1976 only on March
24, 1977 when the herein undersigned counsel showed him a xerox
copy of the same which the undersigned counsel procured a day
earlier. (Mar. 23)
That the defendants therefore seek the setting aside and lifting the
effects of the decision aforementioned based on mistake and/or
excusable neglect for their failure to inquire from their lawyer Atty.
Monteclaros or with this Court believing that they will be duly
noti ied of any proceeding in connection with the above-entitled
case either by their lawyer Atty. Monteclaros or by the Of ice of the
Clerk of Court of this Court inasmuch as they are not the plaintiffs
and are therefore in the defensive side of the case.
That an Af idavit of Merit is attached to the present petition for
Relief of Judgment based on Rule 38 of the Revised Rules of Court
and herein marked as Annex '1' to form an integral part hereof
executed by principal defendant Laureano Arcilla and said
defendants, in accordance with the obligations contained in said
af idavit of merits, has a good and valid defense against the claim of
plaintiffs, considering that the late Segunda O. Vda. de Arcilla
voluntarily and willingly executed the document of sale sought to be
annulled, the contents thereof having been fully explained to her by
the notary public and it was for a valuable consideration."
On May 18, 1977, respondent Judge issued his now assailed Order
denying petitioner's Petition for Relief, the pertinent portion
reading as follows —
"The plaintiff in her opposition, contends that the petition for relief
from judgment is already iled out of time because the judgment of
this Court was received by counsel for the defendants on November
8, 1976, hence, the defendants had only up to January 8, 1977 to ile
a petition for relief from judgment. Sec. 3 of Rule 38 of the Rules of
Court clearly states that "A petition provided for in either of the
preceeding section of this rule must be veri ied, iled within sixty
(60) days after the petitioner learns of the judgment, order, or other
proceeding to be set aside, and not more than six (6) months after
such judgment or order was entered or said proceeding was taken".
It is claimed by the defendants that they learned only of the
judgment on March 24, 1977. This contention of the defendants
cannot be given weight because notice to counsel is notice to the
client and since the defendants' former counsel Atty. Cosme D.
Monteclaros received the judgment on November 8, 1976, then the
date to be reckoned with is the date when the defendants' counsel
received the judgment which is November 8, 1976.
This Court is in sympathy with the pathetic plight of the defendants
if it is really true that the order declaring them in default was not
through a fault of their own but since they slept on their rights for
quite a time such as would bar the present petition, this Court is not
in a position to extend the period within which to ile the present
petition for relief from judgment.
Based on Syllabus of Dean Monteclar  By RGL  76 of 95
 
In view of the foregoing, the petition for relief from judgment is
hereby denied for having been iled beyond the reglementary
period."
Attributing grave abuse of discretion on the part of respondent
Judge in issuing the aforesaid Order, petitioner now comes to Us
through the instant petition praying that the said challenged order
be set aside and declared null and void.
The only issue then to be resolved in this case is whether or not the
lower court acted with grave abuse of discretion and/or without
jurisdiction in denying the Petition for Relief from judgment for
having been iled out of time.
The pertinent provisions of Rule 38 of the Revised Rules of Court on
"Relief from Judgments, Orders or Other Proceedings" state —
"Sec. 2. Petition to Court of First Instance for relief from judgment
or other proceeding thereof. — When a judgment or order is
entered, or any other proceeding is taken, against a party in a Court
of First Instance through fraud, accident, mistake or excusable
negligence, he may ile a petition in such court and in the same
cause praying that the judgment, order or proceeding be set aside.
Sec. 3. Time for iling petition, contents and veri ication. — A
petition provided for in either of the preceding sections of this rule
must be veri ied iled within sixty (60) days after the petitioner
learns of the judgment, order or other proceeding to be set aside,
and not more than six (6) months after such judgment or order was
entered or such proceeding was taken; and must be accompanied
with af idavits showing the fraud, accident, mistake or excusable
negligence relied upon, and the facts constituting the petitioner's
good and substantial cause of action or defense, as the case may be."
In the case of Turqueza vs. Hernando, L-51626, April 30, 1980, 97
SCRA 483, this Court held that —
"The Court has said time and again that the doctrine of inality of
judgments is grounded on fundamental considerations of public
policy and sound practice that at the risk of occasional error, the
judgments of courts must become inal at some de inite date ixed
by law. The law gives an exception or "last chance" of a timely
petition for relief from judgment within the reglementary period
(within 60 days from knowledge and 6 months from entry of
judgment) under Rule 38 supra, but such grace period must be
taken as "absolutely ixed, inextendible, never interrupted and
cannot be subjected to any condition or contingency. Because the
period ixed is itself devised to meet a condition or contingency
(fraud, accident, mistake or excusable neglect), the equitable
remedy is an act of grace, as it were, designed to give the aggrieved
party another and last chance, and failure to avail of such last
chance within the grace period ixed by the statute or the Rules of
Court is fatal."
The rule, therefore, is that in order for a petition for relief iled
under Rule 38 to be entertained by the court, the petitioner must
satisfactorily show that he has faithfully and strictly complied with
the provisions of said Rule 38. Consequently, in assailing the lower
court's dismissal of his petition for relief for having been iled out of
time, it is incumbent upon herein petitioner to show that the said
petition was iled within the reglementary period speci ied in
Section 3, Rule 38. He has failed to do so, instead he argues on the
merits of his petition for relief, without irst showing that the same
was iled on time in the court below. On this ground alone, the
instant case should be dismissed.
Moreover, We agree with the respondent Judge that the petition for
relief was iled late. We note that the decision sought to be set aside
 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

was rendered on October 27, 1976. Petitioner, through counsel,
received a copy of the said decision on November 8, 1976, and he
iled his petition for relief from judgment only on April 18, 1977.
Clearly, the same was iled beyond the period allowed by Section 3
of Rule 38. As in previous cases, this Court holds and so rules that
the instant petition iled after the lapse of the reglementary period
cannot be entertained.[7]
Arguing on the merits of his petition for relief, petitioner's, main
contention is that the order of default was illegally and improperly
issued because he was not noti ied of the pre-trial on October 2,
1975, consequently, all subsequent proceedings including the
judgment by default were all null and void.
At irst blush, petitioner's aforesaid contention appears very
tenable, for indeed it is settled that a declaration of default, in the
absence of a notice of pre-trial constitutes denial of due process.[8]
But a deeper examination of the pleadings and the record of the
case would show that petitioner was present during the pre-trial
conference on July 29, 1975 when the lower court reset the pre-trial
to October 2, 1975. On the said date, however, although noti ied,
both petitioner and his counsel did not appear, hence, the
declaration of default pursuant to Sec. 2, of Rule 20 of the Rules of
Court.
mistake, or excusable negligence, nor show a valid defense in favor
of the party seeking relief. The general allegation made therein to
the effect that "petitioner has a good and valid defense considering
that the late Segunda O. Vda. de Arcilla voluntarily and willingly
executed the document of Sale", is not suf icient compliance with
the rules. Since the Deed of Sale sought to be annulled was written
in English and it is admitted that Segunda O. Vda. de Arcilla is an
illiterate and do not know how to read and write, it would have
been an easy matter for petitioner to have secured the af idavit of
Nemesio Jubay, the Notary Public who allegedly notarized the
document as well as the witnesses to the execution and signing
thereof to show that the contents of the document was fully
explained to said Segunda O. Vda. de Arcilla and that she voluntarily
signed the same. This way, petitioner could convince the Court that
in his legal ight, he had a leg on which to stand. It thus results that
reversal of the order complained of, as well as the judgment
rendered thereon would be an idle ceremony. It would not advance
or for that matter serve the ends of justice. It would only result in
another waste of time; effort and expense. Paraphrasing what this
Court has stated in Paner vs. Yatco[9] it would be pointless to re-open
this case, "for like a mirage it would merely raise false hopes and in
the end avail her (him) nothing."
For the reasons stated above, the Order of the lower court dated
May 8, 1977 denying herein petitioner's Petition for Relief should
be af irmed.

The case iled before the lower court is for annulment of a deed of
sale allegedly executed by Segunda O. Vda. de Arcilla in favor of one WHEREFORE, the instant special civil action is hereby DISMISSED.
of his sons, herein petitioner Laureano Arcilla. It was originally Costs against petitioner.
iled and instituted by the said Segunda O. Vda. de Arcilla but she
died even before the pre-trial of the case and was therefore
substituted by her other children. The other defendant in the case SO ORDERED.
Nemesio Jubay was the Notary Public who allegedly notarized the
document. From the evidence presented by the plaintiffs, the lower
court found — Aquino, (Chairman), Concepcion, Jr., Abad Santos, Escolin, Alampay,
and Patajo, JJ., concur.
"A careful perusal of the Deed of Sale (Exh. "E") sought to be
annulled bear and bare that the same was written in English and
that Segunda O. Vda. de Arcilla is an illiterate who do not know how 33 DBP v CA, 169 SCRA 409 
to write having af ixed her thumbmark on the said document which 251 Phil. 390
fact is corroborated by the testimony of Marcela Arcilla.

FIRST DIVISION 
While it is true that the natural presumption is that one always acts
G.R. No. L-49410, January 26, 1989 
with due care and signs with full knowledge of all the contents of a
document for which he can not repudiate the transaction (Abaya vs.
Standard Vaccume Oil Co. L-9511, August 30, 1957; Javier vs. Javier, DEVELOPMENT BANK OF THE PHILIPPINES, PETITIONER, 
7 Phil. 261; Tan Tua vs. Jy Liao Sontua, 56 Phil. 20) this presumption VS.  COURT  OF  APPEALS,  JESUS  DE  JESUS  AND  ALUDIA 
referred to cannot apply in the case at bar when one of the parties is MARIANO, RESPONDENTS. 
unable to read and write the contract in a language not understood
by one of the parties (Art. 1332, New Civil Code). In both cases, the
 
person enforcing the contract must show the terms thereof have
been fully explained to the party (Ayala vs. Balderama Lumber
Manufacturing Co., Inc. (CA) 490 O.G. 980). D E C I S I O N 
NARVASA, J.:
Everyone knows that a pre-trial in civil actions is mandatory, and
Furthermore, the record is replete of proof that the care and
has been so since January 1, 1964.[1] Yet to this day its place in the
custody of the deceased Segunda O. Vda. de Arcilla was burdened on
scheme of things is not fully appreciated, and it receives but
the defendant Laureano Arcilla and this fact, coupled with the age,
perfunctory treatment in many courts. Some courts consider it a
in irmity and intelligence of the former, advantage may have favored
mere technicality, serving no useful purpose save perhaps,
the situation of the latter which lead to the consummation of the
occasionally to furnish ground for non-suiting the plaintiff, or
questioned document (Exh. "E") by virtue of which the latter has the
declaring a defendant in default, or, wistfully, to bring about a
burden of proof to dislodge such misapprehension. With respect to
compromise. The pre-trial device is not thus put to full use. Hence
Atty. Nemesio Jubay, he should be reminded of the protective
it has failed in the main to accomplish the chief objective envisioned
mandate of Art. 1332 of the New Civil Code for those illiterates and
for it: the simpli ication, abbreviation and expedition of the trial, if
those documents drawn in English or Spanish."
not indeed its dispensation. This is a great pity, because the
Examining the petition for relief iled by petitioner, while the same objective is attainable, and with not much dif iculty, if the device
appears veri ied and accompanied by an af idavit of merit, the were more intelligently and extensively handled.
allegations of fact made therein do not prove either fraud, accident,

Based on Syllabus of Dean Monteclar  By RGL  77 of 95 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
While it is not, to be sure, reasonable to expect that a pre-trial will
always result in the parties’ reaching agreement as to all the matters
speci ied in the rule, e.g., an amicable settlement or a submission to
arbitration, amendments to the pleadings, stipulations or
admissions of facts and of documents, preliminary reference of
issues to a commissioner, etc.,[2] it is nonetheless certain that by it
the Court can always bring about agreement on at least two (2)
other matters that will aid in the prompt disposition of the action.
For one thing, a trial court can always compel the parties to simplify,
or at the very least identify, the issues. The Court has the power to
require the parties to make a formal statement of the issues of fact
and of law involved in the action; to set out, in other words, which of
their material averments of fact, or parts thereof, are admitted and
which denied. It should be no argument, specially where there is
some complexity or numerosity about the disputed facts alleged in
the pleadings, that a reading of those pleadings will make possible
the identi ication of the admissions and denials. The desirability
and usefulness of the itemization in a single document (a) of the
facts which are admitted -- and as to which, therefore, no evidence
need be presented -- and (b) of those which are controverted -- and
as to which proof must be adduced -- cannot be gainsaid. Moreover,
the admitted and disputed facts being thus particularly stated, the
determination of the issues of law becomes a relatively simple task.
Since such an issue-identification document obviously requires little
effort to draw up, allows identi ication of the triable issues by
reference to one single document, instead of by tedious examination
of all the pleadings every time a question of materiality of proof
comes up, and limits the matters on which trial shall be had and on
which adjudgment shall ultimately be made, it cannot but be
deemed a forward step in the disposition of the suit, and should by
all means be required at every pre-trial.
Again, it is unquestionably within the trial court's power to require
the parties at the pre-trial to (a) state the number of witnesses
intended to be called to the stand, their names and addresses, and a
brief summary of the evidence each of them is expected to give, as
well as to (b) formally disclose the number of the documents and
things to be submitted and to furnish copies thereof or a short
description of the nature of each. The tenor or character of the
testimony of the witnesses and of the writings to be adduced at the
trial being thus made known, in addition to the particular issues of
fact and law, it becomes reasonably feasible to require the parties to
state the number of trial dates that each will need to put on his case,
and maybe bring about a further agreement as to some other
controverted facts, or an amendment of the pleadings, etc.
What needs stressing is that the parties as well as the Trial Court
must realize that at the pre-trial, the parties are obliged not only to
make formal identi ication and speci ication of the issues and of
their proofs, as above described -- indeed, there is no reason why
the Court may not oblige the parties to set these matters down in
separate writings and submit them to the Court prior to the
pre-trial, and then to discuss, re ine and embody the matters agreed
upon in a single document at or shortly after the pre-trial -- but also
and equally as peremptorily, to directly address and discuss with
sincerity and candor and in entire good faith each of the other
subjects enumerated in Section 1, Rule 20, i.e., the "possibility of an
amicable settlement or of a submission to arbitration," the
"advisability of a preliminary reference of issues to a commissioner,"
and "such other matters as may aid in the prompt disposition of the
action," inclusive of a resort to the modes of discovery.
Consistently with the mandatory character of the pre-trial, the Rules
oblige not only the lawyers but the parties as well to appear for this
Based on Syllabus of Dean Monteclar  By RGL  78 of 95
 
