G.R. No.
166738 August 14, 2009 appearance and deputized the Provincial Prosecutor of Nueva Vizcaya to
ROWENA PADILLA-RUMBAUA, Petitioner,
vs.
EDWARD RUMBAUA, Respondent.
DECISION
BRION, J.:
Petitioner Rowena Padilla-Rumbaua (petitioner) challenges, through her
petition for review on certiorari,1 the decision dated June 25, 20042 and
the resolution dated January 18, 20053 of the Court of Appeals (CA) in
CA-G.R. CV No. 75095. The challenged decision reversed the
decision4 of the Regional Trial Court (RTC) declaring the marriage of the
petitioner and respondent Edward Rumbaua (respondent) null and void
on the ground of the latter’s psychological incapacity. The assailed
resolution, on the other hand, denied the petitioner’s motion for
reconsideration.
ANTECEDENT FACTS
The present petition traces its roots to the petitioner’s complaint for the
declaration of nullity of marriage against the respondent before the RTC,
docketed as Civil Case No. 767. The petitioner alleged that the
respondent was psychologically incapacitated to exercise the essential
obligations of marriage as shown by the following circumstances: the
respondent reneged on his promise to live with her under one roof after
finding work; he failed to extend financial support to her; he blamed her
for his mother’s death; he represented himself as single in his
transactions; and he pretended to be working in Davao, although he was
cohabiting with another woman in Novaliches, Quezon City.
Summons was served on the respondent through substituted service, as
personal service proved futile.5 The RTC ordered the provincial
prosecutor to investigate if collusion existed between the parties and to
ensure that no fabrication or suppression of evidence would take
place.6 Prosecutor Melvin P. Tiongson’s report negated the presence of
collusion between the parties.7
The Republic of the Philippines (Republic), through the office of the
Solicitor General (OSG), opposed the petition.8 The OSG entered its
assist in all hearings of the case.9
The petitioner presented testimonial and documentary evidence to
substantiate her charges.
The petitioner related that she and the respondent were childhood
neighbors in Dupax del Norte, Nueva Vizcaya. Sometime in 1987, they
met again and became sweethearts but the respondent’s family did not
approve of their relationship. After graduation from college in 1991, the
respondent promised to marry the petitioner as soon as he found a job.
The job came in 1993, when the Philippine Air Lines (PAL) accepted the
respondent as a computer engineer. The respondent proposed to the
petitioner that they first have a "secret marriage" in order not to
antagonize his parents. The petitioner agreed; they were married in
Manila on February 23, 1993. The petitioner and the respondent,
however, never lived together; the petitioner stayed with her sister in
Fairview, Quezon City, while the respondent lived with his parents in
Novaliches.
The petitioner and respondent saw each other every day during the first
six months of their marriage. At that point, the respondent refused to live
with the petitioner for fear that public knowledge of their marriage would
affect his application for a PAL scholarship. Seven months into their
marriage, the couple’s daily meetings became occasional visits to the
petitioner’s house in Fairview; they would have sexual trysts in motels.
Later that year, the respondent enrolled at FEATI University after he lost
his employment with PAL.10
In 1994, the parties’ respective families discovered their secret marriage.
The respondent’s mother tried to convince him to go to the United States,
but he refused. To appease his mother, he continued living separately
from the petitioner. The respondent forgot to greet the petitioner during
her birthday in 1992 and likewise failed to send her greeting cards on
special occasions. The respondent indicated as well in his visa
application that he was single.
In April 1995, the respondent’s mother died. The respondent blamed the
petitioner, associating his mother’s death to the pain that the discovery of
his secret marriage brought. Pained by the respondent’s action, the
petitioner severed her relationship with the respondent. They eventually
reconciled through the help of the petitioner’s father, although they still
lived separately.
In 1997, the respondent informed the petitioner that he had found a job in
Davao. A year later, the petitioner and her mother went to the
respondent’s house in Novaliches and found him cohabiting with one
Cynthia Villanueva (Cynthia). When she confronted the respondent about
it, he denied having an affair with Cynthia.11 The petitioner apparently did
not believe the respondents and moved to to Nueva Vizcaya to recover
from the pain and anguish that her discovery brought. 12
The petitioner disclosed during her cross-examination that
communication between her and respondent had ceased. Aside from her
oral testimony, the petitioner also presented a certified true copy of their
marriage contract;13 and the testimony, curriculum vitae, 14 and
psychological report15 of clinical psychologist Dr. Nedy Lorenzo Tayag
(Dr. Tayag).
Dr. Tayag declared on the witness stand that she administered the
following tests on the petitioner: a Revised Beta Examination; a Bender
Visual Motor Gestalt Test; a Rorschach Psychodiagnostic Test; a Draw a
Person Test; a Sach’s Sentence Completion Test; and MMPI. 16 She
thereafter prepared a psychological report with the following findings:
TEST RESULTS AND EVALUATION
Psychometric tests data reveal petitioner to operate in an average
intellectual level. Logic and reasoning remained intact. She is seen to be
the type of woman who adjusts fairly well into most situations especially if
it is within her interests. She is pictured to be faithful to her commitments
and had reservations from negative criticisms such that she normally
adheres to social norms, behavior-wise. Her age speaks of maturity, both
intellectually and emotionally. Her one fault lies in her compliant attitude
which makes her a subject for manipulation and deception such that of
respondent. In all the years of their relationship, she opted to endure his
irresponsibility largely because of the mere belief that someday things will
be much better for them. But upon the advent of her husband’s infidelity,
she gradually lost hope as well as the sense of self-respect, that she has
finally taken her tool to be assertive to the point of being aggressive and
very cautious at times – so as to fight with the frustration and insecurity
she had especially regarding her failed marriage.
Respondent in this case, is revealed to operate in a very self-
centered manner as he believes that the world revolves around him.
His egocentrism made it so easy for him to deceitfully use others for
his own advancement with an extreme air of confidence and
dominance. He would do actions without any remorse or guilt
feelings towards others especially to that of petitioner.
REMARKS
Love happens to everyone. It is dubbed to be boundless as it goes
beyond the expectations people tagged with it. In love, "age does matter."
People love in order to be secure that one will share his/her life with
another and that he/she will not die alone. Individuals who are in love had
the power to let love grow or let love die – it is a choice one had to face
when love is not the love he/she expected.
In the case presented by petitioner, it is very apparent that love really
happened for her towards the young respondent – who used "love" as a
disguise or deceptive tactic for exploiting the confidence she extended
towards him. He made her believe that he is responsible, true, caring and
thoughtful – only to reveal himself contrary to what was mentioned. He
lacked the commitment, faithfulness, and remorse that he was able to
engage himself to promiscuous acts that made petitioner look like an
innocent fool. His character traits reveal him to suffer Narcissistic
Personality Disorder - declared to be grave, severe and
incurable.17 [Emphasis supplied.]
The RTC Ruling
The RTC nullified the parties’ marriage in its decision of April 19, 2002.
The trial court saw merit in the testimonies of the petitioner and Dr.
Tayag, and concluded as follows:
xxxx
Respondent was never solicitous of the welfare and wishes of his wife.
Respondent imposed limited or block [sic] out communication with his
wife, forgetting special occasions, like petitioner’s birthdays and
Valentine’s Day; going out only on occasions despite their living
separately and to go to a motel to have sexual intercourse.
It would appear that the foregoing narration are the attendant facts in this
case which show the psychological incapacity of respondent, at the time
of the celebration of the marriage of the parties, to enter into lawful
marriage and to discharge his marital responsibilities (See Articles 68 to
71, Family Code). This incapacity is "declared grave, severe and
incurable."
WHEREFORE, in view of the foregoing, the marriage between petitioner
Rowena Padilla Rumbaua and respondent Edwin Rumbaua is hereby
declared annulled.
SO ORDERED.18
The CA Decision
The Republic, through the OSG, appealed the RTC decision to the
CA.19 The CA decision of June 25, 2004 reversed and set aside the RTC
decision, and denied the nullification of the parties’ marriage.20
In its ruling, the CA observed that Dr. Tayag’s psychiatric report did not
mention the cause of the respondent’s so-called "narcissistic personality
disorder;" it did not discuss the respondent’s childhood and thus failed to
give the court an insight into the respondent’s developmental years. Dr.
Tayag likewise failed to explain why she came to the conclusion that the
respondent’s incapacity was "deep-seated" and "incurable."
The CA held that Article 36 of the Family Code requires the incapacity to
be psychological, although its manifestations may be physical. Moreover,
the evidence presented must show that the incapacitated party was
mentally or physically ill so that he or she could not have known the
marital obligations assumed, knowing them, could not have assumed
them. In other words, the illness must be shown as downright incapacity
or inability, not a refusal, neglect, or difficulty to perform the essential
obligations of marriage. In the present case, the petitioner suffered
because the respondent adamantly refused to live with her because of
his parents’ objection to their marriage.
The petitioner moved to reconsider the decision, but the CA denied her
motion in its resolution of January 18, 2005. 21
The Petition and the Issues
The petitioner argues in the present petition that –
1. the OSG certification requirement under Republic v.
Molina22 (the Molina case) cannot be dispensed with because
A.M. No. 02-11-10-SC, which relaxed the requirement, took effect
only on March 15, 2003;
2. vacating the decision of the courts a quo and remanding the
case to the RTC to recall her expert witness and cure the defects
in her testimony, as well as to present additional evidence, would
temper justice with mercy; and
3. Dr. Tayag’s testimony in court cured the deficiencies in her
psychiatric report.
The petitioner prays that the RTC’s and the CA’s decisions be reversed
and set aside, and the case be remanded to the RTC for further
proceedings; in the event we cannot grant this prayer, that the CA’s
decision be set aside and the RTC’s decision be reinstated.
The Republic maintained in its comment that: (a) A.M. No. 02-11-10-SC
was applicable although it took effect after the promulgation of Molina; (b)
invalidating the trial court’s decision and remanding the case for further
proceedings were not proper; and (c) the petitioner failed to establish
respondent’s psychological incapacity.23
The parties simply reiterated their arguments in the memoranda they
filed.
THE COURT’S RULING
We resolve to deny the petition for lack of merit.
A.M. No. 02-11-10-SC is applicable
In Molina, the Court emphasized the role of the prosecuting attorney or
fiscal and the OSG; they are to appear as counsel for the State in
proceedings for annulment and declaration of nullity of marriages:
(8) The trial court must order the prosecuting attorney or fiscal and the
Solicitor General to appear as counsel for the state. No decision shall be
handed down unless the Solicitor General issues a certification, which
will be quoted in the decision, briefly stating therein his reasons for his
agreement or opposition, as the case may be, to the petition. The
Solicitor General, along with the prosecuting attorney, shall submit to the
court such certification within fifteen (15) days from the date the case is
deemed submitted for resolution of the court. The Solicitor General shall
discharge the equivalent function of the defensor vinculi contemplated
under Canon 1095. [Emphasis supplied.]
A.M. No. 02-11-10-SC24 -- which this Court promulgated on March 15,
2003 and duly published -- is geared towards the relaxation of the OSG
certification that Molina required. Section 18 of this remedial regulation
provides:
SEC. 18. Memoranda. – The court may require the parties and the public
prosecutor, in consultation with the Office of the Solicitor General, to file
their respective memoranda in support of their claims within fifteen days
from the date the trial is terminated. It may require the Office of the
lawphil.net
Solicitor General to file its own memorandum if the case is of significant
interest to the State. No other pleadings or papers may be submitted
without leave of court. After the lapse of the period herein provided, the
case will be considered submitted for decision, with or without the
memoranda.
The petitioner argues that the RTC decision of April 19, 2002 should be
vacated for prematurity, as it was rendered despite the absence of the
required OSG certification specified in Molina. According to the petitioner,
A.M. No. 02-11-10-SC, which took effect only on March 15, 2003, cannot
overturn the requirements of Molina that was promulgated as early as
February 13, 1997.
The petitioner’s argument lacks merit.
The amendment introduced under A.M. No. 02-11-10-SC is procedural or
remedial in character; it does not create or remove any vested right, but
only operates as a remedy in aid of or confirmation of already existing
rights. The settled rule is that procedural laws may be given retroactive
effect,25 as we held in De Los Santos v. Vda. de Mangubat: 26
Procedural Laws do not come within the legal conception of a retroactive
law, or the general rule against the retroactive operation of statues - they
may be given retroactive effect on actions pending and undetermined at
the time of their passage and this will not violate any right of a person
who may feel that he is adversely affected, insomuch as there are no
vested rights in rules of procedure.
A.M. No. 02-11-10-SC, as a remedial measure, removed the mandatory
nature of an OSG certification and may be applied retroactively to
pending matters. In effect, the measure cures in any pending matter any
procedural lapse on the certification prior to its promulgation. Our rulings
in Antonio v. Reyes27 and Navales v. Navales28 have since confirmed and
clarified that A.M. No. 02-11-10-SC has dispensed with
the Molina guideline on the matter of certification, although Article 48
mandates the appearance of the prosecuting attorney or fiscal to ensure
that no collusion between the parties would take place. Thus, what is
important is the presence of the prosecutor in the case, not the remedial
requirement that he be certified to be present. From this perspective, the
petitioner’s objection regarding the Molina guideline on certification lacks
merit.
A Remand of the Case to the RTC is Improper
The petitioner maintains that vacating the lower courts’ decisions and the
remand of the case to the RTC for further reception of evidence are
procedurally permissible. She argues that the inadequacy of her
evidence during the trial was the fault of her former counsel, Atty. Richard
Tabago, and asserts that remanding the case to the RTC would allow her
to cure the evidentiary insufficiencies. She posits in this regard that while
mistakes of counsel bind a party, the rule should be liberally construed in
her favor to serve the ends of justice.
We do not find her arguments convincing.
A remand of the case to the RTC for further proceedings amounts to the
grant of a new trial that is not procedurally proper at this stage. Section 1
of Rule 37 provides that an aggrieved party may move the trial court to
set aside a judgment or final order already rendered and to grant a new
trial within the period for taking an appeal. In addition, a motion for new
trial may be filed only on the grounds of (1) fraud, accident, mistake or
excusable negligence that could not have been guarded against by
ordinary prudence, and by reason of which the aggrieved party’s rights
have probably been impaired; or (2) newly discovered evidence that, with
reasonable diligence, the aggrieved party could not have discovered and
produced at the trial, and that would probably alter the result if presented.
In the present case, the petitioner cites the inadequacy of the evidence
presented by her former counsel as basis for a remand. She did not,
however, specify the inadequacy. That the RTC granted the petition for
declaration of nullity prima facie shows that the petitioner’s counsel had
not been negligent in handling the case. Granting arguendo that the
petitioner’s counsel had been negligent, the negligence that would justify
a new trial must be excusable, i.e. one that ordinary diligence and
prudence could not have guarded against. The negligence that the
petitioner apparently adverts to is that cited in Uy v. First Metro Integrated
Steel Corporation where we explained:29
Blunders and mistakes in the conduct of the proceedings in the trial court
as a result of the ignorance, inexperience or incompetence of counsel do
not qualify as a ground for new trial. If such were to be admitted as valid
reasons for re-opening cases, there would never be an end to litigation
so long as a new counsel could be employed to allege and show that the
prior counsel had not been sufficiently diligent, experienced or learned.
This will put a premium on the willful and intentional commission of errors
by counsel, with a view to securing new trials in the event of conviction,
or an adverse decision, as in the instant case.
Thus, we find no justifiable reason to grant the petitioner’s requested
remand.
Petitioner failed to establish the
respondent’s psychological incapacity
A petition for declaration of nullity of marriage is anchored on Article 36 of
the Family Code which provides that "a marriage contracted by any party
who, at the time of its celebration, was psychologically incapacitated to
comply with the essential marital obligations of marriage, shall likewise be
void even if such incapacity becomes manifest only after its
solemnization." In Santos v. Court of Appeals,30 the Court first declared
that psychological incapacity must be characterized by (a) gravity; (b)
juridical antecedence; and (c) incurability. The defect should refer to "no
less than a mental (not physical) incapacity that causes a party to be truly
incognitive of the basic marital covenants that concomitantly must be
assumed and discharged by the parties to the marriage." It must be
confined to "the most serious cases of personality disorders clearly
demonstrative of an utter insensitivity or inability to give meaning and
significance to the marriage."
We laid down more definitive guidelines in the interpretation and
application of Article 36 of the Family Code in Republic v. Court of
Appeals where we said:
(1) The burden of proof to show the nullity of the marriage
belongs to the plaintiff. Any doubt should be resolved in favor of
the existence and continuation of the marriage and against its
dissolution and nullity. This is rooted in the fact that both our
Constitution and our laws cherish the validity of marriage and
unity of the family. Thus, our Constitution devotes an entire Article
on the Family, recognizing it "as the foundation of the nation." It
decrees marriage as legally "inviolable," thereby protecting it from
dissolution at the whim of the parties. Both the family and
marriage are to be "protected" by the state.
The Family Code echoes this constitutional edict on marriage and
the family and emphasizes their permanence, inviolability and
solidarity.
(2) The root cause of the psychological incapacity must be (a)
medically or clinically identified, (b) alleged in the complaint, (c)
sufficiently proven by experts and (d) clearly explained in the
decision. Article 36 of the Family Code requires that the
incapacity must be psychological - not physical, although its
manifestations and/or symptoms may be physical. The evidence
must convince the court that the parties, or one of them, was
mentally or psychically ill to such an extent that the person could
not have known the obligations he was assuming, or knowing
them, could not have given valid assumption thereof. Although no
example of such incapacity need be given here so as not to limit
the application of the provision under the principle of ejusdem
generis, nevertheless such root cause must be identified as a
psychological illness and its incapacitating nature fully explained.
Expert evidence may be given by qualified psychiatrists and
clinical psychologists.
(3) The incapacity must be proven to be existing at "the time of
the celebration" of the marriage. The evidence must show that
the illness was existing when the parties exchanged their "I do's."
The manifestation of the illness need not be perceivable at such
time, but the illness itself must have attached at such moment, or
prior thereto.
(4) Such incapacity must also be shown to be medically or
clinically permanent or incurable. Such incurability may be
absolute or even relative only in regard to the other spouse, not
necessarily absolutely against everyone of the same sex.
Furthermore, such incapacity must be relevant to the assumption
of marriage obligations, not necessarily to those not related to
marriage, like the exercise of a profession or employment in a
job. x x x
(5) Such illness must be grave enough to bring about the
disability of the party to assume the essential obligations of
marriage. Thus, "mild characteriological peculiarities, mood
 changes, occasional emotional outbursts" cannot be accepted as
root causes. The illness must be shown as downright incapacity
or inability, not a refusal, neglect or difficulty, much less ill will. In
other words, there is a natal or supervening disabling factor in the
person, an adverse integral element in the personality structure
that effectively incapacitates the person from really accepting and
thereby complying with the obligations essential to marriage.
(6) The essential marital obligations must be those embraced by
Articles 68 up to 71 of the Family Code as regards the husband
and wife as well as Articles 220, 221 and 225 of the same Code
in regard to parents and their children. Such non-complied marital
obligation(s) must also be stated in the petition, proven by
evidence and included in the text of the decision.
(7) Interpretations given by the National Appellate Matrimonial
Tribunal of the Catholic Church in the Philippines, while not
controlling or decisive, should be given great respect by our
courts…
(8) The trial court must order the prosecuting attorney or fiscal
and the Solicitor General to appear as counsel for the state. No
decision shall be handed down unless the Solicitor General
issues a certification, which will be quoted in the decision, briefly
stating therein his reasons for his agreement or opposition, as the
case may be, to the petition. The Solicitor General, along with the
prosecuting attorney, shall submit to the court such certification
within fifteen (15) days from the date the case is deemed
submitted for resolution of the court. The Solicitor General shall
discharge the equivalent function of the defensor
vinculi contemplated under Canon 1095.
These Guidelines incorporate the basic requirements we established in
Santos. To reiterate, psychological incapacity must be characterized by:
(a) gravity; (b) juridical antecedence; and (c) incurability. 31 These
requisites must be strictly complied with, as the grant of a petition for
nullity of marriage based on psychological incapacity must be confined
only to the most serious cases of personality disorders clearly
demonstrative of an utter insensitivity or inability to give meaning and
significance to the marriage. Furthermore, since the Family Code does
not define "psychological incapacity," fleshing out its terms is left to us to
do so on a case-to-case basis through jurisprudence. 32 We emphasized
this approach in the recent case of Ting v. Velez-Ting33 when we
explained:
It was for this reason that we found it necessary to emphasize in Ngo Te
that each case involving the application of Article 36 must be treated
distinctly and judged not on the basis of a priori assumptions,
predilections or generalizations but according to its own attendant facts.
Courts should interpret the provision on a case-to-case basis, guided by
experience, the findings of experts and researchers in psychological
disciplines, and by decisions of church tribunals.
In the present case and using the above standards and approach, we
find the totality of the petitioner’s evidence insufficient to prove that the
respondent is psychologically unfit to discharge the duties expected of
him as a husband.
a. Petitioner’s testimony did not prove the root cause, gravity and
incurability of respondent’s condition
The petitioner’s evidence merely showed that the respondent: (a)
reneged on his promise to cohabit with her; (b) visited her occasionally
from 1993 to 1997; (c) forgot her birthday in 1992, and did not send her
greeting cards during special occasions; (d) represented himself as
single in his visa application; (e) blamed her for the death of his mother;
and (f) told her he was working in Davao when in fact he was cohabiting
with another woman in 1997.
These acts, in our view, do not rise to the level of the "psychological
incapacity" that the law requires, and should be distinguished from the
"difficulty," if not outright "refusal" or "neglect" in the performance of some
marital obligations that characterize some marriages. In Bier v. Bier, 34 we
ruled that it was not enough that respondent, alleged to be
psychologically incapacitated, had difficulty in complying with his marital
obligations, or was unwilling to perform these obligations. Proof of a natal
or supervening disabling factor – an adverse integral element in the
respondent's personality structure that effectively incapacitated him from
complying with his essential marital obligations – had to be shown and
was not shown in this cited case.
In the present case, the respondent’s stubborn refusal to cohabit with the
petitioner was doubtlessly irresponsible, but it was never proven to be
rooted in some psychological illness. As the petitioner’s testimony
reveals, respondent merely refused to cohabit with her for fear of
jeopardizing his application for a scholarship, and later due to his fear of
antagonizing his family. The respondent’s failure to greet the petitioner on
her birthday and to send her cards during special occasions, as well as
his acts of blaming petitioner for his mother’s death and of representing
himself as single in his visa application, could only at best amount to
forgetfulness, insensitivity or emotional immaturity, not necessarily
psychological incapacity. Likewise, the respondent’s act of living with
another woman four years into the marriage cannot automatically be
equated with a psychological disorder, especially when no specific
evidence was shown that promiscuity was a trait already existing at the
inception of marriage. In fact, petitioner herself admitted that respondent
was caring and faithful when they were going steady and for a time after
their marriage; their problems only came in later.
To be sure, the respondent was far from perfect and had some character
flaws. The presence of these imperfections, however, does not
necessarily warrant a conclusion that he had a psychological malady at
the time of the marriage that rendered him incapable of fulfilling his duties
and obligations. To use the words of Navales v. Navales:35
Article 36 contemplates downright incapacity or inability to take
cognizance of and to assume basic marital obligations. Mere "difficulty,"
"refusal" or "neglect" in the performance of marital obligations or "ill will"
on the part of the spouse is different from "incapacity" rooted on some
debilitating psychological condition or illness. Indeed, irreconcilable
differences, sexual infidelity or perversion, emotional immaturity and
irresponsibility, and the like, do not by themselves warrant a finding of
psychological incapacity under Article 36, as the same may only be due
to a person's refusal or unwillingness to assume the essential obligations
of marriage and not due to some psychological illness that is
contemplated by said rule.
b. Dr. Tayag’s psychological report and court testimony
We cannot help but note that Dr. Tayag’s conclusions about the
respondent’s psychological incapacity were based on the information fed
to her by only one side – the petitioner – whose bias in favor of her cause
cannot be doubted. While this circumstance alone does not disqualify the
psychologist for reasons of bias, her report, testimony and conclusions
deserve the application of a more rigid and stringent set of standards in
the manner we discussed above.36 For, effectively, Dr. Tayag only
diagnosed the respondent from the prism of a third party account; she did
not actually hear, see and evaluate the respondent and how he would
have reacted and responded to the doctor’s probes.
Dr. Tayag, in her report, merely summarized the petitioner’s narrations,
and on this basis characterized the respondent to be a self-centered,
egocentric, and unremorseful person who "believes that the world
revolves around him"; and who "used love as a…deceptive tactic for
exploiting the confidence [petitioner] extended towards him." Dr. Tayag
then incorporated her own idea of "love"; made a generalization that
respondent was a person who "lacked commitment, faithfulness, and
remorse," and who engaged "in promiscuous acts that made the
petitioner look like a fool"; and finally concluded that the respondent’s
character traits reveal "him to suffer Narcissistic Personality Disorder with
traces of Antisocial Personality Disorder declared to be grave and
incurable."
We find these observations and conclusions insufficiently in-depth and
comprehensive to warrant the conclusion that a psychological incapacity
existed that prevented the respondent from complying with the essential
obligations of marriage. It failed to identify the root cause of the
respondent's narcissistic personality disorder and to prove that it existed
at the inception of the marriage. Neither did it explain the incapacitating
nature of the alleged disorder, nor show that the respondent was really
incapable of fulfilling his duties due to some incapacity of a psychological,
not physical, nature. Thus, we cannot avoid but conclude that Dr. Tayag’s
conclusion in her Report – i.e., that the respondent suffered "Narcissistic
Personality Disorder with traces of Antisocial Personality Disorder
declared to be grave and incurable" – is an unfounded statement, not a
necessary inference from her previous characterization and portrayal of
the respondent. While the various tests administered on the petitioner
could have been used as a fair gauge to assess her own psychological
condition, this same statement cannot be made with respect to the
respondent’s condition. To make conclusions and generalizations on the
respondent’s psychological condition based on the information fed by
only one side is, to our mind, not different from admitting hearsay
evidence as proof of the truthfulness of the content of such evidence.
Petitioner nonetheless contends that Dr. Tayag’s subsequent testimony
in court cured whatever deficiencies attended her psychological report.
We do not share this view.
A careful reading of Dr. Tayag’s testimony reveals that she failed to
establish the fact that at the time the parties were married, respondent
was already suffering from a psychological defect that deprived him of
the ability to assume the essential duties and responsibilities of marriage.
Neither did she adequately explain how she came to the conclusion that
respondent’s condition was grave and incurable. To directly quote from
the records:
ATTY. RICHARD TABAGO:
Q: I would like to call your attention to the Report already marked as Exh.
"E-7", there is a statement to the effect that his character traits begin to
suffer narcissistic personality disorder with traces of antisocial personality
disorder. What do you mean? Can you please explain in layman’s word,
Madam Witness?
DR. NEDY LORENZO TAYAG:
A: Actually, in a layman’s term, narcissistic personality disorder cannot
accept that there is something wrong with his own behavioral
manifestation. [sic] They feel that they can rule the world; they are
eccentric; they are exemplary, demanding financial and emotional
support, and this is clearly manifested by the fact that respondent abused
and used petitioner’s love. Along the line, a narcissistic person cannot
give empathy; cannot give love simply because they love themselves
more than anybody else; and thirdly, narcissistic person cannot support
his own personal need and gratification without the help of others and
this is where the petitioner set in.
Q: Can you please describe the personal [sic] disorder?
A: Clinically, considering that label, the respondent behavioral
manifestation under personality disorder [sic] this is already considered
grave, serious, and treatment will be impossible [sic]. As I say this, a kind
of developmental disorder wherein it all started during the early formative
years and brought about by one familiar relationship the way he was
reared and cared by the family. Environmental exposure is also part and
parcel of the child disorder. [sic]
Q: You mean to say, from the formative [years] up to the present?
A: Actually, the respondent behavioral manner was [present] long before
he entered marriage. [Un]fortunately, on the part of the petitioner, she
never realized that such behavioral manifestation of the respondent
connotes pathology. [sic]
xxxx
Q: So in the representation of the petitioner that the respondent is now
lying [sic] with somebody else, how will you describe the character of this
respondent who is living with somebody else?
A: This is where the antisocial personality trait of the respondent [sic]
because an antisocial person is one who indulge in philandering
activities, who do not have any feeling of guilt at the expense of another
person, and this [is] again a buy-product of deep seated psychological
incapacity.
Q: And this psychological incapacity based on this particular deep seated
[sic], how would you describe the psychological incapacity? [sic]
A: As I said there is a deep seated psychological dilemma, so I would say
incurable in nature and at this time and again [sic] the psychological
pathology of the respondent. One plays a major factor of not being able
to give meaning to a relationship in terms of sincerity and endurance.
Q: And if this psychological disorder exists before the marriage of the
respondent and the petitioner, Madam Witness?
A: Clinically, any disorder are usually rooted from the early formative
years and so if it takes enough that such psychological incapacity of
respondent already existed long before he entered marriage, because if
you analyze how he was reared by her parents particularly by the mother,
there is already an unhealthy symbiosis developed between the two, and
this creates a major emotional havoc when he reached adult age.
Q: How about the gravity?
A: This is already grave simply because from the very start respondent
never had an inkling that his behavioral manifestation connotes pathology
and second ground [sic], respondent will never admit again that such
behavior of his connotes again pathology simply because the disorder of
the respondent is not detrimental to himself but, more often than not, it is
detrimental to other party involved.
xxxx
PROSECUTOR MELVIN TIONGSON:
Q: You were not able to personally examine the respondent here?
DR. NEDY TAYAG:
A: Efforts were made by the psychologist but unfortunately, the
respondent never appeared at my clinic.
Q: On the basis of those examinations conducted with the petitioning wife
to annul their marriage with her husband in general, what can you say
about the respondent?
A: That from the very start respondent has no emotional intent to give
meaning to their relationship. If you analyze their marital relationship they
never lived under one room. From the very start of the [marriage], the
respondent to have petitioner to engage in secret marriage until that time
their family knew of their marriage [sic]. Respondent completely refused,
completely relinquished his marital obligation to the petitioner.
xxxx
COURT:
Q: Because you have interviewed or you have questioned the petitioner,
can you really enumerate the specific traits of the respondent?
DR. NEDY TAYAG:
A: One is the happy-go-lucky attitude of the respondent and the
dependent attitude of the respondent.
Q: Even if he is already eligible for employment?
A: He remains to be at the mercy of his mother. He is a happy-go-lucky
simply because he never had a set of responsibility. I think that he
finished his education but he never had a stable job because he
completely relied on the support of his mother.
Q: You give a more thorough interview so I am asking you something
specific?
A: The happy-go-lucky attitude; the overly dependent attitude on the part
of the mother merely because respondent happened to be the only son. I
said that there is a unhealthy symbiosis relationship [sic] developed
between the son and the mother simply because the mother always
pampered completely, pampered to the point that respondent failed to
develop his own sense of assertion or responsibility particularly during
that stage and there is also presence of the simple lying act particularly
his responsibility in terms of handling emotional imbalance and it is
clearly manifested by the fact that respondent refused to build a home
together with the petitioner when in fact they are legally married. Thirdly,
respondent never felt or completely ignored the feelings of the petitioner;
he never felt guilty hurting the petitioner because on the part of the
petitioner, knowing that respondent indulge with another woman it is very,
very traumatic on her part yet respondent never had the guts to feel guilty
or to atone said act he committed in their relationship, and clinically this
falls under antisocial personality. 37
In terms of incurability, Dr. Tayag’s answer was very vague and
inconclusive, thus:
xxxx
ATTY. RICHARD TABAGO
Q: Can this personally be cured, madam witness?
DR. NEDY TAYAG
A: Clinically, if persons suffering from personality disorder curable, up to
this very moment, no scientific could be upheld to alleviate their kind of
personality disorder; Secondly, again respondent or other person
suffering from any kind of disorder particularly narcissistic personality will
never admit that they are suffering from this kind of disorder, and then
again curability will always be a question. [sic] 38
This testimony shows that while Dr. Tayag initially described the general
characteristics of a person suffering from a narcissistic personality
disorder, she did not really show how and to what extent the respondent
exhibited these traits. She mentioned the buzz words that jurisprudence
requires for the nullity of a marriage – namely, gravity, incurability,
existence at the time of the marriage, psychological incapacity relating to
marriage – and in her own limited way, related these to the medical
condition she generally described. The testimony, together with her
report, however, suffers from very basic flaws.
First, what she medically described was not related or linked to
the respondent’s exact condition except in a very general way. In
short, her testimony and report were rich in generalities but
disastrously short on particulars, most notably on how the
respondent can be said to be suffering from narcissistic
personality disorder; why and to what extent the disorder is grave
and incurable; how and why it was already present at the time of
the marriage; and the effects of the disorder on the respondent’s
awareness of and his capability to undertake the duties and
responsibilities of marriage. All these are critical to the success of
the petitioner’s case.
Second, her testimony was short on factual basis for her
diagnosis because it was wholly based on what the petitioner
related to her. As the doctor admitted to the prosecutor, she did
not at all examine the respondent, only the petitioner. Neither the
law nor jurisprudence requires, of course, that the person sought
to be declared psychologically incapacitated should be personally
examined by a physician or psychologist as a condition sine qua
non to arrive at such declaration.39 If a psychological disorder can
be proven by independent means, no reason exists why such
independent proof cannot be admitted and given credit. 40 No such
independent evidence, however, appears on record to have been
gathered in this case, particularly about the respondent’s early life
and associations, and about events on or about the time of the
marriage and immediately thereafter. Thus, the testimony and
report appear to us to be no more than a diagnosis that revolves
around the one-sided and meager facts that the petitioner related,
and were all slanted to support the conclusion that a ground
exists to justify the nullification of the marriage. We say this
because only the baser qualities of the respondent’s life were
examined and given focus; none of these qualities were weighed
and balanced with the better qualities, such as his focus on
having a job, his determination to improve himself through
studies, his care and attention in the first six months of the
marriage, among others. The evidence fails to mention also what
character and qualities the petitioner brought into her marriage,
for example, why the respondent’s family opposed the marriage
and what events led the respondent to blame the petitioner for the
death of his mother, if this allegation is at all correct. To be sure,
these are important because not a few marriages have failed, not
because of psychological incapacity of either or both of the
spouses, but because of basic incompatibilities and marital
developments that do not amount to psychological incapacity.
The continued separation of the spouses likewise never appeared
to have been factored in. Not a few married couples have likewise
permanently separated simply because they have "fallen out of
love," or have outgrown the attraction that drew them together in
their younger years.
Thus, on the whole, we do not blame the petitioner for the move to
secure a remand of this case to the trial courts for the introduction of
additional evidence; the petitioner’s evidence in its present state is
woefully insufficient to support the conclusion that the petitioner’s
marriage to the respondent should be nullified on the ground of the
respondent’s psychological incapacity.
The Court commiserates with the petitioner’s marital predicament. The
respondent may indeed be unwilling to discharge his marital obligations,
particularly the obligation to live with one’s spouse. Nonetheless, we
cannot presume psychological defect from the mere fact that respondent
refuses to comply with his marital duties. As we ruled in Molina, it is not
enough to prove that a spouse failed to meet his responsibility and duty
as a married person; it is essential that he must be shown to be
incapable of doing so due to some psychological illness. The
psychological illness that must afflict a party at the inception of the
marriage should be a malady so grave and permanent as to deprive the
party of his or her awareness of the duties and responsibilities of the
matrimonial bond he or she was then about to assume.41
WHEREFORE, in view of these considerations, we DENY the petition
and AFFIRM the decision and resolution of the Court of Appeals dated
June 25, 2004 and January 18, 2005, respectively, in CA-G.R. CV No.
75095.
SO ORDERED.
ARTURO D. BRION
Associate Justice
G.R. No. 162518 August 19, 2009
RODRIGO SUMIRAN, Petitioner,
vs.
SPOUSES GENEROSO DAMASO and EVA DAMASO Respondents.
DECISION
PERALTA, J.:
This resolves the Petition for Review on Certiorari under Rule 45 of the
Rules of Court, praying that the Decision1 of the Court of Appeals (CA) in
CA-G.R. SP No. 80267, dated December 22, 2003, and the
Resolution2 dated February 20, 2004, denying petitioner's motion for
reconsideration, be reversed and set aside.
The antecedent facts are as follows.
Petitioner filed a complaint for sum of money and damages with prayer
for preliminary attachment (Civil Case No. 93-2588) against respondents
before the Regional Trial Court (RTC) of Antipolo City, Branch 73.
Petitioner is also the private complainant in Criminal Case Nos. 92-8157
and 92-8158 for violation of Batas Pambansa Blg. 22 with respondent
Generoso Damaso as accused. Upon motion of respondents, said civil
and criminal cases were consolidated and jointly tried.
On February 21, 2003, the RTC promulgated its Decision3 dated January
16, 2003, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, accused GENEROSO DAMASO is
hereby ACQUITTED in Criminal Case Nos. 92-8157 and 92-8158 on
grounds of insufficiency of evidence.
As for Civil Case No. 93-2588, in the interest justice and equity, judgment
is hereby rendered against the plaintiff Rodrigo Sumiran and in favor of
the defendants Damaso. The plaintiff is further ordered to pay to the
defendants the following:
a. ₱50,000.00 as moral damages
b. ₱20,000.00 as exemplary damages, and
c. the cost of suit.
SO ORDERED.4
On March 6, 2003, petitioner filed a motion for reconsideration dated
Match 4, 2003, stating that he received a duplicate original copy of the
decision on February 21, 2003. Respondents opposed said motion. On
May 9, 2003, the RTC issued an Order denying petitioner’s motion for
reconsideration. Thereafter, on May 29, 2003, petitioner filed a Notice of
Appeal dated May 28, 2003, stating instead that he received a copy of
the decision dated January 16, 2003 only on March 8, 2003 and of the
Order dated May 9, 2003 denying his motion for reconsideration on May
19, 2003.
On June 2, 2003, the RTC issued an Order denying due course to the
notice of appeal for having been filed out of time, emphasizing that the
decision was promulgated on February 21, 2003 in the presence of both
parties and their counsels. Considering counsel for petitioner to have
received a copy of the decision on said date of promulgation, the RTC
ruled that since petitioner had filed a motion for reconsideration on the
13th day (March 6, 2003), he had belatedly filed the notice of appeal
when he filed it ten (10) days after allegedly receiving the Order of May 9,
2003 on May 19, 2003. A motion for reconsideration was filed by
petitioner on June 20, 2003, but the same was denied by the RTC on
October 1, 2003.
Petitioner then filed a petition for certiorari with the CA. However, the CA
found the petition unmeritorious and dismissed the same in its Decision
dated December 22, 2003. Ruling that petitioner was bound by his
judicial admission that he received the Decision of the RTC when it was
promulgated on February 21, 2003, the CA held that petitioner’s period
within which to file an appeal had lapsed by the time the Notice of Appeal
was filed on May 29, 2003. Petitioner’s motion for reconsideration of the
CA Decision was denied per Resolution dated February 20, 2004.
Hence, this petition where it is alleged that the CA erred in ruling that
petitioner’s period to appeal had lapsed, as such ruling was premised on
misapprehension of facts and contradicted by evidence on record. The
CA also allegedly failed to state in its decision and resolution the
particular evidence upon which the same was based; and there were
supposedly some facts that, if properly noticed and considered, would
justify a different conclusion.
The petition deserves some consideration.
As early as 2005, the Court categorically declared in Neypes v. Court of
Appeals5 that by virtue of the power of the Supreme Court to amend,
repeal and create new procedural rules in all courts, the Court is allowing
a fresh period of 15 days within which to file a notice of appeal in the
RTC, counted from receipt of the order dismissing or denying a motion for
new trial or motion for reconsideration. This would standardize the appeal
periods provided in the Rules and do away with the confusion as to when
the 15-day appeal period should be counted. Thus, the Court stated:
To recapitulate, a party-litigant may either file his notice of appeal within
15 days from receipt of the Regional Trial Court’s decision or file it within
15 days from receipt of the order (the "final order") denying his motion for
new trial or motion for reconsideration. Obviously, the new 15-day period
may be availed of only if either motion is filed; otherwise, the decision
becomes final and executory after the lapse of the original appeal period
provided in Rule 41, Section 3.6
The foregoing ruling of the Court was reiterated in Makati Insurance Co.,
Inc. v. Reyes,7 to wit:
Propitious to petitioner is Neypes v. Court of Appeals, promulgated on 14
September 2005 while the present Petition was already pending before
us. x x x
xxxx
With the advent of the "fresh period rule," parties who availed themselves
of the remedy of motion for reconsideration are now allowed to file a
notice of appeal within fifteen days from the denial of that motion.
The "fresh period rule" is not inconsistent with Rule 41, Section 3 of the
Revised Rules of Court which states that the appeal shall be taken
"within fifteen (15) days from notice of judgment or final order appealed
from." The use of the disjunctive word "or" signifies disassociation and
independence of one thing from another. It should, as a rule, be
construed in the sense which it ordinarily implies. Hence, the use of "or"
in the above provision supposes that the notice of appeal may be filed
within 15 days from the notice of judgment or within 15 days from notice
of the "final order," x x x.
xxxx
The "fresh period rule" finally eradicates the confusion as to when the 15-
day appeal period should be counted – from receipt of notice of judgment
or from receipt of notice of "final order" appealed from.
Taking our bearings from Neypes, in Sumaway v. Urban Bank, Inc., we
set aside the denial of a notice of appeal which was purportedly filed five
days late. With the fresh period rule, the 15-day period within which to file
the notice of appeal was counted from notice of the denial of the therein
petitioner’s motion for reconsideration. 1avvphi1
We followed suit in Elbiña v. Ceniza, wherein we applied the principle
granting a fresh period of 15 days within which to file the notice of appeal,
counted from receipt of the order dismissing a motion for new trial or
motion for reconsideration or any final order or resolution.
Thereafter, in First Aqua Sugar Traders, Inc. v. Bank of the Philippine
Islands, we held that a party-litigant may now file his notice of appeal
either within fifteen days from receipt of the original decision or within
fifteen days from the receipt of the order denying the motion for
reconsideration.
In De los Santos v. Vda. de Mangubat, we applied the same principle of
"fresh period rule," expostulating that procedural law refers to the
adjective law which prescribes rules and forms of procedure in order that
courts may be able to administer justice. Procedural laws do not come
within the legal conception of a retroactive law, or the general rule
against the retroactive operation of statutes. The "fresh period rule" is
irrefragably procedural, prescribing the manner in which the appropriate
period for appeal is to be computed or determined and, therefore, can be
made applicable to actions pending upon its effectivity, such as the
present case, without danger of violating anyone else’s rights. (Emphasis
supplied)
The retroactivity of the Neypes rule in cases where the period for appeal
had lapsed prior to the date of promulgation of Neypes on September 14,
2005, was clearly explained by the Court in Fil-Estate Properties, Inc. v.
Homena-Valencia,8 stating thus:
The determinative issue is whether the "fresh period" rule announced in
Neypes could retroactively apply in cases where the period for appeal
had lapsed prior to 14 September 2005 when Neypes was promulgated.
That question may be answered with the guidance of the general rule
that procedural laws may be given retroactive effect to actions pending
and undetermined at the time of their passage, there being no vested
rights in the rules of procedure. Amendments to procedural rules are
procedural or remedial in character as they do not create new or remove
vested rights, but only operate in furtherance of the remedy or
confirmation of rights already existing.
Sps. De los Santos reaffirms these principles and categorically warrants
that Neypes bears the quested retroactive effect, to wit:
Procedural law refers to the adjective law which prescribes rules and
forms of procedure in order that courts may be able to administer
justice.http://www.supremecourt.gov.ph/jurisprudence/2007/october2007/
149508.htm - _ftn Procedural laws do not come within the legal
conception of a retroactive law, or the gener al rule against the retroactive
operation of statues ― they may be given retroactive effect on actions pending and
undetermined at the time of their passage and this will not violate any right of a
person who may feel that he is adversely affected, insomuch as there are no vested
rights in rules of
procedure.http://www.supremecourt.gov.ph/jurisprudence/2007/october2007/149
508.htm - _ftn
the Order denying his motion for reconsideration, his period to appeal
had not yet lapsed.
IN VIEW OF THE FOREGOING, the petition is GRANTED. The Decision
of the Court of Appeals in CA-G.R. SP No. 80267, dated December 22,
2003, and the Resolution dated February 20, 2004, are hereby
REVERSED and SET ASIDE. The Order of the Regional Trial Court of
Antipolo City, Branch 73, dated June 2, 2003 in Civil Case No. 93-2588,
and its Order dated October 1, 2003, reiterating the June 2, 2003 Order,
are hereby declared NULL and VOID. The Regional Trial Court of
Antipolo City, Branch 73, is DIRECTED to give due course to petitioner’s
Notice of Appeal dated May 28, 2003. No costs.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice

The "fresh period rule" is a procedural law as it prescribes a fresh period

of 15 days within which an appeal may be made in the event that the
motion for reconsideration is denied by the lower court. Following the rule
on retroactivity of procedural laws, the "fresh period rule" should be
applied to pending actions, such as the present case.

Also, to deny herein petitioners the benefit of the "fresh period rule" will
amount to injustice, if not absurdity, since the subject notice of judgment
and final order were issued two years later or in the year 2000, as
compared to the notice of judgment and final order in Neypes which were
issued in 1998. It will be incongruous and illogical that parties receiving
notices of judgment and final orders issued in the year 1998 will enjoy the
benefit of the "fresh period rule" while those later rulings of the lower
courts such as in the instant case, will not. 9

Since this case was already pending in this Court at the time of
promulgation of Neypes, then, ineluctably, the Court must also apply the
foregoing rulings to the present case. Petitioner is entitled to a "fresh
period" of 15 days − counted from May 19, 2003, the date of petitioner’s
receipt of the Order denying his motion for reconsideration of the RTC
Decision − within which to file his notice of appeal. Therefore, when he
filed said notice on May 29, 2003, or only ten (10) days after receipt of
G.R. No. 136368 January 16, 2002
JAIME TAN, JR., as Judicial Administrator of the Intestate Estate of
Jaime C. Tan, petitioner,
vs.
HON. COURT OF APPEALS (Ninth Special Div.) and JOSE A.
MAGDANGAL and ESTRELLA MAGDANGAL, respondents.
PUNO, J.:
This is a petition for review of the Decision of the Court of Appeals dated
July 15, 19981 and its Resolution dated November 9, 19982 denying
petitioner's motion for reconsideration in CA-G.R. SP-41738.
The facts are as stated in the impugned Decision, viz:
"Involved in this case is a parcel of land, designated as Lot No.
645-C, with an area of 34,829 square meters, more or less,
situated in Bunawan, Davao City. The lot was once covered by
TCT No. T-72067 of the Registry of Deeds of Davao City in the
name of the late Jaime C. Tan (Tan, for short) married to
Praxedes V. Tan.
From the petition, the motion to dismiss petition, their respective
annexes and other pleadings, we gather the following factual
antecedents:
On January 22, 1981, Tan, for a consideration of P59,200.00,
executed a deed of absolute sale over the property in question in
favor of spouses Jose Magdangal and Estrella Magdangal.
Simultaneous with the execution of this deed, the same
contracting parties entered into another agreement whereunder
Tan given one (1) year within which to redeem or repurchase the
property.
Albeit given several opportunities and/or extensions to exercise
the option, Tan failed to redeem the property until his death on
January 4, 1988.
On May 2, 1988, Tan's heirs filed before the Regional Trial Court
at Davao City a suit against the Magdangals for reformation of
instrument. Docketed as CIVIL CASE NO. 19049-88, the
complaint alleged that, while Tan and the Magdangals
denominated their agreement as deed of absolute sale, their real
intention was to conclude an equitable mortgage.
Barely hours after the complaint was stamped 'received,' the
Magdangals were able to have Tan's title over the lot in question
canceled and to secure in their names TCT No. T-134470. This
development prompted the heirs of Tan, who were to be later
substituted by Jaime V. Tan, Jr. (Tan, Jr.) as plaintiff, to file a
supplemental complaint.
The intervening legal tussles are not essential to this narration.
What is material is that on June 4, 1991, Branch 11 of the
Regional Trial Court of Davao City rendered judgment finding for
Tan, Jr., as plaintiff therein. The dispositive portion of the decision
reads:.
'WHEREFORE, judgment is rendered:
1. The Deed of Absolute Sale (Exhibits B, B-1) is, in
accordance with the true intention of the parties, hereby
declared and reformed an equitable mortgage;
2. The plaintiff is ordered to pay the defendants within
120 days after the finality of this decision P59,200 plus
interest at the rate of 12% per annum from May 2, 1988,
the date the complaint was filed, until paid;
3. In order to avoid multiplicity of suits and to fully give
effect to the true intention of the parties, upon the
payment of the aforesaid amount, TCT No. T-134470 in
the name of defendants Jose Magdangal and Estrella
Magdangal (Exh. 13) and shall be deemed canceled and
null and void and TCT No. T-72067 in the name of Jaime
C. Tan and Praxedes Valles Tan (Exh. A) be reinstated).
No pronouncement as to costs.
SO ORDERED. (Annex 'B', Petition; Emphasis added).'
From the above, the Magdangals appealed to this Court in CA-
G.R. CV No. 33657.
In a decision promulgated on September 28, 1995, this Court,
thru its then Special Third Division, affirmed in toto the appealed
decision of the lower court. Copy of this affirmatory judgment was
each received by the Magdangals and Tan, Jr. on October 5,
1995.
On March 13, 1996, the Clerk of this Court entered in the Book of
Entries of Judgment the Decision in CA-G.R. CV No. 33657 and
issued the corresponding Entry of Judgment which, on its face,
stated that the said Decision 'has on October 21, 1995 become
final and executory' (Annex 'L', Petition; Emphasis added).
On March 21, 1996, the Magdangals filed in the lower court a
MOTION FOR CONSOLIDATION AND WRIT OF POSSESSION,
therein alleging that they did not appeal from the aforesaid
decision of this Court, adding '[T]hat the appealed judgment of
the Court of Appeals has become final and executory 15 days
from October 5, 1995 or up to October 20, 1995, which the 120
days redemption period commences. And noting that the
redemption period has expired without Tan, Jr. exercising his
option, the Magdangals thus prayed that the title 'in the name of
Jaime C. Tan and Praxedes Tan be consolidated and confirmed
in the name of the (Magdangals) x x x and pending such
issuance, a writ of possession be ordered issued (Annex "C",
Petition).
1âwphi1.nêt
In opposition to this motion (Annex 'F', Petition), Tan, Jr. alleged,
among other things, that until an entry of judgment has been
issued by the Court of Appeals and copy thereof furnished the
parties, the appealed decision of the court a quo in this case
cannot be considered final and executory. Pressing the point,
Tan, Jr., citing Cueto vs. Collantes, infra., would then assert that
the period of redemption on his part commenced to run from
receipt of entry of judgment in CA-G.R. CV No. 33657.
Meanwhile, Tan, Jr. via a motion for execution dated March 27,
1996, which he filed directly with this court, prayed this court to
direct the court a quo to issue the corresponding writ of execution
in Civil Case No. 19049-88. In a related move, Tan, Jr. filed on
April 16, 1996, a MANIFESTATION AND MOTION therein
advising the court a quo of his intention to redeem the property in
question and of the fact that, on such date, he has deposited with
its clerk of court the repurchase price, plus interest, as required
by its original decision. By way of relief, Tan, Jr. prayed that the
Magdangals be ordered to claim the amount thus deposited and
the Register of Deeds of Davao City, to reinstate the title of Jaime
Tan and Praxedes Tan.
Jointly acting on the aforementioned MOTON FOR
CONSOLIDATION AND WRIT OF POSSESION of the
Magdangals (Annex 'C', Petition), MANIFESTATION AND
MOTION of Tan, Jr. (Annex 'I', Petition), the court a quo presided
by the respondent judge, came out with the first challenged order
of June 10, 1996 (Annex 'N', Petition) dispositively reading, as
follows:
'WHEREFORE, x x x the Motion for Consolidation and a
Writ of Possession is hereby DENIED for lack of merit.
The deposit of the amount of P116,032.00 made by
plaintiff with the Office of Court x x x on April 17, 1996 is
hereby considered full payment of the redemption price
and the Clerk of Court is hereby ordered to deliver said
amount to herein defendants.
The Register of Deeds of Davao City x x x is hereby
directed to cancel TCT No. T-134470 in the name of Jose
Magdangal and Estrella Magdangal and, thereafter, to
reinstate TCT No. 72067 in the name of Jaime C. Tan
and Praxedes Valles Tan and to submit her compliance
thereto within ten (10) days from receipt of this Order.
SO ORDERED.'
Explaining her action, the respondent judge wrote in the same
order:
'Following the ruling of the Supreme Court in Cueto vs.
Collantes, et al., 97 Phil. 325, the 120 days period for
plaintiff to pay the amount of P59,200.00 plus interest x x
x should be reckoned from the date of Entry of Judgment
x x x which was March 13, 1996. The plaintiff made a
deposit on April 17, 1996 well within the 120-day period
mandated by the decision of this Court.'
In due time, the Magdangals moved for a reconsideration.
However, in her next assailed order of July 24, 1996 (Annex 'R',
 Petition), the respondent judge denied the motion for being
proforma and fatally defective."3
Petitioner assails the aforequoted Decision as follows:
"I. Petitioner's right to due process was violated when the Court of
Appeals rendered a judgment on the merits of private
respondents' petition without granting to petitioner the opportunity
to controvert the same.
II. Appeal not certiorari was the appropriate remedy of private
respondents as there was no grave abuse of discretion as to
amount to lack of or excess of jurisdiction on the part of the trial
judge. Neither is delay in resolving the main case a ground for
giving due course to the petition.
III. Cueto vs. Collantes, 97 Phil. 325, was disregarded by the
Court of Appeals in resolving the petition of private respondents.
It is still good case law and was in effect made a part of section 2
of Rule 68 of the 1997 Rules of Civil Procedure on Foreclosure of
Mortgage.
IV. The St. Dominic vs. Intermediate Appellate Court, 138 SCRA
242 case is not applicable to the case at bar; on the other hand
the ruling in Gutierrez Hermanos vs. de La Riva, 46 Phil. 827,
applies.
V. Equity considerations justify giving due course to this
petition."4 (emphasis ours)
We will immediately resolve the key issue of what rule should govern the
finality of judgment favorably obtained in the trial court by the petitioner.
The operative facts show that in its Decision of June 4, 1991, the trial
court held that: (1) the contract between the parties is not an absolute
sale but an equitable mortgage; and (2) petitioner Tan should pay to the
respondents Magdangal "within 120 days after the finality of this decision
P59,200.00 plus interest at the rate of 12% per annum from May 2, 1988,
the date the complaint was filed, until paid." 5
On September 28, 1995 in CA-G.R. CV No. 33657, the Special Third
Division of the Court of Appeals affirmed the decision of the trial court in
toto. Both parties received the decision of the appellate court on October
5, 1995. On March 13, 1996, the clerk of court of the appellate court
entered in the Book of Entries of Judgement the decision in CA-G.R. CV
No. 33657 and issued the corresponding Entry of Judgment which, on its
face, stated that the said decision "has on October 21, 1995 become final
and executory."6
The respondents Magdangal filed in the trial court a Motion for
Consolidation and Writ of Possession.7 They alleged that the 120-day
period of redemption of the petitioner has expired. They reckoned that
the said period began 15 days after October 5, 1995, the date when the
finality of the judgment of the trial court as affirmed by the appellate court
commenced to run.
On the other hand, petitioner filed on March 27, 1996 a motion for
execution in the appellate court praying that it "direct the court a quo to
issue the corresponding writ of execution in Civil Case No. 19049-
88."8 On April 17, 1996, petitioner deposited with the clerk of court the
repurchase price of the lot plus interest as ordered by the decision.
On June 10, 1996, the trial court allowed the petitioner to redeem the lot
in question. It ruled that the 120-day redemption period should be
reckoned from the date of Entry of Judgment in the appellate court or
from March 13, 1996.9 The redemption price was deposited on April 17,
1996. As aforestated, the Court of Appeals set aside the ruling of the trial
court.
From 1991-1996, the years relevant to the case at bar, the rule that
governs finality of judgment is Rule 51 of the Revised Rules of Court. Its
sections 10 and 11 provide:
"SEC. 10. Entry of judgments and final resolutions. - If no appeal
or motion for new trial or reconsideration is filed within the time
provided in these Rules, the judgment or final resolution shall
forthwith be entered by the clerk in the book of entries of
judgments. The date when the judgment or final resolution
becomes executory shall be deemed as the date of its entry. The
record shall contain the dispositive part of the judgment or final
resolution and shall be signed by the clerk, with a certificate that
such judgment or final resolution has become final and executory.
(2a, R36)
SEC. 11. Execution of judgment. - Except where the judgment or
final order or resolution, or a portion thereof, is ordered to be
 immediately executory, the motion for its execution may only be
filed in the proper court after its entry.
In original actions in the Court of Appeals, its writ of execution
shall be accompanied by a certified true copy of the entry of
judgment or final resolution and addressed to any appropriate
officer for its enforcement.
In appealed cases, where the motion for execution pending
appeal is filed in the Court of Appeals at a time that it is in
possession of the original record or the record on appeal, the
resolution granting such motion shall be transmitted to the lower
court from which the case originated, together with a certified true
copy of the judgment or final order to be executed, with a
directive for such court of origin to issue the proper writ for its
enforcement."
This rule has been interpreted by this Court in Cueto vs. Collantes as
follows:10
"The only error assigned by appellants refer to the finding of the
lower court that plaintiff can still exercise his right of redemption
notwithstanding the expiration of the 90-day period fixed in the
original decision and, therefore, defendants should execute the
deed of reconveyance required in said decision. Appellants
contend that, the final judgment of the Court of Appeals having
been entered on July 8, 1953, the 90-day period for the exercise
of the right of redemption has long expired, it appearing that
plaintiff deposited the redemption money with the clerk of court
only on October 17, 1953, or, after the expiration of 101 days.
Appellee brands this computation as erroneous, or one not in
accordance with the procedure prescribed by the rules of court.
Appellee's contention should be sustained. The original decision
provides that appellee may exercise his right of redemption within
the period of 90 days from the date the judgment has become
final. It should be noted that appellee had appealed from this
decision. This decision was affirmed by the court of appeals and
final judgment was entered on July 8, 1953. Does this mean that
the judgment became final on that date?
Let us make a little digression for purposes of clarification. Once
a decision is rendered by the Court of Appeals a party may
appeal therefrom by certiorari by filing with the Supreme Court a
petition within 10 days from the date of entry of such decision
(Section 1, Rule 46). The entry of judgment is made after it has
become final, i.e., upon the expiration of 15 days after notice
thereof to the parties (Section 8, Rule 53, as modified by a
resolution of the Supreme Court dated October 1, 1945). But, as
Chief Justice Moran has said, 'such finality *** is subject to the
aggrieved party's right of filing a petition for certiorari under this
section,' which means that 'the Court of Appeals shall remand the
case to the lower court for the execution of its judgment, only
after the expiration of ten (10) days from the date of such
judgment, if no petition for certiorari is filed within that period.' (1
Moran, Comments on the Rules of Court, 1952 ed., p. 950) It
would therefore appear that the date of entry of judgment of the
Court of Appeals is suspended when a petition for review is filed
to await the final entry of the resolution or decision of the
Supreme Court.
Since in the present case appellee has filed a petition for review
within the reglementary period, which was dismissed by
resolution of July 6, 1953, and for lack of a motion for
reconsideration the entry of final judgment was made on
August 7, 1953, it follows that the 90-day period within which
appellee may exercise his right of redemption should be counted
from said date, August 7, 1953. And appellee having exercised
such right on October 17, 1953 by depositing the redemption
money with the clerk of court, it is likewise clear that the motion
be filed for the exercise of such right is well taken and is within
the purview of the decision of the lower court." 11
On April 18, 1994, this Court issued Circular No. 24-94, viz:
"TO: COURT OF APPEALS, SANDIGANBAYAN, COURT
OF TAX APPEALS, REGIONAL TRIAL COURTS,
METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL
COURTS, MUNICIPAL CIRCUIT TRIAL COURTS, AND
ALL MEMBERS OF THE INTEGRATED BAR OF THE
PHILIPPINES
SUBJECT: RESOLUTION OF THE COURT EN
BANC APPROVING AND PROMULGATING THE
REVISED PROVISION ON EXECUTION OF
JUDGMENTS. SPECIFICALLY IN APPEALED CASES,
 AND AMENDING SECTION 1, RULE 39 OF THE RULES
OF COURT
It appears that in a number of instances, the execution of
judgments in appealed cases cannot be promptly enforced
because of undue administrative delay in the remand of the
records to the court of origin, aggravated at times by
misplacement or misdelivery of said records. The Supreme Court
Committee on the Revision of the Rules of Court has drafted
proposals including a provision which can remedy the procedural
impasse created by said contingencies.
Accordingly, pending approval by the Court of the revised rules
on Civil Procedure, and to provide a solution to the aforestated
problems, the Court Resolved to approve and promulgate the
following section thereof on execution of judgments, amending
Section 1, Rule 39 of the Rules of Court:
Section 1. Execution upon judgments or final orders. - Execution
shall issue as a matter of right, on motion, upon a judgment or
order that disposes of the action or proceeding upon expiration of
the period to appeal therefrom if no appeal has been duly
perfected.
If the appeal has been duly perfected and finally resolved, such
execution may forthwith be applied for in the lower court from
which the action originated, on motion of the judgment obligee,
submitting therewith certified true copies of the judgment or
judgments or the final order or orders sought to be enforced and
of the entry thereof, with notice to the adverse party.
The appellate court may, on motion in the same case, when the
interest of justice so requires, direct the court of origin to issue the
writ of execution.
This resolution shall be published in two (2) newspapers of
general circulation and shall take effect on June 1, 1994.
April 18, 1994.
"(Sgd.) ANDRES R. NARVASA
Chief Justice"
The Circular took effect on June 1, 1994.
The 1997 Revised Rules of Civil Procedure, however, amended the rule
on finality of judgment by providing in section 1, Rule 39 as follows:
"Section 1. Execution upon judgments or final orders. - Execution
shall issue as a matter of right, on motion, upon a judgment or
order that disposes of the action or proceeding upon the
expiration of the period to appeal therefrom if no appeal has been
duly perfected. (1a)
If the appeal has been duly perfected and finally resolved, the
execution may forthwith be applied for in the court of origin, on
motion of the judgment obligee, submitting therewith certified true
copies of the judgment or judgments or final order or orders
sought to be enforced and of the entry thereof, with notice to the
adverse party.
The appellate court may, on motion in the same case, when the
interest of justice so requires, direct the court of origin to issue the
writ of execution."
The rationale of the new rule is explained by retired Justice F.D.
Regalado as follows:12
"1. The term 'final order' is used in two senses depending on
whether it is used on the issue of appealability or on the issue of
binding effect. For purposes of appeal, an order is "final" if it
disposes of the action, as distinguished from an interlocutory
order which leaves something to be done in the trial court with
respect to the merits of the case (De la Cruz, et al. vs. Paras, et
al., L-41053, Feb. 27, 1976). For purposes of binding effect or
whether it can be subject of execution, an order is 'final' or
executory after the lapse of the reglementary period to appeal
and no appeal has been perfected (see Perez, et al. vs. Zulueta,
L-10374, Sept. 30, 1959; cf. Denso [Phil.], Inc. vs. IAC, et al.,
G.R. No. 75000, Feb. 27, 1987; Montilla vs. CA, et al., L-47968,
May 9, 1988).
2. On the aspect of appealability, these revised Rules use the
adjective 'final' with respect to orders and resolutions, since to
terminate a case the trial courts issue orders while the appellate
courts and most of the quasi-judicial agencies issue resolutions.
Judgment are not so qualified since the use of the so-called
interlocutory judgments is not favored in this jurisdiction, while the
categorization of an order or a resolution for purposes of denoting
that it is appealable is to distinguish them from interlocutory
orders or resolutions. However, by force of extended usage the
phrase 'final and executory judgment' is sometimes used and
tolerated, although the use of 'executory' alone would suffice.
These observations also apply to the several and separate
judgments contemplated in Rule 36, or partial judgments which
totally dispose of a particular claim or severable part of the case,
subject to the power of the court to suspend or defer action on an
appeal from or further proceedings in such special judgment, or
as provided by Rule 35 on the matter of partial summary
judgments which are not considered as appealable (see Sec. 4,
Rule 35 and the explanation therein).
The second paragraph of this section is an innovation in response
to complaints over the delay caused by the former procedure in
obtaining a writ of execution of a judgment, which has already
been affirmed on appeal, with notice to the parties. As things then
stood, after the entry of judgment in the appellate court, the
prevailing party had to wait for the records of the case to be
remanded to the court of origin when and where he could then
move for the issuance of a writ of execution. The intervening time
could sometimes be substantial, especially if the court a quo is in
a remote province, and could also be availed of by the losing
party to delay or thwart actual execution.
On these considerations, the Supreme Court issued Circular No.
24-94, dated April 18, 1994, approving and promulgating in
advance this amended Section 1 of Rule 39 and declaring the
same effective as of June 1, 1994.
Under the present procedure, the prevailing party can secure
certified true copies of the judgment or final order of the appellate
court and the entry thereof, and submit the same to the court of
origin with and to justify his motion for a writ of execution, without
waiting for its receipt of the records from the appellate court. That
motion must be with notice to the adverse party, with a hearing
when the circumstances so require, to enable him to file any
objection thereto or bring to the attention of said court matters
which may have transpired during the pendency of the appeal
and which may have a bearing on the execution sought to
enforce the judgment.
The third paragraph of this section, likewise a new provision, is
due to the experience of the appellate courts wherein the trial
court, for reasons of its own or other unjustifiable circumstances,
unduly delays or unreasonably refuses to act on the motion for
execution or issue the writ therefor. On motion in the same case
while the records are still with the appellate court, or even after
the same have been remanded to the lower court, the appellate
court can direct the issuance of the writ of execution since such
act is merely in the enforcement of its judgment and which it has
the power to require."
It is evident that if we apply the old rule on finality of judgment, petitioner
redeemed the subject property within the 120-day period of redemption
reckoned from the appellate court's entry of judgment. The appellate
court, however, did not apply the old rule but the 1997 Revised Rules of
Civil Procedure. In fine, it applied the new rule retroactively and we hold
that given the facts of the case at bar this is an error.
There is no dispute that rules of procedure can be given retroactive
effect. This general rule, however, has well-delineated exceptions. We
quote author Agpalo:13
"9.17. Procedural laws.
Procedural laws are adjective laws which prescribe rules and
forms of procedure of enforcing rights or obtaining redress for
their invasion; they refer to rules of procedure by which courts
applying laws of all kinds can properly administer justice. They
include rules of pleadings, practice and evidence. As applied to
criminal law, they provide or regulate the steps by which one who
commits a crime is to be punished.
The general rule that statutes are prospective and not retroactive
does not ordinarily apply to procedural laws. It has been held that
"a retroactive law, in a legal sense, is one which takes away or
impairs vested rights acquired under laws, or creates a new
obligation and imposes a new duty, or attaches a new disability,
in respect of transactions or considerations already past. Hence,
remedial statutes or statutes relating to remedies or modes of
procedure, which do not create new or take away vested rights,
but only operate in furtherance of the remedy or confirmation of
rights already existing, do not come within the legal conception of
a retroactive law, or the general rule against the retroactive
operation of statutes." The general rule against giving statutes
retroactive operation whose effect is to impair the obligations of
contract or to disturb vested rights does not prevent the
application of statutes to proceedings pending at the time of their
enactment where they neither create new nor take away vested
rights. A new statute which deals with procedure only is
presumptively applicable to all actions - those which have
accrued or are pending.
Statutes regulating the procedure of the courts will be construed
as applicable to actions pending and undetermined at the time of
their passage. Procedural laws are retroactive in that sense and
to that extent. The fact that procedural statutes may somehow
affect the litigants' rights may not preclude their retroactive
application to pending actions. The retroactive application of
procedural laws is not violative of any right of a person who may
feel that he is adversely affected. Nor is the retroactive
application of procedural statutes constitutionally objectionable.
The reason is that as a general rule no vested right may attach to,
nor arise from, procedural laws. It has been held that "a person
has no vested right in any particular remedy, and a litigant cannot
insist on the application to the trial of his case, whether civil or
criminal, of any other than the existing rules of procedure."
Thus, the provision of Batas Bilang 129 in Section 39 thereof
prescribing that "no record on appeal shall be required to take an
appeal" is procedural in nature and should therefore be applied
retroactively to pending actions. Hence, the question as to
whether an appeal from an adverse judgment should be
dismissed for failure of appellant to file a record on appeal within
thirty days as required under the old rules, which question is
pending resolution at the time Batas Bilang 129 took effect,
became academic upon the effectivity of said law because the
law no longer requires the filing of a record on appeal and its
retroactive application removed the legal obstacle to giving due
course to the appeal. A statute which transfers the jurisdiction to
try certain cases from a court to a quasi-judicial tribunal is a
remedial statute that is applicable to claims that accrued before
its enactment but formulated and filed after it took effect, for it
does not create new nor take away vested rights. The court that
has jurisdiction over a claim at the time it accrued cannot validly
try the claim where at the time the claim is formulated and filed
the jurisdiction to try it has been transferred by law to a quasi-
judicial tribunal, for even actions pending in one court may be
validly taken away and transferred to another and no litigant can
acquire a vested right to be heard by one particular court.
9.18. Exceptions to the rule.
The rule that procedural laws are applicable to pending actions or
proceedings admits certain exceptions. The rule does not apply
where the statute itself expressly or by necessary implication
provides that pending actions are excepted from its operation, or
where to apply it to pending proceedings would impair vested
rights. Under appropriate circumstances, courts may deny the
retroactive application of procedural laws in the event that to do
so would not be feasible or would work injustice. Nor may
procedural laws be applied retroactively to pending actions if to
do so would involve intricate problems of due process or impair
the independence of the courts."
We hold that section 1, Rule 39 of the 1997 Revised Rules of Procedure
should not be given retroactive effect in this case as it would result in
great injustice to the petitioner. Undoubtedly, petitioner has the right to
redeem the subject lot and this right is a substantive right. Petitioner
followed the procedural rule then existing as well as the decisions of this
Court governing the reckoning date of the period of redemption when he
redeemed the subject lot. Unfortunately for petitioner, the rule was
changed by the 1997 Revised Rules of Procedure which if applied
retroactively would result in his losing the right to redeem the subject lot.
It is difficult to reconcile the retroactive application of this procedural rule
with the rule of fairness. Petitioner cannot be penalized with the loss of
the subject lot when he faithfully followed the laws and the rule on the
period of redemption when he made the redemption. The subject lot may
only be 34,829 square meters but as petitioner claims, "it is the only
property left behind by their father, a private law practitioner who was
felled by an assassin's bullet."14
Petitioner fought to recover this lot from 1988. To lose it because of a
change of procedure on the date of reckoning of the period of redemption
is inequitous. The manner of exercising the right cannot be changed and
the change applied retroactively if to do so will defeat the right of
redemption of the petitioner which is already vested.
IN VIEW WHEREOF, the decision of the Court of Appeals dated July 15,
1998 and its Resolution dated November 9, 1998 in CA-G.R. SP-41738
are annulled and set aside. The Orders dated June 10, 1996 and July 24,
1996 of the RTC of Davao City, 11th Judicial Region, Branch 11, in Civil
Case No. 19049-88 are reinstated. No costs.
SO ORDERED.
G.R. No. 188051 November 22, 2010
ASIA UNITED BANK, Petitioner,
vs.
GOODLAND COMPANY, INC., Respondent.
DECISION
NACHURA, J.:
Petitioner assails the February 16, 2009 Decision1 and the May 18, 2009
Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 103304,
annulling the August 23, 20073 and February 15, 20084 Orders of the
Regional Trial Court (RTC) of Makati City, Branch 150, which in turn
denied due course to respondent Goodland Company, Inc.’s
(GOODLAND) notice of appeal for invalid substitution of counsel.
The antecedents:
An Ex-Parte Application/Petition for the Issuance of Writ of
Possession5 was filed by Asia United Bank (AUB) over a 5,801-square-
meter lot located in Makati City and covered by Transfer Certificate of
Title (TCT) No. 223120 of the Registry of Deeds of Makati in AUB’s
name. The property was previously registered in the name of
GOODLAND under TCT No. 192674 (114645).
The petition alleged that, on February 20, 2000, GOODLAND executed a
Third Party Real Estate Mortgage on the property in favor of AUB to
secure the ₱202 million credit accommodation extended by the latter to
Radiomarine Network (Smartnet) Inc. (Radiomarine).
When Radiomarine defaulted in the payment of its obligation, AUB
instituted extrajudicial foreclosure proceedings against the real estate
mortgage. At the public auction sale held on December 4, 2006, AUB
was declared the highest bidder. On the same date, a Certificate of Sale
was issued in its name and registered with the Registry of Deeds of
Makati City.
With the expiration of the redemption period, AUB proceeded to execute
an Affidavit of Consolidation of Ownership, through its First Vice-
President, Florante del Mundo. AUB thereafter secured a Certificate
Authorizing Registration from the Bureau of Internal Revenue to facilitate
the transfer of the title.
On December 8, 2006, TCT No. 192674 (114645) was cancelled and, in
lieu thereof, TCT No. 223120 was issued in the name of AUB.
GOODLAND, through its counsel, Atty. Antonio Bautista (Atty. Bautista),
opposed the petition, denying that it executed the real estate mortgage.
GOODLAND further averred that the signature of the notary public
appearing on the deed was a forgery, and that no technical description of
the property supposedly mortgaged was indicated therein. Concluding
that AUB’s title was derived from the foreclosure of a fake mortgage,
GOODLAND prayed for the petition’s denial.6
On March 1, 2007, the RTC issued the writ of possession sought by AUB.
It ratiocinated that, as the purchaser of the property at the foreclosure
sale and as the new title holder thereof, AUB’s right of possession and
enjoyment of the same had become absolute. 7
GOODLAND, through its counsel on record, Atty. Bautista, filed a motion
for reconsideration8 and a supplemental motion for reconsideration, 9 but
both were denied in the Order10 dated April 25, 2007, which was received
by Atty. Bautista on June 15, 2007.11
Relentless, GOODLAND sought recourse with the CA by initially filing a
Notice of Appeal12 with the RTC, through a certain Atty. Lito Mondragon
(Atty. Mondragon) of the Mondragon & Montoya Law Offices. On August
23, 2007, the RTC issued an Order13 denying due course to
GOODLAND’s notice of appeal for being legally inutile due to Atty.
Mondragon’s failure to properly effect the substitution of former counsel
on record, Atty. Bautista. GOODLAND moved for reconsideration, but the
same was denied in the Order dated February 15, 2008. 14
GOODLAND elevated the incident to the CA by way of a special civil
acton for certiorari. In its February 16, 2009 Decision, the CA granted the
petition and directed the RTC to give due course to the notice of appeal,
thus:
WHEREFORE, the petition is hereby GRANTED. The assailed Orders
dated August 23, 2007 and February 15, 2008 of the Regional Trial
Court, Branch 150, Makati City are ANNULLED and SET ASIDE. The trial
court is DIRECTED to give due course to petitioner’s Notice of Appeal.
SO ORDERED.15
Aggrieved, AUB moved for reconsideration, but the CA denied the motion
in its Resolution dated May 18, 2009. Hence, the present petition for
review on certiorari,16 praying for the reinstatement of the RTC Order.
The petition is meritorious.
Under Rule 138, Section 26 of the Rules of Court, for a substitution of
attorney to be effectual, the following essential requisites must concur:
(1) there must be a written application for substitution; (2) it must be filed
with the written consent of the client; (3) it must be with the written
consent of the attorney substituted; and (4) in case the consent of the
attorney to be substituted cannot be obtained, there must at least be
proof of notice that the motion for substitution was served on him in the
manner prescribed by the Rules of Court. 17
The courts a quo were uniform and correct in finding that Atty.
Mondragon failed to observe the prescribed procedure and, thus, no valid
substitution of counsel was actualized. However, they took divergent
postures as to the repercussion of such non-compliance, thereby igniting
the herein controversy.
The RTC strictly imposed the rule on substitution of counsel and held that
the notice of appeal filed by Atty. Mondragon was a mere scrap of paper.
However, relying on our pronouncement in Land Bank of the Philippines
v. Pamintuan Development Co.,18 the CA brushed aside the procedural
lapse and took a liberal stance on considerations of substantial justice,
viz.:
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. Thus, substantial justice would be better served by
giving due course to petitioner’s notice of appeal. 19
AUB argues that the liberality applied by the Court in Land Bank is
incompatible with the herein controversy, and that Pioneer Insurance and
Surety Corporation v. De Dios Transportation Co., Inc., 20 which espouses
the same view adopted by the RTC, is more appropriate.
GOODLAND, on the other hand, insists that the CA committed no
reversible error in ordering that the notice of appeal be allowed in order
not to frustrate the ends of substantial justice.
We agree with AUB. A revisit of our pronouncements in Land Bank and
Pioneer is in order.
In Land Bank, we held that the Department of Agrarian Reform
Adjudication Board gravely abused its discretion when it denied due
course to the Notice of Appeal and Notice of Entry of Appearance filed by
petitioner’s new counsel for failure to effect a valid substitution of the
former counsel on record.
We clarified that the new counsel never intended to replace the counsel
of record because, although not so specified in the notice, they entered
their appearance as collaborating counsel. Absent a formal notice of
substitution, all lawyers who appear before the court or file pleadings in
behalf of a client are considered counsel of the latter. We pursued a
liberal application of the rule in order not to frustrate the just, speedy, and
inexpensive determination of the controversy.
In Pioneer, we adopted a strict posture and declared the notice of
withdrawal of appeal filed by appellant’s new counsel as a mere scrap of
lawphi1
paper for his failure to file beforehand a motion for the substitution of the
counsel on record.
Provoking such deportment was the absence of a special power of
attorney authorizing the withdrawal of the appeal in addition to the lack of
a proper substitution of counsel. More importantly, we found that the
withdrawal of the appeal was calculated to frustrate the satisfaction of the
judgment debt rendered against appellant, thereby necessitating a rigid
application of the rules in order to deter appellant from benefiting from its
own deleterious manipulation thereof.
The emerging trend of jurisprudence is more inclined to the liberal and
flexible application of the Rules of Court. However, we have not been
remiss in reminding the bench and the bar that zealous compliance with
the rules is still the general course of action. Rules of procedure are in
place to ensure the orderly, just, and speedy dispensation of cases; 21 to
this end, inflexibility or liberality must be weighed. The relaxation or
suspension of procedural rules or the exemption of a case from their
operation is warranted only by compelling reasons or when the purpose
of justice requires it.22
As early as 1998, in Hon. Fortich v. Hon. Corona, 23 we expounded on
these guiding principles:
Procedural rules, we must stress, should be treated with utmost respect
and due regard since they are designed to facilitate the adjudication of
cases to remedy the worsening problem of delay in the resolution of rival
claims and in the administration of justice. The requirement is in
pursuance to the bill of rights inscribed in the Constitution which
guarantees that "all persons shall have a right to the speedy disposition
of their cases before all judicial, quasi-judicial and administrative bodies."
The adjudicatory bodies and the parties to a case are thus enjoined to
abide strictly by the rules. While it is true that a litigation is not a game of
technicalities, it is equally true that every case must be prosecuted in
accordance with the prescribed procedure to ensure an orderly and
speedy administration of justice. There have been some instances
wherein this Court allowed a relaxation in the application of the rules, but
this flexibility was "never intended to forge a bastion for erring litigants to
violate the rules with impunity." A liberal interpretation and application of
the rules of procedure can be resorted to only in proper cases and under
justifiable causes and circumstances.
In Sebastian v. Hon. Morales,24 we straightened out the misconception
that the enforcement of procedural rules should never be permitted if it
would prejudice the substantive rights of litigants:
Under Rule 1, Section 6 of the 1997 Rules of Civil Procedure, liberal
construction of the rules is the controlling principle to effect substantial
justice. Thus, litigations should, as much as possible, be decided on their
merits and not on technicalities. This does not mean, however, that
procedural rules are to be ignored or disdained at will to suit the
convenience of a party. Procedural law has its own rationale in the
orderly administration of justice, namely, to ensure the effective
enforcement of substantive rights by providing for a system that obviates
arbitrariness, caprice, despotism, or whimsicality in the settlement of
disputes. Hence, it is a mistake to suppose that substantive law and
procedural law are contradictory to each other, or as often suggested,
that enforcement of procedural rules should never be permitted if it would
result in prejudice to the substantive rights of the litigants.
x x x. Hence, rules of procedure must be faithfully followed except only
when for persuasive reasons, they may be relaxed to relieve a litigant of
an injustice not commensurate with his failure to comply with the
prescribed procedure. x x x.
Indeed, the primordial policy is a faithful observance of the Rules of
Court, and their relaxation or suspension should only be for persuasive
reasons and only in meritorious cases, to relieve a litigant of an injustice
not commensurate with the degree of his thoughtlessness in not
complying with the procedure prescribed.25 Further, a bare invocation of
"the interest of substantial justice" will not suffice to override a stringent
implementation of the rules.26
A reading of the CA’s Decision readily shows that the leniency it granted
GOODLAND was merely anchored on substantial justice. The CA
overlooked GOODLAND’s failure to advance meritorious reasons to
support its plea for the relaxation of Rule 138, Section 26. The fact that
GOODLAND stands to lose a valuable property is inadequate to
dispense with the exacting imposition of a rather basic rule.
More importantly, the CA failed to realize that the ultimate consequences
that will come about should GOODLAND’s appeal proceed would in fact
contravene substantial justice. The CA and, eventually, this Court will just
re-litigate an otherwise non-litigious matter and thereby compound the
delay GOODLAND attempts to perpetrate in order to prevent AUB from
rightfully taking possession of the property.
It is a time-honored legal precept that after the consolidation of titles in
the buyer's name, for failure of the mortgagor to redeem, entitlement to a
writ of possession becomes a matter of right.27 As the confirmed owner,
the purchaser’s right to possession becomes absolute. 28 There is even no
need for him to post a bond,29 and it is the ministerial duty of the courts to
issue the same upon proper application and proof of title. 30 To accentuate
the writ’s ministerial character, the Court has consistently disallowed
injunction to prohibit its issuance despite a pending action for annulment
of mortgage or the foreclosure itself. 31
The nature of an ex parte petition for issuance of the possessory writ
under Act No. 3135 has been described as a non-litigious proceeding
and summary in nature.32 As an ex parte proceeding, it is brought for the
benefit of one party only, and without notice to or consent by any person
adversely interested.33
Subsequent proceedings in the appellate courts would merely involve a
reiteration of the foregoing settled doctrines. The issue involved in the
assailed RTC issuances is conclusively determined by the above cited
legal dictum, and it would be unnecessarily vexatious and unjust to allow
the present controversy to undergo protracted litigation.
AUB’s right of possession is founded on its right of ownership over the
property which it purchased at the auction sale. Upon expiration of the
redemption period and consolidation of the title to the property, its
possessory rights over the same became absolute. We quote with
approval the pronouncement of the RTC, viz.:
As the purchaser of the property in the foreclosure sale to which new title
has already been issued, petitioner’s right over the property has become
absolute, vesting upon it the right of possession and enjoyment of the
property which this Court must aid in effecting its delivery. Under the
circumstances, and following established doctrine, the issuance of a writ
of possession is a ministerial function whereby the court exercises neither
discretion nor judgment x x x. Said writ of possession must be enforced
without delay x x x.34
The law does not require that a petition for a writ of possession be
granted only after documentary and testimonial evidence shall have been
offered to and admitted by the court.35 As long as a verified petition states
the facts sufficient to entitle petitioner to the relief requested, the court
shall issue the writ prayed for.36
Given the foregoing, we are bound to deny a liberal application of the
rules on substitution of counsel and resolve definitively that
GOODLAND’s notice of appeal merits a denial, for the failure of Atty.
Mondragon to effect a valid substitution of the counsel on record.
Substantial justice would be better served if the notice of appeal is
disallowed. In the same way that the appellant in Pioneer was not
permitted to profit from its own manipulation of the rules on substitution of
counsel, so too can GOODLAND be not tolerated to foster vexatious
delay by allowing its notice of appeal to carry on.
WHEREFORE, premises considered, the petition is GRANTED. The
February 16, 2009 Decision and the May 18, 2009 Resolution of the
Court of Appeals are hereby ANNULLED and SET ASIDE; and the
August 23, 2007 and February 15, 2008 Orders of the Regional Trial
Court of Makati City, Branch 150, are REINSTATED.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
Acting Chairperson
G.R. No. 140954. April 12, 2005
HEIRS OF BERTULDO1 HINOG: Bertuldo Hinog II, Bertuldo Hinog III,
Bertuldo Hinog, Jr., Jocelyn Hinog, Bertoldo Hinog IV, Bertoldo
Hinog V, Edgardo Hinog, Milagros H. Pabatao, Lilian H. King,
Victoria H. Engracia, Terisita C. Hinog, Paz H. Besana, Roberto C.
Hinog, Vicente C. Hinog, Roel C. Hinog, Marilyn C. Hinog, Bebot C.
Hinog, lordes C. Hinog, Pablo Chiong, Arlene Lanasang (All
respresented by Bertuldo Hinog III), Petitioners,
vs.
HON. ACHILLES MELICOR, in his capacity as Presiding Judge, RTC,
Branch 4, 7th Judicial Region, Tagbiliran City, Bohol, and
CUSTODIO BALANE, RUFO BALANE, HONORIO BALANE, and
TOMAS BALANE, Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for certiorari and prohibition under Rule 65 of the
Rules of Court which assails the Orders dated March 22, 1999, August
13, 1999 and October 15, 1999 of the Regional Trial Court, Branch 4, of
Tagbilaran City, Bohol in Civil Case No. 4923.
The factual background of the case is as follows:
On May 21, 1991, private respondents Custodio, Rufo, Tomas and
Honorio, all surnamed Balane, filed a complaint for "Recovery of
Ownership and Possession, Removal of Construction and Damages"
against Bertuldo Hinog (Bertuldo for brevity). They alleged that: they own
a 1,399- square meter parcel of land situated in Malayo Norte, Cortes,
Bohol, designated as Lot No. 1714; sometime in March 1980, they
allowed Bertuldo to use a portion of the said property for a period of ten
years and construct thereon a small house of light materials at a nominal
annual rental of ₱100.00 only, considering the close relations of the
parties; after the expiration of the ten-year period, they demanded the
return of the occupied portion and removal of the house constructed
thereon but Bertuldo refused and instead claimed ownership of the entire
property.
Accordingly, private respondents sought to oust Bertuldo from the
premises of the subject property and restore upon themselves the
ownership and possession thereof, as well as the payment of moral and
exemplary damages, attorney’s fees and litigation expenses "in amounts
justified by the evidence." 2
On July 2, 1991, Bertuldo filed his Answer. He alleged ownership of the
disputed property by virtue of a Deed of Absolute Sale dated July 2,
1980, executed by one Tomas Pahac with the knowledge and conformity
of private respondents.3
After the pre-trial, trial on the merits ensued. On November 18, 1997,
private respondents rested their case. Thereupon, Bertuldo started his
direct examination. However, on June 24, 1998, Bertuldo died without
completing his evidence.
On August 4, 1998, Atty. Sulpicio A. Tinampay withdrew as counsel for
Bertuldo as his services were terminated by petitioner Bertuldo Hinog III.
Atty. Veronico G. Petalcorin then entered his appearance as new
counsel for Bertuldo.4
On September 22, 1998, Atty. Petalcorin filed a motion to expunge the
complaint from the record and nullify all court proceedings on the ground
that private respondents failed to specify in the complaint the amount of
damages claimed so as to pay the correct docket fees; and that
under Manchester Development Corporation vs. Court of Appeals,5 non-
payment of the correct docket fee is jurisdictional.6
In an amended motion, filed on October 2, 1998, Atty. Petalcorin further
alleged that the private respondents failed to pay the correct docket fee
since the main subject matter of the case cannot be estimated as it is for
recovery of ownership, possession and removal of construction. 7
Private respondents opposed the motion to expunge on the following
grounds: (a) said motion was filed more than seven years from the
institution of the case; (b) Atty. Petalcorin has not complied with Section
16, Rule 3 of the Rules of Court which provides that the death of the
original defendant requires a substitution of parties before a lawyer can
have legal personality to represent a litigant and the motion to expunge
does not mention of any specific party whom he is representing; (c)
collectible fees due the court can be charged as lien on the judgment;
and (d) considering the lapse of time, the motion is merely a dilatory
scheme employed by petitioners.8
In their Rejoinder, petitioners manifested that the lapse of time does not
vest the court with jurisdiction over the case due to failure to pay the
correct docket fees. As to the contention that deficiency in payment of
docket fees can be made as a lien on the judgment, petitioners argued
that the payment of filing fees cannot be made dependent on the result of
the action taken.9
