Pleadings

1. Benguet Exploration Inc. vs CA, G.R. No. 117434, Feb. 9,2001

2. Bough vs. Cantiveros, 40 Phil. 209

3. Hibberd vs. Rohde, 32, Phil. 478

4. Caneland Sugar Corp.vs Alon, G.R No. 142896, Sep. 12, 2007

5. Villanueva-Ong vs Juan Ponce Enrile, G.R No. 212904, Nov.

22, 2017 • Intercontinental Broadcasting Corp. vs Legasto, G.R.
No. 169108, April 16, 2006

6. Sps. Carlos Munsalud and Winnie Munsalud, v. National

Housing Authority, G.R. NO. 167181 : December 23, 2008

7. Rizal vs Naredo, G.R No. 151898, March 14, 2012

8. Republic vs Kenrick Development Corporation, G.R No.

149576, Aug. 8, 2006

9. Estate of Jose Uy vs Atty. Pacifico M. Maghari, G.R. No. 10525,

Sept 1, 2015

10. Dr. Malix et.al., vs Dr. Baltazar

11. Koruga vs. Arcenas; G.R No. 168332, June 19, 2009

12. Bacolor, et. al., vs Makabali Memorial Hospital Inc. et. al., G.R
No. 204325, April 18, 2016

13. Roxas vs CA, G.R No. 139337, August 15, 2001

G.R. No. 117434 February 9, 2001

BENGUET EXPLORATION, INC., petitioner,

vs.
COURT OF APPEALS, SWITZERLAND GENERAL INSURANCE, CO., LTD., and SEA WOOD
SHIPPING, INC., respondents.

MENDOZA, J.:

This is a petition for review on certiorari of the decision, dated June 30, 1994, and resolution, dated
September 29, 1994, of the Court of Appeals1 which affirmed the decision of the Regional Trial Court,
Branch 149, Makati, dismissing the complaints filed by petitioner against herein private respondents,
and denied petitioner's motion for reconsideration, respectively.

The background of this case is as follows:

On November 29, 1985, petitioner Benguet Exploration, Inc. (Benguet) filed a complaint for damages
against Seawood Shipping, Inc. (Seawood Shipping) with the Regional Trial Court of Makati, which was
docketed as Civil Case No.12394 and assigned to Branch 149.2 On March 4, 1986, petitioner Benguet
filed another complaint for damages against respondent Switzerland General Insurance, Co., Ltd.
(Switzerland Insurance), which was docketed as Civil Case No.130853 and assigned to Branch 148 of
the court.

The two cases were consolidated. Switzerland Insurance filed a third-party complaint against Seawood
Shipping, praying that the latter be ordered to indemnify it for whatever might be adjudged against it in
favor of petitioner.4 Thereafter, the cases were jointly tried, during which petitioner Benguet presented
its employees, Rogelio Lumibao and Ernesto Cayabyab, as witnesses.

Rogelio Lumibao, marketing assistant of Benguet, was in charge of exportation. His responsibilities
included the documentation of export products, presentations with banks, and other duties connected
with the export of products. He explained that private respondent Seawood Shipping was chartered by
petitioner Benguet to transport copper concentrates. The bill of lading (Exh. A) stated that the cargo,
consisting of 2,243.496 wet metric tons of copper concentrates, was loaded on board Sangkulirang No.
3 at Poro Point, San Fernando, La Union. It was insured by Switzerland Insurance (marine insurance
policy was marked Exh. C). When the cargo was unloaded in Japan, however, Rogelio Lumibao
received a report (Exh. B), dated August 19, 1985, from a surveyor in Japan stating that the cargo was
355 metric tons short of the amount stated in the bill of lading. For this reason, petitioner Benguet made
a claim of the loss to Seawood Shipping and Switzerland Insurance. In its letter, dated August 21, 1985
(Exh. D), petitioner Benguet made a formal demand for the value of the alleged shortage. As both
Seawood Shipping and Switzerland Insurance refused the demand, petitioner Benguet brought these
cases against Seawood Shipping and Switzerland Insurance.5

On cross-examination, Lumibao admitted that he did not see the actual loading of the cargo at Poro
Point and that his knowledge was limited to what was contained in the bill of lading which he received
about two days after the loading. Lumibao testified that at Camp 6, Kennon Road, Baguio, the copper
concentrates were weighed prior to being transported to Poro Point, where they were once more
weighed before being loaded on the vessel. But again he admitted that he had not seen the actual
weighing and loading of the copper concentrates because he was not the one in charge of the operation.
Nor was he in Japan when the cargo was unloaded. He also did not know how to perform the procedure
for weighing cargo. Thus, he could not determine the truth or falsity of the contents of the draft survey.
He only knew that there was in fact a shortage based on his reading of the draft report.6 Further,
Lumibao testified that, although he prepared the export declaration, he did not prepare the bill of lading.
The bill of lading was made on the basis of the draft survey conducted by the Overseas Merchandise
Inspection Co., Ltd. or OMIC.7 Some other person undertook the weighing of the cargo, and Lumibao
was only informed by telephone of the cargo's weight during its loading and unloading.1âwphi1.nêt

Lumibao had nothing to do with the preparation of the bill of lading, the weighing of the copper
concentrates, and the shipment of the cargo. He did not accompany the trucks which transferred the
cargo from Baguio to Poro Point. He was not on the ship when the cargo was loaded at Poro Point. Nor
did he know if spillage occurred during the loading or unloading of the copper concentrates.

Lumibao said that the buyer of the copper concentrates was the Brandeis Intsel Co., Inc. Upon receipt of
the cargo, Brandeis Intsel Co., Inc. paid for the cargo based on its weight in dry metric tons, or 90
percent more or less of the price of 2,243.496 tons, the weight of the cargo in wet metric tons. With
regard to the insurance policy, he testified that petitioner Benguet made no objection to any of the terms
stated on the face of the policy.8

Ernesto Cayabyab next testified for petitioner. He had been with Benguet for 13 years and, at the time of
his testimony, he was secretary of Nil Alejandre, manager of Benguet. According to Cayabyab, on July
28, 1985, he was sent to the warehouse (bodega) at Poro Point, La Union to assist in the loading of the
copper concentrates. These copper concentrates were to be loaded on the ship Sangkulirang No.
3. Cayabyab said he was present when the cargo was loaded on the ship, as evidenced by the
Certificate of Loading (Exh. E), Certificate of Weight (Exh. F), and the Mate's Receipt (Exh. G), all dated
July 28, 1985. According to Cayabyab, the Marine Surveyor and the Chief Mate would go around the
boat to determine how much was loaded on the ship. Cayabyab stated that he saw petitioner Benguet's
representative and his immediate superior, Mr. Alejandre, and the Inspector of Customs, Mr. Cardenas,
sign the Certificate of Weight. Cayabyab also witnessed the ship captain sign the Certificate of
Weight,9 which stated therein that 2,243.496 wet metric tons of copper concentrates were loaded on the
ship.10 Cayabyab likewise confirmed the authenticity of the Mate's Receipt, saying that he witnessed the
Chief Mate sign the document.11

When cross-examined, Cayabyab said that, as a secretary, his duties included computing the
company's daily main production in the mine site and accompanying his superior, Mr. Alejandre, during
shipments. He explained that the copper concentrates were transported by dump trucks from the mining
site to Poro Point for over a month, possibly even three to six months. Cayabyab went to Poro Point on
July 27, 1985 to witness the loading of the copper concentrates on the vessel Sangkulirang No. 3. But
the copper concentrates had already been delivered and stored in a bodega when he arrived. These
concentrates were placed on the cemented ground inside the bodega after their weight was recorded.
Describing the procedure for weighing, he said that the trucks, without the copper concentrates, were
weighed. Then, after they had been loaded with copper concentrates, the trucks were placed in
the bodega and weighed again. To determine the weight of the copper concentrates, the weight of the
trucks was deducted from the weight of the trucks loaded with copper concentrates. The copper
concentrates were then loaded on the ship by means of a conveyor at the average rate of 400 tons an
hour. Cayabyab did not know, however, how many trucks were used to load the entire cargo of the
copper concentrates nor did he know exactly how many hours were spent loading the copper
concentrates to the ship. He could only remember that he reported for work in the morning and that he
worked overtime because he had to wait until the loading of the cargo was finished before he could
leave. During the loading, he moved from place to place, and his attention was sometimes distracted.
Thus, he could not tell with certainty that no spillage took place during the loading. The figure of
2,243.496 wet metric tons was computed by the Marine Surveyor and the Chief Mate.12

Respondent Switzerland Insurance then presented its evidence. Three witnesses, Eduardo Pantoja,
Anastacio Fabian, and Edgardo Diño, testified for it.

Eduardo Pantoja, assistant branch manager of respondent Switzerland Insurance in the Philippines,
testified that he prepared the data and conditions of the marine insurance policy of petitioner Benguet
using information furnished by the latter, although some of the conditions attached to the policy were
conditions Switzerland Insurance attached to all the marine policies issued by it. Pantoja stated that the
figure of 2,243.496 wet metric tons contained in the policy of Benguet was taken from the latter's
declaration. Switzerland Insurance relied on the value of the cargo declared by the insured on the basis
of the principle of uberrimae fidei, i.e., the insured must act in the utmost good faith.13 One of the
conditions set forth in the marine policy (Exh. 8) was that the "[w]arranted vessel is equipped with steel
centerline bulk head." According to Pantoja, this condition was specifically included in the policy
because the nature of the cargo warranted the same, and Switzerland Insurance would not have
accepted the policy had such condition not been attached. The purpose of the centerline bulkhead was
to prevent the copper concentrates from shifting while being transported on the ship. Upon verification
by Certified Adjusters, Inc., adjusters of Switzerland Insurance, it was found that the
vessel Sangkulirang No. 3 did not have a steel centerline bulkhead. Pantoja identified a letter, dated
February 13, 1986, sent by his company to petitioner Benguet cancelling its insurance contract because
the carrying vessel was not equipped with a steel centerline bulkhead as warranted under the policy
(Exh. 7-a). Enclosed was Check No. HSBC 419463 for P98,174.43 representing the refund by
Switzerland Insurance of the premium payments, documentary stamps, and premium taxes paid by
petitioner Benguet (Exh. 7). He testified that Switzerland Insurance paid its legal counsel P40,000.00 as
attorney's fees plus appearance fees.14

On cross-examination, Pantoja explained that the company had its own system of determining various
rates of insurance. Several factors were taken into consideration, such as the nature of the goods, the
manner by which they were packed, and the destination of the cargo. For example, Switzerland
Insurance would anticipate pilferages if the cargo involved household goods or, in the case of chemicals,
it would consider the possibility of spillage. Pantoja, however, stated that he did not make any
investigation in this case but used only his previous experience and project knowledge in dealing with
similar cases. He admitted that Switzerland Insurance checked whether the ship had a steel centerline
bulkhead only after a claim had been made by petitioner Benguet. He explained, however, that it was
impossible for them to make the investigation before the execution of the marine policy because they
had only one day to check whether the ship had a steel centerline bulkhead and the ship at that time
was not in Manila but in Poro Point. He reiterated that good faith dealing with the insured included
relying on the truth of the latter's representations. There was little risk involved in relying on the insured's
representations because the company would not have accepted the risk if it found that the conditions in
the policy had not been complied with. Switzerland Insurance refused Benguet's demand because non-
compliance with the condition that the ship be equipped with a steel centerline bulkhead rendered the
marine insurance policy null and void from the beginning. This is why Switzerland Insurance refunded
the premium paid by petitioner Benguet. Pantoja stated that petitioner Benguet did not claim that the
loss was caused by the shipping of the cargo because it did not know the cause of the shortage.15

Another witness for Switzerland Insurance was Anastacio Fabian, the marine manager of Certified
Adjusters, Inc. He testified that he went to Poro Point where the shipment was loaded for transport to
Japan. It took him almost two months to finish his investigation and to come up with a written report (Exh.
12). He prepared a letter, dated January 31, 1986, seeking a certification from Capt. Jae Jang
of Sangkulirang No. 3 on whether the ship was equipped with a steel centerline bulkhead (Exh. 5). In
response thereto, respondent Seawood Shipping sent a letter, dated February 1, 1986, stating therein
that the vessel was not equipped with a steel centerline bulkhead (Exh. 6). This steel centerline
bulkhead was a steel separation of a vessel for the purpose of preventing the vessel from sinking,
especially in heavy weather. Pictures of the ship were taken by Wise Insurance showing that the vessel
did not have a steel centerline bulkhead (Exhs. 15 to 15-H).

Fabian also identified petitioner Benguet's export declaration (Exh. 11) which provides therein that the
cargo loaded on the ship weighed 2,050 wet metric tons or 1,845 dry metric tons.16 On further direct
examination, he testified that Certified Adjusters, Inc.'s president, Mr. Edgardo Diño, wrote a letter,
dated January 13, 1986, to the shipping company inquiring as to the circumstances surrounding the loss
of the cargo (Exh. 17). Seawood Shipping responded to Certified Adjusters, Inc. in a letter, dated
January 16, 1986, explaining that the weight of the cargo might have been increased by the rains which
occurred during the loading, and that the shortage upon unloading might be due to the moisture which
evaporated during the voyage from the Philippines to Japan. Fabian testified that the moisture on the
copper concentrates increased the weight of the cargo.

Fabian said that during his investigation he asked how and when the shipment was loaded in the vessel
and where it was loaded. He also checked records of the loading of the cargo. Although he admitted that
the records show that a shortage of the copper concentrates had occurred when these reached Japan,
he attributed it to the rains which occurred during the loading of the copper concentrates which
increased their weight, although he conceded that it was not possible that the rains would cause a
shortage of around 300 metric tons. He did not know what could have caused the shortage.17

The last witness to testify for the defense was Edgardo Diño, president and general manager of Certified
Adjusters, Inc. He testified that his company conducted an investigation and found that the
vessel Sangkulirang No. 3 was not equipped with a steel centerline bulkhead. The main function of the
steel centerline bulkhead was to prevent shifting of the copper concentrates during transport. If there
was no steel centerline bulkhead, the vessel was liable to sink. He stated that the ship had two holds,
one of which was loaded with petitioner Benguet's copper concentrates and the other with a Lepanto
shipment. Diño identified photographs showing that only a wooden partition separated the two cargoes
on both holds (Exhs. 15-A to 15-G). He testified that his company wrote a letter to the shipping company
inquiring about the shortage which occurred on petitioner Benguet's copper concentrates. He expressed
doubt that the loss of moisture of the copper concentrates caused the shortage because these were
actually mixed with some water to keep them from heating up or to prevent spontaneous combustion.
According to Diño, it was possible that some shifting of the cargo occurred as indicated by the
photographs of the ship.18

Based on the evidence presented, the trial Court rendered its decision on July 2, 1990 dismissing
petitioner's complaint as well as Switzerland Insurance's third-party complaint against Seawood
Shipping.

On appeal, its decision was affirmed by the Court of Appeals.19 Petitioner Benguet moved for
reconsideration, but its motion was denied.20 Hence this petition.
Petitioner Benguet contends that the Court of Appeals gravely erred in ruling that it failed to establish
the loss or shortage of the subject cargo because such loss was sufficiently established by documentary
and testimonial evidence, as well as the admissions of private respondents.21 Petitioner argues that
documents regarding the tonnage of the copper concentrates have been properly identified and that the
bill of lading (Exh. A), the Certificate of Weight (Exh. F), and the Mate's Receipt (Exh. G), all of which
stated that 2,243.496 wet metric tons of copper concentrates were loaded on the ship, create a prima
facie presumption that such amount was indeed what was loaded on the vessel. Petitioner asserts that
the Draft Survey Report of OMIC (Exh. B) was sufficient evidence to prove that the cargo which arrived
in Japan had a shortage of 355 wet metric tons.

We find petitioner's contentions to be without merit.

First. It is settled that only questions of law may be raised on appeal by certiorari under Rule 45. The
trial court, having heard the witnesses and observed their demeanor and manner of testifying, is in a
better position to decide the question of their credibility. Hence, unless the factual findings complained of
are not supported by the evidence on record or the assailed judgment is based on a misapprehension of
facts, the findings of the trial court must be accorded the highest respect, even finality, by this Court.22 It
is noteworthy that the Court of Appeals made the same factual findings as did the trial court.23

Contrary to this rule, petitioner is raising questions of facts as it seeks an evaluation of the evidence
presented by the parties. However, we find no basis for concluding that both the trial court and the Court
of Appeals misappreciated the evidence in this case. To the contrary, we find that petitioner failed to
present evidence to prove that the weight of the copper concentrates actually loaded on the
ship Sangkulirang No. 3 was 2,243.496 wet metric tons and that there was a shortage of 355 metric tons
when the cargo was discharged in Japan.

Petitioner's own witness, Rogelio Lumibao, admitted that he was not present at the actual loading of the
cargo at Poro Point, his information being limited to what was contained in the bill of lading. As he was
not in charge of the operation, he did not see the actual weighing and loading of the copper
concentrates. Nor did he prepare the bill of lading. He only verified the weight of the cargo, from the time
it was loaded on the ship to the time it was unloaded in Japan, through the telephone. Neither was he
present when the cargo was discharged in Japan.24 Thus, Lumibao testified:

Q Now Exhibit A is a bill of lading which you identified?

A Yes, sir.

Q Do you have anything to do in the preparation of this bill of lading?

A None, sir.

Q In other words, you did not verify if the weight stated in the bill of lading was the actual weight of
the copper concentrate loaded in the ship of the dependant Seawood Shipping Inc.?

A The bill of lading is prepared on the basis of the draft survey. That is the procedure.

Q And who undertakes the draft survey?

A For that particular shipment we required or hired the services of OMIC.

Q In other words, your draft survey is from the point of origin to Poro Point up to the point of
destination, Onahama, Japan, was done by OMIC?

A Yes, sir.

Q And you have nothing to do with OMIC?

A None, sir.

Q You are not an employee of OMIC?

A No, sir.

Q Are you connected with it in any way?

A No, sir.

Q In the Bill of Lading, you identified this document a xerox copy of the supposed original Bill of
Lading and marked as Exh. A, are the wordings and figures "copper concentrate 2,243.496 WMT" this
means weight per metric ton?

A Yes, sir.

Q Did you have it [verified] if this was the actual weight loaded on the ship of the defendant
Seawood, Shipping, Inc.?

A We were advised by the OMIC surveyor that the weight was loaded.

Q Did you personally verify if these figures are true?

A Yes, by phone.

Q Did you participate in weighing?

A No, sir. Just by phone.

Q In other words somebody else made the weighing not you?

A Yes, sir.

Q Did you personally do the verification of the actual weight loaded in the ship?

A Yes, sir by phone.

Q So you are informed [of] the weight actually loaded by phone?

A Yes, sir.

Q Do you always verify by phone?

A That is only preliminary, while waiting what is the concluding things. (sic) That is after the surveyor
has submitted the report to us.

Q So in other words, all the time you have been basing your testimony on reports prepared by other
person?

A Yes, sir.

Q In fact, you have nothing to do with the preparation of the Bill of Lading?

A Yes, sir.

Q You have nothing to do with the weighing of the copper concentrate? . . . . You have nothing to do
[with] the transport of the copper concentrate from Camp 6, Baguio to Poro Point?

A None, sir.

Q You did not even accompany the truck?

A No, sir.

Q You were not at the shipside when this copper concentrate was loaded?

A No, sir.

Q You did not know whether there was spillage when or while loading copper Concentrates?

A Yes, sir.

Q Neither were you on the ship on its way to Japan, were you?

A No, sir.

Q You were not at Onahama, Japan, the port of destination?

A No, sir.25

On the other hand, Ernesto Cayabyab testified that he was at Poro Point when the copper concentrates
were being loaded on the ship. Although he was present when the Certificate of Loading (Exh. E),
Certificate of Weight (Exh. F), and the Mate's Receipt (Exh. G) were signed at the loading site,26 he
admitted that he could not say for certain that no spillage occurred during the loading of the cargo on the
ship because his attention was not on the cargo at all times.27

It is evident that petitioner's witnesses had no personal knowledge of the actual weight of copper
concentrates loaded on the vessel and discharged in Japan. Lumibao had no pan in the preparation of
the bill of lading (Exh. A) and the Draft Survey Report prepared by OMIC (Exh. B). Nor was he present
when the copper concentrates were loaded on the vessel or when the cargo was unloaded in Japan. He
merely relied on the declarations made by other persons that 2,243.496 wet metric tons were indeed
loaded on Sangkulirang No. 3 and that the cargo was short by 355 metric tons when unloaded in Japan.
The same may be said of witness Cayabyab. While present at the loading site and familiar with the
procedure followed in loading the cargo, he admitted that he could not state for certain that no spillage
occurred as his attention was not at all times focused on the loading operation. Moreover, none of the
documents he identified, i.e., Certificate of Loading, Certificate of Weight, and Mate's Receipt, were
signed by him. He only witnessed the signing of these documents by other people. Hence, he was in no
position to testify as to the truth or falsity of the figures contained therein. The testimonies of these
witnesses were thus hearsay. It has been held:

Any evidence, whether oral or documentary, is hearsay if its probative value is not based on the
personal knowledge of the witness but on the knowledge of another person who is not on the witness
stand. Hearsay evidence, whether objected to or not, has no probative value unless the proponent can
show that the evidence falls within the exceptions to the hearsay evidence rule.28

Second. Petitioner contends that the genuineness and due execution of the documents
presented, i.e., Bill of Lading, Certificate of Loading, Certificate of Weight, Mate's Receipt, were properly
established by the testimony of its witness, Ernesto Cayabyab, and that as a result, there is a prima
facie presumption that their contents are true.

This contention has no merit. The admission of the due execution and genuineness of a document
simply means that "the party whose signature it bears admits that he signed it or that it was signed by
another for him with his authority; that at the time it was signed it was in words and figures exactly as set
out in the pleading of the party relying upon it; that the document was delivered; and that any formal
requisites required by law, such as a seal, an acknowledgment, or revenue stamp, which it lacks, are
waived by him."29 In another case, we held that "When the law makes use of the phrase 'genuineness
and due execution of the instrument' it means nothing more than that the instrument is not spurious,
counterfeit, or of different import on its face from the one executed."30 It is equally true, however, that -

Execution can only refer to the actual making and delivery, but it cannot involve other matters without
enlarging its meaning beyond reason. The only object of the rule was to enable a plaintiff to make out a
prima facie, not a conclusive case, and it cannot preclude a defendant from introducing any defense on
the merits which does not contradict the execution of the instrument introduced in evidence.31
In this case, respondents presented evidence which casts doubt on the veracity of these documents.
Respondent Switzerland Insurance presented Export Declaration No. 1131/85 (Exh. 11)32 which
petitioner's own witness, Rogelio Lumibao, prepared,33 in which it was stated that the copper
concentrates to be transported to Japan had a gross weight of only 2,050 wet metric tons or 1,845 dry
metric tons, 10 percent more or less.34 On the other hand, Certified Adjusters, Inc., to which Switzerland
Insurance had referred petitioner's claim, prepared a report which showed that a total of 2,451.630 wet
metric tons of copper concentrates were delivered at Poro Point.35 As the report stated:

It is to be pointed out that there were no actual weighing made at Benguet Exploration, Inc.'s site. The
procedure done was that after weighing the trucks before and after unloading at Philex Poro Point
Installation, the weight of the load was determined and entered on "Philex" Trip Ticket which was later
on copied and entered by the truck driver on Benguet Exploration, Inc.'s Transfer Slip.36

Considering the discrepancies in the various documents showing the actual amount of copper
concentrates transported to Poro Point and loaded in the vessel, there is no evidence of the exact
amount of copper concentrates shipped. Thus, whatever presumption of regularity in the transactions
might have risen from the genuineness and due execution of the Bill of Lading, Certificate of Weight,
Certificate of Loading, and Mate's Receipt was successfully rebutted by the evidence presented by
respondent Switzerland Insurance which showed disparities in the actual weight of the cargo
transported to Poro Point and loaded on the vessel. This fact is compounded by the admissions made
by Lumibao and Cayabyab that they had no personal knowledge of the actual amount of copper
concentrates loaded on the vessel. Correctly did the Court of Appeals rule:

In the face of these admissions, appellant's claim of loss or shortage is placed in serious doubt, there
being no other way of verifying the accuracy of the figures indicated in appellant's documentary
evidence that could confirm the alleged loss of 355.736 MT. Notwithstanding the figure stated in Bill of
Lading No. PP/0-1. (Exhibit A) that 2,243.496 WMT of copper concentrates was loaded by appellant at
the port of origin, it should be stressed that this is merely prima facie evidence of the receipt by the
carrier of said cargo as described in the bill of lading. Thus, it has been held that recitals in the bill of
lading as to the goods shipped raise only a rebuttable presumption that such goods were delivered for
shipment and as between the consignor and a receiving carrier, the fact must outweigh the recital
(Saludo vs. Court of Appeals, 207 SCRA 498, 509 [1992]. Resultingly, the admissions elicited from
appellant's witnesses that they could not confirm the accuracy of the figures indicated in their
documentary evidence with regard to the actual weight of the cargo loaded at the port of origin and that
unloaded at the port of destination, in effect rebuts the presumption in favor of the figure indicated in the
bill of lading.37

WHEREFORE, the decision of the Court of Appeals is AFFIRMED.1âwphi1.nêt

SO ORDERED.

Bellosillo, Quisumbing, Buena, De Leon, Jr., JJ., concur.

G.R. No. 13300 September 29, 1919

BASILIA BOUGH and GUSTAVUS BOUGH, plaintiffs-appellants,

vs.
MATILDE CANTIVEROS and PRESBITERA HANOPOL, defendants-appellees.

P. E. del Rosario and William F. Mueller for appellants.

Sison and Veloso for appellees.

MALCOLM, J.:

This action was begun in the Court of First Instance of Leyte, pursuant to a complaint by means of which
the plaintiffs Basilia Bough and Gustavus Bough sought to have themselves put in possession of the
property covered by the deed of sale quoted in the complaint, and to require the defendant Matilde
Cantiveros to pay the plaintiffs the sum of five hundreds pesos by way of damages, and to pay the costs.
Matilde Cantiveros answered with a general denial and a special defense, not sworn to, in which she
asked that judgment be rendered declaring the contract of sale theretofore made between herself and
Basilia Bough null. The plaintiffs, thereupon, denied under oath the genuineness and due execution of
the so-called donation intervivos set forth in the answer. Presbitera Hanopol was permitted to intervene
as a defendant. After trial, judgment was rendered by the Honorable W. E. McMahon, judge of first
instance, in favor of the defendants, declaring the deed of sale, Exhibit A, fictitious, null, and without
effect, and absolving the defendants from the complaint, with costs against the plaintiffs. It is from this
judgment through the ordinary means of perfection of a bill of exceptions that the case is brought to this
court for decision.

The facts are these: Matilde Cantiveros is reputed to be the richest resident of the municipality of
Carigara, Leyte. In the latter part of the year 1913, she was the owner of various parcels of realty of the
value of thirty thousand pesos or more. On December 24, 1912, Matilde Cantiveros and her husband
Jose Vasquez, signed a marital contract of separation. At this time there lived with Matilde Cantiveros,
Basilia Hanopol, a cousin and protege since childhood, who was married to Gustavus Bough. For this
reason, Gustavus Bough was regarded by Matilde Cantiveros with great confidence, even as her child.
Through the influence of Gustavus Bough, who brought a story to Matilde Cantiveros that her husband
Jose Vasquez was in town and might contest the contract for the separation of the conjugal property,
Matilde Cantiveros was induced to sign a fictitious contract of sale of all her property to Basilia Bough.
This document, introduced in evidence as Exhibit A, was prepared in due from and acknowledged
before a notary public, the amount of the consideration, ten thousand pesos, being last inserted with a
pen. By this deed, Matilde Cantiveros purported to convey sixty-three parcels of land, the real value of
which was over thirty thousand pesos, for ten thousand pesos, although no evidence that any such sum
ever passed between the parties was introduced, to her cousin, Basilia Bough. In order to reassure
Matilde Cantiveros that they would not take advantage of the fictitious sale, Gustavus Bough and Basilia
Bough prepared and signed another document, introduced in evidence as Exhibit 1, which is a donation
by them to Matilde Cantiveros of all the property mentioned in Exhibit A, to be effective in case of the
death of themselves and their children before the death of Matilde Cantiveros. The defendant, Matilde
Cantiveros, has remained in possession of the property.

These facts, which, it may be said, are mainly derived from the findings of the trial court, merely repeat
the threadbare story of a conveyance of property entered into with a fraudulent intention and for a
fraudulent purpose, in order to defeat recovery in a suit at law by a third party.

Plaintiffs and appellants assign six errors of the trial court. In so far as these assignments concern the
facts, they need no discussion. Plaintiff's declarations have not been corroborated, while defendant's
story has been corroborated by reliable witnesses. All the reason — all the equity — of the case, is in
favor of the defendants. As far as necessary for the disposition of the appeal, we resolve plaintiff's
points in order.

1. The first assignment of error reads: "The lower Court erred in permitting the defendants to present
evidence, over the objections of the plaintiff, tending to impugn the genuineness and due execution of
the document, Exhibit A, and in admitting them to show the circumstances under which it was executed.

It is undeniable that this was an action brought upon a written instrument, and that the complaint
contained a copy of the instrument, but that its genuineness and due execution were not specifically
denied under oath in the answer. Is this fatal to the defense?
Section 103 of the Philippine Code of Civil Procedure provides:

When an action is brought upon a written instrument and the complaint contains or has annexed a copy
of such instrument, the genuineness and due execution of the instrument shall be deemed admitted,
unless specifically denied under oath in the answer; and when the defense to an action, or a
counterclaim stated in an answer, is founded upon a written instrument and the copy thereof is
contained in or annexed to the answer, the genuineness and due execution of such instrument shall be
deemed admitted, unless specifically denied under oath by the plaintiff in his pleadings.

This section is derived from sections 448 and 449 of the Code of Civil Procedure of California, and is to
be found in varying form in the statutes of practically all the states of the American Union. The meaning
of this portion of the Code, and the intention of the Legislature in enacting it, are easily found. The law
says that the genuineness and due execution of a written instrument properly pleaded shall be deemed
admitted unless the plaintiff or defendant, as the case may be, shall specifically deny the same under
oath. When the law makes use of the phrase "genuineness and due execution of the instrument" it
means nothing more than that the instrument is not spurious, counterfeit, or of different import on its
face from the one executed. As an example, where the name of a corporation is signed to the document
which is the basis of an action, the failure of the defendant corporation to put in issue, by denial under
oath, the due execution of the instrument, as required in section 103 of the Code of Civil Procedure,
operates as an admission of the authority of the officer to execute the contract, since the authority of the
officer to bind the company is essential to the due execution of its contract. (Ramirez vs. Orientalist Co.
and Fernandez [1918], 38 Phil., 634.) But the failure of the party to file an affidavit denying the
genuineness and due execution of the document does not estop him from controverting it by evidence of
fraud, mistake, compromise, payment, statute of limitations, estoppel, and want of consideration. As
section 285 of our Code of Civil Procedure permits a writing to be impeached because of its illegality or
fraud, such a defense would not be barred by the provisions of section 103. (Moore vs. Copp [1897],
119 Cal., 429 Brooks vs. Johnson [1898], 122 Cal., 569; Hibberd vs. Rohde and McMillian [1915], 32
Phil., 476.)

We hold that although the defendants did not deny the genuineness and due execution of the contract
of sale of December 9, 1913, under oath, yet the defendants could properly set up the defenses of fraud
and want of consideration.

2. The second assignment of error reads: "The lower Court erred in finding that the plaintiff Gustavus
Bough, having prepared a contract of separation between the defendant Matilde Cantiveros and her
husband, Jose Vasquez, sought to cause her to believe that she exposed herself to a suit by her
husband regarding her property, notwithstanding the contract of separation, and for that reason and for
the purpose of shielding herself from the consequences of the apprehended suit, that she and her
mother executed the document Exhibit A."

Counsel relies on the provisions of article 1218 of the Civil Code, which provides that "Public
instruments are evidence, even against a third person, of the fact which gave rise to their execution and
of the date of the latter." The effect of this article has been announced in numerous decisions of the
Supreme Court of Spain and of this Court. (See Hijos de I. de la Rama vs. Robles and Robles [1907], 8
Phil., 712.) But in conjunction with article 1218 of the Civil Code, there should always be read section
285 of the Code of Civil Procedure which provides that:

When the terms of an agreement have been reduced to writing by the parties, it is to be considered as
containing all those terms, and therefore there can be, between the parties and their representatives or
successors in interest, no evidence of the terms of agreement other than contents of the writing, except
in the following cases:

1. Where a mistake or imperfection of the writing, or its failure to express the true intent and agreement
of the parties, is put in issue by the pleadings;

2. Where the validity of the agreement is the fact in dispute. But this section does not exclude other
evidence of the circumstances under which the agreement was made, or to which it relates, or to explain
an intrinsic ambiguity, or to establish its illegality or fraud. The term `agreement' includes deeds and
intruments conveying real estate, and wills as well as contracts between parties.

While thus as the law well says "public instruments are evidence of the fact which gave rise to their
execution" and are to be considered as containing all the terms of the agreement, yet, if the validity of
the agreement is the issue, parole evidence may be introduced to establish illegality or fraud. Evidence
to establish illegality or fraud, is expressly permitted under section 285 of the Code of Civil Procedure,
and may be proved by circumstantial evidence, aided by legitimate inferences from the direct facts.
(Camacho vs. Municipality of Baliuag [1914], 28 Phil., 466; Maulini vs. Serrano [1914], 28 Phil., 640;
Union Mut. Life Insurance Co. vs. Wilkinson [1872], 13 Wall, 222; Maxon vs. Llewelyn [1898], 122 Cal.,
195, construing section 1856 of the Code of Civil Procedrue of California, identical with section 285 of
the Code of Civil Procedure of the Philippines.)

We hold that parole evidence was properly admitted to show the illegality of the contract of sale
introduced as Exhibit A.

3. The third point raised by appellant is, that the defendant, having accepted the donation expressed in
the instrument Exhibit 1, is now estopped from denying the consideration set forth therein. A sufficient
answer is, that it having been established that Exhibit A is invalid, such an instrument cannot be made
the basis of an estoppel.

We hold that the so-called donation in favor of Matilde Cantiveros did not operate to create an estoppel.

4. The last question which is propounded by appellant relates to the effect of the illegality of the instant
contract.

It is rudimentary that contracting parties may not establish pacts, clauses, and conditions, which conflict
with the laws, morals, or public order; "public order" signifies "the public weal" — public policy (Article
1255, Civil Code; Manresa, Comentarios al Codigo Civil, Vol. 8, p. 574.) It is further well settled, that a
party to an illegal contract cannot come into a court of law and ask to have his illegal objects carried out.
The rule is expressed in the maxims: "Ex dolo malo non oritur actio," and "In pari delicto potior est
conditio defendentis." The law will not aid either party to an illegal agreement; it leaves the parties where
it finds them. (Article 1306, Civil Code; Perez vs. Herranz [1907], 7 Phil., 693.) Where, however, the
parties to an illegal contract are not equally guilty, and where public policy is considered as advanced by
allowing the more excusable of the two to sue for relief against the transaction, relief is given to him.
Cases of this character are, where they conveyance was wrongfully induced by the grantee through
imposition or overreaching, or by false representations, especially by one in a confidential relation. (13 C.
J., 497-499; Pride vs. Andrew [1894], 51 Ohio State, 405.)

As corroborative examples of these principles, we may cite the following:

Where a husband falsely represented to his wife that she was liable for certain debts, and that the
creditors would take her property and influenced by this, and intending to defraud such creditors, she
transferred her property to him, it was held that the deed would be set aside. (Boyd vs. De la Montagnie
[1878], 73 N.Y., 498.)

Where a party has given a conveyance of his property with intent to defraud a creditor, the law will allow
him no relief against such conveyance, but will leave him in the situation in which he has placed himself.
But where there is no creditor in fact, but only an imaginary one, through fear of whom the grantor,
encouraged by the grantee, makes the conveyance, a fraudulent intent will not be imputed to the grantor,
and where the conveyance of the property has been without consideration, he may recover the same or
its value. (Kervick vs. Mitchell [1885], 68 Iowa, 273.)

Where a son falsely represented to his mother that a suit was about to be brought against her for
slander which would result in her losing all her property, and thereby induced her to convey all her
property to him, it was held that the conveyance would be set aside at her suit. (Harper vs. Harper & Co.
[1887], 85 Ky., 160.)

Where a woman seventy years of age and illiterate was induced by her son-in-law and the sureties on
his bond to execute a mortgage to the sureties to indemnify them on a defalcation by the son-in-law, by
holding out to her the anticipated punishment of the latter, without allowing her a chance to consult any
disinterested friend, it was held that the mortgage would be set aside. (Bell vs. Campbell [1894], 123
Mo., 1.)

One who executes a bill of sale at the instance of the grantee for the purpose of putting his property
beyond the reach of a third person whom the grantee represented was about to institute suit against the
grantor, is entitled to recover the value of the property, where such third person had no valid claim
against the grantor, but had been settled with in full, and his receipt taken. (Kervick vs. Mitchell [1885],
68 Iowa, 273.)
A brother who conveyed property to his sister on a secret trust for his benefit, to defeat any claim for
alimony which his wife, who had instituted a suit for divorce, might make against him, is entitled to
enforce the trust upon which the conveyance was made, where it does not appear that any claim for
alimony was ever set up by his wife, or allowed, or that facts existed entitling her to such an allowance.
The court said: `It does not appear that there was any creditor whose rights or interests could be
prejudiced by the conveyance, and the question is whether or not the mere motive which impelled the
party to make the deed will preclude him from enforcing the trust upon which it was executed. We think
that where there is no creditor, there is no fraud, and therefore no policy of the law to prevent the
enforcement of the trust. (Rivera vs. White [1901], 94 Tex., 538.)

A conveyance made by a mother to a daughter in consequence of false representations that her

property might otherwise be taken from her to satisfy a claim for alimony arising from a suit for divorce
about to be brought against her son by his wife will be cancelled. The Court said: "If the conveyance
was made for the purpose of protecting the property from such claim, such representations being untrue,
and such apprehensions in fact groundless, then she is entitled to have the deeds set aside."
(Kleeman vs. Peltzer [1885], 17 Neb., 381.)