purpose before the Court,[3] and when a party "fails to appear at a
pre-trial conference (he) may be non-suited or considered as in
default."[4] The obligation “to appear" denotes not simply the
personal appearance, or the mere physical presentation by a party
of one's self, but connotes as importantly, preparedness to go into
the different subjects assigned by law to a pre-trial. And in those
instances where a party may not himself be present at the pre-trial,
and another person substitutes for him, or his lawyer undertakes to
appear not only as an attorney but in substitution of the client's
person, it is imperative for that representative or the lawyer to have
"special authority" to make such substantive agreements as only the
client otherwise has capacity to make. That "special authority"
should ordinarily be in writing or at the very least be "duly
established by evidence other than the self-serving assertion of
counsel (or the proclaimed reprsentative) himself."[5] Without that
special authority, the lawyer or representative cannot be deemed
capacitated to appear in place of the party; hence, it will be
considered that the latter has failed to put in an appearance at all,
and he may therefore "be non-suited or considered as in default,"[6]
notwithstanding his lawyer's or delegate's presence.
These principles were applied by the Trial Court in the case at bar:
irst, against the defendants (now private respondents) who were
declared in default for failure to appear at the pre-trial initially
scheduled, and later -- after the default was lifted and another
pre-trial ordered, despite plaintiff’s (now petitioner's) evidence
having already been received ex parte -- against said plaintiff which,
in its turn, twice failed to make a proper appearance at the second,
and a third, pre-trial and was on that account twice declared
non-suited. It is the correctness of that application of principles
adversely to petitioner by the Trial Court, sanctioned by the
Appellate Tribunal, that is the chief issue in this appeal.
The case was commenced by a complaint iled by the Development
Bank of the Philippines with the Court of First Instance of Masbate
against the spouses Jesus de Jesus and Aludia Mariano. The
complaint prayed for a judgment condemning the defendant
spouses to pay a loan in the aggregate amount of P16,720.00
obtained by the latter from the plaintiff’s predecessor-in-interest,
the Rehabilitation Finance Corporation. The loan, payable with
interest at six per cent per annum, was evidenced by ive
promissory notes, and was secured by a deed of assignment of the
debtor spouses’ leasehold rights over land covered by Fishpond
Lease Agreement No. 396. Suit was brought when the spouses
failed to pay the loan in accordance with its terms.[7]
The defendants' answer admitted the loan and the failure to pay the
amortizations thereon but sought to avoid liability by setting up the
defense of laches, usury, and an agreement with respect to the
ishpond: for its development by the plaintiff, as capitalist partner,
and the defendants as industrial partners.[8] The Development Bank
of the Philippines, hereafter simply DBP, iled a reply in which it
denied under oath the averment of usury, and controverted the
existence of the asserted partnership.
The defendants were initially declared in default for failure to
appear for a conference on the date irst set for the pre-trial, but
after the DBP had presented its evidence ex parte, the Court set
aside the order of default, on defendants' motion, and re-scheduled
the case for pre-trial on May 17, 1971.[9]
At the second pre-trial, the attorney appearing for DBP was unable
to produce any authority to represent his client at the conference.
Consequently the Court declared DBP non-suited.[10] However, the
order of non-suit was later reconsidered upon a showing by the
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
DBP that notice of the pre-trial had not been sent to it, only to its
lawyer.[11] The case was once again set for pre-trial.
On the appointed date, September 14, 1972, the DBP lawyer
appeared together with the Assistant Manager of the DBP Legaspi
Branch, a Mr. Alberto Garcia. Garcia presented a special power of
attorney from his Branch Manager, investing him with authority to
act for the DBP, and to sign any compromise agreement that might
be agreed upon in accordance with the policies of the bank.[12] The
defendants challenged the adequacy and ef icacy of Garcia's power
of attorney, claiming that the principal, the Branch Manager, did not
himself have the power to enter into any amicable settlement of the
bank's claims and so had delegated nothing to his Assistant.[13] The
Court upheld the challenge and once again declared DBP
non-suited.[14] DBP iled a motion for reconsideration but this was
denied. DBP iled a second motion for reconsideration, this time
alluding to a resolution of the DBP Board of Governors (No. 4696)
dated November 8, 1972 supposedly authorizing the Branch
Manager, the Assistant Manager and the Branch Cashier, to
represent DBP at the pre-trial.[15] But this was also denied, for lack
of merit.[16]
DBP then went up to the Court of Appeals. Here, too, it failed. The
Appellate Court af irmed the Trial Courts order of dismissal, by
decision rendered on October 24, 1978.[17] It is this decision of the
Court of Appeals which DBP, by its petition for review on certiorari,
Would have this Court reverse.
At the time of the challenge to the authority of the DBP Assistant
Manager to represent the bank at the pre-trial, the authority to
compromise claims due to government owned or controlled
corporations, such as the DBP, was conferred by law (R.A. No. 2266)
on the Auditor General as regards claims not exceeding P1,000.00,
and on the President of the Philippines, as regards claims exceeding
P1,000.00, it being additionally required that if the claim exceeded
P10,000.00, the approval of Congress had to be obtained. It was not
until November 20, 1972, upon effectivity of Presidential Decree No.
61, that authority to compromise, release, or otherwise settle claims
due to the DBP was expressly and exclusively conferred upon its
Board of Governors. Therefore, according to the Court of Appeals,
when that Board of Governors approved and adopted Resolution
No. 4696 on November 8, 1972 -- granting authority to the Branch
Manager, Assistant Manager and Branch Cashier to represent it at
the pre-trial -- the Board itself had no power to compromise or
otherwise settle claims due to it; it would not receive that power
until 12 days later, November 20, 1972, on promulgation of P.D. No.
61 as aforestated; hence, the Board could not have transmitted to its
designated delegates that power to compromise, release, or
otherwise settle claims, which it did not yet possess at the time.
DBP suggests that it was error to Consider an interval of two
months (from September 14, 1972, when the authority of the DBP
Assistant Manager was irst challenged to November 20, 1972,
when PD 61 gave the DBP Board exclusive authority to compromise
its claims), or the much shorter one of twelve days (from November
8, 1972, when the DBP passed the resolution giving the Assistant
Manager authority to represent it at the pre-trial, to November 20,
1972, when PD 61 was promulgated), as giving rise to an
irredeemably fatal defect, foreclosing any possibility of relief to the
petitioner. The argument is not without plausibility. After all, as
this Court has held,[18] the rule on pre-trial was not meant to be "an
implacable bludgeon" to smite every party guilty of an infraction of
the rules, "but ** a tool to assist the trial courts in the orderly and
expeditious conduct of trials," and should hence be liberally
construed to the end that there may be not merely a speedy, but
more importantly, a just determination of the merits of every action.
Based on Syllabus of Dean Monteclar  By RGL  79 of 95
 
However, the petitioner's case rests on much irmer ground,
jurisprudential support for which is not wanting. As already
adverted to, after issues had been joined in the Trial Court and a
first pre-trial conference had been scheduled, the private
respondents failed to appear thereat, were on that account declared
in default and DBP was allowed to, and did, present its evidence ex
parte. The effect of these successive incidents was to terminate the
pre-trial stage of the action and to limit the effect of the subsequent
lifting of the order of default issued against the private respondents
to the restoration of their right to notice of subsequent proceedings
and to take part in the trial.[19] Such lifting, as has also been held by
this Court on another occasion, did not revert the action to the
pre-trial stage or authorize, much less render mandatory, a second
pre-trial.[20]
"The defendant Pioneer Insurance & Surety Corp.having complied
with the order of the Court to appear and attend this pre?trial, and
had manifested its opposition to settling the case amicably, said
party may no longer be compelled to attend a second pre-trial
hearing, and neither may it be punished by the court by its order
declaring said defendant as in default. The mandatory character of
a pre-trial and the serious consequences confronting the parties in
the event that each party fails to attend the same must impose a
strict application of the Rule such that where we ind no authority
for the Court to call another pre-trial hearing, as in fact there is
none in said Rule, the conclusion is inescapable that the respondent
Judge committed a grave and serious abuse of discretion and acted
in excess of jurisdiction in declaring defendant Pioneer Insurance &
Surety Corp. as in default for failure to attend the second pre-trial
called by the Judge on February 29, 1972. In other words, there is
nothing in the Rules that empowers or authorizes the court to call a
second pre-trial hearing after it has called a irst pre-trial duly
attended by the parties, and lacking such authority, the court
perforce lacks the authority to declare a failure to prosecute on the
part of plaintiff for failing to attend such second pre-trial; it also
lacks the authority to declare the defendant ‘as in default’ by reason
of the latter's failure to be present at the said second pre-trial."
The scheduling of a second pre-trial after DBP had inished
presenting its evidence frustrated, rather than advanced, the
primary purpose of pre-trials of abbreviating trial by limitation and
simpli ication of the issues, if not indeed of dispensing altogether
with the necessity of trial. Neither is that purpose served by
non-suiting a plaintiff at such a stage of the action. The correct
course would have been to proceed with the trial, in fact already
well under way, allowing the defendants (private respondents) to
cross-examine the plaintiff’s (DBP's) witnesses and thereafter to
offer their evidence.
WHEREFORE, inding suf icient merit in the petition, the Court
hereby grants the same. The Decision of the Court of Appeals
complained of is reversed, and the order dismissing the petitioner's
complaint is set aside. The Trial Court is directed to continue with
the trial of Civil Case No. 280-II in the manner above indicated and
thereafter render judgment therein as the facts and the law may
warrant. No pronouncement as to costs.
SO ORDERED.
Cruz, Gancayco, Griño-Aquino, and Medialdea, JJ., concur.
34 Young v CA, 204 SCRA 584 
THIRD DIVISION
G.R. No. 81239, December 04, 1991
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
NELSON L. YOUNG AND VIOLETA YOUNG, PETITIONERS, VS. THE
HONORABLE COURT OF APPEALS AND INDUSTRIAL FINANCE
CORPORATION, RESPONDENTS.
DECISION
DAVIDE, JR., J.:
This is a petition for review on certiorari under Rule 45 of the Rules
of Court to set aside the decision[1] of 24 August 1987 of respondent
Court of Appeals in C.A.-G.R. CV No. 07484[2] which af irmed in toto
the decision of Branch 135 of the Regional Trial Court of Makati,
Metro Manila of 3 May 1985 in Civil Case No. 1219.
The factual and procedural antecedents are not disputed.
On 3 July 1981, herein private respondent (hereinafter referred to
as IFC), as assignee of a deed of sale with chattel mortgage and the
accompanying promissory note, iled a complaint against the
petitioners with the then Court of First Instance (now Regional Trial
Court) of Rizal (at Pasig, Metro Manila) for the payment of the total
sum of P157,588.39 which became due on the note by reason of its
acceleration clause, the interest thereon, and of attorney's fees. The
note was executed by petitioners in favor of Baroq Motor Sales, Inc.
in connection with their purchase of a cargo truck on installment
basis. The case was docketed as Civil Case No. 41881 and was
assigned to Branch VI of said court.
For failure to ile their Answer within the reglementary period, the
Pasig court, upon motion of IFC, declared petitioners in default in its
order of 25 September 1981 and allowed IFC to present its evidence
ex-parte on 30 October 1981. However, on 30 September 1981,
petitioners iled an Answer With Counterclaim and a Motion to
Admit Third-Party Complaint against Worldwide Insurance Co., Inc.
with which they insured against loss or damage the cargo truck for
P180,000.00. The Pasig court granted this motion on 15 October
1981.
On 15 October 1981, IFC iled its reply to the Answer. On 27
October 1981, petitioners iled a motion to reconsider the default
Order of 25 September 1981, which the court granted on 30
October 1981.
On 4 December 1981, the Third-Party defendant iled its Answer
with Compulsory Counterclaim.
Then, on 17 December 1981, the Pasig court set the case for
pre-trial conference on 29 March 1982 at 8:00 A.M.
When the case was called for pre-trial on 28 March 1982, neither
petitioners nor their counsel appeared despite due notice. Upon
motion of IFC, the Pasig court issued an Order declaring petitioners
in default, allowing IFC to present its evidence ex-parte before a
Commissioner and dismissing the third-party complaint without
prejudice; however, since petitioners arrived shortly thereafter, the
court gave them ive (5) days from receipt of the Order within which
to ile any motion they may deem necessary.
At 2:35 o'clock in the afternoon of 30 March 1982, IFC presented its
evidence before the Commissioner designated by the Pasig court
and rested its case.
On 7 April 1982, petitioners iled a motion to reconsider the 29
March 1982 Order declaring them in default and dismissing the
third-party complaint. They prayed that the order be lifted and that
the case be set for pre-trial conference.
On 20 May 1982, the Pasig court issued the following Order:
"Finding the motion for reconsideration iled by the defendants
dated April 6, 1982, to be well-taken and in the interest of justice,
the Court grants the same. The Order dated March 29, 1982
declaring defendants in default and dismissing the third party
complaint is hereby reconsidered and set aside. Plaintiff's evidence,
however, stands." (underscoring supplied for emphasis)
Based on Syllabus of Dean Monteclar  By RGL  80 of 95
 
