THE DIOCESE OF BACOLOD, REPRESENTED BY THE MOST REV. BISHOP VICENTE M.

NAVARRA
and THE BISHOP HIMSELF IN HIS PERSONAL CAPACITY, Petitioners,
vs.
COMMISSION ON ELECTIONS AND THE ELECTION OFFICER OF BACOLOD CITY, ATTY. MAVIL V.
MAJARUCON, Respondents.
G.R. No. 205728 January 21, 2015

FACTS:

On February 21, 2013, petitioners posted two (2) tarpaulins within a private compound
housing the San Sebastian Cathedral of Bacolod. Each tarpaulin was approximately six feet (6′)
by ten feet (10′) in size. They were posted on the front walls of the cathedral within public view.
The first tarpaulin contains the message “IBASURA RH Law” referring to the Reproductive
Health Law of 2012 or Republic Act No. 10354. The second tarpaulin is the subject of the
present case. This tarpaulin contains the heading “Conscience Vote” and lists candidates as
either “(Anti-RH) Team Buhay” with a check mark, or “(Pro-RH) Team Patay” with an “X” mark.
The electoral candidates were classified according to their vote on the adoption of Republic Act
No. 10354, otherwise known as the RH Law. Those who voted for the passing of the law were
classified by petitioners as comprising “Team Patay,” while those who voted against it form
“Team Buhay.”

Respondents conceded that the tarpaulin was neither sponsored nor paid for by any
candidate. Petitioners also conceded that the tarpaulin contains names ofcandidates for the
2013 elections, but not of politicians who helped in the passage of the RH Law but were not
candidates for that election.

ISSUES:

Whether or not the size limitation and its reasonableness of the tarpaulin is a political question,
hence not within the ambit of the Supreme Court’s power of review.
Whether or not the petitioners violated the principle of exhaustion of administrative remedies
as the case was not brought first before the COMELEC En Banc or any if its divisions.
Whether or not COMELEC may regulate expressions made by private citizens.
Whether or not the assailed notice and letter for the removal of the tarpaulin violated
petitioners’ fundamental right to freedom of expression.
Whether the order for removal of the tarpaulin is a content-based or content-neutral
regulation.
Whether or not there was violation of petitioners’ right to property.
Whether or not the tarpaulin and its message are considered religious speech.

HELD:

FIRST ISSUE: No.

The Court ruled that the present case does not call for the exercise of prudence or
modesty. There is no political question. It can be acted upon by this court through the
expanded jurisdiction granted to this court through Article VIII, Section 1 of the Constitution..

The concept of a political question never precludes judicial review when the act of a
constitutional organ infringes upon a fundamental individual or collective right. Even assuming
arguendo that the COMELEC did have the discretion to choose the manner of regulation of the
tarpaulin in question, it cannot do so by abridging the fundamental right to expression.

Also the Court said that in our jurisdiction, the determination of whether an issue
involves a truly political and non-justiciable question lies in the answer to the question of
whether there are constitutionally imposed limits on powers or functions conferred upon
political bodies. If there are, then our courts are duty-bound to examine whether the branch or
instrumentality of the government properly acted within such limits.

A political question will not be considered justiciable if there are no constitutionally

imposed limits on powers or functions conferred upon political bodies. Hence, the existence of
constitutionally imposed limits justifies subjecting the official actions of the body to the scrutiny
and review of this court.
 In this case, the Bill of Rights gives the utmost deference to the right to free speech.
Any instance that this right may be abridged demands judicial scrutiny. It does not fall squarely
into any doubt that a political question brings.

SECOND ISSUE: No.

The Court held that the argument on exhaustion of administrative remedies is not
proper in this case.

Despite the alleged non-exhaustion of administrative remedies, it is clear that the

controversy is already ripe for adjudication. Ripeness is the “prerequisite that something had by
then been accomplished or performed by either branch or in this case, organ of government
before a court may come into the picture.”

Petitioners’ exercise of their right to speech, given the message and their medium, had
understandable relevance especially during the elections. COMELEC’s letter threatening the
filing of the election offense against petitioners is already an actionable infringement of this
right. The impending threat of criminal litigation is enough to curtail petitioners’ speech.

In the context of this case, exhaustion of their administrative remedies as COMELEC

suggested in their pleadings prolongs the violation of their freedom of speech.

THIRD ISSUE: No.

Respondents cite the Constitution, laws, and jurisprudence to support their position
that they had the power to regulate the tarpaulin. However, the Court held that all of these
provisions pertain to candidates and political parties. Petitioners are not candidates. Neither do
they belong to any political party. COMELEC does not have the authority to regulate the
enjoyment of the preferred right to freedom of expression exercised by a non-candidate in this
case.
FOURTH ISSUE: Yes.

The Court held that every citizen’s expression with political consequences enjoys a
high degree of protection.

Moreover, the respondent’s argument that the tarpaulin is election propaganda, being
petitioners’ way of endorsing candidates who voted against the RH Law and rejecting those
who voted for it, holds no water.

The Court held that while the tarpaulin may influence the success or failure of the
named candidates and political parties, this does not necessarily mean it is election
propaganda. The tarpaulin was not paid for or posted “in return for consideration” by any
candidate, political party, or party-list group.

By interpreting the law, it is clear that personal opinions are not included, while
sponsored messages are covered.

The content of the tarpaulin is a political speech

Political speech refers to speech “both intended and received as a contribution to public
deliberation about some issue,” “fostering informed and civic minded deliberation.” On the
other hand, commercial speech has been defined as speech that does “no more than propose a
commercial transaction.” The expression resulting from the content of the tarpaulin is,
however, definitely political speech.

FIFTH ISSUE: Content-based regulation.

Content-based restraint or censorship refers to restrictions “based on the subject

matter of the utterance or speech.” In contrast, content-neutral regulation includes controls
merely on the incidents of the speech such as time, place, or manner of the speech.
 The Court held that the regulation involved at bar is content-based. The tarpaulin
content is not easily divorced from the size of its medium.

Content-based regulation bears a heavy presumption of invalidity, and this court has
used the clear and present danger rule as measure.

Under this rule, “the evil consequences sought to be prevented must be substantive,
‘extremely serious and the degree of imminence extremely high.’” “Only when the challenged
act has overcome the clear and present danger rule will it pass constitutional muster, with the
government having the burden of overcoming the presumed unconstitutionality.”

Even with the clear and present danger test, respondents failed to justify the
regulation. There is no compelling and substantial state interest endangered by the posting of
the tarpaulin as to justify curtailment of the right of freedom of expression. There is no reason
for the state to minimize the right of non-candidate petitioners to post the tarpaulin in their
private property. The size of the tarpaulin does not affect anyone else’s constitutional rights.

SIXTH ISSUE: Yes.

The Court held that even though the tarpaulin is readily seen by the public, the
tarpaulin remains the private property of petitioners. Their right to use their property is
likewise protected by the Constitution.

Any regulation, therefore, which operates as an effective confiscation of private

property or constitutes an arbitrary or unreasonable infringement of property rights is void,
because it is repugnant to the constitutional guaranties of due process and equal protection of
the laws.

The Court in Adiong case held that a restriction that regulates where decals and
stickers should be posted is “so broad that it encompasses even the citizen’s private property.”
Consequently, it violates Article III, Section 1 of the Constitution which provides that no person
shall be deprived of his property without due process of law.
SEVENTH ISSUE: No.

The Court held that the church doctrines relied upon by petitioners are not binding
upon this court. The position of the Catholic religion in the Philippines as regards the RH Law
does not suffice to qualify the posting by one of its members of a tarpaulin as religious speech
solely on such basis. The enumeration of candidates on the face of the tarpaulin precludes any
doubt as to its nature as speech with political consequences and not religious speech.

Doctrine of benevolent neutrality

With religion looked upon with benevolence and not hostility, benevolent neutrality
allows accommodation of religion under certain circumstances. Accommodations are
government policies that take religion specifically into account not to promote the
government’s favored form of religion, but to allow individuals and groups to exercise their
religion without hindrance. Their purpose or effect therefore is to remove a burden on, or
facilitate the exercise of, a person’s or institution’s religion.

As Justice Brennan explained, the “government may take religion into account . . . to
exempt, when possible, from generally applicable governmental regulation individuals whose
religious beliefs and practices would otherwise thereby be infringed, or to create without state
involvement an atmosphere in which voluntary religious exercise may flourish.”

Lemon test

A regulation is constitutional when:

It has a secular legislative purpose;

It neither advances nor inhibits religion; and
It does not foster an excessive entanglement with religion.
Heirs of Teodora Loyola, presented herein by Zosimo L. Mendoza, Sr., vs Court Of Appeals and
Alicia R. Loyola
G.R. No. 188658
January 11, 2017

FACTS

This case involves a 4,419-square meter parcel of land located in Lingatin , Morong, Bataan. The
land is formerly a public agricultural land planted with nipa and coconut

On May 19, 2003, the Heirs of Teodora Loyola (Heirs), represented by Zosimo Mendoza, Sr.
(Zosimo), files a complaint for annulment of free patent and original certificate of title,
reconveyance of ownership and possession, and damages against respondent Alicia Loyola

The Heirs claimed that the property belonged to their grandparents (Teodora), who had been in
possession of the property since time immemorial

The Heirs insisted that they since maintained open, continuous, exclusive and notorious
possession until the present. However, Alicia was allegedly able to obtain the free patent and
original certificate of title over the property through fraud and misrepresentation. Alicia was
the wife of their deceased cousin Gabriel Loyola (Gabriel), who was given permission to use
part of Teodora’s property

Alicia denied such allegations against her and that the free patent and certificate of title was
registered as early as December 1985.

Trial on the case proceeded.

The Heirs relied on testimonial evidence to prove their claim over the property. Upon,
testimony and cross-examination of their neighbour Jose Perez, he admitted that Teodora had
a brother, Jose Loyola, Gabriel’s father and Alicia’s father-in-law. He also admitted that he did
not know if Teodora and her brother co-owned the property.

The Heirs could only present a tax declaration as documentary evidence to prove their claim
over the property. Although they maintained that they had paid the real estate taxes, they
could not present any receipts because these were allegedly lost.

Alicia denied all allegations against her and maintained that she and Gabriel legally and
regularly obtained the free patent and original certificate of title.

The RTC did not rule on the Merits. Instead, it dismissed the case without prejudice for failure
to implead an indispensable party.

Motion for reconsideration was denied and then the Heirs filed an appeal before the CA
questioning the dismissal.

The CA upheld the RTC’s dismissal of the case. They found that the RTC erred in finding that
there was a failure to implead an indispensable party. Nevertheless, it found that the evidence
presented by the Heirs was insufficient to overcome the presumption of regularity of the free
patent and original certificate of title issued to Alicia.

The Heirs elevated the case to the Court in a petition for certiorari.

ISSUES

1. WON the CA gravely abused its discretion when it went beyond the issue of dismissal and
ruled on the sufficiency of petitioners’ evidence before the RTC; and,
2.
WON the petitioners were able to sufficiently establish their title or ownership over the
property.
HELD

The court dismissed the petition.

Petitioners availed themselves of the wrong remedy. They should have filed a petition for
review under Rule 45 instead of a petition for certiorari under Rule 65 of the Rules of Court.

The CA did not commit grave abuse of discretion in dismissing petitioners’ complaint. It had
jurisdiction over the person and the subject matter of the case, and there is no showing that it
whimsically or capriciously exercised this jurisdiction. At most, it may have committed an error
of procedure, as petitioners question its ruling on the merits of the case and not just on the
issue of dismissal for failure to implead indispensable parties.

As petitioners fail to avail themselves of the proper remedy, the petition ought to be dismissed.
Nonetheless, so as not to further delay the disposition of this case, the court resolves the issue
of whether the CA erred in ruling on the merits of the case and not just on the issue of dismissal
for failure to implead indispensable parties.

Rule 51, Section 8 of the Rules of Court provides that the CA may review errors that are not
assigned but are closely related to or dependent on an assigned error. The CA is allowed
discretion if it finds that their consideration is necessary in arriving at a complete and just
resolution of the case.

The Court sustains the CA’s finding that petitioners failed to adequately prove their claim over
the property against respondent. The testimonies of their witnesses and the tax declaration
without tax receipts are not sufficient to overcome the presumption of regularity of the
performance of official duties of the government offices responsible for the issuance.

There is no evidence of any anomaly or irregularity in the proceedings that led to the
registration of the land. Tax declarations and tax receipts are not conclusive evidence of
ownership or of the right to possess the land.
Petitioners failed to show that only Teodora Loyola is the only heir to the property. Testimonies
revealed that she has a brother. Likewise, petitioners failed to show that they are the only heirs
of Teodora Loyola.

Failing to prove their title over the property, petitioners cannot rightfully claim that they have
been fraudulently deprived of the property.

Petition is dismissed and the CA’s resolution and decision are affirmed.
REPUBLIC v. MICHELLE SORIANO GALLO, GR No. 207074, 2018-01-17

Facts:

To accurately reflect these facts in her documents, Gallo prayed before the Regional Trial Court
of Ilagan City, Isabela in Special Proc. No. 2155[5] for the correction of her name from
"Michael" to "Michelle" and of her biological sex from "Male" to "Female" under Rule 108[6] of
the Rules of Court.[7]

In addition, Gallo asked for the inclusion of her middle name, "Soriano"; her mother's middle
name, "Angangan"; her father's middle name, "Balingao"; and her parent's marriage date, May
23, 1981, in her Certificate of Live Birth, as these were not recorded.[

As proof, she attached to her petition copies of her diploma, voter's certification, official
transcript of records, medical certificate, mother's birth certificate, and parents' marriage
certificate... he Regional Trial Court, in its December 7, 2010 Order, granted the petition.