In this instance, the grantor, reposing faith in the integrity of the grantee, and relying on a suggested
occurrence, which did not in fact take place, was made the dupe of the grantee, and led into an
agreement against public policy. The party asking to be relieved from the agreement which she was
induced to enter into by means of fraud, was thus in delicto, but not in pari delicto with the other party.
The deed was procured by misrepresentation and fraud sufficient to vitiate the transaction. The rights of
creditors are not affected. We feel that justice will be done if we place the grantor in the position in which
she was before these transactions were entered into.

The facts of this case are not greatly dissimilar from those to be found in Hibberd vs. Rohde and
McMillian ([1915], 32 Phil., 476), relating to the defenses permissible where an instrument was
submitted by the plaintiff, and not denied under oath by the defendant, and to the subject of contracts
against public policy. The doctrine there announced need not be incorporated in this decision.

We resolve each assignment of error against the appellants, and having done so, affirm the judgment of
the trial court, with costs of this instance against the appellants. So ordered.

Arellano, C.J., Torres, Johnson, Araullo, Street, Avanceña and Moir, JJ., concur .
G.R. No. 183034 March 12, 2014

SPOUSES FERNANDO and MA. ELENA SANTOS, Petitioners,

vs.
LOLITA ALCAZAR, represented by her Attorney-in-Fact DELFIN CHUA, Respondent.

DECISION

DEL CASTILLO, J.:

The rule that the genuineness and due execution of the instrument shall be deemed admitted, unless
the adverse party specifically denies them under oath, applies only to parties to such instrument.

Assailed in this Petition for Review on Certiorari1 are the September 27, 2007 Decision2 of the Court of
Appeals (CA) in CA-G.R. CV No. 87935, entitled "Lolita Alcazar, represented by her Attorney-in-Fact,
Delfin Chua, Plaintiff-Appellee, versus Spouses Fernando T. Santos, Defendants-Appellants," and its
May 23, 2008 Resolution3 denying petitioners' Motion for Reconsideration.

Factual Antecedents

In February 2001, respondent Lolita Alcazar, proprietor of Legazpi Color Center (LCC), instituted
through her attorney-in-fact Delfin Chua a Complaint4 for sum of money against the petitioners, spouses
Fernando and Ma. Elena Santos, to collect the value of paint and construction materials obtained by the
latter from LCC amounting to ₱1,456,000.00, which remained unpaid despite written demand. The case
was docketed as Civil Case No. 9954 and assigned to Branch 5 of the Regional Trial Court of Legazpi
City. Respondent’s cause of action is based on a document entitled "Acknowledgment"5 apparently
executed by hand by petitioner Fernando, thus:

ACKNOWLEDGMENT

This is to certify that I acknowledge my obligation in the amount of One Million Four
Hundred Fifty Six Thousand (₱1,456,000), Philippine Currency with LEGAZPI COLOR
CENTER, LEGAZPI CITY.

Signed at No. 32 Agno St. Banaue, Quezon City on December 12, 2000.

(signed)
FERNANDO T. SANTOS
Debtor

Signed in the presence of:

(signed)
TESS ALCAZAR
Proprietress
Legazpi Color Center

Witnesses in the signing:

(signed) (signed)
DELFIN A. CHUA AILEEN C. EDADES6

Respondent alleged in her Complaint:

xxxx

4. That as part of the agreement, defendants also obligated themselves to pay plaintiff at the rate of 3%
interest per month based on the unpaid principal, to cover the cost of money;
5. That as of December, 2000, the total obligation of defendants with plaintiff which consists of principal
and interest was ₱1,456,000.00, a copy of the document where defendants acknowledged their unpaid
obligation is hereto attached as Annex "B"; (referring to the above Acknowledgment)

6. That on January 5, 2001, plaintiff sent a final demand to defendants to pay the indebtedness, but said
demand fell on deaf ears and defendants did not even bother to communicate with plaintiff, copy of the
demand letter is hereto attached as Annex "C";7

She thus prayed that judgment be rendered ordering petitioners to pay her the sum of ₱1,456,000.00,
with interest at the rate of 3% per month; attorney’s fees in the amount of ₱72,800.00, and ₱1,500.00
per court appearance; and costs of the suit.

In their Answer,8 petitioners sought the dismissal of the Complaint, alleging among others that –

4. Paragraph 5 is specifically denied as the document which Defendant Fernando T. Santos signed
does not reflect the true contract or intention of the parties, the actionable document is incorrect and has
to be reformed to reflect the real indebtedness of the defendants;

5. Paragraph 6 of the complaint is specifically denied as the same does not reflect the correct amount.
The defendants[’] computation is that the amount of ₱600,000.00 is the only amount due and the
instrument used as the actionable document does not reflect the correct substance of the transaction
and indicates a reformation of the actionable document;

6. Paragraph 7 is specifically denied as defendants are willing to pay the correct amount, not the amount
in the complaint as the same does not indicate the correct amount owing to the plaintiff;

xxxx

VERIFICATION

I, Fernando T. Santos[,] of legal age, Filipino[,] married and resident of Banawe,

Quezon City[,] under oath declare:

1. That I am the defendant in the above entitled case;

2. That I have read and understood the contents thereof and affirm that the allegations
contained therein are true and correct of my personal knowledge[;]

3. That I have not commenced any other action or proceeding involving x x x the
same issues in the Supreme Court, Court of Appeals or any other tribunal/agency[;]

4. That to the best of my knowledge, no such action or proceeding involving the same
issues in the Supreme Court, Court of Appeals or any other tribunal/agency [is
pending];

5. That if I should thereafter learn that a similar action or proceeding has been filed or
is pending before the Supreme Court, Court of Appeals or any other tribunal/agency, I
undertake to report the fact within 5 days therefrom to this court.

IN WITNESS WHEREOF, I have hereunto set [my] hand this April 18, 2001 x x x.

(signed)
Fernando T. Santos
Defendant9

Pre-trial was conducted. On September 26, 2005, the trial court issued its Pre-trial Order10 setting forth
the matters taken up during the pre-trial conference and the schedule of hearings. The presentation of
respondent’s evidence was set on October 10; November 8 and 21; and December 6 and 13, 2005.
Petitioners were scheduled to present their case on January 9 and 23; and February 6, 2006.11
On November 8, 2005, respondent presented her evidence and testified in court as the lone witness. On
November 21, 2005, she made a formal offer of her evidence and rested her case.

On January 17, 2006, petitioners filed a Demurrer to Evidence,12 which respondent opposed. Petitioners
argued that the Acknowledgment – respondent’s Exhibit "A" which was presented in court – was not an
original copy and thus inadmissible; petitioners’ receipt of the written demand was not proved; the
alleged deliveries of paint and construction materials were not covered by delivery receipts; and
respondent’s testimony was merely hearsay and uncorroborated.

On January 26, 2006, the trial court issued an Order13 denying petitioners’ demurrer for lack of merit. In
the same Order, the trial court scheduled the presentation of petitioners’ evidence in the morning and
afternoon sessions of February 20, 2006.

Petitioners moved to reconsider the trial court’s January 26, 2006 Order. On February 20, 2006, the trial
court issued an Order14 denying petitioners’ Motion for Reconsideration and scheduled the presentation
of evidence for the petitioners on March 20, 2006.

On March 15, 2006, petitioners moved to reset the March 20, 2006 scheduled hearing, on the ground
that on said date and time, their counsel was to appear in another scheduled case.

On March 20, 2006, or the day of the scheduled hearing, petitioners’ counsel failed to appear, prompting
the trial court to issue an Order15 1) denying petitioners’ March 15, 2006 motion to reset for lack of merit
and for violating Section 4, Rule 15 of the 1997 Rules of Civil Procedure;16 2) declaring that petitioners
have waived their right to present evidence; and 3) declaring that Civil Case No. 9954 is deemed
submitted for decision.

Petitioners went up to the CA on certiorari. Docketed as CA-G.R. SP. No. 93889, the Petition
questioned the denial of petitioners’ demurrer. Meanwhile, they filed a Motion for Reconsideration17 of
the March 20, 2006 Order denying their motion to reset, but the trial court denied the same in an Order
dated April 24, 2006.18

The Decision of the Regional Trial Court

On June 27, 2006, the trial court rendered its Decision19 in Civil Case No. 9954, which contained the
following decretal portion:

WHEREFORE, Premises Considered, judgment is rendered ordering the defendants to pay the plaintiff
the following amounts, to wit:

1. The sum of 1,456,000 pesos plus interest thereon at the legal rate commencing from the time the
complaint was filed in court until such time such amount has been paid in full;

2. The sum of 10,000 pesos as litigation expenses; and

3. The sum of 25,000 pesos as attorney’s fees.

The defendants shall pay the costs of suit.

Needless to say, the counterclaim in the Answer is Dismissed.

SO ORDERED.20

The trial court essentially held that petitioners, in their Answer, admitted that they entered into
transactions with the respondent for the delivery of paint and construction materials, which remained
unpaid; that from the Acknowledgment, Exhibit "A," signed by Fernando and duly presented,
authenticated, and identified by respondent during trial, petitioners admitted that their unpaid obligation
– including interest – amounted to ₱1,456,000.00; and that petitioners’ plea for reformation has no basis.

Petitioners filed their Motion for Reconsideration,21 arguing that the trial court should not have pre-
empted CA-G.R. SP No. 93889, and instead should have awaited the resolution thereof; that the
Acknowledgment was signed by Fernando alone, and thus the judgment should not bind his co-
defendant and herein petitioner Ma. Elena Santos; that petitioners’ liability has not been established
since no delivery receipts, invoices and statements of account were presented during trial to show
delivery of paint and construction materials; that respondent was unable to present the original of the
Acknowledgment, which puts the Decision of the trial court – declaring that the original thereof was
presented and authenticated by respondent – in serious doubt; and that there is no evidentiary basis to
hold petitioners liable for ₱1,456,000.00.

In an Order22 dated August 8, 2006, the trial court denied petitioners’ Motion for Reconsideration.

The Assailed Court of Appeals Decision

Petitioners interposed an appeal with the CA. Docketed as CA-G.R. CV No. 87935, the ruling in the
appeal is the subject of the present Petition. Petitioners claimed that the trial court erred in allowing
respondent to present her evidence ex parte; the Acknowledgment has not been authenticated; the
adjudged liability in the amount of ₱1,456,000.00 was not sufficiently proved by respondent, as she
failed to present receipts and statements of account which would show the true amount of their
obligation, including interest; the trial court based its findings on erroneous conclusions, assumptions
and inferences; and the trial court erred in declaring them to have waived their right to present evidence.

Meanwhile, in CA-G.R. SP. No. 93889, the CA issued its Decision23 dated March 30, 2007, dismissing
petitioners’ certiorari petition and sustaining the trial court’s denial of their demurrer. The CA held that
petitioners failed to deny specifically under oath the genuineness and due execution of the
Acknowledgment; consequently, 1) its genuineness and due execution are deemed admitted, 2) there
was thus no need to present the original thereof, and 3) petitioners’ liability was sufficiently
established.24 The CA added that under the circumstances, certiorari was not the proper remedy;
petitioners should have gone to trial and awaited the trial court’s Decision, which they could appeal if
adverse.

The Decision became final and executory on April 27, 2007.25

On September 27, 2007, the CA issued the herein assailed Decision in CA-G.R. CV No. 87935, which
held as follows:

WHEREFORE, the instant appeal is DENIED and consequently DISMISSED for lack of merit.

SO ORDERED.26

The CA held that in their Answer, petitioners admitted that they owed respondent, albeit to the extent of
₱600,000.00; this judicial admission of liability required no further proof. And with this admission of
liability, the Acknowledgment which was duly authenticated and formally offered in evidence was
sufficient to establish their liability, and no further proof in the form of receipts and statements of account
was required. The appellate court stated that Fernando’s categorical admission of liability as contained
in the Acknowledgment as well as petitioners’ admissions in their Answer sufficed. It held further that
respondent was competent to testify on the Acknowledgment as she was a signatory therein.

The CA likewise held that since they failed to oppose the Acknowledgment in the court below as a result
of their having waived their right to present evidence, petitioners cannot now belatedly question the
document. Moreover, their claim of a lesser liability in the amount of ₱600,000.00 remained to be plain
unsubstantiated allegations as a result of their failure to refute respondent’s evidence and present their
own.

Finally, the CA held that petitioners were not deprived of due process during trial; on the contrary, they
were afforded sufficient opportunity to participate in the proceedings by way of constant strict reminders
by the court and several continuances, but they failed to take part in the proceedings.

Petitioners moved to reconsider, but in the second assailed May 23, 2008 disposition, the appellate
court stood its ground. Thus, the instant Petition seeking a reversal of the assailed CA dispositions and
the dismissal of the Complaint in Civil Case No. 9954.

Issues

Petitioners now raise the following issues for the Court’s resolution:
IN THE RESOLUTION OF THE COURT OF APPEALS, THE ARGUMENT IN PETITIONERS’ MOTION
FOR RECONSIDERATION THAT RESPONDENT FAILED TO PRODUCE AND PRESENT THE
ORIGINAL COPY OF THE ACKNOWLEDGMENT RECEIPT EXHIBIT "A" WHICH IS A VIOLATION OF
THE BEST EVIDENCE RULE, WAS NOT ACTED UPON AND CONSIDERED "REHASH".

THE COURT OF APPEALS27 FOUND THE NEED FOR RECEIPTS OF STATEMENTS OF ACCOUNT
TO BE PRESENTED REFLECTING THE ACTUAL OBLIGATION OF PETITIONERS IN ITS DECISION
DATED JULY 20, 2004 AND THUS SET ASIDE AND REMANDED TO THE COURT A QUO THE CASE
FOR FURTHER PROCEEDINGS BUT THE SAME WAS COUNTERMANDED IN THE ASSAILED
DECISION.

CONTRARY TO THE FINDINGS OF THE COURT OF APPEALS, PETITIONERS DID NOT ADMIT IN
THEIR ANSWER THAT THEY ARE INDEBTED TO RESPONDENT IN THE AMOUNT OF
₱1,456,000.00.

THE COURT OF APPEALS FAILED TO RULE ON THE ABSENCE OF ANY RECORD OF THE
PROCEEDINGS OF THE PRE-TRIAL CONFERENCE HELD ON SEPTEMBER 26, 2005. THE COURT
OF APPEALS SHOULD HAVE SERIOUSLY CONSIDERED TACKLING THE ISSUE OF
PRESUMPTIONS, INFERENCES, AND MISCONCEPTION OF FACTS USED BY THE COURT A QUO
[IN ARRIVING AT] ITS FINDINGS AND CONCLUSIONS.

PETITIONERS WERE NOT DULY NOTIFIED OF THE NOVEMBER 8, 2005 HEARING IN VIOLATION
OF SECTIONS 4 AND 5 [OF RULE 15] OF THE RULES OF COURT WHICH THE COURT OF
APPEALS FAILED TO RULE.

PETITIONERS HAVE BEEN DEPRIVED OF THEIR DAY IN COURT WHEN THEY WERE
CONSIDERED TO HAVE WAIVED THEIR RIGHT TO PRESENT EVIDENCE AND THE CASE
SUBMITTED FOR DECISION, THE CONTRARY RULING OF THE COURT OF APPEALS
NOTWITHSTANDING.28

Petitioners’ Arguments

Petitioners, in their Petition and Reply,29 assert that during the proceedings below, only a photocopy of
the Acknowledgment was presented and identified by respondent even as the original was not lost, the
same having been made part of the record of the case when respondent’s evidence was first presented
ex parte.30 For this reason, they argue that the photocopy presented and offered in evidence is
inadmissible and could not be the basis for arriving at a finding of liability on their part, pursuant to the
best evidence rule.

Petitioners further point out that in the first CA disposition, specifically in CA-G.R. CV No. 71187, the
appellate court’s Thirteenth Division ruled that in establishing petitioners’ pecuniary liability, receipts and
statements of account reflecting the actual amount of their obligation and interest thereon were
necessary. Later on, in CA-G.R. CV No. 87935, the same division of the CA made a complete
turnaround, declaring that receipts and statements of account were no longer necessary. For petitioners,
this retraction by the CA was irregular.

Petitioners add that the pre-trial conference in Civil Case No. 9954 is a sham, as there are no records to
show that it was ever conducted. Consequently, this irregularity renders the proceedings below –
including the assailed judgment – null and void. They add that the trial court irregularly proceeded to
receive respondent’s evidence ex parte on November 8, 2005 despite lack of notice of hearing.

Next, petitioners point out inconsistencies and erroneous assumptions made by the appellate court
which formed the basis of its decision, such as Ma. Elena’s undue inclusion in the judgment of liability,
when it is evident from the Acknowledgment that it was executed and signed by Fernando alone.

Finally, petitioners submit that in denying a continuance of the March 20, 2006 hearing and declaring
them to have waived their right to present evidence, the trial court deprived them of their day in court.

Respondent’s Arguments

In her Comment,31 respondent counters that the Petition presents no valid cause for the Court’s exercise
of its power of review; that the issues raised therein have been duly taken up and conclusively resolved
by the CA; that with the finality of the Decision in CA-G.R. SP No. 93889, petitioners may no longer
raise any issue pertaining to the Acknowledgment, the genuineness and due execution of which they
are considered to have admitted; and that with the resolution by the CA of the issues revived in the
Petition, petitioners are guilty of forum shopping.

Respondent adds that petitioners are bound by the proceedings taken during the pre-trial conference,
and may not pretend to be ignorant of the hearing dates agreed upon and set by the trial court.
Respondent argues that petitioners may not claim to be oblivious of the pre-trial conference itself, since
their representative was present all throughout the proceedings, and a pre-trial order was issued
thereafter which contained the matters taken up during pre-trial and the hearing dates scheduled by the
court.

Our Ruling

The Court denies the Petition.

Respondent’s failure to present the original copy of the Acknowledgment during the taking of her
testimony for the second time, and the presentation of a mere photocopy thereof at said hearing, does
not materially affect the outcome of the case. It was a mere procedural inadvertence that could have
been cured and did not affect petitioners’ cause in any manner. As conceded by them and as held by
the CA, the original exists and was made part of the records of the case when respondent’s evidence
was first taken. Though respondent now claims that she had lost the original, the CA proclaimed that the
document resides in the record. This would explain then why respondent cannot find it in her possession;
it is with the court as an exhibit. Besides, it evidently appears that there is no question raised on the
authenticity and contents of the photocopy that was presented and identified in court; petitioners merely
insist that the photocopy is inadmissible as a result of respondent’s failure to present the original, which
they nevertheless admit to exist and is found and included in the record of the case.

While it is a basic rule of evidence that the original copy prevails over a mere photocopy,32 there is no
harm if in a case, both the original and a photocopy thereof are authenticated, identified and formally
offered in evidence by the party proponent.

More to the point is the fact that petitioners failed to deny specifically under oath the genuineness and
due execution of the Acknowledgment in their Answer. The effect of this is that the genuineness and
due execution of the Acknowledgment is deemed admitted. "By the admission of the genuineness and
due execution [of such document] is meant that the party whose signature it bears admits that he signed
it or that it was signed by another for him with his authority; that at the time it was signed it was in words
and figures exactly as set out in the pleading of the party relying upon it; that the document was
delivered; and that any formal requisites required by law, such as a seal, an acknowledgment, or
revenue stamp, which it lacks, are waived by him. Hence, such defenses as that the signature is a
forgery x x x; or that it was unauthorized x x x; or that the party charged signed the instrument in some
other capacity than that alleged in the pleading setting it out x x x; or that it was never delivered x x x,
are cut off by the admission of its genuineness and due execution."33

"There is no need for proof of execution and authenticity with respect to documents the genuineness
and due execution of which are admitted by the adverse party."34 With the consequent admission
engendered by petitioners’ failure to properly deny the Acknowledgment in their Answer, coupled with its
proper authentication, identification and offer by the respondent, not to mention petitioners’ admissions
in paragraphs 4 to 6 of their Answer that they are indeed indebted to respondent, the Court believes that
judgment may be had solely on the document, and there is no need to present receipts and other
documents to prove the claimed indebtedness. The Acknowledgment, just as an ordinary
acknowledgment receipt, is "valid and binding between the parties who executed it, as a document
evidencing the loan agreement they had entered into."35 The absence of rebutting evidence occasioned
by petitioners’ waiver of their right to present evidence renders the Acknowledgment as the best
evidence of the transactions between the parties and the consequential indebtedness incurred.36 Indeed,
the effect of the admission is such that "a prima facie case is made for the plaintiff which dispenses with
the necessity of evidence on his part and entitles him to a judgment on the pleadings unless a special
defense of new matter, such as payment, is interposed by the defendant."37

However, as correctly argued by petitioners, only Fernando may be held liable for the judgment amount
of ₱1,456,000.00, since Ma. Elena was not a signatory to the Acknowledgment. She may be held liable
only to the extent of ₱600,000.00, as admitted by her and Fernando in paragraph 5 of their Answer; no
case against her may be proved over and beyond such amount, in the absence of her signature and an
acknowledgment of liability in the Acknowledgment. The rule that the genuineness and due execution of
the instrument shall be deemed admitted, unless the adverse party specifically denies them under oath,
applies only to parties to the document.38

As for petitioners’ claim that in CA-G.R. CV No. 87935, the same division of the CA made a complete
turnaround from its original pronouncement in CA-G.R. CV No. 71187 – thus doing away with the
requirement of presenting receipts and statements of account which it originally required in the latter
case, the Court finds no irregularity in this. The admission of liability resulting from petitioners’ admission
of indebtedness in their Answer and other pleadings,39 their failure to specifically deny under oath the
genuineness and due execution of the Acknowledgment, as well as their waiver of their right to present
evidence – all these did away with the necessity of producing receipts and statements of account which
would otherwise be required under normal circumstances.

On the claim that they were denied their day in court, the Court notes that despite reminders and
admonitions by the trial court, petitioners caused several continuances of trial, which understandably
prompted the trial court to finally deny their March 15, 2006 motion to reset the scheduled March 20
hearing and declare a waiver of their right to present evidence. Thus, as found by the CA,

 In its September 26, 2005 Pre-Trial Order, the trial court fixed the hearing dates with a firm
declaration that the same "shall be strictly followed and all postponements made by the parties
shall be deducted from such party’s allotted time to present evidence.

 When plaintiff-appellee finished her presentation of evidence ahead of schedule, the appellants
were again advised of their schedule for presentation of evidence – i.e., December 6 and 13,
2005 and January 9 and 23 and February 6, 2006. Despite said schedule, the appellants failed
to appear in court.

 On January 9, 2006, the lower court reiterated the scheduled hearing set on January 26, 2006
and included February 20, 2006 as an additional hearing date.

 Instead of presenting their evidence, the appellants filed a Demurrer to Evidence on January
17, 2006 which, however, was denied by the trial court in its Order dated January 26, 2006.

 On February 20, 2006, the trial court again allowed another hearing date – March 20, 2006 – to
afford the appellants added opportunity to present their evidence.

The foregoing clearly show that not only were appellants given an opportunity to be heard, an added
mileage in due process was extended to them by the trial court.40

Petitioners submit further that the trial court’s subsequent denial of their motion for continuance of the
March 20, 2006 hearing was improper. Yet again, the Court does not subscribe to this view. Petitioners
filed their motion to reset the March 20, 2006 previously scheduled hearing, but the trial court did not act
on the motion. Instead of attending the March 20, 2006 hearing, petitioners’ counsel proceeded to
absent himself and attended the supposed hearing of another case. This was improper. As we have
held before,

[A] party moving for postponement should be in court on the day set for trial if the motion is not acted
upon favorably before that day. He has no right to rely either on the liberality of the court or on the
generosity of the adverse party. x x x

[A]n attorney retained in a case the trial of which is set for a date on which he knows he cannot appear
because of his engagement in another trial set previously on the same date, has no right to presume
that the court will necessarily grant him continuance. The most ethical thing for him to do in such a
situation is to inform the prospective client of all the facts so that the latter may retain another attorney, If
the client, having full knowledge of all the facts, still retain[s] the attorney, he assumes the risk himself
and cannot complain of the consequences if the postponement is denied and finds himself without
attorney to represent him at the trial.41

The grant or denial of a motion for postponement rests on the court’s sound discretion; it is a matter of
privilege, not a right. "A movant for postponement should not assume beforehand that his motion will be
granted. The grant or denial of a motion for postponement is a matter that is addressed to the sound
discretion of the trial court. Indeed, an order declaring a party to have waived the right to present
evidence for performing dilatory actions upholds the trial court's duty to ensure that trial proceeds
despite the deliberate delay and refusal to proceed on the part of one party."42

On the other questions raised by petitioners, specifically that the pre-trial conference is a sham for lack
of records of the proceedings, and that the November 8, 2005 hearing where respondent's evidence
was taken exparte was irregular for lack of a notice of hearing - the Court finds them to be without merit.
It is evident that a pre-trial conference was held, and that petitioners' representative was present therein;
moreover, the proceedings were covered by the required pre-trial order, which may itself be considered
a record of the pre-trial.43 In said order, the November 8, 2005 pre-scheduled hearing was particularly
specified.44 Thus, from the very start, petitioners knew of the November 8 hearing; if they failed to attend,
no fault may be attributed to the trial court.

WHEREFORE, the Petition is DENIED. The September 27, 2007 Decision and May 23, 2008 Resolution
of the Court of Appeals in CA-G.R. CV No. 87935 are AFFIRMED, with MODIFICATION in that
petitioner Ma. Elena Santos is held liable for the principal and interest only to the extent of ₱600,000.00.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice
G.R. No. 142896 September 12, 2007

CANELAND SUGAR CORPORATION, petitioners,

vs.
HON. REYNALDO M. ALON, LAND BANK OF THE PHILIPPINES, and ERIC B. DE
VERA, respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

On July 15, 1999, Caneland Sugar Corporation (petitioner) filed with the Regional Trial Court (RTC) of
Silay City, Branch 40, a complaint for damages, injunction, and nullity of mortgage against the Land
Bank of the Philippines (respondent) and Sheriff Eric B. de Vera, docketed as Civil Case No. 2067-40,
praying for the following reliefs: issuance of a temporary restraining order enjoining respondent and the
Sheriff from proceeding with the auction sale of petitioner’s property; declaration of nullity of any
foreclosure sale to be held; declaration of nullity of the mortgage constituted over petitioner’s property
covered by TCT No. T-11292 in favor of respondent; and award of damages.1

On July 21, 1999, the RTC issued an Order holding in abeyance the auction sale set on July 23, 1999,
as agreed upon by the parties.2 Notwithstanding said directive, another foreclosure sale was scheduled
on October 15, 1999. Per RTC Order dated October 14, 1999, the October 15 scheduled sale was held
in abeyance; but re-scheduled the sale on November 15, 1999, for the following reasons:

However, P.D. 385 provides that it shall be mandatory for government financial institution to foreclose
collaterals and/or securities for any loan, credit accommodations and/or guarantees granted by them
whenever the arrearages on such account, including accrued interest and other charges amount to at
least 20% of the total outstanding obligation as appearing in the books of the financial institution.
Moreover, no restraining order, temporary or permanent injunction shall be issued by the court against
any government financial institution in any action taken by such institution in compliance with the
mandatory foreclosure provided by said law. x x x The defendant Land Bank of the Philippines and Eric
B. De Vera, Sheriff of this Court, are hereby authorized to proceed with the extrajudicial foreclosure sale
on November 15, 1999.3

Petitioner filed a Motion for Reconsideration of the trial court’s Order, but this was denied per Order
dated November 8, 1999.4

Petitioner then filed with the Court of Appeals (CA) a Petition for Certiorari and Prohibition with
Injunction, docketed as CA-G.R. SP No. 56137. In a Decision5 dated March 22, 2000, the CA, finding
that the RTC did not commit any grave abuse of discretion, denied due course and dismissed the
petition for lack of merit.6 Petitioner sought reconsideration of the Decision, which was eventually denied
by the CA in a Resolution dated April 17, 2000.7

Hence, the present Petition for Review on Certiorari under Rule 45 of the Rules of Court.

Petitioner contends in the main that the RTC’s act of authorizing the foreclosure of its property amounts
to a prejudgment of the case since it amounts to a ruling that respondent has a valid mortgage in its
favor. Petitioner also argues, among others, that Presidential Decree (P.D.) No. 385 is not applicable
inasmuch as at the time of the lease to Sunnix, Inc., the management and control of its operations has
already been virtually taken over by respondent.

On the other hand, respondent maintains that: P.D. No. 385 prohibits the issuance of an injunctive order
against government financial institutions; the CA did not commit any grave abuse of discretion; the RTC
Order merely dealt with the propriety of the injunctive order and not the validity of the mortgage; and the
issue of the propriety of the injunctive order has been rendered moot and academic by the foreclosure
sale conducted and the issuance of a certificate of sale by the sheriff.8

Based on the arguments of the parties, the principal issue is whether the CA erred in finding that the
RTC did not commit grave abuse of discretion in not enjoining the extrajudicial foreclosure of the
properties subject of this case.
Without first resolving the foregoing issue, the Court finds that the petition should be denied for the sole
reason that the act sought to be enjoined by petitioner is already fait accompli. In Transfield Philippines,
Inc. v. Luzon Hydro Corporation,9 the Court held that –

[I]njunction would not lie where the acts sought to be enjoined have already become fait accompli or an
accomplished or consummated act. In Ticzon v. Video Post Manila, Inc. this Court ruled that where the
period within which the former employees were prohibited from engaging in or working for an enterprise
that competed with their former employer— the very purpose of the preliminary injunction —has expired,
any declaration upholding the propriety of the writ would be entirely useless as there would be no actual
case or controversy between the parties insofar as the preliminary injunction is concerned.10

Records show that the foreclosure sale which petitioner sought to be enjoined by the RTC has already
been carried out by the Sheriff, and in fact, a Certificate of Sale dated June 26, 2000 was issued to
respondent.11 There is, therefore, no more actual case or controversy between the parties insofar as the
RTC’s refusal to enjoin the sale is concerned, and any resolution by the Court of the impropriety or
propriety of the RTC’s refusal to issue any restraining or injunctive relief against the foreclosure sale will
serve no purpose but merely lend further addle to Civil Case No. 2067-40 pending before the RTC.

Nevertheless, even if petitioner’s quest for the issuance of an injunctive relief has been rendered moot
and academic by the holding of the foreclosure sale and issuance of Certificate of Sale, the Court finds it
necessary to resolve the merits of the principal issue raised for the future guidance of both bench and
bar. As the Court stated in Acop v. Guingona, Jr.,12 "courts will decide a question otherwise moot and
academic if it is ‘capable of repetition, yet evading review.’"

Petitioner does not dispute its loan obligation with respondent. Petitioner’s bone of contention before the
RTC is that the promissory notes are silent as to whether they were covered by the Mortgage Trust
Indenture and Mortgage Participation on its property covered by TCT No. T-11292.13 It does not
categorically deny that these promissory notes are covered by the security documents. These vague
assertions are, in fact, negative pregnants, i.e., denials pregnant with the admission of the substantial
facts in the pleading responded to which are not squarely denied. As defined in Republic of the
Philippines v. Sandiganbayan,14 a negative pregnant is a "form of negative expression which carries
with it an affirmation or at least an implication of some kind favorable to the adverse party. It is a denial
pregnant with an admission of the substantial facts alleged in the pleading. Where a fact is alleged with
qualifying or modifying language and the words of the allegation as so qualified or modified are literally
denied, has been held that the qualifying circumstances alone are denied while the fact itself is
admitted."

Petitioner’s allegations do not make out any justifiable basis for the granting of any injunctive relief. Even
when the mortgagors were disputing the amount being sought from them, upon the non-payment of the
loan, which was secured by the mortgage, the mortgaged property is properly subject to a foreclosure
sale. This is in consonance with the doctrine that to authorize a temporary injunction, the plaintiff must
show, at least prima facie, a right to the final relief.15

The foregoing conclusion finds greater force in light of the provisions of P.D. No. 385,16 Section 1 of
which, provides for a mandatory foreclosure, viz.:

Section 1. It shall be mandatory for government financial institutions, after the lapse of sixty (60) days
from the issuance of this Decree, to foreclose the collaterals and/or securities for any loan, credit,
accommodation, and/or guarantees granted by them whenever the arrearages on such account,
including accrued interest and other charges, amount to at least twenty (20%) of the total outstanding
obligations, including interest and other charges, as appearing in the books of account and/or related
records of the financial institution concerned. This shall be without prejudice to the exercise by the
government financial institution of such rights and/or remedies available to them under their respective
contracts with their debtors, including the right to foreclose on loans, credits, accommodations, and or
guarantees on which the arrearages are less than twenty percent (20%).

while Section 2 prohibits the issuance of restraining orders or injunctions against government financial
institutions in any foreclosure action taken by such institutions, to wit:

Section 2. No restraining order, temporary or permanent injunction shall be issued by the court against
any government financial institution in any action taken by such institution in compliance with the
mandatory foreclosure provided in Section 1 hereof whether such restraining order, temporary or
permanent injunction is sought by the borrower(s) or any third party or parties, except after due hearing
in which it is established by the borrower and admitted by the government financial institution concerned
that twenty percent (20%) of the outstanding arrearages had been paid after the filing of foreclosure
proceedings.

Petitioner cannot find any solace in its contention that the case of Filipinas Marble Corporation v.
Intermediate Appellate Court17 is applicable to the present case. In Filipinas Marble, it was the DBP-
imposed management of FMC that brought the corporation to ruin, not to mention that there were prima
facie findings of mismanagement and misappropriation of the loan proceeds by DBP and Bancom.
Moreover, the liability of FMC for the loan, which was the basis of the mortgage being foreclosed, was
not yet settled. These circumstances prompted the Court to grant an injunction against the foreclosure
sale. The Court ruled –

x x x P.D. 385 was never meant to protect officials of government lending institutions who take over the
management of a borrower corporation, lead that corporation to bankruptcy through mismanagement or
misappropriation of its funds, and who, after ruining it, use the mandatory provisions of the decree to
avoid the consequences of their misdeeds.

The designated officers of the government financing institution cannot simply walk away and then state
that since the loans were obtained in the corporation’s name, then P.D. 385 must be peremptorily
applied and that there is no way the borrower corporation can prevent the automatic foreclosure of the
mortgage on its properties once the arrearages reach twenty percent (20%) of the total obligation no
matter who was responsible.18

In the case at bench, petitioner does not deny its liability. While petitioner alleged that the management
and control of its operations has already been virtually taken over by respondent, thus, implying that it
was respondent that caused petitioner's present miserable financial state, this allegation is obviously
merely an attempt to place itself under the Filipinas Marble situation in order to preempt the operation of
P.D. No. 385. Petitioner’s claim is more appropriately threshed out and determined after trial on the
merits.

The Court likewise cannot sustain petitioner's argument that the RTC’s refusal to grant any injunctive
relief amounts to a prejudgment of the issues before it. The RTC’s sole basis for allowing the foreclosure
sale to proceed is P.D. No. 385. It did not make any finding or disposition on the issue of the validity of
the mortgage.

In any event, such issue of the validity of the mortgage, not to mention the issue of the nullity of the
foreclosure sale as well as petitioner’s prayer for damages, still has to be resolved in the trial court.

As ruled in Philippine National Bank v. Court of Appeals,19 to wit:

In the instant case, aside from the principal action for damages, private respondent sought the issuance
of a temporary restraining order and writ of preliminary injunction to enjoin the foreclosure sale in order
to prevent an alleged irreparable injury to private respondent. It is settled that these injunctive reliefs are
preservative remedies for the protection of substantive rights and interests. Injunction is not a cause
of action in itself but merely a provisional remedy, an adjunct to a main suit. When the act
sought to be enjoined ha[d] become fait accompli, only the prayer for provisional remedy should
be denied. However, the trial court should still proceed with the determination of the principal
action so that an adjudication of the rights of the parties can be had.20 (Emphasis supplied)

WHEREFORE, the petition is DENIED.

Costs against petitioner.

SO ORDERED.

Ynares-Santiago, Chairperson, Chico-Nazario, Nachura, Reyes, JJ., concur.

 G.R. No. 212904, November 22, 2017

YOLANDA VILLANUEVA-ONG, Petitioner, v. JUAN PONCE ENRILE, Respondent.

DECISION

TIJAM, J.:

Before Us is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, assailing the
Decision2 dated March 4, 2014 and Resolution3 dated June 9, 2014 of the Court of Appeals (CA) in CA-
G.R. SP No. 132034.

The Facts

On December 4, 2012, Juan Ponce Enrile (respondent) filed a civil Complaint4 for damages against
Yolanda Villanueva-Ong (petitioner) for libel before the Regional Trial Court (RTC) of Pasay City,
Branch 118, in Civil Case No. R-PSY-12-12031-CV. The pertinent portions of the complaint are as
follows:
2.1 On 16 October 2012, a libelous article entitled "Like father like Son?" was
published in page 16, Opinion Section of the Philippine Star. The article was authored
by [petitioner]. x x x

2.2 The article characterizes [respondent] as a liar, fraud, and manipulator. It accuses
[respondent] of attempting to "revise history" with a devious purpose of enticing the
electorate to support his only son, Juan Castañer Ponce Enrile, Jr., (popularly known
as Jack Enrile), an incumbent Congressman in the province of Cagayan and a
candidate in the upcoming senatorial elections. [Petitioner], instead of giving fair
comments on [respondent] as public official, deliberately focuses on attacking his
character with false and defamatory accusations and intrigues affecting his family and
personal life.