Upon manifestation of IFC on 21 July 1982, the Pasig court set the
case for hearing on 15 October 1982. In a Notice of Hearing dated
11 October 1982, the hearing was reset to 21 January 1983. Then,
on 14 December 1982, on the ground that the presiding judge was
on leave, a notice was issued resetting "the case" for 9 March 1983.
No hearing took place on the latter date because of the
reorganization of the judiciary in January 1983.
The case was subsequently transferred to Branch 135 of the
Regional Trial Court of Makati, Metro Manila, then presided over by
Judge Rafael T. Mendoza, and was docketed therein as Civil Case. No.
1219. This Branch (hereinafter referred to as the Makati Court)
issued on 20 April 1983 a Notice of Hearing/Pre-Trial Conference
setting the hearing of the case for 24 June 1983 at 8:30 A.M.;
however, due to the absence of the third-party defendant, the court,
upon agreement of the parties present, reset the pre-trial
conference to 2 September 1983.
On 2 September 1983, IFC, its counsel and the third-party
defendant did not appear thus prompting the Makati court to issue
the following Order:
"For failure of the plaintiff and counsel to appear today, despite due
notice, as well as the third party defendant and counsel, as prayed
for by the defendant, through counsel, the complaint is hereby
dismissed, and the third party defendant declared as in default and
third party plaintiff is allowed to present its evidence ex parte on
September 8,1983, at 2:00 P.M. in support of his third party
complaint."
IFC received a copy of this Order on 20 September 1983.
Petitioners did not present their evidence.
On 25 May 1984, the Makati court issued the following Order:
"It appearing that despite the lapse of time plaintiff has failed to
take the necessary steps to prosecute its case, this Court hereby
orders the instant case dismissed for lack of interest to prosecute."
Upon IFC's motion for reconsideration of 13 September 1984,
wherein it gave as reason for its failure to actively prosecute the
case its occasional substitution of counsel and the transfer of the
case from Pasig to Makati,[3] the Makati court issued on 25
September 1984 an Order reading as follows:
"Motu propio this Court hereby modi ies its order dated May 25,
1984 in the sense that between the words 'time' and 'plaintiff', the
words ‘third-party’ should be inserted. In all other aspect (sic), the
aforesaid order stands.
Accordingly, the motion of the plaintiff thru counsel dated
September 11, 1984 is deemed moot and academic."
As thus modi ied, the 25 May 1984 Order was then clearly directed
against herein petitioners who did not present, ex-parte, their
evidence on 8 September 1983.
On 27 September 1984, IFC iled with the Makati court a
manifestation and motion praying that the latter's Order of 2
September 1983 dismissing the complaint be reconsidered and set
aside, the case be submitted for decision based on the evidence
presented by the IFC and that petitioners' right to present their
evidence be considered to have been waived.
Petitioners on the other hand assert that they were not furnished
with copies of the manifestation and motion and of the order of the
court of 12 October 1984 requiring them to comment thereon
which was sent to their counsel, but returned to the court with the
stamped notation "Unclaimed."[4]
On 14 February 1985, IFC iled a manifestation and motion
reiterating its prayer that the case be submitted for decision on the
basis of the evidence it had presented. Reacting, petitioners again
claim that neither they nor their counsel received a copy thereof.[5]
Pursuant thereto, the Makati court issued on 25 February 1985 an
Order directing the court stenographer who took down the
stenographic notes of the proceedings in the case before the Pasig
court to submit the transcripts thereof within ten (10) days from
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
notice, after which "the instant case will be deemed submitted for
decision."
On 3 May 1985, the Makati court rendered its decision in Civil Case
No. 1219, the dispositive portion of which reads:
"WHEREFORE, judgment is hereby rendered in favor of the plaintiff
and against the defendants, ordering the latter to pay plaintiff
jointly and severally:
1. The amount of P134,472.34 plus penalty charges
thereon at the rate of 3% per month from the iling
of the complaint until fully paid;
2. The sum of P10,000.00 as attorney's fees;
3. Costs of suit."[6]
Petitioners appealed from the decision to the Court of Appeals,
which docketed the case as C.A.-G.R. CV No. 07484. They asserted
therein that the Makati court erred in setting aside its 2 September
1983 Order dismissing IFC's complaint and thereafter rendering a
decision in the latter's favor, and contended in support thereof that
said order had long become inal and had the effect of an
adjudication on the merits pursuant to Section 3, Rule 117 of the
Rules of Court.[7]
The respondent court de ined the issue before it in this wise:
"x x x whether plaintiffs' [IFC's] failure to appear at the hearing set
on September 2, 1983 -- during which for such failure the Order
dismissing the complaint was issued -- may be considered a failure
to prosecute or a failure to comply with the rules or with an order of
the court below on the part of the plaintiff within the contemplation
of Rule 17, Section 3, supra."[8]
Respondent court rejected the petitioners' contention. It held that
pre-trial was set by the Pasig court for 29 March 1982. However,
petitioners were declared in default; it was at that stage that the
requirement of Section 1, Rule 20 of the Rules of Court was deemed
to have been complied with, and what was subsequently set by the
Makati court, irst on 24 June 1983 and then on 2 September 1983
upon a so-called "Notice of Hearing/Pre-Trial Conference," "was and
should have been a hearing and not a pre-trial," considering "that at
that particular stage (on September 2, 1983) all of the pleadings
had already been submitted by the parties and plaintiff had already
adduced its evidence." Furthermore, it was held in Jalover vs.
Ytoriaga[9] that where the plaintiff had already adduced evidence
and rested its case before the dismissal of said case, the absence of
the plaintiff at a subsequent hearing cannot be considered a failure
to prosecute on plaintiffs' part; it can only be construed as a waiver
of the right to cross-examine the witnesses which the opposite
party might present at the hearing and to object to the admissibility
of the evidence of the latter.[10] Moreover, respondent court
considered as satisfactory IFC's explanation for its failure to
prosecute the case. Hence, in the decision promulgated on 24
August 1987, respondent Court of Appeals af irmed in toto the
decision of the Makati court. Their motion for its reconsideration
having been denied in the resolution of 21 December 1987,
petitioners came to this Court via this petition for review which
they iled on 5 February 1988.[11] They urge Us to set aside
respondent court's decision because it erred:
(1) “in not passing upon the issue of inality of the order dated
September 2, 1983 -- dismissing plaintiff-appellee's complaint;”
(2) “in not concluding that the order dated September 2, 1983 x x x
being inal and executory, the lower court has lost jurisdiction to set
aside the same;”
(3) “in misapplying the doctrine enunciated x x x in the case of
Jalover vs. Ytoriaga, 80 SCRA 100, to the case at bar;”
(4) “in not concluding that after the order dated September 2, 1983
x x x became inal and executory, the subsequent proceedings and
the decision rendered anew by the trial court dated May 3, 1985 are
null and void.”[12]
We required the respondents to comment on the petition;[13] IFC
complied with the order on 27 July 1988.[14]
Based on Syllabus of Dean Monteclar  By RGL  81 of 95
 
We then gave the petition due course and required the parties to
submit their respective Memoranda,[15] which petitioners complied
with on 28 October 1988[16] and the IFC only on 17 July 1990.[17]
The principal issue in this case is whether or not the Makati court's
order of 2 September 1983 dismissing IFC's complaint for failure to
appear on said date had long become inal such that it was error for
the former to issue its order of 25 February 1985 granting IFC's 27
September 1984 motion (to set aside said order of 2 September
1983 and to decide the case on the basis of the evidence it earlier
presented ex-parte pursuant to the default order of 29 March 1982).
The issue in turn revolves on the propriety and validity of the said
dismissal order. If such order is valid, then certainly it became inal
upon the lapse of ifteen (15) days from receipt thereof by IFC. Both
IFC and petitioners agree that the former received the order on 20
September 1983. Accordingly, per Section 39 of B.P. Blg. 129, IFC
had until 5 October 1983 within which to either ile a motion to
reconsider the order or to appeal therefrom. Upon the other hand,
if the Order was null and void, as IFC claims, it never became inal.
As to be expected, petitioners assert that the Order was valid since
what was set for 2 September 1983 was the pre-trial of the case; it
was a re-setting of the pre-trial scheduled on 24 June 1983. Indeed,
the Order of 24 June 1983 reads:
“By agreement, pre-trial is reset to September 2, 1983.”[18]
Since IFC accepted the notice of pre-trial for 24 June 1983 and
agreed to its re-setting, it is now estopped from claiming that the
Makati court should not have set the case for pre-trial since one had
already been had on 29 March 1982. Petitioners then conclude that
since IFC failed to appear for pre-trial on 2 September 1983, the
Makati court correctly dismissed the complaint pursuant to Section
2, Rule 20 of the Rules of Court which provides:
"SECTION 2. Failure to appear at pre-trial conference. -- A party who
fails to appear at a pre-trial conference may be non-suited or
considered as in default."
and that such dismissal amounts to an adjudication on the merits
per Section 3, Rule 17 of the Rules of Court, which reads as follows:
"SECTION 3. Failure to prosecute. -- If plaintiff fails to appear at the
time of the trial, or to prosecute his action for an unreasonable
length of time, or to comply with these rules or any order of the
court, the action may be dismissed upon motion of the defendant or
upon the court's own motion. This dismissal shall have the effect of
an adjudication upon the merits, unless otherwise provided by
court."
Hence, it was error for the Makati court to set aside this Order in its
25 February 1985 Order on the basis of IFC's 27 September 1984
manifestation and motion.
IFC does not dispute the fact that it neither iled a motion to
reconsider or appealed from the order of 2 September 1983. It,
however, claims that the Makati court erred in dismissing the case
on 2 September 1983 since it had already offered its evidence on 30
March 1982 pursuant to the default order of 28 March 1982 and
that per the Order of 20 May 1982, while the default order was set
aside, the court explicitly stated therein that "plaintiff's evidence,
however, stands." In short, a party cannot be said "to have failed to
prosecute when his evidence is already a part of the records of the
case and the court can decide the case based on the evidence
already presented."[19] It then went on to conclude that the 2
September 1983 Order is null and void and a void order is no order
at all. Hence, even if it was received by IFC on 20 September 1983,
it never became inal and did not produce any legal or binding
effect.[20]
Two (2) earlier cases decided eleven (11) years apart aid Us in
resolving the issue in this case.
In Pioneer Insurance and Surety Corp., et al. vs. Hontanosas, et al.,[21]
decided on 31 August 1977, a pre-trial was conducted between
original plaintiffs and Pioneer on 5 May 1971. The latter opposed
any amicable settlement; thereupon, plaintiffs marked their
pre-trial exhibits, objections to which were reserved by Pioneer.
The parties then agreed to set the trial on the merits on 11 June
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
1971. However, after the complaint was amended to include an
additional party defendant, the court set the case again for pre-trial
on the basis of the amended complaint, and because defendants
failed to appear at such pretrial, it declared them as in default,
allowed the plaintiffs to present their evidence ex-parte and
thereafter rendered a decision in favor of the plaintiffs. This Court
set aside the default order and ruled that the judge issued it with
grave and serious abuse of discretion and in excess of jurisdiction
since:
"x x x there is nothing in the Rules that empowers or authorizes the
court to call a second pre-trial hearing after it has called a irst
pre-trial duly attended by the parties, and lacking such authority,
the court perforce lacks authority to declare a failure to prosecute
on the part of the plaintiff for failing to attend such second pre-trial;
it also lacks the authority to declare the defendant 'as in default' by
reason of the latter's failure to be present at the said second
pre-trial."
The extended disquisition of the Court reads:
"Unquestionably, the present Rules make pre-trial mandatory. And
the reason for making pre-trial mandatory is that pre-trial
conferences bring the parties together, thus making possible an
amicable settlement or doing away with at least the non-essentials
of a case from the beginning. (Borja vs. Roxas, 73 Phil. 647).
Philippine jurisprudence has laid down the legal doctrine that while
it is true that it is mandatory for the parties and their attorneys to
appear before the trial court for a pre-trial conference to consider
inter alia the possibility of an amicable settlement, the rule was by
no means intended as an implacable bludgeon but as a tool to assist
the trial court in the orderly and expeditious conduct of trials. The
rule is addressed to the sound discretion of the trial court. (Rice
and Corn Administration vs. Ong Ante, et al., G.R. No. L-30558, Oct.
4, 1971).
Both client and counsel must appear at the pre-trial. This is
mandatory. Failure of the client to appear is a ground for dismissal.
(American Ins. Co. vs. Republic 1967D Phil. 63; Hone Ins. Co. vs.
United States Lines Co., 1967D Phil. 401, cited in Saulog vs.
Custombuilt Manufacturing Corp. No. L-29612, Nov. 15, 1968;
Taroma v. Sayo, L-37296, Oct. 30, 1975 (67 SCRA 508).
In the case of Insurance Co. of North America vs. Republic, et al., G.R.
No. L-26794, Nov. 15, 1967, 21 SCRA 887, the Supreme Court,
speaking thru Justice Bengzon, held that Sec. 1, Rule 20 of the Rules
requires the court to hold a pre-trial before the case is heard and
since in this case, a pre-trial has already been had, the fact that an
amended complaint was later iled, did not necessitate another
pre-trial. It would have been impractical, useless and
time-consuming to call another pre-trial.
xxx
The defendant Pioneer Insurance & Surety Corp. having complied
with the order of the Court to appear and attend this pre-trial, and
had manifested its opposition to settling the case amicably, said
party may no longer be compelled to attend a second pre-trial
hearing, and neither may it be punished by the court by its order
declaring said defendant as in default. The mandatory character of
a pre-trial and the serious consequences confronting the parties in
the event that each party fails to attend the same must impose a
strict application of the Rule such that where we ind no authority
for the Court to call another pre-trial hearing, as in fact there is
none in said Rule, the conclusion is inescapable that the respondent
Judge committed a grave and serious abuse of discretion and acted
in excess of jurisdiction in declaring defendant Pioneer Insurance &
Surety Corp. ‘as in default’ for failure to attend the second pre-trial
called by the Judge on February 29, 1972. In other words, there is
nothing in the Rules that empowers or authorizes the court to call a
second pre-trial hearing after it has called a irst pre-trial duly
attended by the parties, and lacking such authority, the court
perforce lacks the authority to declare a failure to prosecute on the
part of the plaintiff for failing to attend such second pre-trial; it also
lacks the authority to declare the defendant ‘as in default’ by reason
of the latter's failure to be present at the said second pre-trial.
It serves no purpose for the court to call again another pre-trial
where the parties had previously agreed to disagree, where the
Based on Syllabus of Dean Monteclar  By RGL  82 of 95
 
