.R. No.

219491, October 17, 2018

STEPHEN Y. KU, Petitioner, v. RCBC SECURITIES, INC., Respondent.

DECISION

PERALTA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking the reversal and setting aside of the Decision1 and Resolution2 of the
Court of Appeals (CA), promulgated on October 9, 2014 and July 14, 2015, respectively, in CA-G.R. SP No. 132816. The assailed CA Decision reversed and set aside
the: (1) September 12, 2013 Order3 of the Regional Trial Court (RTC) of Makati City, Branch 63 which directed the re-raffle of the Complaint filed by petitioner
Stephen Y. Ku; and (2) October 25, 2013 Order4 of the RTC of Makati City, Branch 149, which denied respondent RCBC Securities, Inc.'s Motion to Dismiss and
ordered petitioner to pay the docket fees based on the value of the shares of stocks which he prays to be returned to him.

The facts are as follows:

Respondent RCBC Securities, Inc. is a corporation duly organized and existing under the laws of the Philippines. It is primarily engaged in the brokerage business,
specifically for the purpose of buying and selling any and all kinds of shares, bonds, debentures, securities, products, commodities, gold bullion, monetary exchange,
and any and all other kinds of properties in the Philippines or in any foreign country. Petitioner Stephen Y. Ku, on the other hand, opened an account with respondent
on June 5, 2007, for the purchase and sale of securities.

On February 22, 2013, petitioner filed with the RTC of Makati a Complaint for Sum of Money and Specific Performance with Damages against respondent. Pertinent
portions of his allegations read as follows:

xxxx

3. Sometime in June 2007, plaintiff [herein petitioner] opened a trade account with RSEC [herein respondent] for the purpose of buying and selling securities as
evidenced by the Customer Account Information Form and Agreement dated 05 June 2007.

xxxx

4. Unknown to plaintiff, the name of M.G. Valbuena ("MGV") was deliberately inserted beside the name of Ivan L. Zalameda as one of the agents after plaintiff
completed and signed the Agreement.

5. As to when the fraudulent insertion was made, plaintiff has no idea. Plaintiff only discovered this anomaly when plaintiff recently requested for a copy of his Account
Information.

6. In the course of plaintiff's trading transactions with RSEC, MGV represented herself as a Sales Director of RSEC, duly authorized to transact business on behalf of
the latter.

xxxx

7. With this representation, plaintiff continued to transact business with RSEC through MGV, on the honest belief that the latter was acting for and in behalf of
RSEC.

8. In the beginning, plaintiff's dealings with RSEC through MGV went on smoothly.

9. Every time plaintiff authorized a trade, plaintiff would be furnished with a Trade Confirmation by RSEC. Having successfully and profitably managed plaintiff's
account, or as so represented to plaintiff, MGV was able to gain the trust and confidence of plaintiff.

10. In addition to acting as broker for plaintiff's trading account, investment in ARPO was also successfully solicited by plaintiff.

11. ARPO, as represented to plaintiff, is an investment arm of RSEC that offers considerably higher interest rate of return as compared to any other financing company.

12. Thus, sometime in November 2007, plaintiff agreed to invest in ARPO funds, which continued to run for more than two (2) years, the total of which amounted to
Php38,300,205.00. x x x.

13. Sometime in January 2012, it came to the knowledge of plaintiff that his account with RSEC was subject of mismanagement. MGV was blacklisted by RSEC due to
numerous fraudulent and unauthorized transactions committed by the former. Worse, MGV allegedly was able to divert investments made by "high networth" clients of
RSEC into some other accounts.

14. On 17 January 2012, plaintiff was furnished by RSEC of a copy of an undated audit report (sometimes referred to as "ledger") principally showing that the total
claim of plaintiff with RSEC amounts to Php77,561,602.75

xxxx

15. On 18 January 2012, plaintiff wrote RSEC informing the latter that simultaneous to RSEC's audit, plaintiff likewise is in the process of conducting an independent
audit of his own account in order to validate the amount claimed by RSEC.

16. In the same letter, plaintiff made clear to RSEC that it has never authorized a discretionary account with MGV and requested for all documents relative to plaintiff's
audit.

xxxx

17. After audit, plaintiff has conclusively determined that there were FOUR HUNDRED SIXTY-SEVEN (467) unauthorized transactions in his account. A review of
the said transactions would show that multiple buying and selling transactions on the same day were repeatedly done over a period of four (4) years.

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18. Being unauthorized, plaintiff also never received any document confirming any of the said transactions. Worse, plaintiff was given and is in the possession of
fabricated confirmation statements for trades he actually authorized, but were not, in reality executed.

19. After evaluation and audit, and after exclusion of all the unauthorized trades, plaintiff should have remaining cash in his trade account in the amount of
Php992,970.78 and the following stock position under his trade account to date:

Stock Symbol Qty

AGI 500,000

COL 50,000

EG 57,940

GERI 400,000

IP 50,000

KPP 400,000

LC 3,000,000

LR 100,000

MA 50,000,000

MEG 2,215,000

PA 3,100,000

SHNG 143

SLI 1,000,000

xxxx

38. In summary, plaintiff's audit report would show that RSEC owes plaintiff the total amount of Php70,064,426.88 as of 31 October 2012, broken down as follows:

a. Php992,970.78, representing remaining cash in plaintiff's trade account;

b. Php15,166,251.10, representing unaccounted for and/or wrongfully credited payments to plaintiff's trade account;

c. Php38,300,205.00 representing total principal investment in ARPO; and

d. Php15,605,000.00 as unpaid ARPO interests as of 31 October 2012.

xxxx

39. Deeply bothered by the turn of events, plaintiff wrote RSEC on 10 May 2012 and demanded payment for the said amounts. Plaintiff also demanded return of the
shares of stocks identified in Paragraph 16 hereof.

xxxx

40. However, despite the detailed presentation of plaintiff's payments to RSEC, RSEC, in its letter-reply dated 29 May 2012, only made categorical denials of its
relationship with ARPO and failed to sufficiently explain what happened to plaintiff's account or where did all of plaintiff's money intended for ARPO go.

xxxx

41. Not satisfied, plaintiff again wrote RSEC to reiterate its (sic) request for documents in support of RSEC's defense. Plaintiff also made it clear to RSEC that dealings
of plaintiff with MGV were all made in trust and confidence and on honest belief that MGV was vested with apparent authority from RSEC to transact business on the
latter's behalf.

xxxx

42. After completing the audit report x x x, plaintiff sent a demand letter dated 11 January 2013 to RSEC, x x x.

43. Without any valid and justifiable reason, however, RSEC refused and still continues to refuse to heed plaintiff's demand.

x x x.5

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Petitioner prayed for the payment of the amounts mentioned in Paragraph 38 of the Complaint as well as the shares of stocks enumerated in Paragraph 19 of the said
Complaint. Petitioner also sought the recovery of treble damages, exemplary damages and attorney's fees.

The Complaint, docketed as Civil Case No. 13-171, was raffled-off to Branch 63, RTC of Makati.

On May 29, 2013, respondent filed a Motion to Dismiss6 contending that: (1) the RTC of Makati did not acquire jurisdiction over the subject matter of the case because
petitioner deliberately evaded the payment of the correct docket fees; (2) the Complaint stated no cause of action for its failure to state with particularity the
circumstances constituting fraud, in violation of the Rules of Court, as well as for failing to allege the basis of petitioner's cause of action for the amounts claimed as
principal investment and unpaid interest in ARPO, an investment arm owned and managed by respondent; and (3) petitioner has waived, abandoned or otherwise
extinguished his claims after he failed to raise any objection, with respect to his statements of account, within the prescriptive period to do so under the parties'
agreement.

Petitioner filed his Comment/Opposition to the Motion to Dismiss.7 Subsequently, respondent filed its Reply.8

After conducting several hearings on the Motion to Dismiss, the RTC of Makati, Branch 63, issued its questioned Order dated September 12, 2013, to wit:

xxxx

After going over plaintiff's [herein petitioner's] Complaint and defendant's [herein respondent's] Motion to Dismiss and the Reply that followed, the Court is of the
considered view that this case involves trading of securities. Consequently, the case should be heard and tried before a Special Commercial Court.

Accordingly, the Court's Branch Clerk of Court is forthwith directed to forward the entire record of the case to the Office of the Clerk of Court for re-raffle.

SO ORDERED.

x x x.9

The case was, subsequently, re-raffled to Branch 149 of the RTC of Makati.

Thereafter, in its Order10 dated October 25, 2013, the RTC of Makati, Branch 149, denied the Motion to Dismiss for lack of merit. It held that petitioner's payment of
insufficient docket fees does not warrant the dismissal of the Complaint and that the trial court still acquires jurisdiction over the case subject to the payment of the
deficiency assessment. The RTC, thus, ordered petitioner "to pay the docket fees on the value of the shares of stocks being prayed to be returned to him, within thirty
(30) days from receipt" of the said Order. As to petitioner's alleged failure to state a cause of action, Branch 149 ruled that an examination of the Complaint would show
that "certain allegations of fraud therein [are] sufficiently pleaded x x x." With respect to the alleged waiver, abandonment or extinguishment of petitioner's claims,
Branch 149 held that the parties presented conflicting assertions, the resolution of which should be properly made in a full-blown trial.

Aggrieved, respondent filed with the CA a petition for certiorari under Rule 65 of the Rules of Court, imputing grave abuse of discretion upon Judges Tranquil P.
Salvador, Jr. and Cesar O. Untalan by reason of their issuance of the said Orders in their respective capacities as Presiding Judges of the RTC of Makati City, Branches
63 and 149.

On October 9, 2014, the CA promulgated its assailed Decision by disposing as follows:

WHEREFORE, premises considered, the instant Petition for Certiorari is GRANTED and the assailed Orders dated 12 September 2013 and 25 October 2013 issued
by the Regional Trial Court of Makati City, Branches 63 and 149, respectively, are hereby REVERSED and SET ASIDE. Concomitantly, Civil Case No. 13-171,
entitled Stephen K. Yu (sic) v. RCBC Securities, Inc. is DISMISSED for lack of jurisdiction. Finally, the Urgent Verified Motion for Issuance of Temporary Restraining
Order and/or Writ of Preliminary Injunction is DENIED for being moot and academic.

SO ORDERED.11

The CA held that, based on the language of the Order of September 12, 2013, the RTC of Makati, Branch 63, has acknowledged that it has no jurisdiction over the
subject matter of the case; and having acknowledged its lack of jurisdiction, Branch 63 should have dismissed the Complaint, instead of having it re-raffled to another
Branch. Thus, the CA ruled that Judge Salvador, Jr. of Branch 63 committed grave abuse of discretion amounting to lack or excess of jurisdiction in ordering the re-
raffle of the case. The CA further ruled that, as a consequence, "all the proceedings undertaken [by Branch 149 of the same RTC] under Judge Untalan, who received
the case after the questionable re-raffle, are utterly null and void, including, but not limited to, the issuance of the [Order dated October 25, 2013]."

Petitioner filed a Motion for Reconsideration, but the CA denied it in its Resolution dated July 14, 2015.

Hence, the present petition based on the following Assignment of Errors:

A.

THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT FOUND THAT THE ORDERS WERE ISSUED WITH GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR EXCESS [OF] JURISDICTION.

B.

THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT FOUND THAT THE HONORABLE JUDGE TRANQUIL SALVADOR,
JR. ACKNOWLEDGED THE ABSENCE OF JURISDICTION OF HIS REGULAR COURT OVER THE CASE.

C.

THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT FOUND THAT BOTH HONORABLE TRIAL COURTS, BRANCHES 63
AND 149, HAVE NO JURISDICTION OVER THE INSTANT CASE DUE TO THE INSUFFICIENT PAYMENT OF DOCKET FEES.

D.

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THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT FOUND THAT A MOTION FOR RECONSIDERATION BEFORE THE
FILING OF THIS PETITION CAN BE DISPENSED WITH. 12

The issue which confronts this Court in the instant case is whether the CA erred in granting herein respondent's petition for certiorari, and reversing and setting aside
the September 12, 2013 and October 25, 2013 Orders of the RTC of Makati City, Branches 63 and 149, respectively.

The petition is meritorious.

The basic question that should be resolved is: which court has jurisdiction over the complaint filed by petitioner?

The settled rule is that jurisdiction over the subject matter of a case is conferred by law and determined by the allegations in the complaint, which comprise a concise
statement of the ultimate facts constituting the plaintiff's cause of action.13 The nature of an action, as well as which court or body has jurisdiction over it, is determined
based on the allegations contained in the complaint of the plaintiff.14 The averments in the complaint and the character of the relief sought are the ones to be
consulted.15 Once vested by the allegations in the complaint, jurisdiction also remains vested, irrespective of whether or not the plaintiff is entitled to recover upon all or
some of the claims asserted therein. 16

In the present case, the provisions of law which need to be examined are Republic Act No. 879917 (RA 8799), Presidential Decree No. 902-A18 (PD 902-A) and Batas
Pambansa Blg. 12919 (BP 129), as amended by Republic Act No. 7691 (RA 7691).

Section 5.2 of RA 8799 provides:

The Commission's jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or
the appropriate Regional Trial Court: Provided, That the Supreme Court in the exercise of its authority may designate the Regional Trial Court branches that shall
exercise jurisdiction over the cases. The Commission shall retain jurisdiction over pending cases involving intra-corporate disputes submitted for final resolution which
should be resolved within one (1) year from the enactment of this Code. The Commission shall retain jurisdiction over pending suspension of payment/rehabilitation
cases filed as of 30 June 2000 until finally disposed.

In relation to the above provision, Section 5 of PD 902-A states that:

In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations, partnerships and other forms of associations
registered with it as expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases involving.

(a) Devices or schemes employed by or any acts, of the board of directors, business associates, its officers or partnership, amounting to fraud and misrepresentation
which may be detrimental to the interest of the public and/or of the stockholder, partners, members of associations or organizations registered with the Commission;

(b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members, or associates; between any or all of them and the
corporation, partnership or association of which they are stockholders, members or associates, respectively; and between such corporation, partnership or association
and the state insofar as it concerns their individual franchise or right to exist as such entity; and

(c) Controversies in the election or appointments of directors, trustees, officers or managers of such corporations, partnerships or associations.

On the other hand, Section 19(1) and (8) of BP 129, as amended, provides:

Regional Trial Courts shall exercise exclusive original jurisdiction:

(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation;

xxx xxx xxx

(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and costs or the value of the property in
controversy exceeds Three hundred thousand pesos (P300,000.00) or, in such other cases in Metro Manila, where the demand exclusive of the above-mentioned items
exceeds Four hundred thousand pesos (P400,000.00).

As it now stands, jurisdiction over the cases enumerated under. Section 5 of PD 902-A, collectively known as intra-corporate controversies or disputes, now falls under
the jurisdiction of the RTCs.

In this regard, it is worthy to reiterate this Court's ruling in Gonzales, et al., v. GJH Land, Inc., et al.20 which characterizes and explains the transfer of jurisdiction of all
cases enumerated under Section 5 of PD 902-A from the Securities and Exchange Commission (SEC) to the RTCs. In the said Decision, which was promulgated
subsequent to the issuance of the questioned RTC Orders in the present case, this Court made a distinction between a court's "subject matter jurisdiction" and its
"exercise of jurisdiction." Pertinent portions of the said ruling provide, thus:

As a basic premise, let it be emphasized that a court's acquisition of jurisdiction over a particular case's subject matter is different from incidents pertaining to the
exercise of its jurisdiction. Jurisdiction over the subject matter of a case is conferred by law, whereas a court's exercise of jurisdiction, unless provided by the law
itself, is governed by the Rules of Court or by the orders issued from time to time by the Court. In Lozada v. Bracewell, it was recently held that the matter of whether
the RTC resolves an issue in the exercise of its general jurisdiction or of its limited jurisdiction as a special court is only a matter of procedure and has nothing
to do with the question of jurisdiction.

Pertinent to this case is RA 8799 which took effect on August 8, 2000. By virtue of said law, jurisdiction over cases enumerated in Section 5 of Presidential Decree No.
902-A was transferred from the Securities and Exchange Commission (SEC) to the RTCs, being court of general jurisdiction . x x x

xxxx

The legal attribution of Regional Trial Courts as courts of general jurisdiction stems from Section 19 (6), Chapter II of Batas Pambansa Bilang (BP) 129, known as
"The Judiciary Reorganization Act of 1980":

xxxx

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Therefore, one must be disabused of the notion that the transfer of jurisdiction was made only in favor of particular RTC branches, and not the RTCs in general.

xxxx

x x x Harkening back to the statute that had conferred subject matter jurisdiction, two things are apparently clear: (a) that the SEC's subject matter jurisdiction over
intra-corporate cases under Section 5 of Presidential Decree No. 902-A was transferred to the Courts of general jurisdiction, i.e., the appropriate Regional Trial Courts;
and (b) the designated branches of the Regional Trial Court, as per the rules promulgated by the Supreme Court, shall exercise jurisdiction over such cases. x x x.

xxxx

For further guidance, the Court finds it apt to point out that the same principles apply to the inverse situation of ordinary civil cases filed before the proper RTCs
but wrongly raffled to its branches designated as Special Commercial Courts. In such a scenario, the ordinary civil case should then be referred to the
Executive Judge for re-docketing as an ordinary civil case; thereafter, the Executive Judge should then order the raffling of the case to all branches of the
same RTC, subject to limitations under existing internal rules, and the payment of the correct docket fees in case of any difference. Unlike the limited
assignment raffling of a commercial case only to branches designated as Special Commercial Courts in the scenarios stated above, the re-raffling of an ordinary civil
case in this instance to all courts is permissible due to the fact that a particular branch which has been designated as a Special Commercial Court does not shed the
RTC's general jurisdiction over ordinary civil cases under the imprimatur of statutory law, i.e., Batas Pambansa Bilang (BP) 129. To restate, the designation of Special
Commercial Courts was merely intended as a procedural tool to expedite the resolution of commercial cases in line with the court's exercise of jurisdiction. This
designation was not made by statute but only by an internal Supreme Court rule under its authority to promulgate rules governing matters of procedure and its
constitutional mandate to supervise the administration of all courts and the personnel thereof. Certainly, an internal rule promulgated by the Court cannot go beyond the
commanding statute. But as a more fundamental reason, the designation of Special Commercial Courts is, to stress, merely an incident related to the court's exercise of
jurisdiction, which, as first discussed, is distinct from the concept of jurisdiction over the subject matter. The RTC's general jurisdiction over ordinary civil cases is
therefore not abdicated by an internal rule streamlining court procedure.

x x x.21

In short, jurisdiction over intra-corporate controversies is transferred by law (RA 8799) from the SEC to the RTCs in general, but the authority to exercise such
jurisdiction is given by the Supreme Court, in the exercise of its rule-making power under the Constitution, to RTCs which are specifically designated as Special
Commercial Courts. On the other hand, the cases enumerated under Section 19 of BP 129, as amended, are taken cognizance of by the RTCs in the exercise of their
general jurisdiction.

Thus, based on the allegations in petitioner's Complaint, in relation to the above provisions of law, there is no dispute that the case falls under the jurisdiction of the
RTC. However, whether or not the RTC shall take cognizance of the case in the exercise of its general jurisdiction, or as a special commercial court, is another matter.
In resolving this issue, what needs to be determined, at the first instance, is the nature of petitioner's complaint. Is it an ordinary civil action for collection, specific
performance and damages as would fall under the jurisdiction of regular courts or is it an intra-corporate controversy or of such nature that it is required to be heard and
tried by a special commercial court?

Petitioner contends that the allegations in his Complaint indicate that it is an action for collection of a sum of money and specific performance with damages and, as
such, it falls under the general jurisdiction of the RTC.

The CA, on the other hand, did not directly resolve the issue as to the nature of the complaint and, instead, proceeded to decide the case by working on the premise that
Branch 63 has acknowledged its lack of jurisdiction over the subject matter of petitioner's complaint and, as such, should have dismissed the same and not order its re-
raffle to another branch.

The Court agrees with petitioner.

In the case of Medical Plaza Makati Condominium Corporation v. Cullen,22 this Court held as follows:

In determining whether a dispute constitutes an intra-corporate controversy, the Court uses two tests, namely, the relationship test and the nature of the controversy test.

An intra-corporate controversy is one which pertains to any of the following relationships: (1) between the corporation, partnership or association and the public; (2)
between the corporation, partnership or association and the State insofar as its franchise, permit or license to operate is concerned; (3) between the corporation,
partnership or association and its stockholders, partners, members or officers; and (4) among the stockholders, partners or associates themselves. Thus, under the
relationship test, the existence of any of the above intra-corporate relations makes the case intra-corporate.

Under the nature of the controversy test, "the controversy must not only be rooted in the existence of an intra-corporate relationship, but must as well pertain to the
enforcement of the parties' correlative rights and obligations under the Corporation Code and the internal and intra-corporate regulatory rules of the corporation." In
other words, jurisdiction should be determined by considering both the relationship of the parties as well as the nature of the question involved.23

Applying the above tests, the Court finds, and so holds, that the case is not an intra-corporate dispute and, instead, is an ordinary civil action. There are no intra-
corporate relations between the parties. Petitioner is neither a stockholder, partner, member or officer of respondent corporation. The parties' relationship is limited to
that of an investor and a securities broker. Moreover, the questions involved neither pertain to the parties' rights and obligations under the Corporation Code, if any, nor
to matters directly relating to the regulation of the corporation.

On the basis of the foregoing, since the Complaint filed by petitioner partakes of the nature of an ordinary civil action, it is clear that it was correctly raffled-off to
Branch 63. Hence, it is improper for it (Branch 63) to have ordered the re-raffle of the case to another branch of the Makati RTC. Nonetheless, the September 12, 2013
Order of Branch 63, although erroneous, was issued in the valid exercise of the RTC's jurisdiction. Such mistaken Order can, thus, be considered as a mere procedural
lapse which does not affect the jurisdiction which the RTC of Makati had already acquired. Moreover, while designated as a Special Commercial Court, Branch 149, to
which it was subsequently re-raffled, retains its general jurisdiction to try ordinary civil cases such as petitioner's Complaint. In addition, after its re-raffle to Branch
149, the case remained docketed as an ordinary civil case. Thus, the Order dated October 12, 2013 was, likewise issued by Branch 149 in the valid exercise of the RTC's
jurisdiction. In sum, it is error to conclude that the questioned Orders of Branches 63 and 149 are null and void on the ground of lack of jurisdiction, because, in fact,
both branches of the Makati RTC have jurisdiction over the subject matter of petitioner's Complaint.

Hence, considering that the RTC of Makati has jurisdiction over the subject matter of petitioner's complaint, and that Branch 149 continued and continues to exercise
jurisdiction over the case during the pendency of the proceedings leading to this petition and, thus, has presumably conducted hearings towards the resolution of

5
petitioner's complaint, this Court, in the interest of expediency and in promoting the parties' respective rights to a speedy disposition of their case, finds it proper that
Civil Case No. 13-171 should remain with Branch 149, instead of being remanded to Branch 63 or re-raffled anew among all courts of the same RTC.

With respect to petitioner's payment of insufficient docket fees, this Court's ruling in The Heirs of the Late Ruben Reinoso, Sr. v. Court of Appeals, et al.,24 is instructive,
to wit:

The rule is that payment in full of the docket fees within the prescribed period is mandatory. In Manchester v. Court of Appeals [233 Phil 579, (1987)], it was held that a
court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. The strict application of this rule was, however, relaxed two (2) years after
in the case of Sun Insurance Office, Ltd. v. Asuncion, wherein the Court decreed that where the initiatory pleading is not accompanied by the payment of the docket fee,
the court may allow payment of the fee within a reasonable period of time, but in no case beyond the applicable prescriptive or reglementary period. This ruling was
made on the premise that the plaintiff had demonstrated his willingness to abide by the rules by paying the additional docket fees required. Thus, in the more recent case
of United Overseas Bank v. Ros, the Court explained that where the party does not deliberately intend to defraud the court in payment of docket fees, and manifests its
willingness to abide by the rules by paying additional docket fees when required by the court, the liberal doctrine enunciated in Sun Insurance Office, Ltd., and not the
strict regulations set in Manchester, will apply. It has been on record that the Court, in several instances, allowed the relaxation of the rule on non-payment of docket
fees in order to afford the parties the opportunity to fully ventilate their cases on the merits. .In the case of La Salette College v. Pilotin, the Court stated:

Notwithstanding the mandatory nature of the requirement of payment of appellate docket fees, we also recognize that its strict application is qualified by the
following: first, failure to pay those fees within the reglementary period allows only discretionary, not automatic, dismissal; second, such power should be used by the
court in conjunction with its exercise of sound discretion in accordance with the tenets of justice and fair play, as well as with a great deal of circumspection in
consideration of all attendant circumstances.

While there is a crying need to unclog court dockets on the one hand, there is, on the other, a greater demand for resolving genuine disputes fairly and equitably, for it is
far better to dispose of a case on the merit which is a primordial end, rather than on a technicality that may result in injustice.25

Indeed, this Court has held that the ruling in Manchester does not apply to cases where insufficient filing fees were paid based on the assessment made by the clerk of
court, and there was no intention to defraud the government.26 It was further held that the filing of the complaint or appropriate initiatory pleading and the payment of
the prescribed docket fee vest a trial court with jurisdiction over the subject matter or nature of the action.27 If the amount of docket fees paid is insufficient considering
the amount of the claim, the clerk of court of the lower court involved or his duly-authorized deputy has the responsibility of making a deficiency assessment.28 The
party filing the case will be required to pay the deficiency, but jurisdiction is not automatically lost.29

In the present case, the Court does not agree with the CA when it ruled that "the intention of [petitioner] Ku to evade payment of the correct filing fees[,] if not to
mislead the docket clerk in the assessment of the filing fees[,] is manifest." The fact alone that petitioner failed to indicate in the body of his Complaint as well as in his
prayer, the value of the shares of stocks he wishes to recover from respondent is not sufficient proof of a deliberate intent to defraud the court in the payment of docket
fees. On the contrary, there is no dispute that upon filing of his Complaint, petitioner paid docket fees amounting to P1,465,971.41, which was based on the assessment
made by the clerk of court. In a number of cases,30 this Court has ruled that the plaintiff's payment of the docket fees based on the assessment made by the docket clerk
negates bad faith or intent to defraud the government. There is, likewise, no dispute that, subsequently, when ordered by Branch 149 to pay additional docket fees
corresponding to the value of the shares of stocks being recovered, petitioner immediately paid an additional sum of P464,535.83. Moreover, unlike
in Manchester where the complainant specified in the body of the complaint the amount of damages sought to be recovered but omitted the same in its prayer, petitioner
in the instant case consistently indicated both in the body of his Complaint and in his prayer, the number of shares sought to be recovered, albeit without their
corresponding values. The foregoing circumstances would show that there was no deliberate intent to defraud the court in the payment of docket fees.

WHEREFORE, the instant petition for review on certiorari is GRANTED. The Decision and Resolution of the Court of Appeals promulgated on October 9, 2014 and
July 14, 2015, respectively, in CA-G.R. SP No. 132816, are REVERSED and SET ASIDE. Civil Case No. 13-171, entitled Stephen Y. Ku v. RCBC Securities, Inc., is
hereby REINSTATED and the Regional Trial Court of Makati City, Branch 149, is DIRECTED to PROCEED WITH THE HEARING of the case, with utmost
dispatch, until its termination.

SO ORDERED.

G.R. No. 202664, November 20, 2015

MANUEL LUIS C. GONZALES AND FRANCIS MARTIN D. GONZALES, Petitioners, v. GJH LAND, INC. (FORMERLY KNOWN AS S.J. LAND, INC.),
CHANG HWAN JANG A.K.A. STEVE JANG, SANG RAK KIM, MARIECHU N. YAP, AND ATTY. ROBERTO P. MALLARI II, Respondent.

DECISION

PERLAS-BERNABE, J.:

This is a direct recourse to the Court, via a petition for review on certiorari,1 from the Orders dated April 17, 20122 and July 9, 20123 of the Regional Trial Court (RTC)
of Muntinlupa City, Branch 276 (Branch 276) dismissing Civil Case No. 11-077 for lack of jurisdiction.

The Facts

On August 4, 2011, petitioners Manuel Luis C. Gonzales4 and Francis Martin D. Gonzales (petitioners) filed a Complaint5 for "Injunction with prayer for Issuance
of Status Quo Order, Three (3) and Twenty (20)-Day Temporary Restraining Orders, and Writ of Preliminary Injunction with Damages" against respondents GJH Land,
Inc. (formerly known as S.J. Land, Inc.), Chang Hwan Jang, Sang Rak Kim, Mariechu N. Yap, and Atty. Roberto P. Mallari II6 (respondents) before the RTC of
Muntinlupa City seeking to enjoin the sale of S.J. Land, Inc.'s shares which they purportedly bought from S.J. Global, Inc. on February 1, 2010. Essentially, petitioners
alleged that the subscriptions for the said shares were already paid by them in full in the books of S.J. Land, Inc.,7 but were nonetheless offered for sale on July 29, 2011
to the corporation's stockholders,8 hence, their plea for injunction.

The case was docketed as Civil Case No. 11-077 and raffled to Branch 276, which is not a Special Commercial Court. On August 9, 2011, said branch issued a
temporary restraining order,9 and later, in an Order10 dated August 24, 2011, granted the application for a writ of preliminary injunction.

After filing their respective answers11 to the complaint, respondents filed a motion to dismiss12 on the ground of lack of jurisdiction over the subject matter, pointing out
that the case involves an intra-corporate dispute and should, thus, be heard by the designated Special Commercial Court of Muntinlupa City.13

6
The RTC Ruling

In an Order14 dated April 17, 2012, Branch 276 granted the motion to dismiss filed by respondents. It found that the case involves an intra-corporate dispute that is
within the original and exclusive jurisdiction of the RTCs designated as Special Commercial Courts. It pointed out that the RTC of Muntinlupa City, Branch 256
(Branch 256) was specifically designated by the Court as the Special Commercial Court, hence, Branch 276 had no jurisdiction over the case and cannot lawfully
exercise jurisdiction on the matter, including the issuance of a Writ of Preliminary Injunction.15 Accordingly, it dismissed the case.

Dissatisfied, petitioners filed a motion for reconsideration,16 arguing that they filed the case with the Office of the Clerk of Court of the RTC of Muntinlupa City which
assigned the same to Branch 276 by raffle.17 As the raffle was beyond their control, they should not be made to suffer the consequences of the wrong assignment of the
case, especially after paying the filing fees in the amount of P235,825.00 that would be for naught if the dismissal is upheld.18 They further maintained that the RTC has
jurisdiction over intra-corporate disputes under Republic Act No. (RA) 8799,19 but since the Court selected specific branches to hear and decide such suits, the case
must, at most, be transferred or raffled off to the proper branch.20

In an Order21 dated July 9, 2012, Branch 276 denied the motion for reconsideration, holding that it has no authority or power to order the transfer of the case to the
proper Special Commercial Court, citing Calleja v. Panday22 (Calleja); hence, the present petition.

The Issue Before the Court

The essential issue for the Court's resolution is whether or not Branch 276 of the RTC of Muntinlupa City erred in dismissing the case for lack of jurisdiction over the
subject matter.

The Court's Ruling

The petition is meritorious.

At the outset, the Court finds Branch 276 to have correctly categorized Civil Case No. 11-077 as a commercial case, more particularly, an intra-corporate
dispute,23 considering that it relates to petitioners' averred rights over the shares of stock offered for sale to other stockholders, having paid the same in full. Applying
the relationship test and the nature of the controversy test, the suit between the parties is clearly rooted in the existence of an intra-corporate relationship and pertains to
the enforcement of their correlative rights and obligations under the Corporation Code and the internal and intra-corporate regulatory rules of the corporation,24 hence,
intra-corporate, which should be heard by the designated Special Commercial Court as provided under A.M. No. 03-03-03-SC25 dated June 17, 2003 in relation to Item
5.2, Section 5 of RA 8799.