It lent credence to the documents Gallo presented and found that the corrections she sought
were "harmless and innocuous."

The Office of the Solicitor General appealed, alleging that the applicable rule should be Rule
103 of the Rules of Court for Petitions for Change of Name.[19] It argued that Gallo did not
comply with the jurisdictional requirements under Rule 103 because the title of her Petition
and the published Order did not state her official name, "Michael Gallo."[20] Furthermore, the
published Order was also defective for not stating the cause of the change of name.[21]

The Court of Appeals, in its assailed April 29, 2013 Decision, denied the Office of the Solicitor
General's appeal.[22] It found that Gallo availed of the proper remedy under Rule 108 as the
corrections sought were clerical, harmless, and innocuous

However, the Republic, through the Office of the Solicitor General, believes otherwise. For it,
Gallo wants to change the name that she was given. Thus, it filed the present Petition via Rule
45 under the 1997 Rules of Civil Procedure. The Petition raises procedural errors made by the
Regional Trial Court and the Court of Appeals in finding for Gallo.

Issues:

whether or not the Republic of the Philippines raised a question of fact in alleging that the
change sought by Michelle Soriano Gallo is substantive and not a mere correction of error;...
whether or not Michelle Soriano Gallo's petition involves a substantive change under Rule 103
of the Rules of Court instead of mere correction of clerical errors... whether or not Michelle
Soriano Gallo failed to exhaust administrative remedies and observe the doctrine of primary
jurisdiction.

Ruling:

In assailing the Court of Appeals' ruling that the change sought by Gallo was a mere correction
of error, petitioner raises a question of fact not proper under a Rule 45 Petition, which should
only raise questions of law.

In the case at bar, petitioner raises an issue which requires an evaluation of evidence as
determining whether or not the change sought is a typographical error or a substantive change
requires looking into the party's records, supporting documents, testimonies, and other
evidence.

Rule 103 of the Rules of Court does not apply to the case at bar. The change in the entry of
Gallo's biological sex is governed by Rule 108 of the Rules of Court while Republic Act No. 9048
applies to all other corrections sought.

a person may now change his or her first name or correct clerical errors in his or her name
through administrative proceedings. Rules 103 and 108 only apply if the administrative petition
has been filed and later denied.
Republic Act No. 10172 does not apply in the case at bar as it was only enacted on August 15,
2012—more than two (2) years after Gallo filed her Petition for Correction of Entry on May 13,
2010.[85] Hence, Republic Act No. 9048 governs.

Gallo's Petition involves a mere correction of clerical errors.

Gallo is not attempting to replace her current appellation. She is merely correcting the
misspelling of her given name. "Michelle" could easily be misspelled as "Michael," especially
since the first four (4) letters of these two (2) names are exactly the same. The differences only
pertain to an additional letter "a" in "Michael," and "le" at the end of "Michelle." "Michelle"
and "Michael" may also be vocalized similarly, considering the possibility of different accents or
intonations of different people. In any case, Gallo does not seek to be known by a different
appellation. The lower courts have determined that she has been known as "Michelle" all
throughout her life. She is merely seeking to correct her records to conform to her true given
name.

However, Rule 108 does not apply in this case either.

he applicable law then for the correction of Gallo's name is Republic Act No. 9048... it is the civil
registrar who has primary jurisdiction over Gallo's petition, not the Regional Trial Court. Only if
her petition was denied by the local city or municipal civil registrar can the Regional Trial Court
take cognizance of her case.

as to these corrections, Gallo should have sought to correct them administratively before filing
a petition under Rule 108.

However, the petition to correct Gallo's biological sex was rightfully filed under Rule 108 as this
was a substantial change excluded in the definition of clerical or typographical errors in
Republic Act No. 9048

Petitioner does not deny that the issue of non-compliance with these two (2) doctrines was
only raised in this Court. Thus, in failing to invoke these contentions before the Regional Trial
Court, it is estopped from invoking these doctrines as grounds for dismissal.
Principles:

By qualifying the definition of a clerical, typographical error as a mistake "visible to the eyes or
obvious to the understanding," the law recognizes that there is a factual determination made
after reference to and evaluation of existing documents presented. Thus, corrections may be
made even though the error is not typographical if it is "obvious to the understanding," even if
there is no proof that the name or circumstance in the birth certificate was ever used.

Rule 108 applies when the person is seeking to correct clerical and innocuous mistakes in his or
her documents with the civil register.[63] It also governs the correction of substantial errors in
the entry of the information enumerated in Section 2 of this Rule[64] and those affecting the
civil status, citizenship, and nationality of a person.[65] The proceedings under this rule may
either be summary, if the correction pertains to clerical mistakes, or adversary, if it pertains to
substantial errors.

Rule 108 also requires a petition to be filed before the Regional Trial Court. The trial court then
sets a hearing and directs the publication of its order in a newspaper of general circulation in
the province

After the hearing, the trial court may grant or dismiss the petition and serve a copy of its
judgment to the Civil Registrar

Republic Act No. 10172 clarifies that these changes may now be administratively corrected
where it is patently clear that there is a clerical or typographical mistake in the entry. It may be
changed by filing a subscribed and sworn affidavit with the local civil registry office of the city or
municipality where the record being sought to be corrected or changed is kept... dispensed
with the need for judicial proceedings in case of any clerical or typographical mistakes in the
civil register, or changes of first name or nickname

No entry in a civil register shall be changed or corrected without a judicial order, except for
clerical or typographical errors and change of first name or nickname which can be corrected or
changed by the concerned city or municipal civil registrar or consul general in accordance with
the provisions of this Act and its implementing rules and regulations... t was only when Republic
Act No. 10172 was enacted on August 15, 2012 that errors in entries as to biological sex may be
administratively corrected, provided that they involve a typographical or clerical error... a party
must first avail of all administrative processes available before seeking the courts' intervention.
The administrative officer concerned must be given every opportunity to decide on the matter
within his or her jurisdiction. Failing to exhaust administrative remedies affects the party's
cause of action as these remedies refer to a precedent condition which must be complied with
prior to filing a case in court... failure to observe the doctrine of exhaustion of administrative
remedies does not affect the court's jurisdiction.[119] Thus, the doctrine may be waived...
octrine of primary administrative jurisdiction refers to the competence of a court to take
cognizance of a case at first instance. Unlike the doctrine of exhaustion of administrative
remedies, it cannot be waived.

or reasons of equity, in cases where jurisdiction is lacking, this Court has ruled that failure to
raise the issue of non-compliance with the doctrine of primary administrative jurisdiction at an
opportune time may bar a subsequent filing of a motion to dismiss based on that ground by
way of laches.

Thus, where a party participated in the proceedings and the issue of non-compliance was raised
only as an afterthought at the final stage of appeal, the party invoking it may be estopped from
doing so.

There are many accepted exceptions, such as: (a) where there is estoppel on the part of the
party invoking the doctrine... where there is unreasonable delay or official inaction that will
irretrievably prejudice the complainant;
MEGAN SUGAR CORPORATION, Petitioner, v. REGIONAL TRIAL COURT OF ILOILO, BRANCH 68,
DUMANGAS, ILOILO; NEW FRONTIER SUGAR CORP. AND EQUITABLE PCI BANK, Respondents.

PERALTA, J.:

FACTS:

Respondent New Frontier Sugar Corporation (NFSC) obtained a loan from respondent Equitable
PCI Bank (EPCIB) which was secured by a real estate mortgage over NFSC land consisting of
ninety-two (92) hectares located in Passi City, Iloilo, and a chattel mortgage over NFSC sugar
mill.

NFSC subsequently entered into a Memorandum of Agreement (MOA) with Central Iloilo
Milling Corporation (CIMICO), whereby the latter agreed to take-over the operation and
management of the NFSC raw sugar factory and facilities.

NFSC filed a compliant for specific performance and collection against CIMICO for the latter
failure to pay its obligations under the MOA.

CIMICO filed with the Regional Trial Court (RTC) of Dumangas, Iloilo, Branch 68, a case against
NFSC for sum of money and/or breach of contract. For NFSC failure to pay its debt, EPCIB
instituted extra-judicial foreclosure proceedings over NFSC land and sugar mill. During public
auction, EPCIB was the sole bidder and was thus able to buy the entire property and
consolidate the titles in its name.

The RTC issued a restraining order, directing EPCIB and PISA to desist from taking possession
over the property in dispute. Hence, CIMICO was able to continue its possession over the
property.

CIMICO and petitioner Megan Sugar Corporation (MEGAN) entered into a MOA whereby
MEGAN assumed CIMICO rights, interests and obligations over the property.
During the hearing on the motion for intervention, Atty. Reuben Mikhail Sabig (Atty. Sabig)
appeared before the RTC and entered his appearance as counsel for MEGAN.Several counsels
objected to Atty. Sabig appearance since MEGAN was not a party to the proceedings; however,
Atty. Sabig explained to the court that MEGAN had purchased the interest of CIMICO and
manifested that his statements would bind MEGAN./span>

In denying MEGAN petition, the CA ruled that since Atty. Sabig had actively participated before
the RTC, MEGAN was already estopped from assailing the RTC jurisdiction.

ISSUE: Whether Atty. Sabig is the agent of MEGAN and is thus estopped from assailing the
jurisdiction of the RTC.

HELD: YES.

CIVIL LAW: Doctrine of Estoppel, Relationship of Principal and Agent

After a judicial examination of the records pertinent to the case at bar, this Court agrees with
the finding of the CA that MEGAN is already estopped from assailing the jurisdiction of the
RTC./span>

The doctrine of estoppel is based upon the grounds of public policy, fair dealing, good faith and
justice, and its purpose is to forbid one to speak against his own act, representations, or
commitments to the injury of one to whom they were directed and who reasonably relied
thereon.The doctrine of estoppel springs from equitable principles and the equities in the case.
It is designed to aid the law in the administration of justice where without its aid injustice might
result. It has been applied by this Court wherever and whenever special circumstances of a case
so demand.

Based on the events and circumstances surrounding the issuance of the assailed orders, this
Court rules that MEGAN is estopped from assailing both the authority of Atty. Sabig and the
jurisdiction of the RTC. While it is true, as claimed by MEGAN, that Atty. Sabig said in court that
he was only appearing for the hearing of Passi Sugar motion for intervention and not for the
case itself, his subsequent acts, coupled with MEGAN inaction and negligence to repudiate his
authority, effectively bars MEGAN from assailing the validity of the RTC proceedings under the
principle of estoppel.

MEGAN can no longer deny the authority of Atty. Sabig as they have already clothed him with
apparent authority to act in their behalf. It must be remembered that when Atty. Sabig entered
his appearance, he was accompanied by Concha, MEGAN director and general manager.Concha
himself attended several court hearings, and on December 17, 2002, even sent a letter to the
RTC asking for the status of the case. A corporation may be held in estoppel from denying as
against innocent third persons the authority of its officers or agents who have been clothed by
it with ostensible or apparent authority. Atty. Sabig may not have been armed with a board
resolution, but the appearance of Concha made the parties assume that MEGAN had
knowledge of Atty. Sabig actions and, thus, clothed Atty. Sabig with apparent authority such
that the parties were made to believe that the proper person and entity to address was Atty.
Sabig. Apparent authority, or what is sometimes referred to as the "holding out" theory, or
doctrine of ostensible agency, imposes liability, not as the result of the reality of a contractual
relationship, but rather because of the actions of a principal or an employer in somehow
misleading the public into believing that the relationship or the authority exists.

One of the instances of estoppel is when the principal has clothed the agent with indicia of
authority as to lead a reasonably prudent person to believe that the agent actually has such
authority. With the case of MEGAN, it had all the opportunity to repudiate the authority of
Atty. Sabig since all motions, pleadings and court orders were sent to MEGAN office. However,
MEGAN never questioned the acts of Atty. Sabig and even took time and effort to forward all
the court documents to him.

To this Court mind, MEGAN cannot feign knowledge of the acts of Atty. Sabig, as MEGAN was
aware from the very beginning that CIMICO was involved in an on-going litigation.

PETITION DENIED.
HEIRS OF ALFONSO YUSINGCO v. AMELITA BUSILAK, GR No. 210504, 2018-01-24

Facts:

On August 11, 2005, herein petitioners filed five separate (5) Complaints[5] for accion
publiciana and/or recovery of possession against herein respondents and a certain Reynaldo
Peralta

The suits, which were subsequently consolidated, were filed with the MTCC of Surigao City

Petitioners uniformly alleged in the said Complaints that: they are owners of three (3) parcels of
land... all located at Barangay Taft, Surigao City; they inherited the lots from their predecessor-
in-interest, Alfonso Yusingco... they were in possession of the said properties prior to and at the
start of the Second World War, but lost possession thereof during the war; after the war,
petitioners discovered that the subject properties were occupied by several persons, which
prompted petitioners to file separate cases for accion reivindicatoria and recovery of
possession against these persons... herein respondents entered different portions of the same
properties and occupied them without the knowledge and consent of petitioners; petitioners
were forced to tolerate the illegal occupation of respondents as they did not have sufficient
resources to protect their property at that time and also because their ownership was still
being disputed in the earlier cases filed... the cases which they earlier filed were decided in
their favor and they were declared the owners of the subject properties; thereafter, petitioners
demanded that respondents vacate the said properties, but the latter refused.