issues had been joined and where the court itself had been satis ied
that a hearing on the merits is the next step to conduct as in the
instant case where the court, after the pre-trial on May 5, 1971, set
the trial of the case on its merits for June 11, 1971. Indeed, a second
pre-trial is impractical, useless and time-consuming."
xxx
In Development Bank of the Philippines vs. Court of Appeals, et
al.,[22] decided on 26 January 1989, at a irst pre-trial conference, the
defendants were declared by the trial court to be as in default and
the plaintiff Development Bank of the Philippines (DBP) was
allowed, as in fact it did, present its evidence ex-parte. But on
motion of defendants, the order of default was set aside and the
case re-scheduled for pre-trial on which occasion, however, DBP
was declared non-suited because the challenge of defendants
concerning the "adequacy and ef icacy" of the power of attorney
granted by DBP to its Assistant Manager to appear for it at pre-trial
was sustained by the trial court. The Court of Appeals having
sustained the court a quo, this Court ruled that the effect of the
following successive incidents therein, to wit: the joinder of the
issues, the scheduling of the pre-trial conference, the failure of
defendants to appear at pre-trial, the declaration of defendant, and
the ex-parte presentation of evidence by the plaintiff was "to
terminate the pre-trial stage of the action and to limit the effect of
the subsequent lifting of the order of default issued against the
private respondents to the restoration of their right to notice of
subsequent proceedings and to take part in the trial.[23] Such lifting,
as has also been held by this Court on another occasion, did not
revert the action to the pre-trial stage or authorize, much less
render mandatory, a second pre-trial."[24]
We went on to say that:
"The scheduling of a second pre-trial after DBP had inished
presenting its evidence frustrated, rather than advanced, the
primary purpose of pre-trials of abbreviating trial by limitation and
simpli ication of the issues, if not indeed of dispensing altogether
with the necessity of trial. Neither is that purpose served by
non-suiting a plaintiff at such a stage of the action. The correct
course would have been to proceed with the trial, in fact already
well under way, allowing the defendants (private respondents) to
cross-examine the plaintiff's (DBP's) witnesses and thereafter to
offer their evidence."
In the present case, it is quite obvious that the Pasig court had no
intention of reverting the case to its pre-trial stage. This is easily
borne out by the fact that its Order of 20 May 1982 is silent as to the
prayer in petitioner's motion of 7 April 1982 that "the case be set
for pre-trial conference with due notice to all parties concerned."
Moreover, it subsequently sent a notice of hearing setting the
hearing of the case on 15 October 1982, which was reset to 21
January 1983 in the notice dated 11 October 1982. Yet, while this
may be so, the parties herein and the Makati court failed to fully
comprehend the situation, which could have been due to the
transfer of the case from the Pasig court and their failure to examine
the records.
Thus, it is not clear whether the Makati court initially set the case
for pre-trial or for hearing. The heading of its 20 April 1983 Notice
is rather vague, if not misleading. It reads "Notice of
Hearing/Pre-Trial Conference." But, as the respondent court noted,
its body refers to a setting of the "hearing of the case" on 24 June
1983.[25] Its personnel in charge of notices may have used the
mimeographed blank forms but forgot to cancel the inappropriate
words in the heading. In any case, the parties considered the notice
as one for pre-trial for, on 24 June 1983, due to the absence of the
third-party defendant, IFC and the petitioners agreed to reset the
pre-trial to 2 September 1983 and the court issued the
corresponding order. In essence, therefore, the parties in this case
had voluntarily agreed that the case be set anew for pre-trial. And
the Makati court, by its order, yielded, in effect, to the agreement of
the parties. This fact brings this case out of the doctrine enunciated
in the Pioneer and DBP cases, and ingrafts an exception thereto. No
one can question the soundness and wisdom of the doctrine that
the pre-trial stage is completed after a party had been ordered
non-suited or declared as in default, as the case may be, and that an
order lifting it does not revert the action to its pretrial stage, or
authorize, much less, a second pre-trial. However, neither the Rules
nor the doctrine bars the parties from agreeing, after such lifting, to
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
hold a pre-trial and to effectively accomplish its objectives which
could not have been done at the irst pre-trial because of the
absence of the plaintiff, resulting in his non-suit, or the absence of
the defendant, resulting in his being declared as in default. The
necessity for a second pre-trial may have been felt by the parties in
this case considering that defendant had a third-party complaint
and the third-party defendant had set up a compulsory
counterclaim. At such pre-trial, the parties could consider the
matter of an amicable settlement, the simpli ication of the issues
and the possibility of obtaining stipulations or admissions of facts
and of documents to avoid unnecessary proof which would, at the
very least, shorten the proceedings. It must be remembered that
the factual milieu surrounding the default order in this case is
entirely different from that in Pioneer where the defaulted party
attended the irst pre-trial and rejected any amicable settlement of
the case. DBP involved the non-suit at the second pre-trial of a
party which had already adduced its evidence ex-parte at the irst
pre-trial after defendant was declared in default and was present at
the second pre-trial; DBP was declared non-suited simply because
the authority of its representative was challenged.
Elsewise stated, IFC had waived the effect of the lifting of the order
of default and had voluntarily agreed to have another pre-trial.
For its failure to appear at the pre-trial on 2 September 1983, IFC
could be validly non-suited and its complaint dismissed. Even if We
follow the arguments of the respondent court and the IFC that the
Makati court could not validly set the case for pre-trial and that the
2 September 1983 setting was in fact for a hearing - - and, therefore,
for the cross-examination of the witness for IFC whose evidence had
been adduced ex-parte on 30 March 1982 -- the Makati court could
undoubtedly dismiss the complaint under. Section 3, Rule 17 of the
Rules of Court because neither IFC nor its counsel appeared and
worse, its witness could not be cross-examined. Said section reads:
"SECTION 3. Failure to prosecute. -- If plaintiff fails to appear at the
time of the trial, or to prosecute his action for an unreasonable
length of time, or to comply with these rules or any order of the
court, the action may be dismissed upon motion of the defendant or
upon the court's own motion. This dismissal shall have the effect of
an adjudication on the merits unless otherwise provided by court."
When cross-examination is not done or completed due to causes
attributable to the party offering the witness, the uncompleted
testimony is rendered incompetent and should be stricken from the
record.[26]
In the instant case, the Makati court did not provide in its order of 2
September 1983 that the dismissal of the complaint was without
prejudice. Hence, it had the effect of an adjudication on the
merits.[27] This Order was received by IFC on 20 September 1983.
IFC knew that it was an order issued in connection with the 2
September 1983 pre-trial conference -- or hearing on the merits if it
forgot the agreement it entered into with the adverse party on 24
June 1983. Its counsel knew, or was supposed to know, that it had
only ifteen (15) days from receipt of a copy thereof within which to
either move for its reconsideration or appeal therefrom. Yet, it did
nothing until 27 September 1984, when it iled a manifestation and
motion to set aside the order and decide the case on the basis of the
evidence it had presented on 30 March 1982.
Undoubtedly, at the time it iled the manifestation and motion, the 2
September 1983 order had long become inal. Neither appeal nor a
petition for relief from judgment was available to IFC. The Makati
court had lost jurisdiction over the case. It had no authority to
modify, annul or set aside the inal order. Once a decision becomes
inal and executory, it is removed from the power and jurisdiction of
the court which rendered it to further alter or amend it, much less
revoke it.[28] This doctrine of inality of judgment is grounded on
fundamental considerations of public policy and sound practice that
at the risk of occasional error, the judgments of the courts must
become inal at some de inite date ixed by law.[29] To allow courts to
amend inal judgments will result in endless litigation.[30]
The foregoing discussions are more than suf icient to abort the
theory of IFC that the Order of 2 September 1983 was null and void
and never had any binding effect because it had already presented
its evidence and, per Jalover vs. Ytoriaga, supra., such a party can
not be considered to have failed to prosecute Jalover is not
applicable in this case.
Based on Syllabus of Dean Monteclar  By RGL  83 of 95
 
The conclusion We have reached may be harsh on IFC. But, it is
quite clear from the records that it slept on its rights. It did nothing
-- absolutely nothing -- for more than a year after receipt of the
dismissal order of 2 September 1983. It slept too long on whatever
right it had. Laws come to the assistance of the vigilant, not to those
who sleep on their rights. Vigilantibus, non dormientibus, jura
subveniunt. If IFC's counsel neglected his duties, appropriate action
under the Code of Professional Responsibility may be taken against
him.
It follows then that the Order of the Makati court of 25 February
1985 setting aside its 2 September 1983 order and considering the
case submitted for decision on the basis of the evidence of IFC, and
said court's decision of 3 May 1985 are null and void. Respondent
court then committed a reversible error in af irming such decision.
WHEREFORE, the instant petition is GRANTED. The decision of the
respondent court in C.A.-G.R. CV No. 07484 promulgated on 24
August 1987 and its resolution of 21 December 1987 in C.A.-G.R. CV
No. 07484, and the decision of the Regional Trial Court of Makati,
Branch 135, of 3 May 1985 in Civil Case No. 1219 are hereby SET
ASIDE.
Costs against private respondent.
IT IS SO ORDERED.
Gutierrerz, Jr., Bidin, and Romero, JJ., concur.
Fernan, C.J., on leave.
VI. Modes of Discovery 
RULE 22 Computation of Time 
RULE 23 Depositions Pending Action 
RULE 24 Depositions Before Action or Pending 
Appeal 
RULE 25 Interrogatories to Parties 
RULE 26 Admission by Adverse Party 
RULE 27 Production or Inspection of Documents or 
Things 
RULE 28 Physical and Mental Examination of 
Persons 
RULE 29 Refusal to Comply with Modes of 
Discovery 
VII. Trial (RULE 30) 
Trial Proper 
RULE 31 Consolidation or Severance 
RULE 32 Trial by Commissioner 
RULE 33 Demurrer to Evidence 
RULE 34 Judgment on the Pleadings 
RULE 35 Summary Judgments 
VIII. Judgments, Final Orders and Entry Thereof (RULE 
36) 
Rendition of Judgment and Final Orders 
RULE 37 New Trial or Reconsiderations (Remedies 
after Judgment but before finality) 
RULE 38 Relief from Judgments, Orders, or Other 
Proceedings (Remedies after judgment becomes 
final) 
IX. Execution, Satisfaction and Effect of 
of 
Judgments (RULE 39) 
39) 
When execution a matter of right 
Discretionary Execution 
Execution by motion or by independent action 
Execution on case of death of a party 
Forms and contents of a writ of execution 
 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

Execution of judgment, how enforced  The Deputy Sheriff of this Court is ordered to immediately serve the
Levy on execution, its effect  Temporary Protection Order (TPO) upon the respondent personally
and to seek and obtain the assistance of law enforcement agents, if
Property exempt from execution 
needed, for purposes of effecting the smooth implementation of this
35 Republic v Daisy Yahon, 201043, 16 Jun 2014  order.
FIRST DIVISION 
G.R. No. 201043, June 16, 2014 
In the meantime, let copy of this order and petition be served upon
the respondent for him to ile an OPPOSITION within a period of
REPUBLIC  OF  THE  PHILIPPINES,  REPRESENTED  BY  THE  ive (5) days from receipt hereof and let a Preliminary Conference
ARMED  FORCES  OF  THE  PHILIPPINES  FINANCE  CENTER  and hearing on the merits be set on October 17, 2006 at 2:00 o’clock
(AFPFC),  PETITIONER,  VS.  DAISY  R.  YAHON,  in the afternoon.
RESPONDENT. 
To insure that petitioner can receive a fair share of
  respondent’s retirement and other benefits, the following
agencies thru their heads are directed to WITHHOLD any
D E C I S I O N  retirement, pension and other benefits of respondent, S/SGT.
VILLARAMA, JR., J.: CHARLES A. YAHON, a member of the Armed Forces of the
Philippines assigned at 4ID, Camp Evangelista, Patag, Cagayan de
Before the Court is a petition for review on certiorari under Rule 45
Oro City until further orders from the court:
which seeks to nullify and set aside the Decision[1] dated November
29, 2011 and Resolution[2] dated March 9, 2012 of the Court of
1. Commanding General/Of icer of the Finance Center of the
Appeals (CA) Mindanao Station in CA-G.R. SP No. 02953-MIN. The
Armed Forces of the Philippines, Camp Emilio Aguinaldo,
CA af irmed the orders and decision of the Regional Trial Court
Quezon City;
(RTC) of Cagayan de Oro City, Branch 22 granting temporary and
2. The Management of RSBS, Camp Emilio Aguinaldo, Quezon
permanent protection orders, and denying the motion to lift the
City;
said temporary protection order (TPO).
3. The Regional Manager of PAG-IBIG, Mortola St., Cagayan
de Oro City.
Daisy R. Yahon (respondent) iled a petition for the issuance of
protection order under the provisions of Republic Act (R.A.) No. VIOLATION OF THIS ORDER IS PUNISHABLE BY LAW.
9262,[3] otherwise known as the “Anti-Violence Against Women and
Their Children Act of 2004,” against her husband, S/Sgt. Charles A.
IF THE RESPONDENT APPEARS WITHOUT COUNSEL ON THE DATE
Yahon (S/Sgt. Yahon), an enlisted personnel of the Philippine Army
OF THE PRELIMINARY CONFERENCE AND HEARING ON THE
who retired in January 2006. Respondent and S/Sgt. Yahon were
MERITS OF THE ISSUANCE OF A PERMANENT PROTECTION
married on June 8, 2003. The couple did not have any child but
ORDER, THE COURT SHALL NOT RESCHEDULE OR POSTPONE THE
respondent has a daughter with her previous live-in partner.
PRELIMINARY CONFERENCE AND HEARING BUT SHALL APPOINT
A LAWYER FOR THE RESPONDENT AND IMMEDIATELY PROCEED
On September 28, 2006, the RTC issued a TPO, as follows: WITH THE SAID HEARING.

Finding the herein petition for the Issuance of Protection Order to
be suf icient in form and substance and to prevent great and
irreparable injury to the petitioner, a TEMPORARY PROTECTION
ORDER is forthwith issued to respondent, S/SGT. CHARLES A.
YAHON directing him to do the following acts:
1. Respondent is enjoined from threatening to commit or
committing further acts of physical abuse and violence
against the petitioner;
2. To stay away at a distance of at least 500 meters from
petitioner, her residence or her place of work;
3. To refrain from harassing, annoying, intimidating,
contacting or communicating with petitioner;
4. Respondent is prohibited from using or possessing any
irearm or deadly weapon on occasions not related to his
job;
5. To provide reasonable inancial spousal support to the
petitioner.
The Local Police Of icers and the Barangay Of icials through the
Chairman in the area where the petitioner and respondent live at
Poblacion, Claveria, Misamis Oriental and Bobuntogan, Jasaan,
Misamis Oriental are directed to respond to any request for
assistance from the petitioner for the implementation of this order.
They are also directed to accompany the petitioner to their conjugal
abode at Purok 2, Bobuntogan, Jasaan, Misamis Oriental to get her
personal belongings in order to insure the safety of the petitioner.
IF THE RESPONDENT FAILS TO APPEAR ON THE DATE OF THE
PRELIMINARY CONFERENCE AND HEARING ON THE MERITS
DESPITE PROPER NOTICE, THE COURT SHALL ALLOW EX-PARTE
PRESENTATION OF EVIDENCE BY THE PETITIONER AND RENDER
JUDGMENT ON THE BASIS OF THE PLEADINGS AND EVIDENCE ON
RECORD. NO DELEGATION OF THE RECEPTION OF EVIDENCE
SHALL BE ALLOWED.
SO ORDERED.[4] (Emphasis supplied.)
S/Sgt. Yahon, having been personally served with copy of the TPO,
appeared during the scheduled pre-trial but informed the court that
he did not yet have a counsel and requested for time to hire his own
counsel. However, he did not hire a counsel nor ile an opposition or
answer to the petition. Because of his failure to appear in the
subsequent hearings of the case, the RTC allowed the ex-parte
presentation of evidence to determine the necessity of issuance of a
Permanent Protection Order (PPO).
Meanwhile, as prayed for by respondent who manifested that S/Sgt.
Yahon deliberately refused to give her spousal support as directed
in the TPO (she claimed that she had no source of livelihood since
he had told her to resign from her job and concentrate on keeping
their house), the RTC issued another order directing S/Sgt. Yahon to
give respondent spousal support in the amount of P4,000.00 per