The present controversy lies, however, in the procedure to be followed when a commercial case - such as the instant intra-corporate dispute -has been properly
filed in the official station of the designated Special Commercial Court but is, however, later wrongly assigned by raffle to a regular branch of that station.

As a basic premise, let it be emphasized that a court's acquisition of jurisdiction over a particular case's subject matter is different from incidents pertaining to the
exercise of its jurisdiction. Jurisdiction over the subject matter of a case is conferred by law, whereas a court's exercise of jurisdiction, unless provided by the law
itself, is governed by the Rules of Court or by the orders issued from time to time by the Court.26 In Lozada v. Bracewell,27 it was recently held that the matter of
whether the RTC resolves an issue in the exercise of its general jurisdiction or of its limited jurisdiction as a special court is only a matter of procedure and
has nothing to do with the question of jurisdiction.

Pertinent to this case is RA 8799 which took effect on August 8, 2000. By virtue of said law, jurisdiction over cases enumerated in Section 528 of Presidential Decree
No. 902-A29 was transferred from the Securities and Exchange Commission (SEC) to the RTCs, being courts of general jurisdiction. Item 5.2, Section 5 of RA 8799
provides:chanRoblesvirtualLawlibrary

SEC. 5. Powers and Functionsof the Commission. - x x x

xxxx

5.2 The Commission's jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is hereby transferred to the Courts of general
jurisdiction or the appropriate Regional Trial Court: Provided, that the Supreme Court in the exercise of its authority may designate the Regional Trial Court
branches that shall exercise jurisdiction over the cases. The Commission shall retain jurisdiction over pending cases involving intra-corporate disputes submitted for
final resolution which should be resolved within one (1) year from the enactment of this Code. The Commission shall retain jurisdiction over pending suspension of
payments/rehabilitation cases filed as of 30 June 2000 until finally disposed. (Emphasis supplied)cralawlawlibrary

The legal attribution of Regional Trial Courts as courts of general jurisdiction stems from Section 19 (6), Chapter II of Batas Pambansa Bilang (BP) 129,30 known as
"The Judiciary Reorganization Act of 1980":chanRoblesvirtualLawlibrary

Section 19. Jurisdiction in civil cases.- Regional Trial Courts shall exercise exclusive original jurisdiction:chanRoblesvirtualLawlibrary

xxxx

(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising jurisdiction or any court, tribunal, person or body exercising
judicial or quasi-judicial functions; x x x x
cralawlawlibrary

As enunciated in Durisol Philippines, Inc. v. CA:31chanroblesvirtuallawlibrary

7
The regional trial court, formerly the court of first instance, is a court of general jurisdiction. All cases, the jurisdiction over which is not specifically provided for by
law to be within the jurisdiction of any other court, fall under the jurisdiction of the regional trial court.32ChanRoblesVirtualawlibrary
cralawlawlibrary

To clarify, the word "or" in Item 5.2, Section 5 of RA 8799 was intentionally used by the legislature to particularize the fact that the phrase "the Courts of general
jurisdiction" is equivalent to the phrase "the appropriate Regional Trial Court." In other words, the jurisdiction of the SEC over the cases enumerated under Section 5 of
PD 902-A was transferred to the courts of general jurisdiction, that is to say (or, otherwise known as), the proper Regional Trial Courts. This interpretation is supported
by San Miguel Corp. v. Municipal Council,33 wherein the Court held that:chanRoblesvirtualLawlibrary

[T]he word "or" may be used as the equivalent of "that is to say" and gives that which precedes it the same significance as that which follows it. It is not always
disjunctive and is sometimes interpretative or expository of the preceding word.34cralawlawlibrary

Further, as may be gleaned from the following excerpt of the Congressional deliberations:chanRoblesvirtualLawlibrary

Senator [Raul S.] Roco: x x x.

xxxx

x x x. The first major departure is as regards the Securities and Exchange Commission. The Securities and Exchange Commission has been authorized under this
proposal to reorganize itself. As an administrative agency, we strengthened it and at the same time we take away the quasi-judicial functions. The quasi-judicial
functions are now given back to the courts of general jurisdiction - the Regional Trial Court, except for two categories of cases.

In the case of corporate disputes, only those that are now submitted for final determination of the SEC will remain with the SEC. So, all those cases, both memos of the
plaintiff and the defendant, that have been submitted for resolution will continue. At the same time, cases involving rehabilitation, bankruptcy, suspension of payments
and receiverships that were filed before June 30, 2000 will continue with the SEC. in other words, we are avoiding the possibility, upon approval of this bill, of people
filing cases with the SEC, in manner of speaking, to select their court.35

x x x x (Emphasis supplied)cralawlawlibrary

Therefore, one must be disabused of the notion that the transfer of jurisdiction was made only in favor of particular RTC branches, and not the RTCs in general.

Consistent with the foregoing, history depicts that when the transfer of SEC cases to the RTCs was first implemented, they were transmitted to the Executive Judges of
the RTCs for raffle between or among its different branches, unless a specific branch has been designated as a Special Commercial Court, in which instance, the
cases were transmitted to said branch.36 It was only on November 21, 2000 that the Court designated certain RTC branches to try and decide said SEC cases37 without,
however, providing for the transfer of the cases already distributed to or filed with the regular branches thereof. Thus, on January 23, 2001, the Court issued SC
Administrative Circular No. 08-200138 directing the transfer of said cases to the designated courts (commercial SEC courts). Later, or on June 17, 2003, the Court issued
A.M. No. 03-03-03-SC consolidating the commercial SEC courts and the intellectual property courts39 in one RTC branch in a particular locality, i.e., the Special
Commercial Court, to streamline the court structure and to promote expediency.40 Accordingly, the RTC branch so designated was mandated to try and decide SEC
cases, as well as those involving violations of intellectual property rights, which were, thereupon, required to be filed in the Office of the Clerk of Court in the official
station of the designated Special Commercial Courts, to wit:chanRoblesvirtualLawlibrary

1. The Regional Courts previously designated as SEC Courts through the: (a) Resolutions of this Court dated 21 November 2000, 4 July 2001, 12 November 2002, and
9 July 2002 all issued in A.M. No. 00-11-03-SC; (b) Resolution dated 27 August 2001 in A.M. No. 01-5-298-RTC; and (c) Resolution dated 8 July 2002 in A.M. No.
01-12-656-RTC are hereby DESIGNATED and shall be CALLED as Special Commercial Courts to try and decide cases involving violations of Intellectual Property
Rights which fall within their jurisdiction and those cases formerly cognizable by the Securities and Exchange Commission:chanRoblesvirtualLawlibrary

xxxx

4. The Special Commercial Courts shall have jurisdiction over cases arising within their respective territorial jurisdiction with respect to the National Capital Judicial
Region and within the respective provinces with respect to the First to Twelfth Judicial Regions. Thus, cases shall be filed in the Office of the Clerk of Court in the
official station of the designated Special Commercial Court;41

x x x x (Underscoring supplied)cralawlawlibrary

It is important to mention that the Court's designation of Special Commercial Courts was made in line with its constitutional authority to supervise the administration of
all courts as provided under Section 6, Article VIII of the 1987 Constitution:chanRoblesvirtualLawlibrary

Section 6. The Supreme Court shall have administrative supervision over all courts and the personnel thereof.cralawlawlibrary

The objective behind the designation of such specialized courts is to promote expediency and efficiency in the exercise of the RTCs' jurisdiction over the cases
enumerated under Section 5 of PD 902-A. Such designation has nothing to do with the statutory conferment of jurisdiction to all RTCs under RA 8799 since in the first
place, the Court cannot enlarge, diminish, or dictate when jurisdiction shall be removed, given that the power to define, prescribe, and apportion jurisdiction is, as
a general rule, a matter of legislative prerogative.42 Section 2, Article VIII of the 1987 Constitution provides:chanRoblesvirtualLawlibrary

Section 2. The Congress shall have the power to define, prescribe, and apportion the jurisdiction of the various courts but may not deprive the Supreme Court of its
jurisdiction over cases enumerated in Section 5 hereof.

xxxx
cralawlawlibrary

8
Here, petitioners filed a commercial case, i.e., an intra-corporate dispute, with the Office of the Clerk of Court in the RTC of Muntinlupa City, which is the official
station of the designated Special Commercial Court, in accordance with A.M. No. 03-03-03-SC. It is, therefore, from the time of such filing that the RTC of
Muntinlupa City acquired jurisdiction over the subject matter or the nature of the action.43 Unfortunately, the commercial case was wrongly raffled to a
regular branch, e.g., Branch 276, instead of being assigned44to the sole Special Commercial Court in the RTC of Muntinlupa City, which is Branch 256. This
error may have been caused by a reliance on the complaint's caption, i.e., "Civil Case for Injunction with prayer for Status Quo Order, TRO and Damages,"45 which,
however, contradicts and more importantly, cannot prevail over its actual allegations that clearly make out an intra-corporate dispute:chanRoblesvirtualLawlibrary

16. To the surprise of MLCG and FMDG, however, in two identical letters both dated 13 May 2011, under the letterhead of GJH Land, Inc., Yap, now acting as its
President, Jang and Kim demanded payment of supposed unpaid subscriptions of MLCG and FMDG amounting to P10,899,854.30 and P2,625,249.41, respectively.

16.1 Copies of the letters dated 13 May 2011 are attached hereto and made integral parts hereof as Annexes "J" and "K", repectively.

17. On 29 July 2011, MLCG and FMDG received an Offer Letter addressed to stockholders of GJH Land, Inc. from Yap informing all stockholders that GJH Land, Inc.
is now offering for sale the unpaid shares of stock of MLCG and FMDG. The same letter states that the offers to purchase these shares will be opened on 10 August
2011 with payments to be arranged by deposit to the depository bank of GJH Land, Inc.

17.1 A copy of the undated Offer Letter is attached hereto and made and made an integral part hereof as Annex "L".

18. The letter of GJH Land, Inc. through Yap, is totally without legal and factual basis because as evidenced by the Deeds of Assignment signed and certified by Yap
herself, all the S.J. Land, Inc. shares acquired by MLCG and FMDG have been fully paid in the books of S.J. Land, Inc.

19. With the impending sale of the alleged unpaid subscriptions on 10 August 2011, there is now a clear danger that MLCG and FMDG would be deprived of
these shares without legal and factual basis.

20. Furthermore, if they are deprived of these shares through the scheduled sale, both MLCG and FMDG would suffer grave and irreparable damage incapable of
pecuniary estimation.

21. For this reason, plaintiffs now come to the Honorable Court for injunctive relief so that after trial on the merits, a permanent injunction should be issued against the
defendants preventing them from selling the shares of the plaintiffs, there being no basis for such sale.46cralawlawlibrary

According to jurisprudence, "it is not the caption but the allegations in the complaint or other initiatory pleading which give meaning to the pleading and on the basis of
which such pleading may be legally characterized."47 However, so as to avert any future confusion, the Court requires henceforth, that all initiatory pleadings state the
action's nature both in its caption and the body, which parameters are defined in the dispositive portion of this Decision.

Going back to the case at bar, the Court nonetheless deems that the erroneous raffling to a regular branch instead of to a Special Commercial Court is only a matter of
procedure - that is, an incident related to the exercise of jurisdiction - and, thus, should not negate the jurisdiction which the RTC of Muntinlupa City had already
acquired. In such a scenario, the proper course of action was not for the commercial case to be dismissed; instead, Branch 276 should have first referred the case to the
Executive Judge for re-docketing as a commercial case; thereafter, the Executive Judge should then assign said case to the only designated Special
Commercial Court in the station, i.e., Branch 256.

Note that the procedure would be different where the RTC acquiring jurisdiction over the case has multiple special commercial court branches; in such a scenario,
the Executive Judge, after re-docketing the same as a commercial case, should proceed to order its re-raffling among the said special branches.

Meanwhile, if the RTC acquiring jurisdiction has no branch designated as a Special Commercial Court, then it should refer the case to the nearest RTC with a
designated Special Commercial Court branch within the judicial region.48 Upon referral, the RTC to which the case was referred to should re-docket the case as a
commercial case, and then: (a) if the said RTC has only one branch designated as a Special Commercial Court, assign the case to the sole special branch; or (b) if the
said RTC has multiple branches designated as Special Commercial Courts, raffle off the case among those special branches.

In all the above-mentioned scenarios, any difference regarding the applicable docket fees should be duly accounted for. On the other hand, all docket fees already paid
shall be duly credited, and any excess, refunded.

At this juncture, the Court finds it fitting to clarify that the RTC mistakenly relied on the Calleja case to support its ruling. In Calleja, an intra-corporate
dispute49 among officers of a private corporation with principal address at Goa, Camarines Sur, was filed with the RTC of San Jose, Camarines Sur, Branch 58 instead
of the RTC of Naga City, which is the official station of the designated Special Commercial Court for Camarines Sur. Consequently, the Court set aside the RTC of San
Jose, Camarines Sur's order to transfer the case to the RTC of Naga City and dismissed the complaint considering that it was filed before a court which, having no
internal branch designated as a Special Commercial Court, had no jurisdiction over those kinds of actions, i.e., intra-corporate disputes. Calleja involved two different
RTCs, i.e., the RTC of San Jose, Camarines Sur and the RTC of Naga City, whereas the instant case only involves one RTC, i.e., the RTC of Muntinlupa City, albeit
involving two different branches of the same court, i.e., Branches 256 and 276. Hence, owing to the variance in the facts attending, it was then improper for the RTC to
rely on the Calleja ruling.

Besides, the Court observes that the fine line that distinguishes subject matter jurisdiction and exercise of jurisdiction had been clearly blurred in Calleja. Harkening
back to the statute that had conferred subject matter jurisdiction, two things are apparently clear: (a) that the SEC's subject matter jurisdiction over intra-corporate
cases under Section 5 of Presidential Decree No. 902-A was transferred to the Courts of general jurisdiction, i.e., the appropriate Regional Trial Courts; and (b) the
designated branches of the Regional Trial Court, as per the rules promulgated by the Supreme Court, shall exercise jurisdiction over such cases. Item 5.2, Section 5 of
RA 8799 provides:chanRoblesvirtualLawlibrary

SEC. 5. Powers and Functions of the Commission. - x x x

xxxx

5.2 The Commission's jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is hereby transferred to the Courts of general

9
jurisdiction or the appropriate Regional Trial Court: Provided, that the Supreme Court in the exercise of its authority may designate the Regional Trial Court
branches that shall exercise jurisdiction over the cases, x x x.cralawlawlibrary

In contrast, the appropriate jurisprudential reference to this case would be Tan v. Bausch & Lomb, Inc.,50 which involves a criminal complaint for violation of
intellectual property rights filed before the RTC of Cebu City but was raffled to a regular branch thereof (Branch 21), and not to a Special Commercial Court. As it
turned out, the regular branch subsequently denied the private complainant's motion to transfer the case to the designated special court of the same RTC, on the ground
of lack of jurisdiction. The CA reversed the regular branch and, consequently, ordered the transfer of the case to the designated special court at that time (Branch 9).
The Court, affirming the CA, declared that the RTC had acquired jurisdiction over the subject matter. In view, however, of the designation of another court as the
Special Commercial Court in the interim (Branch 11 of the same Cebu City RTC), the Court accordingly ordered the transfer of the case and the transmittal of the
records to said Special Commercial Court instead.51Similarly, the transfer of the present intra-corporate dispute from Branch 276 to Branch 256 of the same
RTC of Muntinlupa City, subject to the parameters above-discussed is proper and will further the purposes stated in A.M. No. 03-03-03-SC of attaining a
speedy and efficient administration of justice.

For further guidance, the Court finds it apt to point out that the same principles apply to the inverse situation of ordinary civil cases filed before the proper RTCs
but wrongly raffled to its branches designated as Special Commercial Courts. In such a scenario, the ordinary civil case should then be referred to the
Executive Judge for re-docketing as an ordinary civil case; thereafter, the Executive Judge should then order the raffling of the case to  all branches of the
same RTC, subject to limitations under existing internal rules, and the payment of the correct docket fees in case of any difference. Unlike the limited
assignment/raffling of a commercial case only to branches designated as Special Commercial Courts in the scenarios stated above, the re-raffling of an ordinary civil
case in this instance to all courts is permissible due to the fact that a particular branch which has been designated as a Special Commercial Court does not shed the
RTC's general jurisdiction over ordinary civil cases under the imprimatur of statutory law, i.e., Batas Pambansa Bilang (BP) 129.52 To restate, the designation of Special
Commercial Courts was merely intended as a procedural tool to expedite the resolution of commercial cases in line with the court's exercise of jurisdiction. This
designation was not made by statute but only by an internal Supreme Court rule under its authority to promulgate rules governing matters of procedure and its
constitutional mandate to supervise the administration of all courts and the personnel thereof.53 Certainly, an internal rule promulgated by the Court cannot go beyond
the commanding statute. But as a more fundamental reason, the designation of Special Commercial Courts is, to stress, merely an incident related to the court's exercise
of jurisdiction, which, as first discussed, is distinct from the concept of jurisdiction over the subject matter. The RTC's general jurisdiction over ordinary civil cases is
therefore not abdicated by an internal rule streamlining court procedure.

In fine, Branch 276's dismissal of Civil Case No. 11-077 is set aside and the transfer of said case to Branch 256, the designated Special Commercial Court of the same
RTC of Muntinlupa City, under the parameters above-explained, is hereby ordered.

WHEREFORE, the petition is GRANTED. The Orders dated April 17, 2012 and July 9, 2012 of the Regional Trial Court (RTC) of Muntinlupa City, Branch 276 in
Civil Case No. 11-077 are hereby REVERSED and SET ASIDE. Civil Case No. 11-077 is REFERRED to the Executive Judge of the RTC of Muntinlupa City for re-
docketing as a commercial case. Thereafter, the Executive Judge shall ASSIGN said case to Branch 256, the sole designated Special Commercial Court in the RTC of
Muntinlupa City, which is ORDERED to resolve the case with reasonable dispatch. In this regard, the Clerk of Court of said RTC shall DETERMINE the appropriate
amount of docket fees and, in so doing, ORDER the payment of any difference or, on the other hand, refund any excess.

Furthermore, the Court hereby RESOLVES that henceforth, the following guidelines shall be observed:

1. If a commercial case filed before the proper RTC is wrongly raffled to its regular branch, the proper courses of action are as follows:

1.1 If the RTC has only one branch designated as a Special Commercial Court, then the case shall be referred to the Executive Judge for re-docketing as a commercial
case, and thereafter, assigned to the sole special branch;

1.2 If the RTC has multiple branches designated as Special Commercial Courts, then the case shall be referred to the Executive Judge for re-docketing as a commercial
case, and thereafter, raffled off among those special branches; and

1.3 If the RTC has no internal branch designated as a Special Commercial Court, then the case shall be referred to the nearest RTC with a designated Special
Commercial Court branch within the judicial region. Upon referral, the RTC to which the case was referred to should re- docket the case as a commercial case, and
then: (a) if the said RTC has only one branch designated as a Special Commercial Court, assign the case to the sole special branch; or (b) if the said RTC has multiple
branches designated as Special Commercial Courts, raffle off the case among those special branches.

2. If an ordinary civil case filed before the proper RTC is wrongly raffled to its branch designated as a Special Commercial Court, then the case shall be referred to the
Executive Judge for re-docketing as an ordinary civil case. Thereafter, it shall be raffled off to all courts of the same RTC (including its designated special branches
which, by statute, are equally capable of exercising general jurisdiction same as regular branches), as provided for under existing rules.

3. All transfer/raffle of cases is subject to the payment of the appropriate docket fees in case of any difference. On the other hand, all docket fees already paid shall be
duly credited, and any excess, refunded.

4. Finally, to avert any future confusion, the Court requires that all initiatory pleadings state the action's nature both in its caption and body. Otherwise, the initiatory
pleading may, upon motion or by order of the court motu proprio, be dismissed without prejudice to its re-filing after due rectification. This last procedural rule is
prospective in application.

5. All existing rules inconsistent with the foregoing are deemed superseded.cralawlawlibrary

10
G.R. Nos. 171947-48             December 18, 2008

METROPOLITAN MANILA DEVELOPMENT AUTHORITY, DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, DEPARTMENT
OF EDUCATION, CULTURE AND SPORTS, 1 DEPARTMENT OF HEALTH, DEPARTMENT OF AGRICULTURE, DEPARTMENT OF PUBLIC
WORKS AND HIGHWAYS, DEPARTMENT OF BUDGET AND MANAGEMENT, PHILIPPINE COAST GUARD, PHILIPPINE NATIONAL POLICE
MARITIME GROUP, and DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT, petitioners,
vs.
CONCERNED RESIDENTS OF MANILA BAY, represented and joined by DIVINA V. ILAS, SABINIANO ALBARRACIN, MANUEL SANTOS, JR.,
DINAH DELA PEÑA, PAUL DENNIS QUINTERO, MA. VICTORIA LLENOS, DONNA CALOZA, FATIMA QUITAIN, VENICE SEGARRA, FRITZIE
TANGKIA, SARAH JOELLE LINTAG, HANNIBAL AUGUSTUS BOBIS, FELIMON SANTIAGUEL, and JAIME AGUSTIN R. OPOSA, respondents.

DECISION

VELASCO, JR., J.:

The need to address environmental pollution, as a cause of climate change, has of late gained the attention of the international community. Media have finally trained
their sights on the ill effects of pollution, the destruction of forests and other critical habitats, oil spills, and the unabated improper disposal of garbage. And rightly so,
for the magnitude of environmental destruction is now on a scale few ever foresaw and the wound no longer simply heals by itself.2 But amidst hard evidence and clear
signs of a climate crisis that need bold action, the voice of cynicism, naysayers, and procrastinators can still be heard.

This case turns on government agencies and their officers who, by the nature of their respective offices or by direct statutory command, are tasked to protect and
preserve, at the first instance, our internal waters, rivers, shores, and seas polluted by human activities. To most of these agencies and their official complement, the
pollution menace does not seem to carry the high national priority it deserves, if their track records are to be the norm. Their cavalier attitude towards solving, if not
mitigating, the environmental pollution problem, is a sad commentary on bureaucratic efficiency and commitment.

At the core of the case is the Manila Bay, a place with a proud historic past, once brimming with marine life and, for so many decades in the past, a spot for different
contact recreation activities, but now a dirty and slowly dying expanse mainly because of the abject official indifference of people and institutions that could have
otherwise made a difference.

This case started when, on January 29, 1999, respondents Concerned Residents of Manila Bay filed a complaint before the Regional Trial Court (RTC) in Imus, Cavite
against several government agencies, among them the petitioners, for the cleanup, rehabilitation, and protection of the Manila Bay. Raffled to Branch 20 and docketed
as Civil Case No. 1851-99 of the RTC, the complaint alleged that the water quality of the Manila Bay had fallen way below the allowable standards set by law,
specifically Presidential Decree No. (PD) 1152 or the Philippine Environment Code. This environmental aberration, the complaint stated, stemmed from:

x x x [The] reckless, wholesale, accumulated and ongoing acts of omission or commission [of the defendants] resulting in the clear and present danger to public health
and in the depletion and contamination of the marine life of Manila Bay, [for which reason] ALL defendants must be held jointly and/or solidarily liable and be
collectively ordered to clean up Manila Bay and to restore its water quality to class B waters fit for swimming, skin-diving, and other forms of contact recreation.3

In their individual causes of action, respondents alleged that the continued neglect of petitioners in abating the pollution of the Manila Bay constitutes a violation of,
among others:

(1) Respondents’ constitutional right to life, health, and a balanced ecology;

(2) The Environment Code (PD 1152);

(3) The Pollution Control Law (PD 984);

(4) The Water Code (PD 1067);

11
(5) The Sanitation Code (PD 856);

(6) The Illegal Disposal of Wastes Decree (PD 825);

(7) The Marine Pollution Law (PD 979);

(8) Executive Order No. 192;

(9) The Toxic and Hazardous Wastes Law (Republic Act No. 6969);

(10) Civil Code provisions on nuisance and human relations;

(11) The Trust Doctrine and the Principle of Guardianship; and

(12) International Law

Inter alia, respondents, as plaintiffs a quo, prayed that petitioners be ordered to clean the Manila Bay and submit to the RTC a concerted concrete plan of action for the
purpose.

The trial of the case started off with a hearing at the Manila Yacht Club followed by an ocular inspection of the Manila Bay. Renato T. Cruz, the Chief of the Water
Quality Management Section, Environmental Management Bureau, Department of Environment and Natural Resources (DENR), testifying for petitioners, stated that
water samples collected from different beaches around the Manila Bay showed that the amount of fecal coliform content ranged from 50,000 to 80,000 most probable
number (MPN)/ml when what DENR Administrative Order No. 34-90 prescribed as a safe level for bathing and other forms of contact recreational activities, or the
"SB" level, is one not exceeding 200 MPN/100 ml.4

Rebecca de Vera, for Metropolitan Waterworks and Sewerage System (MWSS) and in behalf of other petitioners, testified about the MWSS’ efforts to reduce pollution
along the Manila Bay through the Manila Second Sewerage Project. For its part, the Philippine Ports Authority (PPA) presented, as part of its evidence, its
memorandum circulars on the study being conducted on ship-generated waste treatment and disposal, and its Linis Dagat (Clean the Ocean) project for the cleaning of
wastes accumulated or washed to shore.

The RTC Ordered Petitioners to Clean Up and Rehabilitate Manila Bay

On September 13, 2002, the RTC rendered a Decision5 in favor of respondents. The dispositive portion reads:

WHEREFORE, finding merit in the complaint, judgment is hereby rendered ordering the abovenamed defendant-government agencies, jointly and solidarily, to clean
up and rehabilitate Manila Bay and restore its waters to SB classification to make it fit for swimming, skin-diving and other forms of contact recreation. To attain this,
defendant-agencies, with defendant DENR as the lead agency, are directed, within six (6) months from receipt hereof, to act and perform their respective duties by
devising a consolidated, coordinated and concerted scheme of action for the rehabilitation and restoration of the bay.

In particular:

Defendant MWSS is directed to install, operate and maintain adequate [sewerage] treatment facilities in strategic places under its jurisdiction and increase their
capacities.

Defendant LWUA, to see to it that the water districts under its wings, provide, construct and operate sewage facilities for the proper disposal of waste.

Defendant DENR, which is the lead agency in cleaning up Manila Bay, to install, operate and maintain waste facilities to rid the bay of toxic and hazardous substances.

Defendant PPA, to prevent and also to treat the discharge not only of ship-generated wastes but also of other solid and liquid wastes from docking vessels that
contribute to the pollution of the bay.

Defendant MMDA, to establish, operate and maintain an adequate and appropriate sanitary landfill and/or adequate solid waste and liquid disposal as well as other
alternative garbage disposal system such as re-use or recycling of wastes.

Defendant DA, through the Bureau of Fisheries and Aquatic Resources, to revitalize the marine life in Manila Bay and restock its waters with indigenous fish and other
aquatic animals.

Defendant DBM, to provide and set aside an adequate budget solely for the purpose of cleaning up and rehabilitation of Manila Bay.

Defendant DPWH, to remove and demolish structures and other nuisances that obstruct the free flow of waters to the bay. These nuisances discharge solid and liquid
wastes which eventually end up in Manila Bay. As the construction and engineering arm of the government, DPWH is ordered to actively participate in removing
debris, such as carcass of sunken vessels, and other non-biodegradable garbage in the bay.

Defendant DOH, to closely supervise and monitor the operations of septic and sludge companies and require them to have proper facilities for the treatment and
disposal of fecal sludge and sewage coming from septic tanks.

Defendant DECS, to inculcate in the minds and hearts of the people through education the importance of preserving and protecting the environment.

Defendant Philippine Coast Guard and the PNP Maritime Group, to protect at all costs the Manila Bay from all forms of illegal fishing.

No pronouncement as to damages and costs.

SO ORDERED.

The MWSS, Local Water Utilities Administration (LWUA), and PPA filed before the Court of Appeals (CA) individual Notices of Appeal which were eventually
consolidated and docketed as CA-G.R. CV No. 76528.

12
On the other hand, the DENR, Department of Public Works and Highways (DPWH), Metropolitan Manila Development Authority (MMDA), Philippine Coast Guard
(PCG), Philippine National Police (PNP) Maritime Group, and five other executive departments and agencies filed directly with this Court a petition for review under
Rule 45. The Court, in a Resolution of December 9, 2002, sent the said petition to the CA for consolidation with the consolidated appeals of MWSS, LWUA, and PPA,
docketed as CA-G.R. SP No. 74944.

Petitioners, before the CA, were one in arguing in the main that the pertinent provisions of the Environment Code (PD 1152) relate only to the cleaning of specific
pollution incidents and do not cover cleaning in general. And apart from raising concerns about the lack of funds appropriated for cleaning purposes, petitioners also
asserted that the cleaning of the Manila Bay is not a ministerial act which can be compelled by mandamus.

The CA Sustained the RTC

By a Decision6 of September 28, 2005, the CA denied petitioners’ appeal and affirmed the Decision of the RTC in toto, stressing that the trial court’s decision did not
require petitioners to do tasks outside of their usual basic functions under existing laws.7

Petitioners are now before this Court praying for the allowance of their Rule 45 petition on the following ground and supporting arguments:

THE [CA] DECIDED A QUESTION OF SUBSTANCE NOT HERETOFORE PASSED UPON BY THE HONORABLE COURT, I.E., IT AFFIRMED THE TRIAL
COURT’S DECISION DECLARING THAT SECTION 20 OF [PD] 1152 REQUIRES CONCERNED GOVERNMENT AGENCIES TO REMOVE ALL
POLLUTANTS SPILLED AND DISCHARGED IN THE WATER SUCH AS FECAL COLIFORMS.

ARGUMENTS

[SECTIONS] 17 AND 20 OF [PD] 1152 RELATE ONLY TO THE CLEANING OF SPECIFIC POLLUTION INCIDENTS AND [DO] NOT COVER CLEANING IN
GENERAL

II

THE CLEANING OR REHABILITATION OF THE MANILA BAY IS NOT A MINISTERIAL ACT OF PETITIONERS THAT CAN BE COMPELLED BY
MANDAMUS.

The issues before us are two-fold. First, do Sections 17 and 20 of PD 1152 under the headings, Upgrading of Water Quality and Clean-up Operations, envisage a
cleanup in general or are they limited only to the cleanup of specific pollution incidents? And second, can petitioners be compelled by mandamus to clean up and
rehabilitate the Manila Bay?

On August 12, 2008, the Court conducted and heard the parties on oral arguments.

Our Ruling

We shall first dwell on the propriety of the issuance of mandamus under the premises.

The Cleaning or Rehabilitation of Manila Bay

Can be Compelled by Mandamus

Generally, the writ of mandamus lies to require the execution of a ministerial duty.8 A ministerial duty is one that "requires neither the exercise of official discretion nor
judgment."9 It connotes an act in which nothing is left to the discretion of the person executing it. It is a "simple, definite duty arising under conditions admitted or
proved to exist and imposed by law."10 Mandamus is available to compel action, when refused, on matters involving discretion, but not to direct the exercise of
judgment or discretion one way or the other.

Petitioners maintain that the MMDA’s duty to take measures and maintain adequate solid waste and liquid disposal systems necessarily involves policy evaluation and
the exercise of judgment on the part of the agency concerned. They argue that the MMDA, in carrying out its mandate, has to make decisions, including choosing where
a landfill should be located by undertaking feasibility studies and cost estimates, all of which entail the exercise of discretion.

Respondents, on the other hand, counter that the statutory command is clear and that petitioners’ duty to comply with and act according to the clear mandate of the law
does not require the exercise of discretion. According to respondents, petitioners, the MMDA in particular, are without discretion, for example, to choose which bodies
of water they are to clean up, or which discharge or spill they are to contain. By the same token, respondents maintain that petitioners are bereft of discretion on whether
or not to alleviate the problem of solid and liquid waste disposal; in other words, it is the MMDA’s ministerial duty to attend to such services.

We agree with respondents.