On January 21, 1999, the trial court, while ordering the complaint to be
expunged from the records and the nullification of all court proceedings
taken for failure to pay the correct docket fees, nonetheless, held:
The Court can acquire jurisdiction over this case only upon the payment
of the exact prescribed docket/filing fees for the main cause of action,
plus additional docket fee for the amount of damages being prayed for in
the complaint, which amount should be specified so that the same can be
considered in assessing the amount of the filing fees. Upon the complete
payment of such fees, the Court may take appropriate action in the light
of the ruling in the case of Manchester Development Corporation vs.
Court of Appeals, supra.10
Accordingly, on January 28, 1999, upon payment of deficiency docket
fee, private respondents filed a manifestation with prayer to reinstate the
case.11 Petitioners opposed the reinstatement12 but on March 22, 1999, the
trial court issued the first assailed Order reinstating the case.13
On May 24, 1999, petitioners, upon prior leave of court,14 filed their
supplemental pleading, appending therein a Deed of Sale dated
November 15, 1982.15 Following the submission of private respondents’
opposition thereto,16 the trial court, in its Order dated July 7, 1999, denied
the supplemental pleading on the ground that the Deed of Absolute Sale
is a new matter which was never mentioned in the original answer dated
July 2, 1991, prepared by Bertuldo’s original counsel and which Bertuldo
verified; and that such new document is deemed waived in the light of
Section 1, Rule 917 of the Rules of Court. The trial court also noted that no
formal substitution of the parties was made because of the failure of
defendant’s counsel to give the names and addresses of the legal
representatives of Bertuldo, so much so that the supposed heirs of
Bertuldo are not specified in any pleading in the case. 18
On July 14, 1999, petitioners manifested that the trial court having
expunged the complaint and nullified all court proceedings, there is no
valid case and the complaint should not be admitted for failure to pay the
correct docket fees; that there should be no case to be reinstated and no
case to proceed as there is no complaint filed. 19
After the submission of private respondents’ opposition20 and petitioners’
rejoinder,21 the trial court issued the second assailed Order on August 13,
1999, essentially denying petitioners’ manifestation/rejoinder. The trial
court held that the issues raised in such manifestation/rejoinder are
practically the same as those raised in the amended motion to expunge
which had already been passed upon in the Order dated January 21,
1999. Moreover, the trial court observed that the Order dated March 22,
1999 which reinstated the case was not objected to by petitioners within
the reglementary period or even thereafter via a motion for
reconsideration despite receipt thereof on March 26, 1999. 22
On August 25, 1999, petitioners filed a motion for reconsideration23 but the
same was denied by the trial court in its third assailed Order dated
October 15, 1999. The trial court held that the Manchester rule was
relaxed in Sun Insurance Office, Ltd. vs. Asuncion.24 Noting that there has
been no substitution of parties following the death of Bertuldo, the trial
court directed Atty. Petalcorin to comply with the provisions of Section 16,
Rule 3 of the Rules of Court. The trial court also reiterated that the Order
dated March 22, 1999 reinstating the case was not assailed by
petitioners within the reglementary period, despite receipt thereof on
March 26, 1999.25
On November 19, 1999, Atty. Petalcorin complied with the directive of the
trial court to submit the names and addresses of the heirs of Bertuldo. 26
On November 24, 1999, petitioners filed before us the present petition
for certiorari and prohibition.27 They allege that the public respondent
committed grave abuse of discretion in allowing the case to be reinstated
after private respondents paid the docket fee deficiency since the trial
court had earlier expunged the complaint from the record and nullified all
proceedings of the case and such ruling was not contested by the private
respondents. Moreover, they argue that the public respondent committed
grave abuse of discretion in allowing the case to be filed and denying the
manifestation with motion to dismiss, despite the defect in the complaint
which prayed for damages without specifying the amounts, in violation of
SC Circular No. 7, dated March 24, 1988.
In their Comment, private respondents aver that no grave abuse of
discretion was committed by the trial court in reinstating the complaint
upon the payment of deficiency docket fees because petitioners did not
object thereto within the reglementary period. Besides, Atty. Petalcorin
possessed no legal personality to appear as counsel for the heirs of
Bertuldo until he complies with Section 16, Rule 3 of the Rules of Court. 28
At the outset, we note the procedural error committed by petitioners in
directly filing the instant petition before this Court for it violates the
established policy of strict observance of the judicial hierarchy of courts.
Although the Supreme Court, Court of Appeals and the Regional Trial
Courts have concurrent jurisdiction to issue writs of certiorari,
prohibition, mandamus, quo warranto, habeas corpus and injunction,
such concurrence does not give the petitioner unrestricted freedom of
choice of court forum.29 As we stated in People vs. Cuaresma:30
This Court's original jurisdiction to issue writs of certiorari is not exclusive.
It is shared by this Court with Regional Trial Courts and with the Court of
Appeals. This concurrence of jurisdiction is not, however, to be taken as
according to parties seeking any of the writs an absolute, unrestrained
freedom of choice of the court to which application therefor will be
directed. There is after all a hierarchy of courts. That hierarchy is
determinative of the venue of appeals, and also serves as a general
determinant of the appropriate forum for petitions for the extraordinary
writs. A becoming regard for that judicial hierarchy most certainly
indicates that petitions for the issuance of extraordinary writs against first
level ("inferior") courts should be filed with the Regional Trial Court, and
those against the latter, with the Court of Appeals. A direct invocation of
the Supreme Court’s original jurisdiction to issue these writs should be
allowed only when there are special and important reasons therefor,
clearly and specifically set out in the petition. This is [an] established
policy. It is a policy necessary to prevent inordinate demands upon the
Court’s time and attention which are better devoted to those matters
within its exclusive jurisdiction, and to prevent further over-crowding of
the Court’s docket.31
The rationale for this rule is two-fold: (a) it would be an imposition upon
the precious time of this Court; and (b) it would cause an inevitable and
resultant delay, intended or otherwise, in the adjudication of cases, which
in some instances had to be remanded or referred to the lower court as
the proper forum under the rules of procedure, or as better equipped to
resolve the issues because this Court is not a trier of facts. 32
Thus, this Court will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts, and exceptional
and compelling circumstances, such as cases of national interest and of
serious implications, justify the availment of the extraordinary remedy of
writ of certiorari, calling for the exercise of its primary jurisdiction.
Exceptional and compelling circumstances were held present in the
following cases: (a) Chavez vs. Romulo33 on citizens’ right to bear arms;
(b) Government of the United States of America vs. Purganan34 on bail in
extradition proceedings; (c) Commission on Elections vs. Quijano-
Padilla35 on government contract involving modernization and
computerization of voters’ registration list; (d) Buklod ng Kawaning EIIB
vs. Zamora36 on status and existence of a public office; and (e) Fortich vs.
Corona37 on the so-called "Win-Win Resolution" of the Office of the
President which modified the approval of the conversion to agro-industrial
area.
In this case, no special and important reason or exceptional and
compelling circumstance analogous to any of the above cases has been
adduced by the petitioners so as to justify direct recourse to this Court.
The present petition should have been initially filed in the Court of
Appeals in strict observance of the doctrine on the hierarchy of courts.
Failure to do so is sufficient cause for the dismissal of the petition at bar.
In any event, even if the Court disregards such procedural flaw, the
petitioners’ contentions on the substantive aspect of the case fail to invite
judgment in their favor.
The unavailability of the writ of certiorari and prohibition in this case is
borne out of the fact that petitioners principally assail the Order dated
March 22, 1999 which they never sought reconsideration of, in due time,
despite receipt thereof on March 26, 1999. Instead, petitioners went
through the motion of filing a supplemental pleading and only when the
latter was denied, or after more than three months have passed, did they
raise the issue that the complaint should not have been reinstated in the
first place because the trial court had no jurisdiction to do so, having
already ruled that the complaint shall be expunged.
After recognizing the jurisdiction of the trial court by seeking affirmative
relief in their motion to serve supplemental pleading upon private
respondents, petitioners are effectively barred by estoppel from
challenging the trial court’s jurisdiction. 38 If a party invokes the jurisdiction
of a court, he cannot thereafter challenge the court’s jurisdiction in the
same case.39 To rule otherwise would amount to speculating on the
fortune of litigation, which is against the policy of the Court. 40
Nevertheless, there is a need to correct the erroneous impression of the
trial court as well as the private respondents that petitioners are barred
from assailing the Order dated March 22, 1999 which reinstated the case
because it was not objected to within the reglementary period or even
thereafter via a motion for reconsideration despite receipt thereof on
March 26, 1999.
It must be clarified that the said order is but a resolution on an incidental
matter which does not touch on the merits of the case or put an end to
the proceedings.41 It is an interlocutory order since there leaves something
else to be done by the trial court with respect to the merits of the
case.42 As such, it is not subject to a reglementary period. Reglementary
period refers to the period set by the rules for appeal or further review of
a final judgment or order, i.e., one that ends the litigation in the trial court.
Moreover, the remedy against an interlocutory order is generally not to
resort forthwith to certiorari, but to continue with the case in due course
and, when an unfavorable verdict is handed down, to take an appeal in
the manner authorized by law.43 Only when the court issued such order
without or in excess of jurisdiction or with grave abuse of discretion and
when the assailed interlocutory order is patently erroneous and the
remedy of appeal would not afford adequate and expeditious relief
will certiorari be considered an appropriate remedy to assail an
interlocutory order.44 Such special circumstances are absolutely wanting in
the present case.
Time and again, the Court has held that the Manchester rule has been
modified in Sun Insurance Office, Ltd. (SIOL) vs. Asuncion45 which defined
the following guidelines involving the payment of docket 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 fees 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.
Plainly, while the payment of the prescribed docket fee 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 fee is paid
within the applicable prescriptive or reglementary period, more so when
the party involved demonstrates a willingness to abide by the rules
prescribing such payment.46 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.47
Under the peculiar circumstances of this case, the reinstatement of the
complaint was just and proper considering that the cause of action of
private respondents, being a real action, prescribes in thirty years,48 and
private respondents did not really intend to evade the payment of the
prescribed docket fee but simply contend that they could not be faulted
for inadequate assessment because the clerk of court made no notice of
demand or reassessment.49 They were in good faith and simply relied on
the assessment of the clerk of court.
Furthermore, the fact that private respondents prayed for payment of
damages "in amounts justified by the evidence" does not call for the
dismissal of the complaint for violation of SC Circular No. 7, dated March
24, 1988 which required that all complaints must specify the amount of
damages sought not only in the body of the pleadings but also in the
prayer in order to be accepted and admitted for filing. Sun
Insurance effectively modified SC Circular No. 7 by providing that filing
fees for damages and awards that cannot be estimated constitute liens
on the awards finally granted by the trial court. 50
Thus, while the docket fees were based only on the real property
valuation, the trial court acquired jurisdiction over the action, and
judgment awards which were left for determination by the court or as may
be proven during trial would still be subject to additional filing fees which
shall constitute a lien on the judgment. It would then be the responsibility
of the Clerk of Court of the trial court or his duly authorized deputy to
enforce said lien and assess and collect the additional fees. 51
It is worth noting that when Bertuldo filed his Answer on July 2, 1991, he
did not raise the issue of lack of jurisdiction for non-payment of correct
docket fees. Instead, he based his defense on a claim of ownership and
participated in the proceedings before the trial court. It was only in
September 22, 1998 or more than seven years after filing the answer,
and under the auspices of a new counsel, that the issue of jurisdiction
was raised for the first time in the motion to expunge by Bertuldo’s heirs.
After Bertuldo vigorously participated in all stages of the case before the
trial court and even invoked the trial court’s authority in order to ask for
affirmative relief, petitioners, considering that they merely stepped into
the shoes of their predecessor, are effectively barred by estoppel from
challenging the trial court’s jurisdiction. Although the issue of jurisdiction
may be raised at any stage of the proceedings as the same is conferred
by law, it is nonetheless settled that a party may be barred from raising it
on ground of laches or estoppel.52
Moreover, no formal substitution of the parties was effected within thirty
days from date of death of Bertuldo, as required by Section 16, Rule 3 53 of
the Rules of Court. Needless to stress, the purpose behind the rule on
substitution is the protection of the right of every party to due process. It
is to ensure that the deceased party would continue to be properly
represented in the suit through the duly appointed legal representative of
his estate.54 Non-compliance with the rule on substitution would render the
proceedings and judgment of the trial court infirm because the court
acquires no jurisdiction over the persons of the legal representatives or of
the heirs on whom the trial and the judgment would be binding. 55 Thus,
proper substitution of heirs must be effected for the trial court to acquire
jurisdiction over their persons and to obviate any future claim by any heir
that he was not apprised of the litigation against Bertuldo or that he did
not authorize Atty. Petalcorin to represent him.
The list of names and addresses of the heirs was submitted sixteen
months after the death of Bertuldo and only when the trial court directed
Atty. Petalcorin to comply with the provisions of Section 16, Rule 3 of the
Rules of Court. Strictly speaking therefore, before said compliance, Atty.
Petalcorin had no standing in the court a quo when he filed his pleadings.
Be that as it may, the matter has been duly corrected by the Order of the
trial court dated October 15, 1999.
To be sure, certiorari under Rule 6556 is a remedy narrow in scope and
inflexible in character. It is not a general utility tool in the legal
workshop.57 It offers only a limited form of review. Its principal function is
to keep an inferior tribunal within its jurisdiction. 58 It can be invoked only
for an error of jurisdiction, that is, one where the act complained of was
issued by the court, officer or a quasi-judicial body without or in excess of
jurisdiction, or with grave abuse of discretion which is tantamount to lack
or in excess of jurisdiction,59 not to be used for any other purpose,60 such
as to cure errors in proceedings or to correct erroneous conclusions of
law or fact.61 A contrary rule would lead to confusion, and seriously
hamper the administration of justice.
Petitioners utterly failed to show that the trial court gravely abused its
discretion in issuing the assailed resolutions. On the contrary, it acted
prudently, in accordance with law and jurisprudence.
WHEREFORE, the instant petition for certiorari is DISMISSED for lack of
merit.
No costs.
SO ORDERED.
G.R. No. 117970 July 28, 1998
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
ULYSSES M. CAWALING, ERNESTO TUMBAGAHAN, RICARDO DE
LOS SANTOS, and HILARIO CAJILO, accused-appellants.
PANGANIBAN, J.:
It is axiomatic that once an accused-appellant admits killing the victim, he
bears the burden of establishing the presence of any circumstance like
self-defense, performance of a lawful duty or, for that matter, double
jeopardy, which may relieve him of responsibility, or which may mitigate
his criminal liability.1 If he fails to discharge this burden, his
conviction becomes inevitable. In this Decision, we also reiterate
the following doctrines: (1) the regional trial court, not the
Sandiganbayan, has jurisdiction over informations for murder
committed by public officers, including a town mayor; (2) the
assessment of trial courts on the credibility of witnesses and their
testimonies deserve great respect; (3) the equipoise rule cannot be
invoked where the evidence of the prosecution is overwhelming; (4)
alibi cannot be believed in the face of credible testimony identifying
the appellants; and (5) conspiracy may be proven by circumstantial
evidence.
The Case
Before us is an appeal from the 34-page Decision 2 dated October
21, 1994, promulgated by the Regional Trial Court of Romblon in
Criminal Case No. OD-269. Convicted of murder were former Mayor
Ulysses M. Cawaling and Policemen Ernesto Tumbagahan, 3 Ricardo
De los Santos and Hilario Cajilo.
Prior to the institution of the criminal case against all the appellants,
an administrative case 4 had been filed before the National Police
Commission, in which Policemen Ernesto Tumbagahan, Ricardo De
los Santos, Hilario Cajilo (three of herein appellants) and Andres
Fontamillas were charged by Nelson Ilisan 5 with the killing of his
brother Ronie 6 Ilisan. On April 6, 1986, Adjudication Board No.
14 7 rendered its Decision which found Tumbagahan, De los Santos,
Cajilo and Fontamillas guilty of grave misconduct and ordered their
dismissal from the service with prejudice. 8 On June 26, 1986, the
Board issued a resolution, 9 dismissing the respondents' motion for
reconsideration for lack of merit.
Subsequently, on June 4, 1987, Second Assistant Provincial Fiscal
Alexander Mortel filed, before the Regional Trial Court (RTC) of
Odiongan, Romblon, 10 an Information for murder 11 against the
appellants and Andres Fontamillas. The accusatory portion reads:
That on or about the 4th day of December 1982, at
around 9:00 o'clock in the evening, in the Poblacion,
[M]unicipality of San Jose, [P]rovince of Romblon,
Philippines, and within the jurisdiction of this
Honorable Court, the said accused, with intent to kill,
conspiring, confederating and mutually helping one
another, did then and there, by means of treachery
and with evident premeditation and taking advantage
of their superior strenght [sic] willfully, unlawfully
and feloniously attack, assault and shoot RONIE
ILISAN, with the use of firearms, inflicting upon the
latter multiple mortal injuries in different parts of his
body which were the direct and immediate cause of
his death.
Accused Tumbagahan, De los Santos, Cajilo and Fontamillas, with
the assistance of their lawyers Atty. Abelardo V. Calsado and
Juanito Dimaano, pleaded not guilty when arraigned on February 15,
1988; 12 while Accused Cawaling, assisted by Counsel Jovencio Q.
Mayor, entered a plea of not guilty on March 16, 1988. 13
After due trial, 14 the court a quo 15 rendered its Decision dated
October 21, 1994, 16 the decretal portion of which reads:
WHEREFORE, this Court finds the accused (1)
ULYSSES M. CAWALING, (2) ERNESTO
TUMBAGAHAN, (3) RICARDO DELOS SANTOS, (4)
HILARIO CAJILO, AND (5) ANDRES FONTAMILLAS
GUILTY beyond reasonable doubt of the crime of
MURDER under the Information, dated June 4, 1987,
and sentences each of them to suffer the penalty
of reclusion perpetua, with the accessory penalties of
the law.
The accused, jointly and severally, are ORDERED to
pay Nelson Elisan the sum of P6,000.00 as actual
damages and the heirs of the deceased Ronie Elisan
the sums of P116,666.66 by way of lost earnings and
P50,000.00 as indemnity for death, without subsidiary
imprisonment in case of insolvency, and to pay the
costs.
The bail bonds of all the accused are ORDERED
CANCELLED and all said accused ORDERED
immediately confined in jail.
The slug (Exh. A); the .38 caliber revolver (with 3
empty shells and 3 live bullets) (Exh. G); and the slug
of bullet (Exh. H) are confiscated in favor of the
government.
After the judgment has become final, the Officer-in-
Charge, Office of the Clerk of Court, this Court, is
ordered to deliver and deposit the foregoing Exhibits
A, F, G and H, inclusive, to the Provincial Director,
PNP, of the Province of Romblon properly receipted.
Thereafter, the receipt must be attached to the record
of the case and shall form part of the record.
The period of preventive imprisonment the accused
had undergone shall be credited in their favor to its
full extent pursuant to Article 29 of the Revised Penal
Code, as amended.
The case against co-accused ALEX BATUIGAS who is
at large is ORDERED ARCHIVED pending his arrest. 17
Hence, this appeal. 18
The Facts
Version of the Prosecution
The trial court gives this summary of the facts as viewed by the
prosecution witnesses:
The killing occurred on December 4, 1982 at around
9:00 o'clock in the evening at the ricefield of
Poblacion, San Jose, Romblon when the bright moon
was already above the sea at an angle of about 45
degrees, or if it was daytime, it was about 9:00 o'clock
in the morning (Imelda Elisan Tumbagahon, on direct
examination, tsn, Jan. 17, 1989, p. 5, and on cross
examination, tsn, April 18, 1989, p. 22).
On December 4, 1982, about 8:00 o'clock or 8:30
o'clock in the evening, Vicente Elisan and his elder
brother Ronie Elisan, the victim, were drinking tuba at
C & J-4 Kitchenette of co-accused Andres
Fontamillas in Poblacion, San Jose, Romblon. When
they stood up to go home, Luz Venus, the wife of
Diosdado Venus, told them not to go out because the
accused were watching them outside about three (3)
meters from the restaurant. Diosdado Venus
accompanied them upon their request and they went
out and walked towards home. About a hundred
meters from the restaurant, the six (6) accused, that
is, Mayor Cawaling, the four (4) policemen, namely,
Hilario Cajilo, Andres Fontamillas, Ernesto
Tumbagahan and Ricardo delos Santos, and civilian
Alex Batuigas, the mayor's brother-in-law,
flashlighted them and Diosdado Venus ran going
back. The two (2) brothers also ran towards home to
the house of their elder sister Imelda Elisan
Tumbagahon. Co-accused Andres Fontamillas and
Hilario Cajilo blocked them on the gate of the fence of
their sister's house. Ronie Elisan ran towards the
ricefield. The accused were chasing them. Vicente
Elisan saw his brother Ronie f[a]ll down on the
ricefield while he ran towards the bushes and la[y] on
the ground. Ronie Elisan rose up by kneeling and
raising his two (2) hands. All the six (6) accused
approached him with their flashlights and shot him.
Ronie fell down about twenty (20) meters from the
bushes where Vicente Elisan hid behind the coconut
tree. Co-accused Cawaling said ["]you left him, he is
already dead.["] Mayor Cawaling was armed with .45
caliber, policemen Andres Fontamillas and Hilario
Cajilo were both with armalites, Ernesto Tumbagahan
and Ricardo delos Santos were both with .38 caliber
and so with civilian Alex Batuigas. They left towards
the house of Mayor Cawaling. After they were gone,
Vicente Elisan ran towards the house of his older
brother Nelson Elisan. Upon seeing him, Vicente told
Nelson that Ronie was already dead. Nelson said
nothing. While they were there, elder sister Imelda
Elisan Tumbagahon, who was crying came. She said:
"Manong, patay ron si Ronie." (Brother, Ronie is
already dead). Nelson said ["]do not be noisy; they
might come back and kill all of us.["] Imelda stopped
crying.
After a while, brothers Nelson and Vicente Elisan
went to the house of barangay captain Aldolfo
Tumbagahon. The three (3) went to the townhall and
called the police but there was none there. Going to
the house of the Chief of Police Oscar Montero, they
were told by his wife that Commander Montero was in
the house of Mayor Cawaling. They proceeded to the
place where Ronie Elisan was shot. The cadaver was
brought to the house of Nelson Elisan. Vicente Elisan
found an empty shell of a .45 caliber about three (3)
arm's length from the body of the victim. They
surrendered it to the Napolcom. 19
Dr. Blandino C. Flores described the gunshot wounds of the victim
as follows:
Gunshot Wounds:
1. Shoulder:
Gun shot wound 1/2 x
1/2 inch in diameter
shoulder right 2 inches
from the neck with
contussion [sic] collar
s[u]rrounding the
wound.
 2. Right Axilla:
narration of the incident as follows:
Gun shot wound 1/4 x
1/4 inch in diameter, 2
inches below the right
nipple with contussion
[sic] collar s[u]rrounding
the wound.
3. Left Axilla:
Exit of the gun shot
wound from the right
axilla, measuring 1/2 x
1/2 inch with edges
everted, one inch below
the axilla and one inch
below the level of the
nipple.
4. Back:
Gun shot wound
measuring 1/4 x 1/4 inch,
along the vertebral
column, right at the level
of the 10th ribs with
contussion [sic] collar.
5. Leg, Left:
Gun shot wound
measuring 1/4 x 1/4
anterior aspect upper
third leg with contussion
[sic] collar, with the exit
1/2 x 1/2 posterior aspect
upper third leg, left. 20
Based on the death certificate (Exhibit E) issued by Dr. Flores,
Ronie Ilisan died of "severe hemorrhage and gun shot wo[unds]." 21
Version of the Defense
Appellant Cawaling, in his 47-page Brief, 22 presented his own
At around 7:00 in the evening of December 4, 1982,
Ulysses Cawaling, then the mayor of the
[M]unicipality of San Jose in the [P]rovince of
Romblon, arrived aboard a hired motorized boat from
Manila in the seashore of San Jose. From the
seashore, he immediately proceeded to his home. At
around 7:30 in the evening, Cawaling went to the
municipal hall to check on administrative matters that
piled up in the course of his trip to Manila. He also
went inside the police station (located inside the
municipal building) to be apprised of any
developments, after which he went out and joined
Pfc. Tumbagahan and Pfc. Cajilo who were standing
near the flagpole in front of the municipal building.
The three engaged in a conversation. Cawaling
learned that the two police officers were the ones
assigned for patrol/alert for that night. The three of
them went inside the INP office and there Cawaling
informed the two policemen that he received
information from reliable persons that certain
persons were plotting to kill him and a member of the
town's police force. It is to be noted that this occurred
at the height of the communist insurgency and
political violence in the countryside in the early 80's.
Hence, such information was taken very seriously,
having been relayed by sources independent of each
other.
Cawaling, as town chief then empowered with
supervisory authority over the local police,
accompanied Pfc. Tumbagahan and Pfc. Cajilo in
conducting patrol and surveillance operations around
the small municipality. He usually did this as routine
since Romblon was then plagued with political
assassinations and armed conflict. On their way to
the seashore, they passed by C & J-4 Kitchenette,
and chanced upon Ronnie Ilisan and his brother
Vicente Ilisan drinking liquor and discussing in very
loud voices. They stopped right in the front of the
restaurant and there they heard Ronnie Ilisan state in
a every loud voice that he will kill a person that night.
Inside the restaurant, without the knowledge then of
Cawaling and the two police officers, witness Gil
Palacio, who was buying cigarettes and Luz Venus,
the cook/server of the restaurant, saw Ronnie Ilisan,
very drunk, brandishing in the air a .38 caliber Smith
and Wesson revolver with a protruding screw.
Initially dismissing Ronnie Ilisan's statement as just
another hollow swagger of an intoxicated person
("salitang lasing"), Cawaling and the two policemen
proceeded on their way. After the patrol, they
returned to the municipal building and stationed
themselves in front. At around 8:30 in the evening,
Ronnie Elisan passed by the municipal hall walking
towards the direction of the house of Nelson Ilisan,
another brother, and shouted the challenge, "gawas
ang maisog", meaning THOSE WHO ARE BRAVE,
COME OUT. Cawaling and the two police officers
again brushed aside [the] challenge as just another
foolish drunken revelry [o]n the part of Ronnie Ilisan,
a well-known troublemaker in the small municipality.
A few moments later, after Ronie Ilisan had passed
by, they distinctly heard a gunshot and hysterical
female voices shouting, "pulis, tabang" meaning
POLICE! HELP! four times. Impelled by the call of
duty, Cawaling and the two policemen immediately
ran in the direction of the gunshot and the desperate
female voices until they reached the house of Nelson
Ilisan in San Jose Street. At this point, they saw
Ronnie Ilisan holding a .38 caliber revolver. They also
saw Vicente Ilisan, Francisco Tesnado, Fe Ilisan, the
wife of Nelson and Delma Ilisan, the wife of Vicente,
the latter two being the same persons who cried
"pulis, tabang" four times. Cawaling then told Ronnie
to surrender his gun but the latter responded by
pointing the gun at Cawaling and pulling the trigger.
At the precise moment that the gun fired, Cawaling
warned the two policemen to drop to the ground by
shouting "dapa". Fortunately, Cawaling was not hit.
Ronnie Ilisan then turned around and ran towards the
church. The two policemen gave chase. Cawaling,
still shaken and trembling after the mischance was
initially left behind but followed shortly. When Ronnie
Ilisan reached the church, he turned around and
again fired at the pursuing Pfc. Cajilo. Fortunately,
the gun misfired. When they finally reached the
ricefield, Pfc. Cajilo fired two (2) warning shots in the
air for Ronnie to surrender. Ronnie responded by
firing once again at Pfc. Tumbagahan but failed to hit
the latter. At that instance, Pfc. Cajilo counter-fired at
Ronnie Ilisan hitting him. Pfc. Tumbagahan also fired
his weapon in the heat of exchange and also hit
Ronnie Ilisan. As a result of the gunshot wounds,
Ronnie Ilisan later on succumbed.
Pfc. Tumbagahan picked up the gun still in the hand
of the dead Ronnie Ilisan and gave it to Pfc. Cajilo.
The three, Cawaling, who subsequently caught up
with them after the incident, and the two police
officers, then proceeded to the police station located
in the municipal building to formally report the
incident in their station blotter. 23
The "Brief for All of the Accused-Appellants" filed by Atty. Napoleon
U. Galit and the "Brief for Appellants Ernesto Tumbagahan and
Hilario Cajilo" submitted by Atty. Joselito R. Enriquez merely
repeated the facts as narrated by the trial court.
Ruling of the Trial Court
Finding the prosecution witnesses and their testimonies credible,
the court a quo convicted the appellants. The killing was qualified to
murder because of the aggravating circumstances of abuse of
superior strength and treachery. The trial court ruled that there was
a notorious inequality of forces between the victim and his
assailants, as the latter were greater in number and armed with
guns. It further ruled that abuse of superior strength absorbed
treachery, as it ratiocinated:
"Certain cases," an authority wrote, "involving the
killing of helpless victim by assailants superior to
them in arms or numbers, or victims who were
overpowered before being killed, were decided on the
theory that the killing was treacherous, when perhaps
the correct qualifying circumstance would be abuse
 of superiority. In these cases the attack was not
sudden nor unexpected and the element of surprise
was lacking." (Id., I Aquino, pp. 423-424). In the
instant case, we earlier ruled that the qualifying
treachery should be considered as an exception to
the general rule on treachery because it was not
present at the inception of the attack. The killing was
not sudden nor unexpected and the element of
surprise was lacking. It is for this reason that we hold
that alevosia should be deemed absorbed or included
in abuse of superiority. Even assuming ex-gratia
argumenti that it should be the other way around, the
situation will not be of help, penaltywise, to the
accused. 24
The defenses raised by the appellants were dismissed and their
witnesses declared unworthy of belief for the following reasons:
1. It was highly improbable that Defense Witness
Tesnado would not tell his wife (Dory) and Bebelinia
Ilisan Sacapaño about the incident he had allegedly
witnessed, more so when Sacapaño was the victim's
first cousin.
2. The spot report prepared by Station Commander
Oscar M. Montero, the testimonies of Cajilo and
Tumbagahan and the medical findings of Dr. Flores
contradicted one another on the following details: the
caliber of the gun used in shooting the victim, the
wounds inflicted and the whereabouts of Cawaling
during the shoot-out.
3. Cawaling and his men, armed with guns, could
have immediately disarmed the victim at the initial
encounter. The court could not understand why the
victim was able to fire his gun, run, then stop and
again fire his gun, without being caught.
4. The positive identification made by the prosecution
witnesses prevails over the alibi posed by De los
Santos and Fontamillas, a defense that was not
corroborated by any other witness.
5. The .38 caliber revolver, allegedly owned by the
victim, was in fact owned and used by Alex Batuigas.
6. The defense presented a photo and a sketch to
prove that Imelda Ilisan Tumabagahan had an
obstructed view of the killing. The trial court ruled
that such evidence was misleading, because the
window, from where said witness allegedly saw the
incident, was at the eastern side of her house, and
thus afforded a clear view of the incident, while the
window referred to by the defense was at the
southern portion.
7. The questioned testimonies of Dr. Flores, Nelson
Ilisan and Provincial Prosecutor Pedro Victoriano, Jr.,
though not formally offered as evidence, may be
admitted because of the failure of the defense to
object thereto at the time they were called to testify.
8. The defense failed to prove that the prosecution
witnesses had any ill motive to testify falsely against
the appellant.
9. Appellants had a motive to kill the victim. Nelson
Ilisan testified that his brother Ronie (the victim) had
witnessed Bonifacio Buenaventura (a former chief
commander of the San Jose Police Force) kill a
certain Ruben Ventura. Cawaling, who was
Buenaventura's first cousin, wanted Ronie dead,
because the latter had not followed his instruction to
leave town to prevent him from testifying in said
case.
Assignment of Errors
The appellants, through their common counsel, Atty. Napoleon
Galit, assign the following errors to the lower court:
1. The trial court gravely erred in sustaining
prosecutor's theory of conspiracy and thus renders
nugatory or has totally forgotten that policemen when
in actual call of duty normally operate in group but
not necessarily in conspiracy.
 2. The trial court gravely erred in believing the theory
of the prosecution that accused-appellant Ulysses
Cawaling was one of the alleged co-conspirators in
the killing of the deceased Ronnie Elisan.
3. The trial court gravely erred in not believing the
defense of accused-appellant Ulysses Cawaling that
he has nothing to do with the shooting incident
except to shout to arrest the accused[,] which
prompted his co-accused policemen to chase the
accused and sho[o]t him when he resisted, after he
fired at Mayor Cawaling.
4. The trial court gravely erred in not giving weight to
accused-appellant policemen['s] testimonies which
carry the presumption of regularity.
5. The trial court gravely erred in not acquitting all the
accused-appellants by applying "the equipoise rule"
thereby resulting [i]n reasonable doubts on the
guilt. 25
In their joint brief, 26 Appellants Tumbagahan and Cajilo cite these
other errors:
1. The trial court gravely erred in relying on the theory
of the prosecution that accused-appellants Ernesto
Tumbagahan and Hilario Cajilo were alleged co-
conspirators in the killing of the victim, Ronie Ilisan.
2. The trial court gravely erred in not believing the
defense that herein accused-appellants merely did a
lawful duty when the shooting incident happened
which led to the death of Ronnie Ilisan.
3. The trial court gravely erred in not acquitting herein
accused-appellants by applying the equipoise rule,
thereby resulting in reasonable doubt on their guilt.
4. Prescinding from the foregoing, herein accused-
appellants do press and hold, that the lower court
committed grave, serious and reversible error in
appreciating the qualifying circumstance of treachery
(alevosia).
5. The lower court committed grave, serious and
reversible error in convicting both accused-
appellants of murder, instead merely of homicide,
defined and penalized under the Revised Penal Code.
6. The lower court committed grave, serious and
reversible error in appreciating the qualifying
circumstance of taking advantage of superior
strength.
7. The consummated crime being merely homicide,
the mitigating circumstance of voluntary surrender
should be considered to lower the penalty of
homicide.
8. The lower court committed error in not considering
double jeopardy.
9 The lower court committed error in not dismissing
the case for want of jurisdiction. 27
Appellant Cawaling imputes these additional errors to the court a
quo:
1. The trial court gravely erred in not acquitting herein
accused-appellant, Ulysses M. Cawaling, considering
that he had no part in the killing and the prosecution
failed to prove his guilt beyond reasonable doubt;
2. The trial court gravely erred in not finding the
shooting incident a result of hot pursuit and shoot-
out between the deceased Ronnie Ilisan and the
police officers in the performance of their duty and
self-defense, and in sustaining the prosecution's
conspiracy theory;
3. The trial court gravely erred in not acquitting
Accused-Appellant Ulysses M. Cawaling considering
that there was blatant absence of due process in the
proceedings tantamount to mistrial. 28
 This Court's Ruling Sec. 4. Jurisdiction. — The Sandiganbayan shall
exercise:
We affirm the conviction of the appellants. In so ruling, we will
resolve the following issues: (1) jurisdiction of the trial court, (2) (a) Exclusive original jurisdiction in all cases
double jeopardy, (3) credibility of prosecution witnesses and their involving:
testimonies, (4) self-defense, (5) performance of lawful duty, (6)
alibi, (7) conspiracy, (8) rule on equipoise, (9) qualifying xxx xxx xxx
circumstances, (10) damages and (11) attending circumstances as
they affect the penalty. (2) Other offenses or
felonies committed by
We shall address the first two issues as important preliminary public officers and
questions and discuss the merits of the remaining ones, which we employees in relation to
have culled from the errors cited by the appellants in their their office, including
aforementioned briefs. those employed in
government-owned or
First Issue: controlled corporations,
whether simple or
Jurisdiction of the Trial Court complexed with other
crimes, where the
Appellants Tumbagahan and Cajilo argue that the trial court erred penalty prescribed by
when it assumed jurisdiction over the criminal case. They insist that law is higher
the Sandiganbayan, not the regular courts, had jurisdiction to try than prision
and hear the case against the appellants, as they were public correccional or
officers at the time of the killing which was allegedly committed by imprisonment for six (6)
reason of or in relation to their office. years, or a fine of
P6,000.00: PROVIDED,
HOWEVER, that offenses
We do not agree.
or felonies mentioned in
this paragraph where the
The jurisdiction of a court to try a criminal case is determined by the penalty prescribed by
law in force at the time of the institution of the action. Once the law does not
court acquires jurisdiction, it may not be ousted from the case by exceed prision
any subsequent events, such as a new legislation placing such correccional or
proceedings under the jurisdiction of another tribunal. The only imprisonment for six (6)
recognized exceptions to the rule, which find no application in the years or a fine of
case at bar, arise when: (1) there is an express provision in the P6,000.00 shall be tried
statute, or (2) the statute is clearly intended to apply to actions by the proper Regional
pending before its enactment. 29 Trial Court, Metropolitan
Trial Court, Municipal
The statutes pertinent to the issue are PD 1606, as amended; 30 and Trial Court and
PD 1850, as amended by PD 1952 and BP 129. Municipal Circuit Trial
Court.
Sec. 4 of PD 1606 31 reads:
xxx xxx xxx
However, former President Ferdinand Marcos issued two
presidential decrees placing the members of the Integrated National
Police under the jurisdiction of courts-martial. Section 1 of PD
1952, 32 amending Section 1 of PD 1850, reads:
Sec. 1. Court Martial Jurisdiction over Integrated
National Police and Members of the Armed Forces.
Any provision of law to the contrary notwithstanding
— (a) uniformed members of the Integrated National
Police who commit any crime or offense cognizable
by the civil courts shall henceforth be exclusively
tried by courts-martial pursuant to and in accordance
with Commonwealth Act No. 408, as amended,
otherwise known as the Articles of War; (b) all
persons subjects to military law under Article 2 of the
aforecited Articles of War who commit any crime or
offense shall be exclusively tried by courts-martial or
their case disposed of under the said Articles of
War; Provided, that, in either of the aforementioned
situations, the case shall be disposed of or tried by
the proper civil or judicial authorities when court-
martial jurisdiction over the offense has prescribed
under Article 38 of Commonwealth Act Numbered
408, as amended, or court-martial jurisdiction over
the person of the accused military or Integrated
National Police personnel can no longer be exercised
by virtue of their separation from the active service
without jurisdiction having duly attached beforehand
unless otherwise provided by law:
PROVIDED FURTHER, THAT THE PRESIDENT MAY,
IN THE INTEREST OF JUSTICE, ORDER OR DIRECT,
AT ANY TIME BEFORE ARRAIGNMENT, THAT A
PARTICULAR CASE BE TRIED BY THE
APPROPRIATE CIVIL COURT.
As used herein, the term uniformed members of the
Integrated National Police shall refer to police
officers, policemen, firemen, and jail guards.
On the other hand, the jurisdiction of regular courts over civil and
criminal cases was laid down in BP 129, the relevant portion of
which is quoted hereunder:
Sec. 20. Jurisdiction in Criminal Cases. — Trial
Courts shall exercise exclusive original jurisdiction in
all criminal cases not within the exclusive jurisdiction
of any court, tribunal or body, except those now
falling under the exclusive and concurrent
jurisdiction of the Sandiganbayan which shall
hereafter be exclusively taken cognizance of by the
latter. 33
In relation to the above, Section 4-a-2 of PD 1606, as amended by PD
1861, quoted earlier, lists two requisites that must concur before the
Sandiganbayan may exercise exclusive and original jurisdiction
over a case: (a) the offense was committed by the accused public
officer in relation to his office; and (b) the penalty prescribed by law
is higher than prision correccional or imprisonment for six (6) years,
or higher than a fine of six thousand pesos (P6,000). 34 Sanchez vs.
Demetriou 35 clarified that murder or homicide may be committed
both by public officers and by private citizens, and that public office
is not a constitutive element of said crime, viz.:
The relation between the crime and the office
contemplated by the Constitution is, in our opinion,
direct and not accidental. To fall into the intent of the
Constitution, the relation has to be such that, in the
legal sense, the offense cannot exist without the
office. In other words, the office must be a
constituent element of the crime as defined in the
statute, such as, for instance, the crimes defined and
punished in Chapter Two to Six, Title Seven, of the
Revised Penal Code.
Public office is not the essence of murder. The taking
of human life is either murder or homicide whether
done by a private citizen or public servant, and the
penalty is the same except when the perpetrator,
being a public functionary, took advantage of his
office, as alleged in this case, in which event the
penalty is increased.
But the use or abuse of office does not adhere to the
crime as an element; and even as an aggravating
circumstance, its materiality arises, not from the
allegations but on the proof, not from the fact that the
 criminals are public officials but from the manner of
the commission of the crime.
Furthermore, the Information filed against the appellants contains
no allegation that appellants were public officers who committed the
crime in relation to their office. The charge was for murder, a felony
punishable under Article 248 of the Revised Penal Code. As clarified
in Aguinaldo, et al. vs. Domagas, et al., 36 "[I]n the absence of such
essential allegation, and since the present case does not involve
charges of violation of R.A. No. 3019 (the Anti-Graft etc. Act), the
Sandiganbayan does not have jurisdiction over the present case.
(Bartolome vs. People, 142 SCRA 459 [1986]) Even before
considering the penalty prescribed by law for the offense charged, it
is thus essential to determine whether that offense was committed
or alleged to have been committed by the public officers and
employees in relation to their offices."
Jurisdiction is determined by the allegations in the complaint or
information. 37 In the absence of any allegation that the offense was
committed in relation to the office of appellants or was necessarily
connected with the discharge of their functions, the regional trial
court, not the Sandiganbayan, has jurisdiction to hear and decide
the case. 38
Second Issue:
Double Jeopardy
In seeking their acquittal, Appellants Tumbagahan and Cajilo also
invoke their right against double jeopardy. They argue that the first
jeopardy attached when a criminal case for murder was filed before
the Judge Advocate General's Office (JAGO), which was allegedly
dismissed after several hearings had been conducted. 39 We are not
persuaded.
There is double jeopardy when the following requisites are present:
(1) a first jeopardy has attached prior to the second; (2) the first
jeopardy has been validly terminated; and (3) a second jeopardy is
for the same offense as that in the first. And the first jeopardy
attaches only (a) after a valid indictment; (b) before a competent
court; (c) after arraignment; (d) when a valid plea has been entered;
and (e) when the accused was acquitted or convicted, or the case
was dismissed or otherwise terminated without his express
consent. 40
For a better appreciation of appellants' argument, we must consider
PD 39 41 and its implementing rules, 42 which prescribe the procedure
before a military commission. A summary preliminary investigation
shall be conducted before trial for the purpose of determining
whether there is prima facie evidence to pursue trial before a
military commission. The investigation report shall contain a
summary of the evidence, the acts constituting the offense or
offenses committed, and the findings and recommendations of the
investigating officer. Thereafter, the report shall be forwarded to the
judge advocate general, who shall determine for either the defense
secretary or for the AFP chief of staff whether the case shall be
referred for trial to a military commission. 43 Where a prima
facie case is found against the accused, formal charges shall be
signed by a commissioned officer designated by the judge advocate
general. 44 The accused shall then be arraigned, during which the
charge and specification shall be read and the accused shall enter
his plea. 45 After hearings, a record of the trial shall be forwarded to
the AFP chief of staff for proper action. 46
In the present case, the appellants have presented no sufficient and
conclusive evidence to show that they were charged, arraigned and
acquitted in a military commission, or that the case was dismissed
therein without their consent. The defense merely offered as
evidence certain disposition forms 47 and a
letter, 48 dated March 8, 1983, recommending that the case against
Appellants Tumbagahan, Cajilo and De los Santos be dropped and
considered closed. 49 No charge sheet and record of arraignment
and trial were presented to establish the first jeopardy.
As pointed out by the solicitor general, "appellants were never
arraigned, they never pleaded before the Judge Advocate General's
Office, there was no trial, and no judgment on the merits had been
rendered." 50
Third Issue:
Credibility of Witnesses
As a general rule, the factual findings of trial courts deserve respect
and are not disturbed on appeal, unless some facts or
circumstances of weight and substance have been overlooked, A. Yes, sir.
misapprehended or misinterpreted, and would otherwise materially
affect the disposition of the case. 51 This rule, however, does not Q. Why?
apply when the judge who penned the decision was not the same
one who had heard the prosecution witnesses testify, 52 as in the A. Because we were being watched by
present case. Nonetheless, we have carefully perused and Mayor Cawaling, Andres Fontamillas,
considered the voluminous records of this case, and we find no Hilario Cajilo and Alex Bat[ui]gas.
reason to alter the findings of the court a quo in regard to the
credibility of the prosecution witnesses and their testimonies.
xxx xxx xxx
Vicente Ilisan, the victim's brother, narrated before the trial court the
Q. When you were informed by Luz
circumstances relevant to the crime:
Venus that you should not go out
because Mayor Cawaling and the
Q. In the evening of December 4, 1982, persons you mentioned were outside
at about 8:00 or 8:30, where were you? watching for you, what did you do?