Based on Syllabus of Dean Monteclar  By RGL  84 of 95 

 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
month and ifty percent (50%) of his retirement bene its which
shall be automatically deducted and given directly to respondent.[5]
In her testimony, respondent also said that S/Sgt. Yahon never
complied with the TPO as he continued making threats and
in licting physical abuse on her person, and failed to give her
spousal support as ordered by the court.
On July 23, 2007, the RTC rendered its Decision,[6] as follows:
After careful review and scrutiny of the evidence presented in this
case, this court inds that there is a need to permanently protect the
applicant, Daisy R. Yahon from further acts of violence that might be
committed by respondent against her. Evidences showed that
respondent who was a member of the Armed Forces of the
Philippines assigned at the Headquarters 4ID Camp Evangelista,
Cagayan de Oro City had been repeatedly in licting physical, verbal,
emotional and economic abuse and violence upon the petitioner.
Respondent in several instances had slapped, mauled and punched
petitioner causing her physical harm. Exhibits G and D are medical
certi icates showing physical injuries suffered by petitioner in licted
by the respondent at instances of their marital altercations.
Respondent at the height of his anger often poked a gun on
petitioner and threatened to massacre her and her child causing
them to lee for their lives and sought refuge from other people. He
had demanded sex from petitioner at an unreasonable time when
she was sick and chilling and when refused poked a gun at her.
Several police blotters were offered as evidence by petitioner
documenting the incidents when she was subjected to respondent’s
ill temper and ill treatment. Verbally, petitioner was not spared from
respondent’s abuses by shouting at her that he was wishing she
would die and he would celebrate if it happens and by calling and
sending her threatening text messages. These incidents had caused
petitioner great psychological trauma causing her [to] fear for her
life and these forced her to seek refuge from the court for
protection. Economically, petitioner was also deprived by
respondent of her spousal support despite order of the court
directing him to give a monthly support of Php4,000.00. In view of
the foregoing, this court inds a need to protect the life of the
petitioner not only physically but also emotionally and
psychologically.
Based on the evidence presented, both oral and documentary, and
there being no controverting evidence presented by respondent,
this Court inds that the applicant has established her case by
preponderance of evidence.
WHEREFORE, premises considered, judgment is hereby rendered
GRANTING the petition, thus, pursuant to Sec. 30 of A.M. No.
04-10-1-SC, let a PERMANENT PROTECTION ORDER be issued
immediately and respondent, S/Sgt. CHARLES A. YAHON is ordered
to give to petitioner, DAISY R. YAHON the amount of FOUR
THOUSAND PESOS (Php4,000.00) per month by way of spousal
support.
Pursuant to the order of the court dated February 6, 2007,
respondent, S/Sgt. Charles A. Yahon is directed to give it to
petitioner 50% of whatever retirement benefits and other
claims that may be due or released to him from the government
and the said share of petitioner shall be automatically
deducted from respondent’s benefits and claims and be given
directly to the petitioner, Daisy R. Yahon.
Let copy of this decision be sent to the Commanding
General/Of icer of Finance Center of the Armed Forces of the
Philippines, Camp Emilio Aguinaldo, Quezon City; the Management
Based on Syllabus of Dean Monteclar  By RGL  85 of 95
 
of RSBS, Camp Emilio Aguinaldo, Quezon City and the Regional
Manager of PAG-IBIG, Mortola St., Cagayan de Oro City for their
guidance and strict compliance.
SO ORDERED.[7] (Emphasis supplied.)
Herein petitioner Armed Forces of the Philippines Finance Center
(AFPFC), assisted by the Of ice of the Judge Advocate General
(OTJAG), AFP, iled before the RTC a Manifestation and Motion (To
Lift Temporary Protection Order Against the AFP)[8] dated
November 10, 2008. Stating that it was making a limited and
special appearance, petitioner manifested that on August 29, 2008,
it furnished the AFP Pension and Gratuity Management Center
(PGMC) copy of the TPO for appropriate action. The PGMC, on
September 2, 2008, requested the Chief, AFPFC the temporary
withholding of the thirty-six (36) Months Lump Sum (MLS) due to
S/Sgt. Yahon. Thereafter, on October 29, 2008, PGMC forwarded a
letter to the Chief of Staff, AFP for the OTJAG for appropriate action
on the TPO, and requesting for legal opinion as to the propriety of
releasing the 36 MLS of S/Sgt. Yahon. Petitioner informed the RTC
that S/Sgt. Yahon’s check representing his 36 MLS had been
processed and is ready for payment by the AFPFC, but to date said
check has not been claimed by respondent.
Petitioner further asserted that while it has initially discharged its
obligation under the TPO, the RTC had not acquired jurisdiction
over the military institution due to lack of summons, and hence the
AFPFC cannot be bound by the said court order. Additionally,
petitioner contended that the AFPFC is not a party-in-interest and is
a complete stranger to the proceedings before the RTC on the
issuance of TPO/PPO. Not being impleaded in the case, petitioner
lamented that it was not afforded due process and it was thus
improper to issue execution against the AFPFC. Consequently,
petitioner emphasized its position that the AFPFC cannot be
directed to comply with the TPO without violating its right to
procedural due process.
In its Order[9] dated December 17, 2008, the RTC denied the
aforesaid motion for having been iled out of time. It noted that the
September 28, 2006 TPO and July 23, 2007 Decision granting
Permanent Protection Order (PPO) to respondent had long become
inal and executory.
Petitioner’s motion for reconsideration was likewise denied under
the RTC’s Order[10] dated March 6, 2009.
On May 27, 2009, petitioner iled a petition for certiorari before the
CA praying for the nulli ication of the aforesaid orders and decision
insofar as it directs the AFPFC to automatically deduct from S/Sgt.
Yahon’s retirement and pension bene its and directly give the same
to respondent as spousal support, allegedly issued with grave abuse
of discretion amounting to lack of jurisdiction.
Respondent iled her Comment with Prayer for Issuance of
Preliminary Injunction, manifesting that there is no information as
to whether S/Sgt. Yahon already received his retirement bene it and
that the latter has repeatedly violated the TPO, particularly on the
provision of spousal support.
After due hearing, the CA‘s Twenty-Second Division issued a
Resolution[11] granting respondent’s application, viz:
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
Upon perusal of the respective pleadings iled by the parties, the
Court inds meritorious private respondent’s application for the
issuance of an injunctive relief. While the 36-month lump sum
retirement bene its of S/Sgt. Charles A. Yahon has already been
given to him, yet as admitted by petitioner itself, the monthly
pension after the mentioned retirement bene its has not yet been
released to him. It appears that the release of such pension could
render ineffectual the eventual ruling of the Court in this Petition.
IN VIEW OF THE FOREGOING, let a WRIT OF PRELIMINARY
INJUNCTION issue enjoining the Armed Forces of the Philippines
Finance Center, its employees, agents, representatives, and any all
persons acting on its behalf, from releasing the remaining pension
that may be due to S/Sgt. Charles A. Yahon.
SO ORDERED.[12]
By Decision dated November 29, 2011, the CA denied the petition
for certiorari and af irmed the assailed orders and decision of the
RTC. The CA likewise denied petitioner’s motion for
reconsideration.
In this petition, the question of law presented is whether petitioner
military institution may be ordered to automatically deduct a
percentage from the retirement bene its of its enlisted personnel,
and to give the same directly to the latter’s lawful wife as spousal
support in compliance with a protection order issued by the RTC
pursuant to R.A. No. 9262.
A protection order is an order issued by the court to prevent further
acts of violence against women and their children, their family or
household members, and to grant other necessary relief. Its
purpose is to safeguard the offended parties from further harm,
minimize any disruption in their daily life and facilitate the
opportunity and ability to regain control of their life.[13] The
protection orders issued by the court may be a Temporary
Protection Order (TPO) or a Permanent Protection Order (PPO),
while a protection order that may be issued by the barangay shall
be known as a Barangay Protection Order (BPO).[14]
Section 8 of R.A. No. 9262 enumerates the reliefs that may be
included in the TPO, PPO or BPO, to wit:
(a) Prohibition of the respondent from threatening to commit or
committing, personally or through another, any of the acts
mentioned in Section 5 of this Act;
(b) Prohibition of the respondent from harassing, annoying,
telephoning, contacting or otherwise communicating with the
petitioner, directly or indirectly;
(c) Removal and exclusion of the respondent from the residence of
the petitioner, regardless of ownership of the residence, either
temporarily for the purpose of protecting the petitioner, or
permanently where no property rights are violated, and if
respondent must remove personal effects from the residence, the
court shall direct a law enforcement agent to accompany the
respondent to the residence, remain there until respondent has
gathered his things and escort respondent from the residence;
(d) Directing the respondent to stay away from petitioner and any
designated family or household member at a distance speci ied by
Based on Syllabus of Dean Monteclar  By RGL  86 of 95
 
the court, and to stay away from the residence, school, place of
employment, or any speci ied place frequented by the petitioner
and any designated family or household member;
(e) Directing lawful possession and use by petitioner of an
automobile and other essential personal effects, regardless of
ownership, and directing the appropriate law enforcement of icer to
accompany the petitioner to the residence of the parties to ensure
that the petitioner is safely restored to the possession of the
automobile and other essential personal effects, or to supervise the
petitioner’s or respondent’s removal of personal belongings;
(f) Granting a temporary or permanent custody of a child/children
to the petitioner;
(g) Directing the respondent to provide support to the woman
and/or her child if entitled to legal support. Notwithstanding
other laws to the contrary, the court shall order an appropriate
percentage of the income or salary of the respondent to be
withheld regularly by the respondent's employer for the same
to be automatically remitted directly to the woman. Failure to
remit and/or withhold or any delay in the remittance of
support to the woman and/or her child without justifiable
cause shall render the respondent or his employer liable for
indirect contempt of court;
(h) Prohibition of the respondent from any use or possession of any
irearm or deadly weapon and order him to surrender the same to
the court for appropriate disposition by the court, including
revocation of license and disquali ication to apply for any license to
use or possess a irearm. If the offender is a law enforcement agent,
the court shall order the offender to surrender his irearm and shall
direct the appropriate authority to investigate on the offender and
take appropriate action on matter;
(i) Restitution for actual damages caused by the violence in licted,
including, but not limited to, property damage, medical expenses,
child care expenses and loss of income;
(j) Directing the DSWD or any appropriate agency to provide
petitioner temporary shelter and other social services that the
petitioner may need; and
(k) Provision of such other forms of relief as the court deems
necessary to protect and provide for the safety of the petitioner and
any designated family or household member, provided petitioner
and any designated family or household member consents to such
relief. (Emphasis supplied.)
Petitioner argues that it cannot comply with the RTC’s directive for
the automatic deduction of 50% from S/Sgt. Yahon’s retirement
bene its and pension to be given directly to respondent, as it
contravenes an explicit mandate under the law governing the
retirement and separation of military personnel.
The assailed provision is found in Presidential Decree (P.D.) No.
1638,[15] which states:
Section 31. The bene its authorized under this Decree, except as
provided herein, shall not be subject to attachment, garnishment,
levy, execution or any tax whatsoever; neither shall they be
assigned, ceded, or conveyed to any third person: Provided, That
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
if a retired or separated of icer or enlisted man who is entitled to
any bene it under this Decree has unsettled money and/or property
accountabilities incurred while in the active service, not more than
ifty per centum of the pension gratuity or other payment due such
of icer or enlisted man or his survivors under this Decree may be
withheld and be applied to settle such accountabilities. (Emphasis
supplied.)
A similar provision is found in R.A. No. 8291, otherwise known as
the “Government Service Insurance System Act of 1997,” which
reads:
SEC. 39. Exemption from Tax, Legal Process and Lien -- x x x
xxxx
The funds and/or the properties referred to herein as well as the
bene its, sums or monies corresponding to the bene its under this
Act shall be exempt from attachment, garnishment, execution, levy
or other processes issued by the courts, quasi-judicial agencies or
administrative bodies including Commission on Audit (COA)
disallowances and from all inancial obligations of the members,
including his pecuniary accountability arising from or caused or
occasioned by his exercise or performance of his of icial functions
or duties, or incurred relative to or in connection with his position
or work except when his monetary liability, contractual or
otherwise, is in favor of the GSIS.
In Sarmiento v. Intermediate Appellate Court,[16] we held that a court
order directing the Philippine National Bank to refrain from
releasing to petitioner all his retirement bene its and to deliver
one-half of such monetary bene its to plaintiff as the latter’s
conjugal share is illegal and improper, as it violates Section 26 of CA
186 (old GSIS Law) which exempts retirement bene its from
execution.
The foregoing exemptions have been incorporated in the 1997
Rules of Civil Procedure, as amended, which governs execution of
judgments and court orders. Section 13 of Rule 39 enumerates
those properties which are exempt from execution:
SEC. 13. Property exempt from execution. – Except as otherwise
expressly provided by law, the following property, and no other,
shall be exempt from execution:
xxxx
(l) The right to receive legal support, or money or property
obtained as such support, or any pension or gratuity from the
Government; (Emphasis supplied.)
It is basic in statutory construction that in case of irreconcilable
con lict between two laws, the later enactment must prevail, being
the more recent expression of legislative will.[17] Statutes must be so
construed and harmonized with other statutes as to form a uniform
system of jurisprudence.[18] However, if several laws cannot be
harmonized, the earlier statute must yield to the later enactment.
The later law is the latest expression of the legislative will.[19]
We hold that Section 8(g) of R.A. No. 9262, being a later enactment,
should be construed as laying down an exception to the general rule
Based on Syllabus of Dean Monteclar  By RGL  87 of 95
 