First off, we wish to state that petitioners’ obligation to perform their duties as defined by law, on one hand, and how they are to carry out such duties, on the other, are
two different concepts. While the implementation of the MMDA’s mandated tasks may entail a decision-making process, the enforcement of the law or the very act of
doing what the law exacts to be done is ministerial in nature and may be compelled by mandamus. We said so in Social Justice Society v. Atienza11 in which the Court
directed the City of Manila to enforce, as a matter of ministerial duty, its Ordinance No. 8027 directing the three big local oil players to cease and desist from operating
their business in the so-called "Pandacan Terminals" within six months from the effectivity of the ordinance. But to illustrate with respect to the instant case, the
MMDA’s duty to put up an adequate and appropriate sanitary landfill and solid waste and liquid disposal as well as other alternative garbage disposal systems is
ministerial, its duty being a statutory imposition. The MMDA’s duty in this regard is spelled out in Sec. 3(c) of Republic Act No. (RA) 7924 creating the MMDA. This
section defines and delineates the scope of the MMDA’s waste disposal services to include:

Solid waste disposal and management which include formulation and implementation of policies, standards, programs and projects for proper and sanitary waste
disposal. It shall likewise include the establishment and operation of sanitary land fill and related facilities and the implementation of other alternative programs
intended to reduce, reuse and recycle solid waste. (Emphasis added.)

The MMDA is duty-bound to comply with Sec. 41 of the Ecological Solid Waste Management Act (RA 9003) which prescribes the minimum criteria for the
establishment of sanitary landfills and Sec. 42 which provides the minimum operating requirements that each site operator shall maintain in the operation of a sanitary

13
landfill. Complementing Sec. 41 are Secs. 36 and 37 of RA 9003,12 enjoining the MMDA and local government units, among others, after the effectivity of the law on
February 15, 2001, from using and operating open dumps for solid waste and disallowing, five years after such effectivity, the use of controlled dumps.

The MMDA’s duty in the area of solid waste disposal, as may be noted, is set forth not only in the Environment Code (PD 1152) and RA 9003, but in its charter as well.
This duty of putting up a proper waste disposal system cannot be characterized as discretionary, for, as earlier stated, discretion presupposes the power or right given by
law to public functionaries to act officially according to their judgment or conscience.13 A discretionary duty is one that "allows a person to exercise judgment and
choose to perform or not to perform."14 Any suggestion that the MMDA has the option whether or not to perform its solid waste disposal-related duties ought to be
dismissed for want of legal basis.

A perusal of other petitioners’ respective charters or like enabling statutes and pertinent laws would yield this conclusion: these government agencies are enjoined, as a
matter of statutory obligation, to perform certain functions relating directly or indirectly to the cleanup, rehabilitation, protection, and preservation of the Manila Bay.
They are precluded from choosing not to perform these duties. Consider:

(1) The DENR, under Executive Order No. (EO) 192,15 is the primary agency responsible for the conservation, management, development, and proper use of the
country’s environment and natural resources. Sec. 19 of the Philippine Clean Water Act of 2004 (RA 9275), on the other hand, designates the DENR as the primary
government agency responsible for its enforcement and implementation, more particularly over all aspects of water quality management. On water pollution, the
DENR, under the Act’s Sec. 19(k), exercises jurisdiction "over all aspects of water pollution, determine[s] its location, magnitude, extent, severity, causes and effects
and other pertinent information on pollution, and [takes] measures, using available methods and technologies, to prevent and abate such pollution."

The DENR, under RA 9275, is also tasked to prepare a National Water Quality Status Report, an Integrated Water Quality Management Framework, and a 10-year
Water Quality Management Area Action Plan which is nationwide in scope covering the Manila Bay and adjoining areas. Sec. 19 of RA 9275 provides:

Sec. 19 Lead Agency.––The [DENR] shall be the primary government agency responsible for the implementation and enforcement of this Act x x x unless otherwise
provided herein. As such, it shall have the following functions, powers and responsibilities:

a) Prepare a National Water Quality Status report within twenty-four (24) months from the effectivity of this Act: Provided, That the Department shall thereafter review
or revise and publish annually, or as the need arises, said report;

b) Prepare an Integrated Water Quality Management Framework within twelve (12) months following the completion of the status report;

c) Prepare a ten (10) year Water Quality Management Area Action Plan within 12 months following the completion of the framework for each designated water
management area. Such action plan shall be reviewed by the water quality management area governing board every five (5) years or as need arises.

The DENR has prepared the status report for the period 2001 to 2005 and is in the process of completing the preparation of the Integrated Water Quality Management
Framework.16 Within twelve (12) months thereafter, it has to submit a final Water Quality Management Area Action Plan.17 Again, like the MMDA, the DENR should
be made to accomplish the tasks assigned to it under RA 9275.

Parenthetically, during the oral arguments, the DENR Secretary manifested that the DENR, with the assistance of and in partnership with various government agencies
and non-government organizations, has completed, as of December 2005, the final draft of a comprehensive action plan with estimated budget and time frame,
denominated as Operation Plan for the Manila Bay Coastal Strategy, for the rehabilitation, restoration, and rehabilitation of the Manila Bay.

The completion of the said action plan and even the implementation of some of its phases should more than ever prod the concerned agencies to fast track what are
assigned them under existing laws.

(2) The MWSS, under Sec. 3 of RA 6234,18 is vested with jurisdiction, supervision, and control over all waterworks and sewerage systems in the territory comprising
what is now the cities of Metro Manila and several towns of the provinces of Rizal and Cavite, and charged with the duty:

(g) To construct, maintain, and operate such sanitary sewerages as may be necessary for the proper sanitation and other uses of the cities and towns comprising the
System; x x x

(3) The LWUA under PD 198 has the power of supervision and control over local water districts. It can prescribe the minimum standards and regulations for the
operations of these districts and shall monitor and evaluate local water standards. The LWUA can direct these districts to construct, operate, and furnish facilities and
services for the collection, treatment, and disposal of sewerage, waste, and storm water. Additionally, under RA 9275, the LWUA, as attached agency of the DPWH, is
tasked with providing sewerage and sanitation facilities, inclusive of the setting up of efficient and safe collection, treatment, and sewage disposal system in the
different parts of the country.19 In relation to the instant petition, the LWUA is mandated to provide sewerage and sanitation facilities in Laguna, Cavite, Bulacan,
Pampanga, and Bataan to prevent pollution in the Manila Bay.

(4) The Department of Agriculture (DA), pursuant to the Administrative Code of 1987 (EO 292),20 is designated as the agency tasked to promulgate and enforce all laws
and issuances respecting the conservation and proper utilization of agricultural and fishery resources. Furthermore, the DA, under the Philippine Fisheries Code of 1998
(RA 8550), is, in coordination with local government units (LGUs) and other concerned sectors, in charge of establishing a monitoring, control, and surveillance system
to ensure that fisheries and aquatic resources in Philippine waters are judiciously utilized and managed on a sustainable basis.21 Likewise under RA 9275, the DA is
charged with coordinating with the PCG and DENR for the enforcement of water quality standards in marine waters.22 More specifically, its Bureau of Fisheries and
Aquatic Resources (BFAR) under Sec. 22(c) of RA 9275 shall primarily be responsible for the prevention and control of water pollution for the development,
management, and conservation of the fisheries and aquatic resources.

(5) The DPWH, as the engineering and construction arm of the national government, is tasked under EO 29223 to provide integrated planning, design, and construction
services for, among others, flood control and water resource development systems in accordance with national development objectives and approved government plans
and specifications.

In Metro Manila, however, the MMDA is authorized by Sec. 3(d), RA 7924 to perform metro-wide services relating to "flood control and sewerage management which
include the formulation and implementation of policies, standards, programs and projects for an integrated flood control, drainage and sewerage system."

On July 9, 2002, a Memorandum of Agreement was entered into between the DPWH and MMDA, whereby MMDA was made the agency primarily responsible for
flood control in Metro Manila. For the rest of the country, DPWH shall remain as the implementing agency for flood control services. The mandate of the MMDA and
DPWH on flood control and drainage services shall include the removal of structures, constructions, and encroachments built along rivers, waterways, and esteros
(drainages) in violation of RA 7279, PD 1067, and other pertinent laws.
14
(6) The PCG, in accordance with Sec. 5(p) of PD 601, or the Revised Coast Guard Law of 1974, and Sec. 6 of PD 979,24 or the Marine Pollution Decree of 1976, shall
have the primary responsibility of enforcing laws, rules, and regulations governing marine pollution within the territorial waters of the Philippines. It shall promulgate
its own rules and regulations in accordance with the national rules and policies set by the National Pollution Control Commission upon consultation with the latter for
the effective implementation and enforcement of PD 979. It shall, under Sec. 4 of the law, apprehend violators who:

a. discharge, dump x x x harmful substances from or out of any ship, vessel, barge, or any other floating craft, or other man-made structures at sea, by any method,
means or manner, into or upon the territorial and inland navigable waters of the Philippines;

b. throw, discharge or deposit, dump, or cause, suffer or procure to be thrown, discharged, or deposited either from or out of any ship, barge, or other floating craft or
vessel of any kind, or from the shore, wharf, manufacturing establishment, or mill of any kind, any refuse matter of any kind or description whatever other than that
flowing from streets and sewers and passing therefrom in a liquid state into tributary of any navigable water from which the same shall float or be washed into such
navigable water; and

c. deposit x x x material of any kind in any place on the bank of any navigable water or on the bank of any tributary of any navigable water, where the same shall be
liable to be washed into such navigable water, either by ordinary or high tides, or by storms or floods, or otherwise, whereby navigation shall or may be impeded or
obstructed or increase the level of pollution of such water.

(7) When RA 6975 or the Department of the Interior and Local Government (DILG) Act of 1990 was signed into law on December 13, 1990, the PNP Maritime Group
was tasked to "perform all police functions over the Philippine territorial waters and rivers." Under Sec. 86, RA 6975, the police functions of the PCG shall be taken
over by the PNP when the latter acquires the capability to perform such functions. Since the PNP Maritime Group has not yet attained the capability to assume and
perform the police functions of PCG over marine pollution, the PCG and PNP Maritime Group shall coordinate with regard to the enforcement of laws, rules, and
regulations governing marine pollution within the territorial waters of the Philippines. This was made clear in Sec. 124, RA 8550 or the Philippine Fisheries Code of
1998, in which both the PCG and PNP Maritime Group were authorized to enforce said law and other fishery laws, rules, and regulations.25

(8) In accordance with Sec. 2 of EO 513, the PPA is mandated "to establish, develop, regulate, manage and operate a rationalized national port system in support of
trade and national development."26 Moreover, Sec. 6-c of EO 513 states that the PPA has police authority within the ports administered by it as may be necessary to
carry out its powers and functions and attain its purposes and objectives, without prejudice to the exercise of the functions of the Bureau of Customs and other law
enforcement bodies within the area. Such police authority shall include the following:

xxxx

b) To regulate the entry to, exit from, and movement within the port, of persons and vehicles, as well as movement within the port of watercraft.27

Lastly, as a member of the International Marine Organization and a signatory to the International Convention for the Prevention of Pollution from Ships, as amended by
MARPOL 73/78,28 the Philippines, through the PPA, must ensure the provision of adequate reception facilities at ports and terminals for the reception of sewage from
the ships docking in Philippine ports. Thus, the PPA is tasked to adopt such measures as are necessary to prevent the discharge and dumping of solid and liquid wastes
and other ship-generated wastes into the Manila Bay waters from vessels docked at ports and apprehend the violators. When the vessels are not docked at ports but
within Philippine territorial waters, it is the PCG and PNP Maritime Group that have jurisdiction over said vessels.

(9) The MMDA, as earlier indicated, is duty-bound to put up and maintain adequate sanitary landfill and solid waste and liquid disposal system as well as other
alternative garbage disposal systems. It is primarily responsible for the implementation and enforcement of the provisions of RA 9003, which would necessary include
its penal provisions, within its area of jurisdiction.29

Among the prohibited acts under Sec. 48, Chapter VI of RA 9003 that are frequently violated are dumping of waste matters in public places, such as roads, canals
or esteros, open burning of solid waste, squatting in open dumps and landfills, open dumping, burying of biodegradable or non- biodegradable materials in flood-prone
areas, establishment or operation of open dumps as enjoined in RA 9003, and operation of waste management facilities without an environmental compliance
certificate.

Under Sec. 28 of the Urban Development and Housing Act of 1992 (RA 7279), eviction or demolition may be allowed "when persons or entities occupy danger areas
such as esteros, railroad tracks, garbage dumps, riverbanks, shorelines, waterways, and other public places such as sidewalks, roads, parks and playgrounds." The
MMDA, as lead agency, in coordination with the DPWH, LGUs, and concerned agencies, can dismantle and remove all structures, constructions, and other
encroachments built in breach of RA 7279 and other pertinent laws along the rivers, waterways, and esteros in Metro Manila. With respect to rivers, waterways,
and esteros in Bulacan, Bataan, Pampanga, Cavite, and Laguna that discharge wastewater directly or eventually into the Manila Bay, the DILG shall direct the
concerned LGUs to implement the demolition and removal of such structures, constructions, and other encroachments built in violation of RA 7279 and other
applicable laws in coordination with the DPWH and concerned agencies.

(10) The Department of Health (DOH), under Article 76 of PD 1067 (the Water Code), is tasked to promulgate rules and regulations for the establishment of waste
disposal areas that affect the source of a water supply or a reservoir for domestic or municipal use. And under Sec. 8 of RA 9275, the DOH, in coordination with the
DENR, DPWH, and other concerned agencies, shall formulate guidelines and standards for the collection, treatment, and disposal of sewage and the establishment and
operation of a centralized sewage treatment system. In areas not considered as highly urbanized cities, septage or a mix sewerage-septage management system shall be
employed.

In accordance with Sec. 7230 of PD 856, the Code of Sanitation of the Philippines, and Sec. 5.1.131 of Chapter XVII of its implementing rules, the DOH is also ordered
to ensure the regulation and monitoring of the proper disposal of wastes by private sludge companies through the strict enforcement of the requirement to obtain an
environmental sanitation clearance of sludge collection treatment and disposal before these companies are issued their environmental sanitation permit.

(11) The Department of Education (DepEd), under the Philippine Environment Code (PD 1152), is mandated to integrate subjects on environmental education in its
school curricula at all levels.32 Under Sec. 118 of RA 8550, the DepEd, in collaboration with the DA, Commission on Higher Education, and Philippine Information
Agency, shall launch and pursue a nationwide educational campaign to promote the development, management, conservation, and proper use of the environment. Under
the Ecological Solid Waste Management Act (RA 9003), on the other hand, it is directed to strengthen the integration of environmental concerns in school curricula at
all levels, with an emphasis on waste management principles.33

(12) The Department of Budget and Management (DBM) is tasked under Sec. 2, Title XVII of the Administrative Code of 1987 to ensure the efficient and sound
utilization of government funds and revenues so as to effectively achieve the country’s development objectives.34

15
One of the country’s development objectives is enshrined in RA 9275 or the Philippine Clean Water Act of 2004. This law stresses that the State shall pursue a policy of
economic growth in a manner consistent with the protection, preservation, and revival of the quality of our fresh, brackish, and marine waters. It also provides that it is
the policy of the government, among others, to streamline processes and procedures in the prevention, control, and abatement of pollution mechanisms for the
protection of water resources; to promote environmental strategies and use of appropriate economic instruments and of control mechanisms for the protection of water
resources; to formulate a holistic national program of water quality management that recognizes that issues related to this management cannot be separated from
concerns about water sources and ecological protection, water supply, public health, and quality of life; and to provide a comprehensive management program for water
pollution focusing on pollution prevention.

Thus, the DBM shall then endeavor to provide an adequate budget to attain the noble objectives of RA 9275 in line with the country’s development objectives.

All told, the aforementioned enabling laws and issuances are in themselves clear, categorical, and complete as to what are the obligations and mandate of each
agency/petitioner under the law. We need not belabor the issue that their tasks include the cleanup of the Manila Bay.

Now, as to the crux of the petition. Do Secs. 17 and 20 of the Environment Code encompass the cleanup of water pollution in general, not just specific pollution
incidents?

Secs. 17 and 20 of the Environment Code

Include Cleaning in General

The disputed sections are quoted as follows:

Section 17. Upgrading of Water Quality.––Where the quality of water has deteriorated to a degree where its state will adversely affect its best usage, the government
agencies concerned shall take such measures as may be necessary to upgrade the quality of such water to meet the prescribed water quality standards.

Section 20. Clean-up Operations.––It shall be the responsibility of the polluter to contain, remove and clean-up water pollution incidents at his own expense. In case of
his failure to do so, the government agencies concerned shall undertake containment, removal and clean-up operations and expenses incurred in said operations shall be
charged against the persons and/or entities responsible for such pollution.

When the Clean Water Act (RA 9275) took effect, its Sec. 16 on the subject, o, amended the counterpart provision (Sec. 20) of the Environment Code (PD 1152). Sec.
17 of PD 1152 continues, however, to be operational.

The amendatory Sec. 16 of RA 9275 reads:

SEC. 16. Cleanup Operations.––Notwithstanding the provisions of Sections 15 and 26 hereof, any person who causes pollution in or pollutes water bodies in excess of
the applicable and prevailing standards shall be responsible to contain, remove and clean up any pollution incident at his own expense to the extent that the same water
bodies have been rendered unfit for utilization and beneficial use: Provided, That in the event emergency cleanup operations are necessary and the polluter fails to
immediately undertake the same, the [DENR] in coordination with other government agencies concerned, shall undertake containment, removal and cleanup operations.
Expenses incurred in said operations shall be reimbursed by the persons found to have caused such pollution under proper administrative determination x x x.
Reimbursements of the cost incurred shall be made to the Water Quality Management Fund or to such other funds where said disbursements were sourced.

As may be noted, the amendment to Sec. 20 of the Environment Code is more apparent than real since the amendment, insofar as it is relevant to this case, merely
consists in the designation of the DENR as lead agency in the cleanup operations.

Petitioners contend at every turn that Secs. 17 and 20 of the Environment Code concern themselves only with the matter of cleaning up in specific pollution incidents,
as opposed to cleanup in general. They aver that the twin provisions would have to be read alongside the succeeding Sec. 62(g) and (h), which defines the terms
"cleanup operations" and "accidental spills," as follows:

g. Clean-up Operations [refer] to activities conducted in removing the pollutants discharged or spilled in water to restore it to pre-spill condition.

h. Accidental Spills [refer] to spills of oil or other hazardous substances in water that result from accidents such as collisions and groundings.

Petitioners proffer the argument that Secs. 17 and 20 of PD 1152 merely direct the government agencies concerned to undertake containment, removal, and cleaning
operations of a specific polluted portion or portions of the body of water concerned. They maintain that the application of said Sec. 20 is limited only to "water pollution
incidents," which are situations that presuppose the occurrence of specific, isolated pollution events requiring the corresponding containment, removal, and cleaning
operations. Pushing the point further, they argue that the aforequoted Sec. 62(g) requires "cleanup operations" to restore the body of water to pre-spill condition, which
means that there must have been a specific incident of either intentional or accidental spillage of oil or other hazardous substances, as mentioned in Sec. 62(h).

As a counterpoint, respondents argue that petitioners erroneously read Sec. 62(g) as delimiting the application of Sec. 20 to the containment, removal, and cleanup
operations for accidental spills only. Contrary to petitioners’ posture, respondents assert that Sec. 62(g), in fact, even expanded the coverage of Sec. 20. Respondents
explain that without its Sec. 62(g), PD 1152 may have indeed covered only pollution accumulating from the day-to-day operations of businesses around the Manila Bay
and other sources of pollution that slowly accumulated in the bay. Respondents, however, emphasize that Sec. 62(g), far from being a delimiting provision, in fact even
enlarged the operational scope of Sec. 20, by including accidental spills as among the water pollution incidents contemplated in Sec. 17 in relation to Sec. 20 of PD
1152.

To respondents, petitioners’ parochial view on environmental issues, coupled with their narrow reading of their respective mandated roles, has contributed to the
worsening water quality of the Manila Bay. Assuming, respondents assert, that petitioners are correct in saying that the cleanup coverage of Sec. 20 of PD 1152 is
constricted by the definition of the phrase "cleanup operations" embodied in Sec. 62(g), Sec. 17 is not hobbled by such limiting definition. As pointed out, the phrases
"cleanup operations" and "accidental spills" do not appear in said Sec. 17, not even in the chapter where said section is found.

Respondents are correct. For one thing, said Sec. 17 does not in any way state that the government agencies concerned ought to confine themselves to the containment,
removal, and cleaning operations when a specific pollution incident occurs. On the contrary, Sec. 17 requires them to act even in the absence of a specific pollution
incident, as long as water quality "has deteriorated to a degree where its state will adversely affect its best usage." This section, to stress, commands concerned
government agencies, when appropriate, "to take such measures as may be necessary to meet the prescribed water quality standards." In fine, the underlying duty to
upgrade the quality of water is not conditional on the occurrence of any pollution incident.

16
For another, a perusal of Sec. 20 of the Environment Code, as couched, indicates that it is properly applicable to a specific situation in which the pollution is caused by
polluters who fail to clean up the mess they left behind. In such instance, the concerned government agencies shall undertake the cleanup work for the polluters’
account. Petitioners’ assertion, that they have to perform cleanup operations in the Manila Bay only when there is a water pollution incident and the erring polluters do
not undertake the containment, removal, and cleanup operations, is quite off mark. As earlier discussed, the complementary Sec. 17 of the Environment Code comes
into play and the specific duties of the agencies to clean up come in even if there are no pollution incidents staring at them. Petitioners, thus, cannot plausibly invoke
and hide behind Sec. 20 of PD 1152 or Sec. 16 of RA 9275 on the pretext that their cleanup mandate depends on the happening of a specific pollution incident. In this
regard, what the CA said with respect to the impasse over Secs. 17 and 20 of PD 1152 is at once valid as it is practical. The appellate court wrote: "PD 1152 aims to
introduce a comprehensive program of environmental protection and management. This is better served by making Secs. 17 & 20 of general application rather than
limiting them to specific pollution incidents."35

Granting arguendo that petitioners’ position thus described vis-à-vis the implementation of Sec. 20 is correct, they seem to have overlooked the fact that the pollution of
the Manila Bay is of such magnitude and scope that it is well-nigh impossible to draw the line between a specific and a general pollution incident. And such
impossibility extends to pinpointing with reasonable certainty who the polluters are. We note that Sec. 20 of PD 1152 mentions "water pollution incidents" which may
be caused by polluters in the waters of the Manila Bay itself or by polluters in adjoining lands and in water bodies or waterways that empty into the bay. Sec. 16 of RA
9275, on the other hand, specifically adverts to "any person who causes pollution in or pollutes water bodies," which may refer to an individual or an establishment that
pollutes the land mass near the Manila Bay or the waterways, such that the contaminants eventually end up in the bay. In this situation, the water pollution incidents are
so numerous and involve nameless and faceless polluters that they can validly be categorized as beyond the specific pollution incident level.

Not to be ignored of course is the reality that the government agencies concerned are so undermanned that it would be almost impossible to apprehend the numerous
polluters of the Manila Bay. It may perhaps not be amiss to say that the apprehension, if any, of the Manila Bay polluters has been few and far between. Hence,
practically nobody has been required to contain, remove, or clean up a given water pollution incident. In this kind of setting, it behooves the Government to step in and
undertake cleanup operations. Thus, Sec. 16 of RA 9275, previously Sec. 20 of PD 1152, covers for all intents and purposes a general cleanup situation.

The cleanup and/or restoration of the Manila Bay is only an aspect and the initial stage of the long-term solution. The preservation of the water quality of the bay after
the rehabilitation process is as important as the cleaning phase. It is imperative then that the wastes and contaminants found in the rivers, inland bays, and other bodies
of water be stopped from reaching the Manila Bay. Otherwise, any cleanup effort would just be a futile, cosmetic exercise, for, in no time at all, the Manila Bay water
quality would again deteriorate below the ideal minimum standards set by PD 1152, RA 9275, and other relevant laws. It thus behooves the Court to put the heads of the
petitioner-department-agencies and the bureaus and offices under them on continuing notice about, and to enjoin them to perform, their mandates and duties towards
cleaning up the Manila Bay and preserving the quality of its water to the ideal level. Under what other judicial discipline describes as "continuing mandamus,"36 the
Court may, under extraordinary circumstances, issue directives with the end in view of ensuring that its decision would not be set to naught by administrative inaction
or indifference. In India, the doctrine of continuing mandamus was used to enforce directives of the court to clean up the length of the Ganges River from industrial and
municipal pollution.37

The Court can take judicial notice of the presence of shanties and other unauthorized structures which do not have septic tanks along the Pasig-Marikina-San Juan
Rivers, the National Capital Region (NCR) (Parañaque-Zapote, Las Piñas) Rivers, the Navotas-Malabon-Tullahan-Tenejeros Rivers, the Meycuayan-Marilao-Obando
(Bulacan) Rivers, the Talisay (Bataan) River, the Imus (Cavite) River, the Laguna De Bay, and other minor rivers and connecting waterways, river banks, and esteros
which discharge their waters, with all the accompanying filth, dirt, and garbage, into the major rivers and eventually the Manila Bay. If there is one factor responsible
for the pollution of the major river systems and the Manila Bay, these unauthorized structures would be on top of the list. And if the issue of illegal or unauthorized
structures is not seriously addressed with sustained resolve, then practically all efforts to cleanse these important bodies of water would be for naught. The DENR
Secretary said as much.38

Giving urgent dimension to the necessity of removing these illegal structures is Art. 51 of PD 1067 or the Water Code,39 which prohibits the building of structures
within a given length along banks of rivers and other waterways. Art. 51 reads:

The banks of rivers and streams and the shores of the seas and lakes throughout their entire length and within a zone of three (3) meters in urban areas,
twenty (20) meters in agricultural areas and forty (40) meters in forest areas, along their margins, are subject to the easement of public use in the interest of
recreation, navigation, floatage, fishing and salvage. No person shall be allowed to stay in this zone longer than what is necessary for recreation, navigation,
floatage, fishing or salvage or to build structures of any kind. (Emphasis added.)

Judicial notice may likewise be taken of factories and other industrial establishments standing along or near the banks of the Pasig River, other major rivers, and
connecting waterways. But while they may not be treated as unauthorized constructions, some of these establishments undoubtedly contribute to the pollution of the
Pasig River and waterways. The DILG and the concerned LGUs, have, accordingly, the duty to see to it that non-complying industrial establishments set up, within a
reasonable period, the necessary waste water treatment facilities and infrastructure to prevent their industrial discharge, including their sewage waters, from flowing into
the Pasig River, other major rivers, and connecting waterways. After such period, non-complying establishments shall be shut down or asked to transfer their
operations.

At this juncture, and if only to dramatize the urgency of the need for petitioners-agencies to comply with their statutory tasks, we cite the Asian Development Bank-
commissioned study on the garbage problem in Metro Manila, the results of which are embodied in the The Garbage Book. As there reported, the garbage crisis in the
metropolitan area is as alarming as it is shocking. Some highlights of the report:

1. As early as 2003, three land-filled dumpsites in Metro Manila - the Payatas, Catmon and Rodriquez dumpsites - generate an alarming quantity of lead and leachate or
liquid run-off. Leachate are toxic liquids that flow along the surface and seep into the earth and poison the surface and groundwater that are used for drinking, aquatic
life, and the environment.

2. The high level of fecal coliform confirms the presence of a large amount of human waste in the dump sites and surrounding areas, which is presumably generated by
households that lack alternatives to sanitation. To say that Manila Bay needs rehabilitation is an understatement.

3. Most of the deadly leachate, lead and other dangerous contaminants and possibly strains of pathogens seeps untreated into ground water and runs into the Marikina
and Pasig River systems and Manila Bay.40

Given the above perspective, sufficient sanitary landfills should now more than ever be established as prescribed by the Ecological Solid Waste Management Act (RA
9003). Particular note should be taken of the blatant violations by some LGUs and possibly the MMDA of Sec. 37, reproduced below:

17
Sec. 37. Prohibition against the Use of Open Dumps for Solid Waste.––No open dumps shall be established and operated, nor any practice or disposal of solid waste by
any person, including LGUs which [constitute] the use of open dumps for solid waste, be allowed after the effectivity of this Act: Provided, further that no controlled
dumps shall be allowed (5) years following the effectivity of this Act. (Emphasis added.)

RA 9003 took effect on February 15, 2001 and the adverted grace period of five (5) years which ended on February 21, 2006 has come and gone, but no single sanitary
landfill which strictly complies with the prescribed standards under RA 9003 has yet been set up.

In addition, there are rampant and repeated violations of Sec. 48 of RA 9003, like littering, dumping of waste matters in roads, canals, esteros, and other public places,
operation of open dumps, open burning of solid waste, and the like. Some sludge companies which do not have proper disposal facilities simply discharge sludge into
the Metro Manila sewerage system that ends up in the Manila Bay. Equally unabated are violations of Sec. 27 of RA 9275, which enjoins the pollution of water bodies,
groundwater pollution, disposal of infectious wastes from vessels, and unauthorized transport or dumping into sea waters of sewage or solid waste and of Secs. 4 and
102 of RA 8550 which proscribes the introduction by human or machine of substances to the aquatic environment including "dumping/disposal of waste and other
marine litters, discharge of petroleum or residual products of petroleum of carbonaceous materials/substances [and other] radioactive, noxious or harmful liquid,
gaseous or solid substances, from any water, land or air transport or other human-made structure."

In the light of the ongoing environmental degradation, the Court wishes to emphasize the extreme necessity for all concerned executive departments and agencies to
immediately act and discharge their respective official duties and obligations. Indeed, time is of the essence; hence, there is a need to set timetables for the performance
and completion of the tasks, some of them as defined for them by law and the nature of their respective offices and mandates.

The importance of the Manila Bay as a sea resource, playground, and as a historical landmark cannot be over-emphasized. It is not yet too late in the day to restore the
Manila Bay to its former splendor and bring back the plants and sea life that once thrived in its blue waters. But the tasks ahead, daunting as they may be, could only be
accomplished if those mandated, with the help and cooperation of all civic-minded individuals, would put their minds to these tasks and take responsibility. This means
that the State, through petitioners, has to take the lead in the preservation and protection of the Manila Bay.

The era of delays, procrastination, and ad hoc measures is over. Petitioners must transcend their limitations, real or imaginary, and buckle down to work before the
problem at hand becomes unmanageable. Thus, we must reiterate that different government agencies and instrumentalities cannot shirk from their mandates; they must
perform their basic functions in cleaning up and rehabilitating the Manila Bay. We are disturbed by petitioners’ hiding behind two untenable claims: (1) that there ought
to be a specific pollution incident before they are required to act; and (2) that the cleanup of the bay is a discretionary duty.

RA 9003 is a sweeping piece of legislation enacted to radically transform and improve waste management. It implements Sec. 16, Art. II of the 1987 Constitution,
which explicitly provides that the State shall protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of
nature.

So it was that in Oposa v. Factoran, Jr. the Court stated that the right to a balanced and healthful ecology need not even be written in the Constitution for it is assumed,
like other civil and political rights guaranteed in the Bill of Rights, to exist from the inception of mankind and it is an issue of transcendental importance with
intergenerational implications.41 Even assuming the absence of a categorical legal provision specifically prodding petitioners to clean up the bay, they and the men and
women representing them cannot escape their obligation to future generations of Filipinos to keep the waters of the Manila Bay clean and clear as humanly as possible.
Anything less would be a betrayal of the trust reposed in them.

WHEREFORE, the petition is DENIED. The September 28, 2005 Decision of the CA in CA-G.R. CV No. 76528 and SP No. 74944 and the September 13, 2002
Decision of the RTC in Civil Case No. 1851-99 are AFFIRMED but with MODIFICATIONS in view of subsequent developments or supervening events in the case.
The fallo of the RTC Decision shall now read:

WHEREFORE, judgment is hereby rendered ordering the abovenamed defendant-government agencies to clean up, rehabilitate, and preserve Manila Bay, and restore
and maintain its waters to SB level (Class B sea waters per Water Classification Tables under DENR Administrative Order No. 34 [1990]) to make them fit for
swimming, skin-diving, and other forms of contact recreation.