2.3 The pertinent portions of the libelous article that characterizes [respondent] as a
liar, fraud, and manipulator are as follows:
"Just when we were about to forgive-and-forget [respondent's]
checkered past, he himself reminded us of what a wily, shifty
chameleon he truly and naturally is.

xxx

In Juan Ponce Enrile: A Memoir, and bio-documentary 'Johnny' that

aired in ABS-CBN-he recants his previous recantation of the
assasination attempt on him, which Marcos used as one more
reason to justify Martial Law. x x x Did he expect national amnesia
to afflict Filipinos who know the truth?"

xxx

"In his attempt to leave an acceptable legacy for posterity and

bequeath a Senate seat for junior, the nonagenarian is sanitizing his
recollections instead of asking for absolution. Stem cell therapy can
deter dementia but it cannot regenerate an innocent man."

xxx

"We are being wooed to perpetuate the 40-years-running Enrile

saga. Every night we should pray: Dear God, Make all who want our
vote, be the men we want them to be."
2.4 The libelous article's opening sentence alone - "Just when we were about to
forgive-and-forget [respondent's] checkered past, he himself reminded us of what a
wily, shifty chameleon he truly and naturally is" - already indicates [petitioner's]
malicious objective: to discredit the integrity of [respondent] and degrade his
accomplishments and success as an elected public official. Read with the succeeding
paragraphs cited above, the libelous article clearly depicts [respondent] as a liar and a
hoax who deceives the public to believe that he is an honorable and respectable
public figure.
 2.5 Worse, the libelous article insinuates that [respondent] is a criminal who
committed the crime of smuggling of cars. Thus:
"Another misdeed associated with father-and-son is the alleged
rampant car smuggling in Port Irene. In 1995, the Cagayan Export
Zone Authority (CEZA) was established through Republic Act 7922,
authored by Cagayan native [respondent]. x x x Despite E0156
issued in 2008, which prohibited such importations, smuggling
continued. Enrile countered that CEZA is not covered by the
prohibition because the importers pay the correct duties and taxes.
Ford reportedly pulled out its manufacturing business to protest the
nefarious activities in CEZA."
2.6 These statements clearly tend to cause dishonor, discredit, disrespect, and
contempt of [respondent] by characterizing him as a liar, fraud, manipulator, criminal
and smuggler of cars.

2.7 At the time of publication of the libelous article, [respondent] is a public officer
holding office in Pasay City.5 (Underlining omitted and italics in the original)
On January 17, 2013, petitioner filed an Answer with Compulsory Counterclaims,6 the pertinent portion
of which, states:
COMPULSORY COUNTERCLAIMS
First Compulsory Counterclaim

[Petitioner] reiterates and incorporates by reference each and every allegation made in each and
2.4
every preceding paragraph and subparagraph of this Answer.

In filing this lawsuit, [respondent] did not implead the editor, publisher, and newspaper that
25.
published [petitioner's] column (The Philippine Star), but only [petitioner].

[Respondent's] unfounded prosecution of [petitioner], coupled with the singling out of [petitioner],
constitutes harassment, malice and evident bad faith. It is meant to intimidate and silence
26. [petitioner], and to place a chilling effect on her rights (and the rights of other journalists) to
express themselves and write freely about [respondent's] public conduct on matters of public
concern.

In filing the Complaint, under the facts and circumstances set out above, [respondent] acted with
malice, evident bad faith, and in a wanton, reckless, offensive and malevolent manner, and has
27. caused [petitioner] damages consisting of x x x:

xxxx

Second Compulsory Counterclaim

[Petitioner], as a Filipino citizen and journalist, has a constitutional right to speak out, write and
express her opinion and make fair comments on matters of public interest, including those
30.
involving the public conduct of [respondent] as a public officer and public figure and his fitness for
public office.

In singling out [petitioner] and suing her alone for libel, [respondent] acted with malice and evident
bad faith. In so doing, [respondent] is using the strong arm of the law to intimidate, cow and
31.
silence [petitioner] and other journalists, and to neutralize and place a chilling effect on their ability
to speak and write freely about [respondent's] public conduct on matters of public concern.
 Under Article 32 of the Civil Code, a public officer who directly indirectly obstructs, defeats,
violates or in any manner impedes or impairs a person's freedom of speech and freedom to write
32.
for the press is liable in actual, moral and exemplary damages, as well as attorney's fees and
costs.7 (Emphasis ours)
The respondent filed a Motion to Dismiss8 (Re: Defendant's permissive counterclaims) which argued
that petitioner's counterclaims are actually permissive, and hence should have complied with the
requirements of an initiatory pleading, specifically the payment of docket fees and certification against
forum shopping. Respondent prayed for dismissal of petitioner's counterclaims for her failure to comply
with such requirements.

Meanwhile, petitioner opposed respondent's motion arguing that her counterclaims are both compulsory
in nature, since both counterclaims arose from the filing of respondent's complaint.9

Ruling of the RTC

The RTC, in its Order10 dated April 26, 2013, gave petitioner 15 days from receipt of the said order, to
pay the appropriate docket fees, otherwise, such counterclaims shall be dismissed. Despite petitioner's
motion for reconsideration,11 the RTC stood its ground, and affirmed its ruling in the Order12 dated July
22, 2013.

Dissatisfied, petitioner filed a petition for certiorari with the CA.

Ruling of the CA

On March 4, 2014, the CA issued the assailed Decision,13 the dispositive portion of which states:
WHEREFORE, premises considered, the Petition is DENIED. No pronouncement as
to costs.

SO ORDERED.14
Hence this petition where petitioner argues that the CA erred in ruling that her counterclaims are
permissive in nature. She contends that the same are compulsory, having arisen from respondent's
filing of complaint in the court a quo.

In his Comment,15 respondent maintains that petitioner's counterclaims are permissive in nature since
they are based on different sources of obligations: petitioner's counterclaims are based on quasi-delict,
while respondent's claim is based on delict.

Issue

Are petitioner's counterclaims compulsory or permissive in nature?

Ruling of the Court

The nature and kinds of counterclaims are well-explained m jurisprudence. In Alba, Jr. v. Malapajo,16 the
Court explained:
[C]ounterclaim 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.17
"A counterclaim is permtsstve 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."18

Determination of the nature of counterclaim is relevant for purposes of compliance to the requirements
of initiatory pleadings. In order for the court to acquire jurisdiction, permissive counterclaims require
payment of docket fees, while compulsory counterclaims do not.19

Jurisprudence has laid down tests in order to determine the nature of a counterclaim, to wit:
(a) Are the issues of fact and law raised by the claim and 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[?] x x x [A positive answer to
all four questions would indicate that the counterclaim is compulsory].20
In this case, the complaint filed by respondent for damages arose from the alleged malicious publication
written by petitioner, hence central to the resolution of the case is petitioner's malice, or specifically that
the libelous statement must be shown to have been written or published with the knowledge that they
are false or in reckless disregard of whether they are false or not.21

Meanwhile, petitioner's counterclaim presupposes bad faith or malice on the part of respondent in
instituting the complaint for damages. In the allegations supporting her counterclaims, it was alleged that
respondent's complaint was filed merely to harass or humiliate her.

Such allegations are founded on the theory of malicious prosecution. Traditionally, the term malicious
prosecution has been associated with unfounded criminal actions, jurisprudence has also recognized
malicious prosecution to include baseless civil suits intended to vex and humiliate the defendant despite
the absence of a cause of action or probable cause.22

In this case, while it can be conceded that petitioner can validly interpose a claim based on malicious
prosecution, the question still remains as to the nature of her counterclaim, and the consequent
obligation to comply with the requirements of initiatory pleadings.

We find that petitioners claims are compulsory, and hence should be resolved along with the civil
complaint filed by respondent, without the necessity of complying with the requirements for initiatory
pleadings.

Indeed, a perfunctory reading of respondent's allegations in support of her counterclaims refers to

incidental facts or issues related to her counterclaim against petitioner. She alleges that respondent
unduly singled her out, and is actually violating her legal and constitutional rights.

However, stripped of the aforesaid niceties, it is at once apparent that petitioner essentially argues that
respondent's suit is unfounded and is merely instituted to harass and vex her.

A counterclaim purely for damages and attorneys fees by reason of the unfounded suit filed by the
respondent, has long been settled as falling under the classification of compulsory counterclaim and it
must be pleaded in the same action, otherwise, it is barred.23 In Lafarge Cement Phil. Inc. v. Continental
Cement Corp.24 citing Tiu Po, et al. v. Hon. Bautista, et al.,25 this Court ruled that counterclaims seeking
moral, actual and exemplary damages and attorneys fees against the respondent on account of their
malicious and unfounded complaint was compulsory.26

In this case, the counterclaims, set up by petitioner arises from the filing of respondent's complaint. "The
counterclaim is so intertwined with the main case that it is incapable of proceeding independently."27 We
find that the evidence supporting respondent's cause that malice attended in the publication of the
article would necessarily negate petitioner's counterclaim for damages premised on the malicious and
baseless suit filed by respondent.

Bungcayao, Sr. v. Fort Ilocandia Property Holdings and Development Corp.28 cited by respondent, is
starkly different from the factual circumstances obtaining at the case at bar. In that case, petitioner
Manuel C. Bungcayao, Sr. sought the annulment of a Deed of Assignment, Release, Waiver and
Quitclaim, on the ground of the lack of authority of petitioner's son to represent him thereon. For their
part, respondent prayed, as counterclaims to the complaint, that petitioner be required to: 1) return the
amount of P400,000 from respondent, 2) to vacate the portion of the respondent's property he
(petitioner) was occupying, and 3) to pay damages because his (petitioner) continued refusal to vacate
the property caused tremendous delay in the planned implementation of Fort Ilocandias expansion
projects. In that case,We ruled that the recovery of possession of the property is a permissive
counterclaim, while being an offshoot of the basic transaction between the parties, will not be barred if
not set up in the answer to the complaint in the same case. This is because the title of respondent to the
disputed property therein was actually recognized by the administrative authorities. Necessarily,
respondent will not be precluded from asserting its right of ownership over the land occupied by
petitioner in a separate proceeding. In other words, respondent's right therein can be enforced
separately and is distinct from the legal consequences of the Deed of Assignment, Release, Waiver and
Quitclaim executed between the parties therein.
The same, however, does not obtain in the instant case. Petitioner's counterclaims refer to the
consequences brought about by respondent's act of filing the complaint for damages.

Petitioner's allegation citing Article 32 of the Civil Code do not dilute the compulsory nature of her
counterclaims. In Alday v. FGU Insurance Corporation,29 this Court found the following allegation in
therein defendant's counterclaim to be permissive, despite mention of the civil code provision on abuse
of rights, to wit:
(b) the minimum amount of P500,000.00 plus the maximum allowable interest
representing defendant's accumulated premium reserve for 1985 and previous years,
which FGU has unjustifiably failed to remit to defendant despite repeated demands in
gross violation of their Special Agent's Contract and in contravention of the
principle of law that "every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe
honesty and good faith."30 (Emphasis ours)
Considering the foregoing, petitioner's counterclaims should not be prejudiced for non-compliance with
the procedural requirements governing initiatory pleadings.

Neither should her counterclaims be dismissed pursuant to this Court's ruling in Korea Technologies Co.
Ltd. v. Hon. Lerma, et al.,31 which held that "effective August 16, 2004 under Section 7, Rule 141, as
amended by A.M. No. 04-2-04-SC, docket fees are now required to be paid in compulsory counterclaim
or cross-claims."32 Note must be taken of OCA Circular No. 96-2009 entitled "Docket Fees For
Compulsory Counterclaims," dated August 13, 2009, where it was clarified that the rule on imposition of
filing fees on compulsory counterclaims has been suspended. Such suspension remains in force up to
this day.

WHEREFORE, premises considered, We resolve to GRANT the petition. The Decision dated March 4,
2014 and Resolution dated June 9, 2014 of the Court of Appeals in CA-G.R. SP No. 132034 are
hereby REVERSED and SET ASIDE.

SO ORDERED.

Sereno, C.J., (Chairperson), Leonardo-De Castro, Del Castillo, and Jardeleza, JJ., concur.
 THIRD DIVISION

[G.R. NO. 167181 : December 23, 2008]

SPS. CARLOS MUNSALUD and WINNIE MUNSALUD, Petitioners, v. NATIONAL HOUSING

AUTHORITY, Respondent.

DECISION

REYES, R.T., J.:

INSUFFICIENCY in form and substance, as a ground for dismissal of the complaint, should not be
based on the title or caption, especially when the allegations of the pleading support an action.

In pursuit of a reversal of the Decision1 of the Court of Appeals (CA) affirming the order of dismissal2 of
the Regional Trial Court (RTC) in a complaint for mandamus, 3 petitioners-spouses Carlos Munsalud
and Winnie Munsalud lodged before this Court a Petition for Review on certiorari.

The Facts

Laid bare from the records are the following facts:

Petitioner Winnie Munsalud is the daughter and one of the compulsory heirs of the late Lourdes Bulado
(Bulado) who died on December 8, 1985. During the lifetime of Bulado, respondent National Housing
Authority (NHA) awarded her a lot located at 942 R. Higgins St., CAA Compound, Bgy. 185, Pasay City.
The award was made pursuant to the "Land for the Landless" program of respondent. She resided at
the said property until her death.

When Bulado died, petitioner Winnie assumed the obligation to pay the monthly amortizations.
Respondent NHA recognized petitioner spouses' assumption of obligations as their names were
reflected in the receipts. They were allowed to occupy the lot up to the present. To prove their
occupancy over the lot, petitioners offered as evidence the following documents, viz.:

1. Tag Card No. 77-02830-03 issued by then Pasay City Mayor Pablo Cuneta and
then NHA General Manager Gaudencio Tobias;

2. Application and Contract for Water Services No. 295319 in the name of Bulado but
the same was signed by petitioner Winnie;

3. Tax Declaration No. B-007-27566 over the land issued by the Assessor's Office of
Pasay City in the name of defendant recognizing its beneficial use in favor of
petitioners;

4. Tax Declaration No. B-007-27667 over the residential structure erected on the land
and issued by the Assessor's Office of Pasay City in the names of petitioners;

5. 'Pagpapatunay' dated September 5, 1989 signed by neighbors and acquaintances

of petitioners attesting to their long time residence in the property;

6. Deposit Receipt No. 286444 dated September 27, 1989 issued by the Manila
Electric Company attesting to the installation of electric service in the name of
petitioner Winnie on the property.4

On September 14, 1989, petitioners completed the payments of the amortizations due on the property.
Reflected on the left side portion of the official receipt evidencing full payment is the annotation "full
payment." Consequently, petitioners demanded that respondent NHA issue in their favor a deed of sale
and a title over the property. Respondent, however, refused.

On January 28, 2003, petitioners, by counsel, sent respondent a letter to issue a deed of sale and title.
Despite receipt, respondent did not issue the requested documents. On March 6, 2003, respondent
wrote petitioners informing them that petitioner Winnie's name does not appear as beneficiary.
Petitioners replied that Winnie was representing her mother, the late Lourdes Bulado. Respondent did
not respond to the reply.

Left with no recourse, petitioners instituted a complaint for mandamus before the court a quo.

RTC Order

On April 22, 2003, the RTC dismissed the complaint for mandamus, disposing thus:

Considering that the petition is insufficient in form and substance, there being no
reference to any law which the respondent by reason of its office, trust or station is
especially enjoined as a duty to perform or any allegation that respondent is unlawfully
excluding petitioners from using or enjoying any right or office which said petitioners
are entitled to, the above-entitled petition is hereby DISMISSED, pursuant to Section
3 Rule 65 of the 1997 Rules of Civil Procedure.

SO ORDERED.5

Petitioners moved for reconsideration but they did not succeed. Thus, petitioners seasonably appealed
to the CA.

CA Disposition

On August 23, 2004, the CA affirmed the RTC dismissal of the mandamus petition.

WHEREFORE, the instant appeal is hereby DISMISSED. Accordingly, the assailed

Order of Dismissal is AFFIRMED.

SO ORDERED.6

In agreeing with the court a quo, the appellate court rationalized as follows:

It is essential to the issuance of the writ of mandamus that the petitioner should have
a clear legal right to the thing demanded and it must be the imperative duty of the
respondent to perform the act required. It is a command to exercise a power already
possessed and to perform a duty already imposed.

It well settled that the legal right of petitioner to the performance of the particular act
which is sought to be compelled must be clear and complete. A clear legal right within
the meaning of the rule means a right which is clearly founded in, or granted by law; a
right which is inferable as a matter of law. Likewise, mandamus refers only to acts
enjoined by law to be done. The duties to be enforced must be such as are clearly
peremptorily enjoined by law or by reason of official station. However, appellants
failed to point out in their petition the specific law by which defendant is duty bound to
perform the act sought to be performed, as well as the law which would grant them
the clear legal right to the issuance of the writ of mandamus .

Foregoing discussed, we find no error on the part of the court a quo in dismissing the
petition for mandamus filed by plaintiffs-appellants.

On September 20, 2004, petitioners moved for reconsideration but it was denied by the CA on February
22, 2005. Hence, the present recourse.

Issues

I.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN

AFFIRMING THE ORDERS OF THE HONORABLE REGIONAL TRIAL COURT OF
QUEZON CITY DATED APRIL 22, 2003 AND SEPTEMBER 25, 2003 WHERE THE
LATTER COURT - RELYING UPON THE APPELLATION AND/OR LABEL THAT
 PETITIONERS GAVE THEIR COMPLAINT (I.E., MANDAMUS) IN CIVIL CASE NO.
Q-03-492 - DISMISSED THE COMPLAINT THEREIN PURPORTEDLY BECAUSE
THE SAID COMPLAINT FAILED TO COMPLY WITH SECTION 3, RULE 65 OF THE
1997 RULES OF CIVIL PROCEDURE.

II.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN

DENYING PETITIONERS' MOTION FOR RECONSIDERATION OF ITS DECISION
DATED AUGUST 23, 2004.7 (Underscoring supplied)cralawlibrary

Poring over the arguments presented, the focal issue is whether in giving due course to an action, the
court is fenced within the parameters of the title given by plaintiff to the case without regard to the
averments of the pleading.

Elsewise stated, does the trial court have absolute discretion to dismiss an action on the ground that it is
insufficient in form and substance based alone on its designation when, from the body and the relief
prayed for, it could stand as an action sufficient in form and substance?

Our Ruling

Petitioners' action designated as mandamus was dismissed by the trial court on the ground that it is
insufficient in form and substance. This begs the question: when is an action sufficient in form and when
is it sufficient in substance?cra lawlibrary

To begin with, form is the methodology used to express rules of practice and procedure.8 It is the order
or method of legal proceedings.9 It relates to technical details.10 It is ordinarily the antithesis of
substance.11 It is an established method of expression or practice. It is a fixed or formal way of
proceeding.12

A pleading is sufficient in form when it contains the following:

1. A Caption, setting forth the name of the court, the title of the action indicating the
names of the parties, and the docket number which is usually left in blank, as the
Clerk of Court has to assign yet a docket number;

2. The Body, reflecting the designation, the allegations of the party's claims or
defenses, the relief prayed for, and the date of the pleading;

3. The Signature and Address of the party or counsel;13

4. Verification. This is required to secure an assurance that the allegations have been
made in good faith, or are true and correct and not merely speculative;14

5. A Certificate of Non-forum Shopping, which although not jurisdictional, the same is

obligatory;15

6. An Explanation in case the pleading is not filed personally to the Court. Likewise,
for pleading subsequent to the complaint, if the same is not served personally to the
parties affected, there must also be an explanation why service was not done
personally.16

Likewise, for all other pleadings, not initiatory in nature, there must be:

A Proof of Service, which consists in the written admission of the party served, or the
official return of the server, or the affidavit of the party serving, containing a full
statement of the date, place and manner of service. If the service is by ordinary mail,
proof thereof shall consist of an affidavit of the person mailing. If service is by
registered mail, proof shall be made by such affidavit and the registry receipt issued
by the mailing office.17
In case a party is represented by counsel de parte, additional requirements that go into the form of the
pleading should be incorporated, viz.:

1. The Roll of Attorney's Number;

2. The Current Professional Tax Receipt Number; andcralawlibrary

3. The IBP Official Receipt No. or IBP Lifetime Membership Number.18

4. MCLE Compliance or Exemption Certificate Number and Date of Issue (effective

January 1, 2009).19

In the case at bench, a naked perusal of the complaint docketed as Civil Case No. Q03 - 49278
designated by petitioners as mandamus reveals that it is sufficient in form. It has the caption with the
name of the court, the name of the parties, and the docket number. The complaint contains allegations
of petitioners' claims. It has a prayer and the date when it was prepared. The signature page shows the
signature and name of petitioners' counsel, the counsel's IBP, PTR and Roll of Attorney's Numbers. The
complaint was also verified and accompanied by a certificate of non-forum shopping and signed by
petitioners as plaintiffs. It was filed personally with the office of the clerk of court.

Now, is the petition insufficient in substance?cra lawlibrary

Substance is that which is essential and is used in opposition to form.20 It is the most important element
in any existence, the characteristic and essential components of anything, the main part, the essential
import, and the purport.21 It means not merely subject of act, but an intelligible abstract or synopsis of its
material and substantial elements, though it may be stated without recital of any details.22 It goes into
matters which do not sufficiently appear or prejudicially affect the substantial rights of parties who may
be interested therein and not to mere informalities.23

As used in reference to substance of common-law actions, substance comprehends all of the essential
or material elements necessary to sufficiently state a good cause of action invulnerable to attack by
general demurrer.24

Substance is one which relates to the material allegations in the pleading. It is determinative of whether
or not a cause of action exists. It is the central piece, the core, and the heart constituting the controversy
addressed to the court for its consideration. It is the embodiment of the essential facts necessary to
confer jurisdiction upon the court.

The court a quo anchored the dismissal of petitioners' complaint on the basis of Rule 65, Section 325 of
the 1997 Rules of Civil Procedure. It found that there was no reference to any law which respondent
NHA, by reason of its office, trust or station, is specifically enjoined as a duty to perform. It declared that
there was no allegation in the petition below that respondent is unlawfully excluding petitioners from
using or enjoying any right or office which said petitioners are entitled to.

Although the complaint was captioned as Mandamus, petitioners' averments, as well as the relief sought,
called for an action for specific performance. Pertinent portions of the complaint for mandamus provide:

3. Plaintiff Winnie Munsalud is the daughter of the late Lourdes Bulado, and as such is
one of Bulado's compulsory heirs. x x x;

4. During the lifetime of Bulado, she was awarded a parcel of land at a "land for the
landless" program of the defendant;

xxx

6. When Bulado died in 1985, Plaintiffs assumed her obligations over the aforesaid
property, particularly the payment of the amortizations therein;

7. Defendant recognized this assumption of Bulado's obligations by the Plaintiffs

considering that in the receipts covering the amortizations, the names of the Plaintiffs
as the ones paying the Defendant were indicated therein;
 8. In fact, Defendant also allowed Plaintiffs to move into, and occupy, as they continue
to occupy up to now, the above described premises;

xxx

10. On September 14, 1989, Plaintiffs completed the payment of the amortizations
due over the property in question, and this is evidenced by an official receipt,
numbered 19492, which Defendant's cashier, Yasmin D. Aquino, issued to the
Plaintiffs themselves, although the official name of the payor indicated therein was still
that of the deceased Lourdes Bulado;

xxx

12. Significantly, that receipt contained the annotation appearing on the left side
thereof, that the amount paid thereon constituted "full payment";

13. Since then, Plaintiffs have been demanding from the Defendant the issuance of
the deed of sale and the title over the property in question, but, inexplicably, and
without any legal justification whatsoever, Defendant has refused to issue that deed of
sale and title;

14. On January 28, 2003, Plaintiffs, through counsel, sent a letter to the Defendant
seeking the issuance of that deed of sale and title but, despite receipt thereof,
Defendant again refused and failed [to] act favorably thereon;

xxx

20. At this point that the lot in question had already been fully paid for by the Plaintiffs,
there is now a need to compel the Defendant to comply with its duty to issue a deed of
sale in favor of the heirs of the deceased Lourdes Bulado, particularly Plaintiffs Carlos
and Winnie Munsalud, as well to issue a title over the same property in favor of the
same heirs.

WHEREFORE, it is most respectfully prayed that judgment be rendered commanding

the Defendant, after due notice and hearing, to issue a deed of sale and/or a title, in
favor of the heirs of the deceased Lourdes Bulado, particularly Plaintiffs Carlos and
Winnie Munsalud, over the property subject of this action.26 (Underscoring
supplied)cralawlibrary

A plain reading of the allegations of the complaint reveals that petitioner Winnie Munsalud assumed the
obligations of her deceased mother, the original awardee of respondent's "Land for the Landless
Program." One of the obligations of an awardee is to pay the monthly amortizations. Petitioners
complied with said obligation and religiously paid the amortizations until these were fully paid.

Indeed, petitioners have complied with what is incumbent upon them under the program. Hence, it is
now the turn of respondent to comply with what is incumbent upon it.

In a letter dated February 21, 2003,27 respondent informed petitioners' counsel that per its records, the
name of petitioner Winnie Munsalud does not appear as a beneficiary. For the guidance of respondent,
Winnie Munsalud is not actually a beneficiary. The beneficiary of its program is Lourdes Bulado, her
deceased mother. This fact was made known to respondent when another letter dated March 6,
200328 was sent by the counsel of the heirs of Lourdes Bulado. In the same letter, respondent was
informed that petitioner Winnie is representing her deceased mother, Lourdes Bulado, viz.:

In view of the contents of that letter, we would like to notify you that Ms. Munsalud is
actually representing her deceased mother, Lourdes Bulado, who, on September 14,
1989 completed her payment for Lot 12, Block 79 of the Maricaban Estate. A copy of
the receipt evidencing that completed is attached hereto as Annex B for your easy
reference.
 In view thereof, may we reiterate our request for the issuance of the title over the
aforesaid property in the name of Lourdes Bulado.29 (Underscoring
supplied)cralawlibrary

The letter was received by respondent on March 12, 2003. On account of this second letter, respondent
could have easily verified if the name of Lourdes Bulado appears as a beneficiary and awardee of its
"Land for the Landless Program." However, respondent never responded to the second letter. This left
petitioners with no recourse but to bring the action to the trial court.

Evidently, the action commenced by petitioners before the trial court, although designated
as mandamus, is in reality an action to perform a specific act. The averments of the complaint are clear.
The essential facts are sufficiently alleged as to apprise the court of the nature of the case. The relief
sought to be obtained aims to compel respondent to issue a deed of sale and the corresponding title
over the property awarded to Bulado. Thus, the Court finds the complaint sufficient in substance.

The designation or caption is not controlling, more than the allegations in the complaint, for it is not even
an indispensable part of the complaint.

Instead of focusing on what an action for mandamus should contain, the court a quo should have
proceeded to examine the essential facts alleged in petitioners' complaint. For what determines the
nature of the action and which court has jurisdiction over it are the allegations in the complaint and the
character of the relief sought.30

The cause of action in a complaint is not determined by the designation given to it by the parties. The
allegations in the body of the complaint define or describe it. The designation or caption is not controlling
more than the allegations in the complaint. It is not even an indispensable part of the complaint.31

There is no need to make reference to any law which respondent by reason of its office is enjoined as a
duty to perform. Respondent's duty arose from its contractual obligation under the "Land for the
Landless Program."

The trial court is reminded that the caption of the complaint is not determinative of the nature of the
action.32 The caption of the pleading should not be the governing factor, but rather the allegations in it
should determine the nature of the action, because even without the prayer for a specific remedy, the
courts may nevertheless grant the proper relief as may be warranted by the facts alleged in the
complaint and the evidence introduced.33

All told, whether or not petitioner Winnie, in her capacity as a compulsory heir of the awardee, becomes
a beneficiary of the program is a question best ventilated during trial on the merits. The conditions,
terms, and provisions of the program in case an awardee dies are evidentiary and should be presented
for determination of the court. Even the effect and the consequence of the assumption of obligation of
the awardee as well as the presence of other compulsory heirs are issues that should be addressed for
the court's evaluation on the basis of the evidence to be laid down before its eyes.

WHEREFORE, the appealed Decision is REVERSED AND SET ASIDE. The case is REMANDED to
the Regional Trial Court which is ORDERED to reinstate the case and to conduct trial on the merits with
dispatch.

No costs.

SO ORDERED.
G.R. No. 169108 April 18, 2006

INTERCONTINENTAL BROADCASTING CORPORATION (IBC-13), Rep. by Its President Renato

Bello, Petitioner,
vs.
HON. ROSE MARIE ALONZO LEGASTO and ANTONIO SALVADOR, Respondents.

DECISION

YNARES-SANTIAGO, J.:

This petition for review on certiorari assails the March 16, 2005 Decision1 of the Court of Appeals in CA-
G.R. SP No. 85085 which denied the petition filed by petitioner Intercontinental Broadcasting
Corporation (IBC-13) for lack of merit, and its July 22, 2005 Resolution2 denying the motion for
reconsideration.

The pertinent facts as found by the Court of Appeals are as follows:

For the purpose of putting an end to the suit for a sum of money docketed as Civil Case No. Q-96-26330
before Branch 88 of the Regional Trial Court of Quezon City, petitioner, as First Party, and private
respondent Antonio Salvador, as Second Party, entered into a Compromise Agreement dated 22 May
1998 which contained the following stipulations, to wit:

"1. The FIRST PARTY shall pay the amount of TWO MILLION (P2,000,000.00) PESOS as shown by
the statement hereto attached as Annex "A" which was verified and and (sic) reconciled with the books
of the FIRST PARTY.

2. Simultaneously with the signing hereof, the FIRST PARTY shall pay 25% of the aforesaid amount and
the balance to be paid in staggered payments, payable in three (3) installments.

3. The FIRST PARTY agrees to offset the airtime 320-30’s daytime spots against the FOUR MILLION
(P4,000,000.00) PESOS marketing fee due to the FIRST PARTY under the separate Marketing
Agreement between IBC and Colours Network, Inc., represented by ANTONIO SALVADOR at
P12,500/spot. These airtime spots shall be utilized by the SECOND PARTY on ROS basis.

4. The balance of 6,080-30’s primetime spots airtime shall mean usage in commercial placement for TV
commercials. In the event of privatization, the said spots will be valued at the company’s prevailing
market price and be made payable upon demand.

5. Both parties shall submit a motion to dismiss the case pending before Branch 88 of the Regional Trial
Court of Quezon City.1avvphil.net

With the submission of the foregoing Compromise Agreement alongside the parties’ 8 June 1998 joint
manifestation and motion to dismiss, Civil Case No. Q-96-26330 was dismissed on July 4, 1998.

On 18 December 2000, however, petitioner commenced an action to declare the aforesaid Compromise
Agreement null and void ab initio. By then already privatized and under a new management, petitioner
alleged, among other matters, that aside from its non-existent cause or object, said agreement was
entered into by its erstwhile management without the requisite approval of the Presidential Commission
on Good Government (PCGG); and, that private respondent should refund the P2,000,000.00 he
received in virtue thereof and pay his overavailment of its 506.75 ROS spots amounting to
P1,140,187.50. Incorporating claims for exemplary damages, attorney’s fees and litigation expenses,
petitioner’s complaint was docketed as Civil Case No.Q-00-42707 before public respondent’s sala.

Contending that petitioner unjustifiably refused to comply with its obligation under paragraph 4
of the selfsame Compromise Agreement, on the other hand, private respondent filed the 5
January 2001 complaint for Specific Performance and Damages against petitioner, its President,
Boots Anson Roa, and Legal Counsel and Corporate Secretary, Atty. Azucena Garcia. Docketed
as Civil Case No. Q-01-43036 before Branch 220 of the Regional Trial Court of Quezon City,
private respondent’s complaint sought the grant of the following reliefs:
"WHEREFORE, it is prayed that judgment be rendered directing defendant IBC to comply with
paragraph 4 of the compromise agreement in accordance with the tenor thereof and to order all
the defendants to jointly and severally pay the plaintiff the following:

1. P200,000.00 as actual damages;

2. P500,000.00 as moral damages; and

3. P300,000.00 for and as attorney’s fees.

Plaintiff further prays for such other equitable reliefs as may be warranted in the premises."

With the two cases subsequently consolidated before public respondent, private respondent filed a
motion for issuance of a writ of attachment on September 23, 2003. Maintaining that, computed on the
average price of P90,000.00 per 30-second spot, his claim already totaled P540,000.000.00 private
respondent alleged, among other matters, that petitioner was guilty of gross insincerity and bad faith in
instituting Civil Case No. Q-00-42707; and, that with the sale of its DMZ-FM Station to Blockbuster
Broadcasting System, petitioner manifested its determination to defeat his claim by leaving no sufficient
security therefore (sic). On the theory that petitioner’s answer to his complaint tendered no genuine
issue as to any material fact, private respondent later filed a motion for summary judgment dated 28
February 2004.

On February 5, 2004, petitioner filed a motion styled as one for dismissal and/or suspension of
all proceedings in the aforesaid consolidated cases. Calling public respondent’s attention to the
fact that private respondent only paid P8,517.50 in docket fees, petitioner maintained that, rather
than for specific performance and damages as indicated in his complaint, private respondent’s
cause of action was actually one for a sum of money, the totality of the latter’s claim, as
disclosed in his motion for issuance of a writ of attachment, translated into unpaid docket fees
amounting to P5,452,237.50; and, that private respondent’s suit should be dismissed for lack of
jurisdiction or, at the very least, suspended until payment of the correct docket fees. The motion
was duly opposed by private respondent on 16 February 2004.3 (Emphasis added)1avvphil.net

On March 26, 2004, the Regional Trial Court of Quezon City, Branch 99, issued an Order4 denying
petitioner’s motion to dismiss and/or suspension of all proceedings pending payment by respondent of
the appropriate docket fees. The trial court held that petitioner is estopped from raising the issue of
deficient docket fee in view of its active participation in the proceedings; that the deficiency in the filing
fees did not divest it of its jurisdiction hence the proceedings need not be dismissed or suspended. The
unpaid docket fees, however, would be treated as a judgment lien if favorable to respondent.

After the denial of its motion for reconsideration,5 petitioner filed on July 14, 2004 a petition for certiorari
before the Court of Appeals. On September 29, 2004, it filed a manifestation apprising the appellate
tribunal that on August 20, 2004, the trial court rendered judgment on respondent’s motion for summary
judgment, the decretal portion of which provides:

WHEREFORE, premises considered, this Court resolves to:

1. DENY the motion for the issuance of writ of attachment for having become moot and academic;

2. RENDERS SUMMARY JUDGMENT AND ORDERS IBC-13 to pay ANTONIO SALVADOR the sum of:

a. Php540,000,000.00 representing the rounded monetized value of the 5,980 (out of 6,080) airtimes
spots with 12% interest per annum thereon from the time of the filing of the complaint in January 2001
until fully paid;

b. Php100,000.00 as and by way of attorney’s fees.

SO ORDERED.6

In its Decision dated March 16, 2005, the Court of Appeals found no abuse of discretion in the denial of
petitioner’s motion to dismiss and/or suspend the proceedings.7 It held that non-payment of the
appropriate docket fees did not divest the trial court of its jurisdiction to try the case and that the Clerk of
Court or his duly authorized deputy has the responsibility to make the deficiency assessment.8
Petitioner’s motion for reconsideration was denied9 hence this petition.

Petitioner contends that respondent failed to pay the correct docket fees thus the trial court never
acquired the requisite jurisdiction over the case; that granting the lower court never lost its jurisdiction
notwithstanding the deficiency assessment, it should have, in the interest of prudence and fair play, at
least ordered the suspension of proceedings pending payment of the appropriate docket fees.10

The petition lacks merit.

Contrary to petitioner’s assertion, jurisdiction was properly acquired in this case. In the case
of Manchester Development Corporation v. Court of Appeals,11 we declared that:

The Court cannot close this case without making the observation that it frowns at the practice of counsel
who filed the original complaint in this case of omitting any specification of the amount of damages in the
prayer although the amount of over P78 million is alleged in the body of the complaint. This is clearly
intended for no other purpose than to evade the payment of the correct filing fees if not to mislead the
docket clerk in the assessment of the filing fee. This fraudulent practice was compounded when, even
as this Court had taken cognizance of the anomaly and ordered an investigation, petitioner through
another counsel filed an amended complaint, deleting all mention of the amount of damages being
asked for in the body of the complaint. It was only when in obedience to the order of this Court of
October 18, 1985, the trial court directed that the amount of damages be specified in the amended
complaint, that petitioners’ counsel wrote the damages sought in the much reduced amount of
P10,000,000.00 in the body of the complaint but not in the prayer thereof. The design to avoid payment
of the required docket fee is obvious.

The Court serves warning that it will take drastic action upon a repetition of this unethical practice.

To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings
should specify the amount of damages being prayed for not only in the body of the pleading but also in
the prayer, and said damages shall be considered in the assessment of the filing fees in any case. Any
pleading that fails to comply with this requirement shall not be accepted nor admitted, or shall otherwise
be expunged from the record.

The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An
amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less
the payment of the docket fee based on the amounts sought in the amended pleading. The ruling in the
Magaspi case, in so far as it is inconsistent with this pronouncement is overturned and reversed.12

The aforequoted pronouncement, however, has no application in the instant case. These stringent
requirements have been relaxed in the subsequent case of Sun Insurance Office, Ltd. (SIOL) v.
Asuncion13 which laid down the following rules:

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or the nature of the
action. Where the filing of the initiatory pleading is not accompanied by payment of docket fee, the court
may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive
or reglementary period.

2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which
shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may
also allow payment of said fee within a reasonable time but also in no case beyond its applicable
prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and
payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in
the pleading, or if specified the same has been left for determination by the court, the additional filing
fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or
his duly authorized deputy to enforce said lien and assess and collect the additional fee. (Emphasis
added)

Subsequently in Tacay v. Regional Trial Court of Tagum, Davao Del Norte,14 the phrase "awards of
claims not specified in the pleading" was clarified to refer only to damages arising after the filing of the
complaint or similar pleading.15 Be that as it may, we find that the court a quo properly acquired
jurisdiction over the case.

In Proton Pilipinas Corporation v. Banque Nationale de Paris,16 a case in which the docket fees paid by
the plaintiff were also insufficient, we held that:

With respect to petitioner’s argument that the trial court did not acquire jurisdiction over the case in light
of the insufficient docket fees, the same does not lie.

True, in Manchester Development Corporation v. Court of Appeals, this Court held that the court
acquires jurisdiction over any case only upon the payment of the prescribed docket fees, hence, it
concluded that the trial court did not acquire jurisdiction over the case.

It bears emphasis, however, that the ruling in Manchester was clarified in Sun Insurance Office, Ltd.
(SIOL) v. Asuncion when this Court held that in the former there was clearly an effort to defraud the
government in avoiding to pay the correct docket fees, whereas in the latter the plaintiff demonstrated
his willingness to abide by paying the additional fees as required.

xxxx

The ruling in Sun Insurance Office was echoed in the 2005 case of Heirs of Bertuldo Hinog v. Hon.
Achilles Melicor17

Plainly, while the payment of the prescribed docket fees is a jurisdictional requirement, even its non-
payment at the time of filing does not automatically cause the dismissal of the case, as long as the fees
is paid within the applicable prescriptive or reglemantary period, more so when the party involved
demonstrates a willingness to abide by the rules prescribing such payment. Thus, when insufficient
filing fees were initially paid by the plaintiffs and there was no intention to defraud the
government, the Manchester rule does not apply.