above-stated that retirement bene its are exempt from execution.
The law itself declares that the court shall order the withholding of
a percentage of the income or salary of the respondent by the
employer, which shall be automatically remitted directly to the
woman “[n]otwithstanding other laws to the contrary.”
Petitioner further contends that the directive under the TPO to
segregate a portion of S/Sgt. Yahon’s retirement bene its was illegal
because said moneys remain as public funds, citing the case of
Pacific Products v. Ong.[20] In that case, this Court sustained the CA
when it held that the garnishment of the amount of P10,500 payable
to BML Trading and Supply while it was still in the possession of the
Bureau of Telecommunications was illegal and therefore, null and
void. The CA therein relied on the previous rulings in Director of
Commerce and Industry v. Concepcion[21] and Avendano v. Alikpala, et
al.[22] wherein this Court declared null and void the garnishment of
the salaries of government employees.
Citing the two aforementioned cases, we thus declared in Pacific
Products:
A rule, which has never been seriously questioned, is that money in
the hands of public of icers, although it may be due government
employees, is not liable to the creditors of these employees in the
process of garnishment. One reason is, that the State, by virtue of its
sovereignty may not be sued in its own courts except by express
authorization by the Legislature, and to subject its of icers to
garnishment would be to permit indirectly what is prohibited
directly. Another reason is that moneys sought to be garnished, as
long as they remain in the hands of the disbursing officer of the
Government, belong to the latter, although the defendant in
garnishment may be entitled to a specific portion thereof. And still
another reason which covers both of the foregoing is that every
consideration of public policy forbids it.[23]
We disagree.
Section 8(g) of R.A. No. 9262 used the general term “employer,”
which includes in its coverage the military institution, S/Sgt.
Yahon’s employer. Where the law does not distinguish, courts
should not distinguish. Thus, Section 8(g) applies to all employers,
whether private or government.
It bears stressing that Section 8(g) providing for spousal and child
support, is a support enforcement legislation. In the United States,
provisions of the Child Support Enforcement Act[24] allow
garnishment of certain federal funds where the intended recipient
has failed to satisfy a legal obligation of child support. As these
provisions were designed “to avoid sovereign immunity problems”
and provide that “moneys payable by the Government to any
individual are subject to child support enforcement proceedings,”
the law is clearly intended to “create a limited waiver of sovereign
immunity so that state courts could issue valid orders directed
against Government agencies attaching funds in their
possession.”[25]
This Court has already ruled that R.A. No. 9262 is constitutional and
does not violate the equal protection clause. In Garcia v. Drilon[26]
the issue of constitutionality was raised by a husband after the
latter failed to obtain an injunction from the CA to enjoin the
implementation of a protection order issued against him by the
RTC. We ruled that R.A. No. 9262 rests on real substantial
distinctions which justify the classi ication under the law: the
unequal power relationship between women and men; the fact that
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
women are more likely than men to be victims of violence; and the
widespread bias and prejudice against women.
We further held in Garcia that the classi ication is germane to the
purpose of the law, viz:
The distinction between men and women is germane to the purpose
of R.A. 9262, which is to address violence committed against
women and children, spelled out in its Declaration of Policy, as
follows:
SEC. 2. Declaration of Policy. – It is hereby declared that the State
values the dignity of women and children and guarantees full
respect for human rights. The State also recognizes the need to
protect the family and its members particularly women and
children, from violence and threats to their personal safety and
security.
Towards this end, the State shall exert efforts to address violence
committed against women and children in keeping with the
fundamental freedoms guaranteed under the Constitution and the
provisions of the Universal Declaration of Human Rights, the
Convention on the Elimination of All Forms of Discrimination
Against Women, Convention on the Rights of the Child and other
international human rights instruments of which the Philippines is
a party.[27]
Under R.A. No. 9262, the provision of spousal and child support
speci ically address one form of violence committed against women
– economic abuse.
D. “Economic abuse” refers to acts that make or attempt to make a
woman inancially dependent which includes, but is not limited to
the following:
1. Withdrawal of inancial support or preventing the victim from
engaging in any legitimate profession, occupation, business or
activity, except in cases wherein the other spouse/partner objects
on valid, serious and moral grounds as de ined in Article 73 of the
Family Code;
2. Deprivation or threat of deprivation of inancial resources and the
right to the use and enjoyment of the conjugal, community or
property owned in common;
3. Destroying household property;
4. Controlling the victims' own money or properties or solely
controlling the conjugal money or properties.[28]
The relief provided in Section 8(g) thus ful ills the objective of
restoring the dignity of women who are victims of domestic
violence and provide them continued protection against threats to
their personal safety and security.
“The scope of reliefs in protection orders is broadened to ensure
that the victim or offended party is afforded all the remedies
necessary to curtail access by a perpetrator to the victim. This
serves to safeguard the victim from greater risk of violence; to
accord the victim and any designated family or household member
safety in the family residence, and to prevent the perpetrator from
committing acts that jeopardize the employment and support of the
Based on Syllabus of Dean Monteclar  By RGL  88 of 95
 
victim. It also enables the court to award temporary custody of
minor children to protect the children from violence, to prevent
their abduction by the perpetrator and to ensure their financial
support.”[29]
WHEREFORE, the petition is DENIED for lack of merit. The
Decision dated November 29, 2011 and Resolution dated March 9,
2012 of the Court of Appeals Mindanao Station in CA-G.R. SP No.
02953-MIN are AFFIRMED and UPHELD.
No costs.
SO ORDERED.
Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Reyes,
JJ., concur.
Return of the writ if unsatisfied 
Execution Sale 
Right of Redemption 
Examination of Judgment obligor when judgment 
unsatisfied 
Entry of satisfaction of judgment 
Effect of judgment or final orders 
X. Modes of Appeal 
Appeal 
RULE 40 Appeal From Municipal Trial Courts to the 
Regional Trial Courts 
RULE 41 Appeal From The Regional Trial Courts
36 Neypes v CA, 14 Sep 2005 
506 Phil. 613
EN BANC 
G.R. NO. 141524, September 14, 2005 
DOMINGO  NEYPES,  LUZ  FAUSTINO,  ROGELIO  FAUSTINO, 
LOLITO  VICTORIANO,  JACOB  OBANIA  AND  DOMINGO 
CABACUNGAN,  PETITIONERS,  VS.  HON.  COURT  OF 
APPEALS,  HEIRS  OF  BERNARDO  DEL  MUNDO,  NAMELY: 
FE,  CORAZON,  JOSEFA,  SALVADOR  AND  CARMEN,  ALL 
SURNAMED  DEL  MUNDO,  LAND  BANK  OF  THE 
PHILIPPINES  AND  HON.  ANTONIO  N.  ROSALES, 
PRESIDING  JUDGE,  BRANCH  43,  REGIONAL  TRIAL 
COURT, ROXAS, ORIENTAL MINDORO, RESPONDENTS. 
 
D E C I S I O N 
CORONA, J.
Petitioners Domingo Neypes, Luz Faustino, Rogelio Faustino, Lolito
Victoriano, Jacob Obania and Domingo Cabacungan iled an action
for annulment of judgment and titles of land and/or reconveyance
and/or reversion with preliminary injunction before the Regional
Trial Court, Branch 43, of Roxas, Oriental Mindoro, against the
Bureau of Forest Development, Bureau of Lands, Land Bank of the
Philippines and the heirs of Bernardo del Mundo, namely, Fe,
Corazon, Josefa, Salvador and Carmen.
In the course of the proceedings, the parties (both petitioners and
respondents) iled various motions with the trial court. Among
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
these were: (1) the motion iled by petitioners to declare the
respondent heirs, the Bureau of Lands and the Bureau of Forest
Development in default and (2) the motions to dismiss iled by the
respondent heirs and the Land Bank of the Philippines, respectively.
In an order dated May 16, 1997, the trial court, presided by public
respondent Judge Antonio N. Rosales, resolved the foregoing
motions as follows: (1) the petitioners' motion to declare
respondents Bureau of Lands and Bureau of Forest Development in
default was granted for their failure to ile an answer, but denied as
against the respondent heirs of del Mundo because the substituted
service of summons on them was improper; (2) the Land Bank's
motion to dismiss for lack of cause of action was denied because
there were hypothetical admissions and matters that could be
determined only after trial, and (3) the motion to dismiss iled by
respondent heirs of del Mundo, based on prescription, was also
denied because there were factual matters that could be
determined only after trial.[1]
The respondent heirs iled a motion for reconsideration of the order
denying their motion to dismiss on the ground that the trial court
could very well resolve the issue of prescription from the bare
allegations of the complaint itself without waiting for the trial
proper.
In an order[2] dated February 12, 1998, the trial court dismissed
petitioners' complaint on the ground that the action had already
prescribed. Petitioners allegedly received a copy of the order of
dismissal on March 3, 1998 and, on the 15th day thereafter or on
March 18, 1998, iled a motion for reconsideration. On July 1, 1998,
the trial court issued another order dismissing the motion for
reconsideration[3] which petitioners received on July 22, 1998. Five
days later, on July 27, 1998, petitioners iled a notice of appeal[4] and
paid the appeal fees on August 3, 1998.
On August 4, 1998, the court a quo denied the notice of appeal,
holding that it was iled eight days late.[5] This was received by
petitioners on July 31, 1998. Petitioners iled a motion for
reconsideration but this too was denied in an order dated
September 3, 1998.[6]
Via a petition for certiorari and mandamus under Rule 65 of the
1997 Rules of Civil Procedure, petitioners assailed the dismissal of
the notice of appeal before the Court of Appeals.
In the appellate court, petitioners claimed that they had seasonably
iled their notice of appeal. They argued that the 15-day
reglementary period to appeal started to run only on July 22, 1998
since this was the day they received the inal order of the trial
court denying their motion for reconsideration. When they iled
their notice of appeal on July 27, 1998, only ive days had elapsed
and they were well within the reglementary period for appeal.[7]
On September 16, 1999, the Court of Appeals (CA) dismissed the
petition. It ruled that the 15-day period to appeal should have been
reckoned from March 3, 1998 or the day they received the February
12, 1998 order dismissing their complaint. According to the
appellate court, the order was the " inal order" appealable under
the Rules. It held further:
Perforce the petitioners' tardy appeal was correctly dismissed for
the (P)erfection of an appeal within the reglementary period and in
the manner prescribed by law is jurisdictional and non-compliance
with such legal requirement is fatal and effectively renders the
judgment inal and executory.[8]
Based on Syllabus of Dean Monteclar  By RGL  89 of 95
 
Petitioners iled a motion for reconsideration of the aforementioned
decision. This was denied by the Court of Appeals on January 6,
2000.
In this present petition for review under Rule 45 of the Rules,
petitioners ascribe the following errors allegedly committed by the
appellate court:
I
THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE
PETITIONERS' PETITION FOR CERTIORARI AND MANDAMUS AND
IN AFFIRMING THE ORDER OF THE HON. JUDGE ANTONIO N.
ROSALES WHICH DISMISSED THE PETITIONERS' APPEAL IN CIVIL
CASE NO. C-36 OF THE REGIONAL TRIAL COURT, BRANCH 43,
ROXAS, ORIENTAL MINDORO, EVEN AFTER THE PETITIONERS HAD
PAID THE APPEAL DOCKET FEES.
II
THE HONORABLE COURT OF APPEALS LIKEWISE ERRED IN
RULING AND AFFIRMING THE DECISION OR ORDER OF THE
RESPONDENT HON. ANTONIO M. ROSALES THAT PETITIONERS'
APPEAL WAS FILED OUT OF TIME WHEN PETITIONERS RECEIVED
THE LAST OR FINAL ORDER OF THE COURT ON JULY 22, 1998 AND
FILED THEIR NOTICE OF APPEAL ON JULY 27, 1998 AND PAID THE
APPEAL DOCKET FEE ON AUGUST 3, 1998.
III
THE HONORABLE COURT OF APPEALS FURTHER ERRED IN
RULING THAT THE WORDS "FINAL ORDER" IN SECTION 3, RULE
41, OF THE 1997 RULES OF CIVIL PROCEDURE WILL REFER TO
THE [FIRST] ORDER OF RESPONDENT JUDGE HON. ANTONIO M.
MORALES DATED FEBRUARY 12, 1998 INSTEAD OF THE LAST AND
FINAL ORDER DATED JULY 1, 1998 COPY OF WHICH WAS
RECEIVED BY PETITIONERS THROUGH COUNSEL ON JULY 22,
1998.
IV.
THE HONORABLE COURT OF APPEALS FINALLY ERRED IN
FINDING THAT THE DECISION IN THE CASE OF DENSO, INC. V. IAC,
148 SCRA 280, IS APPLICABLE IN THE INSTANT CASE THEREBY
IGNORING THE PECULIAR FACTS AND CIRCUMSTANCES OF THIS
CASE AND THE FACT THAT THE SAID DECISION WAS RENDERED
PRIOR TO THE ENACTMENT OF THE 1997 RULES OF CIVIL
PROCEDURE.[9]
The foregoing issues essentially revolve around the period within
which petitioners should have iled their notice of appeal.
First and foremost, the right to appeal is neither a natural right nor
a part of due process. It is merely a statutory privilege and may be
exercised only in the manner and in accordance with the provisions
of law. Thus, one who seeks to avail of the right to appeal must
comply with the requirements of the Rules. Failure to do so often
leads to the loss of the right to appeal.[10] The period to appeal is
ixed by both statute and procedural rules. BP 129,[11] as amended,
provides:
Sec. 39. Appeals. – The period for appeal from inal orders,
resolutions, awards, judgments, or decisions of any court in all these
cases shall be ifteen (15) days counted from the notice of the inal
order, resolution, award, judgment, or decision appealed from.
Provided, however, that in habeas corpus cases, the period for
appeal shall be (48) forty-eight hours from the notice of judgment
appealed from. x x x
Rule 41, Section 3 of the 1997 Rules of Civil Procedure states:
SEC. 3. Period of ordinary appeal. — The appeal shall be taken
within fifteen (15) days from the notice of the judgment or final
order appealed from. Where a record on appeal is required, the
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
appellant shall ile a notice of appeal and a record on appeal within
thirty (30) days from the notice of judgment or inal order.
The period to appeal shall be interrupted by a timely motion for
new trial or reconsideration. No motion for extension of time to ile
a motion for new trial or reconsideration shall be allowed.
(emphasis supplied)
Based on the foregoing, an appeal should be taken within 15
days from the notice of judgment or inal order appealed from. A
inal judgment or order is one that inally disposes of a case, leaving
nothing more for the court to do with respect to it. It is an
adjudication on the merits which, considering the evidence
presented at the trial, declares categorically what the rights and
obligations of the parties are; or it may be an order or judgment
that dismisses an action.[12]
As already mentioned, petitioners argue that the order of July 1,
1998 denying their motion for reconsideration should be construed
as the " inal order," not the February 12, 1998 order which
dismissed their complaint. Since they received their copy of the
denial of their motion for reconsideration only on July 22, 1998, the
15-day reglementary period to appeal had not yet lapsed when they
iled their notice of appeal on July 27, 1998.
What therefore should be deemed as the " inal order," receipt of
which triggers the start of the 15-day reglementary period to appeal
— the February 12, 1998 order dismissing the complaint or the July
1, 1998 order dismissing the MR?
In the recent case of Quelnan v. VHF Philippines, Inc.,[13] the trial
court declared petitioner Quelnan non-suited and accordingly
dismissed his complaint. Upon receipt of the order of dismissal, he
iled an omnibus motion to set it aside. When the omnibus motion
was iled, 12 days of the 15-day period to appeal the order had
lapsed. He later on received another order, this time dismissing his
omnibus motion. He then iled his notice of appeal. But this was
likewise dismissed — for having been iled out of time.
The court a quo ruled that petitioner should have appealed within
15 days after the dismissal of his complaint since this was the inal
order that was appealable under the Rules. We reversed the trial
court and declared that it was the denial of the motion for
reconsideration of an order of dismissal of a complaint which
constituted the final order as it was what ended the issues raised
there.
This pronouncement was reiterated in the more recent case of
Apuyan v. Haldeman et al.[14] where we again considered the order
denying petitioner Apuyan's motion for reconsideration as the inal
order which inally disposed of the issues involved in the case.
Based on the aforementioned cases, we sustain petitioners' view
that the order dated July 1, 1998 denying their motion for
reconsideration was the inal order contemplated in the Rules.
We now come to the next question: if July 1, 1998 was the start of
the 15-day reglementary period to appeal, did petitioners in fact ile
their notice of appeal on time?
Under Rule 41, Section 3, petitioners had 15 days from notice of
judgment or final order to appeal the decision of the trial court. On
the 15th day of the original appeal period (March 18, 1998),
Based on Syllabus of Dean Monteclar  By RGL  90 of 95
 