In particular:

(1) Pursuant to Sec. 4 of EO 192, assigning the DENR as the primary agency responsible for the conservation, management, development, and proper use of the
country’s environment and natural resources, and Sec. 19 of RA 9275, designating the DENR as the primary government agency responsible for its enforcement and
implementation, the DENR is directed to fully implement its Operational Plan for the Manila Bay Coastal Strategy for the rehabilitation, restoration, and conservation
of the Manila Bay at the earliest possible time. It is ordered to call regular coordination meetings with concerned government departments and agencies to ensure the
successful implementation of the aforesaid plan of action in accordance with its indicated completion schedules.

(2) Pursuant to Title XII (Local Government) of the Administrative Code of 1987 and Sec. 25 of the Local Government Code of 1991,42 the DILG, in exercising the
President’s power of general supervision and its duty to promulgate guidelines in establishing waste management programs under Sec. 43 of the Philippine
Environment Code (PD 1152), shall direct all LGUs in Metro Manila, Rizal, Laguna, Cavite, Bulacan, Pampanga, and Bataan to inspect all factories, commercial
establishments, and private homes along the banks of the major river systems in their respective areas of jurisdiction, such as but not limited to the Pasig-Marikina-San
Juan Rivers, the NCR (Parañaque-Zapote, Las Piñas) Rivers, the Navotas-Malabon-Tullahan-Tenejeros Rivers, the Meycauayan-Marilao-Obando (Bulacan) Rivers, the
Talisay (Bataan) River, the Imus (Cavite) River, the Laguna De Bay, and other minor rivers and waterways that eventually discharge water into the Manila Bay; and the
lands abutting the bay, to determine whether they have wastewater treatment facilities or hygienic septic tanks as prescribed by existing laws, ordinances, and rules and
regulations. If none be found, these LGUs shall be ordered to require non-complying establishments and homes to set up said facilities or septic tanks within a
reasonable time to prevent industrial wastes, sewage water, and human wastes from flowing into these rivers, waterways, esteros, and the Manila Bay, under pain of
closure or imposition of fines and other sanctions.

(3) As mandated by Sec. 8 of RA 9275,43 the MWSS is directed to provide, install, operate, and maintain the necessary adequate waste water treatment facilities in
Metro Manila, Rizal, and Cavite where needed at the earliest possible time.

(4) Pursuant to RA 9275,44 the LWUA, through the local water districts and in coordination with the DENR, is ordered to provide, install, operate, and maintain
sewerage and sanitation facilities and the efficient and safe collection, treatment, and disposal of sewage in the provinces of Laguna, Cavite, Bulacan, Pampanga, and
Bataan where needed at the earliest possible time.

18
(5) Pursuant to Sec. 65 of RA 8550,45 the DA, through the BFAR, is ordered to improve and restore the marine life of the Manila Bay. It is also directed to assist the
LGUs in Metro Manila, Rizal, Cavite, Laguna, Bulacan, Pampanga, and Bataan in developing, using recognized methods, the fisheries and aquatic resources in the
Manila Bay.

(6) The PCG, pursuant to Secs. 4 and 6 of PD 979, and the PNP Maritime Group, in accordance with Sec. 124 of RA 8550, in coordination with each other, shall
apprehend violators of PD 979, RA 8550, and other existing laws and regulations designed to prevent marine pollution in the Manila Bay.

(7) Pursuant to Secs. 2 and 6-c of EO 51346 and the International Convention for the Prevention of Pollution from Ships, the PPA is ordered to immediately adopt such
measures to prevent the discharge and dumping of solid and liquid wastes and other ship-generated wastes into the Manila Bay waters from vessels docked at ports and
apprehend the violators.

(8) The MMDA, as the lead agency and implementor of programs and projects for flood control projects and drainage services in Metro Manila, in coordination with
the DPWH, DILG, affected LGUs, PNP Maritime Group, Housing and Urban Development Coordinating Council (HUDCC), and other agencies, shall dismantle and
remove all structures, constructions, and other encroachments established or built in violation of RA 7279, and other applicable laws along the Pasig-Marikina-San Juan
Rivers, the NCR (Parañaque-Zapote, Las Piñas) Rivers, the Navotas-Malabon-Tullahan-Tenejeros Rivers, and connecting waterways and esteros in Metro Manila. The
DPWH, as the principal implementor of programs and projects for flood control services in the rest of the country more particularly in Bulacan, Bataan, Pampanga,
Cavite, and Laguna, in coordination with the DILG, affected LGUs, PNP Maritime Group, HUDCC, and other concerned government agencies, shall remove and
demolish all structures, constructions, and other encroachments built in breach of RA 7279 and other applicable laws along the Meycauayan-Marilao-Obando (Bulacan)
Rivers, the Talisay (Bataan) River, the Imus (Cavite) River, the Laguna De Bay, and other rivers, connecting waterways, and esteros that discharge wastewater into the
Manila Bay.

In addition, the MMDA is ordered to establish, operate, and maintain a sanitary landfill, as prescribed by RA 9003, within a period of one (1) year from finality of this
Decision. On matters within its territorial jurisdiction and in connection with the discharge of its duties on the maintenance of sanitary landfills and like undertakings, it
is also ordered to cause the apprehension and filing of the appropriate criminal cases against violators of the respective penal provisions of RA 9003,47 Sec. 27 of RA
9275 (the Clean Water Act), and other existing laws on pollution.

(9) The DOH shall, as directed by Art. 76 of PD 1067 and Sec. 8 of RA 9275, within one (1) year from finality of this Decision, determine if all licensed septic and
sludge companies have the proper facilities for the treatment and disposal of fecal sludge and sewage coming from septic tanks. The DOH shall give the companies, if
found to be non-complying, a reasonable time within which to set up the necessary facilities under pain of cancellation of its environmental sanitation clearance.

(10) Pursuant to Sec. 53 of PD 1152,48 Sec. 118 of RA 8550, and Sec. 56 of RA 9003,49 the DepEd shall integrate lessons on pollution prevention, waste management,
environmental protection, and like subjects in the school curricula of all levels to inculcate in the minds and hearts of students and, through them, their parents and
friends, the importance of their duty toward achieving and maintaining a balanced and healthful ecosystem in the Manila Bay and the entire Philippine archipelago.

(11) The DBM shall consider incorporating an adequate budget in the General Appropriations Act of 2010 and succeeding years to cover the expenses relating to the
cleanup, restoration, and preservation of the water quality of the Manila Bay, in line with the country’s development objective to attain economic growth in a manner
consistent with the protection, preservation, and revival of our marine waters.

(12) The heads of petitioners-agencies MMDA, DENR, DepEd, DOH, DA, DPWH, DBM, PCG, PNP Maritime Group, DILG, and also of MWSS, LWUA, and PPA, in
line with the principle of "continuing mandamus," shall, from finality of this Decision, each submit to the Court a quarterly progressive report of the activities
undertaken in accordance with this Decision.

No costs.

SO ORDERED.

19
G.R. No. 196058, November 12, 2018

JAMES S. PFLEIDER, Petitioner, v. HON. COURT OF APPEALS – CEBU CITY, ATTY. MARIE LUISE PFLEIDER ALBA, AS SUBSTITUTED BY HER
HEIRS, NAMELY: DAVID JOHN THADDEUS P. ALBA, FERDINAND REY P. ALBA AND JOHANNA A. BILBAO, AND THE FORMER REGISTER
OF DEEDS OF NEGROS OCCIDENTAL, ATTY. MILAGROS S. DELA CRUZ, Respondents.

DECISION

CAGUIOA, J.:

Before the Court is a Petition for Certiorari1 (Petition) under Rule 65 of the Rules of Court filed by petitioner James S. Pfleider (Pfleider), claiming that the Court of
Appeals – Cebu City, Eighteenth Division (CA) committed grave abuse of discretion in issuing its Decision2 dated July 30, 2010 (assailed Decision) and
Resolution3 dated December 10, 2010 (assailed Resolution) in CA-G.R. CV No. 01578.

The Facts and Antecedent Proceedings

As narrated by the CA in its assailed Decision, and as culled from the records of the case, the essential facts and antecedent proceedings of the instant case are as
follows:

This appeal originated from a Complaint,4 docketed as Civil Case No. 1287, filed on 14 April 2005 by [petitioner] Pfleider against [respondents] Atty. Marie Luise
Pfleider-Alba [(Pfleider-Alba)] and the Register] of Deeds of Negros Occidental [(RD)], Atty. Mil[ag]ros S. dela Cruz ("Alba" and "dela Cruz," respectively) [(Dela
Cruz)], before the RTC of Kabankalan City, Negros Occidental [(RTC, Kabankalan City)].

[Petitioner] Pfleider and [respondent Pfleider-Alba] are siblings and among the compulsory heirs of Fred G. Pfleider ("Fred") and Luisa Sanz-Pfleider ("Luisa"). During
his lifetime, Fred acquired, among others, the following pieces of property, to wit:

1.) Lot No. 214-A situated at Bacolod, Negros Occidental and covered with TCT N[o]. 3804;
2.) Lot No. 214-B situated at Bacolod, Negros Occidental and covered with TCT No. T-3805;
3.) Lot [No.] 3500 of the Cauayan Cadastre and covered with TCT No. RT-8245 (32176);
4.) Lot No. 3829 of the Cauayan Cadastre and covered with TCT No. T-RT-8244 (32177); and
5.) Lot No. 3934 of the Cauayan Cadastre and covered with TCT No. 534-N.

[Petitioner] Pfleider, as compulsory heir and pursuant to an approved Project of Partition, inherited the following properties: Lot No. 3834; Lot No. 3829-D and Lot No.
3500.

All of the afore-mentioned parcels of land were used as collaterals in the Real Estate Mortgage ("REM") in favor of [the] Philippine National Bank ("PNB"), Victorias
Branch, executed by Fred during his lifetime, particularly on 13 November 1952.

[Petitioner] Pfleider averred that [respondent Pfleider-Alba] volunteered to represent all of Fred's compulsory heirs before the PNB upon agreement that all siblings
must prepare their share on the amortization payments. Sometime on 15 February 1977, PNB issued Official Receipt No. 927681 in favor of [respondent Pfleider-Alba]
reflecting the amount of P275.00. [Petitioner] Pfleider alleged that at the back of said receipt, [respondent Pfleider-Alba] affixed a handwritten computation of each of
the sibling's share on the amortization payment which is P17,350.00. Subsequently, [petitioner] Pfleider gave P20,000.00 to [respondent Pfleider-Alba] as his share.
This was allegedly evidenced by a written acknowledgement receipt. [Respondent Pfleider-Alba] then assured [petitioner] Pfleider and their mother that she will take
care of the transaction with [the] PNB.

But sometime in July 1986, their mother received a registered letter from the [RD] informing her of the need to reconstitute a page of one of the titles of Fred's
properties. This was also the time that their mother learned of PNB's foreclosure of her husband's mortgaged properties. Thus, on 01 September 1986, [petitioner]
Pfleider, [respondent Pfleider-Alba,] and Mrs. Isobel Pfleider-Mahimer ("Mahimer"), their sister, went to PNB to negotiate. Resultantly, their mother received on 27
November 1986, a letter from PNB informing them of the approval of the extension of their redemption period for six months, from 26 October 1986 until 26 April
1987. During the interim period, [petitioner] Pfleider heard of [respondent Pfleider-Alba's] supposition that all her siblings already relinquished their properties to her.

Then, on the 23rd and 24th of April 1987, [respondent Pfleider-Alba] allegedly called up [petitioner] Pfleider and informed him that she would redeem the foreclosed
properties. Relevant thereto, [respondent Pfleider-Alba] informed [petitioner] Pfleider that he should accomplish a Deed of Quitclaim5 over all the foreclosed properties
since PNB required its execution. [Petitioner] Pfleider, after much hesitation but upon receipt of [respondent Pfleider-Alba's] letter reassuring him that he would not be
prejudiced by the quitclaim, signed it.

However, on 07 January 2003, [petitioner] Pfleider was shocked when he learned that TCT No. T-2070016 consolidating the entire Lot No. 3829 was registered in the
name of [respondent Pfleider-Alba]. The consolidation included Lot No. 3829-D which was [petitioner Pfleider's] share in [the] inheritance. [Petitioner] Pfleider
maintained that [respondent Pfleider-Alba's] action was not only tainted with fraud but also violated the implied trust created between [respondent Pfleider-Alba] and
her siblings. Hence, the filing of the instant [C]omplaint.

Though [respondent Pfleider-Alba] raised several defenses, she essentially sought the dismissal of [petitioner] Pfleider's [C]omplaint on the ground of litis pendentia.
[Respondent Pfleider-Alba] contended that there is another case pending between them involving the same issues, the same properties and even the same pieces of
documentary evidence. It was filed before the RTC of Bacolod City, Branch 46 [(RTC, Bacolod City)], entitled "Marie Luise P. Alba v. James Pfleider." It is an action
for Damages and Injunction with Prayer for Restraining Order and docketed as Civil Case No. 00-11070. [Respondent Pfleider-Alba] likewise insisted that [petitioner]
Pfleider violated the prohibition against forum shopping.

[Respondent] [d]ela Cruz] also filed her Answer asserting that she merely performed her duty in issuing the titles to [respondent Pfleider-Alba's] name. She also
stressed that it was not within the scope of her duty as a Register of Deeds to determine whether [respondent Pfleider-Alba] committed fraud against [petitioner]
Pfleider in securing the title.

[Respondent Pfleider-Alba] then filed a Motion for Preliminary Hearing on the Affirmative Defenses on 31 May 2005, which was opposed by [petitioner] Pfleider.
Nonetheless, [respondent Pfleider-Alba's] [M]otion was granted in the 20 June 2005 Order of [RTC, Kabankalan City]. The parties then proffered their respective
Memorandum.

20
Thereafter, [RTC, Kabankalan City] rendered its Order7 [dated August 15, 2005] finding that litis pendentia did not obtain in the instant [C]omplaint. [Respondent
Pfleider-Alba] filed a Manifestation and Motion for Reconsideration.

[RTC, Kabankalan City] granted [respondent Pfleider-Alba's] Motion for Reconsideration in its assailed Order8 [dated September 26, 2005], viz:

WHEREFORE, finding merit to the motion and in view of said jurisprudence[,] it appearing that there is litis pendentia between Civil Case No. 00-11070 pending with
[RTC, Bacolod City] and the present case, the Order of this Court dated August 15, 2005 is reconsidered and set aside and this case is hereby dismissed.

SO ORDERED.9

This time, it was now [petitioner] Pfleider who filed a Motion for Reconsideration which was likewise denied in the challenged 25 November 2005 Order.10

[Hence, petitioner Pfleider, filing a Notice of Appeal11 on December 19, 2005, appealed the RTC, Kabankalan City's Order dated 25 November 2005 before the CA
under Rule 41 of the Rules of Court.]12

The Ruling of the CA

In its assailed Decision, the CA denied Pfleider's appeal outright. The dispositive portion of the assailed Decision of the CA reads:

WHEREFORE, premises considered and for availing of a wrong remedy, the instant Appeal merits OUTRIGHT DISMISSAL.

No Costs.

SO ORDERED.13

As explained by the CA in its assailed Decision, the CA outrightly denied Pfleider's appeal due to the availment of the wrong remedy. The CA found that Pfleider's
appeal raised pure questions of law, involving the application of the concept of litis pendentia in the instant case due to the pendency of Civil Case No. 00-11070 being
heard before the RTC, Bacolod City. Hence, in accordance with Section 2, Rule 50 of the Rules of Court, which states that an appeal under Rule 41 taken from the RTC
to the CA raising only questions of law shall be dismissed, the CA dismissed the instant appeal.14

Pfleider filed a Motion for Reconsideration15 dated September 8, 2010 before the CA, asking for a reconsideration of the assailed Decision, which was subsequently
denied by the CA in its assailed Resolution.

Hence, the instant Petition for Certiorari.

Pfleider-Alba filed her Comment16 dated December 13, 2011, to which Pfleider responded with a Reply17 dated December 14, 2012.

Issue

Pfleider asks the Court to resolve the question of whether or not the CA committed grave abuse of discretion when it issued the assailed Decision and Resolution
dismissing Pfleider's appeal outright.

The Court's Ruling

The Court resolves to deny the instant Petition.

Procedural Hurdle: Improper Remedy

Before delving into the merits of the abovementioned issue raised by Pfleider, it behooves the Court to first resolve the palpable procedural matter presented by the
instant Petition.

At the outset, the Court takes note that Pfleider, in questioning the correctness of the assailed Decision and Resolution issued by the C A, filed a Petition
for Certiorari under Rule 65 of the Rules of Court.

It is a basic rule in remedial law that where an appeal is available to the aggrieved party, the special civil action for certiorari will not be entertained; remedies of appeal
and certiorari are mutually exclusive, not alternative or successive. Under Rule 45, decisions, final orders or resolutions of the CA in any case, i.e., regardless of the
nature of the action or proceedings involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the appellate process
over the original case. On the other hand, a special civil action under Rule 65 is an independent action based on the specific ground therein provided and, as a general
rule, cannot be availed of as a substitute for the lost remedy of an ordinary appeal, including that to be taken under Rule 45.18

One of the requisites of certiorari is that there is no available appeal or any plain, speedy and adequate remedy. Jurisprudence has held that where an appeal is
available, certiorari will not prosper, even if the ground raised is grave abuse of discretion. Accordingly, when a party adopts an improper remedy, his petition
may be dismissed outright.19

In assailing the Decision and Resolution of the court a quo, Pfleider had the available remedy of appeal by way of a petition for review on certiorari under Rule 45. A
simple perusal of the instant Petition would reveal that the ultimate issue raised is not jurisdictional in nature, but is centered on the supposed errors of the CA in
dismissing Pfleider's appeal outright.

Under prevailing procedural rules and jurisprudence, mere errors of judgment are not proper subjects of a special civil action for certiorari. Where the issue or question
involved affects the wisdom or legal soundness of the decision, and not the jurisdiction of the court to render said decision, the same is beyond the province of a special
civil action for certiorari.

To emphasize, upon careful examination of the instant Petition, it is apparent that Pfieider merely questions the assailed Decision and Resolution, not on the basis of the
CA's lack of jurisdiction to hear and decide Pfleider's appeal, but merely due to the supposed legal errors purportedly committed by the CA when it decided to dismiss
outright Pfleider's appeal.

Hence, for this reason alone, the Court finds sufficient reason to deny the instant Petition.

21
 The CA Did Not Commit Any Reversible Error That Warrants The Court's Exercise Of Its Appellate
Jurisdiction.

While it is true that the Court may set aside technicalities and proceed with the appeal,20 even assuming arguendo that the Court exercises liberality and treats the instant
Petition for Certiorari as a Rule 45 appeal, the outcome remains the same — as the instant Petition is unmeritorious. The Court finds that the CA did not commit any
error, more so grave abuse of discretion, in issuing the assailed Decision and Resolution.

Under Section 2, Rule 41 of the Rules of Court, there are two (2) modes of appealing a judgment or final order of the RTC in the exercise of its original jurisdiction:

(a) If the issues raised involve questions of fact or mixed questions of fact and law, the proper recourse is an ordinary appeal to the CA in accordance with Rule 41
in relation to Rule 44 of the Rules of Court; and

(b) If the issues raised involve only questions of law, the appeal shall be to the Court by petition for review on certiorari in accordance with Rule 45 of the
Rules of Court.21

Corollary, under Section 2, Rule 50 of the Rules of Court, an appeal under Rule 41 taken from the RTC to the CA raising only questions of law shall be dismissed, as
issues purely of law are not reviewable by the said court. Similarly, an appeal by notice of appeal instead of by petition for review from the appellate judgment of an
RTC shall be dismissed.

The Rules of Court is clear and unequivocal, using mandatory language, in establishing the rule that an appeal raising pure questions of law erroneously taken to
the CA shall not be transferred to the appropriate court, but shall be dismissed outright.

The Court thus agrees with the CA's decision to dismiss Pfleider's appeal outright. The appeal of Pfleider, as correctly held by the CA, essentially raised issues purely of
law.

Time and again, the Court has distinguished cases involving pure questions of law from those of pure questions of fact in the following manner — a question of fact
exists when a doubt or difference arises as to the truth or falsity of alleged facts. If the query requires a re-evaluation of the credibility of witnesses or the existence or
relevance of surrounding circumstances and their relation to each other, the issue in that query is factual.22

On the other hand, there is a question of law when the doubt or difference arises as to what the law is on certain state of facts and which does not call for an existence of
the probative value of the evidence presented by the parties-litigants. In a case involving a question of law, the resolution of the issue rests solely on what the law
provides on the given set of circumstances.23

Ordinarily, the determination of whether an appeal involves only questions of law or both questions of law and fact is best left to the appellate court. All doubts as to the
correctness of the conclusions of the appellate court will be resolved in favor of the CA unless it commits an error or commits a grave abuse of discretion.24

A simple perusal of the issues raised by Pfleider in his appeal before the CA, as worded by Pfleider himself in the instant Petition, readily reveals that these are pure
questions of law that do not call for an appreciation of the probative value of the evidence presented by the parties-litigants:

a. Whether or not [RTC, Kabankalan City] erred in finding that there exists a litis pendentia between Civil Case No. 1287 x x x and Civil Case No. 00-11070 x x x;

b. Whether or not [RTC, Kabankalan City] erred in denying the Motion for Reconsideration filed by the [petitioner] x x x;

c. Whether or not [RTC, Kabankalan City] erred in Its application of the case of Development Bank of the Philippines versus Court of Appeals and Carlos Cajes, x x x;

d. Whether or not the dismissal by [RTC, Kabankalan City] x x x shall propagate injustice;

e. Whether or not [RTC, Kabankalan City] failed to appreciate the violation committed by [respondent Pfleider-Alba] of the mandatory provision of Section 5, Rule 15
of the [Rules of Court], which renders her Motion for Reconsideration dated September 8, 2005 a mere scrap of paper.25

Evident from the foregoing is that Pfleider is primarily appealing before the CA the propriety of RTC, Kabankalan City's dismissal of the Complaint on the ground
of litis pendentia. A dismissal based on this ground does not involve a review of the facts of the case but merely the application of the law and the applicable
jurisprudence on litis pendentia.

The issue to be resolved is limited to whether or not the said doctrine was properly applied, which will only involve a review of the Complaints in Civil Case Nos. 1287
and 00-11070,26 and RTC, Kabankalan City's Order of dismissal, but NOT the probative value of the evidence submitted nor the truthfulness or falsity of the facts.
Considering, therefore, that the subject appeal filed by Pfleider before the court a quo raised only questions of law, the CA committed no error in dismissing the same in
fealty to Section 2, Rule 50 of the Rules of Court.

On The Existence Of Litis Pendentia

It must be noted that although the instant Petition was filed solely to question the assailed Decision and Resolution of the CA, and not the RTC, Kabankalan City's
Order dismissing the Complaint, as seen in the Prefatory Statement/Statement of the Case of the instant Petition,27 Pfleider proceeded to discuss even the validity of the
RTC, Kabankalan City's ruling that litis pendentia applies in the instant case, warranting the dismissal of Pfleider's Complaint.

Even if the Court does away with the procedural error committed by Pfleider when he filed the instant Petition for Certiorari and deemed this Rule 65 Petition as an
appeal under Rule 45, it has previously held that such an appeal before the Court is limited to errors of the appellate court and not the trial court.

Jurisprudence dictates that the errors which the Court may review in a petition for review on certiorari are those of the CA, and not those of the trial court which
rendered the decision in the first instance. It is thus imperative that the Court refrains from conducting further scrutiny of the findings of the trial court. To be sure, the
Court's review here is limited only to the errors of law committed by the CA and not the RTC.28

To stress, the only error of law alleged to have been committed by the CA as asserted by Pfleider in the instant Petition is its outright dismissal of Pfleider's appeal in
accordance with Section 2, Rule 50 of the Rules of Court. Hence, following the dictates of established jurisprudence, the review of the instant case is limited to the

22
errors committed by the CA in its assailed Decision and Resolution, and not the ones supposedly committed by the RTC in its Order dated September 26, 2005
dismissing Pfleider's Complaint due to litis pendentia.

Nevertheless, even if the Court disregards the foregoing rule, still, the assertion that litis pendentia was wrongfully applied by the RTC, Kabankalan City is incorrect.

Litis pendentia as a ground for the dismissal of a civil action refers to that situation wherein another action is pending between the same parties for the same cause of
action, such that the second action becomes unnecessary and vexatious. The underlying principle of litis pendentia is the theory that a party is not allowed to vex
another more than once regarding the same subject matter and for the same cause of action. This theory is founded on the public policy that the same subject matter
should not be the subject of controversy in courts more than once, in order that possible conflicting judgments may be avoided for the sake of the stability of the rights
and status of persons.29

First, there is no doubt at all that Civil Case No. 00-11070 heard before RTC, Bacolod City and Civil Case No. 1287 heard before RTC, Kabankalan City involve the
same parties.

Second, despite Civil Case No. 00-11070 being initiated by Pfleider-Alba as an action for Damages and Injunction with Prayer for Restraining Order, it still shares an
identity of rights, reliefs prayed for, and causes of action with Civil Case No. 1287. Indeed, in his Answer with Counterclaim30 to the said Complaint in Civil Case No.
00-11070, as noted by RTC, Kabankalan City in its Order dated September 26, 2005, Pfleider made a counterclaim of ownership over the same property involved in
Civil Case No. 1287, making a direct attack on the validity of the title of Pfleider-Alba over the subject property.31

As held by the Court in Development Bank of the Phils. v. CA,32 a counterclaim claiming ownership over the land and seeking damages can be considered a direct attack
on the title of the defendant as a counterclaim is considered a complaint, only this time, it is the original defendant who becomes the plaintiff. It stands on the same
footing and is to be tested by the same rules as if it were an independent action.

In fact, even in the instant Petition, Pfleider concedes that Civil Case No. 00-11070 also involved the issue of "ownership over the property involved."33

Pfleider argues that since Civil Case No. 1287 involves the question of ownership over the property covered by TCT No. T-207001, Civil Case No. 00-11070
supposedly does not touch upon the same issues because, at the time of the filing of the latter case, TCT No. T-207001 was not yet issued by the RD.34

This argument does not hold water, considering that the issue of ownership over property being raised by Pfleider in Civil Case No. 1287, i.e., the property covered by
TCT No. T-207001 - the entire Lot No. 3829, necessarily involves and encompasses the ownership of the property involved in Civil Case No. 00-11070, i.e., Lot No.
3829-D. In fact, during the proceedings in Civil Case No. 00-11070, Pfleider testified and presented documentary evidence regarding his claim of ownership over Lot
No. 3829-D,35 which is the same property that Pfleider claims should not have been transferred to Pfleider-Alba in Civil Case No. 1287.

Hence, even if the Court were to go beyond what is required of it and determine the correctness of the RTC, Kabankalan City's Order dismissing Pfleider's Complaint in
Civil Case No. 1287, the instant Petition still falls as the Court finds no fault in the RTC, Kabankalan City's dismissal of Pfleider's Complaint on the ground of litis
pendentia.

WHEREFORE, premised considered, the instant Petition is hereby DENIED. The Decision dated July 30, 2010 and Resolution dated December 10, 2010 issued by
the Court of Appeals - Cebu City, Eighteenth Division in CA-G.R. CV No. 01578 are AFFIRMED.

SO ORDERED.

January 11, 2018

G.R. No. 212472

SPECIFIED CONTRACTORS & DEVELOPMENT, INC., AND SPOUSES ARCHITECT ENRIQUE O. OLONAN AND CECILIA R. OLONAN, Petitioners
vs.
JOSE A. POBOCAN , Respondent

DECISION

TIJAM, J.:

This Petition for Review on Certiorari1under Rule 45 urges this Court to reverse and set aside the November 27, 2013 Decision2 and April 28, 2014 Resolution3 of the
Court of Appeals (CA) in CA-G.R. CV No. 99994, and to affirm instead the June 4, 2012 Order4 of the Regional Trial Court (RTC) of Quezon City, Branch 92, in Civil
Case No. Q-11-70338. The court a quo had granted the Motion to Dismiss5 of Specified Contractors & Development Inc. (Specified Contractors), and Spouses

23
Architect Enrique O. Olonan and Cecilia R. Olonan (collectively referred to as petitioners), thereby dismissing the action for specific performance filed by respondent
Jose A. Pobocan. The dismissal of the case was subsequently set aside by the CA in the assailed decision and resolution.

It is undisputed that respondent was in the employ of Specified Contractors until his retirement sometime in March 2011.1âwphi1 His last position was president of
Specified Contractors and its subsidiary, Starland Properties Inc., as well as executive assistant of its other subsidiaries and affiliates.

Architect Olonan allegedly6 agreed to give respondent one (1) unit for every building Specified Contractors were able to construct as part of respondent's compensation
package to entice him to stay with the company. Two (2) of these projects that Specified Contractors and respondent were· able to build were the Xavierville Square
Condominium in Quezon City and the Sunrise 1-foliday Mansion Bldg. I in Alfonso, Cavite. Pursuant to the alleged oral agreement, SpeCified Contractors supposedly
ceded, assigned and transferred Unit 708 of Xavlerville Square Condominium and Unit 208 of Sunrise Holiday Mansion Bldg. I (subject units) in favor of respondent.

In a March 14, 2011 letter7 addressed to petitioner Architect Enrique Olonan as chairman of Specified Contractors, respondent requested the execution of Deeds of
Assignment or Deeds of Sale over the subject units in his favor, along with various other beriefits, in view of his impending retirement on March 19, 2011.

When respondent's demand was unheeded, he filed a Complaint8 on November 21, 2011 before the RTC of Quezon City praying that petitioners be ordered to execute
and deliver the appropriate deeds of conveyance and to pay moral and exemplary damages, as well as attorney's fees.

On January 17, 2012, petitioners, instead of filing an answer, interposed a Motion to Dismiss9 denying the existence of the alleged oral agreement. They argued that,
even assuming arguendo that there was such an oral agreement, the alleged contract is unenforceable for being in violation of the statute of frauds, nor was there any
written document, note or memorandum showing that the subject units have in fact been ceded, assigned or transferred to respondent. Moreover, assuming again that
said agreement existed, the cause of action had long prescribed because the alleged agreements were supposedly entered into in 1994 and 1999 as indicated in
respondent's March 14, 2011 demand letter, supra, annexed to the complaint.

The RTC, in granting10 the motion, dismissed the respondent's complaint in its June 4, 2012 Order. While the RTC disagreed with petitioners that the action had already
prescribed under Articles 114411 and 114512 of the New Civil Code, by reasoning that the complaint is in the· nature of a real action which prescribes after 30 years
conformably with Article 114113, it nonetheless agreed that the alleged agreement should have been put into writing, and that such written note, memorandum or
agreement should have been attached as actionable documents to respondent's complaint.

On appeal, the CA reversed14 the RTC's June 4, 2012 Order, reasoning that the dismissal of respondent's complaint, anchored on the violation of the statute of frauds, is
unwarranted since the rule applies only to executory and not to completed or partially consummated contracts. According to the CA, there was allegedly partial
performance of the alleged obligation based on: (1) the respondent's possession of the subject units; (2) the respondent's payment of condominium dues and realty tax
for Unit 708 Xavierville Square Condominium; (3) the endorsement by petitioners of furniture/equipment for Unit 208 Sunrise Holiday Mansion I; and (4) that shares
on the rental from Unit 208 Sunrise Holiday Mansion I were allegedly received by the respondent and-deducted from his monthly balance on the furniture/equipment
account.