In their Answer, respondents raised essentially similar defenses, contending, in essence, that:
they have been in possession of the subject properties for more than thirty (30) years;
petitioners never actually possessed the said parcels of land and that they never had title over
the same; thus, petitioners' claim would be in conflict with and inferior to respondents' claim of
possession.

Herein respondents filed an appeal with the RTC of Surigao City.

On August 17, 2011, the RTC, Branch 30, Surigao City, rendered a Joint Decision, which
affirmed, with modification, the Omnibus Judgment of the MTCC.

Herein respondents then filed with the CA a petition for review under Rule 42 of the Rules of
Court assailing the abovementioned Joint Decision of the RTC.On July 31, 2013, the CA
promulgated its Decision granting the petition of herein respondents.

Aggrieved by the CA Decision, herein petitioners are now before this Court via the instant
petition for review on certiorari contending that the assailed CA Decision is replete with legal
infirmities

Issues:

When Honorable Court of Appeals held that the prior judgments declaring herein petitioners as
the true and lawful co-owners of the property did not bind herein respondents, as they were
not parties to the actions, saying that these were an accion reivindicatoria and an action for
recovery of possession, hence in personam, and as such, they bound only the parties properly
impleaded and duly heard or given an opportunity to be heard; even if such principle is
inapplicable in the instant case.
Ruling:

The petition is meritorious.

The issues raised in the instant petition boil down to the basic question of whether or not the
final and executory decisions rendered in a previous accion reivindicatoria, finding petitioners
to be the lawful owners of the subject properties, are binding upon respondents.

This Court rules in the affirmative.

A perusal of the complaints filed by petitioners shows that the actions were captioned as
"Accion Publiciana and/or Recovery of Possession." However, the Court agrees with the ruling
of the lower courts that the complaints filed were actually accion reivindicatoria.
Accion reivindicatoria or accion de reivindicacion is, thus, an action whereby the plaintiff alleges
ownership over a parcel of land and seeks recovery of its full possession.[11] It is a suit to
recover possession of a parcel of land as an element of ownership.[12] The judgment in such a
case determines the ownership of the property and awards the possession of the property to
the lawful owner.[13] It is different from accion interdictal or accion publiciana where plaintiff
merely alleges proof of a better right to possess without claim of title.[14]

On the basis of the above discussions, it is clear that the lower courts did not err in ruling that
the suits filed by petitioners are accion reivindicatoria, not accion publiciana, as petitioners seek
to recover possession of the subject lots on the basis of their ownership thereof.

Proceeding to the main issue in the instant petition, there is no dispute that the RTC Decision in
Civil Case No. 1645 and the CA Decision in CA-G.R. CV No. 66508-R used by the MTCC in the
present case as bases in holding that herein petitioners are owners of the subject properties
and are, thus, entitled to legal possession thereof, are judgments on a previous case for accion
reivindicatoria, which was filed by petitioners against persons other than herein respondents.

It is settled that a judgment directing a party to deliver possession of a property to another is in

personam.[15] It is conclusive, not against the whole world, but only "between the parties and
their successors in interest by title subsequent to the commencement of the action."

However, this rule admits of the exception that even a non-party may be bound by the
judgment in an ejectment suit[19] where he is any of the following: (a) trespasser, squatter or
agent of the defendant fraudulently occupying the property to frustrate the judgment; (b) guest
or occupant of the premises with the permission of the defendant; (c) transferee pendente lite;
(d) sublessee; (e) co-lessee; or (f) member of the family, relative or privy of the defendant.

In the instant case, the Court finds no cogent reason to depart from the findings and
conclusions of the MTCC, as affirmed by the RTC, that respondents are mere intruders or
trespassers who do not have a right to possess the subject lots.

On the other hand, the evidence for the defendants showed that they are mere intruders on
the lots in question. They are occupying their respective portions simply as places to stay with
intention of acquiring the said properties in the event that they are public lands and not owned
by any private person.

It is noted that while the defendants had declared their houses and improvements for tax
purposes, not one of them had declared in his name the lot in which his house or improvement
is built on. They just waited for the Yusingcos to show proof of their ownership of the lot.

It was indeed revealing that while professing that the lots are public land, the defendants never
bothered to apply under any of the legal modes of acquiring land of the public domain for the
portion occupied by them.

the CA erred in ruling that the judgments of the RTC (in Civil Case No. 1645) and the CA (in CA-
GR. CV No. 66508-R) on the suit for accion reivindicatoria filed by petitioners against persons
other than herein respondents are not binding upon the latter.

Respondents, being trespassers on the subject lots are bound by the said judgments, which find
petitioners to be entitled to the possession of the subject lots as owners thereof.
SAMUEL M. ALVARADO v. AYALA LAND, GR No. 208426, 2017-09-20

Facts:
Capitol Hills Golf and Country Club, Inc. (Capitol) owned a 15,598-square-meter parcel in
Quezon City... alleged to have had an assessed value of P17,547,750.00 and a zonal value of
P249,568,000.00.

entire parcel was levied by the Quezon City Treasurer on account of unpaid real estate taxes
amounting to P1,857,136.89 plus penalties of P668,569.28... it was subjected to a tax
delinquency sale. Alvarado was noted to have been the highest bidder for the amount of
P2,600,000.00.

respondents filed with the Quezon City Regional Trial Court their Complaint [15] assailing the
validity of the tax sale

Alvarado, the Quezon City Treasurer, the Quezon City Register of Deeds, and several John and
Jane Does who allegedly participated in the conduct of the levy and sale were impleaded...
individual respondents... identified themselves as "members of Capitol Hills Golf [and] Country
Club, Inc.,... Ayala Hillside identified itself as "an association of lot owners residing in Ayala
Hillside Estate who set up their homes in such a location primarily because of the green
environment provided by the Capitol Golf Course."

Ayala Land, Inc. noted that it had an "Agreement [with Capitol] for a joint development of the
Capitol Golf Course since [Ayala Land, Inc.]'s Ayala Hillside Estate . . . is located and situated
inside the Capitol Golf Course."

Complaint alleged several anomalies in the sale. It assailed the sale of the entire parcel for
P2,600,000.00, an amount that, as respondents alleged, equated to 14.41% of its assessed
value, 6.48% of its market value, and 1.01% of its zonal value.

It asserted that the sale of the entire parcel instead of merely a usable portion of it that sufficed
to cover the tax delinquency, net of penalties, of P2,528,992.48 violated Section 260 of the
Local Government Code[22] and Chapter Two, Article 7, Section 14, paragraph 4 of the Quezon
City Revenue Code.

Final Bill of Sale was issued to Alvarado "palpably way ahead before the expiration of the
redemption period"... neither a notice of sale nor a notice of tax delinquency was posted

Alvarado filed his Answer with Compulsory Counterclaim[27] dated April 4, 2011. This Answer
asserted that the Complaint was "procedurally and fatally defective on its face"

Judge Payoyo-Villordon denied Alvarado's Motion to Dismiss.

Alvarado filed a Petition for Certiorari with the Court of Appeals.

Court of Appeals found no grave abuse of discretion on the part of Judge Payoyo-Villordon

Hence, Alvarado filed this Petition.

Issues:

whether or not the Court of Appeals erred in not finding grave abuse of discretion amounting to
lack or excess of jurisdiction

Ruling:

Judge Payoyo-Villordon correctly found petitioner's pleaded grounds to be unavailing. Thus, this
Court sustains her denial of petitioner's Motion to Dismiss.

Even as the resolution of petitioner's prayer to dismiss respondents' Complaint could have still
delved into the full range of grounds permitted by Rule 16, Section 1, this Court still finds no
merit in the grounds actually pleaded by petitioner. Thus, this Court sustains Judge Payoyo-
Villordon's denial of petitioner's plea to dismiss respondents' Complaint.

respondents] have complied with the requirement of the Local Government Code pertaining to
the deposit of the bid amount including interest thereof. In fact, the Court assessed the said
amount and included the same in the payment of docket fee[s].

claim that none of the respondents is a real party in interest makes them similar pleas for
dismissal on account of failure to state a cause of action.

however, respondents are real parties in interest, who properly pleaded causes of action.

Petitioner's basic premise that only the owners of properties subjected to tax delinquency sales
may file actions assailing the validity of tax sales is misguided.

Section 267 permits such invalidations only when "substantive rights . . . have been impaired."
These substantive rights may pertain to "the delinquent owner of the real property or the
person having legal interest therein.''... a person having legal interest over such property, even
a non-owner, may bring an action under Section 267, for as long as his or her substantive rights
have been impaired. The right to file an action under Section 267 is not barred merely on
account of a plaintiff's not being the owner of the property sold.

Respondents have alleged substantive rights impaired by the sale of the subject property to
petitioner.

Respondents represent different categories of plaintiffs, each with unique rights in relation to
the lot put up for a tax delinquency sale.

Capitol is a juridical entity with its own, distinct personality. Consistent with Article 46 of the
Civil Code,[68] it may "acquire and possess property'' such as the lot put up for a tax
delinquency sale. As owner, it exclusively enjoyed the entire bundle of rights associated with
dominion over this parcel.
Though having its own personality, as a golf and country club, Capitol primarily exists for the
utility and benefit of its members. While legal title in its properties is vested in Capitol,
beneficial use redounds to its membership.

As members and shareholders, individual respondents... held the right to use and enjoy, as well
as the limited right to possess Capitol's premises and facilities. Any right of dominion that
Capitol held over the parcel was ultimately for their and other members' benefit.

It was in this capacity as members that they initiated the Complaint assailing the validity of the
tax delinquency sale. They did this because, by the transfer of ownership to petitioner, they
stood to be deprived of the capacity to use and enjoy the entire 15,598-square-meter parcel
which "covers the entire Hole No.5 of the 18-Hole Capitol Golf Course and part of the road way
called Mactan Road."

Capitol's loss of legal title was tantamount to the loss of the quintessence of their membership
and holdings in Capitol.

Capitol is capacitated to incur obligations. This includes obligations voluntarily incurred through
contracts, as well as encumbrances assumed or imposed as easements. It is in keeping with a
contract entered into by Capitol and with easements in which Capitol was the subservient
estate that respondents Ayala Land, Inc. and Ayala Hillside initiated the Complaint assailing the
tax sale.

With respect to Ayala Land, Inc., the allegations were not limited to its being a dominant estate
to an easement of right of way but even included a claim of ownership to a smaller parcel that
was alleged to have been previously consolidated with the 15,598-square-meter parcel
purchased by petitioner... they had an interest in seeing to the preservation of the integrity of
this parcel, in maintaining it in the condition it was in prior to the levy and sale. They, however,
stood to lose their rights as a consequence of Capitol's loss of ownership.

Petition for Review on Certiorari is DENIED

INTERLINK MOVIE HOUSES, INC. vs COURT OF APPEALS G.R. No. 203298
Facts:
Petitioner Interlink Movie Houses filed before the R TC a complaint for sum of money and
damages against respondents Expressions Stationery ShopInter for the latter's unpaid rentals
and damages resulting from its alleged breach of their lease contract.
In the service of summons, Sheriff Benedict R. Muriel served it at the defendant company’s
office.
Interlink then filed a motion to declare herein respondents in default for their failure to file
their answer. Respondents entered a special appearance alleging that the service of the
summons was defective and, as such, the RTC did not acquire jurisdiction over them.
RTC denied Interlink's motion to declare defendants in default. The trial court agreed that the
summons was not served in accordance with Section 11, Rule 14 of the Rules of Court rendering
such service defective.
Again, in the Sheriff’s return, an order of issuance of summons was delivered to the
respondents through a certain Amee Ochotorina, who introduced herself as a secretary.
Interlink filed another motion to declare defendants in default.
To this motion, respondent again entered a special appearance and alleged that the second
service of the summons was still defective because Ochotorina did not work for nor was
connected with the office of the president of Expressions.
The RTC granted the motion to declare defendants in default and allowed Interlink to present
evidence ex parte.
The trial court was convinced that there was sufficient compliance with the rules on service of
summons to a juridical entity considering that the summons was received by the
assistant/secretary of the president.
Issue: Whether the trial court acquired jurisdiction over the persons of the respondents
Ruling: No.
There was no valid service of summons. It is settled that jurisdiction over a defendant in a civil
case is acquired either through service of summons or through voluntary appearance in court
and submission to its authority.
In the absence of service or when the service of summons upon the person of the defendant is
defective, the court acquires no jurisdiction over his person, and a judgment rendered against
him is null and void. In actions in personam, such as collection for a sum of money and
damages, the court acquires jurisdiction over the person of the defendant through personal or
substituted service of summons.
Manotoc vs Court of Appeals Digest

● A court has the power to prohibit a person admitted to bail from leaving the Philippines.
This is a necessary consequence of the nature and function of a bail bond.

● The constitutional right to travel is not an absolute right. The Constitution provides: "The
liberty of abode and of travel shall not be impaired except upon lawful order of the court
xxx." The order of the trial court releasing petitioner on bail constitutes such lawful order.