petitioners did not ile a notice of appeal but instead opted to ile a
motion for reconsideration. According to the trial court, the MR only
interrupted the running of the 15-day appeal period.[15] It ruled that
petitioners, having iled their MR on the last day of the 15-day
reglementary period to appeal, had only one (1) day left to ile the
notice of appeal upon receipt of the notice of denial of their MR.
Petitioners, however, argue that they were entitled under the Rules
to a fresh period of 15 days from receipt of the "final order" or the
order dismissing their motion for reconsideration.
In Quelnan and Apuyan, both petitioners iled a motion for
reconsideration of the decision of the trial court. We ruled there
that they only had the remaining time of the 15-day appeal period
to ile the notice of appeal. We consistently applied this rule in
similar cases,[16] premised on the long-settled doctrine that the
perfection of an appeal in the manner and within the period
permitted by law is not only mandatory but also jurisdictional.[17]
The rule is also founded on deep-seated considerations of public
policy and sound practice that, at risk of occasional error, the
judgments and awards of courts must become inal at some de inite
time ixed by law.[18]
Prior to the passage of BP 129, Rule 41, Section 3 of the 1964
Revised Rules of Court read:
Sec. 3. How appeal is taken. — Appeal maybe taken by serving
upon the adverse party and filing with the trial court within
thirty (30) days from notice of order or judgment, a notice of
appeal, an appeal bond, and a record on appeal. The time during
which a motion to set aside the judgment or order or for new trial
has been pending shall be deducted, unless such motion fails to
satisfy the requirements of Rule 37.
But where such motion has been iled during of ice hours of the last
day of the period herein provided, the appeal must be perfected
within the day following that in which the party appealing received
notice of the denial of said motion.[19] (emphasis supplied)
According to the foregoing provision, the appeal period previously
consisted of 30 days. BP 129, however, reduced this appeal period
to 15 days. In the deliberations of the Committee on Judicial
Reorganization[20] that drafted BP 129, the raison d' etre behind the
amendment was to shorten the period of appeal[21] and enhance the
ef iciency and dispensation of justice. We have since required strict
observance of this reglementary period of appeal. Seldom have we
condoned late iling of notices of appeal,[22] and only in very
exceptional instances to better serve the ends of justice.
In National Waterworks and Sewerage Authority and Authority v.
Municipality of Libmanan,[23] however, we declared that appeal is an
essential part of our judicial system and the rules of procedure
should not be applied rigidly. This Court has on occasion advised
the lower courts to be cautious about not depriving a party of the
right to appeal and that every party litigant should be afforded the
amplest opportunity for the proper and just disposition of his cause,
free from the constraint of technicalities.
In de la Rosa v. Court of Appeals,[24] we stated that, as a rule, periods
which require litigants to do certain acts must be followed unless,
under exceptional circumstances, a delay in the iling of an appeal
may be excused on grounds of substantial justice. There, we
condoned the delay incurred by the appealing party due to strong
considerations of fairness and justice.
In setting aside technical in irmities and thereby giving due course
to tardy appeals, we have not been oblivious to or unmindful of the
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
extraordinary situations that merit liberal application of the Rules.
In those situations where technicalities were dispensed with, our
decisions were not meant to undermine the force and effectivity of
the periods set by law. But we hasten to add that in those rare cases
where procedural rules were not stringently applied, there always
existed a clear need to prevent the commission of a grave injustice.
Our judicial system and the courts have always tried to maintain a
healthy balance between the strict enforcement of procedural laws
and the guarantee that every litigant be given the full opportunity
for the just and proper disposition of his cause.[25]
The Supreme Court may promulgate procedural rules in all
courts.[26] It has the sole prerogative to amend, repeal or even
establish new rules for a more simpli ied and inexpensive process,
and the speedy disposition of cases. In the rules governing appeals
to it and to the Court of Appeals, particularly Rules 42,[27] 43[28] and
45,[29] the Court allows extensions of time, based on justi iable and
compelling reasons, for parties to ile their appeals. These
extensions may consist of 15 days or more.
To standardize the appeal periods provided in the Rules and to
afford litigants fair opportunity to appeal their cases, the Court
deems it practical to allow a fresh period of 15 days within which to
ile the notice of appeal in the Regional Trial Court, counted from
receipt of the order dismissing a motion for a new trial or motion
for reconsideration. [30]
Henceforth, this "fresh period rule" shall also apply to Rule 40
governing appeals from the Municipal Trial Courts to the Regional
Trial Courts; Rule 42 on petitions for review from the Regional Trial
Courts to the Court of Appeals; Rule 43 on appeals from
quasi-judicial agencies[31] to the Court of Appeals and Rule 45
governing appeals by certiorari to the Supreme Court.[32] The new
rule aims to regiment or make the appeal period uniform, to be
counted from receipt of the order denying the motion for new trial,
motion for reconsideration (whether full or partial) or any inal
order or resolution.
We thus hold that petitioners seasonably iled their notice of appeal
within the fresh period of 15 days, counted from July 22, 1998 (the
date of receipt of notice denying their motion for reconsideration).
This pronouncement is not inconsistent with Rule 41, Section 3 of
the Rules which states that the appeal shall be taken within 15 days
from notice of judgment or inal order appealed from. The use of the
disjunctive word "or" signi ies disassociation and independence of
one thing from another. It should, as a rule, be construed in the
sense in which it ordinarily implies.[33] Hence, the use of "or" in the
above provision supposes that the notice of appeal may be iled
within 15 days from the notice of judgment or within 15 days from
notice of the " inal order," which we already determined to refer to
the July 1, 1998 order denying the motion for a new trial or
reconsideration.
Neither does this new rule run counter to the spirit of Section 39 of
BP 129 which shortened the appeal period from 30 days to 15 days
to hasten the disposition of cases. The original period of appeal (in
this case March 3-18, 1998) remains and the requirement for strict
compliance still applies. The fresh period of 15 days becomes
significant only when a party opts to file a motion for new trial or
motion for reconsideration. In this manner, the trial court which
rendered the assailed decision is given another opportunity to
review the case and, in the process, minimize and/or rectify any
error of judgment. While we aim to resolve cases with dispatch and
to have judgments of courts become inal at some de inite time, we
likewise aspire to deliver justice fairly.
Based on Syllabus of Dean Monteclar  By RGL  91 of 95
 
In this case, the new period of 15 days eradicates the confusion as
to when the 15-day appeal period should be counted – from receipt
of notice of judgment (March 3, 1998) or from receipt of notice of
" inal order" appealed from (July 22, 1998).
To recapitulate, a party litigant may either ile his notice of appeal
within 15 days from receipt of the Regional Trial Court's decision or
ile it within 15 days from receipt of the order (the " inal order")
denying his motion for new trial or motion for reconsideration.
Obviously, the new 15-day period may be availed of only if either
motion is iled; otherwise, the decision becomes inal and executory
after the lapse of the original appeal period provided in Rule 41,
Section 3.
Petitioners here iled their notice of appeal on July 27, 1998 or ive
days from receipt of the order denying their motion for
reconsideration on July 22, 1998. Hence, the notice of appeal was
well within the fresh appeal period of 15 days, as already
discussed.[34]
We deem it unnecessary to discuss the applicability of Denso
(Philippines), Inc. v. IAC[35] since the Court of Appeals never even
referred to it in its assailed decision.
WHEREFORE, the petition is hereby GRANTED and the assailed
decision of the Court of Appeals REVERSED and SET ASIDE.
Accordingly, let the records of this case be remanded to the Court of
Appeals for further proceedings.
No costs.
SO ORDERED.
Davide, Jr., Puno, Panganiban, Quisumbing, Ynares-Santiago,
Sandoval-Gutierrez, Carpio, Austria-Martinez, Carpio Morales,
Callejo, Sr., Azcuna, Tinga, Chico-Nazario, and Garcia, JJ., concur.
RULE 42 Petition for Review From the Regional 
Trial Courts to the Court of Appeals 
RULE 43 Appeals From the Court of Tax Appeals
and Quasi-Judicial Agencies to the Court of
Appeals
37 St Martin Funeral Homes v NLRC, 16 Sep 1998 
356 Phil. 811
EN BANC 
G.R. No. 130866, September 16, 1998 
ST.  MARTIN  FUNERAL  HOME,  PETITIONER,  VS. 
NATIONAL  LABOR  RELATIONS  MARTINEZ, COMMISSION 
AND BIENVENIDO ARICAYOS, RESPONDENTS. 
 
D E C I S I O N 
REGALADO, J.:
The present petition for certiorari stemmed from a complaint for
illegal dismissal iled by herein private respondent before the
National Labor Relations Commission (NLRC), Regional Arbitration
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
Branch No. III, in San Fernando, Pampanga. Private respondent
alleges that he started working as Operations Manager of petitioner
St. Martin Funeral Home on February 6, 1995. However, there was
no contract of employment executed between him and petitioner
nor was his name included in the semi-monthly payroll. On January
22, 1996, he was dismissed from his employment for allegedly
misappropriating P38,000.00 which was intended for payment by
petitioner of its value added tax (VAT) to the Bureau of Internal
Revenue (BIR).[1]
Petitioner on the other hand claims that private respondent was not
its employee but only the uncle of Amelita Malabed, the owner of
petitioner St. Martin’s Funeral Home. Sometime in 1995, private
respondent, who was formerly working as an overseas contract
worker, asked for inancial assistance from the mother of Amelita.
Since then, as an indication of gratitude, private respondent
voluntarily helped the mother of Amelita in overseeing the
business.
In January 1996, the mother of Amelita passed away, so the latter
she took over the management of the business. She then discovered
that there were arrears in the payment of taxes and other
government fees, although the records purported to show that the
same were already paid. Amelita then made some changes in the
business operation and private respondent and his wife were no
longer allowed to participate in the management thereof. As a
consequence, the latter iled a complaint charging that petitioner
had illegally terminated his employment.[2]
Based on the position papers of the parties, the labor arbiter
rendered a decision in favor of petitioner on October 25, 1996
declaring that no employer-employee relationship existed between
the parties and, therefore, his of ice had no jurisdiction over the
case.[3]
Not satis ied with the said decision, private respondent appealed to
the NLRC contending that the labor arbiter erred (1) in not giving
credence to the evidence submitted by him; (2) in holding that he
worked as a "volunteer" and not as an employee of St. Martin
Funeral Home from February 6, 1995 to January 23, 1996, or a
period of about one year; and (3) in ruling that there was no
employer-employee relationship between him and petitioner.[4]
On June 13, 1997, the NLRC rendered a resolution setting aside the
questioned decision and remanding the case to the labor arbiter for
immediate appropriate proceedings.[5] Petitioner then iled a
motion for reconsideration which was denied by the NLRC in its
resolution dated August 18, 1997 for lack of merit,[6] hence the
present petition alleging that the NLRC committed grave abuse of
discretion.[7]
Before proceeding further into the merits of the case at bar, the
Court feels that it is now exigent and opportune to reexamine the
functional validity and systemic practicability of the mode of
judicial review it has long adopted and still follows with respect to
decisions of the NLRC. The increasing number of labor disputes that
ind their way to this Court and the legislative changes introduced
over the years into the provisions of Presidential Decree (P.D.) No.
442 (The Labor Code of the Philippines and Batas Pambansa Blg.
(B.P. No.) 129 (The Judiciary Reorganization Act of 1980) now
stridently call for and warrant a reassessment of that procedural
aspect.
Based on Syllabus of Dean Monteclar  By RGL  92 of 95
 
We prefatorily delve into the legal history of the NLRC. It was irst
established in the Department of Labor by P.D. No. 21 on October
14, 1972, and its decisions were expressly declared to be appealable
to the Secretary of Labor and, ultimately, to the President of the
Philippines.
On May 1, 1974, P.D. No. 442 enacted the Labor Code of the
Philippines, the same to take effect six months after its
promulgation.[8] Created and regulated therein is the present NLRC
which was attached to the Department of Labor and Employment
for program and policy coordination only.[9] Initially, Article 302
(now, Article 223) thereof also granted an aggrieved party the
remedy of appeal from the decision of the NLRC to the Secretary of
Labor, but P.D. No. 1391 subsequently amended said provision and
abolished such appeals. No appellate review has since then been
provided for.
Thus, to repeat, under the present state of the law, there is no
provision for appeals from the decision of the NLRC.[10] The present
Section 223, as last amended by Section 12 of R.A. No. 6715, instead
merely provides that the Commission shall decide all cases within
twenty days from receipt of the answer of the appellee, and that
such decision shall be inal and executory after ten calendar days
from receipt thereof by the parties.
When the issue was raised in an early case on the argument that
this Court has no jurisdiction to review the decisions of the NLRC,
and formerly of the Secretary of Labor, since there is no legal
provision for appellate review thereof, the Court nevertheless
rejected that thesis. It held that there is an underlying power of the
courts to scrutinize the acts of such agencies on questions of law
and jurisdiction even though no right of review is given by statute;
that the purpose of judicial review is to keep the administrative
agency within its jurisdiction and protect the substantial rights of
the parties; and that it is that part of the checks and balances which
restricts the separation of powers and forestalls arbitrary and
unjust adjudications.[11]
Pursuant to such ruling, and as sanctioned by subsequent decisions
of this Court, the remedy of the aggrieved party is to timely ile a
motion for reconsideration as a precondition for any further or
subsequent remedy,[12] and then seasonably avail of the special civil
action of certiorari under Rule 65,[13] for which said Rule has now
ixed the reglementary period of sixty days from notice of the
decision. Curiously, although the 10-day period for inality of the
decision of the NLRC may already have lapsed as contemplated in
Section 223 of the Labor Code, it has been held that this Court may
still take cognizance of the petition for certiorari on jurisdictional
and due process considerations if iled within the reglementary
period under Rule 65.[14]
Turning now to the matter of judicial review of NLRC decisions, B.P.
No. 129 originally provided as follows:
SEC. 9. Jurisdiction. - The Intermediate Appellate Court shall
exercise:
(1) Original jurisdiction to issue writs of mandamus, prohibition,
certiorari, habeas corpus, and quo warranto, and auxiliary writs or
processes, whether or not in aid of its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of
judgments of Regional Trial Courts; and
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
(3) Exclusive appellate jurisdiction over all inal judgments,
decisions, resolutions, orders, or awards of Regional Trial Courts
and quasi-judicial agencies, instrumentalities, boards, or
commissions, except those falling within the appellate jurisdiction
of the Supreme Court in accordance with the Constitution, the
provisions of this Act, and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section
17 of the Judiciary Act of 1948.
The Intermediate Appellate Court shall have the power to try cases
and conduct hearings, receive evidence and perform any and all acts
necessary to resolve factual issues raised in cases falling within its
original and appellate jurisdiction, including the power to grant and
conduct new trials or further proceedings.
These provisions shall not apply to decisions and interlocutory
orders issued under the Labor Code of the Philippines and by the
Central Board of Assessment Appeals.[15]
Subsequently, and as it presently reads, this provision was amended
by R.A. No. 7902 effective March 18, 1995, to wit:
SEC. 9. Jurisdiction. - The Court of Appeals shall exercise:
(1) Original jurisdiction to issue writs of mandamus, prohibition,
certiorari, habeas corpus, and quo warranto, and auxiliary writs or
processes, whether or not in aid of its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of
judgments of Regional Trial Courts; and
(3) Exclusive appellate jurisdiction over all inal judgments,
decisions, resolutions, orders or awards of Regional Trial Courts
and quasi-judicial agencies, instrumentalities, boards or
commissions, including the Securities and Exchange Commission,
the Social Security Commission, the Employees Compensation
Commission and the Civil Service Commission, except those falling
within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the Labor Code of the Philippines
under Presidential Decree No. 442, as amended, the provisions of
this Act, and of subparagraph (1) of the third paragraph and
subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948.
The Court of Appeals shall have the power to try cases and conduct
hearings, receive evidence and perform any and all acts necessary
to resolve factual issues raised in cases falling within its original and
appellate jurisdiction, including the power to grant and conduct
new trials or further proceedings. Trials or hearings in the Court of
Appeals must be continuous and must be completed within, three
(3) months, unless extended by the Chief Justice."
It will readily be observed that, aside from the change in the name
of the lower appellate court,[16] the following amendments of the
original provisions of Section 9 of B.P. No. 129 were effected by R.A.
No. 7902, viz.:
1. The last paragraph which excluded its application to the Labor
Code of the Philippines and the Central Board of Assessment Appeals
was deleted and replaced by a new paragraph granting the Court of
Appeals limited powers to conduct trials and hearings in cases
within its jurisdiction.
2. The reference to the Labor Code in that last paragraph was
transposed to paragraph (3) of the section, such that the original
Based on Syllabus of Dean Monteclar  By RGL  93 of 95
 