A. I was inside the restaurant of Andres A. We did not go out.

Fontamillas.
Q. Since you remained inside, what did
xxx xxx xxx you do?

Q. What were you doing there? A. I also viewed thru the window.

A. I was drinking tuba. Q. Did you see them?

Q. When you were about to finish A. Yes, sir.

drinking tuba, what did you do?
Q. How far were they from the
A. I stood up preparing to go home. restaurant?

Q. Were you able to leave that A. About three meters.

restaurant actually?
Q. What were they doing outside the
A. No, sir. restaurant?

Q. Why? A. They were also viewing us.

A. Luz Venus told us not to go out Q. For how long did they remain there
when [I] stood up to go home. viewing you?

Q. Do you know why you were A. Just a short time.

advise[d] not to go out?
Q. And later on, do you know where did
they go? [sic]
A. No, sir. I went out from the
restaurant and when I went out, I did
not see them anymore.
Q. Before you went out of the
restaurant, what did you do?
A. Diosdado Venus accompanied us.
Q. Why did you ask Diosdado Venus to
accompany you?
A. Yes, sir. Because we were aware
that we were being watched from
outside so we asked to be
accompanied by Diosdado Venus.
Q. From the restaurant accompanied
by Diosdado Venus, what did you do?
A. Towards home.
Q. Were you able to reach home?
A. No, sir.
Q. Why, what happened on the way?
A. Diosdado Venus ran going back
because we were lighted by a
flashlight.
Q. How many flashlight[s] were trimed
[sic] to you?
A. Six.
Q. Did you come to know who trimed
[sic] the flashlight towards you?
A. Yes, sir.
Q. Who were they?
A. Mayor Cawaling, Andres
Fontamillas, Hilario Cajilo, Ernesto
Tumbagahan, Ricardo delos Santos
and Alex Batuigas.
Q. How were you able to recognize
them when that was night time?
A. Because the flashlight[s] were
bright.
Q. When Diosdado Venus ran back to
his restaurant, what did your brother
Ronie Elisan and you do?
A. We also ran towards home.
Q. To whose house?
A. That of my older sister Imelda
[E]lisan.
Q. Were you able to reach that house?
A. No, sir.
Q. Why, what happened when you ran
away?
A. Andres Fontamillas and Hilario
Cajilo were blocking us on the gate of
the fence of my sister's house.
Q. Since your way was blocked, where
did Ronie Elisan go?
A. We ran towards the ricefield.
Q. When you ran, what did Mayor
Cawaling do?
A. They were chasing us.
Q. What about Alex Batuigas, what did
he do?
A. He also followed helping chasing us.
[sic]
Q. What about the four policemen, what
did they do?
A. The same. They were also chasing
us.
Q. About how far is that restaurant
[from] the spot where you were first
lighted by the flashlight of the
accused?
A. About one hundred meters.
Q. Now, according to you, you ran
towards the ricefield, what happened
while you were running towards the
ricefield?
A. I saw my brother fell [sic] down.
Q. Fell down where?
A. On the ricefield.
Q. What about you, where were you
when your brother fell down in the
ricefield?
A. I ran towards the bushes.
Q. What did you do upon reaching the
bushes?
A. I la[y] on the ground with my belly
touch[ing] on the ground behind the
coconut tree.
Q. When your brother according to you
had fallen on the ricefield, what did he
do thereafter?
A. He rose up, [raised] his hands and
surrender[ed] to them.
Q. In rising, what was his position?
A. He was rising like this. (Witness
demonstrating by kneeling [and]
raising his two hands).
Q. While Ronie Elisan was kneeling and
raising both of his hands, what
happened?
A. Mayor Cawaling approached him
together with the four policemen and
his brother-in-law and they shot him.
Q. Do you know what weapon[s] were
used in shooting your brother?
A. Yes, sir.
Q. What weapon were used?
A. The weapon of Mayor Cawaling is
.45 caliber and that of Andres
Fontamillas and Hilario Cajilo were
both armalite and that of Ernesto
Tumbagahan, Alex Batuigas and
Ricardo delos Santos were .38 caliber.
 Q. How were you able to identify their
weapons?
A. Because the flashlight[s] were
bright.
Q. Now, what happened to your brother
when he was fired upon by the accused
in this case?
A. He fell down.
Q. And how far is that spot where your
elder brother had fallen down to the
spot where Diosdado Venus left you
when he returned to the restaurant?
A. To my estimate it is about 300
meters.
Q. After your brother had fallen down,
what did the accused do?
A. Mayor Cawaling said, ["]you left him,
he is already dead.["]
Q. Where did they go?
A. They went towards the house of
Mayor Cawaling. 53
Imelda Tumbagahan was at home feeding her child when she heard
her brother Ronie shouting for help. After getting a flashlight and
looking through the window of her house, she saw Cawaling and
Alex Batuigas chasing Ronie who was running towards her house.
Tumbagahan and De los Santos prevented Ronie from entering the
fence of her house, as a result of which, her brother ran towards a
rice field nearby. There, on bended knees and with hands raised,
Ronie was shot by Cawaling and his men. 54
Nelson Ilisan also heard his younger brother Ronie shouting for
help while being chased by the group of Cawaling. As Cajilo and
Fontamillas blocked Ronie from entering the gate of Imelda's house,
the victim ran towards a rice field. Nelson stopped Cawaling and
asked, "Nong, basi guinalagas ninyo and acon hali? (Nong, why do
you chase my brother?)" But the mayor merely continued chasing
Ronie. Thereafter, Nelson saw his brother, on his knees with both
hands raised, shot by appellants. 55
The three aforementioned witnesses narrated in detail the assault
against their brother Ronie and positively identified the appellants
as the perpetrators. The trial court cannot be faulted for relying on
their testimonies and accepting them as true, 56 especially when the
defense failed, to prove any ill motive on their part. 57 In addition,
family members who have witnessed the killing of their loved one
usually strive to remember the faces of the assailants. 58 Thus, the
relationship per se of witnesses with the victim does not necessarily
mean that the former are biased. On the contrary, it is precisely
such relationship that would impel them to seek justice and put the
real culprit behind bars, rather than impute the offense to the
innocent. 59
Appellant Cawaling submits that the prosecution witnesses
tampered with the evidence by cleaning the cadaver before an
autopsy could be done. "Such irregular washing of the cadaver by a
close relative of the deceased, who is educated and who
presumably knew perfectly well the need to preserve it in its original
state for the medico-legal examination[,] is highly suspicious. It
points to the fact that the relatives of the deceased wanted to hide,
or erase something that would bolster and assist the defense (that
is, state of drunkenness, powder burns or lack thereof, indicating
the firing of a weapon or the proximity of the weapon used on the
deceased, etc.)." 60
Such contention is unavailing. First, Bebelinia Sacapaño merely
cleaned the cadaver and made no further examination. Second,
appellants had an opportunity to have the body examined again to
determine or prove important matters, such as whether Ronie was
drunk, if he fired a gun, how many and what caliber of guns were
used in shooting him; they did not, however, avail themselves of
this opportunity. As public officers, appellants knew that it was
within their power to request or secure from the court, or any other
competent authority, an order for another autopsy 61 or any such
evidence as may affirm their innocence. Third, their conviction lies
in the strong and convincing testimonial evidence of the
prosecution, not in the corroborative testimony of Bebelinia
Sacapaño.
Relying on the testimonies of Luz Venus and Gil Palacio, Appellant
Cawaling also pointed out that "[t]he power of observation of
alleged eyewitness Vicente was severely affected by his
intoxication. It may be inferred that an intoxicated person's sense[s]
of sight and hearing and of touch are less acute than those of a
sober person and that his observation are inexact as to what
actually occurred." 62
This argument is not persuasive. The evidence presented fails to
show that Vicente was so intoxicated that night as to affect his
powers of observation and retrospection. Defense Witness Palacio
merely saw the witness drinking tuba on the night of the
killing. 63 Meanwhile the whole testimony of Luz on the matter mainly
reveals that Ronie was the person she was referring to as drunk, as
shown by this portion: 64
Q When Ronie and Vicente both
surnamed Ilisan entered the C & J-4
kitchenette what if any did you
observe?
A I saw them so dr[u]nk (Nakita ko sila
lasing na lasing).
Q Who was lasing na lasing or so
dr[u]nk?
A Ronie Ilisan sir.
Granting that Vicente was drunk, the conviction of the appellants is
still inevitable in view of the positive declarations of Witnesses
Nelson and Imelda, who unequivocally identified appellants as
perpetrators of the senseless killing of their brother Ronie.
Appellant Cawaling also questions the trial court's reliance on the
testimonies of Dr. Blandino Flores, 65 Nelson Ilisan 66 and Prosecutor
Pedro Victoriano, Jr., 67 for failure of the prosecution to offer them as
evidence. In People vs. Java, 68 this Court ruled that the testimony of
a witness, although not formally offered in evidence, may still be
admitted by the courts, if the other party does not object to its
presentation. The Court explained: "Section 36 of [Rule 132]
requires that an objection in the course of the oral examination of a
witness should be made as soon as the grounds therefor shall
become reasonably apparent. Since no objection to the
admissibility of evidence was made in the court below, an objection
raised for the first time on appeal will not be considered." In the
present case, a cursory reading of the stenographic notes reveals
that the counsel for the appellants did not raise any objection when
said witnesses testified on the matters now being impugned.
Moreover, they repeatedly cross-examined the witnesses, which
shows that they had waived their objections to the said testimonies
of such witnesses.
Lastly, Appellant Mayor Cawaling questions the motive of
Prosecutor Pedro Victoriano Jr. This contention is likewise bereft of
merit. Unlike judges who are mandated to display cold neutrality in
hearing cases, 69 prosecutors are not required to divest themselves
of their personal convictions and refrain from exhibiting partiality. In
this case, there is reasonable ground for Prosecutor Victoriano to
believe that an offense has been committed and that the accused
was probably guilty thereof. 70 Under the circumstance, it is his
sworn duty to see that justice is served. 71 Thus, "[h]e may prosecute
with earnestness and vigor — indeed, he should do so. But, while
he may strike hard blows, he is not at liberty to strike foul ones. It is
as much his duty to refrain from improper methods calculated to
produce a wrongful conviction as it is to use every legitimate means
to bring about a just one." 72 Further,
Under the prevailing criminal procedure, the fiscal's
sphere of action is quite extensive, for he has very
direct and active intervention in the trial, assuming as
the Government's representative the defense of
society, which has been disturbed by the crime, and
taking public action as though he were the injured
party, for the purpose of securing the offender's
punishment, whenever the crime has been proved
and the guilt of the accused as the undoubted
perpetrator thereof established. 73
Fourth Issue:
Self-Defense
To escape criminal liability, the appellants also invoke the justifying
circumstances of self-defense and lawful performance of
duty. 74 Allegedly, Ronie was firing his gun and shouting. "Guwa ang
maisog! (Come out who is brave!)." Then the mayor and the
policemen arrived at the scene to pacify him. Ronie fired at them,
which forced them to chase him and return fire.
We find this scenario bereft of plausibility.
Unlawful aggression on the part of the victim is a condition sine qua
non for the successful invocation of self-defense. 75 As factually
found by the trial court, unlawful aggression did not start with the
victim, but rather with the appellants. Cawaling and his men
proceeded to the C & J-4 Kitchenette and waited for Ronie to come
out. When the victim did, they chased and shot him without giving
him any opportunity to defend himself.
Granting arguendo the veracity of the defense's factual version, it is
important to note that appellants admitted that Ronie was running
away from them when they chased and shot him. Thus, unlawful
aggression — assuming it was initially present — had ceased, and
the appellants no longer had any right to pursue the offender. Basic
is the rule that when unlawful aggression ceases, the defender no
longer has the right to kill or even wound the former aggressor.
Upon the cessation of the unlawful aggression and the danger or
risk to life and limb, there should be a corresponding cessation of
hostilities on the part of the person defending himself. 76
Furthermore, the means employed to ward off the attack was
unreasonably excessive. Being armed, the appellants could have
easily ordered the victim to surrender. Even the first shot at his
shoulder would have been sufficient to immobilize him, yet they
fired a succession of shots at him while he was in no position to put
up a defense.
Jurisprudence teaches that when an accused admits having
committed the crime but invokes self-defense to escape criminal
liability, the burden of proof is reversed and shifted to him. He must
then prove the elements of self-defense. 77 It necessarily follows that
he must now rely on the strength of his own evidence and not on
the weakness of that of the prosecution; for even if the latter
evidence were weak, it could not be disbelieved after the accused
has admitted the
killing. 78 Thus, appellants must establish with clear and convincing
evidence that the killing was justified, and that they incurred no
criminal liability therefor. 79 They failed to do so, and their conviction
thus becomes inevitable. 80
Fifth Issue:
Lawful Performance of Duties
Appellants contend that the killing of Ronie resulted from the lawful
performance of their duties as police officers. However, such
justifying circumstance may be invoked only after the defense
successfully proves that (1) the accused acted in the performance
of a duty, and (2) the injury or offense committed is the necessary
consequence of the due performance or lawful exercise of such
duty. 81 These two requisites are wanting in this case.
The appellants, except Mayor Cawaling, were men in uniform who
happened to be on duty when they killed Ronie. The victim was nor
committing any offense at the time. Killing the victim under the
circumstances of this case cannot in any wise be considered a valid
performance of a lawful duty by men who had sworn to maintain
peace and order and to protect the lives of the people. As aptly held
in People vs. De la Cruz, 82 "Performance of duties does not include
murder." That Ronie was a troublemaker in their town is not an excuse;
as the Court declared in the same case of People vs. De la Cruz,
"Murder is never justified, regardless of the victim."
Sixth Issue:
Alibi
We likewise brush aside the defenses of alibi and denial raised by
Appellant De los Santos. Prosecution witnesses positively identified
him and Fontamillas as part of the group which chased and shot
Ronie Ilisan. It is elementary that alibi and denial are outweighed by
positive identification that is categorical, consistent and untainted
by any ill motive on the part of the eyewitness testifying on the
matter. Alibi and denial, if not substantiated by clear and convincing
evidence, are negative and self-serving evidence undeserving of
weight in law. 83
In fact, De los Santos failed to establish with clear and convincing
evidence that it was physically impossible for him to have been at
the scene of the crime during its commission. 84 The evidence he had
presented demonstrated only that, at the time, he was sleeping in his
house, which was near the locus criminis.
Alibi is always considered with suspicion and received with caution,
not only because it is inherently weak and unreliable, but also
because it is easily fabricated and concocted. 85 It is therefore
incumbent upon the appellant to prove that he was at another place
when the felony was committed, and that it was physically impossibie
for him to have been at the scene of the crime at the time it was
committed. 86 This he failed to prove.
Seventh Issue:
Conspiracy
The trial court correctly appreciated the presence of conspiracy.
Conspiracy exists when two or more persons come to an agreement
concerning the commission of a felony and decide to commit it.
Direct proof of conspiracy is rarely found, for criminals do not write
down their lawless plans and plots. The agreement to commit a
crime, however, may be deduced from the mode and manner of the
commission of the offense or inferred from acts that point to a joint
purpose and design, concerted action, and community of intent. 87 It
does not matter who inflicted the mortal wound, as the act of one is the
act of all, and each incurs the same criminal liability. 88 We concur with
the trial court's elucidation:
All of the accused chased the victim and his brother;
four (4) of whom blocked their ways, first, to their
elder brother Nelson Elisan's house and, second, to
their elder sister Imelda Elisan Tumbagahon's house.
Having changed course by proceeding to the ricefield
in their desperate attempt to evade the accused, all
the six (6) armed accused continued their pursuit.
Their victim, having fallen on the rice paddy, and
rising and kneeling on it with raised hands, all the
said accused with their flashlights beamed on their
victim, in a united and concerted manner, shot him.
After Ronie Elisan had fallen down, co-accused
Mayor Cawaling was even heard as saying "(Y)ou left
[sic] him, he is already dead." . . . . 89
Eighth Issue:
Equipoise Rule
We reject appellants' position that the equipoise rule should apply
to this case. 90 In People vs. Lagnas, 91 the Court, through Mr. Justice
Florenz D. Regalado, described this rule as follows:
Once again, albeit in effect a supportive and
cumulative consideration in view of the preceding
disquisition, the equipoise rule finds application in
this case, that is, if the inculpatory facts and
circumstances are capable of two or more
explanations, one of which is consistent with the
innocence of the accused and the other consistent
with his guilt, then the evidence does not fulfill the
test of moral certainty, and is not sufficient to support
a conviction.
In this case, the inculpatory facts point to only one conclusion:
appellants are guilty. As amplified in the discussion above, the
Court agrees with the trial court that the guilt of the appellants was
proven beyond reasonable doubt.
Ninth Issue:
Murder or Homicide?
The Information alleges three qualifying circumstances: treachery,
evident premeditation and taking advantage of superior strength. If
appreciated, any one of these will qualify the killing to murder.
However, Appellants Tumbagahan and Cajilo posit that there was no
treachery, reasoning that Ronie was not an unsuspecting victim, as
he had been forewarned by Diosdado Venus of the presence of the
appellants inside the restaurant, and there had been a chase prior to
the killing. Further, they contend that abuse of superior strength is
deemed absorbed in treachery, and that "the addition of abuse of
superior strength to qualify the case to murder is nothing more than
mere repetition — a legal chicanery, so to say. Similarly, where
treachery is not proved, there can be no abuse of superior strength,
vice-versa." 92
We partly agree.
Treachery exists when the malefactors employ means and methods
that tend directly and especially to insure their execution without
risk to themselves arising from the defense which the victims might
make. The essence of treachery is the sudden and unexpected
attack without the slightest provocation on the part of the person
attacked. 93 While we do not disregard the fact that the victim, together
with his brother Vicente, was able to run towards a rice field, we still
believe that treachery attended the killing.
In People vs. Landicho, 94 we ruled that treachery might still be
appreciated even when the victim was warned of danger to his person,
for "what is decisive is that the execution of the attack made it
impossible for the victim to defend himself or to retaliate."
The appellants waited for Ronie to come out of the restaurant. All of
them chased the victim and prevented him from seeking refuge
either in the house of his sister Imelda or that of his brother Nelson.
All of them carried firearms and flashlights. They fired their guns at
the victim while he was on his knees with arms raised, manifesting
his intention not to fight back.
We cannot appreciate the aggravating circumstance of abuse of
superior strength, however, as we have consistently ruled that it is
deemed absorbed in treachery. 95
We also affirm the finding of the trial court that the prosecution
failed to prove the attending circumstance of evident premeditation.
To prove this aggravating circumstance, the prosecution must show
the following: (1) the time when the offender determined to commit
the crime; (2) an act manifestly indicating that the offender clung to
his determination; and (3) a lapse of time, between the
determination to commit the crime and the execution thereof,
sufficient to allow the offender to reflect upon the consequences of
his act. 96 Nothing in the records shows how and when the plan to kill
was hatched, or how much time had elapsed before it was carried out.
Tenth Issue:
Damages
The trial court awarded the following: (a) P50,000.00, as civil
indemnity; (b) P6,000.00, as actual damages; and (c) P116,666.66,
for lost earnings. In computing the latter, the trial court used the
following formula:
Total annual net income = 10% x total annual gross
income
= .10 x P25,000.00
= P2,500.00.
xxx xxx xxx
Loss of earning capacity of Ronie Elisan = 2/3 (90-20)
x P2,500.00 = P116,666.66. 97
Consistent with jurisprudence, we affirm the ruling of the trial court
awarding the amount of P50,000 as civil indemnity to the heirs of the
victim. 98
We cannot do the same to the award of actual damages and lost
earnings, however. The award of actual damages has no basis, as
no receipts were presented to substantiate the expenses allegedly
incurred. An alleged pecuniary loss must be established by credible
evidence before actual damages may be awarded. 99 Similarly
erroneous is the award for loss of earning capacity, which should be
computed as follows: 100
2/3 x [80 — age of victim at the time of death] x
[reasonable portion of the annual net income which
would have been received as support by heirs]
As testified to by Nelson Ilisan, the deceased had been earning an
average of P100 daily or P3,000 monthly. 101 From this monthly
income must be deducted the reasonable amount of P1,000
representing the living and other necessary expenses of the deceased.
Hence, the lost earnings of the deceased should be computed as
follows:
= 2/3 x [80 - 22] x [P24,000]
= 2/3 x [58] x [P24,000]
= 2[P1,392,000]
 3 G.R. No. 97381 November 5, 1992
= P2,784,000
3 CIVIL SERVICE COMMISSION and ROGELIO A. DAYAN, in his
= P928,000.
Eleventh Issue:
Aggravating and Mitigating Circumstances
Prior to the amendment of Section 248 of the Revised Penal
Code, 102 the imposable penalty for murder was reclusion temporal in
its maximum period to death. In their Brief, Appellants Cajilo and
Tumbagahan argue for the imposition of the lower penalty of reclusion
temporal, contending that their filing of bail bonds/property bonds,
before the order for their arrest was issued, should be treated as
voluntary surrender. 103
We cannot accept this contention. In the first place, it has no factual
basis. The warrant for the arrest of herein appellants was issued on
August 18, 1987, 104 but appellants' counsel filed the Urgent Motion for
Bail only thereafter, on September 2, 1987. 105 In the second place,
appellants failed to prove the requisites for voluntary surrender, which
are: (1) the offender has not been actually arrested; (2) the offender
surrenders himself to a person in authority or to the latter's agent; and
(3) the surrender is voluntary. 106 The records reveal that a warrant of
arrest was actually served on Tumbagahan and Cajilo 107 on September
2, 1987 and that they were in fact detained. 108
In view of the absence of any other aggravating or mitigating
circumstance, the trial court correctly imposed reclusion perpetua.
WHEREFORE, the appeal is hereby DENIED and the assailed
Decision is AFFIRMED with the following MODIFICATIONS: (1) the
award of P6,000 as actual damages is DELETED, and (2) the award
for loss of earning capacity is INCREASED to P928,000. Costs
against appellant.
SO ORDERED.
BENIGNO V. MAGPALE, JR., petitioner,
vs.
capacity as the General Manager of the Philippine Ports
Authority, respondents.
MELO, J.:
Before Us is a petition for review on certiorari assailing Resolution No.
90-962 dated October 19, 1990 of respondent Civil Service Commission
(CSC). Said CSC resolution set aside and modified the decision dated
February 5, 1990 of the Merit System Protection Board in MSPB Case
No. 449, which ordered the immediate reinstatement in the service of
herein petitioner Benigno V. Magpale, Jr., without loss of seniority rights
and with payment of back salaries and other emoluments to which he is
entitled under the law.
The record shows that petitioner started his career in government as an
employee in the Presidential Assistance on Community Development in
1960. Fifteen years later, or in 1975, he transferred to the Philippine
Ports Authority (PPA) as Arrastre Superintendent. He was promoted to
the position of Port Manager in 1977 of the Port Management Unit
(PMU), General Santos City. Then he was reassigned, in the same year
to PPA-PMU, Tacloban City where he likewise discharged the functions
of Port Manager. On December 1, 1982, the PPA General Manager
designated Atty. William A. Enriquez as officer-in-charge of PPA-PMU,
Tacloban City effective December 6, 1982. On January 6, 1983,
petitioner was ordered to immediately report to the Assistant General
Manager (AGM) for Operation, PPA, Manila, Petitioner reported at PPA
Manila on the same date and performed the duties and functions
assigned to him.
In an Internal Control Department Report dated March 5, 1984, the PMU-
Tacloban Inventory Committee and the Commission on Audit (COA)
stated that petitioner failed to account for equipment of PPA value at
P65,542.25 and to liquidate cash advances amounting to P130,069.61.
He was found also to have incurred unauthorized absences from May 25,
1984 to July 23, 1984.
On July 23, 1984, or nineteen months after he began reporting in Manila,
a formal charge for Dishonesty, Pursuit of Private Business without
permission as required by Civil Service Rules and Regulations, Frequent
and Unauthorized Absences and Neglect of Duty was filed against
petitioner. Based on said charges he was ordered preventively
suspended and has been out of service since then.
For almost four years the case remained unacted upon. The formal
investigation and hearing resumed on September 18, 1987.
On January 18, 1989 a Decision was rendered by the Secretary of the
Department of Transportation and Communication (DOTC), through its
Administrative Action Board, finding petitioner guilty of Gross Negligence
on two counts: (a) for his failure to account for the forty-four (44) assorted
units of equipment, among them a Sony Betamax and a TV Camera, and
(b) for failing to render the required liquidation of his cash advances
amounting to P44,877.00 for a period of four years. Petitioner was also
found guilty of frequent and unauthorized absences. Accordingly, he was
meted the penalty of dismissal from the service with the corresponding
accessory penalties.
When petitioner's motion for reconsideration of the aforesaid Decision
was denied in the DOTC's Order of February 20, 1989, he appealed to
the Merit System and Protection Board (MSPB) of respondent Civil
Service Commission.
On February 5, 1990, the MSPB rendered a Decision reversing the
Decision of the DOTC. The pertinent portion of the MSPB's Decision
reads:
After a careful review of the record of the case, this Board
found the appeal meritorious. Respondent cannot be held
liable for Gross Negligence for his alleged failure to
account for several properties and for failure to liquidate
the cash advances he received as there was no showing
that he has been specifically required to do so either by
law or regulation. The mere detail of respondent to PPA-
Manila, in the absence of an order requiring him to turn
over and account for the funds and property received for
his office at PMU-Tacloban will not necessarily obligate
him to make accounting for the same.
Moreover, Section 105, Chapter 5 of Presidential Decree
1445, otherwise known as "The Government Auditing
Code of the Philippines" measured the liability of an
officer accountable for government property only to the
money value of said property. Though respondent is the
person primarily liable for these funds and property, he
holds this liability jointly with the person who has the
actual possession thereof and who has the immediate
responsibility for the safekeeping.
As to the charge relative to respondent's frequent
unauthorized absences had been sufficiently and
convincingly explained, due to which the Board found him
not at all guilty of the offense charged (sic).
IN VIEW THEREOF, the decision appealed from is
hereby reversed. Respondent-Appellant Magpale should
immediately by reinstated in the service without loss of
seniority rights and with payment of back salaries and
other emoluments to which he is entitled under the law.
(pp. 31-32, Rollo.)
On March 1, 1990, PPA, through its General Manager, herein respondent
Rogelio A Dayan, filed an appeal with the Civil Service Field Office-PPA,
and the latter office indorsed the appeal to respondent CSC in a letter
dated March 5, 1990.
On March 5, 1990, petitioner requested the Secretary of the DOTC to
direct the PPA to implement the MSPB decision as it has become final
and executory. Said request was reiterated in another letter also dated
March 5, 1990 by petitioner to OIC Wilfredo M. Trinidad of the Office of
the Assistant Secretary for Administration and Legal Affairs, DOTC.
On March 13, 1990, petitioner filed with the MSPB a Motion for
Implementation of the MSPB decision. This was opposed by the PPA
through its General Manager.
On April 27, 1990 petitioner filed with respondent CSC his comment to
the appeal of the PPA contending that he is not an accountable officer
and is under no obligation to account for the property and equipment; that
said property and equipment were not received by him as custodian and
he should not be held liable for the loss of the same; that the said
property and equipment were place in PPA-PMU Tacloban City which the
herein petitioner left on October 8, 1982 and since then had lost control
over them. Moreover, petitioner averred that as to the unliquidated cash
advances of P44,877.00, the same had long been liquidated. Finally,
petitioner claimed that his failure to secure the clearance for any possible
property or financial obligation in PMU-Tacloban was due to the urgency
of his transfer to PPA-Manila and the absence of any order or demand to
secure the clearance.
On May 29, 1990, the MSPB issued an Order for the immediate
implementation of its February 5, 1990 Decision ruling that:
Records further show that a copy of this Board's decision
was received by the Office of the Honorable Secretary,
that Department, thru Mr. Frankie Tampus on February 6,
1990. Records finally show that as of March 5, 1990, no
motion for reconsideration of this Board's aforementioned
decision has ever been filed as evidenced by the
certification of even date issued and signed by Director
Adelaida C. Montero of the Office for Central Personnel
Records, this Commission. Hence, said decision has long
become final and executory. (p. 34, Rollo.)
On June 28, 1990, petitioner filed a Motion to Dismiss the appeal of PPA
claiming that:
1. Appeal of PPA was filed out of time and that the CSC
has no jurisdiction over it;
2. The PPA has not exhausted administrative remedies
before appealing to the higher body, the CSC;
3. The MSPB decision has become final and therefore
cannot be disturbed anymore.
(p. 22, Rollo.)
On October 19, 1990, respondent CSC rendered its now assailed
Resolution No. 90-962, the pertinent portion of which reads as follows:
The Commission thus holds respondent Magpale guilty of
Gross Neglect of Duty on two (2) counts for the forty-four
(44) equipments (sic) under his charge and to render an
accounting for cash advances amounting to P44,877.90.
Accordingly, considering two mitigating circumstances of
length of service and first offense in favor of respondent,
the commission hereby imposes a penalty of suspension
for a period of one (1) year against him. As he has been
out of the service since 1984, the penalty is deemed
served and he should now be reinstated to his former
position. This is, however, without prejudice to any
criminal or civil proceedings that the agency concerned or
the COA may institute as proper under the premises.
Finally, the decision of the MSPB exonerating the
respondent Magpale for Gross Negligence is hereby
reversed. Corollarily, the order of payment of back
salaries is hereby set aside. MSPB is likewise reminded
to be more circumspect on matters of this nature,
especially as the instant case involves accountability of
public funds and property.
WHEREFORE, foregoing premises considered, the
Commission finds respondent Benigno V. Magpale, Jr.,
guilty of Gross Neglect of Duty on two (2) counts for
failure to account for the forty-four (44) equipments (sic)
under his charge and to render an accounting for cash
advance amounting to P44,877.90. In view of the
attendant mitigating circumstances of length of service
and first offense in favor of respondents and the Neglect
of Duty to account for cash advance in the amount of
P44,877.90 (second count) be appreciated as an
aggravating circumstances, the penalty of suspension for
one (1) year shall be imposed against respondent. This
shall be without prejudice to any criminal or civil
proceeding that PPA or COA may institute against
respondent. Accordingly, the Decision and Order of
MSBP dated February 5, 1990 and May 29, 1990,
respectively, are hereby set aside. (pp. 27-28, Rollo.)
Hence, the present recourse.
The petition alleges that respondent CSC, in issuing its Resolution No.
90-962, gravely abused its discretion because:
 1. The law did not authorize an appeal by the government
from an adverse decision of the Merit Systems Protection
Board (MSBP);
2. Respondent PPA General Manager did not have the
right or legal personality to appeal from the MSPB
decision;
3. Assuming that the appeal was available to respondent
DAYAN, the same was filed out time after the MSPB
decision had long become final and executory. (pp. 6-7,
Petition; pp. 7-8, Rollo.)
In support of this first contention, petitioner invokes Paragraph 2(a).
Section 16, Chapter 3, Subtitle A, Title I, Book V of Executive Order No.
292, otherwise known as the Administrative Code of 1987 which
provides:
Sec. 16. Offices in the Commission. — The Commission
shall have the following offices:
xxx xxx xxx
(2) The Merit Systems Protection Board
composed of a Chairman and two (2)
members shall have the following
functions:
(a) Hear and decide on
appeal administrative
cases involving officials
and employees of the Civil
Service. Its decision shall
be final except those
involving dismissal or
separation from the
service which may be
appealed to the
Commission. (Emphasis
supplied.)
claiming that since the MSBP decision was for dismissal or separation
from the service, but reinstatement without loss of seniority rights and
with payment of back salaries, the said MSBP decision should be
deemed final, immediately executory and unappealable.
Petitioner next contends that assuming, for the sake of argument, that the
decision of the MSBP was appealable, respondent Dayan, even in his
capacity as General Manager of the PPA, did not have the legal
personality not the right to appeal the decision of the
MSBP, citing Paragraph 1, Section 49, Chapter 7, Subtitle A, Title I, Book
V, of Executive Order No. 292 and the case of Paredes vs. CSC, G.R.
No. 88177, December 4, 1990, 192 SCRA 84.
Assuming further that the MSBP decision was appealable and that
respondent Dayan had the legal personality to appeal the MSBP
decision, petitioner still contends that the appeal should not have been
given due course by the respondent CSC because the appeal was not
filed with the proper disciplining office in accordance with same Section
49 of Executive Order No. 292, which in this case, should be the DOTC,
not with the CSC Field Office at the PPA.
On the merit of the petition, petitioner claims that assuming even further
that an appeal lies from the MSBP decision, that respondent Dayan had
the legal personality or standing to institute the appeal that it was filed
with the proper office, still CSC Resolution 90-962 was rendered with
grave abuse of discretion because petitioner cannot be suspended for
alleged failure to account for pieces of equipment and cash advances
since this is not the neglect of duty contemplated by Section 36 of
Presidential Degree No. 807 or Section 46 of chapter in the Civil Service
in Executive Order 292. At most, petitioner can be held liable for the
money value of the equipment and advances as mandated by Section
105 of Presidential Decree No. 1445, the Government Auditing Code of
the Philippines.
For its part, respondent CSC maintains —
First, that the finality of the MSPB decision in the disciplinary cases as
stated in Section 16, Paragraph 2(a), Book V of Executive Order No. 292,
relied upon by petitioner, is modified by section 12, Paragraph 11, Book
V, of the same Executive Order No. 292, which reads:
Sec. 12. Powers and Functions. — The Commission shall
have the following powers and functions:
xxx xxx xxx
 (11) Hear and decide administrative case instituted by or
bought directly or on appeal, including contested
appointments, and review decisions and actions of its
offices and of the agencies attached to it.
Furthermore, relevant provisions of Executive Order No 135 dated
February 25, 1987 amending Section 19(b) of Presidential Decree No.
807 and Section 8 of Presidential Decree No. 1409 state, thus:
WHEREAS, in the interest of justice, there is a need to
confer upon the Civil Service Commission jurisdiction
over appeal in contested or provisional appointments and
to make its decision thereon, as well as in administrative
disciplinary cases final and reviewable by the Supreme
Court.
xxx xxx xxx
Relationship with the Civil Service Commission. –– The
Commission shall hear and decide appeals from other
decisions of the Board provided that the decisions of the
Commission shall be subject to review on certiorari upon
receipt of the copy thereof by the aggrieved part.
Thus, respondent CSC argues that it is deemed not to have lost its
appellate jurisdiction over the decisions of the MSPB in administrative
disciplinary case.
Second, the case of Paredes vs. CSC is not applicable. Respondent
Dayan appealed the MSPB decision not in his personal capacity nor in
pursuit in his private interest, but as head of PPA, being the general
manager thereof.
Third, the appeal was filed with the proper disciplining office because the
decision appealed from was that of the MSPB, one of the offices in
respondent CSC. Thus, respondent CSC was justified in giving due
course to PPA's notice of appeal filed with its (CSC) Field Office at the
PPA.
Finally, petitioner's claim that he is liable only for the money value of the
property and cash advances and cannot be administratively charged for
such infraction is untenable and a mockery of the civil service law. For his
failure to account for the property under his charge and to liquidate his
cash advances, petitioner is guilty of Gross Neglect of Duty and should
have been dismissed from the service if no mitigating circumstances
were considered in his favor.
We gave due course to the petition and required the parties to file their
respective memoranda. After considering the same and the pertinent
laws and jurisprudence, We find that the petition must be granted.
After Mendez vs. Civil Service Commission, (204 SCRA 965 [1991]), the
extent of the authority of respondent CSC to review the decisions of the
MSPB is now a settled matter.
The Court, in said case held:
It is axiomatic that the right to appeal is
merely a statutory privilege and may be
exercised only in the manner and in
accordance with the provisions of law.
(Victorias Milling Co., Inc. vs. Office of the
Presidential Assistant for Legal Affairs,
153 SCRA 318).
A cursory reading of P.D. 807, otherwise
known as "The Philippines Civil Service
Law" shows that said law does not
contemplate a review of decisions
exonerating officers or employees from
administrative charges.
Section 37 paragraph (a) thereof, provides:
The Commission shall decide upon appeal
all administrative disciplinary cases
involving the imposition of the penalty of
suspension for more than thirty days, or
fine in an amount exceeding thirty day's
salary, demotion in rank or salary or
transfer, removal or dismissal from office. .
. . (Emphasis supplied) (p. 7. Rollo)
Said provisions must be read together with Section 39
paragraph (a) of P.D. 805 which contemplates:
 Appeals, where allowable, shall be made
by the party adversely affected by the
decision . . . (Emphasis supplied) (p.
104, Rollo)
The phrase "party adversely affective by the decision"
refers to the government employees against whom the
administrative case is filed for the purpose of disciplinary
action which may take the form of suspension, demotion
in rank or salary, transfer, removal or dismissal from
office. In the instant case, Coloyan who filed the appeal
cannot be considered an aggrieved party because he is
not the respondent of the administrative case below.
Finally, pursuant to Section 37 paragraph (b) of P.D. 807,
the city mayor, as head of the city government, is
empowered to enforce judgment with finality on lesser
penalties like suspension from work for one month and
forfeiture of salary equivalent to one month against erring
employees.
By inference or implication, the remedy of appeal may be
availed of only in a case where the respondent is found
guilty of the charges filed against him. But the respondent
is exonerated of said charges, as in this case, there is no
occasion on appeal. (pp. 967-968)
The above ruling is a reiteration of the earlier pronouncement in Paredes
vs. Civil Service Commission, (192 SCRA 84 [1990]) cited by petitioner,
where We said:
Based on the above provisions of law, appeal to the Civil
Service Commission in an administrative case is
extended to the party adversely affected by the decision,
that is, the person or the respondent employee who has
been meted out the penalty of suspension for more than
thirty days; or fine in an amount exceeding thirty days
salary demotion in rank or salary or transfer, removal or
dismissal from office. The decision of the disciplining
authority is even final and not appealable to the Civil
Service Commission in cases where the penalty imposed
is suspension for not more than thirty days or fine in an
amount not exceeding thirty days salary. Appeal in cases
allowed by law must be filed within fifteen days from
receipt of the decision.
Here the MSPB after hearing and the submission of
memoranda exonerated private respondent Amor of all
charges except for habitual tardiness. The penalty was
only a reprimand so that even private respondent Amor,
the party adversely affected by the decision, cannot even
interpose an appeal to the Civil Service Commission.
As correctly ruled by respondent, petitioner Paredes the
complainant is not the part adversely affected by the
decision so that she has no legal personality to interpose
an appeal to the Civil Service Commission. In an
administrative case, the complainant is a mere witness
(Gonzalo vs. D. Roda, 64 SCRA 120). Even if she is the
Head of the Administrative Services Department of the
HSRC as a complaint she is merely a witness for the
government in an administrative case. No private interest
is involved in an administrative case as the offense is
committed against the government. (pp. 98-99)
While it is true, as contended by respondent Civil Service Commission
that under Section 12 (par. 11), Chapter 3, Subtitle A, Book V of
Executive Order 292, the CSC does have the power to —
Hear and decide administrative cases instituted by or
brought before it directly or on appeal, including contested
appointments, and review decisions and actions of its
offices and of the agencies attached to it. . . .
the exercise of the power is qualified by and should be read together with
the other sections of the same sub-title and book of Executive Order 292,
particularly Section 49 which prescribes the following requisites for the
exercise of the power of appeal, to wit:
(a) the decision must be appealable;
(b) the appeal must be made by the party adversely
affected by the decision;
 (c) the appeal must be made within fifteen days from
receipt of the decision, unless a petition for the
reconsideration is seasonably filed; and
(d) the notice of appeal must be filed with the disciplining
office, which shall forward the records of the case,
together with the notice of appeal to the appellate
authority within fifteen days from filing of the notice of
appeal, with its comments, if any.
Under Section 47 of the same Code, the CSC shall decide on appeal all
administrative disciplinary cases involving the imposition of:
(a) a penalty of suspension for more than thirty days; or
(b) fine in an amount exceeding thirty days salary; or
c) demotion in rank or salary or transfer; or
(d) removal or dismissal from office.
The February 5, 1990 decision of the MSPB did not involve dismissal or
separation from office, rather, the decision exonerated petitioner and
ordered him reinstated to his former position. Consequently, in the light of
our pronouncements in the aforecited cases of Mendez v. Civil Service
Commission and Paredes vs. Civil Service Commission, the MSPB
decision was not a proper subject of appeal to the CSC.
Settled is the rule that a tribunal, board, or officer exercising judicial
functions acts without jurisdiction if no authority has been conferred by
law to hear and decide the case. (Acena v. Civil Service Commission,
193 SCRA 623 [1991]).
WHEREFORE, the decision of the Civil Service Commission is hereby
ANNULLED and SET ASIDE and the decision of the Merit Systems
Protection Board dated February 5, 1990 is hereby REINSTATED.
SO ORDERED.
G.R. No. 90503 September 27, 1990
NESTOR SANDOVAL, petitioner,
vs.
HON. DOROTEO CAÑEBA, Presiding Judge, RTC, Manila, Branch
20, DEPUTY SHERIFF OF MANILA (RTC, Manila, Branch 20), and
ESTATE DEVELOPERS & INVESTORS CORPORATION, respondents.
Arnold V. Guerrero & Associates for petitioner.
Lino M. Patajo for private respondent.
GANCAYCO, J.:
The issue in this petition is whether or not the ordinary courts have jurisdiction over the collection of
unpaid installments regarding a subdivision lot.
On August 20, 1987 private respondent filed a complaint in the Regional
Trial Court (RTC) of Manila for the collection of unpaid installments
regarding a subdivision lot, pursuant to a promissory note, plus interest.
On January 29, 1988 the trial court rendered a decision.
It appears that petitioner was declared in default so much so that after
receiving the evidence of private respondent, the trial court rendered its
decision on January 19,1988, the dispositive portion of which reads as
follows:
WHEREFORE, on the allegations and the
prayer of the complaint and the evidence
adduced in support therefor, judgment is
hereby rendered, ordering the defendant
to pay plaintiff the following:
1. The sum of P73,867.42 plus interest and other charges
commencing from January 1, 1988 until fully paid;
2. Such sum which shall not be less than P2,000.00 or
25% of the amount of delinquency whichever is greater,
as and for attorney's fees.
3. Costs against the defendant.
 4. SO ORDERED. 1
On September 28, 1988 the trial court issued an order directing the
issuance of a writ of execution to enforce its decision that had become
final and executory.
On September 30, 1988 petitioner filed a motion to vacate judgment and
to dismiss the complaint on the ground that the lower court has no
jurisdiction over the subject matter and that its decision is null and void. A
motion for reconsideration of the writ of execution was also filed by
petitioner. An opposition to both motions was filed by private respondent
to which a reply was filed by petitioner.
On February 17, 1989 the trial court denied the motion to vacate the
judgment on the ground that it is now beyond the jurisdiction of the Court
to do so. It directed the issuance of a writ of execution anew.
Hence the herein petition wherein it is alleged that the trial court
committed a grave abuse of discretion as follows:
5.1. The respondent Judge gravely abused his discretion
and acted without jurisdiction in taking cognizance of the
complaint before him notwithstanding
that exclusive and original jurisdiction over the subject-
matter thereof is vested with the Housing and Land Use
Regulatory Board (HLURB) pursuant to PD 957.
5.2. The respondent Judge gravely abused his discretion
and acted without jurisdiction in refusing to vacate his
judgment rendered without jurisdiction and in issuing a
writ of execution to implement his abovesaid void
judgment. 2
The petition is impressed with merit.
Under Section 1 of Presidential Decree No. 957 the National Housing
Authority (NHA) was given the exclusive jurisdiction to hear and decide
certain cases as follows:
SEC.1. In the exercise of its function to regulate the real
estate trade and business and in addition to its powers
provided for in Presidential Decree No. 957, the National
Housing Authority shall have exclusive jurisdiction to hear
and decide cases of the following nature:
A. Unsound real estate business practices:
B. Claims involving refund and any other claims filed by
subdivision lot or condominium unit buyer against the
project owner, developer, dealer, broker or salesman;and
C. Cases involving specific performance of contractual
and statutory obligations filed by buyers of subdivision lot
or condominium unit against the owner, developer,
dealer, broker or salesman. (Emphasis supplied.)
The language of this section, particularly, the second portion thereof,
leaves no room for doubt that exclusive jurisdiction over the case
between the petitioner and private respondent is vested not on the RTC
but on the NHA. The NHA was re-named Human Settlements Regulatory
Commission and thereafter it was re-named as the Housing and Land
Use Regulatory Board (HLURB). 3
Undeniably the sum of money sought to be collected by private
respondent from petitioner represented unpaid installments of a
subdivision lot which the petitioner purchased. Petitioner alleges that he
suspended payments thereof because of the failure of the developer to
develop the subdivision pursuant to their agreement.
In Antipolo Realty Corporation vs. National Housing Authority, 4 the suit
which was filed with the NHA, likewise involved non-payment of
installments over a subdivision lot, wherein this Court held that the NHA
has exclusive authority to hear and decide the case.
In Solid Homes, Inc. vs. Teresita Payawal, 5 this Court ruled that upon the
issuance of Presidential Decree No. 957, the trial court may no longer
assume jurisdiction over the cases enumerated in Section 1 of
Presidential Decree No. 397. We even stated therein that the Housing
and Land Use Regulatory Board has the authority to award damages in
the exercise of this exclusive power conferred upon it by Presidential
Decree No. 1344.
In Estate Developers and Investors Corporation vs. Antonio Sarte and
Erlinda Sarte, G.R. No. 93646, which is a case substantially similar to the
instant case, in a resolution of August 13, 1990 this Court upheld the
exclusive jurisdiction of the HLURB over the collection suit.
Considering that the trial court has no jurisdiction under the
circumstances obtaining in this case, the decision it rendered is null and
void ab initio. It is as if no decision was rendered by the trial court at all.
When as in this case the attention of the trial court is drawn to its lack of
competence and authority to act on the case, certainly the trial court has
a duty to vacate the judgment by declaring the same to be null and
void ab initio.
This is as it should be. Inasmuch as the questioned judgment is null and
void, it is, as above observed, as if no decision had been rendered by the
trial court. It cannot become final and exucutory, much less can it be
enforced by a writ of execution.
The trial court, rather than reiterating the issuance of a writ of execution
in this case, which it did, should have recalled and cancelled the writ of
execution of the judgment.
WHEREFORE, the petition is GRANTED. The questioned decision of the
trial court dated January 29, 1988 is hereby declared null and void for
lack of jurisdiction. No pronouncement as to costs.
SO ORDERED.
Narvasa (Chairman), Cruz, Griño-Aquino and Medialdea, JJ., concur.
G.R. No. 155713 May 5, 2006
MILAGROS G. LUMBUAN,* Petitioner,
vs.
ALFREDO A. RONQUILLO, Respondent.
DECISION
QUISUMBING, J.:
This petition for review on certiorari seeks to reverse and set aside the
Decision1 dated April 12, 2002, of the Court of Appeals in CA-G.R. SP
No. 52436 and its Resolution2 dated October 14, 2002, denying the
petitioner’s motion for reconsideration.
The salient facts, as found by the Court of Appeals, 3 are as follows:
Petitioner Milagros G. Lumbuan is the registered owner of Lot 19-A,
Block 2844 with Transfer Certificate of Title No. 193264, located in
Gagalangin, Tondo, Manila. On February 20, 1995, she leased it to
respondent Alfredo A. Ronquillo for a period of three years with a monthly
rental of P5,000. The parties also agreed that there will be a 10% annual
increase in rent for the succeeding two years, i.e., 1996 and 1997, 4 and
the leased premises will be used exclusively for the respondent’s fastfood
business, unless any other use is given, with the petitioner’s prior written
consent.5
While the respondent at the start operated a fastfood business, he later
used the premises as residence without the petitioner’s prior written
consent. He also failed to pay the 10% annual increase in rent
of P500/month starting 1996 and P1,000/month in 1997 to the present.
Despite repeated verbal and written demands, the respondent refused to
pay the arrears and vacate the leased premises.
On November 15, 1997, the petitioner referred the matter to the
Barangay Chairman’s office but the parties failed to arrive at a
settlement. The Barangay Chairman then issued a Certificate to File
Action.6
On December 8, 1997, the petitioner filed against the respondent an
action for Unlawful Detainer, docketed as Civil Case No. 157922-CV. It
was raffled to the Metropolitan Trial Court (MeTC) of Manila, Branch 6.
On December 15, 1997, the respondent received the summons and copy
of the complaint. On December 24, 1997, he filed his Answer by mail.
Before the MeTC could receive the respondent’s Answer, the petitioner
filed a Motion for Summary Judgment dated January 7, 1998.7 Acting
upon this motion, the MeTC rendered a decision8 on January 15, 1998,
ordering the respondent to vacate and surrender possession of the
leased premises; to pay the petitioner the amount of P46,000 as unpaid
rentals with legal interest until fully paid; and to pay the petitioner P5,000
as attorney’s fees plus cost of the suit.
The respondent then filed a Manifestation calling the attention of the
MeTC to the fact that his Answer was filed on time and praying that the
decision be set aside. The MeTC denied the prayer, ruling that the
Manifestation was in the nature of a motion for reconsideration which is a
prohibited pleading under the Rules on Summary Procedure.
Upon appeal, the case was raffled to the Regional Trial Court (RTC) of
Manila, Branch 38, and docketed as Civil Case No. 98-87311. On July 8,
1998, the RTC rendered its decision9 setting aside the MeTC decision.
The RTC directed the parties to go back to the Lupon Chairman or
Punong Barangay for further proceedings and to comply strictly with the
condition that should the parties fail to reach an amicable settlement, the
entire records of the case will be remanded to MeTC of Manila, Branch 6,
for it to decide the case anew.
The respondent sought reconsideration but the RTC denied the motion in
an Order dated March 15, 1999. Thus, he sought relief from the Court of
Appeals through a petition for review.10 On April 12, 2002, the appellate
court promulgated a decision, reversing the decision of the RTC and
ordering the dismissal of the ejectment case. The appellate court ruled
that when a complaint is prematurely instituted, as when the mandatory
mediation and conciliation in the barangay level had not been complied
with, the court should dismiss the case and not just remand the records
to the court of origin so that the parties may go through the prerequisite
proceedings.
The petitioner filed a motion for reconsideration, which was denied by the
appellate court. Hence, this present petition.
In the meantime, while this petition was pending before this Court, the
parties went through barangay conciliation proceedings as directed by
the RTC of Manila, Branch 38. Again, they failed to arrive at an amicable
settlement prompting the RTC to issue an Order 11 remanding the case to
the MeTC of Manila, Branch 6, where the proceedings took place anew.
On April 25, 2000, the MeTC rendered a second decision, the dispositive
portion of which reads:
WHEREFORE, premises considered, judgment on the merits is hereby
rendered for the plaintiff as follows:
1. Ordering defendant and all persons claiming right of
possession under him to voluntarily vacate the property located at
Lot 19-A Block 2844, Gagalangin, Tondo, Manila and surrender
possession thereof to the plaintiff;
2. Ordering defendant to pay to plaintiff the amount of
P387,512.00 as actual damages in the form of unpaid rentals and
its agreed increase up to January 2000 and to pay the amount of
P6,500.00 a month thereafter until the same is actually vacated;
3. Ordering the defendant to pay to plaintiff the sum of
P10,000.00 as and for attorney’s fees plus cost of the suit.
SO ORDERED.12
The respondent appealed the foregoing decision. The case was raffled
1avvphil.net
to RTC of Manila, Branch 22, and docketed as Civil Case No. 00-98173.
The RTC ruled in favor of the petitioner and dismissed the appeal. The
respondent elevated the case to the Court of Appeals, where it is now
pending.
The sole issue for our resolution is:
[WHETHER] THE COURT OF APPEALS GRAVELY ERRED IN
DISMISSING THE COMPLAINT FOR THE ALLEGED FAILURE OF THE
PARTIES TO COMPLY WITH THE MANDATORY MEDIATION AND
CONCILIATION PROCEEDINGS IN THE BARANGAY LEVEL.13
With the parties’ subsequent meeting with the Lupon Chairman or
Punong Barangay for further conciliation proceedings, the procedural
defect was cured. Nevertheless, if only to clear any lingering doubt why
the Court of Appeals erred in dismissing the complaint, we shall delve on
the issue.
The petitioner alleges that the parties have gone through barangay
conciliation proceedings to settle their dispute as shown by the Certificate
to File Action issued by the Lupon/Pangkat Secretary and attested by the
Lupon/Pangkat Chairman. The respondent, on the other hand, contends
that whether there was defective compliance or no compliance at all with
the required conciliation, the case should have been dismissed.
The primordial objective of the Katarungang Pambarangay Rules,14 is to
reduce the number of court litigations and prevent the deterioration of the
quality of justice which has been brought about by the indiscriminate filing
of cases in the courts. To attain this objective, Section 412(a) of Republic
Act No. 716015 requires the parties to undergo a conciliation process
before the Lupon Chairman or the Pangkat as a precondition to filing a
complaint in court,16 thus:
would end up with this Court, we find that we cannot do so in the instant
case.
It must be underscored that supervening events have taken place before
the lower courts where the parties have been adequately heard, and all
the issues have been ventilated. Since the records of those proceedings
are with the Court of Appeals, it is in a better position to fully adjudicate
the rights of the parties. To rely on the records before this Court would
prevent us from rendering a sound judgment in this case. Thus, we are
left with no alternative but to leave the matter of ruling on the merits to
the appellate court.