Facts:

Ricardo Manotoc Jr. was one of the two principal stockholders of Trans-Insular Management
Inc. and the Manotoc Securities Inc., a stock brokerage house. He was in US for a certain time.
He went home to file a petition with SEC for appointment of a management committee for both
businesses. Pending disposition of the case, the SEC requested the Commissioner of
Immigration not to clear Manotoc for departure, and a memorandum to this effect was issued
by the Commissioner.

Meanwhile, six clients of Manotoc Securities Inc. filed separate criminal complaints for estafa
against Manotoc. Manotoc posted bail in all cases. He then filed a motion for permission to
leave the country in each trial courts stating as ground therefor his desire to go to the United
States, "relative to his business transactions and opportunities." His motion was denied. He also
wrote the Immigration Commissioner requesting the recall or withdrawal of the latter's
memorandum, but said request was also denied. Thus, he filed a petition for certiorari and
mandamus before the Court of Appeals seeking to annul the judges' orders, as well as the
communication-request of the SEC, denying his leave to travel abroad. The same was denied;
hence, he appealed to the Supreme Court. He contends that having been admitted to bail as a
matter of right, the courts which granted him bail could not prevent him from exercising his
constitutional right to travel.
Issues:

1. Whether a court has the power to prohibit a person admitted to bail from leaving the
Philippines.

2. Whether the constitutional right to travel is absolute

Held:

A court has the power to prohibit a person admitted to bail from leaving the Philippines. This is
a necessary consequence of the nature and function of a bail bond. Rule 114, Section 1 of the
Rules of Court defines bail as the security required and given for the release of a person who is
in the custody of the law, that he will appear before any court in which his appearance may be
required as stipulated in the bail bond or recognizance. The condition imposed upon petitioner
to make himself available at all times whenever the court requires his presence operates as a
valid restriction on his right to travel. Indeed, if the accused were allowed to leave the
Philippines without sufficient reason, he may be placed beyond the reach of the courts.

The constitutional right to travel being invoked by petitioner is not an absolute right. Section 5,
Article IV of the 1973 Constitution (Sec 6. Art. III, 1987 Constitution) states:

The liberty of abode and of travel shall not be impaired except upon lawful order of the court,
or when necessary, in the interest of national security, public safety or public health.

The order of the trial court releasing petitioner on bail constitutes such lawful order as
contemplated by the above-quoted constitutional provision. (Ricardo Manotoc vs. Court of
Appeals, G.R. No. L-62100, May 30, 1986)
Petitioner: HECTOR TREÑAS
Respondent: PEOPLE OF THE PHILIPPINES
G.R. No. 195002, January 25, 2012
DOCTRINE: In criminal cases, venue is jurisdictional. A court cannot exercise jurisdiction over a
person charged with an offense committed outside its limited territory.
Facts:
1. Elizabeth Luciaja gave P150,000.00 to Atty. Hector Treñas to assist in the titling of a
house and lot located in Iloilo City. Treñas prepared and issued a Deed of Sale with Assumption
of Mortgage. He also gave Elizabeth three Revenue Official Receipts amounting to P120,000.
However, when Elizabeth consulted with the BIR, she was informed that the receipts were fake.
When confronted, Hector admitted to her that the receipts were fake and that he used the
money for his other transactions. Elizabeth demanded the return of the money. Thus, the
instant case of Estafa was filed against Hector.
2. An Information was filed by the Office of the City Prosecutor before the RTC Makati
City which rendered a Decision finding petitioner guilty of the crime of Estafa. Petitioner
appealed with the CA which also rendered a Decisionaffirming that of the RTC.
3. Petitioner asserts that nowhere in the evidence presented by the prosecution does it
show that ₱ 150,000 was given to and received by petitioner in Makati City. Also, the evidence
shows that the Receipt issued by petitioner was without any indication of the place where it
was issued. Meanwhile, the Deed of Sale with Assumption of Mortgage prepared by petitioner
was signed and notarized in Iloilo City. Petitioner claims that the only logical conclusion is that
the money was actually delivered to him in Iloilo City, especially since his residence and office
were situated there as well. Absent any direct proof as to the place of delivery, one must rely
on the disputable presumption that things happened according to the ordinary course of
nature.
Issue:
1. Whether RTC Makati has jurisdiction over the controversy.
Ruling + Ratio:
The place where the crime was committed determines not only the venue of the action
but is an essential element of jurisdiction. For jurisdiction to be acquired by courts in criminal
cases, the offense should have been committed or any one of its essential ingredients should
have taken place within the territorial jurisdiction of the court. Territorial jurisdiction in criminal
cases is the territory where the court has jurisdiction to take cognizance or
to try the offense allegedly committed therein by the accused. Thus, it cannot take jurisdiction
over a person charged with an offense allegedly committed outside of that limited territory.
Furthermore, the jurisdiction of a court over the criminal case is determined by the
allegations in the complaint or information. In this case, the prosecution failed to show that the
offense of estafa was committed within the jurisdiction of the RTC of Makati City. Also, the
Affidavit of Complaint executed by Elizabeth does not contain any allegation as to where the
offense was committed.
Aside from the lone allegation in the Information, no other evidence was presented by
the prosecution to prove that the offense or any of its elements was committed in Makati City.
There is nothing in the documentary evidence offered by the prosecution that points to where
the offense, or any of its elements, was committed.
There being no showing that the offense was committed within Makati, The RTC of that
city has no jurisdiction over the case.
The case is REFERRED to the IBP Board of Governors for investigation and
recommendation pursuant to Section 1 of Rule 139-B of the Rules of Court.
DISPOSITION: There being no showing that the offense was committed within Makati, The RTC
of that city has no jurisdiction over the case.
Anama vs Citi Bank
G.R. No. 192048
December 13, 2017

FACTS

Douglas F. Anama obtained a loan and executed a promissory note in the amount of P418,000
and a chattel mortgage in favor of Citibank. Due to the failure of Anama to pay the monthly
installments, in 1974, Citibank filed a complaint for sum of money and replevin with the Court
of First Instance of Manila.
Anama filed his answer with counterclaim alleging that his failure to pay 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.
The Regional Trial Court (RTC) issued an Order of Replevin over the machineries and equipment
covered by the chattel mortgage.
In 1982, the CA rendered a decision in favor of Anama and nullified RT's orders of seizure.
However, during the pendency of the case in the CA, the court's records including the records
of the subject case was destroyed by fire.

In 2009, Anama filed a petition for reconstruction of record and revival of judgment with the
CA. 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. The CA denied the petition for lack of
jurisdiction since actions for revival of judgments is with the RTC.
Anama argued that his petition for revival of judgment should be filed in the court that issued
the judgments ought to be revived, the CA in this case.

ISSUE

Whether or not CA did not err in dismissing the petition to revive judgment on the ground of
lack of jurisdiction.
RULING
No, jurisdiction over a petition to revive judgment is properly with the RTCs. Thus, the CA is
correct in holding that it does not have jurisdiction to hear and decide Anama's action for
revival of judgment 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. 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.

DOCTRINE
In determining the jurisdiction of an action whose subject is incapable of pecuniary estimation,
thenature of the principal action or remedy sought must first be ascertained

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.
Mayuga vs Atienza
Gr no. 208197

Facts:
On May 4, 2000, Araceli Mayuga (Araceli, for short), as plaintiff, instituted a petition for
Cancellation and Recall of Free Patent Application (FPA) No. 11636 and FPA No. 11637 [and
Reconveyance] against Antonio Atienza, representing the heirs of Armando Atienza, Benjamin
Atienza, Jr., representing the heirs of Benjamin Atienza, Sr., Community Environment and
Natural Resource Officer and Register of Deeds of Romblon, as defendants. The petition,
docketed as Civil Case No. OD-489, was raffled to the Regional Trial Court (RTC) of Odiongan,
Romblon, Branch 82.
In her Petition, Araceli, alleged, that [she, Benjamin A. Atienza, Sr. and Armando A. Atienza are
the surviving legitimate, legal and forced heirs of the late Perfecto Atienza who died intestate
on June 1,1978[7], and:]
That the said deceased Perfecto Atienza left estates, to wit:
(a) Lot 9819 Csd 341-D (known as Lot 61-A) with an area of 294 square meters, and
(b) Lot 9820 Csd 341-D (known as Lot 61-B) with an area of 280 square meters,
or a total area of 574 square meters, both lots are located at Budiong, Odiongan, Romblon to
which the three (3) compulsory/forced heirs are entitled to an equal share of 1/3 [each].
That through manipulation and misrepresentation with intent to defraud a co-heir, respondent
Antonio L. Atienza[, son of deceased Armando Atienza,[8]] was able to secure Free Patent
(NRDN-21) 11636 while respondent Benjamin A. Atienza was able to secure Free Patent (NRDN-
21) 11637, both patents dated February 28, 1992. 5.) That Petitioner was not notified of the
application filed with public respondent Community Environment & Natural Resource Officer
nor any notice of hearings of proceedings as required by law, being a co-heir and party- in-
interest.
Thus, she prayed [for],
1.) The recall and cancellation of FPA (NRD-IV-21) 11636 dated February 28, 1992 issued to
Antonio L. Atienza.
2.) The recall and cancellation of FPA (NRD-IV-21) 11637 dated February 28, 1992 issued to
Benjamin A. Atienza.
3.) [The division of] the two lots into three (3) equal parts among the three (3) forced heirs,
namely: the Petitioner, Benjamin A. Atienza and Armando A. Atienza.
On June 19, 2000, defendants filed a motion for bill of particulars because the allegations of
manipulation and misrepresentation were general, vague and ambiguous on which they could
not make an intelligent answer.
On August 18, 2000, the RTC issued an Order admitting the Reply to Bill of Particulars.
In their Answer, defendants denied the material allegations of the complaint, and by way of
affirmative defenses, averred that, the petition is moot and academic; the Free Patent Titles
have become indefeasible after the lapse of one year from its issuance in 1992; fraud as a
ground for review of title under Section 38 of Act 496 is not applicable to a case where a
certificate of title was issued in pursuance of a patent application;
Defendant Community Environment and Natural Resources Officer (CENRO, for short) also filed
an Answer, alleging that, Free Patent No. 045909-92-141P was issued by then Provincial
Environment and Natural Resources Officer (PENRO), Dionico F. Gabay on February 28, 1992 by
virtue of the Free Patent Application No. (NRD-IV-21)-11636 filed by Antonio L. Atienza at the
CENRO Office in Odiongan, Romblon covering Lot No. 9819, Cad. 341-D, Odiongan Cadastre
which is identical to Lot 61-A, Csd-04-008722-D; while Free Patent Application No. (NRD-IV-
21)11637 filed by Benjamin A. Atienza with the CENRO Office covering Lot 9820, Cad. 341-D,
Odiongan Cadastre which is identical to Lot 61-B, Csd-04-008722-D; it has no participation
whatsoever in the processing and issuance of free patents and/or titles in the names of Antonio
L. Atienza and Benjamin A. Atienza. It also prayed that it be excluded as a defendant in the case.
Defendants moved to dismiss the original petition for failure of the plaintiff’s counsels to state
their IBP No. and P.T.R. No. and the amended complaint for failure to attach a verification and
certification against forum-shopping but on September 13, 2001, he RTC issued an Order
denying the motion to dismiss for lack of merit.
On April 27, 2010, the RTC ruled in favor of Plaintiff Araceli. It ruled that the application by the
defendants for a Free Patent with the CENRO is tainted with fraud because said application was
processed without the plaintiff’s knowledge nor a notice of hearing of any proceeding was sent
to her. In fact, the defendants took advantage while the latter was in the United States.
Moreover, the titling of the fraudulently registered real property will not bar the action for
reconveyance.
Defendants filed a motion for reconsideration but the same was denied in the Order dated July
29, 2010.
Aggrieved, defendants interposed an appeal [before the Court of Appeals] assailing the decision
of the RTC.
The CA granted the appeal. It reversed and set aside the RTC Decision dated April 27, 2010, and
dismissed the Amended Complaint for Recall and Cancellation of Free Patent Application (FPA)
No. 11636 and FPA No. 11637 and Action for Reconveyance.

Issue:

1.) Whether the CA erred in reversing the RTC Decision and dismissing the amended
complaint of
the petitioner for cancellation of free patent and reconveyance?
2.) W/o there is fraud according to the petitoner?

Ruling:
The Petition lacks merit.
1.)
An ordinary civil action for declaration of nullity of free patents and certificates of title is not
the same as an action for reversion. The difference between them lies in the allegations as to
the character of ownership of the realty whose title is sought to be nullified. In an action for
reversion, the pertinent allegations in the complaint would admit State ownership of the
disputed land.
On the other hand, a cause of action for declaration of nullity of free patent and certificate of
title would require allegations of the plaintiffs ownership of the contested lot prior to the
issuance of such free patent and certificate of title as well as the defendant's fraud or mistake;
as the case may be, in successfully obtaining these documents of title over the parcel of land
claimed by plaintiff. In such a case, the nullity arises strictly not from the fraud or deceit but
from the fact that the land is beyond the jurisdiction of the Bureau of Lands to bestow and
whatever patent or certificate of title obtained therefor is consequently void ab initio. The real
party in interest is x x x the plaintiff who alleges a preexisting right of ownership over the parcel
of land in question even before the grant of title to the defendant.
With respect to the purported cause of action for reconveyance, it is settled that in this kind of
action the free patent and the certificate of title are respected as incontrovertible. What is
sought instead is the transfer of the property, in this case the title thereof, which has been
wrongfully or erroneously registered in the defendant's name. All that must be alleged in the
complaint are two (2) facts which admitting them to be true would entitle the plaintiff to
recover title to the disputed land, namely, (1) that the plaintiff was the owner of the land and,
(2) that the defendant had illegally dispossessed him of the same.