exclusionary clause therein now provides "except those falling
within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the Labor Code of the Philippines
under Presidential Decree No. 442, as amended, the provisions of
this Act, and of subparagraph (1) of the third paragraph and
subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948." (Italics supplied)
3. Contrarily, however, speci ically added to and included among the
quasi-judicial agencies over which the Court of Appeals shall have
exclusive appellate jurisdiction are the Securities and Exchange
Commission, the Social Security Commission, the Employees
Compensation Commission and the Civil Service Commission.
This, then, brings us to a somewhat perplexing impassè , both in
point of purpose and terminology. As earlier explained, our mode of
judicial review over decisions of the NLRC has for some time now
been understood to be by a petition for certiorari under Rule 65 of
the Rules of Court. This is, of course, a special original action limited
to the resolution of jurisdictional issues, that is, lack or excess of
jurisdiction and, in almost all cases that have been brought to us,
grave abuse of discretion amounting to lack of jurisdiction.
It will, however, be noted that paragraph (3), Section 9 of B.P. No.
129 now grants exclusive appellate jurisdiction to the Court of
Appeals over all inal adjudications of the Regional Trial Courts and
the quasi-judicial agencies generally or speci ically referred to
therein except, among others, "those falling within the appellate
jurisdiction of the Supreme Court in accordance with x x x the Labor
Code of the Philippines under Presidential Decree No. 442, as
amended, x x x." This would necessarily contradict what has been
ruled and said all along that appeal does not lie from decisions of
the NLRC.[17] Yet, under such excepting clause literally construed,
the appeal from the NLRC cannot be brought to the Court of
Appeals, but to this Court by necessary implication.
The same exceptive clause further confuses the situation by
declaring that the Court of Appeals has no appellate jurisdiction
over decisions falling within the appellate jurisdiction of the
Supreme Court in accordance with the Constitution, the provisions
of B.P. No. 129, and those speci ied cases in Section 17 of the
Judiciary Act of 1948. These cases can, of course, be properly
excluded from the exclusive appellate jurisdiction of the Court of
Appeals. However, because of the aforementioned amendment by
transposition, also supposedly excluded are cases falling within the
appellate jurisdiction of the Supreme Court in accordance with the
Labor Code. This is illogical and impracticable, and Congress could
not have intended that procedural gaffe, since there are no cases in
the Labor Code the decisions, resolutions, orders or awards wherein
are within the appellate jurisdiction of the Supreme Court or of any
other court for that matter.
A review of the legislative records on the antecedents of R.A. No.
7902 persuades us that there may have been an oversight in the
course of the deliberations on the said Act or an imprecision in the
terminology used therein. In ine, Congress did intend to provide for
judicial review of the adjudications of the NLRC in labor cases by
the Supreme Court, but there was an inaccuracy in the term used for
the intended mode of review. This conclusion which we have
reluctantly but prudently arrived at has been drawn from the
considerations extant in the records of Congress, more particularly
on Senate Bill No. 1495 and the Reference Committee Report on S.
No. 1495/H. No. 10452.[18]
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action
In sponsoring Senate Bill No. 1495, Senator Raul S. Roco delivered
his sponsorship speech[19] from which we reproduce the following
excerpts:
The Judiciary Reorganization Act, Mr. President, Batas Pambansa
Blg. 129, reorganized the Court of Appeals and at the same time
expanded its jurisdiction and powers. Among others, its appellate
jurisdiction was expanded to cover not only inal judgment of
Regional Trial Courts, but also all inal judgment(s), decisions,
resolutions, orders or awards of quasi-judicial agencies,
instrumentalities, boards and commissions, except those falling
within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the provisions of BP Blg. 129 and
of subparagraph 1 of the third paragraph and subparagraph 4 of
Section 17 of the Judiciary Act of 1948.
Mr. President, the purpose of the law is to ease the workload of the
Supreme Court by the transfer of some of its burden of review of
factual issues to the Court of Appeals. However, whatever benefits that
can be derived from the expansion of the appellate jurisdiction of the
Court of Appeals was cut short by the last paragraph of Section 9 of
Batas Pambansa Blg. 129 which excludes from its coverage the
"decisions and interlocutory orders issued under the Labor Code of
the Philippines and by the Central Board of Assessment Appeals."
Among the highest number of cases that are brought up to the
Supreme Court are labor cases. Hence, Senate Bill No. 1495 seeks to
eliminate the exceptions enumerated in Section 9 and, additionally,
extends the coverage of appellate review of the Court of Appeals in
the decision(s) of the Securities and Exchange Commission, the
Social Security Commission, and the Employees Compensation
Commission to reduce the number of cases elevated to the Supreme
Court. (Emphases and corrections ours)
xxx
Senate Bill No. 1495 authored by our distinguished Colleague from
Laguna provides the ideal situation of drastically reducing the
workload of the Supreme Court without depriving the litigants of
the privilege of review by an appellate tribunal.
In closing, allow me to quote the observations of former Chief
Justice Teehankee in 1986 in the Annual Report of the Supreme
Court:
x x x Amendatory legislation is suggested so as to relieve the
Supreme Court of the burden of reviewing these cases which
present no important issues involved beyond the particular fact and
the parties involved, so that the Supreme Court may wholly devote
its time to cases of public interest in the discharge of its mandated
task as the guardian of the Constitution and the guarantor of the
people’s basic rights and additional task expressly vested on it now
"to determine whether or not there has been a grave abuse of
discretion amounting to lack of jurisdiction on the part of any
branch or instrumentality of the Government."
We used to have 500,000 cases pending all over the land, Mr.
President. It has been cut down to 300,000 cases some ive years
ago. I understand we are now back to 400,000 cases. Unless we
distribute the work of the appellate courts, we shall continue to
mount and add to the number of cases pending.
Based on Syllabus of Dean Monteclar  By RGL  94 of 95
 
In view of the foregoing, Mr. President, and by virtue of all the
reasons we have submitted, the Committee on Justice and Human
Rights requests the support and collegial approval of our Chamber.
xxx
Surprisingly, however, in a subsequent session, the following
Committee Amendment was introduced by the said sponsor and the
following proceedings transpired:[20]
Senator Roco. On page 2, line 5, after the line "Supreme Court in
accordance with the Constitution," add the phrase "THE LABOR
CODE OF THE PHILIPPINES UNDER P.D. 442, AS AMENDED." So that it
becomes clear, Mr. President, that issues arising from the Labor Code
will still be appealable to the Supreme Court.
The President. Is there any objection? (Silence) Hearing none, the
amendment is approved.
Senator Roco. On the same page, we move that lines 25 to 30 be
deleted. This was also discussed with our Colleagues in the House of
Representatives and as we understand it, as approved in the House,
this was also deleted, Mr. President.
The President. Is there any objection? (Silence) Hearing none, the
amendment is approved.
Senator Roco. There are no further Committee amendments, Mr.
President.
Senator Romulo. Mr. President, I move that we close the period of
Committee amendments.
The President. Is there any objection? (Silence) Hearing none, the
amendment is approved. (Italics supplied)
xxx
Thereafter, since there were no individual amendments, Senate Bill
No. 1495 was passed on second reading and being a certi ied bill, its
unanimous approval on third reading followed.[21]; Record of the
Senate, Vol. V, No. 63, pp. 180-181.21 The Conference Committee
Report on Senate Bill No. 1495 and House Bill No. 10452, having
theretofore been approved by the House of Representatives, the
same was likewise approved by the Senate on February 20, 1995,[22]
inclusive of the dubious formulation on appeals to the Supreme
Court earlier discussed.
The Court is, therefore, of the considered opinion that ever since
appeals from the NLRC to the Supreme Court were eliminated, the
legislative intendment was that the special civil action of certiorari
was and still is the proper vehicle for judicial review of decisions of
the NLRC. The use of the word "appeal" in relation thereto and in
the instances we have noted could have been a lapsus plumae
because appeals by certiorari and the original action for certiorari
are both modes of judicial review addressed to the appellate courts.
The important distinction between them, however, and with which
the Court is particularly concerned here is that the special civil
action of certiorari is within the concurrent original jurisdiction of
this Court and the Court of Appeals;[23] whereas to indulge in the
assumption that appeals by certiorari to the Supreme Court are
allowed would not subserve, but would subvert, the intention of
Congress as expressed in the sponsorship speech on Senate Bill No.
1495.
 
 

Civil Procedure  FULL TEXT OF CASES  Ordinary Civil Action 

 

Incidentally, it was noted by the sponsor therein that some quarters
were of the opinion that recourse from the NLRC to the Court of
Appeals as an initial step in the process of judicial review would be
circuitous and would prolong the proceedings. On the contrary, as
he commendably and realistically emphasized, that procedure
would be advantageous to the aggrieved party on this reasoning:
SO ORDERED.
Narvasa, C.J., Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug,
Kapunan, Mendoza, Panganiban, Martinez, Quisumbing, and
Purisima, JJ., concur.

On the other hand, Mr. President, to allow these cases to be

appealed to the Court of Appeals would give litigants the advantage RULE 45 Appeal by Certiorari to the Supreme Court 
to have all the evidence on record be reexamined and reweighed
after which the indings of facts and conclusions of said bodies are XI. Procedure in the Court of Appeals 
correspondingly af irmed, modi ied or reversed. RULE 44 Ordinary Appealed Cases 
RULE 46 Original Cases 
RULE 47 Annulment of Judgments of Final Orders 
Under such guarantee, the Supreme Court can then apply strictly and Resolutions (of the RTC) 
the axiom that factual indings of the Court of Appeals are inal and RULE 48 Preliminary Conference 
may not be reversed on appeal to the Supreme Court. A perusal of
RULE 49 Oral Argument 
the records will reveal appeals which are factual in nature and may,
RULE 50 Dismissal of Appeal 
therefore, be dismissed outright by minute resolutions.[24]
RULE 51 Judgment (of the CA) 
While we do not wish to intrude into the Congressional sphere on
RULE 52 Motion for Reconsideration 
the matter of the wisdom of a law, on this score we add the further
observations that there is a growing number of labor cases being RULE 53 New Trial 
elevated to this Court which, not being a trier of fact, has at times RULE 54 Internal Business 
been constrained to remand the case to the NLRC for resolution of RULE 55 Publications of Judgments and Final 
unclear or ambiguous factual indings; that the Court of Appeals is Resolutions 
procedurally equipped for that purpose, aside from the increased
XII. Procedure In The Supreme Court (RULE 56) 
number of its component divisions; and that there is undeniably an
imperative need for expeditious action on labor cases as a major A. Original Cases 
aspect of constitutional protection to labor. B. Appealed Cases 

Therefore, all references in the amended Section 9 of B.P. No. 129 to

supposed appeals from the NLRC to the Supreme Court are
interpreted and hereby declared to mean and refer to petitions for
certiorari under Rule 65. Consequently, all such petitions should
henceforth be initially iled in the Court of Appeals in strict
observance of the doctrine on the hierarchy of courts as the
appropriate forum for the relief desired.

Apropos to this directive that resort to the higher courts should be

made in accordance with their hierarchical order, this
pronouncement in Santiago vs. Vasquez, et al.[25] should be taken
into account:
One inal observation. We discern in the proceedings in this case a
propensity on the part of petitioner, and, for that matter, the same
may be said of a number of litigants who initiate recourses before
us, to disregard the hierarchy of courts in our judicial system by
seeking relief directly from this Court despite the fact that the same
is available in the lower courts in the exercise of their original or
concurrent jurisdiction, or is even mandated by law to be sought
therein. This practice must be stopped, not only because of the
imposition upon the precious time of this Court but also because of
the inevitable and resultant delay, intended or otherwise, in the
adjudication of the case which often has to be remanded or referred
to the lower court as the proper forum under the rules of
procedure, or as better equipped to resolve the issues since this
Court is not a trier of facts. We, therefore, reiterate the judicial
policy that this Court will not entertain direct resort to it unless the
redress desired cannot be obtained in the appropriate courts or
where exceptional and compelling circumstances justify availment
of a remedy within and calling for the exercise of our primary
jurisdiction.
WHEREFORE, under the foregoing premises, the instant petition
for certiorari is hereby REMANDED, and all pertinent records
thereof ordered to be FORWARDED, to the Court of Appeals for
appropriate action and disposition consistent with the views and
ruling herein set forth, without pronouncement as to costs.

Based on Syllabus of Dean Monteclar  By RGL  95 of 95