SECTION 412. Conciliation. – (a) Pre-condition to Filing of Complaint in WHEREFORE, the petition is GRANTED. The decision and resolution of
Court. – No complaint, petition, action, or proceeding involving any matter the Court of Appeals in CA-G.R. SP No. 52436 are REVERSED and SET
within the authority of the lupon shall be filed or instituted directly in court ASIDE, and the decision of the Regional Trial Court of Manila, Branch
or any other government office for adjudication, unless there has been a 38, in Civil Case No. 98-87311 is AFFIRMED.
confrontation between the parties before the lupon chairman or the
pangkat, and that no conciliation or settlement has been reached as The Court of Appeals is ordered to proceed with the appeal in CA – G.R.
certified by the lupon secretary or pangkat secretary as attested to by the No. 73453 and decide the case with dispatch.
lupon or pangkat chairman….
SO ORDERED.
Here, the Lupon/Pangkat Chairman and Lupon/Pangkat Secretary signed
the Certificate to File Action stating that no settlement was reached by LEONARDO A. QUISUMBING
the parties. While admittedly no pangkat was constituted, it was not Associate Justice
denied that the parties met at the office of the Barangay Chairman for
possible settlement. The efforts of the Barangay Chairman, however,
proved futile as no agreement was reached. Although no pangkat was
formed, in our mind, there was substantial compliance with the law. It is
noteworthy that under the aforequoted provision, the confrontation before
the Lupon Chairman or the pangkat is sufficient compliance with the
precondition for filing the case in court. 17 This is true notwithstanding the
mandate of Section 410(b) of the same law that the Barangay Chairman
shall constitute a pangkat if he fails in his mediation efforts. Section
410(b) should be construed together with Section 412, as well as the
circumstances obtaining in and peculiar to the case. On this score, it is
significant that the Barangay Chairman or Punong Barangay is herself
the Chairman of the Lupon under the Local Government Code. 18

Finally, this Court is aware that the resolution of the substantial issues in
this case is pending with the Court of Appeals. While ordinarily, we would
have determined the validity of the parties’ substantial claims since to
await the appellate court’s decision will only frustrate speedy justice and,
in any event, would be a futile exercise, as in all probability the case
G.R. No. 140954. April 12, 2005
HEIRS OF BERTULDO1 HINOG: Bertuldo Hinog II, Bertuldo Hinog III,
Bertuldo Hinog, Jr., Jocelyn Hinog, Bertoldo Hinog IV, Bertoldo
Hinog V, Edgardo Hinog, Milagros H. Pabatao, Lilian H. King,
Victoria H. Engracia, Terisita C. Hinog, Paz H. Besana, Roberto C.
Hinog, Vicente C. Hinog, Roel C. Hinog, Marilyn C. Hinog, Bebot C.
Hinog, lordes C. Hinog, Pablo Chiong, Arlene Lanasang (All
respresented by Bertuldo Hinog III), Petitioners,
vs.
HON. ACHILLES MELICOR, in his capacity as Presiding Judge, RTC,
Branch 4, 7th Judicial Region, Tagbiliran City, Bohol, and
CUSTODIO BALANE, RUFO BALANE, HONORIO BALANE, and
TOMAS BALANE, Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for certiorari and prohibition under Rule 65 of the
Rules of Court which assails the Orders dated March 22, 1999, August
13, 1999 and October 15, 1999 of the Regional Trial Court, Branch 4, of
Tagbilaran City, Bohol in Civil Case No. 4923.
The factual background of the case is as follows:
On May 21, 1991, private respondents Custodio, Rufo, Tomas and
Honorio, all surnamed Balane, filed a complaint for "Recovery of
Ownership and Possession, Removal of Construction and Damages"
against Bertuldo Hinog (Bertuldo for brevity). They alleged that: they own
a 1,399- square meter parcel of land situated in Malayo Norte, Cortes,
Bohol, designated as Lot No. 1714; sometime in March 1980, they
allowed Bertuldo to use a portion of the said property for a period of ten
years and construct thereon a small house of light materials at a nominal
annual rental of ₱100.00 only, considering the close relations of the
parties; after the expiration of the ten-year period, they demanded the
return of the occupied portion and removal of the house constructed
thereon but Bertuldo refused and instead claimed ownership of the entire
property.
Accordingly, private respondents sought to oust Bertuldo from the
premises of the subject property and restore upon themselves the
ownership and possession thereof, as well as the payment of moral and
exemplary damages, attorney’s fees and litigation expenses "in amounts
justified by the evidence." 2
On July 2, 1991, Bertuldo filed his Answer. He alleged ownership of the
disputed property by virtue of a Deed of Absolute Sale dated July 2,
1980, executed by one Tomas Pahac with the knowledge and conformity
of private respondents.3
After the pre-trial, trial on the merits ensued. On November 18, 1997,
private respondents rested their case. Thereupon, Bertuldo started his
direct examination. However, on June 24, 1998, Bertuldo died without
completing his evidence.
On August 4, 1998, Atty. Sulpicio A. Tinampay withdrew as counsel for
Bertuldo as his services were terminated by petitioner Bertuldo Hinog III.
Atty. Veronico G. Petalcorin then entered his appearance as new
counsel for Bertuldo.4
On September 22, 1998, Atty. Petalcorin filed a motion to expunge the
complaint from the record and nullify all court proceedings on the ground
that private respondents failed to specify in the complaint the amount of
damages claimed so as to pay the correct docket fees; and that
under Manchester Development Corporation vs. Court of Appeals,5 non-
payment of the correct docket fee is jurisdictional.6
In an amended motion, filed on October 2, 1998, Atty. Petalcorin further
alleged that the private respondents failed to pay the correct docket fee
since the main subject matter of the case cannot be estimated as it is for
recovery of ownership, possession and removal of construction. 7
Private respondents opposed the motion to expunge on the following
grounds: (a) said motion was filed more than seven years from the
institution of the case; (b) Atty. Petalcorin has not complied with Section
16, Rule 3 of the Rules of Court which provides that the death of the
original defendant requires a substitution of parties before a lawyer can
have legal personality to represent a litigant and the motion to expunge
does not mention of any specific party whom he is representing; (c)
collectible fees due the court can be charged as lien on the judgment;
and (d) considering the lapse of time, the motion is merely a dilatory
scheme employed by petitioners.8
In their Rejoinder, petitioners manifested that the lapse of time does not
vest the court with jurisdiction over the case due to failure to pay the
correct docket fees. As to the contention that deficiency in payment of
docket fees can be made as a lien on the judgment, petitioners argued
that the payment of filing fees cannot be made dependent on the result of
the action taken.9
On January 21, 1999, the trial court, while ordering the complaint to be
expunged from the records and the nullification of all court proceedings
taken for failure to pay the correct docket fees, nonetheless, held:
The Court can acquire jurisdiction over this case only upon the payment
of the exact prescribed docket/filing fees for the main cause of action,
plus additional docket fee for the amount of damages being prayed for in
the complaint, which amount should be specified so that the same can be
considered in assessing the amount of the filing fees. Upon the complete
payment of such fees, the Court may take appropriate action in the light
of the ruling in the case of Manchester Development Corporation vs.
Court of Appeals, supra.10
Accordingly, on January 28, 1999, upon payment of deficiency docket
fee, private respondents filed a manifestation with prayer to reinstate the
case.11 Petitioners opposed the reinstatement12 but on March 22, 1999, the
trial court issued the first assailed Order reinstating the case.13
On May 24, 1999, petitioners, upon prior leave of court,14 filed their
supplemental pleading, appending therein a Deed of Sale dated
November 15, 1982.15 Following the submission of private respondents’
opposition thereto,16 the trial court, in its Order dated July 7, 1999, denied
the supplemental pleading on the ground that the Deed of Absolute Sale
is a new matter which was never mentioned in the original answer dated
July 2, 1991, prepared by Bertuldo’s original counsel and which Bertuldo
verified; and that such new document is deemed waived in the light of
Section 1, Rule 917 of the Rules of Court. The trial court also noted that no
formal substitution of the parties was made because of the failure of
defendant’s counsel to give the names and addresses of the legal
representatives of Bertuldo, so much so that the supposed heirs of
Bertuldo are not specified in any pleading in the case. 18
On July 14, 1999, petitioners manifested that the trial court having
expunged the complaint and nullified all court proceedings, there is no
valid case and the complaint should not be admitted for failure to pay the
correct docket fees; that there should be no case to be reinstated and no
case to proceed as there is no complaint filed. 19
After the submission of private respondents’ opposition20 and petitioners’
rejoinder,21 the trial court issued the second assailed Order on August 13,
1999, essentially denying petitioners’ manifestation/rejoinder. The trial
court held that the issues raised in such manifestation/rejoinder are
practically the same as those raised in the amended motion to expunge
which had already been passed upon in the Order dated January 21,
1999. Moreover, the trial court observed that the Order dated March 22,
1999 which reinstated the case was not objected to by petitioners within
the reglementary period or even thereafter via a motion for
reconsideration despite receipt thereof on March 26, 1999. 22
On August 25, 1999, petitioners filed a motion for reconsideration23 but the
same was denied by the trial court in its third assailed Order dated
October 15, 1999. The trial court held that the Manchester rule was
relaxed in Sun Insurance Office, Ltd. vs. Asuncion.24 Noting that there has
been no substitution of parties following the death of Bertuldo, the trial
court directed Atty. Petalcorin to comply with the provisions of Section 16,
Rule 3 of the Rules of Court. The trial court also reiterated that the Order
dated March 22, 1999 reinstating the case was not assailed by
petitioners within the reglementary period, despite receipt thereof on
March 26, 1999.25
On November 19, 1999, Atty. Petalcorin complied with the directive of the
trial court to submit the names and addresses of the heirs of Bertuldo. 26
On November 24, 1999, petitioners filed before us the present petition
for certiorari and prohibition.27 They allege that the public respondent
committed grave abuse of discretion in allowing the case to be reinstated
after private respondents paid the docket fee deficiency since the trial
court had earlier expunged the complaint from the record and nullified all
proceedings of the case and such ruling was not contested by the private
respondents. Moreover, they argue that the public respondent committed
grave abuse of discretion in allowing the case to be filed and denying the
manifestation with motion to dismiss, despite the defect in the complaint
which prayed for damages without specifying the amounts, in violation of
SC Circular No. 7, dated March 24, 1988.
In their Comment, private respondents aver that no grave abuse of
discretion was committed by the trial court in reinstating the complaint
upon the payment of deficiency docket fees because petitioners did not
object thereto within the reglementary period. Besides, Atty. Petalcorin
possessed no legal personality to appear as counsel for the heirs of
Bertuldo until he complies with Section 16, Rule 3 of the Rules of Court. 28
At the outset, we note the procedural error committed by petitioners in
directly filing the instant petition before this Court for it violates the
established policy of strict observance of the judicial hierarchy of courts.
Although the Supreme Court, Court of Appeals and the Regional Trial
Courts have concurrent jurisdiction to issue writs of certiorari,
prohibition, mandamus, quo warranto, habeas corpus and injunction,
such concurrence does not give the petitioner unrestricted freedom of
choice of court forum.29 As we stated in People vs. Cuaresma:30
This Court's original jurisdiction to issue writs of certiorari is not exclusive.
It is shared by this Court with Regional Trial Courts and with the Court of
Appeals. This concurrence of jurisdiction is not, however, to be taken as
according to parties seeking any of the writs an absolute, unrestrained
freedom of choice of the court to which application therefor will be
directed. There is after all a hierarchy of courts. That hierarchy is
determinative of the venue of appeals, and also serves as a general
determinant of the appropriate forum for petitions for the extraordinary
writs. A becoming regard for that judicial hierarchy most certainly
indicates that petitions for the issuance of extraordinary writs against first
level ("inferior") courts should be filed with the Regional Trial Court, and
those against the latter, with the Court of Appeals. A direct invocation of
the Supreme Court’s original jurisdiction to issue these writs should be
allowed only when there are special and important reasons therefor,
clearly and specifically set out in the petition. This is [an] established
policy. It is a policy necessary to prevent inordinate demands upon the
Court’s time and attention which are better devoted to those matters
within its exclusive jurisdiction, and to prevent further over-crowding of
the Court’s docket.31
The rationale for this rule is two-fold: (a) it would be an imposition upon
the precious time of this Court; and (b) it would cause an inevitable and
resultant delay, intended or otherwise, in the adjudication of cases, which
in some instances had to be remanded or referred to the lower court as
the proper forum under the rules of procedure, or as better equipped to
resolve the issues because this Court is not a trier of facts. 32
Thus, this Court will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts, and exceptional
and compelling circumstances, such as cases of national interest and of
serious implications, justify the availment of the extraordinary remedy of
writ of certiorari, calling for the exercise of its primary jurisdiction.
Exceptional and compelling circumstances were held present in the
following cases: (a) Chavez vs. Romulo33 on citizens’ right to bear arms;
(b) Government of the United States of America vs. Purganan34 on bail in
extradition proceedings; (c) Commission on Elections vs. Quijano-
Padilla35 on government contract involving modernization and
computerization of voters’ registration list; (d) Buklod ng Kawaning EIIB
vs. Zamora36 on status and existence of a public office; and (e) Fortich vs.
Corona37 on the so-called "Win-Win Resolution" of the Office of the
President which modified the approval of the conversion to agro-industrial
area.
In this case, no special and important reason or exceptional and
compelling circumstance analogous to any of the above cases has been
adduced by the petitioners so as to justify direct recourse to this Court.
The present petition should have been initially filed in the Court of
Appeals in strict observance of the doctrine on the hierarchy of courts.
Failure to do so is sufficient cause for the dismissal of the petition at bar.
In any event, even if the Court disregards such procedural flaw, the
petitioners’ contentions on the substantive aspect of the case fail to invite
judgment in their favor.
The unavailability of the writ of certiorari and prohibition in this case is
borne out of the fact that petitioners principally assail the Order dated
March 22, 1999 which they never sought reconsideration of, in due time,
despite receipt thereof on March 26, 1999. Instead, petitioners went
through the motion of filing a supplemental pleading and only when the
latter was denied, or after more than three months have passed, did they
raise the issue that the complaint should not have been reinstated in the
first place because the trial court had no jurisdiction to do so, having
already ruled that the complaint shall be expunged.
After recognizing the jurisdiction of the trial court by seeking affirmative
relief in their motion to serve supplemental pleading upon private
respondents, petitioners are effectively barred by estoppel from
challenging the trial court’s jurisdiction. 38 If a party invokes the jurisdiction
of a court, he cannot thereafter challenge the court’s jurisdiction in the
same case.39 To rule otherwise would amount to speculating on the
fortune of litigation, which is against the policy of the Court. 40
Nevertheless, there is a need to correct the erroneous impression of the
trial court as well as the private respondents that petitioners are barred
from assailing the Order dated March 22, 1999 which reinstated the case
because it was not objected to within the reglementary period or even
thereafter via a motion for reconsideration despite receipt thereof on
March 26, 1999.
It must be clarified that the said order is but a resolution on an incidental
matter which does not touch on the merits of the case or put an end to
the proceedings.41 It is an interlocutory order since there leaves something
else to be done by the trial court with respect to the merits of the
case.42 As such, it is not subject to a reglementary period. Reglementary
period refers to the period set by the rules for appeal or further review of
a final judgment or order, i.e., one that ends the litigation in the trial court.
Moreover, the remedy against an interlocutory order is generally not to
resort forthwith to certiorari, but to continue with the case in due course
and, when an unfavorable verdict is handed down, to take an appeal in
the manner authorized by law.43 Only when the court issued such order
without or in excess of jurisdiction or with grave abuse of discretion and
when the assailed interlocutory order is patently erroneous and the
remedy of appeal would not afford adequate and expeditious relief
will certiorari be considered an appropriate remedy to assail an
interlocutory order.44 Such special circumstances are absolutely wanting in
the present case.
Time and again, the Court has held that the Manchester rule has been
modified in Sun Insurance Office, Ltd. (SIOL) vs. Asuncion45 which defined
the following guidelines involving the payment of docket 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 fees 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.
Plainly, while the payment of the prescribed docket fee 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 fee is paid
within the applicable prescriptive or reglementary period, more so when
the party involved demonstrates a willingness to abide by the rules
prescribing such payment.46 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.47
Under the peculiar circumstances of this case, the reinstatement of the
complaint was just and proper considering that the cause of action of
private respondents, being a real action, prescribes in thirty years,48 and
private respondents did not really intend to evade the payment of the
prescribed docket fee but simply contend that they could not be faulted
for inadequate assessment because the clerk of court made no notice of
demand or reassessment.49 They were in good faith and simply relied on
the assessment of the clerk of court.
Furthermore, the fact that private respondents prayed for payment of
damages "in amounts justified by the evidence" does not call for the
dismissal of the complaint for violation of SC Circular No. 7, dated March
24, 1988 which required that all complaints must specify the amount of
damages sought not only in the body of the pleadings but also in the
prayer in order to be accepted and admitted for filing. Sun
Insurance effectively modified SC Circular No. 7 by providing that filing
fees for damages and awards that cannot be estimated constitute liens
on the awards finally granted by the trial court. 50
Thus, while the docket fees were based only on the real property
valuation, the trial court acquired jurisdiction over the action, and
judgment awards which were left for determination by the court or as may
be proven during trial would still be subject to additional filing fees which
shall constitute a lien on the judgment. It would then be the responsibility
of the Clerk of Court of the trial court or his duly authorized deputy to
enforce said lien and assess and collect the additional fees. 51
It is worth noting that when Bertuldo filed his Answer on July 2, 1991, he
did not raise the issue of lack of jurisdiction for non-payment of correct
docket fees. Instead, he based his defense on a claim of ownership and
participated in the proceedings before the trial court. It was only in
September 22, 1998 or more than seven years after filing the answer,
and under the auspices of a new counsel, that the issue of jurisdiction
was raised for the first time in the motion to expunge by Bertuldo’s heirs.
jurisdiction, or with grave abuse of discretion which is tantamount to lack
or in excess of jurisdiction,59 not to be used for any other purpose,60 such
as to cure errors in proceedings or to correct erroneous conclusions of
law or fact.61 A contrary rule would lead to confusion, and seriously
hamper the administration of justice.

After Bertuldo vigorously participated in all stages of the case before the
trial court and even invoked the trial court’s authority in order to ask for
affirmative relief, petitioners, considering that they merely stepped into
the shoes of their predecessor, are effectively barred by estoppel from
challenging the trial court’s jurisdiction. Although the issue of jurisdiction
may be raised at any stage of the proceedings as the same is conferred
by law, it is nonetheless settled that a party may be barred from raising it
on ground of laches or estoppel.52
Petitioners utterly failed to show that the trial court gravely abused its
discretion in issuing the assailed resolutions. On the contrary, it acted
prudently, in accordance with law and jurisprudence.
WHEREFORE, the instant petition for certiorari is DISMISSED for lack of
merit.
No costs.

Moreover, no formal substitution of the parties was effected within thirty SO ORDERED.
days from date of death of Bertuldo, as required by Section 16, Rule 3 53 of
the Rules of Court. Needless to stress, the purpose behind the rule on
Puno, (Chairman), Callejo, Sr., Tinga and Chico-Nazario, JJ., concur.
substitution is the protection of the right of every party to due process. It
is to ensure that the deceased party would continue to be properly
represented in the suit through the duly appointed legal representative of
his estate.54 Non-compliance with the rule on substitution would render the
proceedings and judgment of the trial court infirm because the court
acquires no jurisdiction over the persons of the legal representatives or of
the heirs on whom the trial and the judgment would be binding. 55 Thus,
proper substitution of heirs must be effected for the trial court to acquire
jurisdiction over their persons and to obviate any future claim by any heir
that he was not apprised of the litigation against Bertuldo or that he did
not authorize Atty. Petalcorin to represent him.

The list of names and addresses of the heirs was submitted sixteen
months after the death of Bertuldo and only when the trial court directed
Atty. Petalcorin to comply with the provisions of Section 16, Rule 3 of the
Rules of Court. Strictly speaking therefore, before said compliance, Atty.
Petalcorin had no standing in the court a quo when he filed his pleadings.
Be that as it may, the matter has been duly corrected by the Order of the
trial court dated October 15, 1999.

To be sure, certiorari under Rule 6556 is a remedy narrow in scope and

inflexible in character. It is not a general utility tool in the legal
workshop.57 It offers only a limited form of review. Its principal function is
to keep an inferior tribunal within its jurisdiction. 58 It can be invoked only
for an error of jurisdiction, that is, one where the act complained of was
issued by the court, officer or a quasi-judicial body without or in excess of
G.R. Nos. 79937-38 February 13, 1989
SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J.
WARBY, petitioners,
vs.
HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104,
Regional Trial Court, Quezon City and MANUEL CHUA UY PO
TIONG, respondents.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices
for petitioners. Tanjuatco, Oreta, Tanjuatco, Berenguer & Sanvicente Law
Offices for private respondent.
GANCAYCO, J.:
Again the Court is asked to resolve the issue of whether or not a court
acquires jurisdiction over a case when the correct and proper docket fee
has not been paid.
On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for
brevity) filed a complaint with the Regional Trial Court of Makati, Metro
Manila for the consignation of a premium refund on a fire insurance policy
with a prayer for the judicial declaration of its nullity against private
respondent Manuel Uy Po Tiong. Private respondent as declared in
default for failure to file the required answer within the reglementary
period.
On the other hand, on March 28, 1984, private respondent filed a
complaint in the Regional Trial Court of Quezon City for the refund of
premiums and the issuance of a writ of preliminary attachment which was
docketed as Civil Case No. Q-41177, initially against petitioner SIOL, and
thereafter including E.B. Philipps and D.J. Warby as additional
defendants. The complaint sought, among others, the payment of actual,
compensatory, moral, exemplary and liquidated damages, attorney's
fees, expenses of litigation and costs of the suit. Although the prayer in
the complaint did not quantify the amount of damages sought said
amount may be inferred from the body of the complaint to be about Fifty
Million Pesos (P50,000,000.00).
Only the amount of P210.00 was paid by private respondent as docket
fee which prompted petitioners' counsel to raise his objection. Said
objection was disregarded by respondent Judge Jose P. Castro who was
then presiding over said case. Upon the order of this Court, the records
of said case together with twenty-two other cases assigned to different
branches of the Regional Trial Court of Quezon City which were under
investigation for under-assessment of docket fees were transmitted to
this Court. The Court thereafter returned the said records to the trial court
with the directive that they be re-raffled to the other judges in Quezon
City, to the exclusion of Judge Castro. Civil Case No. Q-41177 was re-
raffled to Branch 104, a sala which was then vacant.
On October 15, 1985, the Court en banc issued a Resolution in
Administrative Case No. 85-10-8752-RTC directing the judges in said
cases to reassess the docket fees and that in case of deficiency, to order
its payment. The Resolution also requires all clerks of court to issue
certificates of re-assessment of docket fees. All litigants were likewise
required to specify in their pleadings the amount sought to be recovered
in their complaints.
On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil
Case No. Q-41177 was temporarily assigned, issuedan order to the Clerk
of Court instructing him to issue a certificate of assessment of the docket
fee paid by private respondent and, in case of deficiency, to include the
same in said certificate.
On January 7, 1984, to forestall a default, a cautionary answer was filed
by petitioners. On August 30,1984, an amended complaint was filed by
private respondent including the two additional defendants aforestated.
Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was
thereafter assigned, after his assumption into office on January 16, 1986,
issued a Supplemental Order requiring the parties in the case to
comment on the Clerk of Court's letter-report signifying her difficulty in
complying with the Resolution of this Court of October 15, 1985 since the
pleadings filed by private respondent did not indicate the exact amount
sought to be recovered. On January 23, 1986, private respondent filed a
"Compliance" and a "Re-Amended Complaint" stating therein a claim of
"not less than Pl0,000,000. 00 as actual compensatory damages" in the
prayer. In the body of the said second amended complaint however,
private respondent alleges actual and compensatory damages and
attorney's fees in the total amount of about P44,601,623.70.
On January 24, 1986, Judge Asuncion issued another Order admitting
the second amended complaint and stating therein that the same
constituted proper compliance with the Resolution of this Court and that a
copy thereof should be furnished the Clerk of Court for the reassessment
of the docket fees. The reassessment by the Clerk of Court based on
private respondent's claim of "not less than P10,000,000.00 as actual and
compensatory damages" amounted to P39,786.00 as docket fee. This
was subsequently paid by private respondent.
Petitioners then filed a petition for certiorari with the Court of Appeals
questioning the said order of Judie Asuncion dated January 24, 1986.
On April 24, 1986, private respondent filed a supplemental complaint
alleging an additional claim of P20,000,000.00 as d.qmages so the total
claim amounts to about P64,601,623.70. On October 16, 1986, or some
seven months after filing the supplemental complaint, the private
respondent paid the additional docket fee of P80,396.00. 1
On August 13, 1987, the Court of Appeals rendered a decision ruling,
among others, as follows:
WHEREFORE, judgment is hereby rendered:
1. Denying due course to the petition in CA-G.R. SP No.
1, 09715 insofar as it seeks annulment of the order
(a) denying petitioners' motion to dismiss the complaint,
as amended, and
(b) granting the writ of preliminary attachment, but giving
due course to the portion thereof questioning the
reassessment of the docketing fee, and requiring the
Honorable respondent Court to reassess the docketing
fee to be paid by private respondent on the basis of the
amount of P25,401,707.00. 2
Hence, the instant petition.
During the pendency of this petition and in conformity with the said
judgment of respondent court, private respondent paid the additional
docket fee of P62,432.90 on April 28, 1988. 3
The main thrust of the petition is that the Court of Appeals erred in not
finding that the lower court did not acquire jurisdiction over Civil Case No.
Q-41177 on the ground of nonpayment of the correct and proper docket
fee. Petitioners allege that while it may be true that private respondent
had paid the amount of P182,824.90 as docket fee as herein-above
related, and considering that the total amount sought to be recovered in
the amended and supplemental complaint is P64,601,623.70 the docket
fee that should be paid by private respondent is P257,810.49, more or
less. Not having paid the same, petitioners contend that the complaint
should be dismissed and all incidents arising therefrom should be
annulled. In support of their theory, petitioners cite the latest ruling of the
Court in Manchester Development Corporation vs. CA, 4 as follows:
The Court acquires jurisdiction over any case only upon
the payment of the prescribed docket fee. An amendment
of the complaint or similar pleading will not thereby vest
jurisdiction in the Court, much less the payment of the
docket fee based on the amounts sought in the amended
pleading. The ruling in the Magaspi Case in so far as it is
inconsistent with this pronouncement is overturned and
reversed.
On the other hand, private respondent claims that the ruling
in Manchester cannot apply retroactively to Civil Case No. Q41177 for at
the time said civil case was filed in court there was no
such Manchester ruling as yet. Further, private respondent avers that
what is applicable is the ruling of this Court in Magaspi v.
Ramolete, 5 wherein this Court held that the trial court acquired
jurisdiction over the case even if the docket fee paid was insufficient.
The contention that Manchester cannot apply retroactively to this case is
untenable. Statutes regulating the procedure of the courts will be
construed as applicable to actions pending and undetermined at the time
of their passage. Procedural laws are retrospective in that sense and to
that extent. 6
In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of
the full amount of the docket fee is an indispensable step for the
perfection of an appeal. In a forcible entry and detainer case before the
justice of the peace court of Manaoag, Pangasinan, after notice of a
judgment dismissing the case, the plaintiff filed a notice of appeal with
said court but he deposited only P8.00 for the docket fee, instead of
P16.00 as required, within the reglementary period of appeal of five (5)
days after receiving notice of judgment. Plaintiff deposited the additional
P8.00 to complete the amount of the docket fee only fourteen (14) days
later. On the basis of these facts, this court held that the Court of First
Instance did notacquire jurisdiction to hear and determine the appeal as
the appeal was not thereby perfected.
In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention
to become a Filipino citizen by sending it through registered mail to the
Office of the Solicitor General in 1953 but the required filing fee was paid
only in 1956, barely 5V2 months prior to the filing of the petition for
citizenship. This Court ruled that the declaration was not filed in
accordance with the legal requirement that such declaration should be
filed at least one year before the filing of the petition for citizenship.
Citing Lazaro, this Court concluded that the filing of petitioner's
declaration of intention on October 23, 1953 produced no legal effect until
the required filing fee was paid on May 23, 1956.
In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and
Lee were applied. It was an original petition for quo warranto contesting
the right to office of proclaimed candidates which was mailed, addressed
to the clerk of the Court of First Instance, within the one-week period after
the proclamation as provided therefor by law.10 However, the required
docket fees were paid only after the expiration of said period.
Consequently, this Court held that the date of such payment must be
deemed to be the real date of filing of aforesaid petition and not the date
when it was mailed.
Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the
docket fee must be paid before a court will act on a petition or complaint.
However, we also held that said rule is not applicable when petitioner
seeks the probate of several wills of the same decedent as he is not
required to file a separate action for each will but instead he may have
other wills probated in the same special proceeding then pending before
the same court.
Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that
a case is deemed filed only upon payment of the docket fee regardless of
the actual date of its filing in court. Said case involved a complaint for
recovery of ownership and possession of a parcel of land with damages
filed in the Court of First Instance of Cebu. Upon the payment of P60.00
for the docket fee and P10.00 for the sheriffs fee, the complaint was
docketed as Civil Case No. R-11882. The prayer of the complaint sought
that the Transfer Certificate of Title issued in the name of the defendant
be declared as null and void. It was also prayed that plaintiff be declared
as owner thereof to whom the proper title should be issued, and that
defendant be made to pay monthly rentals of P3,500.00 from June 2,
1948 up to the time the property is delivered to plaintiff, P500,000.00 as
moral damages, attorney's fees in the amount of P250,000.00, the costs
of the action and exemplary damages in the amount of P500,000.00.
The defendant then filed a motion to compel the plaintiff to pay the
correct amount of the docket fee to which an opposition was filed by the
plaintiff alleging that the action was for the recovery of a parcel of land so
the docket fee must be based on its assessed value and that the amount
of P60.00 was the correct docketing fee. The trial court ordered the
plaintiff to pay P3,104.00 as filing fee.
The plaintiff then filed a motion to admit the amended complaint to
include the Republic as the defendant. In the prayer of the amended
complaint the exemplary damages earlier sought was eliminated. The
amended prayer merely sought moral damages as the court may
determine, attorney's fees of P100,000.00 and the costs of the action.
The defendant filed an opposition to the amended complaint. The
opposition notwithstanding, the amended complaint was admitted by the
trial court. The trial court reiterated its order for the payment of the
additional docket fee which plaintiff assailed and then challenged before
this Court. Plaintiff alleged that he paid the total docket fee in the amount
of P60.00 and that if he has to pay the additional fee it must be based on
the amended complaint.
The question posed, therefore, was whether or not the plaintiff may be
considered to have filed the case even if the docketing fee paid was not
sufficient. In Magaspi, We reiterated the rule that the case was deemed
filed only upon the payment of the correct amount for the docket fee
regardless of the actual date of the filing of the complaint; that there was
an honest difference of opinion as to the correct amount to be paid as
docket fee in that as the action appears to be one for the recovery of
property the docket fee of P60.00 was correct; and that as the action is
also one, for damages, We upheld the assessment of the additional
docket fee based on the damages alleged in the amended complaint as
against the assessment of the trial court which was based on the
damages alleged in the original complaint.
However, as aforecited, this Court
overturned Magaspi in Manchester. Manchester involves an action for
torts and damages and specific performance with a prayer for the
issuance of a temporary restraining order, etc. The prayer in said case is
for the issuance of a writ of preliminary prohibitory injunction during the
pendency of the action against the defendants' announced forfeiture of
the sum of P3 Million paid by the plaintiffs for the property in question, the
attachment of such property of defendants that may be sufficient to
satisfy any judgment that may be rendered, and, after hearing, the
issuance of an order requiring defendants to execute a contract of
purchase and sale of the subject property and annul defendants' illegal
forfeiture of the money of plaintiff. It was also prayed that the defendants
be made to pay the plaintiff jointly and severally, actual, compensatory
and exemplary damages as well as 25% of said amounts as may be
proved during the trial for attorney's fees. The plaintiff also asked the trial
court to declare the tender of payment of the purchase price of plaintiff
valid and sufficient for purposes of payment, and to make the injunction
permanent. The amount of damages sought is not specified in the prayer
although the body of the complaint alleges the total amount of over P78
Millon allegedly suffered by plaintiff.
Upon the filing of the complaint, the plaintiff paid the amount of only
P410.00 for the docket fee based on the nature of the action for specific
performance where the amount involved is not capable of pecuniary
estimation. However, it was obvious from the allegations of the complaint
as well as its designation that the action was one for damages and
specific performance. Thus, this court held the plaintiff must be assessed
the correct docket fee computed against the amount of damages of about
P78 Million, although the same was not spelled out in the prayer of the
complaint.
Meanwhile, plaintiff through another counsel, with leave of court, filed an
amended complaint on September 12, 1985 by the inclusion of another
co-plaintiff and eliminating any mention of the amount of damages in the
body of the complaint. The prayer in the original complaint was
maintained.
On October 15, 1985, this Court ordered the re-assessment of the docket
fee in the said case and other cases that were investigated. On
November 12, 1985, the trial court directed the plaintiff to rectify the
amended complaint by stating the amounts which they were asking for.
This plaintiff did as instructed. In the body of the complaint the amount of
damages alleged was reduced to P10,000,000.00 but still no amount of
damages was specified in the prayer. Said amended complaint was
admitted.
Applying the principle in Magaspi that "the case is deemed filed only
upon payment of the docket fee regardless of the actual date of filing in
court," this Court held that the trial court did not acquire jurisdiction over
the case by payment of only P410.00 for the docket fee. Neither can the
amendment of the complaint thereby vest jurisdiction upon the Court. For
all legal purposes there was no such original complaint duly filed which
could be amended. Consequently, the order admitting the amended
complaint and all subsequent proceedings and actions taken by the trial
court were declared null and void.13
The present case, as above discussed, is among the several cases of
under-assessment of docket fee which were investigated by this Court
together with Manchester. The facts and circumstances of this case are
similar to Manchester. In the body of the original complaint, the total
amount of damages sought amounted to about P50 Million. In the prayer,
the amount of damages asked for was not stated. The action was for the
refund of the premium and the issuance of the writ of preliminary
attachment with damages. The amount of only P210.00 was paid for the
docket fee. On January 23, 1986, private respondent filed an amended
complaint wherein in the prayer it is asked that he be awarded no less
than P10,000,000.00 as actual and exemplary damages but in the body
of the complaint the amount of his pecuniary claim is approximately
P44,601,623.70. Said amended complaint was admitted and the private
respondent was reassessed the additional docket fee of P39,786.00
based on his prayer of not less than P10,000,000.00 in damages, which
he paid.
On April 24, 1986, private respondent filed a supplemental complaint
alleging an additional claim of P20,000,000.00 in damages so that his
total claim is approximately P64,601,620.70. On October 16, 1986,
private respondent paid an additional docket fee of P80,396.00. After the
promulgation of the decision of the respondent court on August 31, 1987
wherein private respondent was ordered to be reassessed for additional
docket fee, and during the pendency of this petition, and after the
promulgation of Manchester, on April 28, 1988, private respondent paid
an additional docket fee of P62,132.92. Although private respondent
appears to have paid a total amount of P182,824.90 for the docket fee
considering the total amount of his claim in the amended and
supplemental complaint amounting to about P64,601,620.70, petitioner
insists that private respondent must pay a docket fee of P257,810.49.
The principle in Manchester could very well be applied in the present
case. The pattern and the intent to defraud the government of the docket
fee due it is obvious not only in the filing of the original complaint but also
in the filing of the second amended complaint.
However, in Manchester, petitioner did not pay any additional docket fee
until] the case was decided by this Court on May 7, 1987. Thus,
in Manchester, due to the fraud committed on the government, this Court
held that the court a quo did not acquire jurisdiction over the case and
that the amended complaint could not have been admitted inasmuch as
the original complaint was null and void.
In the present case, a more liberal interpretation of the rules is called for
considering that, unlike Manchester, private respondent demonstrated his
willingness to abide by the rules by paying the additional docket fees as
required. The promulgation of the decision in Manchester must have had
that sobering influence on private respondent who thus paid the
additional docket fee as ordered by the respondent court. It triggered his
change of stance by manifesting his willingness to pay such additional
docket fee as may be ordered.
Nevertheless, petitioners contend that the docket fee that was paid is still
insufficient considering the total amount of the claim. This is a matter
which the clerk of court of the lower court and/or his duly authorized
docket clerk or clerk in-charge should determine and, thereafter, if any
amount is found due, he must require the private respondent to pay the
same.
WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of
Court of the court a quo is hereby instructed to reassess and determine
the additional filing fee that should be paid by private respondent
considering the total amount of the claim sought in the original complaint
and the supplemental complaint as may be gleaned from the allegations
and the prayer thereof and to require private respondent to pay the
deficiency, if any, without pronouncement as to costs.
SO ORDERED.
Fernan (C.J), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
Feliciano, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea and
Regalado, JJ., concur.

Thus, the Court rules as follows:

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.
G.R. No. L-41423 February 23, 1989
LUIS JOSEPH, petitioner
vs.
HON. CRISPIN V. BAUTISTA, PATROCINIO PEREZ, ANTONIO
SIOSON, JACINTO PAGARIGAN, ALBERTO CARDENO and LAZARO
VILLANUEVA, respondents.
Jose M. Castillo for petitioner.
Arturo Z. Sioson for private respondent, Patrocinio Perez.
Cipriano B. Farrales for private respondents except P. Perez.
REGALAD0, J.:
Petitioner prays in this appeal by certiorari for the annulment and setting
aside of the order, dated July 8, 1975, dismissing petitioner's complaint,
as well as the order, dated August 22, 1975, denying his motion for
reconsideration of said dismissal, both issued by respondent Judge
Crispin V. Bautista of the former Court of First Instance of Bulacan,
Branch III.
Petitioner herein is the plaintiff in Civil Case No. 50-V-73 entitled "Luis
Joseph vs. Patrocinio Perez, Domingo Villa y de Jesus, Rosario Vargas,
Antonio Sioson, Lazaro Villanueva and Jacinto Pagarigan", filed before
the Court of First Instance of Bulacan, Branch III, and presided over by
respondent Judge Crispin V. Bautista; while private respondents
Patrocinio Perez, Antonio Sioson, Jacinto Pagarigan and Lazaro
Villanueva are four of the defendants in said case. Defendant Domingo
Villa y de Jesus did not answer either the original or the amended
complaint, while defendant Rosario Vargas could not be served with
summons; and respondent Alberto Cardeno is included herein as he was
impleaded by defendant Patrocinio Perez, one of respondents herein, in
her cross-claim.
The generative facts of this case, as culled from the written submission of
the parties, are as follows:
Respondent Patrocinio Perez is the owner of a cargo truck with Plate No.
25-2 YT Phil. '73 for conveying cargoes and passengers for a
consideration from Dagupan City to Manila. On January 12, 1973, said
cargo truck driven by defendant Domingo Villa was on its way to
Valenzuela, Bulacan from Pangasinan. Petitioner, with a cargo of
livestock, boarded the cargo truck at Dagupan City after paying the sum
of P 9.00 as one way fare to Valenzuela, Bulacan. While said cargo truck
was negotiating the National Highway proceeding towards Manila,
defendant Domingo Villa tried to overtake a tricycle likewise proceeding
in the same direction. At about the same time, a pick-up truck with Plate
No. 45-95 B, supposedly owned by respondents Antonio Sioson and
Jacinto Pagarigan, then driven by respondent Lazaro Villanueva, tried to
overtake the cargo truck which was then in the process of overtaking the
tricycle, thereby forcing the cargo truck to veer towards the shoulder of
the road and to ram a mango tree. As a result, petitioner sustained a
bone fracture in one of his legs. 1
The following proceedings thereafter took place: 2
Petitioner filed a complaint for damages against respondent Patrocinio
Perez, as owner of the cargo truck, based on a breach of contract of
carriage and against respondents Antonio Sioson and Lazaro Villanueva,
as owner and driver, respectively, of the pick-up truck, based on quasi-
delict.
Respondent Sioson filed his answer alleging that he is not and never was
an owner of the pick-up truck and neither would he acquire ownership
thereof in the future.
On September 24, 1973, petitioner, with prior leave of court, filed his
amended complaint impleading respondents Jacinto Pagarigan and a
certain Rosario Vargas as additional alternative defendants. Petitioner
apparently could not ascertain who the real owner of said cargo truck
was, whether respondents Patrocinio Perez or Rosario Vargas, and who
was the real owner of said pick-up truck, whether respondents Antonio
Sioson or Jacinto Pagarigan.
Respondent Perez filed her amended answer with crossclaim against her
co-defendants for indemnity and subrogation in the event she is ordered
to pay petitioner's claim, and therein impleaded cross-defendant Alberto
Cardeno as additional alternative defendant.
On September 27, 1974, respondents Lazaro Villanueva, Alberto
Cardeno, Antonio Sioson and Jacinto Pagarigan, thru their insurer,
Insurance Corporation of the Philippines, paid petitioner's claim for
injuries sustained in the amount of P 1,300.00. By reason thereof,
petitioner executed a release of claim releasing from liability the following
parties, viz: Insurance Corporation of the Philippines, Alberto Cardeno,
Lazaro Villanueva, Antonio Sioson and Jacinto Pagarigan.
On December 2, 1974, respondents Lazaro Villanueva, Alberto Cardeno
and their insurer, the Insurance Corporation of the Philippines, paid
respondent Patrocinio Perez' claim for damages to her cargo truck in the
amount of P 7,420.61.
Consequently, respondents Sioson, Pagarigan, Cardeno and Villanueva
filed a "Motion to Exonerate and Exclude Defs/ Cross defs. Alberto
Cardeno, Lazaro Villanueva, Antonio Sioson and Jacinto Pagarigan on
the Instant Case", alleging that respondents Cardeno and Villanueva
already paid P 7,420.61 by way of damages to respondent Perez, and
alleging further that respondents Cardeno, Villanueva, Sioson and
Pagarigan paid P 1,300.00 to petitioner by way of amicable settlement.
Thereafter, respondent Perez filed her "Opposition to Cross-defs.' motion
dated Dec. 2, 1974 and Counter Motion" to dismiss. The so-called
counter motion to dismiss was premised on the fact that the release of
claim executed by petitioner in favor of the other respondents inured to
the benefit of respondent Perez, considering that all the respondents are
solidarity liable to herein petitioner.
On July 8, 1975, respondent judge issued the questioned order
dismissing the case, and a motion for the reconsideration thereof was
denied. Hence, this appeal, petitioner contending that respondent judge
erred in declaring that the release of claim executed by petitioner in favor
of respondents Sioson, Villanueva and Pagarigan inured to the benefit of
respondent Perez; ergo, it likewise erred in dismissing the case.
We find the present recourse devoid of merit.
The argument that there are two causes of action embodied in
petitioner's complaint, hence the judgment on the compromise agreement
under the cause of action based on quasi-delict is not a bar to the cause
of action for breach of contract of carriage, is untenable.
A cause of action is understood to be the delict or wrongful act or
omission committed by the defendant in violation of the primary rights of
the plaintiff. 3 It is true that a single act or omission can be violative of
various rights at the same time, as when the act constitutes juridically a
violation of several separate and distinct legal obligations. However
where there is only one delict or wrong, there is but a single cause of
action regardless of the number of rights that may have been violated
belonging to one person. 4
The singleness of a cause of action lies in the singleness of the- delict or
wrong violating the rights of one person. Nevertheless, if only one injury
resulted from several wrongful acts, only one cause of action arises. 5 In
the case at bar, there is no question that the petitioner sustained a single
injury on his person. That vested in him a single cause of action, albeit
with the correlative rights of action against the different respondents
through the appropriate remedies allowed by law.
The trial court was, therefore, correct in holding that there was only one
cause of action involved although the bases of recovery invoked by
petitioner against the defendants therein were not necessarily Identical
since the respondents were not identically circumstanced. However, a
recovery by the petitioner under one remedy necessarily bars recovery
under the other. This, in essence, is the rationale for the proscription in
our law against double recovery for the same act or omission which,
obviously, stems from the fundamental rule against unjust enrichment.
There is no question that the respondents herein are solidarily liable to
petitioner. On the evidence presented in the court below, the trial court
found them to be so liable. It is undisputed that petitioner, in his amended
complaint, prayed that the trial court hold respondents jointly and
severally liable. Furthermore, the allegations in the amended complaint
clearly impleaded respondents as solidary debtors. We cannot accept the
vacuous contention of petitioner that said allegations are intended to
apply only in the event that execution be issued in his favor. There is
nothing in law or jurisprudence which would countenance such a
procedure.
The respondents having been found to be solidarity liable to petitioner,
the full payment made by some of the solidary debtors and their
subsequent release from any and all liability to petitioner inevitably
resulted in the extinguishment and release from liability of the other
solidary debtors, including herein respondent Patrocinio Perez.
The claim that there was an agreement entered into between the parties
during the pre-trial conference that, after such payment made by the
other respondents, the case shall proceed as against respondent Perez
is both incredible and unsubstantiated. There is nothing in the records to
show, either by way of a pre-trial order, minutes or a transcript of the
notes of the alleged pre-trial hearing, that there was indeed such as
agreement.
WHEREFORE, the challenged orders of the respondent judge are hereby
AFFIRMED.
SO ORDERED.
G.R. No. 150134 October 31, 2007
ERNESTO C. DEL ROSARIO and DAVAO TIMBER
CORPORATION, petitioners,
vs.
FAR EAST BANK & TRUST COMPANY1 and PRIVATE
DEVELOPMENT CORPORATION OF THE PHILIPPINES, respondents.
DECISION
CARPIO MORALES, J.:
The Regional Trial Court (RTC) of Makati City, Branch "65" (sic) 2 having,
by Decision3 of July 10, 2001, dismissed petitioners' complaint in Civil
Case No. 00-540 on the ground of res judicata and splitting of a cause of
action, and by Order of September 24, 20014 denied their motion for
reconsideration thereof, petitioners filed the present petition for review on
certiorari.
From the rather lengthy history of the present controversy, a recital of the
following material facts culled from the records is in order.
On May 21, 1974, petitioner Davao Timber Corporation (DATICOR) and
respondent Private Development Corporation of the Philippines (PDCP)
entered into a loan agreement under which PDCP extended to DATICOR
a foreign currency loan of US $265,000 and a peso loan of P2.5 million or
a total amount of approximately P4.4 million, computed at the then
prevailing rate of exchange of the dollar with the peso.
The loan agreement provided, among other things, that DATICOR shall
pay: (1) a service fee of one percent (1%) per annum (later increased to
six percent [6%] per annum) on the outstanding balance of the peso loan;
(2) 12 percent (12%) per annum interest on the peso loan; and (3)
penalty charges of two percent (2%) per month in case of default.
The loans were secured by real estate mortgages over six parcels of land
– one situated in Manila (the Otis property) which was registered in the
name of petitioner Ernesto C. Del Rosario, and five in Mati, Davao
Oriental – and chattel mortgages over pieces of machinery and
equipment.
Petitioners paid a total of P3 million to PDCP, which the latter applied to
interest, service fees and penalty charges. This left petitioners, by
PDCP's computation, with an outstanding balance on the principal of
more than P10 million as of May 15, 1983.
By March 31, 1982, petitioners had filed a complaint against PDCP
before the then Court of First Instance (CFI) of Manila for violation of the
Usury Law, annulment of contract and damages. The case, docketed as
Civil Case No. 82-8088, was dismissed by the CFI.
On appeal, the then Intermediate Appellate Court (IAC) set aside the
CFI's dismissal of the complaint and declared void and of no effect the
stipulation of interest in the loan agreement between DATICOR and
PDCP.
PDCP appealed the IAC's decision to this Court where it was docketed
as G.R. No. 73198.
In the interim, PDCP assigned a portion of its receivables from petitioners
(the receivables) to its co-respondent Far East Bank and Trust Company
(FEBTC) under a Deed of Assignment dated April 10, 19875 for a
consideration of P5,435,000. The Deed of Assignment was later
amended by two Supplements.6
FEBTC, as assignee of the receivables, and petitioners later executed a
Memorandum of Agreement (MOA) dated December 8, 1988 whereby
petitioners agreed to, as they did pay FEBTC7 the amount of P6.4
million as full settlement of the receivables.
On September 2, 1992, this Court promulgated its Decision in G.R. No.
731988 affirming in toto the decision of the IAC. It determined that after
deducting the P3 million earlier paid by petitioners to PDCP, their
remaining balance on the principal loan was only P1.4 million.
Petitioners thus filed on April 25, 1994 a Complaint 9 for sum of
money against PDCP and FEBTC before the RTC of Makati, mainly to
recover the excess payment which they computed to be P5.3
million10 – P4.335 million from PDCP, and P965,000 from FEBTC. The
case, Civil Case No. 94-1610, was raffled to Branch 132 of the Makati
RTC.
On May 31, 1995, Branch 132 of the Makati RTC rendered a decision11 in
Civil Case No. 94-1610 ordering PDCP to pay petitioners the sum
of P4.035 million,12 to bear interest at 12% per annum from April 25, 1994
until fully paid; to execute a release or cancellation of the mortgages on
the five parcels of land in Mati, Davao Oriental and on the pieces of
machinery and equipment and to return the corresponding titles to
petitioners; and to pay the costs of the suit.
As for the complaint of petitioners against respondent FEBTC, the trial
court dismissed it for lack of cause of action, ratiocinating that the MOA
between petitioners and FEBTC was not subject to this Court's Decision
in G.R. No. 73198, FEBTC not being a party thereto.
From the trial court's decision, petitioners and respondent PDCP
appealed to the Court of Appeals (CA). The appeal was docketed as CA-
G.R. CV No. 50591.
On May 22, 1998, the CA rendered a decision13 in CA-G.R. CV No.
50591, holding that petitioners' outstanding obligation, which this Court
had determined in G.R. No. 73198 to be P1.4 million, could not be
increased or decreased by any act of the creditor PDCP.
The CA held that when PDCP assigned its receivables, the amount
payable to it by DATICOR was the same amount payable to assignee
FEBTC, irrespective of any stipulation that PDCP and FEBTC might have
provided in the Deed of Assignment, DATICOR not having been a party
thereto, hence, not bound by its terms.
Citing Articles 215414 and 216315 of the Civil Code which embody the
principle of solutio indebiti, the CA held that the party bound to refund the
excess payment of P5 million16 was FEBTC as it received the
overpayment; and that FEBTC could recover from PDCP the amount
of P4.035 million representing its overpayment for the assigned
receivables based on the terms of the Deed of Assignment or on the
general principle of equity.
Noting, however, that DATICOR claimed in its complaint only the amount
of P965,000 from FEBTC, the CA held that it could not grant a relief
different from or in excess of that prayed for.
Finally, the CA held that the claim of PDCP against DATICOR for the
payment of P1.4 million had no basis, DATICOR's obligation having
already been paid in full, overpaid in fact, when it paid assignee FEBTC
the amount of P6.4 million.
Accordingly, the CA ordered PDCP to execute a release or cancellation
of the mortgages it was holding over the Mati real properties and the
machinery and equipment, and to return the corresponding certificates of
title to petitioners. And it ordered FEBTC to pay petitioners the amount
of P965,000 with legal interest from the date of the promulgation of its
judgment.
FEBTC's motion for reconsideration of the CA Decision was denied, and
so was its subsequent appeal to this Court.
On April 25, 2000, petitioners filed before the RTC of Makati a
Complaint17 against FEBTC to recover the balance of the excess
payment of P4.335 million.18 The case was docketed as Civil Case No.
00-540, the precursor of the present case and raffled to Branch 143 of
the RTC.
In its Answer,19 FEBTC denied responsibility, it submitting that nowhere in
the dispositive portion of the CA Decision in CA-G.R. CV No. 50591 was
it held liable to return the whole amount of P5.435 million representing
the consideration for the assignment to it of the receivables, and since
petitioners failed to claim the said whole amount in their original
complaint in Civil Case No. 94-1610 as they were merely claiming the
amount of P965,000 from it, they were barred from claiming it.
FEBTC later filed a Third Party Complaint20 against PDCP praying that
the latter be made to pay the P965,000 and the interests adjudged by the
CA in favor of petitioners, as well as the P4.335 million and interests that
petitioners were claiming from it. It posited that PDCP should be held
liable because it received a consideration of P5.435 million when it
assigned the receivables.
Answering21 the Third Party Complaint, PDCP contended that since
petitioners were not seeking the recovery of the amount of P965,000, the
same cannot be recovered via the third party complaint.
PDCP went on to contend that since the final and executory decision in
CA-G.R. CV No. 50591 had held that DATICOR has no cause of action
against it for the refund of any part of the excess payment, FEBTC can
no longer re-litigate the same issue.
Moreover, PDCP contended that it was not privy to the MOA which
explicitly excluded the receivables from the effect of the Supreme Court
decision, and that the amount of P6.4 million paid by petitioners to
FEBTC was clearly intended as consideration for the release and
cancellation of the lien on the Otis property.
Replying,22 FEBTC pointed out that PDCP cannot deny that it benefited
from the assignment of its rights over the receivables from petitioners. It
added that the third party claim being founded on a valid and justified
cause, PDCP's counterclaims lacked factual and legal basis.
Petitioners thereafter filed a Motion for Summary Judgment 23 to which
FEBTC filed its opposition.24
By Order of March 5, 2001, the trial court denied the motion for summary
judgment for lack of merit.25
On July 10, 2001, the trial court issued the assailed Decision dismissing
petitioners' complaint on the ground of res judicata and splitting of cause
of action. It recalled that petitioners had filed Civil Case No. 94-1610 to
recover the alleged overpayment both from PDCP and FEBTC and to
secure the cancellation and release of their mortgages on real properties,
machinery and equipment; that when said case was appealed, the CA, in
its Decision, ordered PDCP to release and cancel the mortgages and
FEBTC to pay P965,000 with interest, which Decision became final and
executory on November 23, 1999; and that a Notice of Satisfaction of
Judgment between petitioners and FEBTC was in fact submitted on
August 8, 2000, hence, the issue between them was finally settled under
the doctrine of res judicata.
The trial court moreover noted that the MOA between petitioners and
FEBTC clearly stated that the "pending litigation before the Supreme
Court of the Philippines with respect to the Loan exclusive of the
Receivables assigned to FEBTC shall prevail up to the extent not
covered by this Agreement." That statement in the MOA, the trial court
ruled, categorically made only the loan subject to this Court's Decision in
G.R. No. 73198, hence, it was with the parties' full knowledge and
consent that petitioners agreed to pay P6.4 million to FEBTC as
consideration for the settlement. The parties cannot thus be allowed to
welsh on their contractual obligations, the trial court concluded.
Respecting the third party claim of FEBTC, the trial court held that
FEBTC's payment of the amount of P1,224,906.67 (P965,000 plus
interest) to petitioners was in compliance with the final judgment of the
CA, hence, it could not entertain such claim because the Complaint filed
by petitioners merely sought to recover from FEBTC the alleged
overpayment of P4.335 million and attorney's fees of P200,000.
Petitioners' motion for reconsideration26 of the July 10, 2001 decision of
the trial court was denied by Order of September 24, 2001.
Hence, the present petition.
In their Memorandum,27 petitioners proffer that, aside from the issue of
whether their complaint is dismissible on the ground of res judicata and
splitting of cause of action, the issues of 1) whether FEBTC can be held
liable for the balance of the overpayment of P4.335 million plus interest
which petitioners previously claimed against PDCP in Civil Case No. 94-
1610, and 2) whether PDCP can interpose as defense the provision in
the Deed of Assignment and the MOA that the assignment of the
receivables shall not be affected by this Court's Decision in G.R. No.
73198, be considered.
Stripped of the verbiage, the only issue for this Court's consideration is
the propriety of the dismissal of Civil Case No. 00-540 upon the grounds
stated by the trial court. This should be so because a Rule 45 petition,
like the one at bar, can raise only questions of law (and that justifies
petitioners' elevation of the case from the trial court directly to this Court)
which must be distinctly set forth.28
The petition is bereft of merit.
Section 47 of Rule 39 of the Rules of Court, on the doctrine of res
judicata, reads:
Sec. 47. Effect of judgments or final orders. — The effect of a
judgment or final order rendered by a court of the Philippines,
 having jurisdiction to pronounce the judgment or final order, may
be as follows:
xxxx
(b) In other cases, the judgment or final order is, with respect to
the matter directly adjudged or as to any other matter that could
have been raised in relation thereto, conclusive between the
parties and their successors in interest by title subsequent to the
commencement of the action or special proceeding, litigating for
the same thing and under the same title and in the same
capacity; and
(c) In any other litigation between the same parties or their
successors in interest, that only is deemed to have been
adjudged in a former judgment or final order which appears upon
its face to have been so adjudged, or which was actually and
necessarily included therein or necessary thereto. (Underscoring
supplied)
The above-quoted provision lays down two main rules. Section 49(b)
enunciates the first rule of res judicata known as "bar by prior judgment"
or "estoppel by judgment," which states that the judgment or decree of a
court of competent jurisdiction on the merits concludes the parties and
their privies to the litigation and constitutes a bar to a new action or suit
involving the same cause of action either before the same or any other
tribunal.29
Stated otherwise, "bar by former judgment" makes the judgment
rendered in the first case an absolute bar to the subsequent action since
that judgment is conclusive not only as to the matters offered and
received to sustain it but also as to any other matter which might have
been offered for that purpose and which could have been adjudged
therein. 30 It is in this concept that the term res judicata is more commonly
and generally used as a ground for a motion to dismiss in civil cases. 31
The second rule of res judicata embodied in Section 47(c), Rule 39 is
"conclusiveness of judgment." This rule provides that any right, fact, or
matter in issue directly adjudicated or necessarily involved in the
determination of an action before a competent court in which a judgment
or decree is rendered on the merits is conclusively settled by the
judgment therein and cannot again be litigated between the parties and
their privies whether or not the claim or demand, purpose, or subject
matter of the two suits is the same. 32 It refers to a situation where the
judgment in the prior action operates as an estoppel only as to the
matters actually determined or which were necessarily included therein. 33
The case at bar satisfies the four essential requisites of "bar by prior
judgment," viz:
(a) finality of the former judgment;
(b) the court which rendered it had jurisdiction over the subject
matter and the parties;
(c) it must be a judgment on the merits; and
(d) there must be, between the first and second actions, identity
of parties, subject matter and causes of action.34
There is no doubt that the judgment on appeal relative to Civil Case No.
94-1610 (that rendered in CA-G.R. CV No. 50591) was a final judgment.
Not only did it dispose of the case on the merits; it also became
executory as a consequence of the denial of FEBTC's motion for
reconsideration and appeal.35
Neither is there room to doubt that the judgment in Civil Case No. 94-
1610 was on the merits for it determined the rights and liabilities of the
parties.36 To recall, it was ruled that: (1) DATICOR overpaid by P5.3
million; (2) FEBTC was bound to refund the excess payment but because
DATICOR's claim against FEBTC was only P965,000, the court could
only grant so much as the relief prayed for; and (3) PDCP has no further
claim against DATICOR because its obligation had already been paid in
full.
Right or wrong, that judgment bars another case based upon the same
cause of action.37
As to the requisite of identity of parties, subject matter and causes of
action, it cannot be gainsaid that the first case, Civil Case No. 94-1610,
was brought by petitioners to recover an alleged overpayment of P5.3
million –P965,000 from FEBTC and P4.335 million from PDCP.
On the other hand, Civil Case No. 00-540, filed by the same petitioners,
was for the recovery of P4.335 million which is admittedly part of the P5.3
million earlier sought to be recovered in Civil Case No. 94-1610. This
time, the action was brought solely against FEBTC which in turn
impleaded PDCP as a third party defendant.
In determining whether causes of action are identical to warrant the
application of the rule of res judicata, the test is to ascertain whether the
same evidence which is necessary to sustain the second action would
suffice to authorize a recovery in the first even in cases in which the
forms or nature of the two actions are different. 38 Simply stated, if the
same facts or evidence would sustain both, the two actions are
considered the same within the rule that the judgment in the former is a
bar to the subsequent action.
It bears remembering that a cause of action is the delict or the wrongful
act or omission committed by the defendant in violation of the primary
rights of the plaintiff.39
In the two cases, petitioners imputed to FEBTC the same alleged
wrongful act of mistakenly receiving and refusing to return an amount in
excess of what was due it in violation of their right to a refund. The same
facts and evidence presented in the first case, Civil Case No. 94-1610,
were the very same facts and evidence that petitioners presented in Civil
Case No. 00-540.
Thus, the same Deed of Assignment between PDCP and FEBTC, the
first and second supplements to the Deed, the MOA between petitioners
and FEBTC, and this Court's Decision in G.R. No. 73198 were submitted
in Civil Case No. 00-540.
Notably, the same facts were also pleaded by the parties in support of
their allegations for, and defenses against, the recovery of the P4.335
million. Petitioners, of course, plead the CA Decision as basis for their
subsequent claim for the remainder of their overpayment. It is well
established, however, that a party cannot, by varying the form of action or
adopting a different method of presenting his case, or by pleading
justifiable circumstances as herein petitioners are doing, escape the
operation of the principle that one and the same cause of action shall not
be twice litigated.40
In fact, authorities tend to widen rather than restrict the doctrine of res
judicata on the ground that public as well as private interest demands the
ending of suits by requiring the parties to sue once and for all in the same
case all the special proceedings and remedies to which they are
entitled.41
This Court finds well-taken then the pronouncement of the court a quo
that to allow the re-litigation of an issue that was finally settled as
between petitioners and FEBTC in the prior case is to allow the splitting
of a cause of action, a ground for dismissal under Section 4 of Rule 2 of
the Rules of Court reading:
SEC. 4. Splitting of a single cause of action; effect of. – If two or
more suits are instituted on the basis of the same cause of action,
the filing of one or a judgment upon the merits in any one is
available as a ground for the dismissal of the others.
(Emphasis and underscoring supplied)
This rule proscribes a party from dividing a single or indivisible cause of
action into several parts or claims and instituting two or more actions
based on it.42 Because the plaintiff cannot divide the grounds for
recovery, he is mandated to set forth in his first action every ground for
relief which he claims to exist and upon which he relies; he cannot be
permitted to rely upon them by piecemeal in successive actions to
recover for the same wrong or injury.43
Clearly then, the judgment in Civil Case No. 94-1610 operated as a bar to
Civil Case No. 00-540, following the above-quoted Section 4, Rule 2 of
the Rules of Court.
A final word. Petitioners are sternly reminded that both the rules on res
judicata and splitting of causes of action are based on the salutary public
policy against unnecessary multiplicity of suits – interest reipublicae ut sit
finis litium.44 Re-litigation of matters already settled by a court's final
judgment merely burdens the courts and the taxpayers, creates
uneasiness and confusion, and wastes valuable time and energy that
could be devoted to worthier cases. 45
WHEREFORE, the Petition is DENIED. The assailed Decision of the
RTC, Branch 143, Makati dismissing petitioners' complaint in Civil Case
No. 00-540 is AFFIRMED.
Costs against petitioners.
SO ORDERED.
G.R. No. 123555 January 22, 1999
PROGRESSIVE DEVELOPMENT CORPORATION, INC., petitioner,
vs.
COURT OF APPEALS and WESTIN SEAFOOD MARKET,
INC. respondents.
BELLOSILLO, J.:
May the lessee which instituted before the Metropolitan Trial Court an
action for forcible entry with damages against its lessor file a separate
suit with the Regional Trial Court against the same lessor for moral and
exemplary damages plus actual and compensatory damages based on
the same forcible entry?
On grounds of litis pendencia and forum-shopping petitioner invokes
established jurisprudence that a party cannot by varying the form of
action or adopting a different method of presenting his case evade the
principle that the same cause of action shall not be litigated twice
between the same parties or their privies. 1 Petitioner therefore prays for
reversal of the decision of the Court of Appeals dated 27 May 1995, as
well as its Resolution dated 17 January 1996 denying reconsideration,
which upheld the denial by the Regional Trial Court of petitioner's motion
to dismiss private respondent's damage suit.
The antecedents: On 27 May 1991 petitioner leased to private,
respondent Westin Seafood Market, Inc., a parcel of land with a
commercial building thereon located at Aranet Center, Cubao, Quezon
City, for a period of nine (9) years and three (3) months, i.e., from 2
January 1989 to 30 April 1998, with a monhtly rental of approximately
P600,000.00. The contract contained, among others, the following
pertinent terms and conditions:
EFFECT OF VIOLATIONS
25. LESSEE hereby agrees that all the provisions
contained in this Contract shall be deemed as conditions,
as-well as covenants, and that this Contract shall be
automatically terminated and cancelled without resorting
to court action should LESSEE violate any or all said
conditions, including the payment of Rent, CUSA and
other charges indicated in the FLP when due within the
time herein stipulated and in any such cases, LESSEE
hereby irrevocably appoints LESSOR, its authorized
agents, employees and/or representatives as his duly
authorized attorney-in-fact, even after the termination,
expiration or cancellation of this Contract, with full power
and authority to open, enter, repossess, secure, enclose,
fence and otherwise take full and complete physical
possession and control of the leased premises and its
contents without resorting to court action and/or to
summarily disconnect electrical and/or water services
thereof, and that LESSEE hereby irrevocably empowers
LESSOR, his authorized agents, employees and/or
representatives to take inventory and possession of
whatever equipment, furniture, articles, merchandise,
appliances, etc., found therein belonging to LESSEE,
consignors and/or to any other persons and to place the
same in LESSOR's warehouse or any other place at
LESSOR's discretion for safekeeping; charging LESSEE
the corresponding storage fees therefor; that in case
LESSEE fails to claim-said equipment, furniture, articles,
merchandise, appliances, etc. from storage and
simultaneously liquidate any liability with LESSOR within
seven (7) days from date of said transfer to LESSOR's
warehouse, LESSOR is likewise hereby expressly
authorized and empowered by LESSEE to dispose of said
property/properties in a public sale through a Notary
Public of LESSOR's choice and to apply the proceeds
thereof to whatever liability and/or indebtedness LESSEE
may have to LESSOR plus reasonable expenses for the
same, including storage fees, and the balance, if any,
shall be turned over to LESSEE; that LESSEE hereby
expressly agrees that any or all acts performed by
LESSOR, his authorized agents, employees and/or
representatives under the provisions of this Section may
not be the subject of any petition for a Writ of Preliminary
Injunction or Mandatory Injunction in court, and that
LESSOR and/or his authorized agents, employees,
and/or representatives shall be free from any civil and/or
criminal liability or responsibility whatsoever therefor.
TERMINATION OF LEASE
 26. Upon-the automatic termination of this lease contract,
as the case may be, LESSEE shall immediately vacate
and redeliver physical possession of the leased premises,
including the keys appertaining thereto, to LESSOR in
good, clean and sanitary condition, reasonable wear and
tear excepted, devoid of all occupants,. equipment,
furnitures articles, merchandise, etc., belonging to
LESSEE or to any other person except those belonging to
LESSOR; that should LESSEE fail to comply with this
provision, LESSOR is hereby given the same rights and
power to proceed against LESSEE as expressly granted
in the immediately; preceding section.
Private respondent failed to pay rentals despite several demands by
petitioner. As of 19 October 1992 the arrearages amounted to
P8,608,284.66. Admittedly, non-payment of rentals constituted breach of
their contract; thus, pursuant to the express authority granted petitioner
under the above-quoted Secs. 25 and 26 of the lease agreement,
petitioner on 31 October 1992 repossessed the leased premises,
inventoried the movable properties found within and owned by private
respondent and scheduled public auction for the sale of the movables on
19 August 1993 with notice to private respondent.
On 26 November 1992 private respondent filed with the Metropolitan Trial
Court of Quezon City a complaint against petitioner for forcible entry with
damages and a prayer for a temporary restraining order and/or writ of
preliminary injunction. 2 The case was raffled to Branch 40 presided over
by Judge Guillermo L. Loja Jr. who issued a temporary restraining order
enjoining petitioner from selling private respondent's properties at a
public auction.
On 9 December 1992 Judge Loja inhibited himself from trying the case
and directed its transfer to Branch 34 presided over by Judge Joselito SD
Generoso. Soon after, petitioner filed an urgent motion for the inhibition
of Judge Generoso and the immediate reraffle of the case arguing that
the summary transfer of the case to Judge Generoso was irregular as it
was not done by raffle.
The motion was granted and the case went to Branch 36 presided over
by Judge Francisco D. Villanueva. Thereafter, on 22 December 1992, at
the continuation of the hearing on the issuance of a writ preliminary
mandatory injunction, the parties agreed, among others, on the following:
(a) private respondent would deposit with the Philippine Commercial and
Industrial Bank in the name of the Metropolitan Trial Court, Branch 36,
the amount of P8,000,000.00 to guarantee the payment of its back
rentals; (b) petitioner would defer the sale of the personal properties of
the Westin Seafood Market, Inc., until a final settlement of the case had
been arrived, at; (c) petitioner shall allow private respondent to retrieve all
the perishable goods from inside the leased premises like frozen meat,
vegetables and fish, all properly receipted for; (d) petitioner shall allow
three (3) maintenance personnel of private respondent to enter the
premises at reasonable working hours to maintain the restaurant
equipment; and (e) the parties shall negotiate for the restoration of the
premises to private respondent, and if no settlement be arrived at on or
before January 8, 1993, the hearing on the merits of the case shall
proceed and the disposition of the amount deposited representing the
rental arrearages shall be left to the. discretion of the court.
This agreement was incorporated in the order of the court dated 22
December 1992 3 which in effect terminated for all intents and purposes
the incident on the issuance of a preliminary writ of injunction.
Private respondent did not comply with its undertaking to deposit with the
designated bank the amount representing its back rentals. Instead, with
the forcible entry case still pending with the MeTC, private respondent
instituted on 9 June 1993 another action for damages against petitioner