Petitioners countered that while there is no dispute that respondent had been occupying Unit 708 - previously Unit 803 - of Xavierville Square Condominium, this was
merely out of tolerance in view of respondent's then position as president of the company and without surrender of ownership. Petitioners also insisted that Unit 208 of
Sunrise Holiday Mansion I continues to be under their possession and control. Thus, finding that the motion to dismiss was predicated on disputable grounds, the CA
declared in its assailed decision that a trial on the merits is necessary to determine once and for all the nature of the respondent's possession of the subject units.

Aggrieved, petitioners sought reconsideration of the CA decision, but were unsuccessful. Hence, the present petition raising three issues:

1. Whether or not the RTC had jurisdiction over the respondent's complaint considering that the allegations therein invoked a right over the subject condominium units
as part of his compensation package, thus a claim arising out of an employer-employee relationship cognizable by the labor arbiter;15

2. Whether or not the respondent's cause of action had already Prescribed;16 and,

3. Whether or not the action was barred by the statute of frauds.17

Resolution of the foregoing issues calls for an examination of the allegations in the complaint and the nature of the action instituted by' respondent. As will be discussed
later, there is merit in petitioners' insistence that respondent's right of action was already barred by the statute of limitations.

What determines the nature of the action and which court has jurisdiction over it are the allegations in the complaint and the character of the relief sought.18 In his
complaint, respondent claimed that petitioners promised to convey to him the subject units to entice him to stay with their company. From this, respondent prayed that
petitioners be compelled to perform their part of the alleged oral agreement. The objective of the suit is to compel petitioners to perform an act, specifically, to execute
written instruments pursuant to a previous oral contract. Notably, the respondent does not claim ownership of, nor title to, the subject properties.

Not all actions involving real property are real actions. In Spouses Saraza, et al. v. Francisco19 , it was clarified that:

x x x Although the end result of the respondent's claim was the transfer of the subject property to his name, the suit was still essentially for specific performance, a
personal action, because it sought Fernando's execution of a deed of absolute sale based on a contract which he had previously made.

Similarly, that the end result would be the transfer of the subject units to respondent's name in the event that his suit is decided in his favor is "an anticipated
consequence and beyond the cause for which the action [for specific performance with damages] was instituted."20 Had respondent's action proceeded to trial, the crux
of the controversy would have been the existence or non-existence of the alleged oral contract from which would flow respondent's alleged right to compel petitioners
to execute deeds of conveyance. The transfer of property sought by respondent is but incidental to or an offshoot of the determination of whether or not there is indeed,
to begin with, an agreement to convey the properties in exchange for services rendered.

Cabutihan v. Landcenter Construction & Development Corporation21explains thus:

A close scrutiny of National Steel and Ruiz reveals that the prayers for the execution of a Deed of Sale were not in any way connected to a contract, like the
Undertaking in this case. Hence, even if there were prayers for the execution of a deed of sale, the actions filed in the said cases were not for specific performance.

In the present case, petitioner seeks payment of her services in accordance with the undertaking the parties signed.

24
It is axiomatic that jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in the complaint and the character of the relief
sought, irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein.22 We therefore find that respondent correctly designated his
complaint as one for specific performance consistent with his allegations and prayer therein. Accordingly, respondent's suit is one that is incapable of pecuniary
estimation and indeed cognizable by the RTC of Quezon City where both parties reside. As stated in Surviving Heirs of Alfredo R. Bautista v. Lindo:23

Settled jurisprudence considers some civil actions as incapable of pecuniary estimation, viz:

1. Actions for specific performance;

While the lack of jurisdiction of a court may be raised at any stage of an action, nevertheless, the party raising such question may be estopped if he has actively taken
part in the very proceedings which he questions and he only objects to the court's jurisdiction because the judgment or the order subsequently rendered is adverse to
him.24 In this case, petitioners' Motion to Dismiss, Reply25 to the opposition on the motion, and Sur-rejoinder26 only invoked the defenses of statute of frauds and
prescription before the RTC. It was only after the CA reversed the RTC's grant of the motion to dismiss that petitioners raised for the first time the issue of jurisdiction
in their Motion for Reconsideration.27 Clearly, petitioners are estopped from raising this issue after actively taking part in the proceedings before the RTC, obtaining a
favorable ruling, and then making an issue of it only after the CA reversed the RTC's order.

Even if this Court were to entertain the petitioners' belated assertion that jurisdiction belongs to the labor arbiter as this case involves a claim arising from an employer-
employee relationship, reliance by petitioners on Domondon v. NLRC28is misplaced. In Domondon, the existence of the agreement on the transfer of car-ownership was
not in issue but rather, the entitlement of a former employee to his entire monetary claims against a former employer, considering that the said employee had not paid
the balance of the purchase price of a company car which the employee opted to retain. In the present case, the existence of the alleged oral agreement, from which
would flow the right to compel performance, is in issue.

As the Court has ascertained that the present suit is essentially for specific performance - a personal action - over which the court a quo had jurisdiction, it was therefore
erroneous for it to have treated the complaint as a real action which prescribes after 30 years under Article 1141 of the New Civil Code. In a personal action, the
plaintiff seeks the recovery of personal property, the enforcement of a contract, or the recovery of damages.29 Real actions, on the other hand, are those affecting title to
or possession of real property, or interest therein.30 As a personal action based upon an oral contract, Article 1145 providing a prescriptive period of six years applies in
this case instead. The shorter period provided by law to institute an action based on an oral contract is due to the frailty of human memory. Nothing prevented the
parties from reducing the alleged oral agreement into writing, stipulating the same in a contract of employment or partnership, or even mentioning the same in an office
memorandum early on.

While the respondent's complaint was ingeniously silent as to when the alleged oral agreement came about, his March 14, 2011 demand letter annexed to his complaint
categorically cites the year 1994 as when he and Architect Olonan allegedly had an oral agreement to become "industrial partners" for which he would be given a unit
from every building they constructed. From this, Unit 208 of Sunrise Holiday Mansion I was allegedly assigned to him. Then he went on to cite his resignation in
October of 1997 and his re-employment with the company on December 1, 1999 for which he was allegedly given Unit 803 of the Xavierville Square Condominium,
substituted later on by Unit 708 thereof.

The complaint for specific performance was instituted on November. 21, 2011, or 17 years from the oral agreement of 1994 and almost 12 years after the December 1,
1999 oral agreement. Thus, the respondent's action upon an oral contract was filed beyond the six-year period within which he should have instituted the same.

Respondent argued that the prescriptive period should not be counted from 1994 because the condominium units were not yet in existence at that time, and that the
obligation would have arisen after the units were completed and ready for occupancy. Article 134731 of the New Civil Code is, however, clear that future things may be
the object of a contract. This is the reason why real estate developers engage in pre-selling activities. But even if we were to entertain respondent's view, his right of
action would still be barred by the statute of limitations.

Condominium Certificate of Title (CCT) No. N-1834 732 for Unit 708 of Xavierville Square Condominium, copy of which was annexed to the complaint, was issued on
September 11, 1997 or more than 13 years before· respondent's March 14, 2011 demand letter.CCT No. CT-61333 for Unit 208 of Sunrise Holiday Mansion Building I;
also annexed to the complaint, was issued on March 12, 1996 or 14 years before respondent's March 14, 2011 demand letter. Indubitably, in view of the instant suit for
specific performance being a personal action founded upon an oral contract which must be brought within six years from the accrual of the right, prescription had
already set in.

Inasmuch as the complaint should have been dismissed by the RTC on the ground of prescription, which fact is apparent from the complaint and its annexes, it is no
longer necessary to delve into the applicability of the statute of frauds.

WHEREFORE, the petition is GRANTED. Accordingly, the Court of Appeals' November 27, 2013 Decision and April 28, 2014 Resolution in CA-G.R. CV No. 99994
are REVERSED and SET ASIDE. We sustain the dismissal of Civil Case No. Q-11-70338, but on the ground that the action for specific performance had already
prescribed.

.R. No. 175507               October 8, 2014

RAMON CHING AND POWING PROPERTIES, INC., Petitioners,

vs.
JOSEPH CHENG, JAIME CHENG, MERCEDES IGNE1 AND LUCINA SANTOS, Respondents.

DECISION

LEONEN, J.:

Rule 17 of the Rules of Civil Procedure governs dismissals of actions at the instance of the plaintiff. Hence, the "two-dismissal rule" under Rule 17, Section 1 of the
Rules of Civil Procedure will not apply if the prior dismissal was done at the instance of the defendant.

This is a petition for review on certiorari assailing the decision2 and resolution3 of the Court of Appeals in CA-G.R. SP. No. 86818, which upheld the (1) order4 dated
November 22, 2002 dismissing Civil Case No. 02-103319 without prejudice, and (2) the omnibus order5 dated July 30, 2004, which denied petitioners’ motion for
reconsideration. Both orders were issued by the Regional Trial Court of Manila, Branch 6.6

The issues before this court are procedural. However, the factual antecedents in this case, which stemmed from a complicated family feud, must be stated to give
context to its procedural development.
25
It is alleged that Antonio Ching owned several businesses and properties, among which was Po Wing Properties, Incorporated (Po Wing Properties).7 His total assets are
alleged to have been worth more than 380 million.8 It is also alleged that whilehe was unmarried, he had children from two women.9

Ramon Ching alleged that he was the only child of Antonio Ching with his common-law wife, Lucina Santos.10 She, however, disputed this. She maintains that even
ifRamon Ching’s birth certificate indicates that he was Antonio Ching’s illegitimate child, she and Antonio Ching merely adopted him and treated him like their own.11

Joseph Cheng and Jaime Cheng, on the other hand, claim to be Antonio Ching’s illegitimate children with his housemaid, Mercedes Igne.12 While Ramon Ching
disputed this,13 both Mercedes and Lucina have not.14

Lucina Santos alleged that when Antonio Ching fell ill sometime in 1996, he entrusted her with the distribution of his estate to his heirs if something were to happen to
him. She alleged that she handed all the property titles and business documents to Ramon Ching for safekeeping.15 Fortunately, Antonio Ching recovered from illness
and allegedly demanded that Ramon Ching return all the titles to the properties and business documents.16

On July 18, 1996, Antonio Ching was murdered.17 Ramon Ching allegedly induced Mercedes Igne and her children, Joseph Cheng and Jaime Cheng, to sign an
agreement and waiver18 to Antonio Ching’s estate in consideration of ₱22.5 million. Mercedes Igne’s children alleged that Ramon Ching never paid them.19 On October
29, 1996, Ramon Ching allegedly executed an affidavit of settlement of estate,20 naming himself as the sole heir and adjudicating upon himself the entirety of Antonio
Ching’s estate.21

Ramon Ching denied these allegationsand insisted that when Antonio Ching died, the Ching family association, headed by Vicente Cheng, unduly influenced him to
give Mercedes Igne and her children financial aid considering that they served Antonio Ching for years. It was for this reason that an agreement and waiver in
consideration of 22.5 million was made. He also alleged that hewas summoned by the family association to execute an affidavit of settlement of estate declaring him to
be Antonio Ching’s sole heir.22

After a year of investigating Antonio Ching’s death, the police found Ramon Ching to be its primary suspect.23 Information24 was filed against him, and a warrant of
arrest25 was issued.

On October 7, 1998, Joseph Cheng, Jaime Cheng, and Mercedes Igne (the Chengs) filed a complaint for declaration of nullity of titles against Ramon Ching before the
Regional Trial Court of Manila. This case was docketed as Civil Case No. 98-91046 (the first case).26

On March 22, 1999, the complaint was amended, with leave of court, to implead additional defendants, including Po Wing Properties, of which Ramon Ching was a
primary stockholder.The amended complaint was for "Annulment of Agreement, Waiver, Extra-Judicial Settlement of Estate and the Certificates of Title Issued by
Virtue of Said Documents with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction."27 Sometime after, Lucina Santos filed a motion for
intervention and was allowed to intervene.28

After the responsive pleadings had been filed, Po Wing Properties filed a motion to dismiss on the ground of lack of jurisdiction of the subject matter.29

On November 13, 2001, the Regional Trial Court of Manila, Branch 6, granted the motion to dismiss on the ground of lack of jurisdiction over the subject
matter.30 Upon motion of the Chengs’ counsel, however, the Chengs and Lucina Santos were given fifteen (15) days to file the appropriate pleading. They did not do
so.31

On April 19, 2002, the Chengs and Lucina Santos filed a complaint for "Annulment of Agreement, Waiver, Extra-Judicial Settlement of Estate and the Certificates of
Title Issued by Virtue of Said Documents with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction" against Ramon Ching and Po Wing
Properties.32 This case was docketed as Civil Case No. 02-103319 (the second case) and raffled to Branch 20 of the Regional Trial Court of Manila.33 When Branch 20
was made aware of the first case, it issued an order transferring the case to Branch 6, considering that the case before it involved substantially the same parties and
causes of action.34

On November 11, 2002, the Chengs and Lucina Santos filed a motion to dismiss their complaint in the second case, praying that it be dismissed without prejudice.35

On November 22, 2002, Branch 6 issued an order granting the motion to dismiss on the basis that the summons had not yet been served on Ramon Ching and Po Wing
Properties, and they had not yet filed any responsive pleading. The dismissal of the second case was made without prejudice.36

On December 9, 2002, Ramon Ching and Po Wing Properties filed a motion for reconsideration of the order dated November 22, 2002. They argue that the dismissal
should have been with prejudice under the "two dismissal rule" of Rule 17, Section 1 of the 1997 Rules of Civil Procedure, in view of the previous dismissal of the first
case.37

During the pendency of the motion for reconsideration, the Chengs and Lucina Santos filed a complaint for "Disinheritance and Declaration of Nullity of Agreement
and Waiver, Affidavit of Extra judicial Agreement, Deed of Absolute Sale, and Transfer Certificates of Title with Prayer for TRO and Writ of Preliminary Injunction"
against Ramon Ching and Po Wing Properties. This case was docketed as Civil Case No. 02-105251(the third case) and was eventually raffled to Branch 6.38

On December 10, 2002, Ramon Ching and Po Wing Properties filed their comment/opposition to the application for temporary restraining order in the third case. They
also filed a motion to dismiss on the ground of res judicata, litis pendencia, forum-shopping, and failure of the complaint to state a cause of action. A series of
responsive pleadings were filed by both parties.39

On July 30, 2004, Branch 6 issued an omnibus order40 resolving both the motion for reconsideration in the second case and the motion to dismiss in the third case. The
trial court denied the motion for reconsideration and the motion to dismiss, holding that the dismissal of the second case was without prejudice and, hence, would not
bar the filing of the third case.41 On October 8, 2004, while their motion for reconsideration in the third case was pending, Ramon Ching and Po Wing Properties filed a
petition for certiorari (the first certiorari case) with the Court of Appeals, assailing the order dated November 22,2002 and the portion of the omnibus order dated July
30, 2004, which upheldthe dismissal of the second case.42

On December 28, 2004, the trial court issued an order denying the motion for reconsideration in the third case. The denial prompted Ramon Ching and Po Wing
Properties to file a petition for certiorari and prohibition with application for a writ of preliminary injunction or the issuance of a temporary restraining order (the second
certiorari case) with the Court of Appeals.43

On March 23, 2006, the Court of Appeals rendered the decision44 in the first certiorari case dismissing the petition. The appellate court ruled that Ramon Ching and Po
Wing Properties’ reliance on the "two-dismissal rule" was misplaced since the rule involves two motions for dismissals filed by the plaintiff only. In this case, it found
that the dismissal of the first case was upon the motion of the defendants, while the dismissal of the second case was at the instance of the plaintiffs.45

26
Upon the denial of their motion for reconsideration,46 Ramon Ching and Po Wing Properties filed this present petition for review47 under Rule 45 of the Rules of Civil
Procedure.

Ramon Ching and Po Wing Properties argue that the dismissal of the second case was with prejudice since the non-filing of an amended complaint in the first case
operated as a dismissal on the merits.48 They also argue that the second case should be dismissed on the ground of res judicata since there was a previous final judgment
of the first case involving the same parties, subject matter, and cause of action.49

Lucina Santos was able to file a comment50 on the petition within the period required.51 The Chengs, however, did not comply.52 Upon the issuance by this court of a
show cause order on September 24, 2007,53 they eventually filed a comment with substantially the same allegations and arguments as that of Lucina Santos’.54

In their comment, respondents allege that when the trial court granted the motion to dismiss, Ramon Ching’s counsel was notified in open court that the dismissal was
without prejudice. They argue that the trial court’s order became final and executory whenhe failed to file his motion for reconsideration within the reglementary
period.55

Respondents argue that the petition for review should be dismissed on the ground of forum shopping and litis pendencia since Ramon Ching and Po Wing Properties are
seeking relief simultaneously in two forums by filing the two petitions for certiorari, which involved the same omnibus order by the trial court.56 They also argue that
the "two-dismissal rule" and res judicata did not apply since (1) the failure to amend a complaint is not a dismissal, and (2) they only moved for dismissal once in the
second case.57

In their reply,58 petitioners argue that they did not commit forum shopping since the actions they commenced against respondents stemmed from the complaints filed
against them in the trial courts.59 They reiterate that their petition for review is only about the second case; it just so happened that the assailed omnibus order resolved
both the second and third cases.60

Upon the filing of the parties’ respective memoranda,61 the case was submitted for decision.62

For this court’s resolution are the following issues:

I. Whether the trial court’s dismissal of the second case operated as a bar to the filing of a third case, asper the "two-dismissal rule"; and

II. Whether respondents committed forum shopping when they filed the third case while the motion for reconsideration of the second case was still pending.

The petition is denied.

The "two-dismissal rule" vis-à-vis

the Rules of Civil Procedure

Dismissals of actions are governed by Rule 17 of the 1997 Rules of Civil Procedure. The pertinent provisions state:

RULE 17
DISMISSAL OF ACTIONS

SEC. 1. Dismissal upon notice by plaintiff. — A complaint may be dismissed by the plaintiff by filing a notice of dismissal at any time before service of the answer or
of a motion for summary judgment. Upon such notice being filed, the court shall issue an order confirming the dismissal. Unless otherwise stated in the notice, the
dismissal is without prejudice, except that a notice operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in a competent court an
action based on or including the same claim.

SEC. 2. Dismissal upon motion of plaintiff. — Except as provided in the preceding section, a complaint shall not be dismissed at the plaintiff's instance save upon
approval of the court and upon such terms and conditions as the court deems proper. If a counterclaim has been pleaded by a defendant prior to the service upon him of
the plaintiff’s motion for dismissal, the dismissal shall be limited to the complaint. The dismissal shall be without prejudice to the right of the defendant to prosecute his
counterclaim in a separate action unless within fifteen (15) days from notice of the motion he manifests his preference to have his counterclaim resolved in the same
action. Unless otherwise specified in the order, a dismissal under this paragraph shall be without prejudice. A class suit shall not be dismissed or compromised without
the approval of the court.

SEC. 3. Dismissal due to fault of plaintiff. — If, for no justifiable cause, the plaintiff fails to appear on the date of the presentation of his evidence in chief on the
complaint, or to prosecute his action for an unreasonable length of time, or to comply with these Rules or any order of the court, the complaint may be dismissed upon
motion of the defendant or upon the court's own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action.
This dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the court. (Emphasis supplied)

The first section of the rule contemplates a situation where a plaintiff requests the dismissal of the case beforeany responsive pleadings have been filed by the
defendant. It is donethrough notice by the plaintiff and confirmation by the court. The dismissal is without prejudice unless otherwise declared by the court.

The second section of the rule contemplates a situation where a counterclaim has been pleaded by the defendant before the service on him or her of the plaintiff’s
motion to dismiss. It requires leave of court, and the dismissal is generally without prejudice unless otherwise declared by the court.

The third section contemplates dismissals due to the fault of the plaintiff such as the failure to prosecute. The case is dismissed either upon motion of the defendant or
by the court motu propio. Generally, the dismissal is with prejudice unless otherwise declared by the court.

In all instances, Rule 17 governs dismissals at the instance of the plaintiff, not of the defendant. Dismissals upon the instance of the defendant are generally governed by
Rule 16, which covers motions to dismiss.63

In Insular Veneer, Inc. v. Hon. Plan,64 Consolidated Logging and Lumber Mills filed a complaint against Insular Veneer to recover some logs the former had delivered
to the latter. It also filed ex partea motion for issuance of a restraining order. The complaint and motion were filed in a trial court in Isabela.65

The trial court granted the motion and treated the restraining order as a writ of preliminary injunction. When Consolidated Logging recovered the logs, it filed a notice
of dismissal under Rule 17, Section 1 of the 1964 Rules of Civil Procedure.66

27
While the action on its notice for dismissal was pending, Consolidated Logging filed the same complaint against Insular Veneer, this time in a trial court in Manila. It
did not mention any previous action pending in the Isabela court.67

The Manila court eventually dismissed the complaint due to the nonappearance of Consolidated Logging’s counsel during pre-trial. Consolidated Logging subsequently
returned to the Isabela court to revive the same complaint. The Isabela court apparently treated the filing of the amended complaint as a withdrawal of its notice of
dismissal.68

Insular Veneer also filed in the Isabela court a motion to dismiss, arguing that the dismissal by the Manila court constituted res judicataover the case. The Isabela court,
presided over by Judge Plan, denied the motion to dismiss. The dismissal was the subject of the petition for certiorari and mandamus with this court.69

This court stated that:

In resolving that issue, we are confronted with the unarguable fact that Consolidated Logging on its volition dismissed its action for damages and injunction in the
Isabela court and refiled substantially the same action in the Manila court. Then, when the Manila court dismissed its action for failure to prosecute, it went hack [sic] to
the Isabela court and revived its old action by means of an amended complaint.

Consolidated Logging would liketo forget the Manila case, consign it to oblivion as if it were a bad dream, and prosecute its amended complaint in the Isabela court as
if nothing had transpired in the Manila court. We hold that it cannot elude the effects of its conduct in junking the Isabela case and in giving that case a reincarnation in
the Manila court.

Consolidated Logging’ [sic] filed a new case in Manila at its own risk. Its lawyer at his peril failed toappear at the pre-trial.70

This court ruled that the filing of the amended complaint in the Isabela court was barred by the prior dismissal of the Manila court, stating that:

The provision in section 1(e), Rule 16 of the Rules of Court that an action may be dismissed because "there is another action pending between the same parties for the
same cause" presupposes that two similar actions are simultaneously pending in two different Courts of First Instance. Lis pendensas a ground for a motion to dismiss
has the same requisites as the plea of res judicata.

On the other hand, when a pleading is amended, the original pleading is deemed abandoned. The original ceases to perform any further function as a pleading. The case
stands for trial on the amended pleading only. So, when Consolidated Logging filed its amended complaint dated March 16, 1970 in Civil Case No. 2158, the prior
dismissal order dated January 5, 1970 in the Manila case could he [sic] interposed in the Isabela court to support the defense of res judicata.71

As a general rule, dismissals under Section 1 of Rule 17 are without prejudice except when it is the second time that the plaintiff caused its dismissal. Accordingly, for a
dismissal to operate as an adjudication upon the merits, i.e, with prejudice to the re-filing of the same claim, the following requisites must be present:

(1) There was a previous case that was dismissed by a competent court;

(2) Both cases were based on or include the same claim;

(3) Both notices for dismissal werefiled by the plaintiff; and

(4) When the motion to dismiss filed by the plaintiff was consented to by the defendant on the ground that the latter paid and satisfied all the claims of the former.72

The purpose of the "two-dismissal rule" is "to avoid vexatious litigation."73 When a complaint is dismissed a second time, the plaintiff is now barred from seeking relief
on the same claim.

The dismissal of the second case was without prejudice in view of the "two-dismissal rule"

Here, the first case was filed as an ordinary civil action. It was later amended to include not only new defendants but new causes of action that should have been
adjudicated in a special proceeding. A motion to dismiss was inevitably filed by the defendants onthe ground of lack of jurisdiction.

The trial court granted that motion to dismiss, stating that:

A careful perusal of the allegations of the Amended Complaint dated February 10, 1999, filed by Plaintiff Joseph Cheng, show that additional causes of action were
incorporated i.e. extra-judicial settlement of the intestate estate of Antonio Ching and receivership, subject matters, which should be threshed out in a special
proceedings case. This is a clear departure from the main cause of action in the original complaint which is for declaration of nullity of certificate of titles with damages.
And the rules of procedure which govern special proceedings case are different and distinct from the rules of procedure applicable in an ordinary civil action.

In view of the afore-going, the court finds the Motion to Dismiss filed by Atty. Maria Lina Nieva S. Casals to be meritorious and the Court is left with no alternative but
to dismiss as it hereby dismisses the Amended Complaint.

However, on motion of Atty. Mirardo Arroyo Obias, counsel for the plaintiffs, he is given a period of fifteen (15) days from today, within which to file an appropriate
pleading, copy furnished to all the parties concerned.

....

SO ORDERED.74

Petitioners are of the view that when Atty. Mirardo Arroyo Obias failed to file the appropriate pleading within fifteen (15) days, he violated the order of the court. This,
they argue, made the original dismissal an adjudication upon the merits, in accordance with Rule 17, Section 3, i.e., a dismissal through the default of the plaintiff.
Hence, they argue that when respondents filed the second case and then caused its dismissal, the dismissal should have been with prejudice according to Rule 17,
Section 1, i.e., two dismissals caused by the plaintiff on the same claim. Unfortunately, petitioners’ theory is erroneous.

The trial court dismissed the first case by granting the motion to dismiss filed by the defendants. When it allowed Atty. Mirardo Arroyo Obias a period of fifteen (15)
days tofile an appropriate pleading, it was merely acquiescing to a request made bythe plaintiff’s counsel that had no bearing on the dismissal of the case.

28
Under Rule 17, Section 3, a defendant may move to dismiss the case if the plaintiff defaults; it does not contemplate a situation where the dismissal was due to lack of
jurisdiction. Since there was already a dismissal prior to plaintiff’s default, the trial court’s instruction to file the appropriate pleading will not reverse the dismissal. If
the plaintiff fails to file the appropriate pleading, the trial court does not dismiss the case anew; the order dismissing the case still stands.

The dismissal of the first case was done at the instance of the defendant under Rule 16, Section 1(b) of the Rules of Civil Procedure, which states:

SECTION 1. Grounds.— Within the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made on any of the
following grounds:

....

(b) That the court has no jurisdiction over the subject matter of the claim;

....

Under Section 5 of the same rule,75 a party may re-file the same action or claim subject to certain exceptions.

Thus, when respondents filed the second case, they were merely refiling the same claim that had been previously dismissed on the basis of lack of jurisdiction. When
they moved to dismiss the second case, the motion to dismiss can be considered as the first dismissal at the plaintiff’s instance.

Petitioners do not deny that the second dismissal was requested by respondents before the service of any responsive pleadings. Accordingly, the dismissal at this
instance is a matter of right that is not subject to the trial court’s discretion. In O.B. Jovenir Construction and Development Corporation v. Macamir Realty and
Development Corporation:76

[T]he trial court has no discretion or option to deny the motion, since dismissal by the plaintiff under Section 1, Rule 17 is guaranteed as a matter of right to the
plaintiffs. Even if the motion cites the most ridiculous of grounds for dismissal, the trial court has no choice but to consider the complaint as dismissed, since the
plaintiff may opt for such dismissal as a matter of right, regardless of ground.77 (Emphasis supplied)

For this reason, the trial court issued its order dated November 22, 2002 dismissing the case, without prejudice. The order states:

When this Motion was called for hearing, all the plaintiffs namely, Joseph Cheng, Jaime Cheng, Mercedes Igne and Lucina Santos appeared without their counsels.
That they verbally affirmed the execution of the Motion to Dismiss, as shown by their signatures over their respective names reflected thereat. Similarly, none of the
defendants appeared, except the counsel for defendant, Ramon Chang [sic], who manifested that they have not yet filed their Answer as there was a defect in the address
of Ramon Cheng [sic] and the latter has not yet been served with summons.

Under the circumstances, and further considering that the defendants herein have not yet filed their Answers nor any pleading, the plaintiffs has [sic] the right to out
rightly [sic] cause the dismissal of the Complaint pursuant to Section 2, Rule 17 of the 1997 Rules of Civil Procedure without prejudice. Thereby, and as prayed for, this
case is hereby ordered DISMISSED without prejudice.

SO ORDERED.78 (Emphasis supplied)

When respondents filed the third case on substantially the same claim, there was already one prior dismissal at the instance of the plaintiffs and one prior dismissal at
the instance of the defendants. While it is true that there were two previous dismissals on the same claim, it does not necessarily follow that the re-filing of the claim
was barred by Rule 17, Section 1 of the Rules of Civil Procedure. The circumstances surrounding each dismissal must first be examined to determine before the rule
may apply, as in this case.

Even assuming for the sake of argument that the failure of Atty. Mirardo Arroyo Obias to file the appropriate pleading in the first case came under the purview of Rule
17, Section 3 of the Rules of Civil Procedure, the dismissal in the second case is still considered as one without prejudice. In Gomez v. Alcantara:79

The dismissal of a case for failure to prosecute has the effect of adjudication on the merits, and is necessarily understood to be with prejudice to the filing of another
action, unless otherwise provided in the order of dismissal. Stated differently, the general rule is that dismissal of a case for failure to prosecute is to be regarded as an
adjudication on the merits and with prejudice to the filing of another action, and the only exception is when the order of dismissal expressly contains a qualification that
the dismissal is without prejudice.80 (Emphasis supplied)

In granting the dismissal of the second case, the trial court specifically orders the dismissal to be without prejudice. It is only when the trial court’s order either is silent
on the matter, or states otherwise, that the dismissal will be considered an adjudication on the merits.

However, while the dismissal of the second case was without prejudice, respondents’ act of filing the third case while petitioners’ motion for reconsideration was still
pending constituted forum shopping.

The rule against forum shopping and the "twin-dismissal rule"

In Yap v. Chua:81

Forum shopping is the institution of two or more actions or proceedings involving the same parties for the same cause of action, either simultaneously or successively,
on the supposition that one or the other court would make a favorable disposition. Forum shopping may be resorted to by any party against whom an adverse judgment
or order has been issued in one forum, in an attempt to seek a favorable opinion in another, other than by appeal or a special civil action for certiorari. Forum shopping
trifles with the courts, abuses their processes, degrades the administration of justice and congest court dockets. What iscritical is the vexation brought upon the courts
and the litigants by a party who asks different courts to rule on the same or related causes and grant the same or substantially the same reliefs and in the process creates
the possibility of conflicting decisions being renderedby the different fora upon the same issues. Willful and deliberate violation of the rule against forum shopping is a
ground for summary dismissal of the case; it may also constitute direct contempt.

To determine whether a party violated the rule against forum shopping, the most important factor toask is whether the elements of litis pendentiaare present, or whether
a final judgment in one case will amount to res judicatain another; otherwise stated, the test for determining forum shopping is whether in the two (or more) cases
pending, there is identity of parties, rights or causes of action, and reliefs sought.82 (Emphasis supplied)

29
When respondents filed the third case, petitioners’ motion for reconsideration of the dismissal of the second case was still pending. Clearly, the order of dismissal was
not yet final since it could still be overturned upon reconsideration, or even on appeal to a higher court.

Moreover, petitioners were not prohibited from filing the motion for reconsideration. This court has already stated in Narciso v. Garcia83 that a defendant has the right to
file a motion for reconsideration of a trial court’s order denying the motion to dismiss since "[n]o rule prohibits the filing of such a motion for reconsideration."84 The
second case, therefore, was still pending when the third case was filed.

The prudent thing that respondents could have done was to wait until the final disposition of the second case before filing the third case. As it stands, the dismissal of
the second case was without prejudice to the re-filing of the same claim, in accordance with the Rules of Civil Procedure. In their haste to file the third case, however,
they unfortunately transgressed certain procedural safeguards, among which are the rules on litis pendentiaand res judicata.

In Yap:

Litis pendentiaas a ground for the dismissal of a civil action refers to that situation wherein another action is pending between the same parties for the same cause of
action, such that the second action becomes unnecessary and vexatious. The underlying principle of litis pendentia is the theory that a party is not allowed to vex
another more than once regarding the same subject matter and for the same cause of action. This theory is founded on the public policy that the same subject matter
should not be the subject of controversy incourts more than once, in order that possible conflicting judgments may be avoided for the sake of the stability of the rights
and status of persons.