Given the foregoing differences, an action for reconveyance and an action for declaration of
nullity of the free patent cannot be pursued simultaneously. The former recognizes the
certificate of title issued pursuant to the free patent as indefeasible while the latter does not.
They may, however, be pursued alternatively pursuant to Section 2, Rule 8 of the Rules of Court
on alternative causes of action or defenses.
The action for declaration of nullity of the free patents issued in favor of the respondents must
fail, as the CA correctly ruled.

2.)
Regarding the petitioner's allegation of fraud, the CA correctly dismissed the same. The bottom
line here is that, fraud and misrepresentation, as grounds for cancellation of patent and
annulment of title, should never be presumed, but must be proved by clear and convincing
evidence, with mere preponderance of evidence not being adequate. Fraud is a question of fact
which must be proved. In this case, the allegations of fraud were never proven. There was no
evidence at all specifically showing actual fraud or misrepresentation (Lopez v CA).
WHEREFORE, the Petition is hereby DENIED for lack of merit. The Court of Appeals Decision
dated July 8,
2013 in CA-G.R. CV No. 95599 is hereby AFFIRMED.
SO, ORDERED.
PHILIPPINE NATIONAL BANK VS ELENITA V. ABELLO et al.
G.R. No. 242570, September 18, 2019

FACTS:
On November 21, 2008, a Complaint for Cancellation/Discharge of Mortgage/Mortgage Liens
was filed by Elenita V. Abello.
The complaint involves parcels of land covered by TCT Nos. T-127632, T-82974, and T-58311, all
located at Bacolod City, registered under the names of Manuel and Elenita (the Spouses
Abello). Inscribed on the TCTs were various encumbrances. Over the two other lots covered by
TCT Nos. T-82974 and T-58311,
inscribed were the real estate mortgage (REM) obtained by the Spouses Abello from the
petitioner on October 30, 1975 for the amount of P227,000.00, under Entry No. 80024, which
was made on November 4, 1975.
Manuel died on October 14, 1998, consequently, his heirs, herein respondents, executed a
Declaration of Heirship on June 5, 2003 authorizing Elenita to act as administrator of the estate.
In their complaint, the respondents sought for the cancellation of the inscriptions claiming that
since the petitioner made no action against them since 1975, the action has already prescribed.
Accordingly, the respondents argued that they should be discharged as a matter of right and
the encumbrances cancelled.

ISSUE:
Whether or not the CA erred in ordering the cancellation of the annotated encumbrances on
the subject TCTs.

HELD:

The commencement of the prescriptive period for REMs is crucial in determining the existence
of cause of action. Prescription, in turn, runs in a mortgage contract not from the time of its
execution, but rather a) when the loan became due and demandable, for instances covered
under the exceptions set forth under Article 1169 of the New Civil Code, or b) from
the date of demand.
A REM is an accessory contract constituted to protect the creditor's interest to ensure the
fulfillment of the principal contract of loan. By its nature, therefore, the enforcement of a
mortgage contract is dependent on whether or not there has been a violation of the principal
obligation.30 Simply, it is the debtor's failure to pay that sets the mortgage contract into
operation. Prior to that, the creditor-mortgagee has no right to speak of under the REM as it
remains contingent upon the debtor's failure to pay his or her loan obligation.

The respondents pray for the cancellation of the encumbrances on the TCTs which refer to the
REMs constituted on the property. Consequently, the cancellation of these annotations is
dependent on whether the action for REM has already prescribed. Therefore, an allegation of
the date of maturity of the loan is also
vital in this case as it signifies the commencement of the running of the period of prescription
for an action for foreclosure REM.
HEIRS OF JUAN M. DINGLASAN v. AYALA CORPORATION, GR No. 204378, 2019-08-05

Facts:

On February 16, 1996, herein petitioners, through their representative Platon Dinglasan, filed
an Application for Registration of Title with the RTC of Batangas City, which was docketed as
Land Registration Case No. N-1515, seeking for the judicial confirmation and registration of
their title over a... parcel... of land located at Barangay Tabangao, Batangas City.

The subject land, designated as Lot 11808, Cad-264 of Batangas Cadastre, contains an area of
Ninety-Three Thousand One Hundred and Twenty (93,120) square meters which was
subdivided into three (3) lots, namely, Lots 11808-A, 11808-B and 11808-C with an area of
16,062, 37,571, and 39,489 square meter, respectively.

Subsequently, several persons filed their respective oppositions, including herein private
respondents Ayala Corporation (Ayala)... and Omniport Economic Center (Omniport) as well as
Pilipinas Shell Corporation (Shell).
Both Ayala and Omniport alleged that they are the registered owners of several lots inside
Cadastral Lot 11808, as evidenced by separate Transfer Certificates of Title (TCT) in their name,
issued by the Register of Deeds of Batangas City.
Shell, on the other hand, had an existing contract of lease over the properties under the name
of Ayala.
Petitioners' application for registration was later amended and was, subsequently, raffled to
Branch 8 of the RTC of Batangas City dated March 3,... Partial Decision[4] dated March 3,
1998... by declaring that the lots claimed by Omniport are excluded from the properties being
sought to be registered by herein petitioners.

In a separate Order dated November 6, 2000

Branch 8 found that the lots being claimed by Ayala have already been "brought under the
Torrens System and for which corresponding [Original Certificates of Title] OCTs or TCTs have
been issued
Branch 8 dismissed herein petitioners' application for registration.

The first Complaint, filed on September 9, 1999 and docketed as Civil Case No. 5413, was for
cancellation of TCTs and damages against Omniport.

On the other hand, the second Complaint, filed on September 7, 2001, later amended on
November 26, 2001, and docketed as Civil Case No. 6046, was for reconveyance, quieting of
title and cancellation of TCTs against Ayala, Shell and the Register of Deeds of Batangas City

Petitioners' basic contention in both Complaints is that the TCTs in the names of Omniport and
Ayala are null and void because the subject lots were never brought under registration and that
OCT 18989, issued in the name of one Severina Luna Orosa (Orosa), from which Omniport's and
Ayala's TCTs were ultimately derived, is fake or spurious.

In their defense, Ayala and Shell contended that: the Complaint states no cause of action; the
Complaint is dismissible. on grounds of prescription and laches; the Complaint is defective for
failure to implead Orosa who is a necessary party; Ayala is an innocent purchaser for having
relied on the validity of Orosa's certificate of title... during the purchase of the disputed lots;
Ayala and Shell are the ones who have been in continuous, open and adverse possession of the
subject properties in the concept of owner; and, petitioners have no personality to question the
validity of and ask for the nullification of the contract of lease between Ayala and Shell because
they are not privy thereto.

RTC rendered its Decision against the Plaintiffs and in favor of the Defendants Ayala and Shell...
petitioners filed an appeal with the CA.

CA affirmed the RTC Decision

Motion for Reconsideration, but the CA denied... instant petition is PARTLY GRANTED. The
August 31, 2011 Decision and October 18, 2012 Resolution of the Court of Appeals in CA-G.R.
CV No. 94671, as well as the June 8, 2009 Decision of the Regional Trial Court of Batangas City,
Branch 8, in Civil Case Nos. 6046 and 5413, are hereby REVERSED AND SET ASIDE.
Issues:

THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE SPOUSES OROSA ARE
INDISPENSABLE PARTIES TO THE CASE.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DECLARING PETITIONERS HAD SLEPT
ON THEIR RIGHTS AND ARE GUILTY OF LACHES.

instant petition is PARTLY GRANTED

Ruling:

Respondent Ayala argues that the instant petition is fatally defective for failure of the other
petitioners to sign and execute the Verification and Certification Against Forum Shopping. In
Altres, et al. v. Empleo, et al.,

The Court summarized the rules on verification and certification against forum shopping, to wit:

An indispensable party is one who stands to be injured or benefited by the outcome of the
petition. He has an interest in the controversy that a final decree would necessarily affect his
rights, such that the courts cannot proceed without his presence.[27] It is settled that the
joinder of all indispensable parties is required under any and all conditions, their presence
being a sine qua non of the exercise of judicial power.

Stated differently, the joinder of indispensable parties is mandatory and courts cannot proceed
without their presence.[The presence of indispensable parties is necessary to vest the... court
with jurisdiction, which is the authority to hear and determine a cause, the right to act in a case.
Thus, without the presence of indispensable parties to a suit or proceeding, the judgment of a
court cannot attain real finality.
The absence of an indispensable party renders all subsequent actions... of the court null and
void for want of authority to act, not only as to the absent parties, but even as to those present.
In the present case, the Court agrees with both the RTC and the CA... that Severina Luna Orosa
is an indispensable party because the main issue in the instant case is whether or not the
issuance of OCT 18989, which was alleged to be registered under Orosa's name, was
fraudulently obtained.
Moreover, petitioners seek the annulment of OCT 18989 and all its derivative titles
It is clear that Orosa's rights are directly affected by the present controversy and that she
stands to be injured by the outcome of the Complaints filed by petitioners. In fine, the absence
of Orosa in the Complaints filed by petitioners renders all subsequent actions of both the RTC
and the CA null and void for want of authority to act, not only as to the absent parties, but even
as to those present.
The settled rule is that the non-joinder of indispensable parties is not a ground for the dismissal
of an action.
The remedy is to implead the non-party claimed to be indispensable. Parties may be added by
order of the court on motion of the party or on its own initiative at any stage of the action
and/or at such times as are just.
The correct course of action in the instant case is to order its remand to the RTC for the
inclusion of those indispensable parties who were not impleaded and for the disposition of the
case on the merits after these parties are given opportunity to present their own evidence.

instant petition is PARTLY GRANTED.

The Regional Trial Court... instant petition is PARTLY GRANTED. The August 31, 2011 Decision
and October 18, 2012 Resolution of the Court of Appeals in CA-G.R. CV No. 94671, as well as the
June 8, 2009 Decision of the Regional Trial Court of Batangas City, Branch 8,
GAFFNEY vs. BUTLER
GR # 219408, Nov 8, 2017
FACTS

On September 21, 2011, Donald Gaffney filed a Complaint against Gina V. Butler for sum of
money. Private respondent alleged that Gina Butler and her husband Anthony Richard Butler
invited Gaffney to invest in ActiveFun Corporation which is an entity engaged in the construction,
operation and management of children's play and party facilities.
Gaffney advanced the approximate amount of PhP12,500,000.00
representing his initial investment in ActiveFun. Subsequently, howver, the proposed investment
agreement did not materialize. Thus, Gaffney then demanded the return of his investments from
petitioner, who personally undertook to repay the total amount of his investments plus accrued
interest. However, despite the lapse of a considerable period of time, petitioner was only able to
pay private respondent an initial amount of Php 1,000,000.00, receipt of which was duly
acknowledged in writing by private respondent. Several demands through phone calls and e-
mails were made to petitioner for her to comply with her undertaking to return the investments
of private respondent but to no avail.
On July 13, 2011, a letter was sent to petitioner through registered mail
demanding her to pay private respondent and Richard McDonnell (another party who infused
funds into ActiveFun) within ten (10) days from receipt of the said letter the aggregate amount
of PhP25,000,000.00 plus accrued interest. In her Answer petitioner averred that she had no
knowledge of private respondent's investment in ActiveFun but admitted that she paid private
respondent the amount of PhPl,000,000.00 only because it is an undue payment, having been
misled and intimidated by the latter into believing that she has an obligation to return said
investment, when no such obligation exists under the law or under a contract. Moreover,
petitioner denied the signature in the Acknowledgment Receipt as hers and claimed that it is a
forgery.
Private respondent filed a Motion for Leave to Admit Amended Complaint
for the purpose of impleading the estate or the heirs of the late Anthony Richard Butler because
no full relief can be had against the Estate/heirs of the latter under the original Complaint,
allegedly represented by petitioner as his surviving spouse. He alleged that petitioner required
him, as a pre-condition for the payment of the balance, to execute a separate handwritten
acknowledgment of the said payment. Petitioner opposed the motion primarily on the ground
that "only natural or juridical persons may be parties in an ordinary civil action."

ISSUE
Whether or not the deceased or his estate may be named as defendant in the present case

RULING

No, the deceased or his estate may not be named a defendant in the present case.

A deceased person does not have the capacity to be sued and may not be made
a defendant in a case. Section 1, Rule 3 of the Revised Rules of Court unequivocally
states that "[o]nly natural or juridical persons, or entities authorized by law may be
parties in a civil action."

Applying this legal provision, the Court, in Ventura v. Militante, declared that
neither a deceased person nor his estate has capacity to be sued, explaining thus:

Parties may be either plaintiffs or defendants. The plaintiff in an action is

the party complaining, and a proper party plaintiff is essential to confer
jurisdiction on the court. In order to maintain an action in a court of justice, the
plaintiff must have an actual legal existence, that is, he, she or it must be a
person in law and possessed of a legal entity as either a natural or an artificial
person, and no suit can be lawfully prosecuted save in the name of such a
person.