A perusal of respondent’s January 5, 2001 complaint shows that he prayed for the following reliefs:

WHEREFORE, it is prayed that judgment be rendered directing defendant IBC to comply with paragraph
4 of the compromise agreement in accordance with the tenor thereof and to order all the defendants to
jointly and severally pay the plaintiff the following:

1. P200,000.00 as actual damages;

2. P500,000.00 as moral damages; and

3. P300,000.00 for and as attorney’s fees.

Plaintiff further prays for such other equitable reliefs as may be warranted in the premises.18

On the other hand, paragraph 4 of the Compromise Agreement which is the subject of the aforequoted
prayer stipulates:

4. The balance of 6,080-30’s primetime spots airtime shall mean usage in commercial placement for TV
commercials. In the event of privatization, the said spots will be valued at the company’s prevailing
market price and be made payable upon demand.19

When the two aforementioned portions are taken together, it becomes apparent that at the time of the
filing of the January 5, 2001 complaint by the respondent, paragraph 4 of the Compromise Agreement
cannot yet be quantified in monetary terms. The value of the 6,080 – 30’s primetime spots was
dependent upon the privatization of the petitioner and its prevailing market price for the primetime spots.
The only basis then for the computation of the docket fees are the damages that the respondent prays
to be awarded to him. It was only when the trial court rendered its summary judgment of August 20,
2004 that respondent’s prayer for specific performance was valued at P540,000,000.00.20

We also note that prior to the filing of the complaint for specific performance, respondent requested for a
meeting with the members of petitioner’s Board of Directors to discuss the monetary equivalent of
paragraph 4 of the Compromise Agreement. Thus, in the letter dated October 26, 200021 addressed to
petitioner’s President, respondent stated thus:

With the upcoming privatization of IBC-13 before the year ends as published in several newspapers,
may I reiterate our request to have a meeting with the present Board of Directors of IBC-13, the
Committee on Privatization and/or Management Committee, so we can finally discuss and settle the
price of the current market of the primetime spot of IBC-13 as embodied on (sic) paragraph 4 of our
Compromise Agreement dated May 22, 1998.

For your further reference, our company took the initiative of getting the official note card of all the TV
stations and we hereby forward a copy of these such as;

Primetime Rate Card per 30’s

1. ABS-CBN Channel 2- - - - - - P 131,250.00

2. PTV Channel 4 - - - - - - - - - 35,000.00

3. ABC Channel 5 - - - - - - - - - 75,000.00

4. GMA Channel 7 - - - - - - - - - 117,000.00

5. RPN Channel 9 - - - - - - - - - 92,000.00

6. IBC Channel 13 - - - - - - - - - ?

On November 29, 2000, respondent again wrote the petitioner in this wise:

This is to inform you that our Compromise Agreement dated May 22, 1998 is final.

Since your auditor claims that he doesn’t have basis in the computation of the spots presented by the
SGV, we agreed to submit a Comparative Statement of the 6,080 spots. The primary objective is to find
the truth and veracity as supported by pertinent documents/papers that became the basis of our
Compromise Agreement and further your basis in paying the additional 1.5 Million Pesos Cash in
pursuant to paragraph I of the Compromise Agreement. We are ready next week to meet your internal
auditor.

After this meeting, may we discuss the cost per spot in pursuant to article 4 of our Compromise
Agreement before Privatization as published in the Daily Inquirer (see attached).22

The foregoing indicate that respondent did not have a clear basis in computing the exact quantitative
value of paragraph 4 of the Compromise Agreement.

On the other hand, the P8,517.00 docket fees were computed on the basis of what was legally
quantifiable at the time of the filing of the complaint. Upon proof of payment of the assessed fees by the
respondent, the trial court properly acquired jurisdiction over the complaint. Jurisdiction once acquired is
never lost, it continues until the case is terminated.23

In the case at bar, the respondent relied on the assessment made by the docket clerk which turned out
to be incorrect. The payment of the docket fees, as assessed, negates any imputation of bad faith or an
intent to defraud the government by the respondent. Thus, when insufficient filing fees were initially paid
by the respondent and there was no intention to defraud the government, the Manchester rule does not
apply.24 Hence, the trial court properly acquired jurisdiction over the instant suit.

Further, Section 2 of Rule 141 of the Rules of Court clearly provides that:

Sec. 2. Fees in lien. – Where the court in its final judgment awards a claim not alleged, or a relief
different from, or more than that claimed in the pleading, the party concerned shall pay the additional
fees which shall constitute a lien on the judgment in satisfaction of said lien. The clerk of court shall
assess and collect the corresponding fees.
While we understand petitioner’s apprehension that the failure to collect the appropriate docket fees
carries detrimental repercussions to the efficient administration of justice, we cannot sustain its stand
that in this case the judiciary will be defrauded of considerable docket fees. Based on the computations
made by the petitioner, the appropriate docket fees is no less than P5,452,237.50. Such amount, if later
found to be proper, constitutes a judgment lien on the P540 million awarded to the respondent by the
trial court by way of summary judgment.

Thus, the Clerk of Court of the Regional Trial Court of Quezon City, Branch 99, or his duly authorized
representative is hereby ordered to assess the amount of deficient docket fees due from the respondent,
which will constitute a judgment lien on the amount awarded to him by summary judgment and to
enforce the said judgment lien and to collect the additional fee.

WHEREFORE, in view of the foregoing, the petition is DENIED. The assailed Decision dated March 16,
2005 and Resolution dated July 22, 2005 of the Court of Appeals in CA-G.R. SP No. 85085
are AFFIRMED.

The Clerk of Court of the Regional Trial Court of Quezon City, Branch 99, or his duly authorized deputy
is hereby ordered to enforce the judgment lien and to assess and collect the additional fees from the
respondent.

SO ORDERED.

CONSUELO YNARES-SANTIAGO
Associate Justice
G.R. No. 151898 March 14, 2012

RICARDO RIZAL, POTENCIANA RIZAL, SATURNINA RIZAL, ELENA RIZAL, and BENJAMIN
RIZAL, Petitioners,
vs.
LEONCIA NAREDO, ANASTACIO LIRIO, EDILBERTO CANTAVIEJA, GLORIA CANTAVIEJA,
CELSO CANTAVIEJA, and the HEIRS of MELANIE CANTAVIEJA, Respondents.

DECISION

REYES, J.:

Before this Court is a petition for review on certiorari under Rule 45 of the Decision1 of the Court of
Appeals (CA) dated July 13, 2001 in CA-G.R. CV No. 26109, affirming the decision of the Regional Trial
Court (RTC), Branch 36, Calamba, Laguna which dismissed the Complaint,2 docketed as Civil Case No.
1153-87-C3 for "partition, recovery of shares with damages" of Lot No. 252 on res judicata.

Factual Antecedents

Herein petitioners Ricardo, Potenciana, Elena, Saturnina and Benjamin, all surnamed Rizal,
commenced Civil Case No. 7836 against Matias Naredo (Matias), Valentin Naredo (Valentin) and Juana
de Leon (Juana) before the then Court of First Instance (CFI) of Laguna involving the accretion of two (2)
hectares of land to Lot No. 454 of the Calamba Estate. In a decision rendered on May 22, 1947, the CFI
ruled in favor of the petitioners. The CFI awarded the ownership of the two-hectare accretion to the
petitioners and ordered the defendants therein to vacate the said land and to pay ₱500.00 a year from
1943 as reasonable rent for their occupancy thereof. Both the CA and the Supreme Court upheld the
decision.

To satisfy the money judgment in Civil Case No. 7836, the provincial sheriff of Laguna levied upon Lots
Nos. 252 and 269 of the Calamba Estate, together with the house erected on Lot No. 252. This Lot No.
252, which is the subject of the controversy, was registered under Transfer Certificate of Title (TCT) No.
RT-488 (RT-3377 No. 12206) in the name of the "Legal Heirs of Gervacia Cantillano," of Parian,
Calamba, Laguna. Several third-party claims were filed, to wit: (a) by Leoncia Naredo (Leoncia) and
Marcela Naredo (Marcela), who are also heirs of Gervacia Cantillano over Lot No. 252; (b) by Pedro
Cantavieja, husband of Marcela over Lot No. 269; and (c) by Teodoro Armesto over the house of mixed
materials standing on Lot No. 252. After the petitioners posted the required bond, the provincial sheriff
proceeded with the auction sale on April 7, 1951. The petitioners were declared the highest bidders. A
final deed of sale was issued to them on April 15, 1952.

On May 9, 1955, Marcela, Leoncia, Matias, Valentin, and Juana instituted Civil Case No. 9908 before
the CFI Branch 1, Laguna, questioning the validity of the execution sale of Lots Nos. 252 and 269 and
the house of mixed materials on Lot No. 252. They claimed that these properties were exempt from
execution.

On December 8, 1955, the CFI declared valid the execution sale of Lots Nos. 252 and 269 of the
Calamba Estate in favor of the petitioners, with a qualification that the petitioners only acquired whatever
rights, title or interests Matias, Valentin and Juana had in Lot No. 252. The sale of the house of mixed
materials in Lot No. 252 was set aside considering that a waiver was executed by the petitioners in favor
of Juana. Although the CFI ordered that the petitioners be placed in possession of Lots Nos. 252 and
269 and Matias and Valentin be ejected therefrom, it did not evict Marcela and Leoncia from Lot No. 252
since they were not parties to Civil Case No. 7836.4

After the aforesaid judgment in Civil Case No. 9908, the petitioners filed Civil Case No. 36-C against
Marcela and Leoncia for partition, accounting and recovery of possession of Lot No. 252. The parties
then entered into a Compromise Agreement whereby the parties acknowledged that they owned Lot No.
252 in common, with 3/5 thereof as the interest of the petitioners and the other 2/5 belonging to therein
defendants Marcela and Leoncia. Said Compromise Agreement was approved by the CFI Branch VI,
Laguna, in an Order dated December 1, 1971.5 The pertinent portions of the agreement read as follows:

5. That the plaintiffs (herein petitioners) and the defendants (herein respondents) agree that said parcel
of land (Lot 252) embraced in Transfer Certificate of Title 12206, and registered in the names of the
Legal Heirs of Gervacia Cantillano, is now owned in common and in undivided shares of TWO-FIFTHS
(2/5) for the defendants and THREE-FIFTHS (3/5) for the plaintiffs;
6. That the plaintiffs and the defendants agree that the subject parcel of land be actually partitioned as
they have so caused the survey and partition of the same per the hereto attached copy of the pertinent
subdivision survey plan, marked as Annex "A" hereof and made integral part of this compromise
agreement;

7. That the plaintiffs and the defendants do hereby express their unqualified conformity to the said
partition and they hereby accept to their full and entire satisfaction their respective determined shares in
the subject parcel of land, and they agree to have their respective determined portions, Two-Fifths (2/5)
for defendants and Three-Fifths (3/5) for plaintiffs, to be covered by independent and separate
certificates of title in their respective names.

8. That the plaintiffs agree to shoulder all the expenses incurred in the partition and to pay all expenses
and fees which may be entailed in the issuance of the independent certificates of title in favor of the
respective parties by the proper Registry of Deeds;6

Ten years after or on August 11, 1981, Marcela and Leoncia, assisted by their husbands, instituted Civil
Case No. 299-83-C assailing the Compromise Agreement. They claimed that said agreement was a
forgery and that their lawyer was not duly authorized for the purpose. In an Order dated July 6, 1984,
the trial court dismissed the case without prejudice to the plaintiffs’ failure to prosecute.

Thereafter, on September 26, 1984, Marcela and Leoncia instituted Civil Case No. 792-84-C, for
enforcement of judgment, partition and segregation of shares with damages over Lot No. 252. On July 6,
1985, the trial court dismissed the complaint on the ground of prescription. No appeal was taken
therefrom.

On September 21, 1987, the petitioners filed a Complaint before the RTC for the immediate segregation,
partition and recovery of shares and ownership of Lot No. 252, with damages. This was docketed as
Civil Case No. 1153-87-C. However, on April 3, 1990, on the basis of the pleadings and exhibits, the
court a quo dismissed the complaint because of res judicata. The trial court stated thus:

"A perusal of this instant case and Civil Case No. 792-84-C, (Exh. ‘1’) will readily show that between
these causes of actions, there are (a) identity of parties; (b) identity of subject matter; and (c) identity of
cause of action. As admitted by the parties, the judgment in Civil Case No. 792-84-C is now final and
executory. While there may appear a difference in the forms of action, the same is irrelevant for
purposes of determining res judicata. It is a firmly established rule that a different remedy sought or a
diverse form of action does not prevent the estoppel of the former adjudication.

x x x."7

Aggrieved, the petitioners appealed to the CA, docketed as CA-G.R. CV No. 26109. Unfortunately, the
original records of the case were misplaced. After earnest efforts were made for the reconstitution of the
records of the case, the parties agreed to have the case submitted for decision based on the documents
submitted.8

In the now assailed decision,9 the CA dismissed the appeal. The CA found that the appellants’ brief
neither contained the required page references to the records, as provided in Section 13 of Rule 44 of
the Rules of Court; nor was it specified, both in the prayer and in the body of the complaint, the specific
amounts of the petitioners’ claim for actual, moral, exemplary and compensatory damages, as
enunciated in Manchester Development Corporation v. Court of Appeals.10

As to the substantive issues raised in the complaint, the CA ruled that the action for partition has been
barred by res judicata. It also held that the petitioners no longer had any cause of action for partition
because the co-ownership of the parties over Lot No. 252 had ceased to exist by the Order of the CFI
Branch VI, Laguna on December 1, 1971.

Issues

In the case at bar, the petitioners submit the following issues for this Court’s consideration, to wit:

A.
THE CA ERRED IN DISMISSING THE APPEAL ON THE GROUND THAT THE PETITIONERS'
APPEAL BRIEF FAILED TO MAKE PAGE REFERENCES TO THE RECORD.

B.

THE CA ERRED IN APPLYING THE RULING IN THE MANCHESTER CASE REGARDING DOCKET
FEES.

C.

THE CA ERRED IN DISMISSING THE APPEAL ON THE GROUND OF PRESCRIPTION AND RES
JUDICATA.

D.

THE RTC ERRED IN DISMISSING THE ENTIRE CASE.11

Ruling and Discussions

We find no merit in the petition.

Failure to observe the requirements under Section 13(a), Rule 44 of the 1997 Rules of Court and to pay
the correct docket fees is fatal to the appeal.

The petitioners argue that the CA erred in dismissing their appeal for their failure to indicate the page
references to the records of the case pursuant to Section 13(a), Rule 4412 of the Rules of Court. They
invoke Section 6, Rule 1 of the 1997 Rules of Civil Procedure which states that "technical rules shall be
liberally construed in order to promote a just, speedy and inexpensive disposition of every action and
proceeding." They cite the case of Pacific Life Assurance Corporation v. Sison,13 where it was held that
an appeal should not be dismissed on mere technicality.

It is settled that technical rules of procedure are mere tools designed to facilitate the attainment of
justice. Their strict and rigid application should be relaxed when they hinder rather than promote
substantial justice. Cases should as much as possible be resolved on the merits, and not on mere
technicalities. The failure of the petitioners' appeal brief to contain page references to the records is a
formal defect which may be considered as minor, if not negligible.14

However, while this Court may be lenient in some instances on formal defects of pleadings filed with the
court, it could not close its eyes when a litigant continuously ignores technical rules, to the point of
wanton disregard of the rationale behind those rules. In fact, this Court has consistently affirmed the
importance of complying with the requirements in Section 13(a), Rule 4415 of the Rules of Court in many
of its decisions, particularly in Mendoza v. United Coconut Planters Bank, Inc.,16 where the Court
explicitly stated that:

Rule 44 and 50 of the 1997 Rules of Civil Procedure are designed for the proper and prompt disposition
of cases before the Court of Appeals Rules of Procedure exist for a noble purpose, and to disregard
such rules in the guise of liberal construction would be to defeat such purpose. The Court of Appeals
noted in its Resolution denying petitioners’ motion for reconsideration that despite ample opportunity,
petitioners never attempted to file an amended appellants’ brief correcting the deficiencies of their brief,
but obstinately clung to their argument that their Appellants’ Brief substantially complied with the rules.
Such obstinacy is incongruous with their plea for liberality in construing the rules on appeal.

De Liano v. Court of Appeals held:

"Some may argue that adherence to these formal requirements serves but a meaningless purpose, that
these may be ignored with little risk in the smug certainty that liberality in the application of procedural
rules can always be relied upon to remedy the infirmities. This misses the point. We are not martinets; in
appropriate instances, we are prepared to listen to reason, and to give relief as the circumstances may
warrant. However, when the error relates to something so elementary as to be inexcusable, our
discretion becomes nothing more than an exercise in frustration. It comes as an unpleasant shock to us
that the contents of an appellant’s brief should still be raised as an issue now. There is nothing arcane
or novel about the provisions of Section 13, Rule 44. The rule governing the contents of appellants’
briefs has existed since the old Rules of Court, which took effect on July 1, 1940, as well as the Revised
Rules of Court, which took effect on January 1, 1964, until they were superseded by the present 1997
Rules of Civil Procedure. The provisions were substantially preserved, with few revisions."17

Moreover, the petitioners also failed to pay the correct docket fees; in which case, jurisdiction did not
vest in the trial court. In Siapno v. Manalo,18 this Court has made it abundantly clear that any complaint,
petition, answer and other similar pleading, which does not specify both in its body and prayer the
amount of damages being claimed, should not be accepted or admitted, or should be expunged from the
records, as may be the case.19

The petitioners alleged in their complaint in Civil Case No. 1153-87-C20 that they suffered actual loss
from the time they had been deprived of their share of 3/5 on Lot No. 252 by the respondents, as well as
moral and exemplary damages, attorney's fees and litigation expenses. However, the only claims they
specified in their prayer were for the attorney's fees in the amount of ₱30,000.00 and ₱500.00 for every
court appearance of the counsel.

In Siapno,21 the complaint alleged in its body the aggregate sum of ₱4,500,000 in moral and exemplary
damages and attorney's fees, but the prayer portion did not mention these claims, nor did it even pray
for the payment of damages. This Court held that such a complaint should be dismissed outright; or if
already admitted, should be expunged from the records. The Court explained that the rule – requiring
the amount of damages claimed to be specified not only in the body of the pleading but also in its prayer
portion – was intended to put an end to the then prevailing practice of lawyers where the damages
prayed for were recited only in the body of the complaint, but not in the prayer, in order to evade
payment of the correct filing fees. As held by the Court in Manchester:22

To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings
should specify the amount of damages being prayed for not only in the body of the pleading but also in
the prayer, and said damages shall be considered in the assessment of the filing fees in any case. Any
pleading that fails to comply with this requirement shall not be accepted nor admitted, or shall otherwise
be expunged from the record.23

In Sun Insurance Office Ltd. v. Judge Asuncion,24 the Court laid down the following rules as regards the
payment of filing fees:

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee that vests a trial court with jurisdiction over the subject matter or nature of the
action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the
court may allow payment of the fee within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which
shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may
also allow payment of said fee within a reasonable time but also in no case beyond its applicable
prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and
payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the
pleading, or if specified the same has been left for determination by the court, the additional filing fee
therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his
duly authorized deputy to enforce said lien and assess and collect the additional fee.25

It cannot be gainsaid from the above guidelines that, with the exception of pauper litigants,26 without the
payment of the correct docket or filing fees within the reglementary period, jurisdiction over the subject-
matter or nature of the action will not vest in the trial court. In fact, a pauper litigant may still have to pay
the docket fees later, by way of a lien on the monetary or property judgment that may accrue to him.
Clearly, the flexibility or liberality of the rules sought by the petitioners cannot apply in the instant case.

Action is dismissible for res judicata and lack of cause of action.

The petitioners vehemently deny that the partition of Lot No. 252 has already been settled in Civil Case
No. 36-C. They insist that the mere determination of the proportionate shares of the parties, as well as
their respective portions of the aforesaid lot in the Compromise Agreement is not enough. They allege
that Lot No. 252 is still covered by the old title, TCT No. 12206, in the name of the heirs of Gervacia
Cantillano. The finality of the decision in Civil Case No. 36-C did not cause Lot No. 252 to divide itself in
accordance with the subdivision plan. They assert that there must be an actual and exclusive
possession of their respective portions in the plan and titles issued to each of them accordingly.27

The petitioners’ contentions are untenable.

Article 484 of the New Civil Code provides that there is co-ownership whenever the ownership of an
undivided thing or right belongs to different persons. Thus, on the one hand, a co-owner of an undivided
parcel of land is an owner of the whole, and over the whole he exercises the right of dominion, but he is
at the same time the owner of a portion which is truly abstract. On the other hand, there is no co-
ownership when the different portions owned by different people are already concretely determined and
separately identifiable, even if not yet technically described.28

Pursuant to Article 494 of the Civil Code, no co-owner is obliged to remain in the co-ownership, and his
proper remedy is an action for partition under Rule 69 of the Rules of Court, which he may bring at
anytime in so far as his share is concerned. Article 1079 of the Civil Code defines partition as the
separation, division and assignment of a thing held in common among those to whom it may belong. It
has been held that the fact that the agreement of partition lacks the technical description of the parties'
respective portions or that the subject property was then still embraced by the same certificate of title
could not legally prevent a partition, where the different portions allotted to each were determined and
became separately identifiable.29

The partition of Lot No. 252 was the result of the approved Compromise Agreement in Civil Case No.
36-C, which was immediately final and executory. Absent any showing that said Compromise
Agreement was vitiated by fraud, mistake or duress, the court cannot set aside a judgment based on
compromise.30 It is axiomatic that a compromise agreement once approved by the court settles the
rights of the parties and has the force of res judicata. It cannot be disturbed except on the ground of vice
of consent or forgery.31

Of equal significance is the fact that the compromise judgment in Civil Case No. 36-C settled as well the
question of which specific portions of Lot No. 252 accrued to the parties separately as their
proportionate shares therein. Through their subdivision survey plan, marked as Annex "A"32 of the
Compromise Agreement and made an integral part thereof, the parties segregated and separately
assigned to themselves distinct portions of Lot No. 252. The partition was immediately
executory,33 having been accomplished and completed on December 1, 1971 when judgment was
rendered approving the same. The CA was correct when it stated that no co-ownership exist when the
different portions owned by different people are already concretely determined and separately
identifiable, even if not yet technically described.34

It bears to note that the parties even acknowledged in Paragraph 7 of the Compromise Agreement that
they had accepted their "respective determined shares in the subject parcel of land, and they agree to
have their respective determined portions, Two-Fifths (2/5) for defendants and Three-Fifths (3/5) for
plaintiffs, to be covered by independent and separate certificates of title in their respective names."35

The petitioners slept on their rights under the partition agreement.

To recall, the petitioners obtained part ownership of Lot No. 252 as the highest bidders at the execution
sale of Lots Nos. 252 and 269 in Civil Case No. 7836, whereas respondents Marcela and Leoncia as
heirs of Gervacia Cantillano retained their 2/5 interest in Lot No. 252 since they were not impleaded in
the said case. As buyers of land, the petitioners had the right to pursue their share therein all the way to
the issuance of their separate title and recovery of possession of their portion, beginning with the filing of
Civil Case No. 36-C.

Concerning the registration with the Registry of Deeds of a judgment of partition of land, Section 81 of
Presidential Decree (P.D.) No. 1529 provides that after the entry of the final judgment of partition, a copy
of such final judgment shall be filed and registered. If the land is set off to the owner in severalty, each
owner shall be entitled to have his certificate entered showing the share set off to him in severalty, and
to receive an owner's duplicate thereof.36

Accordingly, Paragraph 8 of the Compromise Agreement provided that the petitioners shall "shoulder all
the expenses incurred in the partition and to pay all expenses and fees which may be incurred in the
issuance of the independent certificates of title in favor of the respective parties by the proper Registry
of Deeds."37 Unfortunately, the records do not disclose that the petitioners neither filed and registered
with the Register of Deeds a certified copy of the final judgment of partition in Civil Case No. 36-C, nor
did they perform or cause to be performed all further acts requisite for the cancellation of TCT No.
12206 and the issuance of the parties' separate titles over their assigned portions in Lot No. 252. The
only entry in TCT No. 12206,38 prior to the recording on June 13, 1979 of the issuance to the petitioners
of a second duplicate copy of TCT No. 12206, is the annotation in April 1952 of the execution sale of Lot
No. 252 to the petitioners.

Section 6, Rule 39 of the Rules of Court provides:

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

A final and executory judgment may be executed by the prevailing party as a matter of right by mere
motion within five (5) years from the entry of judgment, failing which the judgment is reduced to a mere
right of action which must be enforced by the institution of a complaint in a regular court within ten (10)
years from finality of the judgment.39 In the instant case, there is no showing that after the judgment in
Civil Case No. 36-C, the petitioners filed a motion to execute the same during the first five (5) years after
its finality, or within the succeeding five (5) years, by a civil action to revive the judgment, before it would
have been barred by the statute of limitations.40 An action for revival of judgment is governed by Articles
1144(3) and 1152 of the Civil Code, and Section 6, Rule 39 of the Rules of Court. Articles 1144(3) and
1152 of the Code state:

Art. 1144. The following actions must be brought within ten years from the time the right of action
accrues:

xxxx

(3) Upon a judgment

Art. 1152. The period for prescription of actions to demand the fulfillment of obligations declared by a
judgment commences from the time the judgment became final.

When the petitioners filed Civil Case No. 1153-87-C on September 21, 1987, it was not purportedly to
revive the judgment in Civil Case No. 36-C. It was apparently an action for "Partition, Recovery of
Shares with Damages," but nonetheless citing as basis of the Compromise Agreement in Civil Case No.
36-C. The petitioners wanted to accomplish through an entirely new action what was already
adjudicated in Civil Case No. 36-C, rendered 17 years earlier, but which they inexplicably failed to
enforce. The petitioners do not allege that they tried to execute the compromise judgment in Civil Case
No. 36-C either by motion or by action to revive judgment within the prescriptive period. Absent any
proof that the respondents resorted to dilatory schemes and maneuvers to prevent the execution of the
Compromise Agreement,41 and contrary to the petitioners’ gratuitous assertion in paragraph VIII of their
complaint in Civil Case No. 1153-87-C, we fail to see how the mere filing by the respondents of Civil
Case No. 299-83-C on August 11, 1981 could have in any way prevented or impeded the petitioners
from executing the judgment in Civil Case No. 36-C.

We thus sustain the respondents' affirmative defenses of res judicata and lack of cause of action, and
uphold the appellate and trial courts' rejection of the petitioners' ostensible attempt to revive the already
stale judgment in Civil Case No. 36-C through an entirely new action for partition. The Court agrees with
the CA when it explained:

a. The judgment that effected res judicata is not so much the dismissal of the case due to prescription in
Civil Case No. 792-84-C. What more appropriately leads to res judicata to this case is the final
Compromise Judgment in Civil Case No. 36-C. All the elements of res judicata are present, a final
decision on the merits, between the same parties, on the same subject matter and cause of action. x x x.

b. The present complaint states no cause of action. There is no doubt that appellants’ prayer for partition
is anchored on their supposed co-ownership of Lot No. 252 plus the added fact that it is still covered by
Transfer Certificate of Title No. 12206. However, appellants must have lost track of the fact that at the
time the present action was commenced, partition was no longer an available remedy in their favor
simply because their pretended co-ownership had already ceased to exist. Their 3/5 shares had already
been segregated and determined in the subdivision plan mentioned in the Compromise Judgment and
have, in fact, accepted their share to their satisfaction. In De la Cruz vs. Cruz, 32 SCRA 307 [1970], the
Supreme Court, through Justice J.B.L. Reyes, said that co-ownership no longer exists over the whole
parcel of land where the portions owned by the parties are already determined and identifiable. That
said respective portions are not technically described, or that said portions are still embraced in one and
the same certificate of title, does not make said portions less determinable, or identifiable, or
distinguishable, one from the other, nor that dominion over its portions rest exclusively in their respective
owners.42

Nonetheless, it must be made clear that nothing in this decision shall be understood to mean that the
petitioners have lost their title or interest in the subject property. The final ("definite") deed of sale
executed by the sheriff in favor of the petitioners pursuant to the execution sale in Civil Case No. 7836,
which was duly registered in TCT No. 12206 on April 15, 1952, constituted an effective conveyance to
the petitioners of the property sold therein and entitled them to possession thereof,43 although in the
subsequent decision in 1955 in Civil Case No. 9908, the respondents’ 2/5 interest in the property was
recognized, thereby amending the extent of the petitioners’ title. The said judgment has not been
registered, and neither was the compromise judgment of partition in Civil Case No. 36-C dated
December 1, 1971, which established the parties’ respective specific portions in Lot No. 252. Thus, as a
prerequisite to the issuance of a new title in the name of the petitioners over their 3/5 allocated portion,
we believe that Section 8144 of P.D. No. 1529 does not bar the belated registration of the compromise
judgment in Civil Case No. 36-C.

WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court of Appeals
dated July 13, 2001 in CA-G.R. CV No. 26109 is AFFIRMED.

SO ORDERED.

BIENVENIDO L. REYES
Associate Justice
G.R. No. 149576 August 8, 2006

REPUBLIC OF THE PHILIPPINES, represented by the Land Registration Authority, Petitioner,

vs.
KENRICK DEVELOPMENT CORPORATION, Respondent.

DECISION

CORONA, J.:

The Republic of the Philippines assails the May 31, 2001 decision 1 and August 20, 2001 resolution of
the Court of Appeals in CA-G.R. SP No. 52948 in this petition for review under Rule 45 of the Rules of
Court.

This case stemmed from the construction by respondent Kenrick Development Corporation of a
concrete perimeter fence around some parcels of land located behind the Civil Aviation Training Center
of the Air Transportation Office (ATO) in 1996. As a result, the ATO was dispossessed of some 30,228
square meters of prime land. Respondent justified its action with a claim of ownership over the property.
It presented Transfer Certificate of Title (TCT) Nos. 135604, 135605 and 135606 issued in its name and
which allegedly originated from TCT No. 17508 registered in the name of one Alfonso Concepcion.

ATO verified the authenticity of respondent’s titles with the Land Registration Authority (LRA). On May
17, 1996, Atty. Jose Loriega, head of the Land Title Verification Task Force of the LRA, submitted his
report. The Registrar of Deeds of Pasay City had no record of TCT No. 17508 and its ascendant title,
TCT No. 5450. The land allegedly covered by respondent’s titles was also found to be within Villamor Air
Base (headquarters of the Philippine Air Force) in Pasay City.

By virtue of the report, the Office of the Solicitor General (OSG), on September 3, 1996, filed a
complaint for revocation, annulment and cancellation of certificates of title in behalf of the Republic of
the Philippines (as represented by the LRA) against respondent and Alfonso Concepcion. It was raffled
to Branch 114 of the Regional Trial Court of Pasay City where it was docketed as Civil Case No. 96-
1144.

On December 5, 1996, respondent filed its answer which was purportedly signed by Atty. Onofre
Garlitos, Jr. as counsel for respondent.

Since Alfonso Concepcion could not be located and served with summons, the trial court ordered the
issuance of an alias summons by publication against him on February 19, 1997.

The case was thereafter punctuated by various incidents relative to modes of discovery, pre-trial,
postponements or continuances, motions to dismiss, motions to declare defendants in default and other
procedural matters.

During the pendency of the case, the Senate Blue Ribbon Committee and Committee on Justice and
Human Rights conducted a hearing in aid of legislation on the matter of land registration and titling. In
particular, the legislative investigation looked into the issuance of fake titles and focused on how
respondent was able to acquire TCT Nos. 135604, 135605 and 135606.

During the congressional hearing held on November 26, 1998, one of those summoned was Atty.
Garlitos, respondent’s former counsel. He testified that he prepared respondent’s answer and
transmitted an unsigned draft to respondent’s president, Mr. Victor Ong. The signature appearing above
his name was not his. He authorized no one to sign in his behalf either. And he did not know who finally
signed it.

With Atty. Garlitos’ revelation, the Republic promptly filed an urgent motion on December 3, 1998 to
declare respondent in default, 2 predicated on its failure to file a valid answer. The Republic argued that,
since the person who signed the answer was neither authorized by Atty. Garlitos nor even known to him,
the answer was effectively an unsigned pleading. Pursuant to Section 3, Rule 7 of the Rules of
Court, 3 it was a mere scrap of paper and produced no legal effect.

On February 19, 1999, the trial court issued a resolution granting the Republic’s motion. 4 It found
respondent’s answer to be sham and false and intended to defeat the purpose of the rules. The trial
court ordered the answer stricken from the records, declared respondent in default and allowed the
Republic to present its evidence ex parte.

The Republic presented its evidence ex parte, after which it rested its case and formally offered its
evidence.

Meanwhile, respondent sought reconsideration of the February 19, 1999 resolution but the trial court
denied it.

Aggrieved, respondent elevated the matter to the Court of Appeals via a petition for certiorari 5 seeking
to set aside the February 19, 1999 resolution of the trial court. Respondent contended that the trial court
erred in declaring it in default for failure to file a valid and timely answer.

On May 31, 2001, the Court of Appeals rendered the assailed decision. It found Atty. Garlitos’
statements in the legislative hearing to be unreliable since they were not subjected to cross-examination.
The appellate court also scrutinized Atty. Garlitos’ acts after the filing of the answer 6 and concluded that
he assented to the signing of the answer by somebody in his stead. This supposedly cured whatever
defect the answer may have had. Hence, the appellate court granted respondent’s petition for certiorari.
It directed the lifting of the order of default against respondent and ordered the trial court to proceed to
trial with dispatch. The Republic moved for reconsideration but it was denied. Thus, this petition.

Did the Court of Appeals err in reversing the trial court’s order which declared respondent in default for
its failure to file a valid answer? Yes, it did.

A party may, by his words or conduct, voluntarily adopt or ratify another’s statement. 7 Where it appears
that a party clearly and unambiguously assented to or adopted the statements of another, evidence of
those statements is admissible against him. 8 This is the essence of the principle of adoptive admission.

An adoptive admission is a party’s reaction to a statement or action by another person when it is

reasonable to treat the party’s reaction as an admission of something stated or implied by the other
person. 9 By adoptive admission, a third person’s statement becomes the admission of the party
embracing or espousing it. Adoptive admission may occur when a party:

(a) expressly agrees to or concurs in an oral statement made by another; 10

(b) hears a statement and later on essentially repeats it; 11

(c) utters an acceptance or builds upon the assertion of another; 12

(d) replies by way of rebuttal to some specific points raised by another but ignores further points which
he or she has heard the other make 13 or

(e) reads and signs a written statement made by another. 14

Here, respondent accepted the pronouncements of Atty. Garlitos and built its case on them. At no
instance did it ever deny or contradict its former counsel’s statements. It went to great lengths to explain
Atty. Garlitos’ testimony as well as its implications, as follows:

1. While Atty. Garlitos denied signing the answer, the fact was that the answer was signed. Hence, the
pleading could not be considered invalid for being an unsigned pleading. The fact that the person who
signed it was neither known to Atty. Garlitos nor specifically authorized by him was immaterial. The
important thing was that the answer bore a signature.

2. While the Rules of Court requires that a pleading must be signed by the party or his counsel, it does
not prohibit a counsel from giving a general authority for any person to sign the answer for him which
was what Atty. Garlitos did. The person who actually signed the pleading was of no moment as long as
counsel knew that it would be signed by another. This was similar to addressing an authorization letter
"to whom it may concern" such that any person could act on it even if he or she was not known
beforehand.
3. Atty. Garlitos testified that he prepared the answer; he never disowned its contents and he resumed
acting as counsel for respondent subsequent to its filing. These circumstances show that Atty. Garlitos
conformed to or ratified the signing of the answer by another.

Respondent repeated these statements of Atty. Garlitos in its motion for reconsideration of the trial
court’s February 19, 1999 resolution. And again in the petition it filed in the Court of Appeals as well as
in the comment 15 and memorandum it submitted to this Court.

Evidently, respondent completely adopted Atty. Garlitos’ statements as its own. Respondent’s adoptive
admission constituted a judicial admission which was conclusive on it.

Contrary to respondent’s position, a signed pleading is one that is signed either by the party himself or
his counsel. Section 3, Rule 7 is clear on this matter. It requires that a pleading must be signed by the
party or counsel representing him.

Therefore, only the signature of either the party himself or his counsel operates to validly convert a
pleading from one that is unsigned to one that is signed.

Counsel’s authority and duty to sign a pleading are personal to him. He may not delegate it to just any
person.

The signature of counsel constitutes an assurance by him that he has read the pleading; that, to the
best of his knowledge, information and belief, there is a good ground to support it; and that it is not
interposed for delay. 16 Under the Rules of Court, it is counsel alone, by affixing his signature, who can
certify to these matters.

The preparation and signing of a pleading constitute legal work involving practice of law which is
reserved exclusively for the members of the legal profession. Counsel may delegate the signing of a
pleading to another lawyer 17 but cannot do so

in favor of one who is not. The Code of Professional Responsibility provides:

Rule 9.01 ― A lawyer shall not delegate to any unqualified person the performance of any task which by
law may only be performed by a member of the Bar in good standing.

Moreover, a signature by agents of a lawyer amounts to signing by unqualified persons, 18

something
the law strongly proscribes.

Therefore, the blanket authority respondent claims Atty. Garlitos entrusted to just anyone was void. Any
act taken pursuant to that authority was likewise void. There was no way it could have been cured or
ratified by Atty. Garlitos’ subsequent acts.

Moreover, the transcript of the November 26, 1998 Senate hearing shows that Atty. Garlitos consented
to the signing of the answer by another "as long as it conformed to his draft." We give no value
whatsoever to such self-serving statement.

No doubt, Atty. Garlitos could not have validly given blanket authority for just anyone to sign the answer.
The trial court correctly ruled that respondent’s answer was invalid and of no legal effect as it was an
unsigned pleading. Respondent was properly declared in default and the Republic was rightly allowed to
present evidence ex parte.

Respondent insists on the liberal application of the rules. It maintains that even if it were true that its
answer was supposedly an unsigned pleading, the defect was a mere technicality that could be set
aside.