The requisites of litis pendentiaare: (a) the identity of parties, or at least such as representing the same interests in both actions; (b) the identity of rights asserted and
relief prayed for, the relief being founded on the same facts; and (c) the identity of the two cases such that judgment in one, regardless ofwhich party is successful,
would amount to res judicatain the other.85 (Emphasis supplied)

There is no question that there was an identity of parties, rights, and reliefs in the second and third cases. While it may be true that the trial court already dismissed the
second case when the third case was filed, it failed to take into account that a motion for reconsideration was filed in the second case and, thus, was still pending.
Considering that the dismissal of the second case was the subject of the first certiorari case and this present petition for review, it can be reasonably concluded that the
second case, to this day, remains pending.

Hence, when respondents filed the third case, they engaged in forum shopping. Any judgment by this court on the propriety of the dismissal of the second case will
inevitably affect the disposition of the third case.

This, in fact, is the reason why there were two different petitions for certiorari before the appellate court. The omnibus order dated July 30, 2004 denied two pending
motions by petitioners: (1) the motion for reconsideration in the second case and (2) the motion to dismiss in the third case. Since petitioners are barred from filing a
second motion for reconsideration of the second case, the first certiorari case was filed before the appellate court and is now the subject of this review. The denial of
petitioners’ motion for reconsideration in the third case, however, could still be the subject of a separate petition for certiorari. That petition would be based now on the
third case, and not on the second case.

This multiplicity of suits is the veryevil sought to be avoided by the rule on forum shopping. In Dy v. Mandy Commodities Co., Inc.,86 the rule is that:

Once there is a finding of forum shopping, the penalty is summary dismissal not only of the petition pending before this Court, but also of the other case that is pending
in a lower court. This is so because twin dismissal is a punitive measure to those who trifle with the orderly administration of justice.87 (Emphasis supplied)

The rule originated from the 1986 case of Buan v. Lopez, Jr.88 In Buan, petitioners filed a petition for prohibition with this court while another petition for prohibition
with preliminary injunction was pending before the Regional Trial Court of Manila involving the same parties and based on the same set of facts. This court, in
dismissing both actions, stated:

Indeed, the petitioners in both actions . . . have incurred not only the sanction of dismissal oftheir case before this Court in accordance with Rule 16 of the Rules of
Court, but also the punitive measure of dismissal of both their actions, that in this Court and that in the Regional Trial Court as well. Quite recently, upon substantially
identical factual premises, the Court en banchad occasion to condemn and penalize the act of litigants of filing the same suit in different courts, aptly described as
"forum shopping[.]"89

The rule essentially penalizes the forum shopper by dismissing all pending actions on the same claim filed in any court. Accordingly, the grant of this petition would
inevitably result in the summary dismissal of the third case. Any action, therefore, which originates from the third case pending with any court would be barred by res
judicata.

Because of the severity of the penalty of the rule, an examination must first be made on the purpose of the rule.1âwphi1 Parties resort to forum shopping when they file
several actions of the same claim in different forums in the hope of obtaining a favorable result. It is prohibited by the courts as it "trifle[s] with the orderly
administration of justice."90

In this case, however, the dismissal of the first case became final and executory upon the failure of respondents’counsel to file the appropriate pleading. They filed the
correct pleading the second time around but eventually sought its dismissal as they"[suspected] that their counsel is not amply protecting their interests as the case is not
moving for almost three (3) years."91 The filing of the third case, therefore, was not precisely for the purpose of obtaining a favorable result butonly to get the case
moving, in an attempt to protect their rights.

It appears that the resolution on the merits of the original controversy between the parties has long beenmired in numerous procedural entanglements. While it might be
more judicially expedient to apply the "twin-dismissal rule" and disallow the proceedings in the third case to continue, it would not serve the ends of substantial justice.
Courts of justice must always endeavor to resolve cases on their merits, rather than summarily dismiss these on technicalities: [C]ases should be determined on the
merits, after all parties have been given full opportunity to ventilate their causes and defenses, rather than on technicalities or procedural imperfections. In that way, the
ends of justice would be served better. Rules of procedure are mere tools designed to expedite the decision or resolution of cases and other matters pending in court. A
strict and rigid application of rules, resulting in technicalities that tend to frustrate rather than promote substantial justice, must be avoided.In fact, Section 6 of Rule 1
states that the Rules [on Civil Procedure] shall be liberally construed in order to promote their objective of ensuring the just, speedy and inexpensive disposition of
every action and proceeding.92 (Emphasis supplied)

The rule on forum shopping will not strictly apply when it can be shown that (1) the original case has been dismissed upon request of the plaintiff for valid procedural
reasons; (2) the only pending matter is a motion for reconsideration; and (3) there are valid procedural reasons that serve the goal of substantial justice for the fresh
new· case to proceed.
30
The motion for reconsideration filed in the second case has since been dismissed and is now the subject of a petition for certiorari. The third case filed apparently
contains the better cause of action for the plaintiffs and is now being prosecuted by a counsel they are more comfortable with. Substantial justice will be better served if
respondents do not fall victim to the labyrinth in the procedures that their travails led them. It is for this reason that we deny the petition. WHEREFORE, the petition is
DENIED. The Regional Trial Court of Manila, Branch 6 is ordered to proceed with Civil Case No. 02-105251 with due and deliberate dispatch.

SO ORDERED.

G.R. No. 197122, June 15, 2016

INGRID SALA SANTAMARIA AND ASTRID SALA BOZA, Petitioners, v. THOMAS CLEARY, Respondent.

G.R. No. 197161

KATHRYN GO-PEREZ, Petitioner, v. THOMAS CLEARY, Respondent.

DECISION

LEONEN, J.:

This case stems from a motion for court authorization to take deposition in Los Angeles by respondent Thomas Cleary, an American citizen and Los Angeles resident
who filed a civil suit against petitioners Ingrid Sala Santamaria, Astrid Sala Boza, and Kathryn Go-Perez before the Regional Trial Court of Cebu.

We resolve whether a foreigner plaintiff residing abroad who chose to file a civil suit in the Philippines is allowed to take deposition abroad for his direct testimony on
the ground that he is "out of the Philippines" pursuant to Rule 23, Section 4(c)(2) of the Rules of Court.

These two separate Petitions1 assail the Court of Appeals' (1) August 10, 2010 Decision2 that granted Thomas Cleary's (Cleary) Petition for Certiorari and reversed the
trial court's Orders3 denying Cleary's Motion for Court Authorization to Take Deposition4 before the Consulate- General of the Philippines in Los Angeles; and (2) May
11, 2011 Resolution5 that denied reconsideration.

On January 10, 2002, Cleary, an American citizen with office address in California, filed a Complaint6 for specific performance and damages against Miranila Land
Development Corporation, Manuel S. Go, Ingrid Sala Santamaria (Santamaria), Astrid Sala Boza (Boza), and Kathyrn Go-Perez (Go-Perez) before the Regional Trial
Court of Cebu.

The Complaint involved shares of stock of Miranila Land Development Corporation, for which Cleary paid US$191,250.00.7 Cleary sued in accordance with the Stock
Purchase and Put Agreement he entered into with Miranila Land Development Corporation, Manuel S. Go, Santamaria, Boza, and Go-Perez. Paragraph 9.02 of the
Agreement provides:ChanRoblesVirtualawlibrary

Any suit, action or proceeding with respect to this Agreement may be brought in (a) the courts of the State of California, (b) the United States District Court for the
Central District of California, or (c) the courts of the country of Corporation's incorporation, as Cleary may elect in his sole discretion, and the Parties hereby submit to
any such suit, action proceeding or judgment and waives any other preferential jurisdiction by reason of domicile.8chanroblesvirtuallawlibrary

Cleary elected to file the case in Cebu.

Santamaria, Boza, and Go-Perez filed their respective Answers with Compulsory Counterclaims.9 The trial court then issued a notice of pre-trial conference dated July
4, 2007.10chanrobleslaw

31
In his pre-trial brief, Cleary stipulated that he would testify "in support of the allegations of his complaint, either on the witness stand or by oral
deposition."11 Moreover, he expressed his intent in availing himself "of the modes of discovery under the rules."12chanrobleslaw

On January 22, 2009, Cleary moved for court authorization to take deposition.13 He prayed that his deposition be taken before the Consulate-General of the Philippines
in Los Angeles and be used as his direct testimony.14chanrobleslaw

Santamaria and Boza opposed15 the Motion and argued that the right to take deposition is not absolute.16 They claimed that Cleary chose the Philippine system to file his
suit, and yet he deprived the court and the parties the opportunity to observe his demeanor and directly propound questions on him.17chanrobleslaw

Go-Perez filed a separate Opposition,18 arguing that the oral deposition was not intended for discovery purposes if Cleary deposed himself as plaintiff.19 Since he elected
to file suit in the Philippines, he should submit himself to the procedures and testify before the Regional Trial Court of Cebu.20 Moreover, Go-Perez argued that oral
deposition in the United States would prejudice, vex, and oppress her and her co-petitioners who would need to incur costs to attend.21chanrobleslaw

The trial court denied Cleary's Motion for Court Authorization to Take Deposition in the Order22 dated June 5, 2009. It held that depositions are not meant to be a
substitute for actual testimony in open court. As a rule, a deponent must be presented for oral examination at trial as required under Rule 132, Section 1 of the Rules of
Court. "As the supposed deponent is the plaintiff himself who is not suffering from any impairment, physical or otherwise, it would be best for him to appear in court
and testify under oath[.]"23 The trial court also denied reconsideration.24chanrobleslaw

Cleary elevated the case to the Court of Appeals.

On August 10, 2010, the Court of Appeals granted Cleary's Petition for Certiorari and reversed the trial court's ruling.25cralawred It held that Rule 23, Section 1 of the
Rules of Court allows the taking of depositions, and that it is immaterial that Cleary is the plaintiff himself.26 It likewise denied reconsideration.27chanrobleslaw

Hence, the present Petitions were filed.

Petitioners Ingrid Sala Santamaria and Astrid Sala Boza maintain in their appeal that the right of a party to take the deposition of a witness is not absolute.28 Rather, this
right is subject to the restrictions provided by Rule 23, Section 1629 of the Rules of Court and jurisprudence.30 They cite Northwest Airlines v. Cruz,31 in that absent any
compelling or valid reason, the witness must personally testify in open court according to the general rules on examination of witnesses under Rule 132 of the Rules of
Court.32chanrobleslaw

Likewise, petitioners Santamaria and Boza submit that Cleary cannot, for his sole convenience, substitute his open-court testimony by having his deposition taken in the
United States.33 This will be very costly, time-consuming, disadvantageous, and extremely unfair to petitioners and their counsels who are based in the
Philippines.34chanrobleslaw

Petitioners Santamaria and Boza argue that the proposed deposition in this case is not for discovery purposes as Cleary is the plaintiff himself.35 The Court of Appeals
Decision gives foreigners undue advantage over Filipino litigants in cases under similar circumstances, where the parties and the presiding judge do not have the
opportunity to personally examine and observe the conduct of the testifying witness.36 Thus, the court's suggestion for written interrogatories is also not proper as open-
court testimony is different from mere serving of written interrogatories.37chanrobleslaw

Lastly, petitioners Santamaria and Boza claim that Cleary's sole allegation that he is a resident "out of the Philippines" does not warrant departure from open-court trial
procedure under Rule 132, Section 1 of the Rules of Court.38chanrobleslaw

In her Petition, petitioner Kathryn Go-Perez makes two (2) arguments. First, she contends that granting a petition under Rule 65 involves a finding of grave abuse of
discretion, but the Court of Appeals only found "error" in the trial court orders.39 She cites Triplex Enterprises v. PNB-Republic Bank40 and Yu v. Reyes-Carpio,41 in that
a writ of certiorari is restricted to extraordinary cases where the act of the lower court is void.42 It is designed to correct errors of jurisdiction and not errors of
judgment.43People v. Hubert Webb44 has held that the use of discovery procedures is directed to the sound discretion of the trial judge and certiorari will be issued only
to correct errors of jurisdiction.45 It cannot correct errors of procedure or mistakes in the findings or conclusions by the lower court.46chanrobleslaw

Second, petitioner Go-Perez submits that the Court of Appeals erred in disregarding Rule 23, Section 16 of the Rules of Court, which imposes limits on the right to take
deposition.47 Cleary's self-deposition in the United States, which is not for discovery purposes, is oppressive, vexatious, and bordering on harassment.48 The Court of
Appeals also erred in ignoring applicable jurisprudence such as Northwest, where this Court found that the deposition taken in the United States was to accommodate
the petitioner's employee who was there, and not for discovery purposes. Thus, the general rules on examination of witnesses under Rule 132 of the Rules of Court
should be observed.49chanrobleslaw

Lastly, petitioner Go-Perez contends that the Court of Appeals ignored Rule 132, Section 1 of the Rules of Court, which provides that a witness must testify in open
court.50 That Cleary is the plaintiff himself is material as there is nothing for him to discover when he deposes himself.51chanrobleslaw

On the other hand, respondent Thomas Cleary maintains that Rule 23, Section 4 of the Rules of Court on the taking of deposition applies.52 He is "out of the
Philippines" as an American citizen residing in the United States. This is true even when he entered the Stock Purchase and Put Agreement with petitioners in 1999 and
filed the case in 2009.53 Cleary cites Dasmariñas Garments v. Reyes54 and San Luis v. Rojas.55 The trial court even "previously scheduled the hearing subject to the
notice from the Department of Foreign Affairs for the taking of deposition."56 However, this was later disallowed upon petitioners' opposition.57chanrobleslaw

Respondent submits that the rules on depositions do not authorize nor contemplate any intervention by the court in the process. All that is required under the rules is that
"reasonable notice" be given "in writing to every other party to the action[.]"58 Thus, the trial court's discretion in ruling on whether a deposition may be taken is not
unlimited.59chanrobleslaw

Respondent adds that this Court has allowed the taking of testimonies through deposition in lieu of their actual presence at trial.60 He argues that with the new rules,
depositions serve as both a method of discovery and a method of presenting testimony.61 That the court cannot observe a deponent's demeanor is insufficient
justification to disallow deposition. Otherwise, no deposition can ever be taken as this objection is common to all depositions.62chanrobleslaw

Respondent contends that Northwest does not apply as the deposition in that case was found to have been improperly and irregularly taken.63chanrobleslaw

32
Lastly, respondent argues that the presiding judge of the trial court acted with grave abuse of discretion in denying his Motion for Court Authorization to Take
Deposition.64 That he is an American residing in the United States is undisputed. The trial court even issued the Order dated January 13, 2009 directing him to inform
the court of the "steps he . . . has taken and the progress of his request for a deposition taking filed, if any, with the Department of Justice."65 In later disallowing the
deposition as he is "not suffering from any impairment, physical or otherwise," the presiding judge acted in an arbitrary manner amounting to lack of jurisdiction.66 The
deposition sought is in accordance with the rules. The expenses in attending a deposition proceeding in the United States cannot be considered as a substantial reason to
disallow deposition since petitioners may send cross-interrogatories.67chanrobleslaw

These consolidated Petitions seek a review of the Court of Appeals Decision reversing the trial court's ruling and allowing Cleary to take his deposition in the United
States. Thus, the issues for resolution are:

chanRoblesvirtualLawlibraryFirst, whether the limitations for the taking of deposition under Rule 23, Section 16 of the Rules of Court apply in this case;
and cralawlawlibrary

Second, whether the taking of deposition under Rule 23, Section 4(c)(2) of the Rules of Court applies to a non-resident foreigner plaintiff's direct testimony.

Utmost freedom governs the taking of depositions to allow the widest scope in the gathering of information by and for all parties in relation to their pending case.68 The
relevant section in Rule 23 of the Rules of Court provides:ChanRoblesVirtualawlibrary

RULE 23
DEPOSITIONS PENDING ACTION

SECTION 1. Depositions pending action, when may be taken. - By leave of court after jurisdiction has been obtained over any defendant or over property which is the
subject of the action, or without such leave after an answer has been served, the testimony of any person, whether a party or not, may be taken, at the instance of any
party, by deposition upon oral examination or written interrogatories. The attendance of witnesses may be compelled by the use of a subpoena as provided in Rule 21.
Depositions shall be taken only in accordance with these Rules. The deposition of a person confined in prison may be taken only by leave of court on such terms as the
court prescribes. (Emphasis supplied)

As regards the taking of depositions, Rule 23, Section 1 is clear that the testimony of any person may be taken by deposition upon oral examination or written
interrogatories at the instance of any party.

San Luis explained that this provision "does not make any distinction or restriction as to who can avail of deposition."69 Thus, this Court found it immaterial that the
plaintiff was a non-resident foreign corporation and that all its witnesses were Americans residing in the United States.70chanrobleslaw

On the use of depositions taken, we refer to Rule 23, Section 4 of the Rules of Court. This Court has held that "depositions may be used without the deponent being
actually called to the witness stand by the proponent, under certain conditions and for certain limited purposes."71 These exceptional cases are enumerated in Rule 23,
Section 4(c) as follows:ChanRoblesVirtualawlibrary

SEC 4. Use of depositions. - At the trial or upon the hearing of a motion or an interlocutory proceeding, any part or all of a deposition, so far as admissible under the
rules of evidence, may be used against any party who was present or represented at the taking of the deposition or who had due notice thereof, in accordance with any
one of the following provisions:

chanRoblesvirtualLawlibrary. . . .

(c) The deposition of a witness, whether or not a party, may be used by any party for any purpose if the court finds: (1) that the witness is dead; or (2) that the witness
resides at distance more than one hundred (100) kilometers from the place of trial or hearing, or is out of the Philippines, unless it appears that his absence was
procured by the party offering the deposition; or (3) that the witness is unable to attend or testify because of age, sickness, infirmity, or imprisonment; or (4) that the
party offering the deposition has been unable to procure the attendance of the witness by subpoena; or (5) upon application and notice, that such exceptional
circumstances exist as to make it desirable, in the interest of justice and with due regard to the importance of presenting the testimony of witnesses orally in open court,
to allow the deposition to be used[.] (Emphasis supplied)

The difference between the taking of depositions and the use of depositions taken is apparent in Rule 23, which provides separate sections to govern them.
Jurisprudence has also discussed the importance of this distinction and its implications:ChanRoblesVirtualawlibrary

The availability of the proposed deponent to testify in court does not constitute "good cause" to justify the court's order that his deposition shall not be taken. That the
witness is unable to attend or testify is one of the grounds when the deposition of a witness may be used in court during the trial. But the same reason cannot be
successfully invoked to prohibit the taking of his deposition.

The right to take statements and the right to use them in court have been kept entirely distinct. The utmost freedom is allowed in taking depositions; restrictions are
imposed upon their use. As a result, there is accorded the widest possible opportunity for knowledge by both parties of all the facts before the trial. Such of this
testimony as may be appropriate for use as a substitute for viva voce examination may be introduced at the trial; the remainder of the testimony, having served its
purpose in revealing the facts to the parties before trial, drops out of the judicial picture.

. . . [U]nder the concept adopted by the new Rules, the deposition serves the double function of a method of discovery — with use on trial not necessarily contemplated
— and a method of presenting testimony. Accordingly, no limitations other than relevancy and privilege have been placed on the taking of depositions, while the use at
the trial is subject to circumscriptions looking toward the use of oral testimony wherever practicable.72 (Emphasis supplied)

The rules and jurisprudence support greater leeway in allowing the parties and their witnesses to be deposed in the interest of collecting information for the speedy and
complete disposition of cases.

33
In opposing respondent's Motion for Court Authorization to Take Deposition, petitioners contest at the deposition-taking stage. They maintain that the right to take
deposition is subject to the restrictions found in Rule 23, Section 16 of the Rules of Court on orders for the protection of parties and deponents.73chanrobleslaw

II

Rule 23, Section 16 of the Rules of Court is on orders for the protection of parties and deponents from annoyance, embarrassment, or oppression. The provision
reads:ChanRoblesVirtualawlibrary

SEC. 16. Orders for the protection of parties and deponents. — After notice is served for taking a deposition by oral examination, upon motion seasonably made by any
party or by the person to be examined and for good cause shown, the court in which the action is pending may make an order that the deposition shall not be taken, or
that it may be taken only at some designated place other than that stated in the notice, or that it may be taken only on written interrogatories, or that certain matters shall
not be inquired into, or that the scope of the examination shall be held with no one present except the parties to the action and their officers or counsel, or that after
being sealed the deposition shall be opened only by order of the court, or that secret processes, developments, or research need not be disclosed, or that the parties shall
simultaneously file specified documents or information enclosed in sealed envelopes to be opened as directed by the court or the court may make any other order which
justice requires to protect the party or witness from annoyance, embarrassment, or oppression. (Emphasis supplied)

The provision includes a full range of protective orders, from designating the place of deposition, limiting those in attendance, to imposing that it be taken through
written interrogatories. At the extreme end of this spectrum would be a court order that completely denies the right to take deposition. This is what the trial court issued
in this case.

While Section 16 grants the courts power to issue protective orders, this grant involves discretion on the part of the court, which "must be exercised, not arbitrarily,
capriciously or oppressively, but in a reasonable manner and in consonance with the spirit of the law, to the end that its purpose may be attained."74chanrobleslaw

A plain reading of this provision shows that there are two (2) requisites before a court may issue a protective order: (1) there must be notice; and (2) the order must be
for good cause shown. In Fortune Corporation v. Court of Appeals,75 this Court discussed the concept of good cause as used in the rules:ChanRoblesVirtualawlibrary

The matter of good cause is to be determined by the court in the exercise of judicial discretion. Good cause means a substantial reason—one that affords a legal
excuse. Whether or not substantial reasons exist is for the court to determine, as there is no hard and fast rule for determining the question as to what is meant by the
term "for good cause shown."

The requirement, however, that good cause be shown for a protective order puts the burden on the party seeking relief to show some plainly adequate reasons for the
order. A particular and specific demonstration of facts, as distinguished from conclusory statements, is required to establish good cause for the issuance of a protective
order. What constitutes good cause furthermore depends upon the kind of protective order that is sought.

In light of the general philosophy of full discovery of relevant facts and the board statement of scope in Rule 24, and in view of the power of the court under Sections 16
and 18 of said Rule to control the details of time, place, scope, and financing for the protection of the deponents and parties, it is fairly rare that it will be ordered that
a deposition should not be taken at all. All motions under these subparagraphs of the rule must be supported by "good cause" and a strong showing is required before a
party will be denied entirely the right to take a deposition. A mere allegation, without proof, that the deposition is being taken in bad faith is not a sufficient ground for
such an order. Neither is an allegation that it will subject the party to a penalty or forfeiture. The mere fact that the information sought by deposition has already been
obtained through a bill of particulars, interrogatories, or other depositions will not suffice, although if it is entirely repetitious a deposition may be forbidden. The
allegation that the deponent knows nothing about the matters involved does not justify prohibiting the taking of a deposition, nor that whatever the witness knows is
protected by the "work product doctrine," nor that privileged information or trade secrets will be sought in the course of the examination, nor that all the transactions
were either conducted or confirmed in writing.76 (Emphasis supplied, citations omitted)

Thus, we consider the trial court's explanation for its denial of respondent's Motion for Court Authorization to Take Deposition. The trial court's Order was based on
two (2) premises: first, that respondent should submit himself to our court processes since he elected to seek judicial relief with our courts; and second, that respondent
is not suffering from any impairment and it is best that he appear before our courts considering he is the plaintiff himself.77chanrobleslaw

III

On the first premise, apparent is the concern of the trial court in giving undue advantage to non-resident foreigners who file suit before our courts but do not appear to
testify. Petitioners support this ruling. They contend that the open-court examination of witnesses is part of our judicial system. Thus, there must be compelling reason
to depart from this procedure in order to avoid suits that harass Filipino litigants before our courts.78 Moreover, they argue that it would be costly, time-consuming, and
disadvantageous for petitioners and their counsels to attend the deposition to be taken in Los Angeles for the convenience of respondent.79chanrobleslaw

In the Stock Purchase and Put Agreement, petitioners and respondent alike agreed that respondent had the sole discretion to elect the venue for filing any action with
respect to it.

Paragraph 9.02 of the Agreement is clear that the parties "waive any other preferential jurisdiction by reason of domicile."80 If respondent filed the suit in the United
States—which he had the option to do under the Agreement—this would have been even more costly, time-consuming, and disadvantageous to petitioners who are all
Filipinos residing in the Philippines.

There is no question that respondent can file the case before our courts. With respondent having elected to file suit in Cebu, the bone of contention now is on whether he
can have his deposition taken in the United States. The trial court ruled that respondent should consequently submit himself to the processes and procedures under the
Rules of Court.

Respondent did avail himself of the processes and procedures under the Rules of Court when he filed his Motion. He invoked Rule 23, Section 4(c)(2) of the Rules of
Court and requested to have his deposition taken in Los Angeles as he was "out of the Philippines."

Moreover, Rule 23, Section 1 of the Rules of Court no longer requires leave of court for the taking of deposition after an answer has been served. According to
respondent, he only sought a court order when the Department of Foreign Affairs required one so that the deposition may be taken before the Philippine Embassy or
Consulate.81chanrobleslaw
34
That neither the presiding judge nor the parties will be able to personally examine and observe the conduct of a deponent does not justify denial of the right to take
deposition. This objection is common to all depositions.82 Allowing this reason will render nugatory the provisions in the Rules of Court that allow the taking of
depositions.

As suggested by the Court of Appeals, the parties may also well agree to take deposition by written interrogatories83 to afford petitioners the opportunity to cross-
examine without the need to fly to the United States.84chanrobleslaw

The second premise is also erroneous. That respondent is "not suffering from any impairment, physical or otherwise" does not address the ground raised by respondent
in his Motion. Respondent referred to Rule 23, Section 4(c)(2) of the Rules of Court, in that he was "out of the Philippines."85 This Section does not qualify as to the
condition of the deponent who is outside the Philippines.

IV

Petitioners argue that the deposition sought by respondent is not for discovery purposes as he is the plaintiff himself.86 To support their contention, they cite Northwest,
where this Court held that Rule 132 of the Rules of Court—on the examination of witnesses in open court—should be observed since the deposition was only to
accommodate the petitioner's employee who was in the United States, and not for discovery purposes.87chanrobleslaw

Jurisprudence has discussed how "[u]nder the concept adopted by the new Rules, the deposition serves the double function of a method of discovery—with use on trial
not necessarily contemplated—and a method of presenting testimony."88 The taking of depositions has been allowed as a departure from open-court
testimony. Jonathan Landoil International Co. Inc. v. Spouses Mangundadatu89 is instructive:ChanRoblesVirtualawlibrary

The Rules of Court and jurisprudence, however, do not restrict a deposition to the sole function of being a mode of discovery before trial. Under certain conditions and
for certain limited purposes, it may be taken even after trial has commenced and may be used without the deponent being actually called to the witness stand.
In Dasmariñas Garments v. Reyes, we allowed the taking of the witnesses' testimonies through deposition, in lieu of their actual presence at the trial.

Thus, "[d]epositions may be taken at any time after the institution of any action, whenever necessary or convenient. There is no rule that limits deposition-taking only
to the period of pre-trial or before it; no prohibition against the taking of depositions after pre-trial." There can be no valid objection to allowing them during the process
of executing final and executory judgments, when the material issues of fact have become numerous or complicated.

In keeping with the principle of promoting the just, speedy and inexpensive disposition of every action and proceeding, depositions are allowed as a "departure from
the accepted and usual judicial proceedings of examining witnesses in open court where their demeanor could be observed by the trial judge." Depositions are
allowed, provided they are taken in accordance with the provisions of the Rules of Court (that is, with leave of court if the summons have been served, without leave
of court if an answer has been submitted); and provided, further, that a circumstance for their admissibility exists.

....

When a deposition does not conform to the essential requirements of law and may reasonably cause material injury to the adverse party, its taking should not be
allowed. This was the primary concern in Northwest Airlines v. Cruz. In that case, the ends of justice would be better served if the witness was to be brought to the trial
court to testify. The locus of the oral deposition therein was not within the reach of ordinary citizens, as there were time constraints; and the trip required a travel visa,
bookings, and a substantial travel fare. In People v. Webb, the taking of depositions was unnecessary, since the trial court had already admitted the Exhibits on which
the witnesses would have testified. (Emphasis supplied)90chanroblesvirtuallawlibrary

Petitioners rely on Northwest in that absent any compelling or valid reason, the witness must personally testify in open court.91 They add that the more recent Republic
v. Sandiganbayan92 reiterated the rulings in Northwest,93 specifically, that Northwest emphasized that the "court should always see to it that the safeguards for the
protection of the parties and deponents are firmly maintained."94 Moreover, "[w]here the deposition is taken not for discovery purposes, but to accommodate the
deponent, then the deposition should be rejected in evidence."95Northwest and Republic are not on all fours with this case.

Northwest involved a deposition in New York found to have been irregularly taken. The deposition took place on July 24, 1995, two (2) days before the trial court
issued the order allowing deposition.96 The Consul that swore in the witness and the stenographer was different from the Consulate Officer who undertook the
deposition proceedings.97 In this case, on the other hand, deposition taking was not allowed by the trial court to begin with.

In Northwest, respondent Camille Cruz's opposition to the notice for oral deposition included a suggestion for written interrogatories as an alternative.98 This would
have allowed cross-interrogatories, which would afford her the opportunity to rebut matters raised in the deposition in case she had contentions. However, this
suggestion was denied by the trial court for being time-consuming.99 In this case, petitioners argued even against written interrogatories for being a mile of difference
from open-court testimony.100chanrobleslaw

In Republic, the issue involved Rule 23, Section 4(c)(3) of the Rules of Court in relation to Rule 130, Section 47 on testimonies and depositions at a former
proceeding.101 The deposition of Maurice Bane was taken in London for one case, and what the court disallowed was its use in another case.102chanrobleslaw

In sum, Rule 23, Section 1 of the Rules of Court gives utmost freedom in the taking of depositions. Section 16 on protection orders, which include an order that
deposition not be taken, may only be issued after notice and for good cause shown. However, petitioners' arguments in support of the trial court's Order denying the
taking of deposition fails to convince as good cause shown.

The civil suit was filed pursuant to an agreement that gave respondent the option of filing the case before our courts or the courts of California. It would have been even
more costly, time-consuming, and disadvantageous to petitioners had respondent filed the case in the United States.

Further, it is of no moment that respondent was not suffering from any impairment. Rule 23, Section 4(c)(2) of the Rules of Court, which was invoked by respondent,
governs the use of depositions taken. This allows the use of a deposition taken when a witness is "out of the Philippines."

In any case, Rule 23 of the Rules of Court still allows for objections to admissibility during trial. The difference between admissibility of evidence and weight of
evidence has long been laid down in jurisprudence. These two are not to be equated. Admissibility considers factors such as competence and relevance of submitted

35
evidence. On the other hand, weight is concerned with the persuasive tendency of admitted evidence.103chanrobleslaw

The pertinent sections of Rule 23 on admissibility are:ChanRoblesVirtualawlibrary

SEC. 6. Objections to admissibility. - Subject to the provisions of section 29 of this Rule, objection may be made at the trial or hearing to receiving in evidence any
deposition or part thereof for any reason which would require the exclusion of the evidence if the witness were then present and testifying.

....

SEC. 29. Effect of errors and irregularities in depositions. . . .

....

(c) As to competency and relevancy of evidence. — Objections to the competency of a witness or the competency, relevancy [sic], or materiality of testimony are not
waived by failure to make them before or during the taking of the deposition, unless the ground of the objection is one which might have been obviated or removed if
presented at that time[.]

As regards weight of evidence, "the admissibility of the deposition does not preclude the determination of its probative value at the appropriate time."104 In resorting to
depositions, respondent takes the risk of not being able to fully prove his case.