The rule is no different as regards party defendants. It is incumbent upon

a plaintiff, when he institutes a judicial proceeding, to name the proper party
defendant to his cause of action. In a suit or proceeding in personam of an
adversary character, the court can acquire no jurisdiction for the purpose of trial
or judgment until a party defendant who actually or legally exists and is legally
capable of being sued, is brought before it. It has even been held that the
question of the legal personality of a party defendant is a question of substance
going to the jurisdiction of the court and not one of procedure.

Neither a dead person nor his estate may be a party plaintiff in a court
action. A deceased person does not have such legal entity as is necessary to
bring action so much so that a motion to substitute cannot lie and should be
denied by the court. An action begun by a decedent's estate cannot be said to
have been begun by a legal person, since an estate is not a legal entity; such an
action is a nullity and a motion to amend the party plaintiff will not likewise lie,
there being nothing before the court to amend. Considering that capacity to be
sued is a correlative of the capacity to sue, to the same extent, a decedent does
not have the capacity to be sued and may not be named a party defendant in a
court action. (Emphasis supplied; citations omitted)

Hence, there can be no doubt that a deceased person or his estate may not be
impleaded as defendant in a civil action as they lack legal personality. Thus, when
Anthony died, his legal personality ceased and he could no longer be impleaded as
respondent in the present ordinary civil suit for collection. As such, the complaint
against him should be dismissed on the ground that the pleading asserting the claim
states no cause of action or for failure to state a cause of action pursuant to Section 1
(g), Rule 16 of the Rules of Court, because a complaint cannot possibly state a cause of
action against one who cannot be a party to a civil action.

Moreover, the RTC did not acquire jurisdiction over the person or estate of
Anthony. Summons is a writ by which the defendant is notified of the action brought
against him and service thereof is the means by which the court acquires jurisdiction
over his person. In the present case, no valid service of summons upon the deceased
Anthony was or could have been made, precisely because he was already dead even
before the complaint against him and his wife was filed in court. In several occasions,
the Court has held that the trial court fails to acquire jurisdiction over a defendant who
was already dead at the time the complaint was filed against him.
Zuniga-Santos vs Santos-Gran et al GR. No. 197380, October 8, 2014

Facts:

Petitioner Eliza Zuñiga-Santos filed a Complaint for annulment of sale and revocation of title
against respondents and the Register of Deeds of Marikina City before the RTC. In her Amended
Complaint, petitioner alleged, among others, that she was the registered owner of three (3)
parcels of land located in the Municipality of Montalban, Province of Rizal, prior to their transfer
in the name of private respondent Gran; she has a second husband by the name of Lamberto C.
Santos (Lamberto), with whom she did not have any children; she was forced to take care of
Lamberto’s alleged daughter, Gran, whose birth certificate was forged to make it appear that the
latter was petitioner’s daughter; pursuant to void and voidable documents, i.e., a Deed of Sale,
Lamberto succeeded in transferring the subject properties in favor of and in the name of Gran;
despite diligent efforts, said Deed of Sale could not be located; Accordingly, petitioner prayed,
inter alia, that Gran surrender to her the subject properties and pay damages, including costs of
suit.

For her part, Gran filed a Motion to Dismiss, contending, inter alia, that the Amended Complaint
failed to state a cause of action as the void and voidable documents sought to be nullified were
not properly identified nor the substance thereof set forth, thus, precluding the RTC from
rendering a valid judgment in accordance with the prayer to surrender the subject properties.

The RTC granted Gran’s motion and dismissed the Amended Complaint for its failure to state a
cause of action, considering that the deed of sale sought to be nullified – an “essential and
indispensable part of [petitioner’s] cause of action” – was not attached. Dissatisfied, petitioner
elevated the matter to the CA.

The CA sustained the dismissal of petitioner’s Amended Complaint but on the ground of
insufficiency of factual basis.

Aggrieved, petitioner moved for reconsideration, the CA denied petitioner’s motion, Hence, the
instant petition.
Issue:

Whether the CA correctly denied the petition of reason of Lack of cause of action.

Held:

No, a failure to state a cause of action which is provided in Sec. 1(g) of Rule 16. This is a matter
of insufficiency of the pleading. Sec. 5 of Rule 10, which was also included as the last mode for
raising the issue to the court, refers to the situation where the evidence does not prove a cause
of action. This is, therefore, a matter of insufficiency of evidence. Failure to state a cause of action
is different from failure to prove a cause of action. The remedy in the first is to move for dismissal
of the pleading, while the remedy in the second is to demur to the evidence, hence reference to
Sec. 5 of Rule 10 has been eliminated in this section. The procedure would consequently be to
require the pleading to state a cause of action, by timely objection to its deficiency; or, at the
trial, to file a demurrer to evidence, if such motion is warranted.

A complaint states a cause of action if it sufficiently avers the existence of the three (3) essential
elements of a cause of action, namely: (a) a right in favor of the plaintiff by whatever means and
under whatever law it arises or is created; (b) an obligation on the part of the named defendant
to respect or not to violate such right; and (c) an act or omission on the part of the named
defendant violative of the right of the plaintiff or constituting a breach of the obligation of
defendant to the plaintiff for which the latter may maintain an action for recovery of damages.

A judicious examination of petitioner’s Amended Complaint readily shows its failure to

sufficiently state a cause of action. Contrary to the findings of the CA, the allegations therein do
not proffer ultimate facts which would warrant an action for nullification of the sale and recovery
of the properties in controversy, hence, rendering the same dismissible.
ARTURO C. ALBA v. RAYMUND D. MALAPAJO, GR No. 198752, 2016-01-13

Facts:

Petitioner Arturo C. Alba, Jr., duly represented by his attorneys-in-fact, Arnulfo B. Alba and
Alexander C. Alba, filed with the Regional Trial Court (RTC) of Roxas City, Branch 15, a Complaint
against respondents Raymund D.

Malapajo, Ramil D. Malapajo and the Register of Deeds of Roxas City for recovery of ownership
and/or declaration of nullity or cancellation of title and damages alleging, among others, that he
was the previous registered owner of a parcel of land c... that his title was subsequently canceled
by virtue of a deed of sale he allegedly executed in favor of respondents Malapajo... that the
deed of sale was a forged document which respondents Malapajo were the co-authors of.

Respondents Malapajo filed their Answer with Counterclaim contending that they were innocent
purchasers for value and that the deed was a unilateral document which was presented to them
already prepared and notarized; that before the sale, petitioner... had, on separate occasions,
obtained loans from them and their mother which were secured by separate real estate
mortgages covering the subject property; that the two real estate mortgages had never been
discharge

Petitioner filed a Reply to Answer and Answer to (Permissive) Counterclaim stating, among
others, that the court had not acquired jurisdiction over the nature of respondents' permissive
counterclaim

Petitioner filed a Motion to Set the Case for Preliminary Hearing as if a Motion to Dismiss had
been Filed alleging that respondents' counterclaims are in the nature of a permissive
counterclaim, thus, there must be payment of docket fees and filing of a... certification against
forum shopping; and, that the supposed loan extended by respondents' mother to petitioner,
must also be dismissed as respondents are not the real parties-in-interest.

the RTC issued an Order denying petitioner's motion finding that respondents' counterclaims are
compulsory. Petitioner's motion for reconsideration was denied
Petitioner filed a petition for certiorari with the CA which sought the annulment of the RTC
Orders... the CA dismissed the petition for certiorari

Issues:

The issue for resolution is whether respondents' counterclaim, i.e., reimbursement of the loan
obtained from them in case the deed of absolute sale is declared null and void on the ground of
forgery, is permissive in nature which requires the payment of docket fees and a certification
against forum shopping for the trial court to acquire jurisdiction over the same.

Ruling:

The Court find that the CA erred in denying petitioner's petition for certiorari after the latter had
clearly shown compliance with the proof of service of the petition as required under Section 13
of Rule 13 of the 1997 Rules of Civil Procedure.
A counterclaim is any claim which a defending party may have against an opposing party. A
compulsory counterclaim is one which, being cognizable by the regular courts of justice, arises
out of or is connected with the transaction or occurrence... constituting the subject matter of the
opposing party's claim and does not require for its adjudication the presence of third parties of
whom the court cannot acquire jurisdiction.
Such a counterclaim must be within the jurisdiction of the court both as to the amount and the...
nature thereof, except that in an original action before the Regional Trial Court, necessarily
connected with the subject matter of the opposing party's claim or even where there is such a
connection, the Court has no jurisdiction to entertain the claim or it requires for adjudication the
presence of third persons over whom the court acquire jurisdiction. A compulsory counterclaim
is barred if not set up in the same action.

A counterclaim is permissive if it does not arise out of or is not necessarily connected with the
subject matter of the opposing party's claim. It is essentially an independent claim that may be
filed separately in another case.
To determine whether a counterclaim is compulsory or permissive, we have devised the following
tests:
(a) Are the issues of fact and law raised by the claim and by the counterclaim largely the same?
(b) Would res judicata bar a subsequent suit on defendants' claims, absent the compulsory
counterclaim rule?
(c) Will substantially the same evidence support or refute plaintiffs' claim as well as the
defendants' counterclaim? and
(d) Is there any logical relation between the claim and the counterclaim. A positive answer to all
four questions would indicate that the counterclaim is compulsory.

Since respondents' counterclaim is compulsory, it must be set up in the same action; otherwise,
it would be barred forever. If it is filed concurrently with the main action but in a different
proceeding, it would be abated on the ground of litis pendentia; if filed subsequently, it would
meet the same fate on the ground of res judicata.
There is, therefore, no need for respondents to pay docket fees and to file a certification against
forum shopping for the court to acquire... jurisdiction over the said counterclaim. The SC agree
with the RTC's disquisition in finding that respondents' counterclaim is compulsory
GRANDHOLDINGS INVESTMENTS v. CA
GR No. 221271, Jun 19, 2019

This is a Petition for Certiorari under Rule 65 of the Rules of Court seeking to annul the
Resolutions dated April 21, 2015[1] and September 9, 2015[2] of the Court of Appeals (CA) in CA-
G.R. CV No. 96926, "Philippine National Bank v. TJR Industrial Corporation, " denying the motion
for substitution filed by Grandholdings Investments (SPV-AMC), Inc. (petitioner), a corporation
organized as a special purpose vehicle (SPV) created under Republic Act (R.A.) No. 9182,
otherwise known as "The Special Purpose Vehicle Act of 2002."

The instant petition arose from a complaint for sum of money filed by Allied Bank against TJR
Industrial Corporation, Peter C. Yu, Concepcion Yu, Antonio Siao Inhok, and Thelma Siao Inhok
(private respondents) before the Regional Trial Court (RTC) of Makati City, Branch 136, for failure
to pay their loan obligations covered by Promissory Note Nos. 9625891, 9700123, 9702681,
9708795, 9708930, and 9711461 (subject PNs) in the total amount of P13,800,000.00.[3]

Facts

On May 12, 2008, Allied Bank executed a Deed of Assignment assigning to petitioner all its rights,
title and interest over its non-performing loans (NPLs) including the subject PNs.

On October 28, 2009, the Bangko Sentral ng Pilipinas (BSP) issued a Certificate of Eligibility (of
Non-Performing Assets)[5] stating, among others, that Allied Bank is qualified as a financial
institution having non-performing assets (NPAs) in accordance with R.A. No. 9182, as amended
by R.A. No. 9343,[6] and its implementing rules and regulations (IRR). The certificate also
indicates that the transfer/sale of Allied Bank's NPAs to petitioner has been approved by the BSP
and that such transfer appears to be in the nature of a "true sale" under R.A. No. 9182.

On March 29, 2011, the RTC rendered a Decision[7] ordering private respondents to solidarily
pay Allied Bank the amount of P13,800,000.00 with interest from January 26, 2000 until full
payment. On January 17, 2013 Allied Bank merged with the Philippine National Bank, the latter
being the surviving entity.
Aggrieved thereby, private respondents appealed before the CA.

In a letter dated April 3, 2014, Rosauro C. Macalagay, General Manager of petitioner, informed
TJR Industrial Corporation that petitioner is now the creditor of its loan account in lieu of Allied
Bank and demanded payment of the obligation within 30 days from receipt thereof.

During the pendency of the appeal, petitioner filed a Motion for Substitution dated November
11, 2014 pursuant to the Deed of Assignment executed in its favor. Private respondents filed their
Opposition (To the Motion for Substitution filed by Grandholdings Investment [SPV-AMC, Inc.])
contending that petitioner cannot be substituted as plaintiff-appellee in the absence of proof
that there was compliance with the notice requirement set forth in Section 12(a), Article III of
R.A. No. 9182.

On April 21, 2015, the CA denied the motion.

Petitioner moved for the reconsideration of the April 21, 2015 Resolution, but the same was
denied in its September 9, 2015 Resolution.

Hence, this Petition for Certiorari alleging grave abuse of discretion by the CA in rendering the
assailed resolutions on the ground of non- compliance with the notice requirement of R.A. No.
9182.

Issue

W/N the petitionerneeds to comply with RA 9182 to be substituted as plaintiff-appellee?