Procedural requirements which have often been disparagingly labeled as mere technicalities have their
own valid raison d’ etre in the orderly administration of justice. To summarily brush them aside may
result in arbitrariness and injustice. 19

The Court’s pronouncement in Garbo v. Court of Appeals 20 is relevant:

Procedural rules are [tools] designed to facilitate the adjudication of cases. Courts and litigants alike are
thus [enjoined] to abide strictly by the rules. And while the Court, in some instances, allows a relaxation
in the application of the rules, this, we stress, was never intended to forge a bastion for erring litigants to
violate the rules with impunity. The liberality in the interpretation and application of the rules applies only
in proper cases and under justifiable causes and circumstances. While it is true that litigation is not a
game of technicalities, it is equally true that every case must be prosecuted in accordance with the
prescribed procedure to insure an orderly and speedy administration of justice.

Like all rules, procedural rules should be followed except only when, for the most persuasive of reasons,
they may be relaxed to relieve a litigant of an injustice not commensurate with the degree of his
thoughtlessness in not complying with the prescribed procedure. 21 In this case, respondent failed to
show any persuasive reason why it should be exempted from strictly abiding by the rules.

As a final note, the Court cannot close its eyes to the acts committed by Atty. Garlitos in violation of the
ethics of the legal profession. Thus, he should be made to account for his possible misconduct.

WHEREFORE, the petition is hereby GRANTED. The May 31, 2001 decision and August 20, 2001
resolution of the Court of Appeals in CA-G.R. SP No. 52948 are REVERSED and SET ASIDE and the
February 19, 1999 resolution of the Regional Trial Court of Pasay City, Branch 114 declaring
respondent in default is hereby REINSTATED.

Let a copy of this decision be furnished the Commission on Bar Discipline of the Integrated Bar of the
Philippines for the commencement of disbarment proceedings against Atty. Onofre Garlitos, Jr. for his
possible unprofessional conduct not befitting his position as an officer of the court.

SO ORDERED.

RENATO C. CORONA
Associate Justice
 A.C. NO. 10525, September 01, 2015

INTESTATE ESTATE OF JOSE UY, HEREIN REPRESENTED BY ITS ADMINISTRATOR WILSON

UY, Complainant, v. ATTY. PACIFICO M. MAGHARI III, Respondent.

RESOLUTION

LEONEN, J.:

This resolves a Complaint1 for disbarment directly filed before this court by complainant Wilson Uy, the
designated administrator of the estate of Jose Uy. This Complaint charges respondent Atty. Pacifico M.
Maghari, III (Maghari) with engaging in deceitful conduct and violating the Lawyer's Oath. Specifically,
Maghari is charged with the use of information that is false and/or appropriated from other lawyers in
signing certain pleadings.2

On February 18, 1997, Lilia Hofileña (Hofileña) filed a Petition before the Bacolod City Regional Trial
Court praying that she be designated administratrix of the estate of her common-law partner, the
deceased Jose Uy. This was docketed as Spec. Proc. No. 97-241.3

Hofileña was initially designated administratrix.4 However, a Motion for Reconsideration of the Order
designating Hofileña as administratix was filed by Wilson Uy, one of Jose Uy's children, on behalf of
Jose Uy's spouse and other children.5 In its Order6 dated June 9, 1998, the Regional Trial Court
designated Wilson Uy as administrator of Jose Uy's estate.

Subsequently, Hofileña's claims in the settlement of Jose Uy's estate were granted.7 Hence, she filed a
Motion for Execution8 dated September 14, 2007.

In Spec. Proc No. 97-241 and in other proceedings arising from the conflicting claims to Jose Uy's
estate, Hofileña was represented by her counsel, Atty. Mariano L. Natu-El (Atty. Natu-el). In a pleading
filed in the course of these proceedings (i.e., in the Comment dated May 27, 2009 filed before the Court
of Appeals9), Atty. Natu-El indicated the following details:

MARIANO L. NATU-EL
Counsel for Private-Respondent
Rm. 14, J.S. Building
Lacson-Galo Sts., Bacolod City
IBP O.R. No. 731938 11/24/08
PTR NO. 0223568 1/5/09
ROLL NO. 20865
MCLENO. 001597010 (Emphasis supplied)

There appears to have been conflicts between Wilson Uy and the other heirs of Jose Uy.11 In the course
of the proceedings, Wilson Uy prayed that a subpoena ad testificandum be issued to Magdalena Uy as
she was alleged to have been the treasurer of several businesses owned by Jose Uy.12 In its
Order13 dated April 20, 2010, the Regional Trial Court granted Wilson Uy's Motion that a Subpoena ad
Testificandum be issued to Magdalena Uy.

Thereafter, Magdalena Uy, through Maghari, her counsel, filed a Motion to Quash Subpoena ad
Testificandum with Alternative Motion to Cite the Appearance of Johnny K.H. Uy.14 In signing this Motion,
Maghari indicated the following details:

PACIFICO M. MAGHARI, III

Counsel for Magdalena Uy
590 Ylac St., Villamonte
Bacolod City
IBP O.R. No. 731938 11/24/08 B.C.
PTR NO. 0223568 1/5/09 B.C.
ROLL NO. 20865
MCLECompl. 0015970 1/14/0915 (Emphasis supplied)

On November 9, 2010, Wilson Uy filed his Opposition to Magdalena Uy's Motion to Quash.16

Magdalena Uy, through Maghari, filed her Reply17 to Wilson Uy's Opposition. This Reply was dated
December 8, 2010. In signing this Reply, Maghari indicated the following details:
 PACIFICO M. MAGHARI, III
Counsel for Magdalena Uy
590 Ylac St., Villamonte
Bacolod City
IBP O.R. No. 766304 11/27/09 B.C.
PTR NO. 3793872 1/4/10 B.C.
ROLL NO. 20865
MCLE Compl. 0015970 1/14/0918 (Emphasis supplied)

The Regional Trial Court subsequently denied Magdalena Uy's Motion to Quash.19 Thereafter, Maghari
filed for Magdalena Uy a Motion for Reconsideration20 dated July 15, 2011. In signing this Motion,
Maghari indicated the following details:

PACIFICO M. MAGHARI, III

Counsel for Magdalena Uy
590 Ylac St., Villamonte
Bacolod City
IBP O.R. No. 815530 1/4/11 B.C.
PTR NO. 4190929 1/4/11 B.C.
ROLL NO. 20865
MCLE Compl. IH-0000762 1/14/0921(Emphasis supplied)

As the Motion for Reconsideration was denied,22 Maghari filed for Magdalena Uy a Motion to Recall
Subpoena ad Testificandum23 dated March 8, 2012. In signing this Motion, Maghari indicated the
following details:

PACIFICO M. MAGHARI, III

Counsel for Magdalena Uy
590 Ylac St., Villamonte
Bacolod City
IBP O.R. No. 848630 12/27/11 B.C.
PTR NO. 4631737 1/2/12 B.C.
ROLL NO. 44869
MCLE Compl. III-0000762 1/14/0924 (Emphasis supplied)

At this point, Wilson Uy's counsel noticed that based on the details indicated in the March 8, 2012
Motion, Maghari appeared to have only recently passed the bar examinations. This prompted Wilson Uy
to check the records of Spec. Proc No. 97-241. Upon doing so, he learned that since 2010, Maghari had
been changing the professional details indicated in the pleadings he has signed and has been copying
the professional details of Atty. Natu-El.25cralawred

Wilson Uy then filed a Motion26 to declare Magdalena Uy in indirect contempt (as by then she had still
not complied with the Subpoena ad Testificandum) and to require Maghari to explain why he had been
usurping the professional details of another lawyer.

In its Order27 dated February 16, 2012, the Regional Trial Court declined from citing Magdalena Uy in
contempt as no verified petition asking that she be so cited had been filed.28

On July 31, 2014, Wilson Uy filed before this court the present Complaint for disbarment.29 Pointing to
Maghari's act of repeatedly a changing and using another lawyer's professional details, Wilson Uy
asserts that Maghari violated the Lawyer's Oath and acted in a deceitful manner.

In the Resolution30 dated November 12, 2014, this court directed Maghari to file his Comment on Wilson
Uy's Complaint.

This court, through the Office of the Bar Confidant, received Maghari's Comment31 on March 2, 2015.

For resolution are the issues of whether respondent Atty. Pacifico M. Maghari, III engaged in unethical
conduct and of what proper penalty may be meted on him.

Respondent does not deny the existence of the errant entries indicated by complainant. However, he
insists that he did not incur disciplinary liability. He claims that these entries were mere overlooked
errors:
 For true indeed that after the draft of a particular motion or pleading had been printed
and ready for signature, all what [sic] he did after cursorily going over it was to affix his
signature thereon, specifically, atop his printed name, without giving any special or
particular attention to details as the "IBP, PTR, and MCLE Numbers", considering that
these are matters of record and are easily verifiable, thus he gains nothing by "the
usurpation of professional details of another lawyer" and has no sinister motive or ill-
purpose in so doing[.]32

He attempts to diminish the significance of the dubious entries and instead ascribes ill motive to
complainant. He faults complainant for "nitpicking"33 and calls him a "sore loser"34 and a "disgruntled
litigant"35 who is merely "making a mountain out of a molehill"36 and is predisposed to "fault-finding."

He adds that "for the satisfaction of complainant,"37 he has provided what are supposedly his correct
professional details:

2009

IBP OR No. 765868 - Dec. 22, 2008 - Bacolod City

PTR No. 3408746 - Jan. 5, 2009 -Bacolod City
MCLE Compl. II-0012507 - Jan. 14, 2009 and
III-0000762-Jan. 14, 2009

2010

IBP OR No. 766304 - Dec. 9, 2009 - Bacolod City

PTR No. 3793872 - Jan. 4, 2010 -Bacolod City
MCLE Compl. II-0012507 - Jan. 14, 2009 and
III-0000762 - Jan. 14, 2009

2011

IBP OR No. 815530 -Jan. 4, 2011 -Bacolod City

PTRNo. 4190929 - Jan. 4, 2011 - Bacolod City
MCLE Compl. III-0000762 - Jan. 14, 2009

2012

IBP OR No. 848630-Dec. 27, 2011 - Bacolod City

PTR No. 4631737 - Jan. 2, 2012 -Bacolod City
MCLE Compl. III-0000762 - Jan. 14, 200938ChanRoblesVirtualawlibrary

II

Respondent's avowals, protestations, and ad hominem attacks on complainant fail to impress.

The duplicitous entries speak for themselves. The errors are manifest and respondent admits their
existence. This court would perhaps be well counseled to absolve respondent of liability or let him get
away with a proverbial slap on the wrist if all that was involved were a typographical error, or otherwise,
an error or a handful of errors made in an isolated instance or a few isolated instances. So too, if the
error pertained to only ' one of the several pieces of information that lawyers are required to indicate
when signing pleadings.

None of these can be said of this case. Respondent did not merely commit errors in good faith. The truth
is far from it. First, respondent violated clear legal requirements, and indicated patently false information.
Second, the way he did so demonstrates that he did so knowingly. Third, he did so repeatedly. Before
our eyes is a pattern of deceit. Fourth, the information he used was shown to have been appropriated
from another lawyer. Not only was he deceitful; he was also larcenous. Fifth, his act not only of usurping
another lawyer's details but also of his repeatedly changing information from one pleading to another
demonstrates the intent to mock and ridicule courts and legal processes. Respondent toyed with the
standards of legal practice.

Rule 138, Section 27 of the Rules of Court provides for deceit as a ground for disbarment. The Lawyer's
Oath entails commitment to, among others, obeying laws and legal orders, doing no falsehood,
conducting one's self as a lawyer to the best of one's capacity, and acting with fidelity to both court and
client:
 I, do solemnly swear that I will maintain allegiance to the Republic of the Philippines, I
will support the Constitution and obey the laws as well as the legal orders of the duly
constituted authorities therein; I will do no falsehood, nor consent to the doing of any
in court; I will not wittingly or willingly promote or sue any groundless, false or unlawful
suit, or give aid nor consent to the same; I will delay no man for money or malice, and
will conduct myself as a lawyer according to the best of my knowledge and discretion,
with all good fidelity as well to the courts as to my clients; and I impose upon myself
these voluntary obligations without any mental reservation or purpose of evasion. So
help me God.

No amount of feigned ignorance and ad hominem attacks on complainant can negate the gravity of
respondent's actions. His insolent and mocking violation of statutory and regulatory requirements is a
violation of his duties to society and to courts. His swiping of another lawyer's information is a violation
of his duties to the legal profession. The unnecessary risks that he foiled on his client as a possible
result of deficiently signed pleadings violate his duties to his client. Thus, respondent did not only act in
a deceitful manner and violate the solemn oath he took to be admitted into the legal profession; he also
violated every single chapter of the Code of Professional Responsibility.

It is as clear as the entries themselves that respondent acted in a manner that is woefully unworthy of an
officer of the court. He was not even a good citizen. As respondent has fallen short of the ethical
standards apropos to members of the legal profession, we find it proper to suspend respondent from the
practice of law for two (2) years.

III

The requirement of a counsel's signature in pleadings, the significance of this requirement, and the
consequences of non-compliance are spelled out in Rule 7, Section 3 of the Rules of Court:

Section 3. Signature and address. — Every pleading must be signed by the party or
counsel representing him, stating in either case his address which should not be a
post office box.

The signature of counsel constitutes a certificate by him that he has read the pleading;
that to the best of his knowledge, information, and belief there is good ground to
support it; and that it is not interposed for delay.

An unsigned pleading produces no legal effect. However, the court may, in its
discretion, allow such deficiency to be remedied if it shall appear that the same was
due to mere inadvertence and not intended for delay. Counsel who deliberately files
an unsigned pleading, or signs a pleading in violation of this Rule, or alleges
scandalous or indecent matter therein, or fails promptly report to the court a change of
his address, shall be subject to appropriate disciplinary action. (Emphasis supplied)

A counsel's signature on a pleading is neither an empty formality nor even a mere means for
identification. Through his or her signature, a party's counsel makes a positive declaration. In certifying
through his or her signature that he or she has read the pleading, that there is ground to support it, and
that it is not interposed for delay, a lawyer asserts his or her competence, credibility, and ethics. Signing
a pleading is such a solemn component of legal practice that this court has taken occasion to decry the
delegation of this task to non-lawyers as a violation of the Code of Professional Responsibility:

The signature of counsel constitutes an assurance by him that he has read the
pleading; that, to the best of his knowledge, information and belief, there is a good
ground to support it; and that it is not interposed for delay. Under the Rules of Court, it
is counsel alone, by affixing his signature, who can certify to these matters.

The preparation and signing of a pleading constitute legal work involving practice of
law which is reserved exclusively for the members of the legal profession. Counsel
may delegate the signing of a pleading to another lawyer but cannot do so in favor of
one who is not. The Code of Professional Responsibility
provides:chanRoblesvirtualLawlibrary
Rule 9.01 — A lawyer shall not delegate to any unqualified person
the performance of any task which by law may only be performed
by a member of the Bar in good
standing.ChanRoblesVirtualawlibrary
Moreover, a signature by agents of a lawyer amounts to signing by unqualified
persons, something the law strongly proscribes.39 (Citations omitted)
A counsel's signature is such an integral part of a pleading that failure to comply with this requirement
reduces a pleading to a mere scrap of paper totally bereft of legal effect. Thus, faithful compliance with
this requirement is not only a matter of satisfying a duty to a court but is as much a matter of fidelity to
one's client. A deficiency in this respect can be fatal to a client's cause.

Apart from the signature itself, additional information is required to be indicated as part of a counsel's
signature:

(1) Per Rule 7, Section 3 of the Rules of Court, a counsel's address must be stated;
(2) In Bar Matter No. 1132,40 this court required all lawyers to indicate their Roll of Attorneys number;
In Bar Matter No. 287,41 this court required the inclusion of the "number and date of their official
(3) receipt indicating payment of their annual membership dues to the Integrated Bar of the Philippines
for the current year"; in lieu of this, a lawyer may indicate his or her lifetime membership number;
In accordance with Section 139 of the Local Government Code,42 a lawyer must indicate his
(4)
professional tax receipt number;
Bar Matter No. 192243 required the inclusion of a counsel's Mandatory Continuing Legal Education
(5)
Certificate of Compliance or Certificate of Exemption; and
This court's Resolution in A.M. No. 07-6-5-SC44 required the inclusion of a counsel's contact
(6)
details.

As with the signature itself, these requirements are not vain formalities.

The inclusion of a counsel's Roll of Attorneys number, professional tax receipt number, and Integrated
Bar of the Philippines (IBP) receipt (or lifetime membership) number is intended to preserve and protect
the integrity of legal practice. They seek to ensure that only those who have satisfied the requisites for
legal practice are able to engage in it. With the Roll of Attorneys number, parties can readily verify if a
person purporting to be a lawyer has, in fact, been admitted to the Philippine bar.45 With the professional
tax receipt number, they can verify if the same person is qualified to engage in a profession in the place
where he or she principally discharges his or her functions. With the IBP receipt number, they can
ascertain if the same person remains in good standing as a lawyer. These pieces of information, in the
words of Galicto v. Aquino III, "protect the public from bogus lawyers."46 Paying professional taxes (and
the receipt that proves this payment) is likewise compliance with a revenue mechanism that has been
statutorily devolved to local government units.

The inclusion of information regarding compliance with (or exemption from) Mandatory Continuing Legal
Education (MCLE) seeks to ensure that legal practice is reserved only for those who have complied with
the recognized mechanism for "keep[ing] abreast with law and jurisprudence, maintaining] the ethics of
the profession[,] and enhancing] the standards of the practice of law."47

Lastly, the inclusion of a counsel's address and contact details is designed to facilitate the dispensation
of justice. These pieces of information aid in the service of court processes, enhance compliance with
the requisites of due process, and facilitate better representation of a client's cause. In Juane v.
Garcia,48 this court took occasion to expound on the significance of putting on record a counsel's
address:

The time has come, we believe, for this Court to remind the members of the Bar that it is their
inescapable duty to make of record their correct address in all cases in which they are counsel for a
suitor. For, instances there have been in the past when, because of failure to inform the court of the
change of address, litigations were delayed. And this, not to speak of inconvenience caused the other
parties and the court. Worse still, litigants have lost their cases in court because of such negligence on
the part of their counsel. It is painful enough for a litigant to surfer a setback in a legal battle. It is doubly
painful if defeat is occasioned by his attorney's failure to receive notice because the latter has changed
the place of his law office without giving the proper notice therefor. It is only when some such situation
comes about that the negligent lawyer comes to realize the grave responsibility that he has incurred
both to his client and to the cause of justice. It is then that the lawyer is reminded that in his oath of
office he solemnly declared that he "will conduct" himself "as a lawyer according to the best of his
knowledge and discretion." Too late. Experience indeed is a good teacher. To a lawyer, though, it could
prove very expensive.49

These requirements are not mere frivolities. They are not mere markings on a piece of paper. To willfully
disregard them is, thus, to willfully disregard mechanisms put in place to facilitate integrity, competence,
and credibility in legal practice; it is to betray apathy for the ideals of the legal profession and
demonstrates how one is wanting of the standards for admission to and continuing inclusion in the bar.
Worse, to not only willfully disregard them but to feign compliance only, in truth, to make a mockery of
them reveals a dire, wretched, and utter lack of respect for the profession that one brandishes.
 IV

We underscore several facts. These demonstrate that respondent acted in manifest bad faith, thereby
exhibiting a pattern of insubordination, dishonesty, deceit, and intent to make a mockery of courts and
legal processes.

In signing the Motion to Quash Subpoena ad Testificandum with Altenative Motion to Cite the
Appearance of Johnny K.H. Uy, respondent appropriated four of the five details (i.e., IBP official receipt
number, professional tax receipt number, Roll of Attorneys number, and MCLE compliance number) that
Atty. Natu-el indicated in the Comment dated May 27, 2009, which the latter signed and filed before the
Court of Appeals. Atty. Natu-el's details are reproduced as follows:

MARIANO L. NATU-EL
Counsel for Private-Respondent
Rm. 14, J.S. Building
Lacson-Galo Sts., Bacolod City
IBP O.R. No. 731938 11/24/08
PTR NO. 0223568 1/5/09
ROLL NO. 20865
MCLENO. 001597050 [Emphasis supplied]ChanRoblesVirtualawlibrary

The details that respondent indicated are reproduced as follows:

PACIFICO M. MAGHARI, III

Counsel for Magdalena Uy
590 Ylac St., Villamonte
Bacolod City
IBPO.R. No. 731938 11/24/08 B.C.
PTR NO. 0223568 1/5/09 B.C.
ROLL NO. 20865
MCLE Compl. 00159701/14/0951 (Emphasis supplied)

In signing the Reply dated December 8, 2010, respondent used what was supposedly his correct IBP
official receipt number and professional tax receipt number:

PACIFICO M. MAGHARI, III

Counsel for Magdalena Uy
590 Ylac St., Villamonte
Bacolod City
IBP O.R. No. 766304 11/27/09 B.C.
PTR NO. 3793872 1/4/10 B.C.
ROLL NO. 20865
MCLE Compl. 00159701/14/0952 (Emphasis supplied)

The same pleading, however, still bore Atty. Natu-el's Roll of Attorneys number and MCLE compliance
number, which respondent previously appropriated for himself.

In signing the Motion for Reconsideration dated July 15, 2011, respondent used what was supposedly
his correct IBP official receipt number and professional tax receipt number. However, he still used Atty.
Natu-el's Roll of Attorneys number:

PACIFICO M. MAGHARI, III

Counsel for Magdalena Uy
590 Ylac St., Villamonte
Bacolod City
IBP O.R. No. 815530 1/4/11 B.C.
PTR NO. 4190929 1/4/11 B.C.
ROLL NO. 20865
MCLE Compl. III-0000762 1/14/09 53(Emphasis supplied)

It was only in signing the Motion to Recall Subpoena ad Testificandum54 dated March 8, 2012, that all
the professional details that respondent indicated are supposedly his own:

PACIFICO M. MAGHARI, III

Counsel for Magdalena Uy
590 Ylac St., Villamonte
 Bacolod City
IBP O.R. No. 848630 12/27/11 B.C.
PTR NO. 4631737 1/2/12 B. C.
ROLL NO. 44869
MCLE Compl. 111-0000762 1/14/09 (Emphasis supplied)

Respondent acted deliberately. It is impossible that the erroneous details he indicated on his pleadings
are products of mere inadvertence.

To begin with, details were copied from a pleading submitted by another lawyer. These details somehow
found their way into respondent's own pleadings. Certainly, these details could not have written
themselves, let alone transfer themselves from a pleading prepared by one lawyer to those prepared by
another. Someone must have actually performed the act of copying and transferring; that is, someone
must have intended to copy and transfer them. Moreover, the person responsible for this could have
only been respondent or someone acting under his instructions; the pleadings on which they were
transferred are, after all, respondent's pleadings.

Second, these details were not merely copied, they were modified. "B.C." was added to the IBP official
receipt and professional tax receipt numbers copied from Atty. Natu-el. The facts of modification and
addition show active human intervention to make something more out of markings that could otherwise
have simply been reproduced.

Third, in subsequent pleadings, some details copied from Atty. Natu-el were discarded while some were
retained. The December 8, 2010 Reply still bore Atty. Natu-el's Roll of Attorneys number and MCLE
compliance number, but no longer his IBP official receipt number and professional tax receipt number.
The July 15, 2011 Motion for Reconsideration only bore Atty. Natu-el's MCLE compliance number.
This gradual act of segregating information—discarding some while retaining others, and retaining less
over time—reveals that the author of these markings must have engaged in a willful exercise that filtered
those that were to be discarded from those that were to be retained.

Respondent is rightly considered the author of these acts. Any claim that the error was committed by a
secretary is inconsequential. As this court has stated in Gutierrez v. Zulueta:55

The explanation given by the respondent lawyer to the effect that the failure is
attributable to the negligence of his secretary is devoid of merit. A responsible lawyer
is expected to supervise the work in his office with respect to all the pleadings to be
filed in court and he should not delegate this responsibility, lock, stock and barrel, to
his office secretary. If it were otherwise, irresponsible members of the legal profession
can avoid appropriate disciplinary action by simply disavowing liability and attributing
the problem to the fault or negligence of the office secretary. Such situation will not be
countenanced by this Court.56

In the first place, it is doubtful that respondent has complied with the requirements of paying his dues to
the Integrated Bar of the Philippines, paying his annual professional tax, and completing the necessary
units for Mandatory Continuing Legal Education in the periods concerned. To put it plainly, there would
be no need for him to use incorrect information if he had complied with all pertinent regulations.

In his Comment, respondent provided what are supposedly his correct professional details. We
emphasize, however, that he failed to attach to his Comment copies of the pertinent official receipts,
certifications, and other supporting documents. All that he relies on is a self-serving recital of numbers
and dates. None but respondent, himself, was in a better position to produce the documents that could
prove his claims. His failure to do so is, at the very least, suspicious. It can very well mean that they do
not exist, or that he willfully desisted from producing them. The latter would be more damaging to
respondent, as it calls into operation the basic presumption "[t]hat evidence willfully suppressed would
be adverse if produced."57

Even assuming that the details provided by respondent in his Comment are correct, it still remains that
he (1) used a false IBP official receipt number, professional tax receipt number, Roll of Attorneys
number, and MCLE compliance number a total of seven (7) times; and (2) used another lawyer's details
seven (7) times.

In failing to accurately state his professional details, respondent already committed punishable violations.
An isolated inaccuracy, regardless of the concerned lawyer's lack of bad faith, already merits a penalty
of relative severity. In Bumactao v. Fano,58 respondent Atty. Restito F. Fano was suspended from the
practice of law for the singular violation of indicating wrong MCLE compliance details:
 Here, it is established that respondent Atty. Restito F. Fano falsely indicated "MCLE
Compliance No. III-0018308". . . . . The admitted falsity notwithstanding, respondent
endeavors to douse his culpability by shifting the blame to the MCLE providers - PLM
and IBP Quezon City Chapter — and insisting that he acted in good faith. He likewise
attributes the indication of "MCLE Compliance No. III-0018308" to his secretary /
liaison, an "honest mistake . . . because of the pressure of his many duties."

We are not impressed.

Bar Matter No. 1922, dated June 3, 2008, requires "practicing members of the bar to
indicate in all pleadings filed before the courts or quasi-judicial bodies, the number
and date of issue of their MCLE Certificate of Compliance or Certificate of Exemption,
as may be applicable. . . ." It further provides that "[f]ailure to disclose the required
information would cause the dismissal of the case and the expunction of the pleadings
from the records."

At the very least, respondent was negligent in failing to monitor his own MCLE
compliance. This is a sort of negligence that is hardly excusable. As a member of the
legal profession, respondent ought to have known that non-compliance would have
resulted in the rendering inutile of any pleading he may file before any tribunal. The
grave consequence of non-compliance notwithstanding, respondent (by his own
account) admits to having complacently relied on the statements of MCLE providers.
His negligence, therefore risked harm not only upon himself - he being now burdened
with the present complaint as a direct consequence - but worse, upon his clients, the
reliefs they seek through their pleadings being possibly rendered inoperative.59

This court has never shied away from disciplining lawyers who have willfully engaged in acts of deceit
and falsehood.

In Flores v. Chua,60 respondent Atty. Enrique S. Chua was disbarred on this court's finding of "a habit,
attitude, and mindset not only to abuse one's legal knowledge or training, but also to deliberately defy or
ignore known virtues and values which the legal profession demands from its members."61 Atty. Enrique
S. Chua was found to have notarized a document that he knew to have been falsified so as to make it
appear that a person had personally appeared before him; this was part of a bigger design to defraud
another.

In Nunga v. Viray,62 respondent Atty. Venancio Viray was suspended from the practice of law for three
(3) years after having been found to have notarized a document despite the lapse of his commission as
a notary public.

In Benguet Electric Cooperative v. Flores,63 respondent Atty. Ernesto B. Flores was suspended from the
practice of law for two (2) years after being found to have falsely stated that he did not pursue an appeal
so as to absolve himself of the charge of forum shopping when, in fact, he had perfected an appeal.

Here, respondent violated Bar Matter No. 287, Section 139(e) of the Local Government Code, Bar
Matter No. 1132, and Bar Matter No. 1922, a total of seven (7) times. The sheer multiplicity of instances
belies any claim that we are only dealing with isolated errors. Regardless whether isolated or manifold,
these inaccuracies alone already warrant disciplinary sanctions. However, as shall be discussed,
respondent also acted with dishonest, deceitful, and even larcenous intent.

Respondent is not only accountable for inaccuracies. This case is far from being a matter of clerical
errors. He willfully used false information. In so doing, he misled courts, litigants—his own client
included— professional colleagues, and all others who may have relied on the records and documents
on which these false details appear.

Respondent's act of filing pleadings that he fully knew to contain false information is a mockery of courts,
chief of which is this court, considering that this court is the author of all but one of the regulations that
respondent violated. It is this court that requires respondent to indicate his Roll of Attorneys number, IBP
official receipt number, and MCLE compliance number.

Having also violated a requirement spelled out in the Local Government Code, respondent similarly
made a mockery of an act of the legislature.

Respondent's profligacy does not stop here. He also appropriated for himself another lawyer's
professional details in seven (7) separate instances.

In seven distinct instances, respondent is accountable for three constituent acts of larceny, taking, use,
and profiting.

Seven times, respondent took for himself professional details that belonged to another. In these seven
instances, he used the same swiped details in his own pleadings. So too, in these seven instances he
personally benefited. In these instances, respondent succeeded in making it appear that he filed valid
pleadings and avoided the fatal consequences of a deficiently signed pleading. He was able to pursue
reliefs in court and carry on litigation that could have been terminated as soon as his deficient pleadings
were recognized.

All these instances of falsity, dishonesty, and professional larceny are similarly acts of deceit. In using
false information taken from another, respondent misled courts, parties, and colleagues into believing
that he was faithfully, truthfully, and decently discharging his functions.

Respondent's acts reek of malicious intent to deceive courts. He was not only insubordinate and
disobedient of regulations; he was also dishonest, deceitful and duplicitous. Worse, he was mocking and
contemptuous.

VI

The totality of respondent's actions demonstrates a degree of gravity that warrants suspension from the
practice of law for an extended period.

This case involves anything but trivial non-compliance. It is much graver. The confluence of: (1)
respondent's many violations; (2) the sheer multiplicity of rules violated; (3) the frequency—nay,
pattern—of falsity and deceit; and (4) his manifest intent to bring courts, legal processes, and
professional standards to disrepute brings to light a degree of depravity that proves respondent worthy
of being sanctioned. Having flagrantly disobeyed, deceived, and ridiculed courts, respondent rightly
stands to be at the receiving end of disciplinary action.

Respondent's circumstances are well within the grounds for disciplining lawyers as specified by Rule
138, Section 27 of the Rules of Court. His deception is well demonstrated. He ran afoul of every single
word, save perhaps his name, in the Lawyer's Oath. Then again, it was his own signature, his own
name, that respondent Pacifico M. Maghari, III had disgraced.

Respondent's acts also demonstrate a violation of every single chapter of the Code of Professional
Responsibility.

Canon 1 of the Code of Professional Responsibility pronounces a lawyer's foremost duty "to uphold the
constitution, obey the laws of the land V and promote respect for law and legal processes" Rule 1.01 of
the same Code requires lawyers to "not engage in unlawful, dishonest, immoral or deceitful conduct."

Per Canon 10 of the Code of Professional Responsibility, "[a] lawyer owes candor, fairness and good
faith to the court" Rule 10.01 requires lawyers to "not do any falsehood . . . or allow the court to be
misled by any artifice." Rule 10.03 imposes upon lawyers the duty of faithfully "observ[ing] the rules of
procedure [and] not misusing] them to defeat the ends of justice." Canon 11 exhorts lawyers to "observe
and maintain the respect due to the courts."

Respondent did not merely violate a statute and the many issuances of this court as regards the
information that members of the bar must indicate when they sign pleadings. He did so in a manner that
betrays intent to make a mockery of courts, legal processes, and professional standards. By his actions,
respondent ridiculed and toyed with the requirements imposed by statute and by this court. He trampled
upon professional standards established not only by this court, in its capacity as overseer of the legal
profession, but by the Republic itself, through a duly enacted statute. In so doing, he violated his duty to
society and to the courts.

Canon 8 of the Code of Professional Responsibility requires a lawyer to "conduct himself with
courtesy, fairness and candor toward his professional colleagues."

In appropriating information pertaining to his opposing counsel, respondent did not only fail to observe
common courtesy. He encroached upon matters that, ultimately, are personal to another. This
encroachment is, therefore, not only an act of trickery; it is also act of larceny. In so doing, he violated
his duty to the legal profession.

Canon 17 of the Code of Professional Responsibility imposes upon a lawyer "fidelity to the cause of his
client," while Canon 18 requires a lawyer to "serve his client with competence and diligence."

In using false information in his pleadings, respondent unnecessarily put his own client at risk.
Deficiencies in how pleadings are signed can be fatal to a party's cause as unsigned pleadings produce
no legal effect. In so doing, respondent violated his duty to his clients.

It is tempting to think that the only thing respondent did was to deviate from required formalities.
Respondent was, himself, quite dismissive, stating that he did nothing more than "cursorily [go] over . . .
without giving any ... attention to details . . . that. . . are matters of record and are easily verifiable."64 It is
equally tempting to think it would be excessive of this court to engage in an overly rigid, pedantic
emphasis on formalistic niceties.

However, we have demonstrated that what can otherwise be dismissed as empty formalities are, in fact,
necessary solemnities. They are not ends in themselves but crucial means to enhance the integrity,
competence and credibility of the legal profession. They are vital to the dispensation of justice. The
significance of these solemnities, along with the legal profession's "high standard of legal proficiency, . . .
morality, honesty, integrity[,] and fair dealing[,]"65 put in contrast with how respondent has fallen dismally
and disturbingly short of the high standards that his profession demands, demonstrates the propriety of
momentarily suspending respondent from engaging in legal practice.

It is unsettling that respondent engaged in the mockery and ridicule that he did of the very same
badges—his place in the Roll of Attorneys, his membership in the Integrated Bar, his recognition as a
practicing professional, his continuing training and competence—that are emblematic of his being a
lawyer. Seeing as how he manifested such contempt for these badges, we find that there is every
reason for preventing him, at least temporarily, from engaging in the profession these badges signify.

WHEREFORE, respondent Atty. Pacifico M. Maghari, III, having clearly violated his Lawyer's Oath and
the Canons of the Code of Professional Responsibility through his unlawful, dishonest, and deceitful
conduct, is SUSPENDED from the practice of law for two (2) years, effective upon receipt of a copy of
this Resolution.

Let copies of this Resolution be served on the Office of the Bar Confidant, the Integrated Bar of the
Philippines, and all courts in the country for their information and guidance. Let a copy of this Resolution
be attached to respondent Atty. Pacifico M. Maghari, III's personal record as attorney.

SO ORDERED.chanroblesvirtuallawlibrary

Sereno, C.J., Carpio, Leonardo-De Castro, Brion, Peralta, Bersamin, Del Castillo, Villarama, Jr., Perez,
Mendoza, Perlas-Bernabe, and Jardeleza, JJ., concur.
Velasco, Jr., J., no part. I inhibit due to relation to a party.
Reyes, J., on leave.
 G.R. No. 208224, November 22, 2017

DR. JOSEPH L. MALIXI, DR. EMELITA Q. FIRMACION, MARIETTA MENDOZA, AURORA AGUSTIN,
NORA AGUILAR, MA. THERESA M. BEFETEL, AND MYRNA NISAY, Petitioners, v. DR. GLORY V.
BALTAZAR, Respondent.

DECISION

LEONEN, J.:

This is a Petition for Review on Certiorari1 under Rule 45 of the 1997 Rules of Civil Procedure, praying
that the January 22, 20132 and July 16, 20133 Resolutions of the Court of Appeals in CA-GR. SP No.
127252 and the October 17, 2011 Decision4 and July 17, 2012 Resolution5 of the Civil Service
Commission be reversed and set aside.6 The Civil Service Commission dismissed the administrative
complaint of herein petitioners Dr. Jose L. Malixi (Dr. Malixi), Dr. Emelita Q. Firmacion (Dr. Firmacion),
Marietta Mendoza (Mendoza), Aurora Agustin (Agustin), Nora Aguilar (Aguilar), Ma. Theresa M. Befetel
(Befetel), and Myrna Nisay (Nisay) against herein respondent Dr. Glory V. Baltazar (Baltazar) for
violating the rule on forum shopping.7 The Court of Appeals dismissed the Petition for Certiorari filed by
petitioners on procedural grounds.8

In their Complaint9 dated December 15, 2010, petitioners prayed before the Civil Service Commission
that respondent Dr. Baltazar be held administratively liable for gross misconduct and that she be
dismissed from service.10

Petitioners were employees of Bataan General Hospital holding the following positions: Dr. Malixi was
the Vice President of the Samahan ng Manggagawa ng Bataan General Hospital, Dr. Firmacion was a
Medical Specialist II, Mendoza and Agustin were both Nurse III, Aguilar and Befetel were both Nurse II,
and Nisay was a Nursing Attendant II. Meanwhile, Dr. Baltazar was the Officer-in-Charge Chief of
Bataan General Hospital.11

Petitioners alleged that sometime in May 2008, the Department of Health and the Province of Bataan
entered into a Memorandum of Agreement regarding the construction of Bataan General Hospital's
three (3)-storey building. While this Memorandum was in effect, the Department of Health, through then
Secretary Francisco T. Duque (Duque), issued Department Personnel Order No. 2008-1452, appointing
Dr. Baltazar as the hospital's Officer-in-Charge.12

According to petitioners, the Department of Health and the Province of Bataan entered into a
Supplemental Memorandum.13 One (1) of the provisions stated that the parties agreed to give the
supervision of the hospital to the Secretary of Health or "his duly authorized representative with a
minimum rank of Assistant Secretary[.]"14 A third Memorandum of Agreement was executed by the
parties on June 16, 2009, but the Department of Health refused to renew the agreement "due to a
complaint already filed before the Honorable Congresswoman Herminia Roman, and before the
Department of Health."15

In their Complaint, petitioners questioned the validity of Dr. Baltazar's appointment and
qualifications.16 They alleged that her appointment was "without any basis, experience[,] or
expertise[.]"17 They claimed that she was appointed only by virtue of an endorsement of the Bataan
Governor and without the prescribed Career Service Executive Board qualifications.18 Thus, her
appointment violated Sections 8(1)(c), 8(2), 21(1), and 22 of Book V of the Administrative Code which
provide:

SECTION 8. Classes of Positions in the Career Service. — (1) Classes of positions in

the career service appointment to which requires examinations shall be grouped into
three major levels as follows:
....