with the Regional Trial Court of Quezon City. The case was raffled to
Branch 101 presided over by Judge Pedro T. Santiago. 4
Petitioner filed a motion, to dismiss the damage suit on the ground of litis
pendencia and forum shopping. On 2 July 1993, instead of ruling on the
motion, Judge Santiago issued an order archiving the case pending the
outcome of the forcible entry case being heard at the MeTC for the
reason that "the damages is (sic) principally anchored on whether or not
the defendants (petitioner herein) have committed forcible entry." 5 On 2
August 1993 petitioner moved for reconsideration of the order and
reiterated its motion to dismiss the suit for damages.
Before petitioner's motion to dismiss could be resolved, private
respondent filed with the RTC on 18 August 1993 an amended complaint
for damages. On 14 September 1993 it also filed an Urgent Ex-Parte
Motion for the Issuance of a Temporary Restraining Order and Motion for
the Grant of a Preliminary Prohibitory and Preliminary Mandatory
Injunction. On the very same day, Judge Santiago issued an order (a)
denying petitioner's motion to dismiss, (b) admitting private respondent's
amended complaint, and (c) granting private respondent's application for
a temporary restraining order against petitioner.
Thus, petitioner filed with the Court of Appeals a special civil action
for certiorari and prohibition on the ground that Judge Santjago acted in
excess of his jurisdiction and/or committed grave abuse of discretion
amounting to lack of jurisdiction in admitting, the amended complaint of
private respondent and issuing a restraining order against petitioner; in
allowing private respondent to engage in forum shopping; and, taking
cognizance of the action; for damages despite lack of jurisdiction. 6
But the Court of Appeals dismissed the petition due to the failure of
petitioner to file a motion for reconsideration of Judge Santiago's order of
14 September 1993 which, it explained, was a prerequisite to the
institution of a petition for certiorari and prohibition. It also found that the
elements of litis pendencia were lacking to justify the dismissal of the
action for damages with the RTC because despite the pendency of the
forcible entry case with the MeTC the only damages recoverable thereat
were those caused by the loss of the use and occupation of the property
and not the kind of damages being claimed before the RTC which had no
direct relation to loss of material possession. It clarified that since the
damages prayed for in the amended complaint with the RTC were those
caused by the alleged high-handed manner with which petitioner
reacquired possession of the leased premises and the sale of private
respondent's movables found therein, the RTC and not the MeTC had
jurisdiction over the action of damages. 7
Petitioner, aggrieved by the decision of the appellate court, filed the
instant petition for review on certiorari under Rule 45 of the Rules of
Court alleging that it erred in (a) finding that petitioner failed to avail of its
plain, speedy and adequate remedy of a prior motion for reconsideration
with the RTC; (b) ruling that, the trial judge did not act with grave abuse
of discretion in taking cognizance of the action for damages and
injunction despite the pendency of the forcible entry case with the MeTC;
and, (c) ruling that private respondent did not commit forum shopping
since the causes of action before the RTC and MeTC were not identical
with each other.
There is merit in the petition. While generally a motion for reconsideration
must first be filed before resorting to certiorari in order to give the lower
court an opportunity to correct the errors imputed to it 8 this rule admits of
exceptions and is not intended to be applied without considering the
circumstances of the case. 9 The filing of the motion for reconsideration
before availing of the remedy of certiorari is not sine qua non when the
issue raised is one purely of law, 10 or where the error is patent or the
disputed order is void, 11 or the questions raised on certiorari are the
same as those already squarely presented to and passed upon by the
lower court
In its motion for dismissal of the action for damages with the RTC
petitioner raised the ground that another action for forcible entry was
pending at the MeTC between the same parties involving the same
matter and cause of action. Outrightly rejected by the RTC, the same
issue was elevated by petitioner on certiorari before the Court of Appeals.
Clearly, under the prevailing circumstance, any motion for
reconsideration of the trial court would have been a pointless exercise. 12
We now turn to the issue of whether an action for damages filed with the
Regional Trial Court by the lessee against the lessor should be dismissed
on the ground of pendency of another action for forcible entry and
damages earlier filed by the same lessee against the same lessor before
the Metropolitan Trial Court.
Sec. 1 of Rule 70 of the Rules of Court provides that any person deprived
of the possession of any land or building by force, indimidation, threat,
strategy or stealth, or against whom thepossession of any land or
building is unlawfully withheld, may bring an action in the proper
Municipal Trial Court against the person or persons unlawfully
withholding or depriving of possession, together with damages and costs.
The mandate under this rule is categorical: that all cases for forcible entry
or unlawful detainer shall be filed before the Municipal Trial Court which
shall include not only the plea for restoration of possession but also all
claims for damages and costs arising therefrom. Otherwise expressed,
no claim for damages arising out of forcible entry or unlawful detainer
may be filed separately and independently of the claim for restoration of
possession.
This is consistent with the principle laid down in Sec. 1, par. (e), of Rule
16 of the Rules of Court which states that the pendency of another action
between the same parties for the same cause is a ground for dismissal of
an action. Res adjudicata requires that there must be between the action
sought to be dismissed and the other action the following elements: (a)
identity of parties or at least such as representing the same interest in
both actions; (b) identity of rights asserted and relief prayed for, the relief
being founded on the same facts; and, (c) the identity in the two (2)
preceding particulars should be such that any judgment which may be
rendered on the other action will, regardless of which party is successful,
amount to res adjudicata in the action under
consideration. 13
It is likewise basic under Sec. 3 of Rule 2 of the Revised Rules of Court, xxx xxx xxx
as amended, that a party may not institute more than one suit for a single
cause of action. Under Sec. 4 of the same Rule, if two or more suits are 3.02 Plaintiff, being the lessee of the Subject Premises, is
instituted on the basis of the same cause of action, the filing of one or a entitled to the peaceful occupation and enjoyment of the
judgment upon the merits in any one is available as a ground for the Subject Premises to the exclusion of all others, including
dismissal of the other or others. "Cause of action" is defined by Sec. 2 of defendants herein.
Rule 2 as the act of omission by which a party violates a right of
another. 14 These premises obtaining, there is no question at all that 3.03 Defendants' resort to strong arms tactics to forcibly
private respondent's cause of action in the forcible entry case and in the wrest possession of the Subject Premises from plaintiff
suit for damages is the alleged illegal retaking of possession of the and maintain possession thereof through the use of force,
leased premises by the lessor, petitioner herein, from which all legal threat, strategy and intimidation by the use of superior
reliefs arise. Simply stated, the restoration of possession and demand for number of men and arms amounts to the taking of the law
actual damages in the case before the MeTC and the demand for into their own hands.
damages with the RTC both arise from the same cause of action, i.e., the
forcible entry by petitioner into the least premises.
3.04 Thus, defendants' act of unlawfully evicting out
plaintiff from the Subject Premises it is leasing from
A comparative study of the two (2) complaints filed by private respondent defendant PDC and depriving it of possession thereof
against petitioner before the two (2) trial courts shows that not only are through the use of force, threat, strategy and intimidation
the elements of res adjudicata present, at least insofar as the claim for should be condemned and declared illegal for being
actual and compensatory damages is concerned, but also that the claim contrary; to public order and policy.
for damages — moral and exemplary in addition to actual and
compensatory — constitutes splitting a single cause of action. Since this
3.05 Consequently, defendants should be enjoined from
runs counter to the rule against multiplicity of suits, the dismissal of the
continuing with their illegal acts and be ordered to vacate
second action becomes imperative.
the Subject Premises and restore possession thereof,
together with its contents, to plaintiff.
The complaint for forcible entry contains the following pertinent
allegations —
xxx xxx xxx
2.01 On 02 January 1989, plaintiff entered, into a contract
4.07 Considering that defendants' act of forcibly grabbing
of lease with defendant PDC over a property designated
possession of the Subject Premises from plaintiff is illegal
as Ground Floor, Seafood Market (hereinafter "Subject
and null and void, defendant should be adjudged liable to
Premises") situated at the corner of EDSA, corner
plaintiff for all the aforedescribed damages which plaintiff
MacArthur Street, Araneta Center, Cubao, Quezon City,
incurred as a result thereof.
for a period of ten (10) years from 02 January 1989 to 30
April 1998.
The amended complaint for damages filed by private respondent alleges
basically the same factual circumstances and issues as bases for the
2.02 Immediately after having acquired actual physical
relief prayed for, to wit:
possession of the Subject Premises, plaintiff established
and now operates thereon the now famous Seafood
Market Restaurant. Since then, plaintiff had been in 4. On May 28, 1991, plaintiff and defendant PDC entered
actual, continuous, and peaceful physical possession of into a Contract of Lease for a period of ten years or from
the Subject Premises until 31 October 1992. January 2, 1989 up to April 30, 1998 over a property
designated as Ground Floor, Seafood Market (hereinafter
referred to as Subject Premises) situated at the corner of
EDSA corner McArthur Street, Araneta Center, Cubao,
Quezon City. A copy of the lease contract is attached
hereto as Annex "A".
5. Immediately thereafter, plaintiff took over actual
physical possession of Subject Premises, and established
thereon the now famous "Seafood Market Restaurant."
xxx xxx xxx
7 On October 31, 1992 at around 8:30 p.m., defendant
PDC, without the benefit of any writ of possession or any
lawful court order and with the aid of approximately forty
(40) armed security guards and policemen under the
supervision of defendant Tejam, forcibly entered the
subject premises through force, intimidation, threats and
stealth and relying on brute force and in a thunderboltish
manner and against plaintiff's will, unceremoniously drew
away all of plaintiff's men out of the subject premises,
thereby depriving herein plaintiff of its actual, physical and
natural possession of the subject premises. The illegal,
high-handed manner and gestapo like take-over by
defendants of subject premises is more particularly
described as follows: . . .
8. To date, defendants continue to illegally possess and
hold the Subject Premises, including all the multi-million
improvements, fixtures and equipment therein owned by
plaintiff, all to the damage and prejudice of plaintiff. The
actuations of defendants constitute an unlawful
appropriation, seizure and taking of property against the
will and consent of plaintiff. Worse, defendants are
threatening to sell at public auction and without the
consent of plaintiff and without lawful authority, the multi-
million fixtures and equipment of plaintiff and at prices
way below the market value thereof. Plaintiff hereby
attaches as Annex "B" the letter from defendants dated
August 6, 1993 addressed to plaintiff, informing the latter
that the former intends to sell at an auction on August 19,
1993 at 2:00 p.m. properties of the plaintiff presently in
defendants' possession.
xxx xxx xxx
12. Defendants' unlawful takeover of the premises
constitutes a violation of its obligation under Art. 1654 of
the New Civil Code requiring the lessor to maintain the
lessee in peaceful and adequate enjoyment of the lease
for the entire duration of the contract. Hence, plaintiff has
filed the present suit for the recovery of damages under
Art. 1659 of the New Civil Code. . . .
Restated in its bare essentials, the forcible entry case has one cause of
action, namely, the alleged unlawful entry by petitioner into the leased
premises out of which three (3) reliefs (denominated by private
respondent as is causes of action) arose: (a) the restoration by the lessor
(petitioner herein) of the possession of the leased premises to the lessee;
(b) the claim for actual damages due to the losses suffered by private
respondent such as the deterioration of perishable foodstuff stored inside
the premises and the deprivation of the use of the premises causing loss
of expected profits; and, (c) the claim for attoney's fees and cost of suit.
On the other hand, the complaint for damages prays for a monetary
award consisting of (a) moral damages of P500,000.00 and exemplary
damages of another P500,000.00; (b) actual damages of P20,000,000.00
and compensatory damages of P1,000,000.00 representing unrealized
profits; and, (c) P200,000.00 for attorney's fees and costs, all based on
the alleged forcible takeover of the leased premises by petitioner. Since
actual and compensatory damages were already prayed for in the
forcible entry case before the MeTC, it is obvious that this cannot be
relitigated in the damage suit before the RTC by reason of res adjudicata.
The other claims for moral and exemplary damages cannot also succeed
considering that these sprung from the main incident being heard before
the MeTC. Jurisprudence is unequivocal that when a single delict or
wrong is committed — like the unlawful taking or detention of the property
of the another — there is but one single cause of action regardless of the
number of rights that may have been violated, and all such rights should
be alleged in a single complaint as constituting one single cause of
action. 15 In a forcible entry case, the real issue is the physical possession
of the real property. The question of damages is merely secondary or
incidental, so much so that the amount thereof does not affect the
jurisdiction of the court. In other words, the unlawful act of a deforciant in
taking possession of a piece of land by means of force and intimidation
against the rights of the party actually in possession thereof is a delict or
wrong, or a cause of action that gives rise to two (2) remedies, namely,
the recovery of possession and recovery of damages arising from the
loss of possession, but only to one action. For obvious reasons, both
remedies cannot be the subject of two (2) separate and independent
actions, one for recovery of posssession only, and the other, for the
recovery of damages. That would inevitably lead to what is termed in law
as splitting up a cause of action. 16 In David v. de la Cruz 17 we observed
—
Herein tenants have but one cause of action against their
landlord, their illegal ejectment or removal from their
landholdings, which cause of action however entitles
them to two (2) claims or remedies — for reinstatement of
damages. As both claims arise from the same cause of
action, they should be alleged in a single complaint.
A claim cannot be divided in such a way that a part of the amount of
damages may be recovered in one case and the rest, in
another. 18 In Bacharach v. Icarangal 19 we explained that the rule was
aimed at preventing repeated litigations betweent the same parties in
regard to the same subject of the controversy and to protect the
defendant from unnecessary vexation. Nemo debet bis vexari pro una et
eadem causa.
What then is the effect of the dismissal of the other action? Since the rule
is that all such rights should be alleged in a single complaint, it goes
without saying that those not therein included cannot be the subject of
subsequent complaints for they are barred forever. 20 If a suit is brought
for a part of a claim, a judgment obtained in that action precludes the
plaintiff from bringing a second action for the residue of the claim,
notwithstanding that the second form of action is not identical with the
first or different grounds for relief are set for the second suit. This
principle not only embraces what was actually determined, but also
extends to every matter which the parties might have litigated in the
case. 21 This is why the legal basis upon which private respondent
anchored its second claim for damages, i.e., Art. 1659 in relation to Art.
1654 of the Civil Code, 22 not otherwise raised and cited by private
respondent in the forcible entry case, cannot be used as justification for
the second suit for damages. We note, not without some degree of
displeasure, that by filing a second suit for damages, private respondent
was not only able to press a claim for moral and exemplary damages
which by its failure to allege the same in its suit before the MeTC
foreclosed its right to sue on it, but it was also able to obtain from the
RTC, by way of another temporary restraining order, a second
reprieve from an impending public auction sale of its movables which
could not anymore secure from the MeTC before which the matter of the
issuance of a preliminary writ of injunction was already closed.
The foregoing discussions provide sufficient basis to petitioner's charge
that private respondent and its counsel in the trial courts committed forum
shopping. In Crisostomo v. Securities and Exchange Commission 23 we
ruled —
There is forum-shopping whenever, as a result of an
adverse opinion in one forum, party seeks a favorable
opinion (other than by appeal or certiorari) in another. The
principle applies . . . with respect to suits filed in the
courts . . . in connection with litigations commenced in the
court . . . in anticipation of an unfavorable . . . ruling and a
favorable case where the court in which the second suit
was brought, has no jurisdiction.
This Court likewise elucidated in New Pangasinan Review, Inc. v.
National Labor Relations Commission 24 that there is forum-shopping
when the actions involve the same transactions, the same essential facts
and circumstances. The reason behind the proscription of forum
shopping is obvious. This unnecessarily burdens our courts with heavy
caseloads, unduly taxes the manpower and financial resources of the
judiciary and trifles with and mocks our judicial processes, thereby
adversely affecting the efficient administration of justice. This
condemnable conduct has prompted the Court to issue
circulars 25 ordering among others that a violation thereof shall be cause
for the dismissal of the case or cases without prejudice to the taking of
appropriate action against the counsel or party concerned.
The records ineluctably show that the complaint lodged, by private
respondent with the Regional Trial Court of Quezon City contained no
certification of non-forum shopping. When petitioner filed a motion to
dismiss the case raising among others the ground of forum shopping it
pointed out the absence of the required certification. The amended
complaint, as well as the second and third amended complaints,
attempted to rectify the error by invariably stating that there was no other
action pending between the parties involving the same causes of action
although there was actually a forcible entry case pending before the MTC
of Quezon City. By its admission of a pending forcible entry case, it is
obvious that private respondent was indulging in forum shopping. While
private respondent conveniently failed to inform the RTC that it had
likewise sought damages in the MTC on the basis of the same forcible
entry, the fact remains that it precisely did so, which stratagem was being
duplicated in the second case. This is a compelling reason to dismiss the
second case.
WHEREFORE, the Petition is GRANTED. The questioned Decision of the
Court of Appeals dated 27 September 1995 and the Order of the
Regional Trial Court of Quezon City dated 24 September 1993 are
REVERSED and SET ASIDE. The Regional Trial Court of Quezon City is
directed to dismiss Civil Case No. Q-93-16409, "Westin Seafood Market,
Inc. v. Progressive Development Corporation, et al.," and the
Metropolitan Trial Court of Quezon City to proceed with the proper
disposition of Civil Case No. 6589, "Westin Seafood Market, Inc. v.
Progressive Development Corporation, et al.," with dispacth considering
the summary nature of the case. Treble costs against private respondent.
SO ORDERED.
G.R. No. 170916 April 27, 2007
CGR CORPORATION herein represented by its President ALBERTO
RAMOS, III, HERMAN M. BENEDICTO and ALBERTO R.
BENEDICTO, Petitioners,
vs.
ERNESTO L. TREYES, JR., Respondent
DECISION
CARPIO MORALES, J.:
Assailed via petition for review are issuances of the Regional Trial Court
(RTC), Branch 43, Bacolod City, in Civil Case No. 04-12284, to wit:
Order1 dated August 26, 2005 which dismissed petitioners’ complaint for
damages on the ground of prematurity, and Order 2 dated January 2, 2006
which denied petitioners’ motion for reconsideration.
In issue is one of law – whether a complainant in a forcible entry case
can file an independent action for damages arising after the act of
dispossession had occurred.
CGR Corporation, Herman M. Benedicto and Alberto R. Benedicto
(petitioners) claimed to have occupied 37.3033 hectares of public land in
Barangay Bulanon, Sagay City, Negros Occidental even before the
notarized separate Fishpond Lease Agreement Nos. 5674,3 56944 and
56955 in their respective favor were approved in October 2000 by the
Secretary of Agriculture for a period of twenty-five (25) years or until
December 31, 2024.
On November 18, 2000, Ernesto L. Treyes, Jr. (respondent) allegedly
forcibly and unlawfully entered the leased properties and once
inside barricaded the entrance to the fishponds, set up a barbed wire
1â
fence along the road going to petitioners’ fishponds, and harvested
several tons of milkfish, fry and fingerlings owned by petitioners.
On November 22, 2000, petitioners promptly filed with the Municipal Trial
Court (MTC) in Sagay City separate complaints for Forcible Entry With
Temporary Restraining Order And/Or Preliminary Injunction And
Damages, docketed as Civil Case Nos. 1331,6 13327 and 1333,8 against
Ernesto M. Treyes, Sr. and respondent.
In a separate move, petitioners filed in March 2004 with the Bacolod RTC
a complaint for damages against respondent, docketed as Civil Case No,
04-12284, alleging, inter alia,
xxxx
V
That prior to the issuance of the fishpond lease agreement in
favor of the plaintiffs, they had already been in open and
continuous possession of the same parcel of land;
VI
As lessee and in possession of the above[-]described fishpond,
plaintiffs have continuously occupied, cultivated and developed
the said fishpond and since then, had been regularly harvesting
milkfish, shrimps, mud crabs and other produce of the
fishponds; 1a\^/phi1.net
VII
That the yearly income of the fishpond of the plaintiff corporation
is at least ₱300,000.00 more or less, while the yearly income of
the fishpond of plaintiff Herman Benedicto, Sr. is at least
 ₱100,000.00 more or less, and the yearly income of the fishpond
of plaintiff Alberto Benedicto is at least ₱100,000.00 more or less;
VIII
That sometime last November 18, 2000 or thereabout, defendant
Ernesto L. Treyes, Jr. and his armed men and with the help of the
blue guards from the Negros Veterans Security Agency forcibly
and unlawfully entered the fishponds of the plaintiffs and once
inside barricaded the entrance of the fishpond and set up barb
wire fence along the road going to plaintiffs fishpond
and harvested the milkfish and carted away several tons of
milkfish owned by the plaintiffs;
IX
That on succeeding days, defendant’s men continued their forage
on the fishponds of the plaintiffs by carting and taking away the
remaining full grown milkfish, fry and fingerlings and other marine
products in the fishponds. NOT ONLY THAT, even the chapel
built by plaintiff CGR Corporation was ransacked and destroyed
and the materials taken away by defendant’s men. Religious
icons were also stolen and as an extreme act of sacrilege, even
decapitated the heads of some of these icons;
xxxx
XIII
That the unlawful, forcible and illegal intrusion/destruction of
defendant Ernesto Treyes, Jr. and his men on the fishpond
leased and possessed by the plaintiffs is without any authority of
law and in violation of Article 539 of the New Civil Code which
states:
"Art. 539. Every possessor has a right to be respected in his possession;
and should he be disturbed therein he shall be protected in or restored to
said possession by the means established by the laws and rules of the
Court."9 (Underscoring supplied) and praying for the following reliefs:
1) Ordering the defendant to pay plaintiff CGR Corporation the
sum of at least ₱900,000.00 and to plaintiffs Herman and Alberto
Benedicto, the sum of at least ₱300,000.00 each by way
of actual damages and such other amounts as proved during the
trial;
2) Ordering the defendant to pay the plaintiffs the sum of
₱100,000.00 each as moral damages;
3) Ordering the defendant to pay the plaintiffs the sum of
₱100,000.00 each as exemplary damages;
4) Ordering the defendant to pay the plaintiffs the sum of
₱200,000.00 as attorney’s fees, and to reimburse plaintiffs with all
such sums paid to their counsel by way of appearance
fees.10 (Underscoring supplied)
Respondent filed a Motion to Dismiss11 petitioners’ complaint for
damages on three grounds – litis pendentia, res
judicata and forum shopping.
By the assailed Order12 of August 26, 2005, Branch 43 of the Bacolod
RTC dismissed petitioners’ complaint on the ground of prematurity, it
holding that a complaint for damages may only be maintained "after a
final determination on the forcible entry cases has been made."
Hence, the present petition for review.
The only issue is whether, during the pendency of their separate
complaints for forcible entry, petitioners can independently institute and
maintain an action for damages which they claim arose from incidents
occurring after the dispossession by respondent of the premises.
Petitioners meet the issue in the affirmative. Respondents assert
otherwise.
The petition is impressed with merit.
Section 17, Rule 70 of the Rules of Court provides:
SEC. 17. Judgment. – If after trial the court finds that the allegations of
the complaint are true, it shall render judgment in favor of the plaintiff for
the restitution of the premises, the sum justly due as arrears of rent or as
reasonable compensation for the use and occupation of the premises,
attorney’s fees and costs. If it finds that said allegations are not true, it
shall render judgment for the defendant to recover his costs. If a
counterclaim is established, the court shall render judgment for the sum
found in arrears from either party and award costs as justice requires.
(Emphasis supplied)
The recoverable damages in forcible entry and detainer cases thus refer
to "rents" or "the reasonable compensation for the use and occupation of
the premises" or "fair rental value of the property" and attorney’s fees and
costs.13
The 2006 case of Dumo v. Espinas14 reiterates the long-established rule
that the only form of damages that may be recovered in an action for
forcible entry is the fair rental value or the reasonable compensation for
the use and occupation of the property:
Lastly, we agree with the CA and the RTC that there is no basis for the
MTC to award actual, moral, and exemplary damages in view of the
settled rule that in ejectment cases, the only damage that can be
recovered is the fair rental value or the reasonable compensation for the
use and occupation of the property. Considering that the only issue
raised in ejectment is that of rightful possession, damages which could
be recovered are those which the plaintiff could have sustained as a
mere possessor, or those caused by the loss of the use and occupation
of the property, and not the damages which he may have suffered but
which have no direct relation to his loss of material possession. x x
x15 (Emphasis, underscoring and italics supplied; citations omitted)
Other damages must thus be claimed in an ordinary action. 16
In asserting the negative of the issue, respondent cites the 1999 case of
Progressive Development Corporation, Inc. v. Court of Appeals. 17 In this
case, Progressive Development Corporation, Inc. (Progressive), as
lessor, repossessed the leased premises from the lessee allegedly
pursuant to their contract of lease whereby it was authorized to do so if
the lessee failed to pay monthly rentals. The lessee filed a case for
forcible entry with damages against Progressive before the Metropolitan
Trial Court (MeTC) of Quezon City. During the pendency of the case, the
lessee filed an action for damages before the RTC, drawing Progressive
to file a motion to dismiss based on litis pendentia. The RTC denied the
motion.
On appeal by Progressive, the Court of Appeals sustained the RTC order
denying the motion to dismiss.
Progressive brought the case to this Court. Citing Section 1, Rule 70 of
the Rules of Court, this Court reversed the lower courts’ ruling, it holding
that "all cases for forcible entry or unlawful detainer shall be filed before
the Municipal Trial Court which shall include not only the plea for
restoration of possession but also all claims for damages and costs
therefrom." In other words, this Court held that "no claim for damages
arising out of forcible entry or unlawful detainer may be filed separately
and independently of the claim for restoration of
possession."18 (Underscoring supplied)
In thus ruling, this Court in Progressive made a comparative study of the
therein two complaints, thus:
A comparative study of the two (2) complaints filed by private respondent
against petitioner before the two (2) trial courts shows that not only are
the elements of res adjudicata present, at least insofar as the claim for
actual and compensatory damages is concerned, but also that the claim
for damages–moral and exemplary in addition to actual and
compensatory–constitutes splitting a single cause of action. Since this
runs counter to the rule against multiplicity of suits, the dismissal of the
second action becomes imperative.
The complaint for forcible entry contains the following pertinent
allegations –
2.01 On 02 January 1989, plaintiff entered into a contract of lease with
defendant PDC over a property designated as Ground Floor, Seafood
Market (hereinafter "Subject Premises") situated at the corner of EDSA
corner MacArthur Street, Araneta Center, Cubao, Quezon City, for a
period of ten (10) years from 02 January 1989 to 30 April 1998.
2.02 Immediately after having acquired actual physical possession of the
Subject Premises, plaintiff established and now operates thereon the now
famous Seafood Market Restaurant. Since then, plaintiff had been in
actual, continuous, and peaceful physical possession of the Subject
Premises until 31 October 1992.
xxxx
3.02 Plaintiff, being the lessee of the Subject Premises, is entitled to the
peaceful occupation and enjoyment of the Subject Premises to the
exclusion of all others, including defendants herein.
3.03 Defendants’ resort to strong arms tactics to forcibly wrest
possession of the Subject Premises from plaintiff and maintain
possession thereof through the use of force, threat, strategy and
intimidation by the use of superior number of men and arms amounts to
the taking of the law into their own hands.
3.04 Thus, defendants’ act of unlawfully evicting out plaintiff from the
Subject Premises it is leasing from defendant PDC and depriving it of
possession thereof through the use of force, threat, strategy and
intimidation should be condemned and declared illegal for being contrary
to public order and policy.
3.05 Consequently, defendants should be enjoined from continuing with
their illegal acts and be ordered to vacate the Subject Premises and
restore possession thereof, together with its contents to plaintiff.
xxxx
4.07 Considering that defendants’ act of forcibly grabbing possession of
the Subject Premises from plaintiff is illegal and null and void, defendant
should be adjudged liable to plaintiff for all the aforedescribed damages
which plaintiff incurred as a result thereof.
The amended complaint for damages filed by private respondent alleges
basically the same factual circumstances and issues as bases for the
relief prayed for, to wit:
4. On May 28, 1991, plaintiff and defendant PDC entered into a Contract
of Lease for a period of ten years or from January 2, 1989 up to April 30,
1998 over a property designated as Ground Floor, Seafood Market
(hereinafter referred to as Subject Premises) situated at the corner of
EDSA corner McArthur Street, Araneta Center, Cubao, Quezon City. A
copy of the lease contract is attached hereto as Annex "A."
5. Immediately thereafter, plaintiff took over actual physical possession of
Subject Premises, and established thereon the now famous "Seafood
Market Restaurant."
xxxx
7. On October 31, 1992 at around 8:30 p.m., defendant PDC, without the
benefit of any writ of possession or any lawful court order and with the aid
of approximately forty (40) armed security guards and policemen under
the supervision of defendant Tejam, forcibly entered the subject premises
through force, intimidation, threats and stealth and relying on brute force
and in a thunderboltish manner and against plaintiff’s will,
unceremoniously drew away all of plaintiffs men out of the subject
premises, thereby depriving herein plaintiff of its actual, physical and
natural possession of the subject premises. The illegal high-handed
manner of gestapo like take-over by defendants of subject premises is
more particularly described as follows: x x x x
8. To date, defendants continue to illegally possess and hold the Subject
Premises, including all the multi-million improvements, fixtures and
equipment therein owned by plaintiff, all to the damage and prejudice of
plaintiff. The actuations of defendants constitute an unlawful
appropriation, seizure and taking of property against the will and consent
of plaintiff. Worse, defendants are threatening to sell at public auction
and without the consent, of plaintiff and without lawful authority, the multi-
million fixtures and equipment of plaintiff and at prices way below the
market value thereof. Plaintiff hereby attaches as Annex "B" the letter
from defendants dated August 6, 1993 addressed to plaintiff, informing
the latter that the former intends to sell at an auction on August 19, 1993
at 2:00 p.m. properties of the plaintiff presently in defendants’
possession.
xxxx
12. Defendant’s unlawful takeover of the premises constitutes a violation
of its obligation under Art. 1654 of the New Civil Code requiring the lessor
to maintain the lessee in peaceful and adequate enjoyment of the lease
for the entire duration of the contract. Hence, plaintiff has filed the
present suit for the recovery of damages under Art. 1659 of the New Civil
Code x x x x19 (Emphasis in the original; underscoring supplied)
Analyzing the two complaints, this Court, still in Progressive, observed:
Restated in its bare essentials, the forcible entry case has one cause of
action, namely, the alleged unlawful entry by petitioner into the leased
premises out of which three (3) reliefs (denominated by private
respondent as its causes of action) arose: (a) the restoration by the
lessor (petitioner herein) of the possession of the leased premises to the
lessee, (b) the claim for actual damages due to the losses suffered by
private respondent such as the deterioration of perishable foodstuffs
stored inside the premises and the deprivation of the use of the premises
causing loss of expected profits; and, (c) the claim for attorney’s fees and
costs of suit.
On the other hand, the complaint for damages prays for a monetary
award consisting of (a) moral damages of P500,000.00 and exemplary
damages of another P500,000.00; (b) actual damages of P20,000.00 and
compensatory damages of P1,000,000.00 representing unrealized
profits; and, (c) P200,000.00 for attorney’s fees and costs, all based on
the alleged forcible takeover of the leased premises by petitioner. Since
actual and compensatory damages were already prayed for in the
forcible entry case before the MeTC, it is obvious that this cannot be
relitigated in the damage suit before the RTC by reason of res adjudicata.
Petitioners’ filing of an independent action for damages other than those
sustained as a result of their dispossession or those caused by the loss
of their use and occupation of their properties could not thus be
considered as splitting of a cause of action.
WHEREFORE, the Orders dated August 26, 2005 and January 2, 2006
issued by the Regional Trial Court, Branch 43, Bacolod City, in Civil Case
No. 04-12284 are REVERSED and SET ASIDE.
The Regional Trial Court, Branch 43, Bacolod City, is directed to
REINSTATE Civil Case No. 04-12284 to its docket and to conduct
proceedings thereon with dispatch.