Petitioner argued that the loan account of TJR Industrial Corporation was validly assigned to it by
Allied Bank pursuant to the provisions of R.A. No. 9182 since it was approved by the BSP.
It averred that it has shown substantial compliance with the requirements under Section 12, to
wit:
1) securing the approval of BSP for the transfer/sale of the account of TJR Industrial Corporation
as shown by the certificate of eligibility; and
2) sending a letter-notice to the private respondents' last known address informing them of the
fact of the sale and/or transfer of the NPLs. It asserted that by virtue of the valid assignment of
NPLs by Allied Bank, it has become a transferee pendente lite having the right to be substituted
as party-plaintiff in the case.

For their part, private respondents countered that the CA did not gravely abuse its discretion in
denying petitioner's motion for substitution since it merely complied with the clear and
unequivocal mandate of R.A. No. 9182 that prior notice should be given to borrowers before
there can be a valid assignment of NPLs to an SPV.
They pointed out that their case is identical to the case of Asset Pool A (SPV-AMC), Inc. v. Court
of Appeals,[10] where the Court denied the SPV's motion for substitution because it failed to
prove compliance with the prior notice requirement.
They also noted that petitioner has the burden of proving compliance with the required notice
and that it failed to discharge the same.

Finally, they stressed that Section 19, Rule 3 of the Rules of Court uses the word "may" indicating
that in case of transfer of interest, the substitution of parties is not mandatory. It is therefore
discretionary upon the court to allow or disallow the substitution or joinder by the transferee.
The private respondents emphasized that the decision of the CA was arrived at in consideration
of the law, and hence, may not be assailed.

The petition is meritorious.

An aggrieved party who resorts to the filing of a special civil action for certiorari under Rule 65 of
the Rules of Court bears the burden to show the jurisdictional error or grave abuse of discretion
committed by the public respondent. The Court shall grant the petition and order the annulment
or modification of the assailed resolutions, decisions, and/or order of the public respondent only
upon a clear demonstration of "capricious and whimsical exercise of judgment as is equivalent to
lack of jurisdiction, such as where the power is exercised in an arbitrary or despotic manner by
reason of passion or personal hostility, and it must be so patent and gross so as to amount to an
evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law
The CA denied petitioner’s motion for substitution because no evidence was offered to prove
that there was compliance with the prior notice requirement imposed by Section 12 of R.A. No.
9182, which provides:

SEC. 12. Notice and Manner of Transfer of Assets.-

(a)
No transfer of NPLs to an SPV shall take effect unless the FI concerned shall give prior notice,
pursuant to the Rules of Court, thereof to the borrowers of the NPLs and all persons holding prior
encumbrances upon the assets mortgaged or pledged. Such notice shall be in writing to the
borrower by registered mail at their last known address on file with the FI. The borrower and the
FI shall be given a period of at most ninety (90) days upon receipt of notice, pursuant to the Rules
of Court, to restructure or renegotiate the loan under such terms and conditions as may be
agreed upon by the borrower and the FIs concerned.

(b)
The transfer of NPAs from an FI to an SPV shall be subject to prior certification of eligibility as
NPA by the appropriate regulatory authority having jurisdiction over its operations which shall
issue its ruling within forty-five (45) days from the date of application by the FI for eligibility.

(c)
After the sale or transfer of the NPLs, the transferring FI shall inform the borrower in writing at
the last known address of the fact of the sale or transfer of the NPLs.
The CA emphasized that petitioner did not adduce evidence to prove that private respondents
were notified prior to, or even after the execution of the Deed of Assignment. Consequently, the
transfer of the NPLs to petitioner cannot take effect. In so ruling, the CA appears to have
overlooked Section 12(a) of the law which explicitly imposes upon the financial institution
concerned (Allied Bank) the duty to inform its borrowers (private respondents) about the transfer
of the NPLs. It is a condition that the transferring financial institution should first satisfy for the
deed of assignment to fully produce legal effects. Hence, contrary to private respondents'
contention, petitioner is under no obligation to notify the borrowers of the impending transfer
of NPLs considering that it merely assumes the rights and obligations of Allied Bank 1n collecting
and restructuring its NPLs. The duty to conform to the notice requirement rests solely upon the
financial institution concerned which conveyed its NPLs to the SPY. It is Allied Bank which carries
the burden of proving that its borrowers have been acquainted with the terms of the deed of
assignment, as well as the legal effect of the transfer of the NPLs.

We now come to the question: Did Allied Bank give prior notice to its borrowers about the
transfer of the NPLs?

The existence of the certificate of eligibility in favor of Allied Bank supports an answer in the
affirmative.

It bears to stress that in this case, petitioner has in its possession the Certificate of Eligibility (of
Non-Performing Assets) issued by the BSP to Allied Bank. A certificate of eligibility refers to the
document issued to banks and non-bank financial institutions performing quasi-banking
functions (NBQBs) by the appropriate regulatory authority having jurisdiction over their
operations as to the eligibility of their NPLs or real and other properties owned or acquired in
settlement of loans and receivables for purposes of availing of the tax exemptions and privileges
granted by R.A. No. 9182.[15] Before a bank or NBQB can transfer its NPAs to an SPV, it is required
to file an application for eligibility of said NPAs in accordance with SPV Rule 12 of "The
Implementing Rules and Regulations of the Special Purpose Vehicle (SPV) Act of2002." The rule
states:
SPV Rule 12- Notice and Manner of Transfer of Assets

xxxx

(b) Procedures on the Transfer of Assets to the SPV

An FI that intends to transfer its NPAs to an SPY shall file an application for eligibility of said NPAs,
in the prescribed format, with the Appropriate Regulatory Authority having jurisdiction over its
operations. Said application shall be filed for each transfer of asset/s.
The application by the FI for eligibility of its NPAs proposed to be transferred to an SPV shall be
accompanied by a certification from the FI that:

(1) the assets to be sold/transferred are NPAs as defined under the SPY Act of 2002;

(2) the proposed sale/transfer of said NPAs is under a True Sale;

(3) the notification requirement to the borrowers has been complied with; and

(4) the maximum 90-day period for renegotiation and restructuring has been complied with.

The above certification from the transferring FI shall be signed by a senior officer with a rank of
at least Senior Vice President or equivalent provided such officer is duly authorized by the FI's
board of directors; or the Country Head, in the case of foreign banks.

Items 3 and 4 above shall not apply if the NPL has become a ROPOA after June 30, 2002.

The application may also be accompanied by a certification from an independent auditor

acceptable to the Commission in cases of financing companies and investment houses under
[Rule 3(a)(3)] or from the Commission on Audit in the case of GFIs or GOCCs, that the assets to
be sold or transferred are NPAs as defined under the Act. (Underscoring supplied)
On May 11, 2006, the BSP issued Memorandum No. M-2006-00116 reiterating the above
procedure and providing for specific guidelines for the grant of certificate of eligibility. Relevant
portion of the Memorandum is quoted hereunder:
xxxx

4. The application shall be accompanied by a written certification signed by a senior officer with
a rank of at least Senior Vice President or equivalent, who is authorized by the board of directors,
or by the country head, in the case of foreign banks, that:
the assets to be sold/transferred are NPAs as defined under the SPV Act of 2002;

the proposed sale/transfer of said NPAs is under a true sale;

the notification requirement to the borrowers has been complied with; and

the maximum 90-day period for renegotiation and restructuring has been complied with.
Items c and d above shall not apply if the NPL has become a

ROPOA after 30 June 2002. (Underscoring supplied)

It can be gleaned from the foregoing that the certificate of eligibility shall only be issued upon
compliance with the requirements laid down in the IRR and in Memorandum No. M 2006-001,
one of which is that the application must be accompanied by a certification signed by the duly
authorized officer of the bank or the NBQB that: 1) the assets to be transferred are NPAs; 2) the
proposed transfer is under a true sale; 3) prior notice has been given to the borrowers; and that
4) the borrowers were given 90 days to restructure the loan with the bank or NBQB. Failure to
comply with the requirements and adhere to the procedural guidelines will preclude the BSP
from issuing the corresponding certificate of eligibility. Thus, it does not go against logic and
reason to conclude that with the issuance of the certificate of eligibility, Allied Bank observed all
the conditions, including the prior written notice requirement, and submitted all the necessary
documents required by the SPV Law and its IRR. Ultimately, the transfer of the NPLs is valid and
effective, and, thus, raised petitioner to the status of a transferee pendente lite.

True, the substitution of parties on account of a transfer of interest is not mandatory. Section 19,
Rule 3 of the Rules of Court provides:
SEC. 19. Transfer of interest. -In case of any transfer of interest, the action may be continued by
or against the original party, unless the court upon motion directs the person to whom the
interest is transferred to be substituted in the action or joined with the original party. (Emphasis
supplied)
The word "may" reflect the wide latitude and considerable leeway given to the court in
ascertaining the propriety of substituting a party by another on account of a transfer of interest.
Whether or not a change or substitution of party can take place is left to the sound discretion of
the court. In Heirs of Francisca Medrano v. De Vera,[17] the Court even enunciated that the trial
court is afforded such discretion because, after all, the interest of the transferee is already
sufficiently represented and safeguarded by the participation of the transferor in the case.
The Court expounded on the nature of a transferee pendente lite's interest in Cameron Granville
3 Asset Management, Inc. v. Chua:[18]
Indeed, a transferee pendente lite is a proper party that stands exactly in the shoes of the
transferor, the original party. Transferees are bound by the proceedings and judgment in the
case, such that there is no need for them to be included or impleaded by name. We have even
gone further and said that the transferee is joined or substituted in the pending action by
operation of law from the exact moment when the transfer of interest is perfected between the
original party and the transferee.

Nevertheless, "[w]hether or not the transferee should be substituted for, or should be joined
with, the original party is largely a matter of discretion." That discretion is exercised in pursuance
of the paramount consideration that must be afforded for the protection of the parties' interests
and right to due process.
However, it is equally true that the discretionary nature of allowing the substitution or joinder by
the transferee demands that the court's determination must be well-within the sphere of law,
guided by applicable statutory principles, and supported by factual and legal bases.

The CA, in denying petitioner's motion for substitution, followed the ruling in Asset Pool A (SPV-
AMC), Inc. v. Court of Appeals[19] which held:
As the notice requirement under Section 12(,] Article III of the SPV Law was not amended, the
same was still necessary to effect transfer of Non-Performing Loans to an SPV, like petitioner, to
be effective. There being no compliance with such notice requirement at the time of the
assignment to petitioner of the subject PN during the effectivity of the SPV [L]aw, as amended, it
could not substitute BPI as party plaintiff- appellee. The appellate court's denial of petitioner's
Motion was thus not attended with grave abuse of discretion. (Underscoring supplied)
The Asset Pool case bears apparent parallelism to the case at bench in that the SPVs in both cases
did not adduce evidence to prove that the borrowers were notified prior to, or even after the
execution of the deed of assignment. But the similarity ends there as the facts obtaining in this
case are not on all fours with the Asset Pool case.

In Asset Pool, the CA gave weight to the fact that the SPV failed to prove that the bank filed an
application for eligibility as NPA of the borrower's loan. It also failed to establish that the bank
had given its borrowers a period of 90 days to restructure or renegotiate its loan. This, however,
is in stark contrast with the instant case since petitioner was able to present the certificate of
eligibility issued by the BSP recognizing Allied Bank's NPAs and approving their transfer/sale in
favor of petitioner. The fact that Allied Bank was able to procure a certificate of eligibility of NPAs
is a positive indicia that it has complied with all the conditions for its issuance and negates private
respondents' allegation of absence of prior notice of the transfer/sale of the NPLs. Accordingly,
the deed of assignment is valid; petitioner steps into the shoes of Allied Bank and succeeds to its
rights and interests as private respondents' creditor. As such, petitioner has a valid right to ask
the court that it be substituted as party-plaintiff especially when it sees that it would be able to
better protect its interest if it would be named as party-plaintiff in the case.

Clearly, the CA committed grave abuse of discretion when it denied petitioner's motion for
substitution.

WHEREFORE, the petition is GRANTED. The Resolutions dated April 21, 2015 and September 9,
2015 of the Court of Appeals in CA-G.R. CV No. 96926 are REVERSED and SET ASIDE.

SO ORDERED.
Villongco v. Yabut
GR No. 225022 & 225024
February 5, 2018

Facts:
Phil-Ville is a family corporation founded by Geronima Que engaged in real estate business. The
authorized capital stock of Phil-Ville is Php 20 million divided into 200,000 shares with a par value
of Php100 per share. During her lifetime, Geronima owned 3,140 shares while the remaining
shares were equally distributed among her 6 children – Carolina, Ana Maria, Angelica, Cecilia,
Corazon and Maria Luisa.

When Geronima died, her daughter Cecilia purportedly executed a Sale of Shares of Stock as the
attorney-in-fact of Geronima which effected an inequitable distribution of the 3,410 shares. Such
distribution was reflected in the General Information Sheets filed in 2010 and 2011.

Cecilia Que, et al. wrote a letter to the Ana Maria, corporate secretary, to send out notices for
the holding of the annual stockholders’ meeting. However, before the corporate secretary could
reply, several letters were sent to the stockholders containing a document captioned “Notice of
Annual Stockholders’ Meeting” signed by Cecilia and Ma. Corazon as directors.