(c) The third level shall cover positions in the Career Executive
Service.

(2) Except as herein otherwise provided, entrance to the first two levels shall be
through competitive examinations, which shall be open to those inside and outside the
service who meet the minimum qualification requirements. Entrance to a higher level
does not require previous qualification in the lower level. Entrance to the third level
shall be prescribed by the Career Executive Service Board.
 ....

SECTION 21. Recruitment and Selection of Employees. — (1) Opportunity for

government employment shall be open to all qualified citizens and positive efforts
shall be exerted to attract the best qualified to enter the service. Employees shall be
selected on the basis of fitness to perform the duties and assume the
responsibilities of the positions.

....

SECTION 22. Qualification Standards. — (1) A qualification standard expresses the

minimum requirements for a class of positions in terms of education, training and
experience, civil service eligibility, physical fitness, and other qualities required for
successful performance. The degree of qualifications of an officer or employee shall
be determined by the appointing authority on the basis of the qualification standard for
the particular position.

Qualification standards shall be used as basis for civil service examinations for
positions in the career service, as guides in appointment and other personnel
actions, in the adjudication of protested appointments, in determining training
needs, and as aid in the inspection and audit of the agencies' personnel work
programs.

It shall be administered in such manner as to continually provide incentives to officers

and employees towards professional growth and foster the career system in the
government service.

(2) The establishment, administration and maintenance of qualification standards shall

be the responsibility of the department or agency, with the assistance and approval of
the Civil Service Commission and in consultation with the Wage and Position
Classification Office.19 (Emphasis and underscoring in the original)

Petitioners pointed out that Dr. Baltazar's appointment was by virtue of a secondment pursuant to the
Memorandum of Agreement. Her third year as Officer-in-Charge via secondment already violated the
law for failing to comply with the required qualification standards.20 Granting that there was compliance,
secondment that exceeds one (1) year is subject to the Civil Service Commission's approval under
Section 9(a),21 Rule VII of the Omnibus Rules Implementing Book V of Executive Order No. 292 and
Department of Health Administrative Order No. 46, series of 2001. Civil Service Commission
Memorandum Circular No. 15, series of 1999 likewise provides that the contract of secondment should
be submitted to the Commission within 30 days from its execution. A year after Dr. Baltazar's
secondment, the Commission did not issue any authority for her to continue to hold office as Officer-in-
Charge of the hospital. Hence, her assumption without the required authority was deemed illegal.22

Petitioners averred that the non-renewal of the Memorandum of Agreement by the Department of Health
rendered her appointment ineffective. Her holding of the position after this non-renewal was already
illegal.23

In addition to Dr. Baltazar's alleged invalid appointment and lack of qualifications, petitioners contended
that she committed several abusive and malevolent acts detrimental to Bataan General Hospital's
officers and employees.24 She authorized the collection of fees for the insertion and removal of
intravenous fluids and fees for the Nurse Station without any legal basis.25 She also caused the removal
from payroll of an employee, who, up to the filing of the Complaint, had yet to receive remuneration,
hazard pay, subsistence, and other allowances.26

Petitioners likewise alleged that Dr. Baltazar manipulated the creation of the Selection and Promotion
Board to give her control over the personnel's employment and promotion. She also disregarded the
next-in-line rule when it comes to appointment and promotion of employees.27

Furthermore, Dr. Baltazar allegedly employed two (2) doctors as contractual employees who were paid
P20,000.00 but worked only half the time rendered by an employee-doctor of Bataan General Hospital.
Lastly, petitioners claimed that Dr. Baltazar allowed her doctor siblings to accommodate private patients
while expressly prohibiting other doctors to do the same.28

On October 17, 2011, the Civil Service Commission rendered a Decision29 dismissing the Complaint on
the ground of forum shopping. The Civil Service Commission found that all elements of forum shopping
were present in the case and that petitioners' letter dated September 7, 2010 filed with the Department
of Health contained the same allegations against Dr. Baltazar and sought for the same relief Finally, the
judgment by the Department of Health would result to res judicata in the case before the Civil Service
Commission. It also noted that another case was pending before the Office of the Ombudsman in
relation to the alleged removal of an employee in the hospital's payroll.30

Nevertheless, the Civil Service Commission resolved the issue of Dr. Baltazar's appointment "[f]or
clarificatory purposes[.]"31 It held that Dr. Baltazar was not appointed as Officer-in-Charge of Bataan
General Hospital but was merely seconded to the position. Section 6 of the Civil Service Commission
Circular No. 40, series of 1998, only requires that seconded employees occupy a "professional,
technical and scientific position[.]"32

The Civil Service Commission added that the approval requirement for secondments that exceed one (1)
year was already amended by Civil Service Commission Circular No. 06-1165.33 The new circular
merely required that the Memorandum of Agreement or the secondment contract be submitted to the
Commission "for records purposes[.]"34 Failure to submit within 30 days from the execution of the
agreement or contract will only make the secondment in effect 30 days before the submission date.35

On the alleged violation of the next-in-line rule, the Civil Service Commission held that "[e]mployees
holding positions next-in-rank to the vacated position do not enjoy any vested right thereto for purposes
of promotion."36 Seniority will only be considered if the candidates possess the same qualifications.37

The dispositive portion of the Civil Service Commission Decision read:

WHEREFORE, the complaint of Dr. Joseph L. Malixi, Dr. Emelita Q. Firmacion,

Marietta Mendoza, Aurora Agustin, Nora Aguilar, Ma. Theresa M. Befetel and Myrna
Nisay against Dr. Glory V. Baltazar for Dishonesty; Misconduct; Oppression; Violation
of Existing Civil Service Law and Rules or Reasonable Office Regulations; and
Conduct Prejudicial to the Best Interest of the Service and Being Notoriously
Undesirable is hereby DISMISSED for violation of the rule against forum-
shopping.38 (Emphasis in the original)

Petitioners moved for reconsideration and argued that the letter before the Department of Health was
simply a request to meet the Secretary, and not a Complaint. Furthermore, the letter before the
Department of Health and the Complaint before the Civil Service Commission did not contain the same
parties or seek the same relief.39

On July 17, 2012, the Civil Service Commission promulgated a Resolution40 denying the Motion for
Reconsideration. It held that it was the Department of Health that considered petitioners' letter as their
complaint, and not the Civil Service Commission. Moreover, the Department of Health already exercised
jurisdiction over the case when it required Dr. Baltazar to comment on the letter-complaint.41

Petitioners elevated the case before the Court of Appeals.

On January 22, 2013, the Court of Appeals issued a Minute Resolution,42 dismissing the appeal:

The petition is DISMISSED in view of the following:

1. the dates when the assailed Decision was received and when [a Motion for
Reconsideration] thereto was filed are not indicated;
2. the attached October 17, 2011 Decision and July 17, 2012 Resolution are
mere photocopies;
3. petitioner's counsel's [Mandatory Continuing Legal Education] date of
compliance is not indicated; and
4. there are no proofs of competent evidence of identities.43

Petitioners moved for reconsideration, which was denied by the Court of Appeals in its July 16, 2013
Minute Resolution.44

On September 4, 2013, petitioners filed a Petition for Review45 against Dr. Baltazar before this Court.
They pray for the reversal of the Decision and Resolution of the Court of Appeals and of the Decision
and Resolution of the Civil Service Commission.46
Petitioners maintain that they indicated the important dates in their appeal before the Court of Appeals
and that they attached certified true copies of the assailed Decision and Resolution.47 However, they
admit that they failed to indicate the date of their counsel's Mandatory Continuing Legal Education
(MCLE) compliance and to provide proof of "competent evidence of identities."48

Petitioners also deny that they committed forum shopping. The alleged Complaint sent to the
Department of Health was a mere letter stating the employees' grievances and objections to the
illegalities and violations committed by respondent. It was a mere request for the Department of Health
Secretary to tackle the issues and investigate the concerns in the hospital's management. This letter
was not intended to serve as a formal Complaint. They request that this Court set aside the issue on
forum shopping and that the case be resolved on its merits.49

On January 14, 2014, respondent filed her Comment50 and prayed for the dismissal of the petition. She
argues that the procedural infirmities of petitioners' appeal are fatal to their case.51

On February 27, 2014, petitioners filed their Reply.52 They reiterated their request for the relaxation of
procedural rules and the resolution of the case based on its merits. They also disclosed that Civil
Service Commission Chairman Duque, who signed the October 17, 2011 Decision, was formerly the
Department of Health Secretary who seconded respondent as Bataan General Hospital's Officer-in-
Charge. Lastly, petitioners added that their letter to the Department of Health was not a Complaint since
it was not assigned a case number.53

The sole issue for this Court's resolution is whether or not the Court of Appeals erred in dismissing the
petition based on procedural grounds.

Procedural rules are essential in the administration of justice. The importance of procedural rules in the
adjudication of disputes has been reiterated in numerous cases.54 In Santos v. Court of Appeals, et al.:55

Procedural rules are not to be disdained as mere technicalities that may be ignored at
will to suit the convenience of a party. Adjective law is important in insuring the
effective enforcement of substantive rights through the orderly and speedy
administration of justice. These rules are not intended to hamper litigants or
complicate litigation but, indeed, to provide for a system under which suitors may be
heard in the correct form and manner and at the prescribed time in a peaceful
confrontation before a judge whose authority they acknowledge. The other alternative
is the settlement of their conflict through the barrel of a gun.56

Moreover, in Le Soleil Int'l. Logistics Co., Inc,. et al. v. Sanchez, et al.:57

Time and again, we have stressed that procedural rules do not exist for the
convenience of the litigants; the rules were established primarily to provide order to,
and enhance the efficiency of, our judicial system.58

In this case, the Court of Appeals pointed out four (4) procedural infirmities:

1. the dates when the assailed Decision was received and when [a Motion for
Reconsideration] thereto was filed are not indicated;
2. the attached October 17, 2011 Decision and July 17, 2012 Resolution are
mere photocopies;
3. petitioner's counsel's [Mandatory Continuing Legal Education] date of
compliance is not indicated; and
4. there are no proofs of competent evidence of identities.59

Technical rules serve a purpose. They are not made to discourage litigants from pursuing their case nor
are they fabricated out of thin air. Every section in the Rules of Court and every issuance of this Court
with respect to procedural rules are promulgated with the objective of a more efficient judicial system.

On the first procedural rule that petitioners allegedly failed to comply with, this Court explained the
rationale of the requisite material dates in Lapid v. Judge Laurea:60
 There are three material dates that must he stated in a petition for certiorari brought
under Rule 65. First, the date when notice of the judgment or final order or resolution
was received; second, the date when a motion for new trial or for reconsideration was
filed; and third, the date when notice of the denial thereof was received . . . As
explicitly stated in the aforementioned Rule, failure to comply with any of the
requirements shall be sufficient ground for the dismissal of the petition.

The rationale for this strict provision of the Rules of Court is not difficult to appreciate.
As stated in Santos vs. Court of Appeals, the requirement is for purpose of
determining the timeliness of the petition, thus:

The requirement of setting forth the three (3) dates in a petition

for certiorari under Rule 65 is for the purpose of determining its
timeliness. Such a petition is required to be filed not later than sixty
(60) days from notice of the judgment, order or Resolution sought to
be assailed. Therefore, that the petition for certiorari was filed forty-
one (41) days from receipt of the denial of the motion for
reconsideration is hardly relevant. The Court of Appeals was not in
any position to determine when this period commenced to run and
whether the motion for reconsideration itself was filed on time since
the material dates were not stated . . .

Moreover, as reiterated in Mabuhay vs. NLRC, . . . "As a rule, the perfection of an

appeal in the manner and within the period prescribed by law is jurisdictional and
failure to perfect an appeal as required by law renders the judgment final and
executory."61 (Emphasis in the original, citations omitted)

On the second procedural rule, this Court discussed the necessity of certified true copies
in Pinakamasarap Corporation v. National Labor Relations Commission:62

There is a sound reason behind this policy and it is to ensure that the copy of the
judgment or order sought to be reviewed is a faithful reproduction of the original so
that the reviewing court would have a definitive basis in its determination of whether
the court, body or tribunal which rendered the assailed judgment or order committed
grave abuse of discretion.63 (Citation omitted)

On the third procedural rule, this Court clarified the importance of complying with the required MCLE
information in Intestate Estate of Jose Uy v. Atty. Maghari:64

The inclusion of information regarding compliance with (or exemption from) Mandatory
Continuing Legal Education (MCLE) seeks to ensure that legal practice is reserved
only for those who have complied with the recognized mechanism for "keep[ing]
abreast with law and jurisprudence, maintain[ing] the ethics of the profession[,] and
enhanc[ing] the standards of the practice of law."65

Lastly, proofs of competent evidence of identities are required to ensure "that the allegations are true
and correct and not a product of the imagination or a matter of speculation, and that the pleading is filed
in good faith."66

II

Time and again, this Court has relaxed the observance of procedural rules to advance substantial
justice.67

In Acaylar, Jr. v. Harayo,68 the Court of Appeals denied petitioner's Petition for Review for failure to state
the date he received the assailed Decision of the Regional Trial Court and the date he filed his Motion
for Reconsideration.69 This Court held:

[F]ailure to state the material dates is not fatal to his cause of action, provided the
date of his receipt, i.e., 9 May 2006, of the RTC Resolution dated 18 April 2006
denying his Motion for Reconsideration is duly alleged in his Petition. In the recent
case of Great Southern Maritime Services Corporation v. Acuña, we held that "the
 failure to comply with the rule on a statement of material dates in the petition may be
excused since the dates are evident from the records." The more material date for
purposes of appeal to the Court of Appeals is the date of receipt of the trial court's
order denying the motion for reconsideration. The other material dates may be
gleaned from the records of the case if reasonably evident.

....

Accordingly, the parties are now given the amplest opportunity to fully ventilate their
claims and defenses brushing aside technicalities in order to truly ascertain the merits
of this case. Indeed, judicial cases do not come and go through the portals of a court
of law by the mere mandate of technicalities. Where a rigid application of the rules will
result in a manifest failure or miscarriage of justice, technicalities should be
disregarded in order to resolve the case. In Aguam v. Court of Appeals, we ruled that:

The court has [the] discretion to dismiss or not to dismiss an

appellant's appeal. It is a power conferred on the court, not a duty.
The "discretion must be a sound one, to be exercised in accordance
with the tenets of justice and fair play, having in mind the
circumstances obtaining in each case." Technicalities, however,
must be avoided. The law abhors technicalities that impede the
cause of justice. The court's primary duty is to render or dispense
justice. "A litigation is not a game of technicalities." "Law suits,
unlike duels, are not to be won by a rapier's thrust. Technicality,
when it deserts its proper office as an aid to justice and becomes its
great hindrance and chief enemy, deserves scant consideration
from courts." Litigations must be decided on their merits and not on
technicality. Every party litigant must be afforded the amplest
opportunity for the proper and just determination of his cause, free
from the unacceptable plea of technicalities. Thus, dismissal of
appeals purely on technical grounds is frowned upon where the
policy of the court is to encourage hearings of appeals on their
merits and the rules of procedure ought not to be applied in a very
rigid, technical sense; rules of procedure are used only to help
secure, not override substantial justice. It is a far better and more
prudent course of action for the court to excuse a technical lapse
and afford the parties a review of the case on appeal to attain the
ends of justice rather than dispose of the case on technicality and
cause a grave injustice to the parties, giving a false impression of
speedy disposal of cases while actually resulting in more delay, if
not a miscarriage of justice.70 (Citations omitted)

In Barroga v. Data Center College of the Philippines, et al.,71 petitioner likewise failed to state in his
Petition for Certiorari before the Court of Appeals the date he received the assailed Decision of the
National Labor Relations Commission and the date he filed his Partial Motion for Reconsideration.72 This
Court held that "this omission is not at all fatal because these material dates are reflected in petitioner's
Partial Motion for Reconsideration[.]"73 This Court, citing Acaylar, further held:

In Acaylar, Jr. v. Harayo, we held that failure to state these two dates in the petition
may be excused if the same are evident from the records of the case. It was further
ruled by this Court that the more important material date which must be duly alleged in
the petition is the date of receipt of the resolution of denial of the motion for
reconsideration. In the case at bar, petitioner has duly complied with this rule.

....

The Court has time and again upheld the theory that the rules of procedure are
designed to secure and not to override substantial justice. These are mere tools to
expedite the decision or resolution of cases, hence, their strict and rigid application
which would result in technicalities that tend to frustrate rather than promote
substantial justice must be avoided. The CA thus should not have outrightly dismissed
petitioner's petition based on these procedural lapses.74 (Citations omitted)

In Paras v. Judge Baldado,75 the Court of Appeals dismissed petitioners' Petition for Certiorari on purely
procedural grounds. It found that petitioners failed to attach the required certified true copy of the
assailed Regional Trial Court Order in their petition.76 This Court set aside the resolutions of the Court of
Appeals and held:

[T]he records reveal that duplicate original copies of the said RTC orders were in fact
attached to one of the seven copies of the petition filed with the Court of Appeals;
moreover, copies of the same orders, this time accomplished by the clerk of court,
were submitted by petitioners in their motion for reconsideration. Thus, the Court finds
that there was substantial compliance with the requirement and the Court of Appeals
should have given the petition due course.

"Cases should be determined on the merits, after full opportunity to all parties for
ventilation of their causes and defenses, rather than on technicality or some
procedural imperfections. In that way, the ends of justice would be served
better."77 (Citations omitted)

In Durban Apartments Corporation v. Catacutan,78 petitioner also failed to attach certified true copies of
the assailed decisions of the Labor Arbiter and of the National Labor Relations Commission in their
petition before the Court of Appeals. The Court of Appeals dismissed the petition on procedural grounds;
but this Court, upon review, decided the case on its merits.79 This Court held:

[I]n the exercise of its equity jurisdiction, the Court may disregard procedural lapses
so that a case may be resolved on its merits. Rules of procedure should promote, not
defeat, substantial justice. Hence, the Court may opt to apply the Rules liberally to
resolve substantial issues raised by the parties.

It is well to remember that this Court, in not a few cases, has consistently held that
cases shall be determined on the merits, after full opportunity to all parties for
ventilation of their causes and defense, rather than on technicality or some procedural
imperfections. In so doing, the ends of justice would be better served. The dismissal
of cases purely on technical grounds is frowned upon and the rules of procedure
ought not to be applied in a very rigid, technical sense, for they are adopted to help
secure, not override, substantial justice, and thereby defeat their very ends. Indeed,
rules of procedure are mere tools designed to expedite the resolution of cases and
other matters pending in court. A strict and rigid application of the rules that would
result in technicalities that tend to frustrate rather than promote justice must be
avoided.80 (Citations omitted)

In Manila Electric Company v. Gala,81 respondent sought for the denial of petitioner's Petition for Review
on Certiorari before this Court for allegedly violating procedural rules. Among the grounds that
respondent relied upon was the failure of petitioner's counsels to state in the petition their updated
MCLE certificate numbers.82 This Court brushed aside the technical infirmity and held:

We stress at this point that it is the spirit and intention of labor legislation that the
NLRC and the labor arbiters shall use every reasonable means to ascertain the facts
in each case speedily and objectively, without regard to technicalities of law or
procedure, provided due process is duly observed. In keeping with this policy and in
the interest of substantial justice, we deem it proper to give due course to the petition,
especially in view of the conflict between the findings of the labor arbiter, on the one
hand, and the NLRC and the CA, on the other. As we said in
S.S. Ventures International, Inc. v. S.S. Ventures Labor Union, "the application of
technical rules of procedure in labor cases may be relaxed to serve the demands of
substantial justice."83 (Citations omitted)

In Doble, Jr. v. ABB, Inc.,84 this Court held that the Court of Appeals erred when it dismissed the Petition
for Certiorari due to the failure of petitioner's counsel to provide information regarding his MCLE
compliance.85 Citing People v. Arrojado,86 this Court held:

On point is People v. Arrojado where it was held that the failure of a lawyer to indicate
in his or her pleadings the number and date of issue of his or her MCLE Certificate of
Compliance will no longer result in the dismissal of the case:

In any event, to avoid inordinate delays in the disposition of cases

brought about by a counsel's failure to indicate in his or her
 pleadings the number and date of issue of his or her MCLE
Certificate of Compliance, this Court issued an En Banc Resolution,
dated January 14, 2014 which amended B.M. No. 1922 by
repealing the phrase "Failure to disclose the required information
would cause the dismissal of the case and the expunction of the
pleadings from the records" and replacing it with "Failure to disclose
the required information would subject the counsel to appropriate
penalty and disciplinary action." Thus, under the amendatory
Resolution, the failure of a lawyer to indicate in his or her pleadings
the number and date of issue of his or her MCLE Certificate of
Compliance will no longer result in the dismissal of the case and
expunction of the pleadings from the records. Nonetheless, such
failure will subject the lawyer to the prescribed fine and/or
disciplinary action.

Granted that the Petition for Certiorari was filed before the CA on October 29, 2013
even before the effectivity of En Banc Resolution dated January 14, 2014 which
amended B.M. No. 1922, it bears to stress that petitioner's counsel later submitted
Receipts of Attendance in the MCLE Lecture Series for his MCLE Compliance IV on
March 3, 2014 and the Certificate of Compliance albeit on January 26, 2015. Hence,
the CA erred in issuing the assailed November 28, 2014 Resolution denying Doble's
motion for reconsideration, there being no more reason not to reinstate the petition
for certiorari based on procedural defects which have already been corrected.
Needless to state, liberal construction of procedural rules is the norm to effect
substantial justice, and litigations should, as much as possible, be decided on the
merits and not on technicalities.87 (Emphasis in the original, citations omitted)

In Heirs of Amada Zaulda v. Zaulda,88 one (1) of the grounds cited by the Court of Appeals to support its
dismissal of the Petition for Review was petitioners' failure to provide competent evidence of identities
on the Verification and Certification against Forum Shopping.89 On this point, this Court held:

As regards the competent identity of the affiant in the Verification and Certification,
records show that he proved his identity before the notary public through the
presentation of his Office of the Senior Citizen (OSCA) identification card. Rule II, Sec.
12 of the 2004 Rules on Notarial Practice requires a party to the instrument to present
competent evidence of identity. Sec. 12, as amended, provides:

Sec. 12. Competent Evidence of Identity. – The phrase "competent

evidence of identity" refers to the identification of an individual
based on:

(a) at least one current identification document issued by an official

agency bearing the photograph and signature of the individual, such
as but not limited to, passport, driver's license, Professional
Regulations Commission ID, National Bureau of Investigation
clearance, police clearance, postal ID, voter's
ID, Barangay certification, Government Service Insurance System
(GSIS) e-card, Social Security System (SSS) card, PhilHealth
card, senior citizen card, Overseas Workers Welfare Administration
(OWWA) ID, OFW ID, seaman's book, alien certificate of
registration/immigrant certificate of registration, government office
ID, certificate from the National Council for the Welfare of Disabled
Persons (NCWDP), Department of Social Welfare and Development
certification [as amended by A.M. No. 02-8-13-SC dated February
19, 2008]; or

(b) the oath or affirmation of one credible witness not privy to the
instrument, document or transaction who is personally known to the
notary public and who personally knows the individual, or of two
credible witnesses neither of whom is privy to the instrument,
document or transaction who each personally knows the individual
and shows to the notary public documentary identification.

It is clear from the foregoing provisions that a senior citizen card is one of the
 competent identification cards recognized in the 2004 Rules on Notarial Practice. For
said reason, there was compliance with the requirement. Contrary to the perception of
the CA, attachment of a photocopy of the identification card in the document is not
required by the 2004 Rules on Notarial Practice. Even A.M. No. 02-8-13-SC,
amending Section 12 thereof, is silent on it Thus, the CA's dismissal of the petition for
lack of competent evidence on the affiant's identity on the attached verification and
certification against forum shopping was without clear basis.

Even assuming that a photocopy of competent evidence of identity was indeed

required, non-attachment thereof would not render the petition fatally defective. It has
been consistently held that verification is merely a formal, not jurisdictional,
requirement, affecting merely the form of the pleading such that non-compliance
therewith does not render the pleading fatally defective. It is simply intended to
provide an assurance that the allegations are true and correct and not a product of the
imagination or a matter of speculation, and that the pleading is filed in good faith. The
court may in fact order the correction of the pleading if verification is lacking or it may
act on the pleading although it may not have been verified, where it is made evident
that strict compliance with the rules may be dispensed so that the ends of justice may
be served . . .

....

Again, granting arguendo that there was non-compliance with the verification
requirement, the rule is that courts should not be so strict about procedural lapses
which do not really impair the proper administration of justice. After all, the higher
objective of procedural rule is to ensure that the substantive rights of the parties are
protected. Litigations should, as much as possible, be decided on the merits and not
on technicalities. Every party-litigant must be afforded ample opportunity for the
proper and just determination of his case, free from the unacceptable plea of
technicalities.

In Coca-Cola Bottlers v. De La Cruz, where the verification was marred only by a

glitch in the evidence of the identity of the affiant, the Court was of the considered
view that, in the interest of justice, the minor defect can be overlooked and should not
defeat the petition.

The reduction in the number of pending cases is laudable, but if it would be attained
by precipitate, if not preposterous, application of technicalities, justice would not be
served. The law abhors technicalities that impede the cause of justice. The court's
primary duty is to render or dispense justice. "It is a more prudent course of action for
the court to excuse a technical lapse and afford the parties a review of the case on
appeal rather than dispose of the case on technicality and cause a grave injustice to
the parties, giving a false impression of speedy disposal of cases while actually
resulting in more delay, if not miscarriage of justice."

What should guide judicial action is the principle that a party-litigant should be given
the fullest opportunity to establish the merits of his complaint or defense rather than
for him to lose life, liberty, honor, or property on technicalities. The rules of procedure
should be viewed as mere tools designed to facilitate the attainment of justice. Their
strict and rigid application, which would result in technicalities that tend to frustrate
rather than promote substantial justice, must always be eschewed.90 (Emphasis in the
original, citations omitted)

In Trajano v. Uniwide Sales Warehouse Club,91 respondent prayed for this Court's outright denial of the
Petition for Review due to petitioner's failure to provide competent evidence of identity in the verification
page.92 This Court brushed aside this technicality and held:

Contrary to Uniwide's claim, the records of the case show that the petition's
verification page contains Trajano's competent evidence of identity, specifically,
Passport No. XX041470. Trajano's failure to furnish Uniwide a copy of the petition
containing his competent evidence of identity is a minor error that this Court may and
chooses to brush aside in the interest of substantial justice. This Court has, in proper
instances, relaxed the application of the Rules of Procedure when the party has
shown substantial compliance with it. In these cases, we have held that the rules of
procedure should not be applied in a very technical sense when it defeats the purpose
for which it had been enacted, i.e., to ensure the orderly, just and speedy dispensation
 of cases. We maintain this ruling in this procedural aspect of this case.93 (Citations
omitted)

Despite the number of cases wherein this Court relaxed the application of procedural rules, this Court
has repeatedly reminded litigants that:

[T]he bare invocation of "the interest of substantial justice" is not a magic wand that
will automatically compel this Court to suspend procedural rules. "Procedural rules are
not to be belittled or dismissed simply because their non-observance may have
resulted in prejudice to a party's substantive rights. Like all rules, they are required to
be followed except only for the most persuasive of reasons when they may be relaxed
to relieve a litigant of an injustice not commensurate with the degree of his
thoughtlessness in not complying with the procedure prescribed." The Court reiterates
that rules of procedure . . . "have oft been held as absolutely indispensable to the
prevention of needless delays and to the orderly and speedy discharge of
business. . . . The reason for rules of this nature is because the dispatch of business
by courts would be impossible, and intolerable delays would result, without rules
governing practice . . . . Such rules are a necessary incident to the proper, efficient
and orderly discharge of judicial functions." Indeed, in no uncertain terms, the Court
held that the said rules may be relaxed only in "exceptionally meritorious
cases."94 (Citations omitted)

Circumstances that may merit the relaxation of procedural rules are enumerated in Barnes v. Hon.
Quijano Padilla,95 citing Sanchez v. Court of Appeals:96

In the Sanchez case, the Court restated the range of reasons which may provide
justification for a court to resist a strict adherence to procedure, enumerating the
elements for an appeal to be given due course by a suspension of procedural rules,
such as: (a) matters of life, liberty, honor or property; (b) the existence of special or
compelling circumstances, (c) the merits of the case, (d) a cause not entirely
attributable to the fault or negligence of the party favored by the suspension of the
rules, (e) a lack of any showing that the review sought is merely frivolous and dilatory,
and (f) the other party will not be unjustly prejudiced thereby.97

In Republic v. Dagondon,98 the Court of Appeals dismissed petitioner's appeal for failure to timely file a
motion for reconsideration of the trial court decision.99 The Court of Appeals held that the trial court
decision "could no longer be assailed pursuant to the doctrine of finality and immutability of
judgments."100 This Court relaxed its application of the doctrine on immutability of judgment and held:

The mandatory character, however, of the rule on immutability of final judgments was
not designed to be an inflexible tool to excuse and overlook prejudicial circumstances.
Hence, the doctrine must yield to practicality, logic, fairness, and substantial justice.

....

[A] departure from the doctrine is warranted since its strict application would, in effect,
circumvent and undermine the stability of the Torrens System of land registration
adopted in this jurisdiction. Relatedly, it bears stressing that the subject matter of the
instant controversy, i.e., Lot 84, is a sizeable parcel of real property. More importantly,
petitioner had adequately presented a strong and meritorious case.

Thus, in view of the aforesaid circumstances, the Court deems it apt to exercise its
prerogative to suspend procedural rules and to resolve the present controversy
according to its merits.101 (Citations omitted)

In People v. Layag,102 this Court likewise relaxed the rule on immutability of judgment due to a special or
compelling circumstance. This Court held that the death of accused-appellant is a compelling
circumstance that warrants a re-examination of the criminal case.103

In Philippine Bank of Communications v. Yeung,104 petitioner belatedly filed its Motion for
Reconsideration before the Court of Appeals.105 Nonetheless, this Court gave due course to the Petition
for Review and held:
 [W]e find the delay of 7 days, due to the withdrawal of the petitioner's counsel during
the reglementary period of filing an MR, excusable in light of the merits of the case.
Records show that the petitioner immediately engaged the services of a new lawyer to
replace its former counsel and petitioned the CA to extend the period of filing an MR
due to lack of material time to review the case. There is no showing that the
withdrawal of its counsel was a contrived reason or an orchestrated act to delay the
proceedings; the failure to file an MR within the reglementary period of 15 days was
also not entirely the petitioner's fault, as it was not in control of its former counsel's
acts.

Moreover, after a review of the contentions and the submissions of the parties, we
agree that suspension of the technical rules of procedure is warranted in this case in
view of the CA's erroneous application of legal principles and the substantial merits of
the case. If the petition would be dismissed on technical grounds and without due
consideration of its merits, the registered owner of the property shall, in effect, be
barred from taking possession, thus allowing the absurd and unfair situation where the
owner cannot exercise its right of ownership. This, the Court should not allow. In order
to prevent the resulting inequity that might arise from the outright denial of this
recourse – that is, the virtual affirmance of the writ's denial to the detriment of the
petitioner's right of ownership – we give due course to this petition despite the late
filing of the petitioner's MR before the CA.106 (Emphasis in the original)

In Development Bank of the Philippines v. Court of Appeals,107 petitioner failed to file its appellant's brief
within the extended period granted by the Court of Appeals. Thus, the Court of Appeals dismissed
petitioner's appeal.108 This Court reversed the dismissal and held:

Similarly, the case at bar is impressed with public interest. If petitioner's appeal is
denied due course, a government institution could lose a great deal of money ever a
mere technicality. Obviously, such an appeal is far from being merely frivolous or
dilatory.

....

Time and again, this Court has reiterated the doctrine that the rules of procedure are
mere tools intended to facilitate the attainment of justice, rather than frustrate it. A
strict and rigid application of the rules must always be eschewed when it would
subvert the rules' primary objective of enhancing fair trials and expediting justice.
Technicalities should never be used to defeat the substantive rights of the other party.
Every party-litigant must be afforded the amplest opportunity for the proper and just
determination of his cause, free from the constraints of technicalities.109 (Citations
omitted)

In Parañaque Kings Enterprises, Inc. v. Court of Appeals,110 respondents prayed for the denial of the
petition on the ground that petitioner failed to file 12 copies of its brief, in violation of Rule 45, Section 2
of the Rules of Court.111 This Court dismissed the technical defect and held:

We have ruled that when non-compliance with the Rules was not intended for delay or
did not result in prejudice to the adverse party, dismissal of appeal on mere
technicalities — in cases where appeal is a matter of right — may be stayed, in the
exercise of the court's equity jurisdiction. It does not appear that respondents were
unduly prejudiced by petitioner's nonfeasance. Neither has it been shown that such
failure was intentional.112 (Citation omitted)

III

Due to compelling circumstances in this case, this Court opts for a liberal application of procedural rules.
First, Department Personnel Order No. 2008-1452,113 which designated respondent as Officer-in-
Charge of Bataan General Hospital, was signed by then Department of Health Secretary Duque. Duque
was also the signatory in the 2008 Memorandum of Agreement,114 the undated Supplemental
Memorandum of Agreement,115 and the June 16, 2009 Memorandum of Agreement,116 which were the
bases of respondent's secondment. Duque was later appointed as Civil Service Commission Chairman
and signed the October 17, 2011 Decision and the July 17, 2012 Resolution of the Civil Service
Commission, dismissing the complaint against respondent. Clearly, a conflict of interest existed when
the public officer authorizing the secondment of respondent was also the same person dismissing the
complaint questioning respondent's secondment.

Second, resolving the merits of the case would "give more efficacy to the constitutional mandate on the
accountability of public officers and employees[.]"117 In Executive Judge Paredes v. Moreno,118 this
Court found respondent "guilty of conduct prejudicial to the best interest of the service"119 for his
continued absence of almost three (3) months.120 This Court held:

His misconduct is prejudicial to the service. Although a mere employee/laborer in the

City Court of Manila, respondent is as much duty-bound to serve with the highest
degree of responsibility, integrity, loyalty and efficiency as all other public officers and
employees . . . We find respondent's shortcomings to warrant a sanction to serve as
deterrent not only to him but also to other court employees who shall commit the
same or any and all forms of official misconduct which undermine the people's faith in
their fitness for public service.121

Furthermore, in the interest of judicial economy, the Court of Appeals should avoid dismissal of cases
based merely on technical grounds. Judicial economy requires the prosecution of cases "with the least
cost to the parties"122 and to the courts' time, effort, and resources.123

IV

On a final note, this Court clarifies the concept of forum shopping.

Forum shopping is generally judicial. It exists:

[W]henever a party "repetitively avail[s] of several judicial remedies in different courts,

simultaneously or successively, all substantially founded on the same transactions
and the same essential facts and circumstances, and all raising substantially the
same issues either pending in, or already resolved adversely by, some other court." It
has also been defined as "an act of a party against whom an adverse judgment has
been rendered in one forum of seeking and possibly getting a favorable opinion in
another forum, other than by appeal or the special civil action of certiorari, or the
institution of two or more actions or proceedings grounded on the same cause on the
supposition that one or the other court would make a favorable disposition."
Considered a pernicious evil, it adversely affects the efficient administration of justice
since it clogs the court dockets, unduly burdens the financial and human resources of
the judiciary, and trifles with and mocks judicial processes.124 (Citations omitted)

The test to determine whether or not forum shopping was committed was explained in Dy, et al. v. Yu, et
al.:125

To determine whether a party violated the rule against forum shopping, the most
important factor to ask is whether the clement of litis pendentia is present, or whether
a final judgment in one case will amount to res judicata in another. Otherwise stated,
the test for determining forum shopping is whether in the two (or more) cases pending,
there is identity of parties, rights or causes of action, and reliefs sought. If a situation
of litis pendentia or res judicata arises by virtue of a party's commencement of a
judicial remedy identical to one which already exists (either pending or already
resolved), then a forum shopping infraction is committed.126 (Emphasis in the original,
citation omitted)

In Ligtas v. People,127 this Court reiterated that res judicata may also be applied to "decisions rendered
by agencies in judicial or quasi-judicial proceedings and not to purely administrative
proceedings[.]"128 In Salazar v. De Leon,129 this Court further held;

Res judicata is a concept applied in the review of lower court decisions in accordance
with the hierarchy of courts. But jurisprudence has also recognized the rule of
administrative res judicata: "The rule which forbids the reopening of a matter once
judicially determined by competent authority applies as well to the judicial and quasi-
judicial facts of public, executive or administrative officers and boards acting within
their jurisdiction as to the judgments of courts having general judicial powers. . . It has
been declared that whenever final adjudication of persons invested with power to
 decide on the property and rights of the citizen is examinable by the Supreme Court,
upon a writ of error or a certiorari, such final adjudication may be pleaded as res
judicata." To be sure, early jurisprudence was already mindful that the doctrine of res
judicata cannot be said to apply exclusively to decisions rendered by what are usually
understood as courts without unreasonably circumscribing the scope thereof; and that
the more equitable attitude is to allow extension of the defense to decisions of bodies
upon whom judicial powers have been conferred.130 (Citations omitted)

Thus, forum shopping, in the concept of res judicata, is applicable to judgments or decisions of
administrative agencies performing judicial or quasi-judicial functions.

WHEREFORE, the Petition is GRANTED. The Resolutions dated January 22, 2013 and July 16, 2013 of
the Court of Appeals in CA-GR. SP No. 127252 are REVERSED and SET ASIDE. The case is
hereby REMANDED to the Court of Appeals for a resolution on the merits of the case.

SO ORDERED.
G.R. No. 168332 June 19, 2009

ANA MARIA A. KORUGA, Petitioner,

vs.
TEODORO O. ARCENAS, JR., ALBERT C. AGUIRRE, CESAR S. PAGUIO, FRANCISCO A. RIVERA,
and THE HONORABLE COURT OF APPEALS, THIRD DIVISION, Respondents.

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

G.R. No. 169053 June 19, 2009

TEODORO O. ARCENAS, JR., ALBERT C. AGUIRRE, CESAR S. PAGUIO, and FRANCISCO A.