Thus, we agree with the Court of Appeals in granting the Petition for Certiorari and reversing the trial court's denial of respondent's Motion for Court Authorization to
Take Deposition.

WHEREFORE, the Petitions are DENIED for lack of merit.

SO ORDERED.chanRoblesvirtualLawlibrary

36
February 19, 2018

G.R. No. 226130

LILIA S. DUQUE and HEIRS OF MATEO DUQUE, namely: LILIA S. DUQUE, ALMA D. BALBONA, PERPETUA D. HATA, MARIA NENITA D.
DIENER, GINA D. YBANEZ, and GERVACIO S. DUQUE, Petitioners
vs.
SPOUSES BARTOLOME D. YU, JR. and JULIET O. YU and DELIA DUQUE CAPACIO, Respondents

DECISION

VELASCO, JR., J.:

This Petition for Review on Certiorari under Rule 45 of the Rules of Court assails the Decision1 and the Resolution2 dated September 30, 2014 and July 14, 2016,
respectively, of the Court of Appeals (CA) in CA-G.R. CV No. 04197.

The facts are undisputed.

The herein petitioner Lilia S. Duque and her late husband, Mateo Duque (Spouses Duque), were the lawful owners of a 7 ,000-square meter lot in Lambug, Badian,
Cebu, covered by Tax Declaration (TD) No. 05616 (subject property). On August 28, 1995, Spouses Duque allegedly executed a Deed of Donation over the subject
property in favor of their daughter, herein respondent Delia D. Capacio (Capacio ), who, in turn, sold a portion thereof, i.e., 2, 7 45 square meters, to her herein co-
respondents Spouses Bartolome D. Yu, Jr. and Juliet O. Yu (Spouses Yu).3

With that, Spouses Duque lodged a Verified Complaint for Declaration of Non-Existence and Nullity of a Deed of Donation and Deed of Absolute Sale and
Cancellation of TD (Complaint) against the respondents before the Regional Trial Court (RTC) of Barili, Cebu, docketed as Civil Case No. CEB-BAR-469, claiming
that the signature in the Deed of Donation was forged. Spouses Duque then prayed (1) to declare the Deeds of Donation and of Absolute Sale null and void; (2) to
cancel TD No. 01-07- 05886 in the name of respondent Juliet Yu (married to respondent Bartolome Yu); and (3) to revive TD No. 05616 in the name Mateo Duque
(married to petitioner Lilia Duque ).4

In her Answer, respondent Capacio admitted that the signature in the Deed of Donation was, indeed, falsified but she did not know the author thereof. Respondents
Spouses Yu, for their part, refuted Spouses Duque's personality to question the genuineness of the Deed of Absolute Sale for it was their daughter who forged the Deed
of Donation. They even averred that Spouses Duque's action was already barred by prescription.5

On September 26, 2008, a Motion for Admission by Adverse Party under Rule 26 of the Rules of Court (Motion for Admission) was filed by respondents Spouses Yu
requesting the admission of these documents: (1) Real Estate Mortgage (REM); (2) Deed of Donation; (3) Contract of Lease; (4) TD No. 07-05616; (5) TD No. 14002-
A; (6) Deed of Absolute Sale; and (7) TD No. 01-07-05886. In an Order dated October 3, 2008,6 Spouses Duque were directed to comment thereon but they failed to
do so. By their silence, the trial court, in an Order dated November 24, 2008,7 pronounced that they were deemed to have admitted the same.8

Thus, during trial, instead of presenting their evidence, respondents Spouses Yu moved for demurrer of evidence in view of the aforesaid pronouncement. Spouses
Duque vehemently opposed such motion. In an Order dated January 5, 2011,9 the trial court granted the demurrer to evidence and, thereby, dismissed the Complaint.
Spouses Duque sought reconsideration, which was denied in an Order dated September 21, 2011.10

On appeal, the CA, in its now assailed Decision dated September 30, 2014, affirmed in toto the aforesaid Orders. It agreed with the trial court that Spouses Duque's non-
compliance with the October 3, 2008 Order resulted in the implied admission of the Deed of Donation's authenticity, among other documents. Notably, Spouses Duque
did not even seek reconsideration thereof. With such admission, the trial court ruled that Spouses Duque have nothing more to prove or disprove and their entire
evidence has been rendered worthless.11 Spouses Duque moved for reconsideration but was denied for lack of merit in the questioned CA Resolution dated July 14,
2016. Meanwhile, in view of Mateo Duque's demise, his heirs substituted for him as petitioners in this case.

Hence, this petition imputing errors on the part of the CA (1) in holding that petitioners' failure to reply to the request for admission is tantamount to an implied
admission of the authenticity and genuineness of the documents subject thereof; and (2) in not ruling that the dismissal of the petitioners' Complaint based on an
improper application of the rule on implied admission will result in unjust enrichment at the latter's expense.12

The petition is impressed with merit.

The scope of a request for admission under Rule 26 of the Rules of Court and a party's failure to comply thereto are respectively detailed in Sections 1 and 2 thereof,
which read:

SEC. 1. Request for admission. - At any time after issues have been joined, a party may file and serve upon any other party a written request for the admission by the
latter of the genuineness of any material and relevant document described in and exhibited with the request or of the truth of any material and relevant matter of fact set
forth in the request. Copies of the documents shall be delivered with the request unless copies have already been furnished.

SEC. 2. Implied admission. - Each of the matters of which an admission is requested shall be deemed admitted unless, within a period designated in the request, which
shall not be less than fifteen (15) days after service thereof, or within such further time as the court may allow on motion, the party to whom the request is directed files
and serves upon the party requesting the admission a sworn statement either denying specifically the matters of which an admission is requested or setting forth in detail
the reasons why he cannot truthfully either admit or deny those matters.
37
Objections to any request for admission shall be submitted to the court by the party requested within the period for and prior to the filing of his sworn statement as
contemplated in the preceding paragraph and his compliance therewith shall be deferred until such objections are resolved, which resolution shall be made as early as
practicable. (Emphases supplied.)

Clearly, once a party serves a request for admission as to the truth of any material and relevant matter of fact, the party to whom such request is served has 15 days
within which to file a sworn statement answering it. In case of failure to do so, each of the matters of which admission is requested shall be deemed admitted. This rule,
however, admits of an exception, that is, when the party to whom such request for admission is served had already controverted the matters subject of such request in an
earlier pleading. Otherwise stated, if the matters in a request for admission have already been admitted or denied in previous pleadings by the requested party, the latter
cannot be compelled to admit or deny them anew. In turn, the requesting party cannot reasonably expect a response to the request and, thereafter, assume or
even demand the application of the implied admission rule in Section 2, Rule 26.13 The rationale is that "admissions by an adverse party as a mode of discovery
contemplates of interrogatories that would clarify and tend to shed light on the truth or falsity of the allegations in a pleading, and does not refer to a mere reiteration of
what has already been alleged in the pleadings; or else, it constitutes an utter redundancy and will be a useless, pointless process which petitioner should not be
subjected to."14

Here, the respondents served the request for admission on the petitioners to admit the genuineness and authenticity of the Deed of Donation, among other documents.
But as pointed out by petitioners, the matters and documents being requested to be admitted have already been denied and controverted in the previous pleading, that is,
Verified Complaint for Declaration of Non-Existence and Nullity of a Deed of Donation and Deed of Absolute Sale and Cancellation of TD. In fact, the forgery
committed in the Deed of Donation was the very essence of that Complaint, where it was alleged that being a forged document, the same is invalid and without force
and legal effect. Petitioners, therefore, need not reply to the request for admission. Consequently, they cannot be deemed to have admitted the Deed of Donation's
genuineness and authenticity for their failure to respond thereto.

Moreover, in respondents Spouses Yu's criminal case for estafa15 against respondent Capacio, which they filed immediately upon receipt of a summon in relation to the
Complaint of Spouses Duque, one of the allegations therein was the forgery committed in the very same Deed of Donation, which authenticity and genuineness they
want petitioners to admit in their request for admission. In support thereof, respondents Spouses Yu even utilized the questioned document report of the Philippine
National Police (PNP) Regional Crime Laboratory Office certifying that the signature in the Deed of Donation is a forgery. Thus, it is then safe to conclude that their
request for admission is a sham.

Having said that there was no implied admission of the genuineness and authenticity of the Deed of Donation, this Court, thus, holds that it was also an error for the trial
court to grant the demurrer to evidence.

To recapitulate, the demurrer to evidence was anchored on the alleged implied admission of the Deed of Donation's genuineness and authenticity. The trial court granted
the demurrer holding that with the said implied admission, respondents Spouses Yu's claim became undisputed and Spouses Duque have nothing more to prove or
disprove. This is despite its own findings that the opinion of the handwriting expert and the Answer of respondent Capacio, both confirmed the fact of forgery. The trial
court easily disregarded this on account of the said implied admission. The CA, on appeal, affirmed the trial court.

But in view of this Court's findings that there was no implied admission to speak of, the demurrer to evidence must, therefore, be denied and the Orders granting it shall
be considered void.

Section 1, Rule 33 of the Rules of Court provides for the consequences of a reversal on appeal of a demurrer to evidence, thus:

SECTION 1. Demurrer to evidence. After the plaintiff has completed the presentation of his evidence, the defendant may move for dismissal on the ground that upon
the facts and the law the plaintiff has shown no right to relief. If his motion is denied, he shall have the right to present evidence. If the motion is granted but on appeal
the order of dismissal is reversed he shall be deemed to have waived the right to present evidence.

Citing Generoso Villanueva Transit Co., Inc. v. Javellana,16 this Court in Radiowealth Finance Company v. Spouses Del Rosario17 explained the consequences of a
demurrer to evidence in this wise:

The rationale behind the rule and doctrine is simple and logical.1âшphi1 The defendant is permitted, without waiving his right to offer evidence in the event that his
motion is not granted, to move for a dismissal (i.e., demur to the plaintiffs evidence) on the ground that upon the facts as thus established and the applicable law, the
plaintiff has shown no right to relief. If the trial court denies the dismissal motion, i.e., finds that plaintiffs evidence is sufficient for an award of judgment in the
absence of contrary evidence, the case still remains before the trial court which should then proceed to hear and receive the defendants evidence so that all the facts and
evidence of the contending parties may be properly placed before it for adjudication as well as before the appellate courts, in case of appeal. Nothing is lost. The
doctrine is but in line with the established procedural precepts in the conduct of trials that the trial court liberally receive all proffered evidence at the trial to enable it to
render its decision with all possibly relevant proofs in the record, thus assuring that the appellate courts upon appeal have all the material before them necessary to make
a correct judgment, and avoiding the need of remanding the case for retrial or reception of improperly excluded evidence, with the possibility thereafter of still another
appeal, with all the concomitant delays. The rule, however, imposes the condition by the same token that if his demurrer is granted by the trial court, and the order of
dismissal is reversed on appeal, the movant loses his right to present evidence in his behalf and he shall have been deemed to have elected to stand on the insufficiency
of plaintiffs case and evidence. In such event, the appellate court which reverses the order of dismissal shall proceed to render judgment on the merits on the basis of
plaintiffs evidence. (Underscoring in the original, italics partly in the original and partly supplied.)

In short, defendants who present a demurrer to the plaintiffs' evidence retain the right to present their own evidence, if the trial court disagrees with them; if it agrees
with them, but on appeal, the appellate court disagrees and reverses the dismissal order, the defendants lose the right to present their own evidence. The appellate court
shall, in addition, resolve the case and render judgment on the merits, inasmuch as a demurrer aims to discourage prolonged litigations.18

With this Court's denial of the demurrer to evidence, it will now proceed to rule on the merits of the Complaint solely on the basis of the petitioners' evidence on
record.1âшphi1

Here, it would appear from the trial court's January 5, 2011 Order that the evidence for the petitioners consists mainly of the testimony of the handwriting expert witness
and the Answer of respondent Capacio, which both confirmed that the signature in the Deed of Donation was, indeed, falsified. With these pieces of evidence and
nothing more, this Court is inclined to grant the petitioners' Complaint. Being a falsified document, the Deed of Donation is void and inexistent. As such, it cannot be
the source of respondent Capacio's transferable right over a portion of the subject property. Being a patent nullity, respondent Capacio could not validly transfer a
portion of the subject property in favor of respondents Spouses Yu under the principle of "Nemo dat quod non habet," which means "one cannot give what one does not
have."19 As a consequence, the subsequent Deed of Absolute Sale executed by respondent Capacio in favor of respondents Spouses Yu has no force and effect as the
former is not the owner of the property subject of the sale contract. In effect, the tax declarations in the respective names of respondents Capacio and Juliet O. Yu are
hereby ordered cancelled and the tax declaration in the name of Mateo Duque, et al. is ordered restored.
38
WHEREFORE, premises considered, the petition is GRANTED. The CA Decision and Resolution dated September 30, 2014 and July 14, 2016, respectively, in CA-
G.R. CV No. 04197 are hereby REVERSED and SET ASIDE and a new judgment is hereby rendered as follows: (1) the petitioners' Complaint is
hereby GRANTED; (2) both the Deeds of Donation and of Absolute Sale are declared VOID; (3) Tax Declaration Nos. 14002-A and 01-07-05886 in the names of
respondents Capacio and Juliet O. Yu, respectively, are hereby CANCELLED; and (4) Tax Declaration No. 05616 in the name of Mateo Duque, et al. is
hereby RESTORED.

SO ORDERED.

January 25, 2017

39
G.R. No. 205045

COMMISSIONER OF INTERNAL REVENUE, Petitioner

vs.
SAN MIGUEL CORPORATION, Respondent,

x-----------------------x

G.R. No. 205723

COMMISSIONER OF INTERNAL REVENUE, Petitioner,

vs.
SAN MIGUEL CORPORATION, Respondent.

DECISION

LEONEN, J.:

These consolidated cases consider whether "San Mig Light" is a new brand or a variant of one of San Miguel Corporation's existing beer brands, and whether the
Bureau of Internal Revenue may issue notices of discrepancy that effectively changes "San Mig Light"'s classification from new brand to variant. The issues involve an
application of Section 143 of the 1997 National Internal Revenue Code (Tax Code), as amended, on the definition of a variant, which is subject to a higher excise tax
rate than a new brand. This case also applies the requirement in Rep. Act No. 9334 that reclassification of certain fermented liquor products introduced between January
1, 1997 and December 31, 2003 can only be done by an act of Congress.

The Petition1 docketed as G.R. No. 205045 assails the Court of Tax Appeals En Bane's September 20, 2012 Decision2 affirming the Third Division's grant of San
Miguel Corporation's refund claim in CTA Case No. 7708, and the December 11, 2012 Resolution3 denying reconsideration. The Commissioner of Internal Revenue
prays for the reversal and setting aside of the assailed Decision and Resolution, as well as the issuance of a new one denying San Miguel Corporation's claim for tax
refund or credit.4

On the other hand, the Petition5 docketed as G.R. No. 205723 and consolidated with G.R. No. 205045 assails the Court of Tax Appeals En Bane's October 24, 2012
Decision6 dismissing the Commissioner of Internal Revenue's appeal, and the February 4, 2013 Resolution7 denying reconsideration. The Commissioner of Internal
Revenue prays for the reversal and setting aside of the assailed Decision and Resolution, the issuance of a new one remanding the case to the Court of Tax Appeals for
the production of evidence in San Miguel Corporation's possession, or, in the alternative, the dismissal of the Petitions in CTA Case Nos. 7052, 7053, and 7405.8

On October 19, 1999, Virgilio S. De Guzman (De Guzman), San Miguel Corporation's Former Assistant Vice President for Finance, wrote the Bureau of Internal
Revenue Excise Tax Services Assistant Commissioner Leonardo B. Albar (Assistant Commissioner Albar) to request the registration of and authority to manufacture
"San Mig Light," to be taxed at ₱12.15 per liter.9 The letter dated October 27, 1999 granted this request. 10

On November 3, 1999, De Guzman advised Assistant Commissioner Albar that "San Mig Light" would be sold at a suggested net retail price of ₱21.15 per liter or
₱6.98 per bottle, less value-added tax and specific tax. "San Mig Light" would also be classified under "Medium Priced Brand" to be taxed at ₱9.15 per liter. 11

On January 28, 2002, Alfredo R. Villacorte (Villacorte), San Miguel Corporation's Vice President and Manager of the Group Tax Services, wrote the Bureau of Internal
Revenue Chief of the Large Taxpayers Assistance Division II (LTAD II) to request information on the tax rate and classification of "San Mig Light" and another beer
product named "Gold Eagle King." 12

On February 7, 2002, LTAD II Acting Chief Conrado P. Item replied to Villacorte's letter. 13 He confirmed that based on the submitted documents, San Miguel
Corporation was allowed to register, manufacture, and sell "San Mig Light" as a new brand, had been paying its excise tax for a considerable length of time, and that the
tax classification and rate of "San Mig Light" as a new brand were in order. 14

However, on May 28, 2002, Edwin R. Abella (Assistant Commissioner Abella), Bureau of Internal Revenue Large Taxpayers Service Assistant Commissioner, issued a
Notice of Discrepancy against San Miguel Corporation. The Notice stated that "San Mig Light" was a variant of its existing beer products and must, therefore, be
subjected to the higher excise tax rate for variants.15 Specifically, for the year 1999, "San Mig Light" should be taxed at the rate of ₱19.91 per liter instead of ₱9.15 per
liter; and for the year 2000, the 12% increase should be based on the rate of Pl9.91 per liter under Section l 43(C)(2) of the Tax Code.16 Hence, the Notice demanded
payments of deficiency excise tax in the amount of

₱824,750,204.97, exclusive of increments for years 1999 to April 2002.17

The Finance Manager of San Miguel Corporation's Beer Division wrote a letter-reply dated July 9, 2002 requesting the withdrawal of the Notice of Discrepancy.18 San
Miguel Corporation stated, among other things, that "San Mig Light" was not a variant of any of its existing beer brands because of "the distinctive shape, color
scheme[,] and general appearance"; and the "different alcohol content and innovative low calorie formulation."19 It also emphasized that the Escudo logo was not a beer
brand logo but a corporate logo.20

On October 14, 2002, Assistant Commissioner Abella wrote a letterrejoinder reiterating its finding that "San Mig Light Pale Pilsen" was truly a variant of "San Miguel
Pale Pilsen."21 The letter-rejoinder cited certain statements in San Miguel Corporation's publication, "Kaunlaran," and the corporation's Annual Report as support for its
finding. 22

On November 20, 2002, Villacorte replied by requesting that "San Mig Light be reconfirmed as a new brand . . . the deficiency assessment be set aside and the demand
for payment be withdrawn."23

Subsequently, three (3) conferences were held on the "San Mig Light" tax classification issue. At the conference held on December 16, 2003, Commissioner Guillermo
Parayno, Jr. (Commissioner Parayno) informed San Miguel Corporation that five (5) members of the Bureau of Internal Revenue Management Committee voted that
"San Mig Light" was a variant of "Pale Pilsen in can," while two (2) members voted that it was a variant of "Premium," a high-priced beer product of San Miguel
Corporation.24

40
On January 6, 2004, Commissioner Parayno wrote San Miguel Corporation and validated the findings that "San Mig Light" was a variant of "San Miguel Pale Pilsen in
can," subject to the same excise tax rate of the latter-that is, P13.61 per liter-and that an assessment for deficiency excise tax against San Miguel Corporation was
forthcoming.25

On January 28, 2004, a Preliminary Assessment Notice (PAN) was issued against San Miguel Corporation for deficiency excise tax in the amount of P852,039,418.15,
inclusive of increments, purportedly for the removals of "San Mig Pale Pilsen Light," from 1999 to January 7, 2004.26

On February 4, 2004, a Notice of Discrepancy was issued against San Miguel Corporation on an alleged deficiency excise tax in the amount of ₱28,876,108.84, from
January 8, 2004 to January 29, 2004.27

Accordingly, on March 24, 2004, Bureau of Internal Revenue Deputy Commissioner Estelita C. Aguirre (Deputy Commissioner Aguirre) issued a PAN against San
Miguel Corporation for ₱29,967,465.37 representing deficiency excise tax, inclusive of increments, from January 8, 2004 to January 29, 2004.28

On April 12, 2004 and May 26, 2004, Deputy Commissioner Aguirre issued two (2) Formal Letters of Demand29 to San Miguel Corporation with the accompanying
Final Assessment Notice (FAN) Nos. LTS TF 004-06-02 and LTS TF 129-05-04, respectively, directing San Miguel Corporation to pay deficiency excise taxes in the
amounts of:

(a) ₱876,098,898.83, inclusive of interest until April 30, 2004, for the period of November to December 1999 at ₱12.52 per liter, and January 2000 to January 7, 2004 at
₱13.61 per liter;30 and

(b) P30,763,133.68, inclusive of interest until June 30, 2004, for the period January 8, 2004 to January 29, 2004.31

San Miguel filed a Protest/Request for Reconsideration against each FAN. 32

On August 17, 2004 and August 20, 2004, Former Large Taxpayers Service Officer-in-Charge Deputy Commissioner Kim S. Jacinto-Henares informed San Miguel
Corporation of the denial of the Protest/Request for Reconsiderations against the two (2) FANs "for lack of legal and factual basis."33

G.R. No. 205723

On September 1 7, 2004 and September 22, 2004, San Miguel Corporation filed before the Court of Tax Appeals Petitions for Review, docketed as CTA Case Nos.
7052 and 7053, assailing the denials of its Protest/Request for Reconsiderations of the deficiency excise tax assessments.34

To prevent the issuance of additional excise tax assessments on San Mig Light products and the disruption of its operations, San Miguel Corporation paid excise taxes
at the rate of ₱13.61 beginning February 1, 2004.35

On December 28, 2005, San Miguel Corporation filed with the Bureau of Internal Revenue its first refund claim. The claim sought the refund of ₱782,238,161.47 for
erroneous excise taxes collected on San Mig Light products from February 2, 2004 to November 30, 2005.36

Due to inaction on its claim, on January 31, 2006, San Miguel Corporation filed before the Court Tax Appeals a Petition for Review docketed as CTA Case No.
7405.37 The Court of Tax Appeals, upon motion, later consolidated CTA Case No. 7405 with CTA Case Nos. 7052 and 7053.38

The Court of Tax Appeals First Division, in its Decision39 dated October 18, 2011, granted the Petitions in CTA Case Nos. 7052 and 7053 and partially granted the
Petition in CTA Case No. 7405.40 The Decision's dispositive portion reads:

WHEREFORE, in view of the foregoing considerations, the consolidated Petitions for Review in CTA Case Nos. 7052 and 7053 are hereby GRANTED. The (1) [sic]
letters dated August 17, 2004 and August 20, 2004 of respondents, denying petitioner's Protest/Request for Reconsideration dated May 12, 2004 and July 7, 2004,
respectively, and (2) Assessment Notice Nos. LTS TF 004-06-02 and LTS TF 129-05-04 issued by respondent against petitioner for the periods of November 1999 to
January 7, 2004 and January 8, 2004 to January 29, 2004, are hereby CANCELLED and SET ASIDE.

Moreover, the Petition for Review in CTA Case No. 7405 is hereby PARTIALLY GRANTED. Respondent CIR is hereby ORDERED to REFUND petitioner, or to
ISSUE A TAX CREDIT CERTIFICATE in its favor in, the amount of SEVEN HUNDRED EIGHTY ONE MILLION FIVE HUNDRED FOURTEEN THOUSAND
SEVEN HUNDRED SEVENTY TWO PESOS AND FIFTY SIX CENTAVOUS [sic] (₱781,514,772.56), as determined below:

Claims for Over-Payment of Excise Taxes per P782,238,161.47

Petition

Less: Deductions from claims

1. Excise taxes due on SML removals per P420,252.62

ODI which were not paid per Returns
Polo Plant

2. Excise taxes due per Excise Tax 121,975.00

Returns were Lesser than [the] amounts
per ODI Polo Plant

3. SML Removals per shipping

Memorandum were Greater than OD Is

San Fernando Plant Bacolod Plant 181,080.11

41
 81.18

723,388.91

Recomputed Excise Taxes for P781,5l4,772.56

Refund/Issuance of Tax Credit Certificate

SO ORDERED.41 (Emphasis in the original)

The Commissioner filed a Motion for Reconsideration with Motion for Production of Documents praying that San Miguel Corporation be compelled to produce the
following: (a) "Kaunlaran" publication for the months of October 1999 and January 2000; (b) 1999 Annual Report to stockholders; and (c) copies of the video footage
of two (2) San Mig Light commercials as seen in its website.42 The Commissioner claimed "that the admission of said documents would lead to a better illumination of
the oucome of the case."43

The Court of Appeals First Division denied the Motions in its Resolution44 dated February 6, 2012:

WHEREFORE, premises considered, respondent's [CIR's] MOTION FOR RECONSIDERATION WITH MOTION FOR PRODUCTION OF DOCUMENTS
(Re: Decision promulgated 18 October 2011) and SUPPLEMENTAL MOTION FOR PRODUCTION OF DOCUMENTS are hereby DENIED for lack of merit.

SO ORDERED.45 (Emphasis in the original)

The Court of Tax Appeals En Banc, in its Decision46 dated October 24, 2012, dismissed the Petition and affirmed the Division.47 It also denied reconsideration through
the Resolution48 dated February 4, 2013.

Hence, the Commissioner on Internal Revenue filed the Petition for Review on Certiorari49 docketed as G.R. No. 205723.

G.R. No. 205045

On August 30, 2007, San Miguel Corporation filed its second refund claim with the Bureau of Internal Revenue in the amount of ₱926,389,172.02.50 Due to inaction on
its claim, San Miguel Corporation filed before the Court Tax Appeals a Petition for Review, docketed as CTA Case No. 7708, on November 27, 2007.51

The Court of Tax Appeals Third Division, in its Decision dated January 7, 2011, partially granted the Petition.52 It also denied reconsideration.53 The Decision's
dispositive portion reads:

WHEREFORE, the Petition for Review is hereby PARTIALLY GRANTED. Accordingly, respondent is hereby ORDERED TO REFUND or ISSUE A TAX
CREDIT CERTIFICATE in favor [of] petitioner in the amount of ₱926,169,056.74, representing erroneously, or excessively and/or illegally collected, and overpaid
excise taxes on "San Mig Light" during the period from December 1, 2005 up to July 31, 2007.

SO ORDERED.54 (Emphasis in the original)

On September 20, 2012, the Court of Tax Appeals En Banc55 affirmed the Division and thereafter also denied reconsideration. The Decision's dispositive portion reads:

WHEREFORE, the present Petition for Review is hereby DENIED for lack of merit. The assailed decision and resolution of the Third Division of this Court
promulgated on January 7, 2011 and March 23, 2011, respectively, in CTA Case No. 7708 entitled "SAN MIGUEL CORPORATION vs. COMMISSIONER OF
INTERNAL REVENUE["], are hereby AFFIRMED.

Accordingly, petitioner is ORDERED TO REFUND or ISSUE A TAX CREDIT CERTIFICATE in favor of respondent in the amount of ₱926,169,056.74,
representing erroneously, excessively and/or illegally collected and overpaid excise taxes on "San Mig Light" during the period December 1, 2005 to July 31, 2007.

SO ORDERED.56 (Emphasis in the original)

Hence, the Commissioner on Internal Revenue filed the Petition for Review on Certiorari57 docketed as G.R. No. 205045. The two (2) cases were consolidated.

Respondent San Miguel Corporation filed its Comment58 on the Petitions, to which petitioner filed its Reply.59 The parties then filed their respective memoranda. 60

The issues for resolution are:

First, whether a motion for production of documents and objects may be availed of after the court has rendered judgment;

Second, whether petitioner complied with all requisites of a motion for production of documents and objects under Rule 27, such as a showing of good cause;

Third, whether "San Mig Light" is a new brand and not a variant of "San Miguel Pale Pilsen";

Fourth, whether the "classification freeze" in Rep. Act No. 9334 refers to the freezing of classification of brands, and not to the freezing of net retail prices of brands;

Fifth, whether the deficiency excise tax assessments issued by the Bureau of Internal Revenue against respondent dated April 12, 2004 and May 26, 2004 are valid; and

Lastly, whether respondent is entitled to a refund of excess payment of excise taxes on "San Mig Light" in the amount of ₱781,514, 772.56 for the period from February
1, 2004 up to November 30, 2005, and in the amount of ₱926,169,056.74 for the period from December 1, 2005 up to July 31, 2007.

42
Petitioner questions the denial of its Motion for Production of Documents and Objects. It argues that this motion may be filed after pretrial or during the pendency of
the action since Rule 27, Section 1 of the Revised Rules of Civil Procedure does not explicitly provide that it must be availed of before trial or pre-trial.61 Petitioner
contends that all requisites for filing the motion were satisfied.62 Assuming the Motion was belatedly filed, it should have been granted in the higher interest of justice. 63

Respondent counters that the Motions, which were filed only after the Court of Tax Appeals Division rendered judgment, were belatedly filed since this mode of
discovery must be availed of before trial.64 Rule 27, Section 1 used the phrase, "in which an action is pending"; thus, this defines which court has authority to resolve the
motion and does not define when the motion must be made.65 Respondent contends that this remedy must be availed of before trial in order to facilitate and expedite
case preparations.66 Respondent adds that petitioner also failed to comply with the requisites for the motion. Specifically, the Motion did not adequately describe the
contents of the documents to be produced to show their materiality and relevance to the case.67

Respondent further submits that the documents and objects are immaterial and irrelevant to the issues. The documents petitioner sought to have respondent produce are
referred to as having to do with the taste, alcohol content, and calories of "San Mig Light," when the Tax Code definition of variant has nothing to do with these
matters.68 Respondent submits that in filing the Motions after judgment, petitioner was effectively seeking new trial, which it may only avail itself of with "newly
discovered" evidence. 69

Rule 27, Section 1 of the Revised Rules of Civil Procedure provides:

SECTION 1. Motion for production or inspection; order. - Upon motion of any party showing good cause therefore, the court in which an action is pending may (a)
order any party to produce and permit the inspection and copying or photographing, by or on behalf of the moving party, of any designated documents, papers, books,
accounts, letters, photographs, objects or tangible things, not privileged, which constitute or contain evidence material to any matter involved in the action and which
are in his possession, custody or control; or (b) order any party to permit entry upon designated land or other property in his possession or control for the purpose of
inspecting, measuring, surveying, or photographing the property or any designated relevant object or operation thereon. The order shall specify the time, place and
manner of making the inspection and taking copies and photographs, and may prescribe such terms and conditions as are just. (Emphasis supplied)

Rule 18, Section 6 of the Rules of Court on Pre-Trial requires that the pre-trial briefs shall include "[a] manifestation of their having availed or intention to avail
themselves of discovery procedures."

On July 13, 2004, this Court approved A.M. No. 03-1-09-SC, otherwise known as the Rule on Guidelines to be Observed by Trial Court Judges and Clerks of Court in
the Conduct of Pre-Trial and Use of Deposition - Discovery Measures. Among other things, these rules direct trial courts to require parties to submit, at least three (3)
days before pretrial, pre-trial briefs containing "[a] manifestation of the parties of their having availed or their intention to avail themselves of discovery procedures or
referral to commissioners."70

Republic v. Sandiganbayan71 explained the purpose and policy behind modes of discovery:

The truth is that "evidentiary matters" may be inquired into and learned by the parties before the trial. Indeed, it is the purpose and policy of the law that the parties -
before the trial if not indeed even before the pre-trial - should discover or inform themselves of all the facts relevant to the action, not only those known to them
individually, but also those known to their adversaries; in other words, the desideratum is that civil trials should not be carried on in the dark; and the Rules of Court
make this ideal possible through the deposition-discovery mechanism set forth in Rules 24 to 29. The experience in other jurisdictions has been that ample discovery
before trial, under proper regulation, accomplished one of the most necessary ends of modern procedure: it not only eliminates unessential issues from trials thereby
shortening them considerably, but also requires parties to play the game with the cards on the table so that the possibility of/air settlement before trial is measurably
increased ....