Thereafter, Carolina, Ana Maria, Angelica, comprising of the majority of BOD held an emergency
meeting and made a decision to postpone the annual stockholders’ meeting until the issue of
distribution of the 3,410 shares is settled. All the stockholders were appraised of the
postponement.

Despite the postponement and pendency of a civil case for annulment of sale/distribution of
shares, Cecilia et al proceeded with the scheduled annual stockholders’ meeting participated only
by a few stockholders. In the said meeting were elected new members of the Board of Directors
and officers of Phil-Ville.

Consequently, an election case before the RTC was filed questioning the validity of the holding
of the meeting, lack of quorum and the manner it was conducted, including the invalid inclusion
in the voting of the shares of the late Geronima, the representation and exercise of voting rights
by alleged proxies and proclamation of winners.

RTC declared the election of Cecilia, et al. as void and of no effect considering the lack of quorum
during the annual stockholders meeting. CA affirmed in such aspect the declaration of the void
election.

Issue:
Whether the total undisputed shares should be the basis of determining the presence of a
quorum?

Ruling:
Total outstanding capital stocks, without distinction as to disputed or undisputed shares of stock,
is the basis in determining the presence of quorum.

Right to Vote

The right to vote is inherent in and incidental to the ownership of corporate stocks. It is settled
that unissued stocks may not be voted or considered in determining whether a quorum is present
in a stockholders' meeting. Only stocks actually issued and outstanding may be voted. Thus, for
stock corporations, the quorum is based on the number of outstanding voting stocks. The
distinction of undisputed or disputed shares of stocks is not provided for in the law or the
jurisprudence. When the law does not distinguish, we should not distinguish. Thus, the 200,000
outstanding capital stocks of Phil-Ville should be the basis for determining the presence of a
quorum, without any distinction.

Therefore, to constitute a quorum, the presence of 100,001 shares of stocks in Phil-Ville is

necessary.

CA is correct when it held that only 98,430 shares of stocks were present during the stockholders
meeting, therefore, no quorum had been established. There is no evidence that the 3,140 shares
which allegedly had been transferred to the grandchildren of the Geronima were transferred and
recorded in the stocks and transfer book of Phil-Ville.

A transfer of shares of stock not recorded in the stock and transfer book of the corporation is
non-existent as far as the corporation is concerned. As between the corporation on the one hand,
and its shareholders and third persons on the other, the corporation looks only to its books for
the purpose of determining who its shareholders are. It is only when the transfer has been
recorded in the stock and transfer book that a corporation may rightfully regard the transferee
as one of its stockholders. From this time, the consequent obligation on the part of the
corporation to recognize such rights as it is mandated by law to recognize arises.

Right to inspect or examine the books

The claim that Cecilia et. al should not be faulted for their failure to present the stock and transfer
book because it was in the possession of Ana Maria

as corporate secretary who has an interest adverse from them has no merit . It is basic that a
stockholder has the right to inspect the books of the corporation, and if the stockholder is refused
by an officer of the corporation to inspect or examine the books of the corporation, the
stockholder is not without any remedy. The Corporation Code grants the stockholder a remedy
— to file a case in accordance with Section 144.

In this case, there is no evidence that the disputed shares were recorded in the stocks and
transfer book of Phil-Ville. Thus, insofar as Phil-Ville is concerned, the 3,140 shares of the late
Geronima allegedly transferred to several persons is non-existent. Therefore, the transferees of
the said shares cannot exercise the rights granted unto stockholders of a corporation, including
the right to vote and to be voted upon.
GR No. 241369, Jun 03, 2019 ]
SASHA M. CABRERA v. PHILIPPINE STATISTICS AUTHORITY

The Facts

Petitioner alleged that she was born on July 20, 1989 at Zuba Estate, Lahad Datu Sabah, Malaysia.
However, due to the distance between their house and the Philippine Embassy in Kuala Lumpur,
it was only on August 27, 2008 that her mother reported her birth. The National Statistics Office
in Manila, now the Philippine Statistics Authority (PSA), received her first Report of Birth on
January 29, 2009 and recorded it under Registry Number 2009-4580024.[6]

Subsequently, petitioner discovered that her date of birth was wrongfully entered as July 20,
1980. However, instead of correcting the said error with the Philippine Embassy, petitioner's
mother registered her birth for the second time. Thus, petitioner had a second Report of Birth
recorded in March 2010 under Registry Number 2010-4580208.[7]

Because she had two (2) Reports of Birth, petitioner encountered difficulties in securing official
documents, prompting her to file a petition for cancellation of her first Report of Birth before the
RTC of Davao City, Branch 17 (RTC-Br. 17) docketed as SP. Proc. No. 11,850-12. After due
proceedings where the publication and jurisdictional requirements were shown to have been
complied with, and with the appearance of the Office of the Solicitor General (OSG), as well as a
representative from the PSA, the RTC-Br. 17 granted the petition in a Decision[8] dated
November 19, 2012.[9] Accordingly, it ordered the cancellation of petitioner's first Report of
Birth.[10]

The OSG filed a motion for reconsideration,[11] which the RTC denied in an Order[12] dated
February 27, 2013. Thus, the OSG appealed[13] to the Court of Appeals (CA) which, in a
Decision[14] dated February 11, 2016, granted the same upon a finding that since petitioner's
birth was already validly registered, it can no longer be the subject of a second registration. As
petitioner seeks the correction of her year of birth, which is a substantial change, the CA held
that the proper recourse would have been to file a petition for correction of entry to correct her
first Report of Birth under Rule 108 of the Rules of Court.[15]
Instead of filing a motion for reconsideration therefrom, petitioner re- filed the present petition
to: (a) correct her year of birth from July 20, 1980 to July 20, 1989 in her first Report of Birth; and
(b) cancel her second Report of Birth under Rule 108 of the Rules of Court, which was raffled to
RTC-Br. 14.[16]

The RTC-Br. 14's Ruling

In an Order[17] dated September 15, 2017, the RTC-Br. 14 motu proprio dismissed the petition.
Citing the provisions of Rule 108 of the Rules of Court, particularly Section 1[18] thereof, it held
that since it was the Office of the Consul General of the Philippine Embassy in Kuala Lumpur that
acted as the civil registry in petitioner's case, the petition should have been filed with the RTC
where petitioner's first Record of Birth was registered, i.e., the RTC of the place where the PSA is
located, which is Quezon City, and not the RTC of petitioner's residence in Davao City.[19]

Petitioner's motion for reconsideration[20] was denied m an Order[21] dated June 7, 2018;
hence, this petition.

The Issue Before the Court

The sole issue for the Court's resolution is whether or not the RTC- Br. 14 erred in dismissing the
re-filed petition on the ground of improper venue.

Petitioner argues that venue is procedural and not substantive; it only becomes jurisdictional in
criminal cases. She likewise maintains that improper venue is not equivalent to lack of
jurisdiction, as the parties may waive venue. Further, she insists that until respondents in the
present petition object to venue being improperly laid in a motion to dismiss, it was error for the
RTC-Br. 14 to motu proprio dismiss the case on the ground of lack of jurisdiction, which can only
be done in cases covered by the rules on summary procedure.[22]

On the other hand, the OSG, in its Comment,[23] concurs that venue is merely procedural and
may be fixed by the Rules of Court, while jurisdiction is conferred only by law. It submits that
venue is fixed for the convenience of the parties and their witnesses. As such, for cases involving
birth certificates recorded through the Office of the Consul General, as in this case, Section 1,
Rule 108 of the Rules of Court does not limit the venue of the action to Quezon City only, where
the PSA's head office is located. Finally, even assuming that venue had been improperly laid in
this case, the OSG pointed out that courts may not motu proprio dismiss the same.[24]

The Court's Ruling

The petition is meritorious.

Venue is procedural, not jurisdictional, and hence, may be waived.[25]

Venue is the place of trial or geographical location in which an action or proceeding should be
brought. In civil cases, venue is a matter of procedural law. A patty's objections to venue must be
brought at the earliest opportunity either in a motion to dismiss or in the answer; otherwise, the
objection shall be deemed waived. When the venue of a civil action is improperly laid, the court
cannot motu proprio dismiss the case.[26]

Furthermore, the rules on venue are intended to provide convenience to the parties, rather than
restrict their access to the courts. It simply arranges for the convenient and effective transaction
of business in the courts and do not relate to their power, authority, or jurisdiction over the
subject matter of the action.[27]

At the outset, the Court notes that when petitioner filed her first petition before the RTC-Br. 17
docketed as SP. Proc. No. 11,850-12, she had already pleaded exemption from complying with
the rule on venue by filing her petition in her place of domicile, i.e., Davao City, she being a mere
student who had no means to engage a lawyer to file it on her behalf.[28] Likewise, records show
that the OSG registered no objection to such venue; hence, the RTC-Br. 17 proceeded to hear the
petition and rendered a decision on the merits,[29] which was subsequently reversed by the
CA.[30] During the entire course of the proceedings thereat, from which the present petition
stemmed, venue was never raised as an issue.

Clearly, therefore, it was erroneous for the RTC-Br. 14 to motu proprio dismiss the re-filed
petition before it on the ground of improper venue. Since convenience is the raison d'etre of the
rules on venue,[31] and as it was established that Davao City is the residence of petitioner, and
as further pointed out by the OSG, PSA has a field office located at Ango Building, Cabaguio
Avenue, Davao City, then Davao City is the most convenient venue for the parties.[32] Thus, the
RTC-Br. 14 should have taken cognizance of and heard petitioner's re-filed petition in order to
promote, not defeat, the ends of justice.

Moreover, it was error for the RTC-Br. 14 to dismiss the re-filed petition motu proprio. It is well-
settled that courts may not motu proprio dismiss the case on the ground of improper venue.
Without any objection at the earliest opportunity, as in a motion to dismiss or in the answer, it is
deemed waived. In Radiowealth Finance Company, Inc. v. Nolasco,[33] the Court explained:
Dismissing the complaint on the ground of improper venue is certainly not the appropriate course
of action at this stage of the proceeding, particularly as venue, in inferior courts as well as in the
Courts of First Instance (now RTC), may be waived expressly or impliedly. Where defendant fails
to challenge timely the venue in a motion to dismiss as provided by Section 4 of Rule 4 of the
Rules of Court, and allows the trial to be held and a decision to be rendered, he cannot on appeal
or in a special action be permitted to challenge belatedly the wrong venue, which is deemed
waived.

Thus, unless and until the defendant objects to the venue in a motion to dismiss, the venue
cannot be truly said to have been improperly laid, as for all practical intents and purposes, the
venue, though technically wrong, may be acceptable to the parties for whose convenience the
rules on venue had been devised. The trial court cannot pre-empt the defendant's prerogative to
object to the improper laying of the venue by motu proprio dismissing the case.[34]
In sum, the RTC-Br. 14 erred in motu proprio dismissing petitioner's re-fi1ed petition on the
ground of improper venue. Accordingly, the same must be reinstated, and thereafter, remanded
to the RTC-Br. 14 for further proceedings.

WHEREFORE, the petition is GRANTED. The Orders dated September 15, 2017 and June 7, 2018
of the Regional Trial Court of Davao City, Branch 14 (RTC-Br. 14) in Special Proceeding No. R-DV0-
17-03018- SP are REVERSED and SET ASIDE. Accordingly, the case is REINSTATED and REMANDED
to the RTC-Br. 14 for further proceedings.

SO ORDERED.
FRANCISCO DELGADO v. GQ REALTY DEVELOPMENT CORP.
G.R. No. 241774 September 25, 2019

FACTS:

Petitioner Francisco is a widower who fell in love and entered into a special relationship with
Victoria Gonzales, who, along with her children, started to put up GQ Realty Development
Corporation (GQ Realty).
In order to help Victoria, show potential investors that GQ had sufficient assets and capital,
Francisco bought a condominium apartment. Francisco lived in the subject property even if the
CCT was issued in the name of respondent GQ Realty.
After Victoria’s death, Francisco learned that Victoria’s children distributed among themselves
the properties held in trust by GQ Realty which included the subject property.

Due to this, Francisco filed a Verified Complaint for Reconveyance. Declaration of Nullity of Sale
and Damages against respondent.
The RTC and the CA dismissed the Complaint because according to Francisco’s claim had already
waived, abandoned or extinguished through the execution of an Ante-Nuptial Agreement made
by Francisco and Victoria.

ISSUE:

Whether or not Francisco, in executing the Ante-Nuptial Agreement, waived, abandoned, or

otherwise, extinguished his alleged interest over the subject property

RULING:

Yes. Under Rule 16, Section 6, if no motion to dismiss has been filed, any of the grounds for
dismissal provided for in this Rule may be pleaded as an affirmative defense in the answer and,
in the discretion of the court, a preliminary hearing may be had thereon as if a motion to dismiss
had been filed. In the instant case, the respondents did not file any Motion to Dismiss.
Instead, they filed a Motion for Preliminary Hearing so that the RTC could receive evidence and
thereafter decide whether the affirmative defenses raised by the respondents are meritorious.
According to the RTC and the CA, the respondents were able to prove their affirmative defense
that the alleged claim of Francisco over the subject property has been deemed waived,
abandoned, or otherwise extinguished when he executed the Ante-Nuptial Agreement.
In this regard, the Court holds that Francisco indeed waived, abandoned, or extinguished his
alleged rights over the subject property.