RIVERA, Petitioners,
vs.
HON. SIXTO MARELLA, JR., Presiding Judge, Branch 138, Regional Trial Court of Makati City,
and ANA MARIA A. KORUGA, Respondents.

DECISION

NACHURA, J.:

Before this Court are two petitions that originated from a Complaint filed by Ana Maria A. Koruga
(Koruga) before the Regional Trial Court (RTC) of Makati City against the Board of Directors of Banco
Filipino and the Members of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) for violation of
the Corporation Code, for inspection of records of a corporation by a stockholder, for receivership, and
for the creation of a management committee.

G.R. No. 168332

The first is a Petition for Certiorari under Rule 65 of the Rules of Court, docketed as G.R. No. 168332,
praying for the annulment of the Court of Appeals (CA) Resolution1 in CA-G.R. SP No. 88422 dated
April 18, 2005 granting the prayer for a Writ of Preliminary Injunction of therein petitioners Teodoro O.
Arcenas, Jr., Albert C. Aguirre, Cesar S. Paguio, and Francisco A. Rivera (Arcenas, et al.).

Koruga is a minority stockholder of Banco Filipino Savings and Mortgage Bank. On August 20, 2003,
she filed a complaint before the Makati RTC which was raffled to Branch 138, presided over by Judge
Sixto Marella, Jr.2 Koruga’s complaint alleged:

10. 1 Violation of Sections 31 to 34 of the Corporation Code ("Code") which prohibit self-dealing and
conflicts of interest of directors and officers, thus:

(a) For engaging in unsafe, unsound, and fraudulent banking practices that have jeopardized the welfare
of the Bank, its shareholders, who includes among others, the Petitioner, and depositors. (sic)

(b) For granting and approving loans and/or "loaned" sums of money to six (6) "dummy" borrower
corporations ("Borrower Corporations") which, at the time of loan approval, had no financial capacity to
justify the loans. (sic)

(c) For approving and accepting a dacion en pago, or payment of loans with property instead of cash,
resulting to a diminished future cumulative interest income by the Bank and a decline in its liquidity
position. (sic)

(d) For knowingly giving "favorable treatment" to the Borrower Corporations in which some or most of
them have interests, i.e. interlocking directors/officers thereof, interlocking ownerships. (sic)

(e) For employing their respective offices and functions as the Bank’s officers and directors, or omitting
to perform their functions and duties, with negligence, unfaithfulness or abuse of confidence of fiduciary
duty, misappropriated or misapplied or ratified by inaction the misappropriation or misappropriations, of
(sic) almost ₱1.6 Billion Pesos (sic) constituting the Bank’s funds placed under their trust and
administration, by unlawfully releasing loans to the Borrower Corporations or refusing or failing to
impugn these, knowing before the loans were released or thereafter that the Bank’s cash resources
would be dissipated thereby, to the prejudice of the Petitioner, other Banco Filipino depositors, and the
public.

10.2 Right of a stockholder to inspect the records of a corporation (including financial statements) under
Sections 74 and 75 of the Code, as implemented by the Interim Rules;

(a) Unlawful refusal to allow the Petitioner from inspecting or otherwise accessing the corporate records
of the bank despite repeated demand in writing, where she is a stockholder. (sic)

10.3 Receivership and Creation of a Management Committee pursuant to:

(a) Rule 59 of the 1997 Rules of Civil Procedure ("Rules");

(b) Section 5.2 of R.A. No. 8799;

(c) Rule 1, Section 1(a)(1) of the Interim Rules;

(d) Rule 1, Section 1(a)(2) of the Interim Rules;

(e) Rule 7 of the Interim Rules;

(f) Rule 9 of the Interim Rules; and

(g) The General Banking Law of 2000 and the New Central Bank Act.3

On September 12, 2003, Arcenas, et al. filed their Answer raising, among others, the trial court’s lack of
jurisdiction to take cognizance of the case. They also filed a Manifestation and Motion seeking the
dismissal of the case on the following grounds: (a) lack of jurisdiction over the subject matter; (b) lack of
jurisdiction over the persons of the defendants; (c) forum-shopping; and (d) for being a
nuisance/harassment suit. They then moved that the trial court rule on their affirmative defenses,
dismiss the intra-corporate case, and set the case for preliminary hearing.

In an Order dated October 18, 2004, the trial court denied the Manifestation and Motion, ruling thus:

The result of the procedure sought by defendants Arcenas, et al. (sic) is for the Court to conduct a
preliminary hearing on the affirmative defenses raised by them in their Answer. This [is] proscribed by
the Interim Rules of Procedure on Intracorporate (sic) Controversies because when a preliminary
hearing is conducted it is "as if a Motion to Dismiss was filed" (Rule 16, Section 6, 1997 Rules of Civil
Procedure). A Motion to Dismiss is a prohibited pleading under the Interim Rules, for which reason, no
favorable consideration can be given to the Manifestation and Motion of defendants, Arcenas, et al.

The Court finds no merit to (sic) the claim that the instant case is a nuisance or harassment suit.

WHEREFORE, the Court defers resolution of the affirmative defenses raised by the defendants Arcenas,
et al.4

Arcenas, et al. moved for reconsideration5 but, on January 18, 2005, the RTC denied the motion.6 This
prompted Arcenas, et al. to file before the CA a Petition for Certiorari and Prohibition under Rule 65 of
the Rules of Court with a prayer for the issuance of a writ of preliminary injunction and a temporary
retraining order (TRO).7

On February 9, 2005, the CA issued a 60-day TRO enjoining Judge Marella from conducting further
proceedings in the case.8

On February 22, 2005, the RTC issued a Notice of Pre-trial9 setting the case for pre-trial on June 2 and
9, 2005. Arcenas, et al. filed a Manifestation and Motion10 before the CA, reiterating their application for
a writ of preliminary injunction. Thus, on April 18, 2005, the CA issued the assailed Resolution, which
reads in part:
(C)onsidering that the Temporary Restraining Order issued by this Court on February 9, 2005 expired
on April 10, 2005, it is necessary that a writ of preliminary injunction be issued in order not to render
ineffectual whatever final resolution this Court may render in this case, after the petitioners shall have
posted a bond in the amount of FIVE HUNDRED THOUSAND (₱500,000.00) PESOS.

SO ORDERED.11

Dissatisfied, Koruga filed this Petition for Certiorari under Rule 65 of the Rules of Court. Koruga alleged
that the CA effectively gave due course to Arcenas, et al.’s petition when it issued a writ of preliminary
injunction without factual or legal basis, either in the April 18, 2005 Resolution itself or in the records of
the case. She prayed that this Court restrain the CA from implementing the writ of preliminary injunction
and, after due proceedings, make the injunction against the assailed CA Resolution permanent.12

In their Comment, Arcenas, et al. raised several procedural and substantive issues. They alleged that
the Verification and Certification against Forum-Shopping attached to the Petition was not executed in
the manner prescribed by Philippine law since, as admitted by Koruga’s counsel himself, the same was
only a facsimile.

They also averred that Koruga had admitted in the Petition that she never asked for reconsideration of
the CA’s April 18, 2005 Resolution, contending that the Petition did not raise pure questions of law as to
constitute an exception to the requirement of filing a Motion for Reconsideration before a Petition for
Certiorari is filed.

They, likewise, alleged that the Petition may have already been rendered moot and academic by the
July 20, 2005 CA Decision,13 which denied their Petition, and held that the RTC did not commit grave
abuse of discretion in issuing the assailed orders, and thus ordered the RTC to proceed with the trial of
the case.

Meanwhile, on March 13, 2006, this Court issued a Resolution granting the prayer for a TRO and
enjoining the Presiding Judge of Makati RTC, Branch 138, from proceeding with the hearing of the case
upon the filing by Arcenas, et al. of a ₱50,000.00 bond. Koruga filed a motion to lift the TRO, which this
Court denied on July 5, 2006.

On the other hand, respondents Dr. Conrado P. Banzon and Gen. Ramon Montaño also filed their
Comment on Koruga’s Petition, raising substantially the same arguments as Arcenas, et al.

G.R. No. 169053

G.R. No. 169053 is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, with prayer
for the issuance of a TRO and a writ of preliminary injunction filed by Arcenas, et al.

In their Petition, Arcenas, et al. asked the Court to set aside the Decision14 dated July 20, 2005 of the
CA in CA-G.R. SP No. 88422, which denied their petition, having found no grave abuse of discretion on
the part of the Makati RTC. The CA said that the RTC Orders were interlocutory in nature and, thus,
may be assailed by certiorari or prohibition only when it is shown that the court acted without or in
excess of jurisdiction or with grave abuse of discretion. It added that the Supreme Court frowns upon
resort to remedial measures against interlocutory orders.

Arcenas, et al. anchored their prayer on the following grounds: that, in their Answer before the RTC,
they had raised the issue of failure of the court to acquire jurisdiction over them due to improper service
of summons; that the Koruga action is a nuisance or harassment suit; that there is another case
involving the same parties for the same cause pending before the Monetary Board of the BSP, and this
constituted forum-shopping; and that jurisdiction over the subject matter of the case is vested by law in
the BSP.15

Arcenas, et al. assign the following errors:

I. THE COURT OF APPEALS, IN "FINDING NO GRAVE ABUSE OF DISCRETION

COMMITTED BY PUBLIC RESPONDENT REGIONAL TRIAL COURT OF MAKATI,
BRANCH 138, IN ISSUING THE ASSAILED ORDERS," FAILED TO CONSIDER AND
MERELY GLOSSED OVER THE MORE TRANSCENDENT ISSUES OF THE LACK
OF JURISDICTION ON THE PART OF SAID PUBLIC RESPONDENT OVER THE
 SUBJECT MATTER OF THE CASE BEFORE IT, LITIS PENDENTIA AND FORUM
SHOPPING, AND THE CASE BELOW BEING A NUISANCE OR HARASSMENT
SUIT, EITHER ONE AND ALL OF WHICH GOES/GO TO RENDER THE ISSUANCE
BY PUBLIC RESPONDENT OF THE ASSAILED ORDERS A GRAVE ABUSE OF
DISCRETION.

II. THE FINDING OF THE COURT OF APPEALS OF "NO GRAVE ABUSE OF

DISCRETION COMMITTED BY PUBLIC RESPONDENT REGIONAL TRIAL COURT
OF MAKATI, BRANCH 138, IN ISSUING THE ASSAILED ORDERS," IS NOT IN
ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THIS
HONORABLE COURT.16

Meanwhile, in a Manifestation and Motion filed on August 31, 2005, Koruga prayed for, among others,
the consolidation of her Petition with the Petition for Review on Certiorari under Rule 45 filed by Arcenas,
et al., docketed as G.R. No. 169053. The motion was granted by this Court in a Resolution dated
September 26, 2005.

Our Ruling

Initially, we will discuss the procedural issue.

Arcenas, et al. argue that Koruga’s petition should be dismissed for its defective Verification and
Certification Against Forum-Shopping, since only a facsimile of the same was attached to the Petition.
They also claim that the Verification and Certification Against Forum-Shopping, allegedly executed in
Seattle, Washington, was not authenticated in the manner prescribed by Philippine law and not certified
by the Philippine Consulate in the United States.

This contention deserves scant consideration.

On the last page of the Petition in G.R. No. 168332, Koruga’s counsel executed an Undertaking, which
reads as follows:

In view of that fact that the Petitioner is currently in the United States, undersigned counsel is attaching
a facsimile copy of the Verification and Certification Against Forum-Shopping duly signed by the
Petitioner and notarized by Stephanie N. Goggin, a Notary Public for the Sate (sic) of Washington. Upon
arrival of the original copy of the Verification and Certification as certified by the Office of the Philippine
Consul, the undersigned counsel shall immediately provide duplicate copies thereof to the Honorable
Court.17

Thus, in a Compliance18 filed with the Court on September 5, 2005, petitioner submitted the original
copy of the duly notarized and authenticated Verification and Certification Against Forum-Shopping she
had executed.19 This Court noted and considered the Compliance satisfactory in its Resolution dated
November 16, 2005. There is, therefore, no need to further belabor this issue.

We now discuss the substantive issues in this case.

First, we resolve the prayer to nullify the CA’s April 18, 2005 Resolution.

We hold that the Petition in G.R. No. 168332 has become moot and academic. The writ of preliminary
injunction being questioned had effectively been dissolved by the CA’s July 20, 2005 Decision. The
dispositive portion of the Decision reads in part:

The case is REMANDED to the court a quo for further proceedings and to resolve with deliberate
dispatch the intra-corporate controversies and determine whether there was actually a valid service of
summons. If, after hearing, such service is found to have been improper, then new summons should be
served forthwith.20

Accordingly, there is no necessity to restrain the implementation of the writ of preliminary injunction
issued by the CA on April 18, 2005, since it no longer exists.

However, this Court finds that the CA erred in upholding the jurisdiction of, and remanding the case to,
the RTC.
The resolution of these petitions rests mainly on the determination of one fundamental issue: Which
body has jurisdiction over the Koruga Complaint, the RTC or the BSP?

We hold that it is the BSP that has jurisdiction over the case.

A reexamination of the Complaint is in order.

Koruga’s Complaint charged defendants with violation of Sections 31 to 34 of the Corporation Code,
prohibiting self-dealing and conflict of interest of directors and officers; invoked her right to inspect the
corporation’s records under Sections 74 and 75 of the Corporation Code; and prayed for Receivership
and Creation of a Management Committee, pursuant to Rule 59 of the Rules of Civil Procedure, the
Securities Regulation Code, the Interim Rules of Procedure Governing Intra-Corporate Controversies,
the General Banking Law of 2000, and the New Central Bank Act. She accused the directors and
officers of Banco Filipino of engaging in unsafe, unsound, and fraudulent banking practices, more
particularly, acts that violate the prohibition on self-dealing.

It is clear that the acts complained of pertain to the conduct of Banco Filipino’s banking business. A
bank, as defined in the General Banking Law,21 refers to an entity engaged in the lending of funds
obtained in the form of deposits.22 The banking business is properly subject to reasonable regulation
under the police power of the state because of its nature and relation to the fiscal affairs of the people
and the revenues of the state. Banks are affected with public interest because they receive funds from
the general public in the form of deposits. It is the Government’s responsibility to see to it that the
financial interests of those who deal with banks and banking institutions, as depositors or otherwise, are
protected. In this country, that task is delegated to the BSP, which pursuant to its Charter, is authorized
to administer the monetary, banking, and credit system of the Philippines. It is further authorized to take
the necessary steps against any banking institution if its continued operation would cause prejudice to
its depositors, creditors and the general public as well.23

The law vests in the BSP the supervision over operations and activities of banks. The New Central Bank
Act provides:

Section 25. Supervision and Examination. - The Bangko Sentral shall have supervision over, and
conduct periodic or special examinations of, banking institutions and quasi-banks, including their
subsidiaries and affiliates engaged in allied activities.24

Specifically, the BSP’s supervisory and regulatory powers include:

4.1 The issuance of rules of conduct or the establishment of standards of operation for uniform
application to all institutions or functions covered, taking into consideration the distinctive character of
the operations of institutions and the substantive similarities of specific functions to which such rules,
modes or standards are to be applied;

4.2 The conduct of examination to determine compliance with laws and regulations if the
circumstances so warrant as determined by the Monetary Board;

4.3 Overseeing to ascertain that laws and Regulations are complied with;

4.4 Regular investigation which shall not be oftener than once a year from the last date of
examination to determine whether an institution is conducting its business on a safe or sound
basis: Provided, That the deficiencies/irregularities found by or discovered by an audit shall be
immediately addressed;

4.5 Inquiring into the solvency and liquidity of the institution (2-D); or

4.6 Enforcing prompt corrective action.25

Koruga alleges that "the dispute in the trial court involves the manner with which the Directors’ (sic)
have handled the Bank’s affairs, specifically the fraudulent loans and dacion en pago authorized by the
Directors in favor of several dummy corporations known to have close ties and are indirectly controlled
by the Directors."26 Her allegations, then, call for the examination of the allegedly questionable loans.
Whether these loans are covered by the prohibition on self-dealing is a matter for the BSP to determine.
These are not ordinary intra-corporate matters; rather, they involve banking activities which are, by law,
regulated and supervised by the BSP. As the Court has previously held:

It is well-settled in both law and jurisprudence that the Central Monetary Authority, through the Monetary
Board, is vested with exclusive authority to assess, evaluate and determine the condition of any bank,
and finding such condition to be one of insolvency, or that its continuance in business would involve a
probable loss to its depositors or creditors, forbid bank or non-bank financial institution to do business in
the Philippines; and shall designate an official of the BSP or other competent person as receiver to
immediately take charge of its assets and liabilities.27

Correlatively, the General Banking Law of 2000 specifically deals with loans contracted by bank
directors or officers, thus:

SECTION 36. Restriction on Bank Exposure to Directors, Officers, Stockholders and Their
Related Interests. — No director or officer of any bank shall, directly or indirectly, for himself or as the
representative or agent of others, borrow from such bank nor shall he become a guarantor, indorser or
surety for loans from such bank to others, or in any manner be an obligor or incur any contractual
liability to the bank except with the written approval of the majority of all the directors of the bank,
excluding the director concerned: Provided, That such written approval shall not be required for loans,
other credit accommodations and advances granted to officers under a fringe benefit plan approved by
the Bangko Sentral. The required approval shall be entered upon the records of the bank and a copy of
such entry shall be transmitted forthwith to the appropriate supervising and examining department of the
Bangko Sentral.

Dealings of a bank with any of its directors, officers or stockholders and their related interests shall be
upon terms not less favorable to the bank than those offered to others.

After due notice to the board of directors of the bank, the office of any bank director or officer who
violates the provisions of this Section may be declared vacant and the director or officer shall be subject
to the penal provisions of the New Central Bank Act.

The Monetary Board may regulate the amount of loans, credit accommodations and guarantees that
may be extended, directly or indirectly, by a bank to its directors, officers, stockholders and their related
interests, as well as investments of such bank in enterprises owned or controlled by said directors,
officers, stockholders and their related interests. However, the outstanding loans, credit
accommodations and guarantees which a bank may extend to each of its stockholders, directors, or
officers and their related interests, shall be limited to an amount equivalent to their respective
unencumbered deposits and book value of their paid-in capital contribution in the bank: Provided,
however, That loans, credit accommodations and guarantees secured by assets considered as non-risk
by the Monetary Board shall be excluded from such limit: Provided, further, That loans, credit
accommodations and advances to officers in the form of fringe benefits granted in accordance with rules
as may be prescribed by the Monetary Board shall not be subject to the individual limit.

The Monetary Board shall define the term "related interests."

The limit on loans, credit accommodations and guarantees prescribed herein shall not apply to loans,
credit accommodations and guarantees extended by a cooperative bank to its cooperative
shareholders.28

Furthermore, the authority to determine whether a bank is conducting business in an unsafe or unsound
manner is also vested in the Monetary Board. The General Banking Law of 2000 provides:

SECTION 56. Conducting Business in an Unsafe or Unsound Manner. — In determining whether a

particular act or omission, which is not otherwise prohibited by any law, rule or regulation affecting
banks, quasi-banks or trust entities, may be deemed as conducting business in an unsafe or unsound
manner for purposes of this Section, the Monetary Board shall consider any of the following
circumstances:

56.1. The act or omission has resulted or may result in material loss or damage, or abnormal risk or
danger to the safety, stability, liquidity or solvency of the institution;
56.2. The act or omission has resulted or may result in material loss or damage or abnormal risk to the
institution's depositors, creditors, investors, stockholders or to the Bangko Sentral or to the public in
general;

56.3. The act or omission has caused any undue injury, or has given any unwarranted benefits,
advantage or preference to the bank or any party in the discharge by the director or officer of his duties
and responsibilities through manifest partiality, evident bad faith or gross inexcusable negligence; or

56.4. The act or omission involves entering into any contract or transaction manifestly and grossly
disadvantageous to the bank, quasi-bank or trust entity, whether or not the director or officer profited or
will profit thereby.

Whenever a bank, quasi-bank or trust entity persists in conducting its business in an unsafe or unsound
manner, the Monetary Board may, without prejudice to the administrative sanctions provided in Section
37 of the New Central Bank Act, take action under Section 30 of the same Act and/or immediately
exclude the erring bank from clearing, the provisions of law to the contrary notwithstanding.

Finally, the New Central Bank Act grants the Monetary Board the power to impose administrative
sanctions on the erring bank:

Section 37. Administrative Sanctions on Banks and Quasi-banks. - Without prejudice to the criminal
sanctions against the culpable persons provided in Sections 34, 35, and 36 of this Act, the Monetary
Board may, at its discretion, impose upon any bank or quasi-bank, their directors and/or officers, for any
willful violation of its charter or by-laws, willful delay in the submission of reports or publications thereof
as required by law, rules and regulations; any refusal to permit examination into the affairs of the
institution; any willful making of a false or misleading statement to the Board or the appropriate
supervising and examining department or its examiners; any willful failure or refusal to comply with, or
violation of, any banking law or any order, instruction or regulation issued by the Monetary Board, or any
order, instruction or ruling by the Governor; or any commission of irregularities, and/or conducting
business in an unsafe or unsound manner as may be determined by the Monetary Board, the following
administrative sanctions, whenever applicable:

(a) fines in amounts as may be determined by the Monetary Board to be appropriate, but in no case to
exceed Thirty thousand pesos (₱30,000) a day for each violation, taking into consideration the attendant
circumstances, such as the nature and gravity of the violation or irregularity and the size of the bank or
quasi-bank;

(b) suspension of rediscounting privileges or access to Bangko Sentral credit facilities;

(c) suspension of lending or foreign exchange operations or authority to accept new deposits or make
new investments;

(d) suspension of interbank clearing privileges; and/or

(e) revocation of quasi-banking license.

Resignation or termination from office shall not exempt such director or officer from administrative or
criminal sanctions.

The Monetary Board may, whenever warranted by circumstances, preventively suspend any director or
officer of a bank or quasi-bank pending an investigation: Provided, That should the case be not finally
decided by the Bangko Sentral within a period of one hundred twenty (120) days after the date of
suspension, said director or officer shall be reinstated in his position: Provided, further, That when the
delay in the disposition of the case is due to the fault, negligence or petition of the director or officer, the
period of delay shall not be counted in computing the period of suspension herein provided.

The above administrative sanctions need not be applied in the order of their severity.

Whether or not there is an administrative proceeding, if the institution and/or the directors and/or officers
concerned continue with or otherwise persist in the commission of the indicated practice or violation, the
Monetary Board may issue an order requiring the institution and/or the directors and/or officers
concerned to cease and desist from the indicated practice or violation, and may further order that
immediate action be taken to correct the conditions resulting from such practice or violation. The cease
and desist order shall be immediately effective upon service on the respondents.

The respondents shall be afforded an opportunity to defend their action in a hearing before the Monetary
Board or any committee chaired by any Monetary Board member created for the purpose, upon request
made by the respondents within five (5) days from their receipt of the order. If no such hearing is
requested within said period, the order shall be final. If a hearing is conducted, all issues shall be
determined on the basis of records, after which the Monetary Board may either reconsider or make final
its order.

The Governor is hereby authorized, at his discretion, to impose upon banking institutions, for any failure
to comply with the requirements of law, Monetary Board regulations and policies, and/or instructions
issued by the Monetary Board or by the Governor, fines not in excess of Ten thousand pesos (₱10,000)
a day for each violation, the imposition of which shall be final and executory until reversed, modified or
lifted by the Monetary Board on appeal.29

Koruga also accused Arcenas, et al. of violation of the Corporation Code’s provisions on self-dealing
and conflict of interest. She invoked Section 31 of the Corporation Code, which defines the liability of
directors, trustees, or officers of a corporation for, among others, acquiring any personal or pecuniary
interest in conflict with their duty as directors or trustees, and Section 32, which prescribes the
conditions under which a contract of the corporation with one or more of its directors or trustees – the
so-called "self-dealing directors"30 – would be valid. She also alleged that Banco Filipino’s directors
violated Sections 33 and 34 in approving the loans of corporations with interlocking ownerships, i.e.,
owned, directed, or managed by close associates of Albert C. Aguirre.

Sections 31 to 34 of the Corporation Code provide:

Section 31. Liability of directors, trustees or officers. - Directors or trustees who wilfully and knowingly
vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or
bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in
conflict with their duty as such directors or trustees shall be liable jointly and severally for all damages
resulting therefrom suffered by the corporation, its stockholders or members and other persons.

When a director, trustee or officer attempts to acquire or acquires, in violation of his duty, any interest
adverse to the corporation in respect of any matter which has been reposed in him in confidence, as to
which equity imposes a disability upon him to deal in his own behalf, he shall be liable as a trustee for
the corporation and must account for the profits which otherwise would have accrued to the corporation.

Section 32. Dealings of directors, trustees or officers with the corporation. - A contract of the
corporation with one or more of its directors or trustees or officers is voidable, at the option of such
corporation, unless all the following conditions are present:

1. That the presence of such director or trustee in the board meeting in which the contract was approved
was not necessary to constitute a quorum for such meeting;

2. That the vote of such director or trustee was not necessary for the approval of the contract;

3. That the contract is fair and reasonable under the circumstances; and

4. That in case of an officer, the contract has been previously authorized by the board of directors.

Where any of the first two conditions set forth in the preceding paragraph is absent, in the case of a
contract with a director or trustee, such contract may be ratified by the vote of the stockholders
representing at least two-thirds (2/3) of the outstanding capital stock or of at least two-thirds (2/3) of the
members in a meeting called for the purpose: Provided, That full disclosure of the adverse interest of the
directors or trustees involved is made at such meeting: Provided, however, That the contract is fair and
reasonable under the circumstances.

Section 33. Contracts between corporations with interlocking directors. - Except in cases of fraud, and
provided the contract is fair and reasonable under the circumstances, a contract between two or more
corporations having interlocking directors shall not be invalidated on that ground alone: Provided, That if
the interest of the interlocking director in one corporation is substantial and his interest in the other
corporation or corporations is merely nominal, he shall be subject to the provisions of the preceding
section insofar as the latter corporation or corporations are concerned.

Stockholdings exceeding twenty (20%) percent of the outstanding capital stock shall be considered
substantial for purposes of interlocking directors.

Section 34. Disloyalty of a director. - Where a director, by virtue of his office, acquires for himself a
business opportunity which should belong to the corporation, thereby obtaining profits to the prejudice of
such corporation, he must account to the latter for all such profits by refunding the same, unless his act
has been ratified by a vote of the stockholders owning or representing at least two-thirds (2/3) of the
outstanding capital stock. This provision shall be applicable, notwithstanding the fact that the director
risked his own funds in the venture.

Koruga’s invocation of the provisions of the Corporation Code is misplaced. In an earlier case with
similar antecedents, we ruled that:

The Corporation Code, however, is a general law applying to all types of corporations, while the New
Central Bank Act regulates specifically banks and other financial institutions, including the dissolution
and liquidation thereof. As between a general and special law, the latter shall prevail – generalia
specialibus non derogant.31

Consequently, it is not the Interim Rules of Procedure on Intra-Corporate Controversies,32 or Rule 59 of

the Rules of Civil Procedure on Receivership, that would apply to this case. Instead, Sections 29 and 30
of the New Central Bank Act should be followed, viz.:

Section 29. Appointment of Conservator. - Whenever, on the basis of a report submitted by the
appropriate supervising or examining department, the Monetary Board finds that a bank or a quasi-bank
is in a state of continuing inability or unwillingness to maintain a condition of liquidity deemed adequate
to protect the interest of depositors and creditors, the Monetary Board may appoint a conservator with
such powers as the Monetary Board shall deem necessary to take charge of the assets, liabilities, and
the management thereof, reorganize the management, collect all monies and debts due said institution,
and exercise all powers necessary to restore its viability. The conservator shall report and be
responsible to the Monetary Board and shall have the power to overrule or revoke the actions of the
previous management and board of directors of the bank or quasi-bank.

xxxx

The Monetary Board shall terminate the conservatorship when it is satisfied that the institution can
continue to operate on its own and the conservatorship is no longer necessary. The conservatorship
shall likewise be terminated should the Monetary Board, on the basis of the report of the conservator or
of its own findings, determine that the continuance in business of the institution would involve probable
loss to its depositors or creditors, in which case the provisions of Section 30 shall apply.

Section 30. Proceedings in Receivership and Liquidation. - Whenever, upon report of the head of the
supervising or examining department, the Monetary Board finds that a bank or quasi-bank:

(a) is unable to pay its liabilities as they become due in the ordinary course of business: Provided, That
this shall not include inability to pay caused by extraordinary demands induced by financial panic in the
banking community;

(b) has insufficient realizable assets, as determined by the Bangko Sentral, to meet its liabilities; or

(c) cannot continue in business without involving probable losses to its depositors or creditors; or

(d) has willfully violated a cease and desist order under Section 37 that has become final, involving acts
or transactions which amount to fraud or a dissipation of the assets of the institution; in which cases, the
Monetary Board may summarily and without need for prior hearing forbid the institution from doing
business in the Philippines and designate the Philippine Deposit Insurance Corporation as receiver of
the banking institution.

xxxx
The actions of the Monetary Board taken under this section or under Section 29 of this Act shall be final
and executory, and may not be restrained or set aside by the court except on petition for certiorari on
the ground that the action taken was in excess of jurisdiction or with such grave abuse of discretion as
to amount to lack or excess of jurisdiction. The petition for certiorari may only be filed by the
stockholders of record representing the majority of the capital stock within ten (10) days from receipt by
the board of directors of the institution of the order directing receivership, liquidation or conservatorship.

The designation of a conservator under Section 29 of this Act or the appointment of a receiver under this
section shall be vested exclusively with the Monetary Board. Furthermore, the designation of a
conservator is not a precondition to the designation of a receiver.33

On the strength of these provisions, it is the Monetary Board that exercises exclusive jurisdiction over
proceedings for receivership of banks.

Crystal clear in Section 30 is the provision that says the "appointment of a receiver under this section
shall be vested exclusively with the Monetary Board." The term "exclusively" connotes that only the
Monetary Board can resolve the issue of whether a bank is to be placed under receivership and, upon
an affirmative finding, it also has authority to appoint a receiver. This is further affirmed by the fact that
the law allows the Monetary Board to take action "summarily and without need for prior hearing."

And, as a clincher, the law explicitly provides that "actions of the Monetary Board taken under this
section or under Section 29 of this Act shall be final and executory, and may not be restrained or set
aside by the court except on a petition for certiorari on the ground that the action taken was in excess of
jurisdiction or with such grave abuse of discretion as to amount to lack or excess of
jurisdiction."1avvphi1

From the foregoing disquisition, there is no doubt that the RTC has no jurisdiction to hear and decide a
suit that seeks to place Banco Filipino under receivership.

Koruga herself recognizes the BSP’s power over the allegedly unlawful acts of Banco Filipino’s directors.
The records of this case bear out that Koruga, through her legal counsel, wrote the Monetary Board34 on
April 21, 2003 to bring to its attention the acts she had enumerated in her complaint before the RTC.
The letter reads in part:

Banco Filipino and the current members of its Board of Directors should be placed under investigation
for violations of banking laws, the commission of irregularities, and for conducting business in an unsafe
or unsound manner. They should likewise be placed under preventive suspension by virtue of the
powers granted to the Monetary Board under Section 37 of the Central Bank Act. These blatant
violations of banking laws should not go by without penalty. They have put Banco Filipino, its depositors
and stockholders, and the entire banking system (sic) in jeopardy.

xxxx

We urge you to look into the matter in your capacity as regulators. Our clients, a minority stockholders,
(sic) and many depositors of Banco Filipino are prejudiced by a failure to regulate, and taxpayers are
prejudiced by accommodations granted by the BSP to Banco Filipino35

In a letter dated May 6, 2003, BSP Supervision and Examination Department III Director Candon B.
Guerrero referred Koruga’s letter to Arcenas for comment.36 On June 6, 2003, Banco Filipino’s then
Executive Vice President and Corporate Secretary Francisco A. Rivera submitted the bank’s comments
essentially arguing that Koruga’s accusations lacked legal and factual bases.37

On the other hand, the BSP, in its Answer before the RTC, said that it had been looking into Banco
Filipino’s activities. An October 2002 Report of Examination (ROE) prepared by the Supervision and
Examination Department (SED) noted certain dacion payments, out-of-the-ordinary expenses, among
other dealings. On July 24, 2003, the Monetary Board passed Resolution No. 1034 furnishing Banco
Filipino a copy of the ROE with instructions for the bank to file its comment or explanation within 30 to
90 days under threat of being fined or of being subjected to other remedial actions. The ROE, the BSP
said, covers substantially the same matters raised in Koruga’s complaint. At the time of the filing of
Koruga’s complaint on August 20, 2003, the period for Banco Filipino to submit its explanation had not
yet expired.38
Thus, the court’s jurisdiction could only have been invoked after the Monetary Board had taken action
on the matter and only on the ground that the action taken was in excess of jurisdiction or with such
grave abuse of discretion as to amount to lack or excess of jurisdiction.

Finally, there is one other reason why Koruga’s complaint before the RTC cannot prosper. Given her
own admission – and the same is likewise supported by evidence – that she is merely a minority
stockholder of Banco Filipino, she would not have the standing to question the Monetary Board’s action.
Section 30 of the New Central Bank Act provides:

The petition for certiorari may only be filed by the stockholders of record representing the majority of the
capital stock within ten (10) days from receipt by the board of directors of the institution of the order
directing receivership, liquidation or conservatorship.

All the foregoing discussion yields the inevitable conclusion that the CA erred in upholding the
jurisdiction of, and remanding the case to, the RTC. Given that the RTC does not have jurisdiction over
the subject matter of the case, its refusal to dismiss the case on that ground amounted to grave abuse
of discretion.

WHEREFORE, the foregoing premises considered, the Petition in G.R. No. 168332 is DISMISSED,
while the Petition in G.R. No. 169053 is GRANTED. The Decision of the Court of Appeals dated July 20,
2005 in CA-G.R. SP No. 88422 is hereby SET ASIDE. The Temporary Restraining Order issued by this
Court on March 13, 2006 is made PERMANENT. Consequently, Civil Case No. 03-985, pending before
the Regional Trial Court of Makati City, is DISMISSED.

SO ORDERED.

ANTONIO EDUARDO B. NACHURA

Associate Justice
 G.R. No. 204325, April 18, 2016

LYNMAN BACOLOR, JEFFREY R. GALURA, HELEN B. TORRES, FRITZIE C. VELLEGAS,

RAYMOND CANLAS AND ZHEILA C. TORRES,*Petitioners, v. VL MAKABALI MEMORIAL
HOSPITAL, INC., ALEJANDRO S. MAKABALI, MELCHOR CATAMBING AND DAX M.
TIDULA, Respondents.

DECISION

DEL CASTILLO, J.:

Rules of procedure must be used to achieve speedy and efficient administration of justice and not derail
it. When strict application of the rules on verification and non-forum shopping will result in patent denial
of substantial justice, these rules may be construed liberally. After all, the ends of justice are better
served when cases are determined on the merits, not on mere technicality.1

This Petition for Review on Certiorari assails the Resolution2 dated July 12, 2012 of the Court of
Appeals (CA) in CA-G.R. SP No. 125333. The CA dismissed the Petition for Certiorari filed therewith
because of the purported defective Verification/Certificate of Non-Forum Shopping with Undertaking
appended to the Petition; and of petitioners' violation of Section 3, Rule 46 of the Rules of Court. Also
challenged is, the CA Resolution3 dated October 22, 2012 which denied the Motion for Reconsideration
for lack of merit.