As just intimated, the deposition-discovery procedure was designed to remedy the conceded inadequacy and cumbersomeness of the pre-trial functions of notice-giving,
issue-formulation and fact revelation theretofore performed primarily by the pleadings.

The various modes or instruments of discovery are meant to serve (1) as a device, along with the pre-trial hearing under Rule 20, to narrow and clarify the basic issues
between the parties, and (2) as a device for ascertaining the facts relative to those issues. The evident purpose is, to repeat, to enable the parties, consistent with
recognized privileges, to obtain the fullest possible knowledge of the issues and facts before civil trials and thus prevent that said trials are carried on in the
dark. 72 (Emphasis supplied, citations omitted)

Specifically, this Court discussed the importance of a motion for production of documents under Rule 27 of the Rules of Court in expediting time-consuming trials:

This remedial measure is intended to assist in the administration of justice by facilitating and expediting the preparation of cases for trial and guarding against
undesirable surprise and delay; and it is designed to simplify procedure and obtain admissions of facts and evidence, thereby shortening costly and time-consuming
trials. It is based on ancient principles of equity. More specifically, the purpose of the statute is to enable a party-litigant to discover material information which, by
reason of an opponent's control, would otherwise be unavailable for judicial scrutiny, and to provide a convenient and summary method of obtaining material and
competent documentary evidence in the custody or under the control of an adversary. It is a further extension of the concept of pretrial. 73 (Emphasis supplied)

Consistent with litigation's quest for truth, parties should welcome every opportunity in attaining this objective, such as acting in good faith to reveal material
documents. 74

The scope of discovery must be liberally construed, as a general rule, to serve its purpose of providing the parties with essential information to reach an amicable
settlement or to expedite trial. 75 "Courts, as arbiters and guardians of truth and justice, must not countenance any technical ploy to the detriment of an expeditious
settlement of the case or to a fair, full and complete determination on its merits."76

Rule 27, Section 1 of the Rules of Court does not provide when the motion may be used. Hence, the allowance of a motion for production of document rests on the
sound discretion of the court where the case is pending, with due regard to the rights of the parties and the demands of equity and justice. 77

In Eagleridge Development Corporation v. Cameron Granville 3 Asset Management, Inc., 78 we held that a motion for production of documents may be availed of even
beyond the pre-trial stage, upon showing of good cause as required under Rule 27.79 We allowed the production of documents because the petitioner was able to show
"good cause" and relevance of the documents sought to be produced, and the trial court had not yet rendered its judgment.

In this case, petitioner filed its Motion for Production of Documents after the Court of Tax Appeals Division had rendered its judgment. According to the Court of Tax
Appeals Division, the documents sought to be produced were already discussed in the Commissioner's Memorandum dated October 21, 2010 and were already
considered by the tax court when it rendered its Decision. 80 If petitioner believed that the evidence in the custody and control of respondent "would provide a better

43
illumination of the outcome of the case," it should have sought their production at the earliest opportunity as it had been already aware of their existence.81 Petitioner's
laxity is inexcusable and is a fatal omission.

Under these circumstances, there was indeed no further need for the production of documents and objects desired by petitioner. These pieces of evidence could have
served no useful purpose. On the contrary, the production of those documents after judgment defeats the purpose of modes of discovery in expediting case preparation
and shortening trials.

We find no reversible error on the part of the Court of Tax Appeals En Banc in affirming the Division's denial of petitioner's Motion for Production of Documents.

G.R. No. 187512               June 13, 2012

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
YOLANDA CADACIO GRANADA, Respondent.

DECISION

SERENO, J.:

This is a Rule 45 Petition seeking the reversal of the Resolutions dated 23 January 20091 and 3 April 20092 issued by the Court of Appeals (CA), which affirmed the
grant by the Regional Trial Court (RTC) of the Petition for Declaration of Presumptive Death of the absent spouse of respondent.

44
In May 1991, respondent Yolanda Cadacio Granada (Yolanda) met Cyrus Granada (Cyrus) at Sumida Electric Philippines, an electronics company in Paranaque where
both were then working. The two eventually got married at the Manila City Hall on 3 March 1993. Their marriage resulted in the birth of their son, Cyborg Dean
Cadacio Granada.

Sometime in May 1994, when Sumida Electric Philippines closed down, Cyrus went to Taiwan to seek employment. Yolanda claimed that from that time, she had not
received any communication from her husband, notwithstanding efforts to locate him. Her brother testified that he had asked the relatives of Cyrus regarding the latter’s
whereabouts, to no avail.

After nine (9) years of waiting, Yolanda filed a Petition to have Cyrus declared presumptively dead. The Petition was raffled to Presiding Judge Avelino Demetria of
RTC Branch 85, Lipa City, and was docketed as Sp. Proc. No. 2002-0530.

On 7 February 2005, the RTC rendered a Decision declaring Cyrus as presumptively dead.

On 10 March 2005, petitioner Republic of the Philippines, represented by the Office of the Solicitor General (OSG), filed a Motion for Reconsideration of this
Decision. Petitioner argued that Yolanda had failed to exert earnest efforts to locate Cyrus and thus failed to prove her well-founded belief that he was already dead.
However, in an Order dated 29 June 2007, the RTC denied the motion.

Petitioner filed a Notice of Appeal to elevate the case to the CA, presumably under Rule 41, Section 2(a) of the Rules of Court. Yolanda filed a Motion to Dismiss on
the ground that the CA had no jurisdiction over the appeal. She argued that her Petition for Declaration of Presumptive Death, based on Article 41 of the Family Code,
was a summary judicial proceeding, in which the judgment is immediately final and executory and, thus, not appealable.

In its 23 January 2009 Resolution, the appellate court granted Yolanda’s Motion to Dismiss on the ground of lack of jurisdiction. Citing Republic v. Bermudez-
Lorino,3 the CA ruled that a petition for declaration of presumptive death under Rule 41 of the Family Code is a summary proceeding. Thus, judgment thereon is
immediately final and executory upon notice to the parties.

Petitioner moved for reconsideration, but its motion was likewise denied by the CA in a Resolution dated 3 April 2009.4

Hence, the present Rule 45 Petition.

Issues

1. Whether the CA seriously erred in dismissing the Petition on the ground that the Decision of the RTC in a summary proceeding for the declaration of presumptive
death is immediately final and executory upon notice to the parties and, hence, is not subject to ordinary appeal

2. Whether the CA seriously erred in affirming the RTC’s grant of the Petition for Declaration of Presumptive Death under Article 41 of the Family Code based on the
evidence that respondent presented

Our Ruling

1. On whether the CA seriously erred in dismissing the Petition on the ground that the Decision of the RTC in a summary proceeding for the declaration of presumptive
death is immediately final and executory upon notice to the parties and, hence, is not subject to ordinary appeal

In the assailed Resolution dated 23 January 2009, the CA dismissed the Petition assailing the RTC’s grant of the Petition for Declaration of Presumptive Death of the
absent spouse under Article 41 of the Family Code. Citing Republic v. Bermudez-Lorino,5 the appellate court noted that a petition for declaration of presumptive death
for the purpose of remarriage is a summary judicial proceeding under the Family Code. Hence, the RTC Decision therein is immediately final and executory upon
notice to the parties, by express provision of Article 247 of the same Code. The decision is therefore not subject to ordinary appeal, and the attempt to question it
through a Notice of Appeal is unavailing.

We affirm the CA ruling.

Article 41 of the Family Code provides:

Art. 41. A marriage contracted by any person during the subsistence of a previous marriage shall be null and void, unless before the celebration of the subsequent
marriage, the prior spouse had been absent for four consecutive years and the spouse present has a well-founded belief that the absent spouse was already dead. In case
of disappearance where there is danger of death under the circumstances set forth in the provisions of Article 391 of the Civil Code, an absence of only two years shall
be sufficient.

For the purpose of contracting the subsequent marriage under the preceding paragraph the spouse present must institute a summary proceeding as provided in this
Code for the declaration of presumptive death of the absentee, without prejudice to the effect of reappearance of the absent spouse. (Underscoring supplied.)

Clearly, a petition for declaration of presumptive death of an absent spouse for the purpose of contracting a subsequent marriage under Article 41 of the Family Code is
a summary proceeding "as provided for" under the Family Code.

Further, Title XI of the Family Code is entitled "Summary Judicial Proceedings in the Family Law." Subsumed thereunder are Articles 238 and 247, which provide:

Art. 238. Until modified by the Supreme Court, the procedural rules in this Title shall apply in all cases provided for in this Code requiring summary court proceedings.
Such cases shall be decided in an expeditious manner without regard to technical rules.

x x x           x x x          x x x

Art. 247. The judgment of the court shall be immediately final and executory.

Further, Article 253 of the Family Code reads:

ART. 253. The foregoing rules in Chapters 2 and 3 hereof shall likewise govern summary proceedings filed under Articles 41, 51, 69, 73, 96, 124 and 217, insofar as
they are applicable.

45
Taken together, Articles 41, 238, 247 and 253 of the Family Code provide that since a petition for declaration of presumptive death is a summary proceeding, the
judgment of the court therein shall be immediately final and executory.

In Republic v. Bermudez-Lorino,6 the Republic likewise appealed the CA’s affirmation of the RTC’s grant of respondent’s Petition for Declaration of Presumptive
Death of her absent spouse. The Court therein held that it was an error for the Republic to file a Notice of Appeal when the latter elevated the matter to the CA, to wit:

In Summary Judicial Proceedings under the Family Code, there is no reglementary period within which to perfect an appeal, precisely because judgments rendered
thereunder, by express provision of Section 247, Family Code, supra, are "immediately final and executory."

x x x           x x x          x x x

But, if only to set the records straight and for the future guidance of the bench and the bar, let it be stated that the RTC’s decision dated November 7, 2001, was
immediately final and executory upon notice to the parties. It was erroneous for the OSG to file a notice of appeal, and for the RTC to give due course thereto. The
Court of Appeals acquired no jurisdiction over the case, and should have dismissed the appeal outright on that ground.

Justice (later Chief Justice) Artemio Panganiban, who concurred in the result reached by the Court in Republic v. Bermudez-Lorino, additionally opined that what the
OSG should have filed was a petition for certiorari under Rule 65, not a petition for review under Rule 45.

In the present case, the Republic argues that Bermudez-Lorino has been superseded by the subsequent Decision of the Court in Republic v. Jomoc,7 issued a few months
later.

In Jomoc, the RTC granted respondent’s Petition for Declaration of Presumptive Death of her absent husband for the purpose of remarriage. Petitioner Republic
appealed the RTC Decision by filing a Notice of Appeal. The trial court disapproved the Notice of Appeal on the ground that, under the Rules of Court,8 a record on
appeal is required to be filed when appealing special proceedings cases. The CA affirmed the RTC ruling. In reversing the CA, this Court clarified that while an action
for declaration of death or absence under Rule 72, Section 1(m), expressly falls under the category of special proceedings, a petition for declaration of presumptive
death under Article 41 of the Family Code is a summary proceeding, as provided for by Article 238 of the same Code. Since its purpose was to enable her to contract a
subsequent valid marriage, petitioner’s action was a summary proceeding based on Article 41 of the Family Code, rather than a special proceeding under Rule 72 of the
Rules of Court. Considering that this action was not a special proceeding, petitioner was not required to file a record on appeal when it appealed the RTC Decision to
the CA.

We do not agree with the Republic’s argument that Republic v. Jomoc superseded our ruling in Republic v. Bermudez-Lorino. As observed by the CA, the Supreme
Court in Jomoc did not expound on the characteristics of a summary proceeding under the Family Code. In contrast, the Court in Bermudez-Lorino expressly stated that
its ruling on the impropriety of an ordinary appeal as a vehicle for questioning the trial court’s Decision in a summary proceeding for declaration of presumptive death
under Article 41 of the Family Code was intended "to set the records straight and for the future guidance of the bench and the bar."

At any rate, four years after Jomoc, this Court settled the rule regarding appeal of judgments rendered in summary proceedings under the Family Code when it ruled in
Republic v. Tango:9

This case presents an opportunity for us to settle the rule on appeal of judgments rendered in summary proceedings under the Family Code and accordingly, refine our
previous decisions thereon.

Article 238 of the Family Code, under Title XI: SUMMARY JUDICIAL PROCEEDINGS IN THE FAMILY LAW, establishes the rules that govern summary court
proceedings in the Family Code:

ART. 238. Until modified by the Supreme Court, the procedural rules in this Title shall apply in all cases provided for in this Code requiring summary court
proceedings. Such cases shall be decided in an expeditious manner without regard to technical rules.

In turn, Article 253 of the Family Code specifies the cases covered by the rules in chapters two and three of the same title. It states:

ART. 253. The foregoing rules in Chapters 2 and 3 hereof shall likewise govern summary proceedings filed under Articles 41, 51, 69, 73, 96, 124 and 217, insofar as
they are applicable. (Emphasis supplied.)

In plain text, Article 247 in Chapter 2 of the same title reads:

ART 247. The judgment of the court shall be immediately final and executory.

By express provision of law, the judgment of the court in a summary proceeding shall be immediately final and executory. As a matter of course, it follows that no
appeal can be had of the trial court's judgment in a summary proceeding for the declaration of presumptive death of an absent spouse under Article 41 of the Family
Code. It goes without saying, however, that an aggrieved party may file a petition for certiorari to question abuse of discretion amounting to lack of jurisdiction. Such
petition should be filed in the Court of Appeals in accordance with the Doctrine of Hierarchy of Courts. To be sure, even if the Court's original jurisdiction to issue a
writ of certiorari is concurrent with the RTCs and the Court of Appeals in certain cases, such concurrence does not sanction an unrestricted freedom of choice of court
forum. From the decision of the Court of Appeals, the losing party may then file a petition for review on certiorari under Rule 45 of the Rules of Court with the
Supreme Court. This is because the errors which the court may commit in the exercise of jurisdiction are merely errors of judgment which are the proper subject of an
appeal.

In sum, under Article 41 of the Family Code, the losing party in a summary proceeding for the declaration of presumptive death may file a petition for certiorari with
the CA on the ground that, in rendering judgment thereon, the trial court committed grave abuse of discretion amounting to lack of jurisdiction. From the decision of the
CA, the aggrieved party may elevate the matter to this Court via a petition for review on certiorari under Rule 45 of the Rules of Court.

Evidently then, the CA did not commit any error in dismissing the Republic’s Notice of Appeal on the ground that the RTC judgment on the Petition for Declaration of
Presumptive Death of respondent’s spouse was immediately final and executory and, hence, not subject to ordinary appeal.

2. On whether the CA seriously erred in affirming the RTC’s grant of the Petition for Declaration of Presumptive Death under Article 41 of the Family Code based on
the evidence that respondent had presented

46
Petitioner also assails the RTC’s grant of the Petition for Declaration of Presumptive Death of the absent spouse of respondent on the ground that she had not adduced
the evidence required to establish a well-founded belief that her absent spouse was already dead, as expressly required by Article 41 of the Family Code. Petitioner cites
Republic v. Nolasco,10 United States v. Biasbas11 and Republic v. Court of Appeals and Alegro12 as authorities on the subject.

In Nolasco, petitioner Republic sought the reversal of the CA’s affirmation of the RTC’s grant of respondent’s Petition for Declaration of Presumptive Death of his
absent spouse, a British subject who left their home in the Philippines soon after giving birth to their son while respondent was on board a vessel working as a seafarer.
Petitioner Republic sought the reversal of the ruling on the ground that respondent was not able to establish his "well-founded belief that the absentee is already dead,"
as required by Article 41 of the Family Code. In ruling thereon, this Court recognized that this provision imposes more stringent requirements than does Article 83 of
the Civil Code.13 The Civil Code provision merely requires either that there be no news that the absentee is still alive; or that the absentee is generally considered to be
dead and is believed to be so by the spouse present, or is presumed dead under Articles 390 and 391 of the Civil Code. In comparison, the Family Code provision
prescribes a "well-founded belief" that the absentee is already dead before a petition for declaration of presumptive death can be granted. As noted by the Court in that
case, the four requisites for the declaration of presumptive death under the Family Code are as follows:

1. That the absent spouse has been missing for four consecutive years, or two consecutive years if the disappearance occurred where there is danger of death under the
circumstances laid down in Article 391, Civil Code;

2. That the present spouse wishes to remarry;

3. That the present spouse has a well-founded belief that the absentee is dead; and

4. That the present spouse files a summary proceeding for the declaration of presumptive death of the absentee.

In evaluating whether the present spouse has been able to prove the existence of a "well-founded belief" that the absent spouse is already dead, the Court in Nolasco
cited United States v. Biasbas,14 which it found to be instructive as to the diligence required in searching for a missing spouse.

In Biasbas, the Court held that defendant Biasbas failed to exercise due diligence in ascertaining the whereabouts of his first wife, considering his admission that that he
only had a suspicion that she was dead, and that the only basis of that suspicion was the fact of her absence.

Similarly, in Republic v. Court of Appeals and Alegro, petitioner Republic sought the reversal of the CA ruling affirming the RTC’s grant of the Petition for
Declaration of Presumptive Death of the absent spouse on the ground that the respondent therein had not been able to prove a "well-founded belief" that his spouse was
already dead. The Court reversed the CA, granted the Petition, and provided the following criteria for determining the existence of a "well-founded belief" under Article
41 of the Family Code:

For the purpose of contracting the subsequent marriage under the preceding paragraph, the spouse present must institute a summary proceeding as provided in this Code
for the declaration of presumptive death of the absentee, without prejudice to the effect of reappearance of the absent spouse.

The spouse present is, thus, burdened to prove that his spouse has been absent and that he has a well-founded belief that the absent spouse is already dead before the
present spouse may contract a subsequent marriage. The law does not define what is meant by a well-grounded belief. Cuello Callon writes that "es menester que su
creencia sea firme se funde en motivos racionales."

Belief is a state of the mind or condition prompting the doing of an overt act.1âwphi1 It may be proved by direct evidence or circumstantial evidence which may tend,
even in a slight degree, to elucidate the inquiry or assist to a determination probably founded in truth. Any fact or circumstance relating to the character, habits,
conditions, attachments, prosperity and objects of life which usually control the conduct of men, and are the motives of their actions, was, so far as it tends to explain or
characterize their disappearance or throw light on their intentions, competence [sic] evidence on the ultimate question of his death.

The belief of the present spouse must be the result of proper and honest to goodness inquiries and efforts to ascertain the whereabouts of the absent spouse and whether
the absent spouse is still alive or is already dead. Whether or not the spouse present acted on a well-founded belief of death of the absent spouse depends upon the
inquiries to be drawn from a great many circumstances occurring before and after the disappearance of the absent spouse and the nature and extent of the inquiries made
by present spouse. (Footnotes omitted, underscoring supplied.)

Applying the foregoing standards to the present case, petitioner points out that respondent Yolanda did not initiate a diligent search to locate her absent husband. While
her brother Diosdado Cadacio testified to having inquired about the whereabouts of Cyrus from the latter’s relatives, these relatives were not presented to corroborate
Diosdado’s testimony. In short, respondent was allegedly not diligent in her search for her husband. Petitioner argues that if she were, she would have sought
information from the Taiwanese Consular Office or assistance from other government agencies in Taiwan or the Philippines. She could have also utilized mass media
for this end, but she did not. Worse, she failed to explain these omissions.

The Republic’s arguments are well-taken. Nevertheless, we are constrained to deny the Petition.

The RTC ruling on the issue of whether respondent was able to prove her "well-founded belief" that her absent spouse was already dead prior to her filing of the
Petition to declare him presumptively dead is already final and can no longer be modified or reversed. Indeed, "[n]othing is more settled in law than that when a
judgment becomes final and executory, it becomes immutable and unalterable. The same may no longer be modified in any respect, even if the modification is meant to
correct what is perceived to be an erroneous conclusion of fact or law."15

WHEREFORE, premises considered, the assailed Resolutions of the Court of Appeals dated 23 January 2009 and 3 April 2009 in CA-G.R. CV No. 90165 are
AFFIRMED.

SO ORDERED.

47
December 13, 2017

G.R. No. 192048

DOUGLAS F. ANAMA, Petitioner,
vs.
CITIBANK, N.A. (formerly First National City Bank), Respondent.

DECISION

JARDELEZA, J.:

This is a petition for review on certiorari1 under Rule 45 of the Revised Rules of Court seeking to reverse and set aside the Decision2 dated November 19, 2009
(assailed Decision) and the Resolution3 dated April 20, 2010 (assailed Resolution) of the Court of Appeals (CA) in CA-G.R. SP No. 1077 48, denying petitioner's action
for revival of judgment.

In consideration for a loan obtained from respondent First National City Bank of New York (now Citibank, N.A.) (Citibank), on November 10, 1972, petitioner Douglas
F. Anama (Anama) executed a promissory note in the amount of ₱418,000.00 in favor of Citibank.4 To secure payment of the obligation, Anama also executed in favor
of Citibank a chattel mortgage over various industrial machineries and equipment located on his property at No. 1302, E. de los Santos Avenue, Quezon City.5 For
Anama's failure to pay the monthly installments due on the promissory note starting January 1974, Citibank filed a complaint for sum of money and replevin6 dated
November 13, 1974 (docketed as Civil Case No. 95991) with the Court of First Instance of Manila (now Regional Trial Court), Branch 11. Anama filed his answer with
counterclaim7 and his amended answer with counterclaim,8 alleging, among others, that his failure to pay the monthly installments was due to the fault of Citibank as it
refused to receive the checks he issued, and that the chattel mortgage was defective and void.9

48
On December 2, 1974, the Regional Trial Court (RTC), upon proof of default of Anama in the payment of his loan, issued an Order of Replevin over the machineries
and equipment covered by the chattel mortgage.10

On January 29, 1977, Citibank, alleging that the properties subject of the Order of Replevin which were taken by the Sheriff under his custody were not delivered to it,
filed a motion for [issuance of] alias writ of seizure.11 Citibank prayed that an alias writ of seizure be issued directing the Sheriff to seize the properties and to dispose
them in accordance with Section 6, Rule 60 of the Revised Rules of Court. The RTC granted the motion through its Resolution12 dated February 28, 1977. The Ex-
Officio Sheriff of Quezon City issued three receipts for the seized properties on March 1 7, 18, and 19, 1977.13 Anama filed a motion for reconsideration but this was
denied by the RTC in a Resolution14 dated March 18, 1977.

Anama then filed a petition for certiorari and prohibition with writ of preliminary injunction with the CA on March 21, 1977 (docketed as CAG. R. SP No. 06499) on
the ground that the above resolutions of the trial court were issued in excess of jurisdiction and with grave abuse of discretion because of the lack of evidence proving
Citibank's right to possession over the properties subject of the chattel mortgage.15

On July 30, 1982, the CA rendered a Decision16 (July 30, 1982 Decision) granting Anama's petition for certiorari and prohibition and nullifying the RTC's orders of
seizure, to wit:

WHEREFORE, the petition is granted. The questioned resolutions issued by the respondent judge in Civil Case No. 95991, dated February 28, 1977, and March 18,
1977, together with the writs and processes emanating or deriving therefrom, are hereby declared null and void ab initio.

The respondent ex-of[f]icio sheriff of Quezon City and the respondent First National City Bank are hereby ordered to return all the machineries and equipments with
their accessories seized, dismantled and hauled, to their original and respective places and positions in the shop flooring of the petitioner's premises where these articles
were, before they were dismantled, seized and hauled at their own expense. The said respondents are further ordered to cause the repair of the concrete foundations
destroyed by them including the repair of the electrical wiring and facilities affected during the seizure, dismantling and hauling.

The writ of preliminary injunction heretofore in effect is hereby made permanent. Costs against the private respondents.

SO ORDERED.17

On August 25, 1982, Citibank filed its petition for review on certiorari with this Court (docketed as G.R. No. 61508) assailing the July 30, 1982 Decision of the CA.18
On March 17, 1999, we promulgated a Decision19 dismissing Citibank's petition for lack of merit and affirming the July 30, 1982 Decision of the CA. An Entry of
Judgment20 was subsequently issued on April 12, 1999.

Meanwhile, on November 19, 1981, during the pendency of CA-G.R. SP No. 06499 in the CA, the fourth floor of the Manila City Hall, where Branch 11 of the R TC of
Manila and its records, including the records of Civil Case No. 95991 were located, was destroyed by fire.21

On February 10, 1982, Anama filed a petition for reconstruction of record22 in the RTC, which the latter granted in an Order23 dated May 3, 1982. On December 2,
1982, considering that G.R. No. 61508 was already pending before this Court, the R TC issued an Order24 directing that all pending incidents in Civil Case No. 95991
be suspended until G.R. No. 61508 has been resolved.

On March 12, 2009, Anama filed a petition for revival of judgment with the CA (docketed as CA-G.R. SP No. 107748).25 Anama sought to revive the CA's July 30,
1982 Decision in CA-G.R. SP No. 06499 and argued that Citibank's failure to file an action for the reconstitution of the records in the RTC in Civil Case No. 95991
constituted abandonment of its cause of action and complaint against Anama.26 In addition to the revival of the CA's July 30, 1982 Decision in CA-G.R. SP No. 06499,
Anama sought to remand the case to the RTC for further proceedings in Civil Case No. 95991, particularly his counterclaims against Citibank.27

In its comment, Citibank argued that the petition should be dismissed as an action for revival of judgment is within the exclusive original jurisdiction of the RTC. It also
argued that laches has set in against Anama for having slept on his rights for almost 10 years. Lastly, Citibank claimed that it did not abandon its money claim against
Anama when it did not initiate the reconstitution proceedings in the RTC.28

On November 19, 2009, the CA denied the petition for lack of jurisdiction. Pertinent portions of the assailed Decision reads:

[W]e find that respondent bank correctly question (sic) this Court's jurisdiction to entertain the instant petition to revive the July 30, 1982 decision in CA-G.R. SP No.
06499. While concededly filed within 10 years from the April 12, 1999 entry of the decision rendered in G.R. No. 61508, the petition should have been filed with the
appropriate Regional Trial Court which has exclusive original jurisdiction over all civil actions in which the subject of the litigation is incapable of pecuniary estimation
and/or all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising judicial or quasijudicial functions. x x x29

Anama filed his motion for reconsideration which the CA denied through its assailed Resolution30 dated April 20, 2010.

On June 10, 2010, Anama filed this petition31 and argued that his petition for revival of judgment should be filed in the court that issued the judgment sought to be
revived, the CA in this case.32

In its comment,33 Citibank agrees with the CA that jurisdiction over actions for revival of judgments is with the R TC.34 Citibank also argues that Anama's petition to
revive judgment is already barred by laches and that it did not waive or abandon its claim against Anama in Civil Case No. 95991.35

On December 30, 2010, Anama filed his reply.36

On August 25, 2016, Anama filed a manifestation37 reiterating the arguments on his petition. On February 17, 2017, Citibank filed its comment38 stressing that the CA
did not err in dismissing the petition to revive judgment on the ground of lack of jurisdiction. On March 16, 2017, Anama filed his reply.39

We deny the petition.

An action to revive a judgment is an action whose exclusive purpose is to enforce a judgment which could no longer be enforced by mere motion.40 Section 6, Rule 39
of the Revised Rules of Court provides:

Sec. 6. Execution by motion or by independent action. - A final and executory judgment or order may be executed on motion within five (5) years from the date of its
entry. After the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced by action. The revived judgment may also be
enforced by motion within five (5) years from the date of its entry and thereafter by action before it is barred by the statute of limitations.

49
Section 6 is clear. Once a judgment becomes final and executory, the prevailing party can have it executed as a matter of right by mere motion within five years from
the date of entry of judgment. If the prevailing party fails to have the decision enforced by a motion after the lapse of five years, the said judgment is reduced to a right
of action which must be enforced by the institution of a complaint in a regular court within 10 years from the time the judgment becomes final.41

Further, a revival suit is a new action, having for its cause of action the judgment sought to be revived.42 It is different and distinct from the original judgment sought to
be revived or enforced.43 It is a new and independent action, wherein the cause of action is the decision itself and not the merits of the action upon which the judgment
sought to be enforced is rendered. Revival of judgment is premised on the assumption that the decision to be revived, either by motion or by independent action, is
already final and executory.44

As an action for revival of judgment is a new action with a new cause of action, the rules on instituting and commencing actions apply, including the rules on
jurisdiction. Its jurisdictional requirements are not dependent on the previous action and the petition does not necessarily have to be filed in the same court which
rendered judgment.45

Jurisdiction is defined as the power and authority of the courts to hear, try and decide cases. What determines the jurisdiction of the court is the nature of the action
pleaded as appearing from the allegations in the complaint. The averments and the character of the relief sought are the ones to be consulted.46

The principle is that jurisdiction over the subject matter of a case is conferred by law and determined by the allegations in the complaint which comprise a concise
statement of the ultimate facts constituting the plaintiffs cause of action. The nature of an action, as well as which court or body has jurisdiction over it, is determined
based on the allegations contained in the complaint of the plaintiff, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims
asserted.47 Jurisdiction being a matter of substantive law, the established rule is that the statute in force at the time of the commencement of the action determines the
jurisdiction of the court.48

Batas Pambansa Bilang 129 (BP 129), otherwise known as the Judiciary Reorganization Act of 1980 and its amendments, is the law which confers jurisdiction to the
courts. Section 19 of BP 129, as amended by Republic Act No. 7691,49 provides:

Sec. 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive original jurisdiction:

(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation;

In determining the jurisdiction of an action whose subject is incapable of pecuniary estimation, the nature of the principal action or remedy sought must first be
ascertained. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation and the jurisdiction of the court depends on
the amount of the claim. But, where the primary issue is something other than the right to recover a sum of money, where the money claim is purely incidental to, or a
consequence of, the principal relief sought, such are actions whose subjects are incapable of pecuniary estimation, hence cognizable by the RTCs.50

As an action to revive judgment raises issues of whether the petitioner has a right to have the final and executory judgment revived and to have that judgment enforced
and does not involve recovery of a sum of money, we rule that jurisdiction over a petition to revive judgment is properly with the R TCs. Thus, the CA is correct in
holding that it does not have jurisdiction to hear and decide Anama's action for revival of judgment.

A reading of the CA's jurisdiction also highlights the conclusion that an action for revival of judgment is outside the scope of jurisdiction of the CA. Section 9 of BP
129 provides:

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 final judgments, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards
or commission, 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 CA also has concurrent original jurisdiction over petitions for issuance of writ of amparo,51 writ of habeas data,52 and writ of kalikasan. 53

Not being one of the enumerated cases above, it is clear that the CA is without jurisdiction to hear and decide an action for revival of judgment.

Anama's reliance on Aldeguer v. Gemelo54 to justify his filing with the CA is misplaced.1avvphi1 The issue in Aldeguer is not jurisdiction but venue. The issue was
which between the RTC of Iloilo and RTC of Negros Occidental was the proper court to hear the action.

However, venue and jurisdiction are entirely distinct matters. Jurisdiction may not be conferred by consent or waiver upon a court which otherwise would have no
jurisdiction over the subject matter of an action; but the venue of an action as fixed by statute may be changed by the consent of the parties and an objection that the
plaintiff brought his suit in the wrong county may be waived by the failure of the defendant to make a timely objection. In either case, the court may render a valid
judgment. Rules as to jurisdiction can never be left to the consent or agreement of the parties, whether or not a prohibition exists against their alteration.55 Venue is
procedural, not jurisdictional, and hence may be waived.56

As we have already ruled on jurisdiction, there is no more reason to discuss whether laches has set in against Anama.

Considering, however, that the proceedings in Civil Case No. 95991 have been suspended and remains pending since 1982, we deem it necessary to lift the order of
suspension and instruct the trial court to hear and try the case with deliberate dispatch.

WHEREFORE, the petition is DENIED. The Decision dated November 19, 2009 and Resolution dated April 20, 2010 of the Court of Appeals in CA-G.R. SP No.
107748 are AFFIRMED.

We direct the trial court to proceed with the hearing and disposition in Civil Case No. 95991 with all deliberate dispatch.

50
SO ORDERED.

51