Factual Antecedents

The case stemmed from an amended Complaint4 for illegal dismissal and money claims filed by Drs.
Lynman Bacolor (Dr. Bacolor), Jeffrey R. Galura (Dr. Galura), Helen B. Torres (Dr. Helen), Fritzie C.
Villegas (Dr. Villegas), Raymond Canlas (Dr. Canlas), Zheila C. Torres (Dr. Zheila) and Dax Tidula (Dr.
Tidula) against VL Makabali Hospital Inc. (the Hospital), Alejandro S. Makabali, its owner and President,
and Melchor Catambing (Catambing), its Emergency Room (ER) Manager.5

Allegedly, the Hospital engaged Drs. Bacolor, Galura, Villegas and Canlas as resident physicians
assigned in its ER for one year, commencing October 2000 until October 2001. It engaged Drs. Helen
and Zheila, also as ER resident physicians, starting March 2001 until March 2002, and January 2002
until January 2003, respectively. Despite the expiration of their contracts, the Hospital continued to
employ Drs. Bacolor, Galura, Villegas, Canlas, Helen and Zheila (petitioners).6

Petitioners stated that on May 3, 2006, Catambing and one Dr. Lopez instructed them to resign, and re-
apply to the Hospital as resident physicians under a one-year fixed term contract. They further alleged
that Catambing and Dr. Lopez later directed them to sign a. waiver and offered them "gratitude" pay of
P27,000.00 but they refused to resign; and because of their refusal, respondents demoted them as
assistant physicians in the Operating-Room (OR) of the Hospital.7

Additionally, petitioners insisted that to compel them to resign, respondents issued notices to explain to
Drs. Bacolor, Galura, Helen, Villegas and Canlas. In particular, Drs. Bacolor, Galura and Helen were
charged with dishonesty for allegedly directing patients to secure laboratory examinations outside the
Hospital; while Drs. Villegas and Canlas were charged with violation of timekeeping procedure and
habitual violation of rules and regulations.8

Consequently, petitioners filed a case for constructive illegal dismissal against respondents. They
argued that despite their complaint, respondents still conducted an administrative investigation against
them.9 On June 30, 2006, Drs. Bacolor and Galura received notices of termination from the Hospital.10

Petitioners contended that they were constructively dismissed when respondents demoted them as
assistant physicians in the OR of the Hospital.11 They stated that such demotion was neither necessary
nor temporary, and was arbitrarily done to force them to resign. They further averred that Drs. Bacolor
and Galura were actually illegally dismissed after they were given respective notices of termination.12

On the other hand, Dr. Tidula stated that the Hospital engaged him as resident physician for a year
commencing on January 1, 2001 to December 31, 2001; the Hospital renewed his contract for the year
2002 to 2003; and after his contract expired, the Hospital continued to engage his services.13

Dr. Tidula likewise alleged that in 2005, several resident physicians in the Hospital resigned. As a result,
the remaining resident physicians were made to fill in their duties. Allegedly, it was agreed upon that
when a resident doctor was absent, a reliever would take his place; and the reliever's fee would be
charged against the salary of the absent doctor. Dr. Tidula claimed that the reliever shall punch in the
time card of the absent doctor for t recording, accounting and expediency purposes.14

Furthermore, Dr. Tidula asserted that in February 2006, Dr. Amelita Lising (Dr. Lising), who was a
resident physician, went on leave. He averred that being the acting Chief Resident, he implemented the
agreement regarding the designation of reliever. He stated that the relievers of Dr. Lising were made to
punch in and out her time card to prove that they had taken her place; and they received salary from
that intended for Dr. Lising.15

Dr. Tidula narrated that on May 3, 2006, he and his fellow residents were directed to resign with the
promise that they would be re-engaged under a fixed term of one year. He averred that Catambing and
Dr. Lopez also instructed him and the other resident physicians to tender their resignation and sign a
waiver in favor of the Hospital. He alleged that they were also offered P27,000.00 as financial
assistance; however, he and the other resident physicians refused to resign.16

Additionally, Dr. Tidula alleged that on May 16, 2006, he was ordered to report exclusively at the OR of
the Hospital as assistant physician; and this demotion was a result of his refusal to resign. Consequently,
he filed a complaint for constructive dismissal against the Hospital.17

Later, Catambing gave Dr. Tidula a Notice18 of dismissal for violation of timekeeping procedure. Dr.
Tidula stated that he inquired from Catambing why he was not given any notice to explain. Purportedly,
Catambing informed him that a notice to explain was sent through a private courier. Upon verification, Dr.
Tidula discovered that the notice was delivered to a person unknown to him. He informed the Hospital
about the matter but the Hospital insisted that he was given the opportunity to explain and was invited to
an investigation, as such, the sanction against him remains.19

Dr. Tidula argued that he was illegally dismissed since he did not receive a notice to explain; and he did
not violate any of the company rules.20

For their part, respondents asserted that Drs. Tidula, Bacolor and Galura were validly dismissed. In
particular, they alleged that Dr. Tidula violated timekeeping procedure of the Hospital when he punched
in Dr. Lising's time card on February 2, 6, 10 and 12, 2006.21 On the other hand Drs. Bacolor and Galura
were found guilty of referring patients to other clinics for laboratory examination in February 2006.22

Moreover, respondents claimed that the Hospital did not dismiss Drs. Helen, Villegas and Canlas; thus,
they should be dropped from the complaint. They added that Dr. Zheila was never cited for any
infraction but she abandoned her work as she had been absent since July 2006.23

Ruling of the Labor Arbiter

On July 23, 2010, the LA rendered a Decision24 finding respondents guilty of illegally dismissing
petitioners and Dr. Tidula, as well as ordering respondents to pay them backwages from the time of their
dismissal until finality of the Decision, and separation pay. The LA also ordered the Hospital to pay
petitioners and Dr. Tidula moral damages of P100,000.00 each and exemplary damages of P100,000.00
each, and attorney's fees.

The Hospital appealed to the National Labor Relations Commission (NLRC).25cralawred

Ruling of the National Labor Relations Commission

On November 11, 2011, the NLRC reversed and set aside the LA Decision and dismissed the
complaints.26 It held that there was no showing that petitioners and Dr. Tidula were demoted, and that
such demotion amounted to constructive dismissal. It ruled that "it would be difficult to discern the
differences between the duties of a resident and assistant physician, as both indubitably perform
doctor's duties."27 Also, the NLRC decreed that Dr. Zheila did not even sign the verification and
certificate of non-forum shopping in this case.

Moreover, the NLRC gave credence to respondents' position that Drs. Bacolor and Galura were validly
dismissed because they repeatedly referred patients to another clinic for laboratory examinations. It
ruled that such was an act of deceit because the Hospital offered the same services.

On April 18, 2012, the NLRC denied petitioners and Dr. Tidula's motion for reconsideration.28

Aggrieved, petitioners filed a Petition for Certiorari with the CA ascribing grave abuse of discretion on
the part of the NLRC in giving due course to the appeal despite its alleged lack of appeal bond; and in
reversing the LA Decision.

The Petition was accompanied by three separate Verifications/Certificates of Non-Forum Shopping

signed by Drs. Galura, Bacolor and Helen.29 Atty. Carlos Raphael N. Francisco executed and signed a
Verification/Certificate of Non-Forum Shopping with Undertaking in behalf of Drs. Villegas, Canlas and
Zheila.30

Ruling of the Court of Appeals

On July 12, 2012, the CA issued the assailed Resolution, the pertinent portions of which read:
chanRoblesvirtualLawlibrary

The Petition for Certiorari contains the following infirmities, hence is DISMISSED:

1. The Verification/Certification of Non-Forum Shopping With Undertaking attached to

the Petition is executed by Atty. Carlos Raphael N. Francisco, allegedly [sic] counsel
of record of petitioners Fritzie C. Villegas, Raymond Canlas and Zeila C. Torres, not
by the three petitioners themselves, in violation of Rule 7, Section 5 of the Rules of
Court, and the ruling in Far Eastern Shipping Company v. Court of Appeals et al.

2. The Petition does not indicate in its title that Dax Tidula is a party respondent,
although in the portion entitled 'Parties' he is so named, and does not indicate the
address of Dax Tidula, all in violation of Rule 46, Section 3 of the Rules of Court, in
relation to Rule 65 of the same Rules.

SO ORDERED.31ChanRoblesVirtualawlibrary
On October 22, 2012, the CA denied petitioners' Motion for Reconsideration.32

Aggrieved, petitioners filed this Petition raising the following assignment of errors:
chanRoblesvirtualLawlibrary
THE COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT
PROBABLY IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE
1 HONORABLE COURT WHEN THE COURT OF APPEALS DISMISSED THE PETITION FOR
CERTIORARI OF THE PETITIONERS DESPITE THE FACT THAT SEVERAL OF THE
PETITIONERS HAD VALIDLY EXECUTED VERIFICATIONS AND CERTIFICATES OF NON-
FORUM SHOPPING WHICH WERE ATTACHED TO SAID PETITION FOR CERTIORARI;

THE COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT

PROBABLY IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE
2 HONORABLE COURT WHEN THE COURT OF APPEALS DISMISSED THE PETITION FOR
CERTIORARI OF THE PETITIONERS DESPITE THE FACT THAT THE PETITIONERS HAD
SUBSTANTIALLY COMPLIED WITH THE RULES ON THE EXECUTION OF A VERIFICATION
AND CERTIFICATE OF NON-FORUM SHOPPING;

THE COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT

PROBABLY IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE-
HONORABLE COURT WHEN THE COURT OF APPEALS. DISMISSED THE PETITION FOR
3
CERTIORARI OF THE PETITIONERS DESPITE THE FACT THAT THE ONLY KNOWN ADDRESS
OF RESPONDENT TIDULA WAS INCLUDED IN THE PETITION FOR CERTIORARI AND THAT
RESPONDENT TIDULA, THROUGH HIS COUNSEL, WAS SERVED WITH A COPY OF SUCH
PETITION FOR CERTIORARI;

THE COURT OF APPEALS SANCTIONED A DEPARTURE BY THE NLRC IN NLRC CASE NO[.]
RAB. III-06-10180-06 FROM THE ACCEPTED OR USUAL COURSE OF JUDICIAL
4
PROCEEDINGS AS THE COURT OF APPEALS ALLOWED THE NLRC TO VIRTUALLY EXTEND
THE PERIOD OF THE RESPONDENT HOSPITAL TO FILE AN APPEAL FOR ALMOST FOUR
MONTHS FROM THE EXPIRATION OF THE PERIOD TO FILE SUCH APPEAL;

5 THE COURT OF APPEALS SANCTIONED A DEPARTURE BY THE NLRC IN NLRC CASE NO[.]
RAB. 111-06-10180-06 FROM THE ACCEPTED OR USUAL COURSE OF JUDICIAL
 PROCEEDINGS AS THE COURT OF APPEALS ALLOWED THE NLRC TO GIVE DUE COURSE
TO AN APPEAL THAT WAS CLEARLY FILED OUT OF TIME AND TO MODIFY THE DECISION
OF THE LABOR ARBITER THAT WAS ALREADY FINAL AND EXECUTORY; and

THE COURT OF APPEALS SANCTIONED A DEPARTURE BY THE NLRC IN NLRC CASE NO[.]
RAB. III-06-10180-06 FROM THE ACCEPTED OR USUAL COURSE OF JUDICIAL
PROCEEDINGS AS THE COURT OF APPEALS TOLERATED THE GRAVE ABUSE OF
6
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION COMMITTED BY THE
NLRC IN REVERSING IN TOTO THE DECISION OF THE LABOR ARBITER DESPITE THE FACT
THAT SUCH REVERSAL IS NOT SUPPORTED BY ANY EVIDENCE ON RECORD AND BY THE
APPLICABLE LAWS.33
Petitioners argue that the verifications executed by three of the six petitioners and the verification
executed by their counsel constituted full compliance with the required verification. They contended that
the three petitioners who made their verification are real parties-in-interest, and their counsel who also
verified the Petition had been in possession of authentic and relevant records of the case.

Also, petitioners posit that the failure of Drs. Villegas, Canlas and Zheila to execute a certificate of non-
forum shopping should not have caused the dismissal of the Petition for Certorari. They insist that under
justifiable circumstances, the signature of one of the petitioners in the certificate against forum shopping
substantially complies with the rules. They further point out that all of them share a common interest and
invoke a common cause of action under the same set of facts.

Moreover, petitioners submit that they complied with Section 3, Rule 46 of the Rules of Court. They
contend that they included Dr. Tidula in the Petition for Certiorari as respondent because he remains
interested in the reversal of the NLRC Decision and Resolution. They add that from the inception of the
case, all pleadings had been coursed through Dr. Tidula's counsel; and they are unaware of the address
of Dr. Tidula as he never indicated it in his position paper. Hence, they maintain that it is fair that in the
present proceeding, any pleading intended for Dr. Tidula be sent to his counsel.

In addition, petitioners state that the non-inclusion of Dr. Tidula is not a fatal defect but a mere
typographical error which does not prejudice the rights of any party.

Finally, petitioners fault the CA in not finding that the NLRC committed grave abuse of discretion in
giving due course to the Hospital's appeal despite its failure to post appeal bond within the period to
perfect an appeal. They also maintain that the NLRC committed grave abuse of discretion in holding that
they were not illegally dismissed by respondents.

The Hospital, on the other hand, asserts that the CA correctly dismissed the Petition because it was filed
by a counsel who had no authority from petitioners; and that the Certificate against Forum Shopping
attached thereto was fatally defective. It also declares that the Petition for Certiorari improperly
impleaded Dr. Tidula as respondent. Lastly, it contends that petitioners are not entitled to money claims.

Our Ruling

The Petition is meritorious.

In Altres v. Empleo,34 the Court summarized the basic tenets involving non-compliance with the
requirements on, or filing of defective verification and certificate against forum shopping, to wit:
chanRoblesvirtualLawlibrary
1) A distinction must be made between non-compliance with the requirement on or
submission of defective verification, and non-compliance with the requirement on or
submission of defective certification against forum shopping.

2) As to verification, non-compliance therewith or a defect therein does not

necessarily render the pleading fatally defective. The court may order its submission
or correction or act on the pleading if the attending circumstances are such that strict
compliance with the Rule may be dispensed with in order that the ends of justice may
be served thereby.

3) Verification is deemed substantially complied with when one who has ample
knowledge to swear to the truth of the allegations in the complaint or petition signs the
verification, and when matters alleged in the petition have been made in good faith or
are true and correct.
 4) As to certification against forum shopping, non-compliance therewith or a defect
therein, unlike in verification, is generally not curable by its subsequent submission or
correction thereof, unless there is a need to relax the Rule on the ground of
"substantial compliance" or presence of "special circumstances or compelling
reasons".

5) The certification against forum shopping must be signed by all the plaintiffs or
petitioners in a case; otherwise, those who did not sign will be dropped as parties to
the case. Under reasonable or justifiable circumstances, however, as when all the
plaintiffs or petitioners share a common interest and invoke a common cause of action
or defense, the signature of only one of them in the certification against forum
shopping substantially complies with the Rule.

6) Finally, the certification against forum shopping must be executed by the party-
pleader, not by his counsel. If, however, for reasonable or justifiable reasons, the
party-pleader is unable to sign, he must execute a Special Power of Attorney
designating his counsel of record to sign on his behalf.
The CA dismissed the Petition for Certiorari on the ground that the Verification/Certificate of Non-Forum
Shopping executed by petitioners' counsel on behalf of Drs. Villegas, Canlas and Zheila violated Section
5, Rule 7 of the Rules of Court.35

As properly pointed out by the CA, the Verification/Certificate of Non-Forum Shopping with Undertaking
executed by petitioners' counsel is not valid. As stated in Altres, a certificate against forum shopping
must be signed by the party and in case his counsel signs the same on his behalf, the counsel must be
armed with a special power of attorney. Since petitioners' counsel is not shown to have been authorized
by Drs. Villegas, Canlas and Zheila to sign a certificate of non-forum shopping on their behalf, the
execution of said certificate by counsel violates the foregoing rules.

Nonetheless, the CA failed to consider the concept of "substantial compliance" to the requirements of
verification and certificate of non-forum shopping, as it has been shown that three of the six petitioners
executed their own verification and certificate against forum shopping.

The verification of a pleading is a formal and not a jurisdictional requirement. It is intended to assure that
the allegations in a pleading are true and correct. As such, the court may order the correction of
unverified pleadings, or it may act on them and waive strict compliance with the rules.36

The verification requirement is deemed substantially complied with when a person who has sufficient
knowledge to swear to the truth of the allegations in the complaint or petition signs the verification; and
matters alleged therein have been made in good faith or are true and correct. Thus, there is substantial
compliance if at least one of the petitioners makes a proper verification.37

In Ateneo de Naga University v. Manalo,38 the signature of one of three petitioners therein was
considered substantial compliance with the verification requirement. The Court held that Fr. Tabora, the
petitioner who signed the verification, has sufficient knowledge to swear to the truth of the allegations in
the petition filed with the CA; and his signature was ample assurance that the allegations have been
made in good faith or are true and correct.

In SKM Art Craft Corporation v. Bauca,39 the Court held that the verification and certificate against forum
shopping signed by nine out of 23 respondents substantially complied with the verification requirement
since they have common interest and cause of action. The Court likewise stated that the apparent merit
of the petition and the conflicting findings, of the LA and the NLRC also justified the decision of the CA
to resolve the case on the merits.

In this case, three out of six petitioners signed three separate verifications appended to the Petition
for Certiorari. Their signatures are sufficient assurance that the allegations in the Petition were made in
good faith, or are true and correct. Thus, there is substantial compliance with the verification
requirement.

On the other hand, as a rule, the certificate against forum shopping must be signed by all plaintiffs or
petitioners; otherwise, those who did not sign will be dropped as parties to the case. Under reasonable
or justifiable situations, such as when the plaintiffs or petitioners share a common interest and invoke a
common cause of action or defense, the signature of one of them in the certificate against forum
shopping is considered substantial compliance with the rules.40cralawred

In Abaria v. National Labor Relations Commission,41 47 out of 88 petitioners signed the certificate
against forum shopping. The Court ruled that the petitioning employees shared a common interest and
cause of action when they filed the case for illegal dismissal. The Court decreed ,that when petitioners
therein appealed to the CA, they pursued the case as a collective body, invoking one argument in
support of their cause of action, which is, the illegal dismissal purportedly committed by their employer
when union members resorted to strike due to the employer's refusal to bargain with officers of the local
chapter.

Furthermore, in Torres v. Specialized Packaging Development Corp.,42 the Court allowed the relaxation
of the rules on submission. of certificate against forum shopping. One of the compelling grounds for the
allowance of said certificate therein where only two of 25 petitioners signed the same was the "apparent
merits of the substantive aspects of the case." It noted that the varying views of the LA and the NLRC
give ample basis for the necessity of a review on the merits and the outright dismissal of the petition was
prejudicial to the substantive rights.

Here, three of six petitioners signed the certificate of non-forum shopping. At the least, the CA could
have ordered that those who did not sign it be dropped as parties, but not the outright dismissal of the
Petition.

The Court, nevertheless, holds that there are justifiable reasons for the relaxation of the rules on the
filing of a certificate of non-forum shopping and that the certificate against forum shopping signed by
three out of six petitioners suffices.

Specifically, petitioners' cause of action revolves on the same issue, that is, respondents illegally
dismissed them under similar circumstances. They were all resident physicians who were purportedly 1)
re-employed by the Hospital even after the expiration of their respective one year contracts; 2) forced to
resign and offered to be re-engaged as fixed term employees but declined; 3) demoted; 4) accused of
violations of the Hospital rules and regulations; and, 5) dismissed.

Moreover, substantial justice dictates that the Petition for Certiorari be given due course and be resolved
on the merits. This is especially so since the findings of the LA are contrary to those of the
NLRC,43 particularly on the issues of whether respondents illegally dismissed petitioners and of whether
they were afforded due process of law.

The requirement of strict compliance with the rules on filing of certificate against forum shopping
highlights the mandatory character of the submission of such certificate. However, this mandatory
requirement allows substantial compliance provided that there are justifiable circumstances for the
relaxation of the rules.44

Furthermore, the CA dismissed the Petition for Certiorari because it did not indicate in its title that Dr.
Tidula is a party respondent and the Petition did not state Dr. Tidula's actual address. The CA held that
these omissions violate Section 3,45 Rule 46 of the Rules of Court, in relation to Rule 65 thereof.

We do not agree.

Since Dr. Tidula was included as one of the respondents in the body of the Petition, then the CA could
have clarified with petitioners the non-inclusion of Dr. Tidula in the title and could have ordered the title
rectified.

Likewise, the Court finds that the failure to state the address of Dr. Tidula is insufficient to cause the
dismissal of the Petition. The lack of address of Dr. Tidula is not a fatal defect as he had been
represented by his counsel in the case. The indication that the party "could be served with process care
of his counsel was substantial compliance with the Rules." And, when a party has appeared through
counsel, service is to be made upon the counsel, unless the court expressly orders that it be made upon
the party.46

In view of the foregoing, a remand of the case to the CA for proper disposition on the merits is deemed
proper.chanrobleslaw

WHEREFORE, the Petition is GRANTED. The July 42, 2012 and October 22, 2012 Resolutions of the
Court of Appeals in CA-G.R. SP No. 125333 are REVERSED and SET ASIDE. The case
is REMANDED to the Court of Appeals for appropriate disposition.

SO ORDERED.cralawlawlibrary
G.R. No. 139337 August 15, 2001

MA. CARMINIA C. ROXAS, petitioner,

vs.
HON. COURT OF APPEALS and JOSE ANTONIO F. ROXAS, respondents.

DE LEON, JR., J.:

Before us is a petition for review on certiorari of the Decision1 dated April 21, 1999 and
Resolution2 dated July 20, 1999 of the Court of Appeals nullifying the Orders3 dated May 13, 1998, May
19, 1998 and September 23, 1998 of the Regional Trial Court of Parañaque City, Branch 260, which
found private respondent Jose Antonio F. Roxas liable to pay support pendente lite and subsequently in
contempt of court after failing to tender the required amount of support pendente lite.

The antecedent facts are as follows:

On November 4, 1997, petitioner Ma. Carminia C. Roxas filed with the Regional Trial Court of
Parañaque City, Civil Case No. 97-0523, which is an action for declaration of nullity of marriage on the
ground of psychological incapacity on the part of her husband, Jose Antonio F. Roxas, private
respondent herein, with an application for support pendente lite for their four (4) minor children. The
case was raffled to Branch 257 of the Regional Trial Court of Parañaque City presided by Judge
Rolando C. How. But the petitioner, soon thereafter, filed in the said RTC Branch 257 a Notice of
Dismissal dated November 20, 1997, to dismiss the complaint, without prejudice, pursuant to the
provision of Section 1, Rule 17, of the 1997 Rules of Civil Procedure, considering that summons has not
yet been served and no responsive pleading has yet been filed.

The same complaint, now docketed as Civil Case No. 97-0608, was re-filed on November 25, 1997. It
was raffled in due course to Branch 260 of the Regional Trial Court of Parañaque City presided by
Judge Helen Bautista-Ricafort.

On May 13, 1998, when the case was called for a pre-trial conference, the matter of plaintiff’s
(petitioner’s) application for support pendente lite of their four (4) minor children was taken up. Judge
Bautista-Ricafort received evidence on the application for support pendente lite. The private respondent
and her counsel, Atty. Alberto Diaz, participated in that proceedings by conducting an extensive cross-
examination of the petitioner. The trial court then issued its Order dated May 13, 1998 declaring the
proceedings on the application for support pendente lite terminated and deemed submitted for resolution;
and as prayed for by the parties, also set the case for pre-trial on June 15, 1998 at 8:30
a.m.1âwphi1.nêt

On May 19, 1998, Judge Bautista-Ricafort, issued an Order4 granting the application for
support pendente lite, the pertinent portion of which reads:

xxx xxx xxx

The plaintiff, testifying under oath, submitted Exhibit "A" itemizing the expenses incurred for the support
of the children over a period of time during their stay at Ayala-Alabang; and showed that their total
monthly average expense is P84,585.00, or P42,292.50 per month, per spouse. Interestingly, the
defendant did not adduce any evidence to dispute the figures presented to the Court by the plaintiff, nor
did he present proof of his financial incapacity to contribute more than 50% of the children’s school
tuition fees.

The court has painstakingly reviewed the item included in Exhibit "A", and found the same reasonable,
xxx.

Under Art. 49 of the Family Code, there being no written agreement between the plaintiff and the
defendant for the adequate support of their minor children xxx, this Court finds the prayer for support
pendente lite to be in order. Accordingly, the defendant is hereby ordered to contribute to the support of
the above-named minors, (aside from 50% of their school tuition fees which the defendant has agreed to
defray, plus expenses for books and other supplies), the sum of P42,292.50 per month, effective May 1,
1998, as his share in the monthly support of the children until further orders from this Court. xxx. All
expenses for books and other school supplies shall be shouldered by the plaintiff and the defendant,
share and share alike. Finally, it is understood that any claim for support-in-arrears prior to May 1, 1998,
may be taken up later in the course of the proceedings proper.
On July 22, 1998, the petitioner filed a manifestation and motion praying the trial court to cite private
respondent in contempt of court in accordance with Section 5, Rule 61 of the 1997 Rules of Civil
Procedure, after the latter failed to comply with the said Order dated May 19, 1998 of the trial court.
Private respondent, through his counsel, Atty. Alberto Diaz, filed a counter-manifestation and motion
admitting that "xxx there is really no genuine issue as to his obligation and willingness to contribute to
the expenses for the support of his minor children xxx. He simply wants to make sure that whatever
funds he provides for the purpose will go to the expenses for which they are intended."5 Thus, he prayed
that the manner and mode of payment of his contribution to the expenses of his minor children be
modified such that he will pay directly to the entities or persons to which the payment for such expenses
are intended. On September 23, 1998, Judge Bautista-Ricafort issued an Order6 directing the private
respondent "to comply fully with the Order of this Court dated May 19, 1998 by updating payment of his
share in the support of the minor children, pendente lite, covering the period May 1998 to September
1998, within five (5) days from his receipt hereof xxx under pain of legal sanctions if he still fails to do so.
xxx."

On September 28, 1998, or about four (4) months later, private respondent, through his new counsel,
Atty. Francisco Ma. Guerrerro, filed an Omnibus Motion (1) applying to be authorized to discharge Atty.
Alberto Diaz as his counsel and to substitute him with the new counsel; (2) to re-open hearing on the
Motion for Support Pendente Lite; and (3) to temporarily stay execution of the Orders dated May 19,
1998 and September 23, 1998. The omnibus motion was set for hearing on October 2, 1998. Private
respondent requested that before the omnibus motion is heard the May 19, 1998 Order be temporarily
suspended. When the presiding judge did not grant that request of private respondent, the latter’s new
counsel refused to proceed with the hearing of his omnibus motion.

On October 8, 1998, Judge Bautista-Ricafort issued an Order giving private respondent ten (10) days to
comply with the May 19, 1998 Order, otherwise, he would be cited for contempt of court.

On October 23, 1998, private respondent filed with the Court of Appeals a petition for certiorari
questioning the Orders of the trial court dated May 19, 1998, September 23, 1998 and October 8, 1998.

Meanwhile, on November 27, 1998, Judge Bautista-Ricafort issued another Order,7 the dispositive
portion of which reads:

xxx xxx xxx

Accordingly, and on the strength of the provisions of Sec. 5 Rule 61 of the 1997 Rules of Civil Procedure,
the defendant (herein private respondent) is hereby pronounced guilty of Contempt of Court, and is
hereby ordered arrested and confined at the City Jail of Parañaque City, Metro Manila, without bail, and
as long as he has not complied with and obeyed in full the Order of this Court dated May 19, 1998 by
updating his monthly contribution of P42,292.50 for the period of May 1998 to the date, giving the said
amount directly to the plaintiff, or depositing it with the Clerk of Court, who shall therefor (issue) the
corresponding receipts.

xxx xxx xxx

Private respondent was arrested by the agents of the National Bureau of Investigation (NBI) on
December 14, 1998 but he was released on the following day after the appellate court temporarily
enjoined Judge Bautista-Ricafort from enforcing her November 27, 1998 Order as well as her Orders
dated May 19, 1998, September 23, 1998, and October 8, 1998. When the temporary restraining order
lapsed on March 11, 1998, the respondent was again arrested by virtue of a warrant of arrest issued by
Judge Bautista-Ricafort. After depositing with the clerk of court of the trial court the amount of support in
arrears stated in the Orders of the trial court, private respondent was released from custody.

On April 21, 1999, the Court of Appeals rendered a Decision in favor of private respondent, the
dispositive portion of which states:

WHEREFORE, being meritorious, the instant petition is GRANTED. Consequently, all the
proceedings/actions taken by respondent Judge on the matter of support pendente lite in Civil Case No.
97-0608 (formerly Civil Case No. 97-0523) are hereby declared NULL and VOID, and said CASE is
ordered RETURNED to Branch 257 of the Regional Trial Court of Parañaque City, for appropriate
proceedings.

SO ORDERED.8
The appellate court nullified the Orders and the proceedings of the trial court for the reason that the
certificate of non-forum shopping of the petitioner did not mention the prior filing of Civil Case No. 97-
0523 before the sala of Judge How and the dismissal thereof without prejudice. The decision of the
appellate court elaborated the reasons for the granting of the petition, to wit:

xxx xxx xxx

While a complaint may be dismissed by the plaintiff by filing a notice of dismissal at any time before
service of the answer (Sec. 1, Rule 17), there is however a need to state the fact of prior filing and
dismissal thereof in the certification on non-forum shopping, in the event the complaint is refiled, as in
this case. This must be so in order to prevent the plaintiff or principal party from invoking Section 1 of
Rule 17 in the hope that, if and when refiled, the complaint will be raffled to a more sympathetic judge.

To the mind of the Court, private respondent availed of Section 1 of Rule 17 not for any other reason or
purpose than to take the case out of the sala of Judge How and to have it assigned to another. This
belief finds support from the fact that private respondent’s lawyer and respondent Judge were
classmates at the UP College of Law.

Not only that. While private respondent actually resides in Ayala Alabang, Muntinlupa City, it was made
to appear in the complaint that she is a resident of Parañaque City, where respondent Judge is one of
the RTC Judges. While the question of venue was not properly raised on time, this circumstance is
being cited to support petitioner’s charge of forum-shopping.

xxx xxx xxx

Needless to say, forum-shopping merits such serious sanctions as those prescribed in Section 5, Rule 7
of the 1997 Rules of Civil Procedure. Considering, however, that when the complaint was withdrawn, no
substantial proceedings had as yet been taken by the court to which it was first raffled, and that the
dismissal thereof was then a matter or (sic) right, the Court is not inclined to impose any of the said
sanctions. Instead, for the peace of mind of petitioner who entertains some doubts on the impartiality of
respondent Judge, the annulment case should be returned to Branch 257 of the RTC of Parañaque City,
to which it was originally raffled. And, to enable the Presiding Judge of said Branch to act on the matter
of support pendente lite, which gave rise to this petition for certiorari and disqualification, the
proceedings/actions taken by respondent Judge relative thereto should be set aside, the same having
been attended with grave abuse of discretion.9

xxx xxx xxx

In the instant petition the petitioner poses the following statement of issues, to wit:

DID THE HONORABLE COURT OF APPEALS ERR IN HOLDING THE HEREIN PETITIONER GUILTY
OF FORUM SHOPPING?

II

DID THE HONORABLE COURT OF APPEALS ERR IN NULLIFYING JUDGE RICAFORT’S ORDER
OF SUPPORT PENDENTE LITE AND HER RELATED IMPLEMENTING ORDERS WHICH IT WAS
HER JUDICIAL DUTY TO ISSUE UNDER ART. 49 OF THE FAMILY CODE AND OTHER RELATED
PROVISIONS OF LAW?

III

DID THE HONORABLE COURT OF APPEALS ERR IN NULLIFYING THE PROCEEDINGS ALREADY
HELD BEFORE JUDGE RICAFORT AFFECTING HER QUESTIONED ORDERS, AT THE SAME TIME
IMPLIEDLY UPHOLDING THE VALIDITY OF THE REST OF THE PROCEEDINGS INCLUDING THE
TRIAL ON THE MERITS OF THE CASE FOR ANNULMENT OF MARRIAGE?

IV
DID THE HONORABLE COURT OF APPEALS ERR IN ORDERING THAT CIVIL CASE NO. 97-0523
RAFFLED TO JUDGE RICAFORT BE "RETURNED" TO JUDGE HOW OF BRANCH 257 OF THE RTC
OF PARANAQUE CITY?

In other words, if a case is dismissed without prejudice upon the filing by the plaintiff of a notice of
dismissal pursuant to Section 1 of Rule 17, before the service of the answer or responsive pleading,
would the subsequent re-filing of the case by the same party require that the certificate of non-forum
shopping state that a case involving the same issues and parties was filed and dismissed without
prejudice beforehand? Would the omission of such a statement in the certificate of non-forum shopping
render null and void the proceedings and orders issued by the trial court in the re-filed case?

It is our considered view and we hold that the proceedings and orders issued by Judge Bautista-Ricafort
in the application for support pendente lite (and the main complaint for annulment of marriage) in the re-
filed case, that is, in Civil Case No. 97-0608 were not rendered null and void by the omission of a
statement in the certificate of non-forum shopping regarding the prior filing and dismissal without
prejudice of Civil Case No. 97-0523 which involves the same parties and issues.

Section 5 of Rule 7 of the 1997 Rules of Civil Procedure provides that:

SEC. 5. Certification against forum shopping. – The plaintiff or principal party shall certify under oath in
the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed
thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed
any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his
knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or
claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the
same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days
therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the
complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice,
unless otherwise provided, upon motion and after hearing. The submission of a false certification or non-
compliance with any of the undertakings therein shall constitute indirect contempt of court, without
prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel
clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal
with prejudice and shall constitute direct contempt as well as a cause for administrative sanctions. (n)

Forum shopping is an act of a party against whom an adverse judgment has been rendered in one
forum of seeking and possibly getting a favorable opinion in another forum, other than by appeal or the
special civil action of certiorari, or the institution of two or more actions or proceedings grounded on the
same cause on the supposition that one or the other court would make a favorable disposition. The
language of the Supreme Court circular (now the above-quoted Section 5, Rule 7, 1997 Rules of Civil
Procedure) distinctly suggests that it is primarily intended to cover an initiatory pleading or an incipient
application of a party asserting a claim for relief.10 The most important factor in determining the
existence of forum shopping is the "vexation caused the courts and parties-litigants by a party who asks
different courts to rule on the same or related causes or grant the same or substantially the same
reliefs."11

Since a party resorts to forum shopping in order to increase his chances of obtaining a favorable
decision or action, it has been held that a party cannot be said to have sought to improve his chances of
obtaining a favorable decision or action where no unfavorable decision has ever been rendered against
him in any of the cases he has brought before the courts.12 Forum shopping exists where the elements
of litis pendencia are present, and where a final judgment in one case will amount to res judicata in the
other.13 For the principle of res judicata to apply, the following must be present: (1) a decision on the
merits; (2) by a court of competent jurisdiction; (3) the decision is final; and (4) the two actions involve
identical parties, subject matter and causes of action.14

In the case at bar, there was no adverse decision against the petitioner in Civil Case No. 97-0523 which
was the first case filed and raffled to the sala (Branch 257) of Judge How. The dismissal without
prejudice of the complaint in Civil Case No. 97-0523 at the instance of the petitioner was pursuant to
Section 1, Rule 17 of the 1997 Rules of Civil Procedure15 considering that it was done before service of
answer or any responsive pleading. The dismissal does not amount to litis pendencia nor to res judicata.
There is no litis pendencia since the first case before Judge How was dismissed or withdrawn by the
plaintiff (herein petitioner), without prejudice, upon her filing of a notice of dismissal, pursuant to Section
1, Rule 17 of the 1997 Rules of Civil Procedure. To use the wording of that rule, Judge How’s order is
one merely "confirming the dismissal" of the complaint by the plaintiff (herein petitioner). Neither is
there res judicata for the reason that the order of dismissal was not a decision on the merits but a
dismissal "without prejudice".

Thus, private respondent’s apprehension that the case was dismissed in order to be transferred to the
sala of a judge who is allegedly more sympathetic to the petitioner’s cause is baseless and not a valid
reason to declare the petitioner guilty of forum shopping. First, the petitioner is not assured that the case
would be raffled to a more sympathetic judge. There are five (5) RTC branches in Parañaque, namely,
branch nos. 257, 258, 259, 260 and 274. Second, Judge Bautista-Ricafort of RTC of Parañaque, Branch
260, is presumed to be fair and impartial despite private respondent’s claim that she is an alleged law
school classmate of the petitioner’s counsel. In any event, at the slightest doubt of the impartiality of the
said trial judge, private respondent could have filed before the same judge a motion for her inhibition on
that ground. But private respondent did not.

Private respondent is also estopped in questioning the proceedings and orders of Judge Bautista-
Ricafort. He tacitly acknowledged the validity of the proceedings and the orders issued by the said trial
judge by participating actively in the hearing on the application for support pendente lite and by praying
for the modification of the Order of May 19, 1998 in that he should be allowed to directly pay to the
persons or entities to which payments of such expenses are intended in connection with the required
support pendente lite of their minor children. Private respondent cannot validly claim that he was not
ably and sufficiently represented by his first counsel, Atty. Diaz, especially during the hearing on that
incident on May 13, 1998 when he himself was present thereat.

It is also too late for the private respondent to claim wrong venue in the Regional Trial Court of
Parañaque City as a alleged proof of forum shopping. He should have raised that ground in his answer
or in a motion to dismiss. But he did not, so it is deemed waived. Besides, petitioner is also a resident of
Parañaque where the family of her parents reside.

Considering that the complaint in Civil Case No. 97-0523 was dismissed without prejudice by virtue of
the plaintiff’s (herein petitioner’s) Notice of Dismissal dated November 20, 1997 filed pursuant to Section
1, Rule 17, of the 1997 Rules of Civil Procedure, there is no need to state in the certificate non-forum
shopping in Civil Case No. 97-0608 about the prior filing and dismissal of Civil Case No. 97-0523.
In Gabionza v. Court of Appeals,16 we ruled that it is scarcely necessary to add that Circular No. 28-91
(now Section 5, Rule 7 of the 1997 Rules of Civil Procedure) must be so interpreted and applied as to
achieve the purposes projected by the Supreme Court when it promulgated that Circular. Circular No.
28-91 was designed to serve as an instrument to promote and facilitate the orderly administration of
justice and should not be interpreted with such absolute literalness as to subvert its own ultimate and
legitimate objective or the goal of all rules or procedure – which is to achieve substantial justice as
expeditiously as possible. The fact that the Circular requires that it be strictly complied with merely
underscores its mandatory nature in that it cannot be dispensed with or its requirements altogether
disregarded, but it does not thereby interdict substantial compliance with its provisions under justifiable
circumstances.17

Thus, an omission in the certificate of non-forum shopping about any event that would not constitute res
judicata and litis pendencia as in the case at bar, is not fatal as to merit the dismissal and nullification of
the entire proceedings considering that the evils sought to be prevented by the said certificate are not
present. It is in this light that we ruled in Maricalum Mining Corp. v. National Labor Relations
Commission18 that a liberal interpretation of Supreme Court Circular No. 04-94 on non-forum shopping
would be more in keeping with the objectives of procedural rules which is to "secure a just, speedy and
inexpensive disposition of every action and proceeding."

For a party to be adjudged guilty of forum shopping in the trial courts, a motion to dismiss on the ground
of either litis pendencia or res judicata must be filed before the proper trial court and a hearing
conducted thereon in accordance with Section 5, Rule 7 of the 1997 Rules of Civil Procedure. The same
ground cannot be raised in a petition for certiorari before the appellate court while the main action in the
trial court is still pending for the reason that such ground for a motion to dismiss can be raised before
the trial court any time during the proceedings and is not barred by the filing of the answer to the
complaint.19

The petition for certiorari in the case at bar on the ground of alleged forum shopping in the trial court is
premature for the reason that there is an adequate and speedy remedy available in the ordinary course
of law to private respondent, i.e., a motion to dismiss or a motion for reconsideration on the ground of
either litis pendencia or res judicata before the trial court. But private respondent did not file such a
motion based on either of said grounds. And where the ground is short of res judicata or litis pendencia,
as in the case at bar, the Court of Appeals acted with grave abuse of discretion amounting to excess of
jurisdiction when it granted the petition for certiorari filed by herein private respondent. The trial court
should have been given an opportunity to rule on the matter of alleged forum shopping in consonance
with the hierarchy of courts.

WHEREFORE, the Decision and Resolution dated April 21, 1999 and July 20, 1999 respectively, of the
Court of Appeals are hereby REVERSED, and the Orders dated May 13, 1998, May 19, 1998 and
September 23, 1998 of the Regional Trial Court of Parañaque City, Branch 260, are REINSTATED.

SO ORDERED.1âwphi1.nêt

Bellosillo, Mendoza, Quisumbing, Buena, JJ., concur.