The other claims for moral and exemplary damages cannot also succeed SO ORDERED.
considering that these sprung from the main incident being heard before
the MeTC. x x x20 (Italics in the original; Emphasis and underscoring CONCHITA CARPIO MORALES
supplied) Associate Justice

It bears noting, however, that as reflected in the earlier-quoted

allegations in the complaint for damages of herein petitioners, their claim
for damages have no direct relation to their loss of possession of the
premises. It had to do with respondent’s alleged harvesting and carting
away several tons of milkfish and other marine products in their
fishponds, ransacking and destroying of a chapel built by petitioner CGR
Corporation, and stealing religious icons and even decapitating the heads
of some of them, after the act of dispossession had occurred.

Surely, one of the elements of litis pendentia - that the identity between
the pending actions, with respect to the parties, rights asserted and
reliefs prayed for, is such that any judgment rendered on one action will,
regardless of which is successful, amount to res judicata in the action
under consideration - is not present, hence, it may not be invoked to
dismiss petitioners’ complaint for damages.21

Res judicata may not apply because the court in a forcible entry case has
no jurisdiction over claims for damages other than the use and
occupation of the premises and attorney’s fees.22

Neither may forum-shopping justify a dismissal of the complaint for

damages, the elements of litis pendentia not being present, or where a
final judgment in the forcible entry case will not amount to res judicata in
the former.23
G.R. No. L-16797 February 27, 1963
RODRIGO ENRIQUEZ, ET AL., plaintiffs-appellees,
vs.
SOCORRO A. RAMOS, ET AL., defendants-appellants.
Gelasio L. Dimaano for plaintiffs-appellees.
Vicente K. Aranda for defendants-appellants.
REYES, J.B.L., J.:
Direct appeal on points of law from a decision of the Court of First
Instance of Rizal in its Civil Case No. Q-4232.
The record is to the effect that on 24 November 1958, Rodrigo Enriquez
and the spouses Urbano Dizon and Aurea Soriano de Dizon sold to
Socorro A. Ramos, by a notarial deed of even date, eleven (11) parcels
of land situated in Bago Bantay, Quezon City, and covered by their
corresponding certificates of title, for the stipulated price of P101,000.00.
The vendee paid P5,000.00 down, P2,500.00 in cash, and P2,500.00 by
a check drawn against the Philippine National Bank, and agreed to
satisfy the balance of P96,000.00 within ninety (90) days. To secure the
said balance, the vendee Socorro A. Ramos, in the same deed of sale,
mortgaged the eleven parcels in favor of the vendors. By way of
additional security, Socorro A. Ramos, as attorney-in-fact of her children,
Enrique, Antonio, Milagros, and Lourdes, and as judicial guardian of her
minor child Angelita Ramos, executed another mortgage on Lot No. 409
of the Malinta Estate.
Because of the vendee-mortgagor's failure to comply with some
conditions of the mortgage, this action for foreclosure of the mortgage
was filed by the vendors-mortgagees in the court below, on 29 April
1959. Defendant Socorro Ramos moved to dismiss, alleging that the
plaintiffs previously had filed action against her in the Court of First
Instance of Manila on 24 February 1959 for the recovery of P2,500.00
paid by check as part of the down payment on the price of the mortgaged
lands; that at the time this first suit was filed, the mortgage debt was
already accrued and demandable; that plaintiffs were, therefore, guilty of
splitting a single cause of action, and under section 4 of Rule 2 of the
Rules of Court, the filing of the first action for P2,500.00 was a defense
that could be pleaded in abatement of the second suit. Upon opposition
by the plaintiffs, the Court of First Instance of Quezon City denied the
motion to dismiss; but defendant Ramos repleaded the averments as a
special defense in her answer. After trial, on 16 December 1959, the
Court of First Instance of Quezon City rendered judgment against
defendant Ramos; ordered her to pay P96,000.00, with 12% interest from
24 February 1959 until payment, 10% of the amount due as attorney's
fees, and the costs of the suit; and further decreed the foreclosure sale of
the mortgaged properties in case of non-payment within ninety (90) days.
Socorro Ramos appealed directly to this Court, and here insists that the
action should be dismissed on account of the alleged splitting of
appellee's cause of action, and that the obligation not having fixed a
period, although one was intended, the court below should have set first
a date of maturity before ordering payment or foreclosure.
We find no merit in the appeal.
Wherefore, the parties respectfully pray that the foregoing stipulation of
facts be admitted and approved by this Honorable Court, without
prejudice to the parties adducing other evidence to prove their case not
covered by this stipulation of facts.1äwphï1.ñët
An examination of the first complaint filed against appellant in the Court
of First Instance of Manila shows that it was based on appellants' having
unlawfully stopped payment of the check for P2,500.00 she had issued in
favor of appellees; while the complaint in the present action was for non-
payment of the balance of P96,000.00 guaranteed by the mortgage. The
claim for P2,500.00 was, therefore, a distinct debt not covered by the
security; and since the mortgage was constituted on lands situated in
Quezon City, the appellees could not ask for its foreclosure in the Manila
courts. The two causes of action being different, section 4 of Rule 2 does
not apply.
On the second assignment of error: the stipulation in the mortgage
contract that the obligation for P96,000.00 was to be —
without interest, payable within ninety (90) days from this date,
provided that in case of default it shall bear interest at the rate of
12% per annum,
clearly fixes a date of maturity, the stipulated twelve per cent in case of
default being nothing more than a penalty, designed to induce the debtor
to pay on or before the expiration of the ninety (90) days. Hence, there
was no call upon the court to set another due date.
Finding no error in the judgment appealed from, the same is affirmed,
with costs against appellants.
G.R. No. 167246 July 20, 2011
GEORGE LEONARD S. UMALE, Petitioner,
vs.
CANOGA PARK DEVELOPMENT CORPORATION, Respondent.
DECISION
BRION, J.:
Before us is a petition for review on certiorari1 filed by George Leonard S.
Umale (petitioner), challenging the August 20, 2004 Decision2 of the
Court of Appeals (CA) in CA-G.R. SP. No. 78836 and its subsequent
February 23, 2005 Resolution3 that denied his motion for reconsideration.
The CA reversed the Decision4 of the Regional Trial Court (RTC)-Branch
68, Pasig City, that dismissed Canoga Park Development Corporation’s
complaint for unlawful detainer on the ground of litis pendentia.
ANTECEDENTS
On January 4, 2000, the parties entered into a Contract of
Lease5 whereby the petitioner agreed to lease, for a period of two (2)
years starting from January 16, 2000, an eight hundred sixty (860)-
square-meter prime lot located in Ortigas Center, Pasig City owned by
the respondent. The respondent acquired the subject lot from Ortigas &
Co. Ltd. Partnership through a Deed of Absolute Sale, subject to the
following conditions: (1) that no shopping arcades or retail stores,
restaurants, etc. shall be allowed to be established on the property,
except with the prior written consent from Ortigas & Co. Ltd. Partnership
and (2) that the respondent and/or its successors-in-interest shall
become member/s of the Ortigas Center Association, Inc. (Association),
and shall abide by its rules and regulations. 6
On October 10, 2000, before the lease contract expired, the respondent
filed an unlawful detainer case against the petitioner before the
Metropolitan Trial Court (MTC)-Branch 68, Pasig City, docketed as Civil
Case No. 8084.7 The respondent used as a ground for ejectment the
petitioner’s violation of stipulations in the lease contract regarding the use
of the property. Under this contract, the petitioner shall use the leased lot
as a parking space for light vehicles and as a site for a small drivers’
canteen,8 and may not utilize the subject premises for other purposes
without the respondent’s prior written consent. 9 The petitioner, however,
constructed restaurant buildings and other commercial establishments on
the lot, without first securing the required written consent from the
respondent, and the necessary permits from the Association and the
Ortigas & Co. Ltd. Partnership. The petitioner also subleased the
property to various merchants-tenants in violation of the lease contract.
The MTC-Branch 68 decided the ejectment case in favor of the
respondent. On appeal, the RTC-Branch 155, Pasig City affirmed
in toto the MTC-Branch 68 decision.10 The case, however, was re-raffled
to the RTC-Branch 267, Pasig City because the Presiding Judge of the
RTC-Branch 155, upon motion, inhibited himself from resolving the
petitioner’s motion for reconsideration.11 The RTC-Branch 267 granted
the petitioner’s motion, thereby reversing and setting aside the MTC-
Branch 68 decision. Accordingly, Civil Case No. 8084 was dismissed for
being prematurely filed.12 Thus, the respondent filed a petition for review
with the CA on April 10, 2002.13
During the pendency of the petition for review, the respondent filed on
May 3, 2002 another case for unlawful detainer against the petitioner
before the MTC-Branch 71, Pasig City. The case was docketed as Civil
Case No. 9210.14 This time, the respondent used as a ground for
ejectment the expiration of the parties’ lease contract.
On December 4, 2002, the MTC-Branch 71 rendered a decision15 in favor
of the respondent, the dispositive portion of which read, as follows:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff
[referring to the respondent] and against the defendant and all persons
claiming rights under him, as follows:
1. Defendant and all persons claiming rights under him are
ordered to peacefully vacate the premises located at Lot 9, Block
5, San Miguel Avenue, Ortigas Center, Pasig City, covered by
Transfer Certificate of Title No. 488797 of the Registry of Deeds
of Pasig City and to surrender the possession thereof to the
plaintiff;
 2. Defendant is ordered to pay unto plaintiff the following:
a. Damages for the use of the property after the expiration
of the lease contract therefor in the amount of One
Hundred Fifty Thousand Pesos (₱150,000.00) a month,
beginning 16 January 2002 until he and all those claiming
rights under him have vacated and peacefully turned over
the subject premises to the plaintiff; and
b. One Hundred Thousand Pesos (₱100,000.00) as and
for attorney’s fees together with costs of suit.
3. With respect to the commercial units built by [the] defendant on
the subject land, he is hereby ordered to remove the same from
the subject land and to restore the subject land in the same
condition as it was received unto the plaintiff, at his exclusive
account, failing which the same shall be removed by the plaintiff,
with expenses therefor chargeable to the defendant.
On appeal, the RTC-Branch 68 reversed and set aside the decision of
the MTC-Branch 71, and dismissed Civil Case No. 9210 on the ground
of litis pendentia.16 The petitioner, however, was still ordered to pay rent
in the amount of seventy-one thousand five hundred pesos (₱71,500.00)
per month beginning January 16, 2002, which amount is the monthly rent
stipulated in the lease contract.
Aggrieved by the reversal, the respondent filed a Petition for Review
under Rule 42 of the Rules of Court with the CA. The respondent argued
that there exists no litis pendentia between Civil Case Nos. 8084 and
9210 because the two cases involved different grounds for ejectment,
i.e., the first case was filed because of violations of the lease contract,
while the second case was filed due to the expiration of the lease
contract. The respondent emphasized that the second case was filed
based on an event or a cause not yet in existence at the time of the filing
of the first case.17 The lease contract expired on January 15,
2002,18 while the first case was filed on October 10, 2000.
On August 20, 2004, the CA nullified and set aside the assailed decision
of the RTC-Branch 68, and ruled that there was no litis
pendentia because the two civil cases have different causes of
action. The decision of the MTC- Branch 71 was ordered reinstated.
Subsequently, the petitioner’s motion for reconsideration was denied;
hence, the filing of the present petition for review on certiorari.
In presenting his case before this Court, the petitioner insists that litis
pendentia exists between the two ejectment cases filed against him
because of their identity with one another and that any judgment on the
first case will amount to res judicata on the other. The petitioner argues
that the respondent reiterated the ground of violations of the lease
contract, with the additional ground of the expiration of the lease contract
in the second ejectment case. Also, the petitioner alleges that all of the
elements of litis pendentia are present in this case, thus, he prays for the
reversal and setting aside of the assailed CA decision and resolution, and
for the dismissal of the complaint in Civil Case No. 9210 on the ground
of litis pendentia and/or forum shopping.
THE COURT’S RULING
We disagree with the petitioner and find that there is no litis
pendentia.
As a ground for the dismissal of a civil action, litis pendentia refers to a
situation where two actions are pending between the same parties for the
same cause of action, so that one of them becomes unnecessary and
vexatious.19
Litis pendentia exists when the following requisites are present: identity of
the parties in the two actions; substantial identity in the causes of action
and in the reliefs sought by the parties; and the identity between the two
actions should be such that any judgment that may be rendered in one
case, regardless of which party is successful, would amount to res
judicata in the other.20
In the present case, the parties’ bone of contention is whether Civil Case
Nos. 8084 and 9210 involve the same cause of action. The petitioner
argues that the causes of action are similar, while the respondent argues
otherwise. If an identity, or substantial identity, of the causes of action in
both cases exist, then the second complaint for unlawful detainer may be
dismissed on the ground of litis pendentia.
We rule that Civil Case Nos. 8084 and 9210 involve different causes
of action.
Generally, a suit may only be instituted for a single cause of action. 21 If
two or more suits are instituted on the basis of the same cause of action,
the filing of one or a judgment on the merits in any one is ground for the
dismissal of the others.22
Several tests exist to ascertain whether two suits relate to a single or
common cause of action, such as whether the same evidence would
support and sustain both the first and second causes of action23 (also
known as the "same evidence" test),24 or whether the defenses in one
case may be used to substantiate the complaint in the other.25 Also
fundamental is the test of determining whether the cause of action in
the second case existed at the time of the filing of the first
complaint.26
Of the three tests cited, the third one is especially applicable to the
present case, i.e., whether the cause of action in the second case existed
at the time of the filing of the first complaint – and to which we answer in
the negative. The facts clearly show that the filing of the first ejectment
case was grounded on the petitioner’s violation of stipulations in the
lease contract, while the filing of the second case was based on the
expiration of the lease contract. At the time the respondent filed the first
ejectment complaint on October 10, 2000, the lease contract between the
parties was still in effect. The lease was fixed for a period of two (2)
years, from January 16, 2000, and in the absence of a renewal agreed
upon by the parties, the lease remained effective until January 15, 2002.
It was only at the expiration of the lease contract that the cause of action
in the second ejectment complaint accrued and made available to the
respondent as a ground for ejecting the petitioner. Thus, the cause of
action in the second case was not yet in existence at the time of filing of
the first ejectment case.
In response to the petitioner’s contention that the similarity of Civil Case
Nos. 8084 and 9210 rests on the reiteration in the second case of the
cause of action in the first case, we rule that the restatement does not
result in substantial identity between the two cases. Even if the
respondent alleged violations of the lease contract as a ground for
ejectment in the second complaint, the main basis for ejecting the
petitioner in the second case was the expiration of the lease contract. If
not for this subsequent development, the respondent could no longer file
a second complaint for unlawful detainer because an ejectment complaint
may only be filed within one year after the accrual of the cause of
action,27 which, in the second case, was the expiration of the lease
contract.1awphi1
alleged violations of the lease contract committed by the petitioner. We
note that the damages awarded by the MTC-Branch 71 in Civil Case No.
9210 were for those incurred after the expiration of the lease
contract,28 not for those incurred prior thereto.
Similarly, we do not find the respondent guilty of forum shopping in filing
Civil Case No. 9210, the second civil case. To determine whether a party
violated the rule against forum shopping, the test applied is whether the
elements of litis pendentia are present or whether a final judgment in one
case will amount to res judicata in another.29 Considering our
pronouncement that not all the requisites of litis pendentia are present in
this case, the CA did not err in declaring that the respondent committed
no forum shopping. Also, a close reading of the Verification and
Certification of Non-Forum Shopping30 (attached to the second ejectment
complaint) shows that the respondent did disclose that it had filed a
former complaint for unlawful detainer against the petitioner. Thus, the
respondent cannot be said to have committed a willful and deliberate
forum shopping.
WHEREFORE, the instant petition is DENIED. The assailed Decision
dated August 20, 2004 and Resolution dated February 23, 2005 of the
Court of Appeals in CA-G.R. SP. No. 78836 are AFFIRMED.
SO ORDERED.
ARTURO D. BRION
Associate Justice

Also, contrary to petitioner’s assertion, there can be no conflict between

the decisions rendered in Civil Case Nos. 8084 and 9210 because the
MTC-Branch 71 decided the latter case on the sole issue of whether the
lease contract between the parties had expired. Although alleged by the
respondent in its complaint, the MTC-Branch 71 did not rule on the
 G.R. No. 173783, June 17, 2015
RIVIERA GOLF CLUB, INC., Petitioner, v. CCA HOLDINGS,
B.V., Respondent.
DECISION
BRION, J.:
Before the Court is the petition for review on certiorari1 filed by
Riviera Golf Club, Inc. (Riviera Golf) assailing the January 11,
2006 decision2 and the July 5, 2006 resolution3 of the Court of
Appeals (CA) in CA-G.R.CV No. 83824.
Background Facts
Riviera Golf, a domestic corporation, is the owner of Riviera Golf
Club (Club), a 36-hole golf course and recreational facility in
Silang, Cavite. On October 11, 1996, Riviera Golf entered into
a Management Agreement with CCA Holdings, B.V. (CCA
Holdings), a foreign corporation, for the management and
operation of the Club.
The Management Agreement was for a period of five (5) years.
Under this agreement, Riviera Golf would pay CCA Holdings a
monthly Base Management Fee of 5.5% of the Adjusted Gross
Revenue equivalent to US$16,500.00 per month, adjusted to
4.5% per month from the opening date, plus an incentive
Management Fee of 10% of the Gross Operating Profit.
The parties also entered into a co-terminous Royalty
Agreement that would allow Riviera Golf and the Club's
developer, Armed Forces of the Philippines' Retirement and
Separation Benefits System (AFP-RSBS), to use CCA Holdings'
name and facilities to market the Club's shares. In consideration
of the license to use CCA Holdings' name, Riviera Golf and AFP-
RSBS will pay CCA Holdings a gross licensing fee of 1% on all
membership fees paid in the sale of shares, an additional gross
licensing fee of 4% on all club shares, and 7% on non-golf
memberships sold.
Riviera Golf initially paid the agreed fees, but defaulted in its
payment of the licensing fees and the reimbursement claims in
September 1997. Riviera Golf likewise failed to pay the monthly
management and incentive fees in June 1999, prompting CCA
Holdings to demand the amounts due under both agreements.
On October 29, 1999, Riviera Golf sent CCA Holdings a letter
informing the latter that it was pre-terminating the
Management Agreement purportedly to alleviate the financial
crisis that the AFP-RSBS was experiencing. The Royalty
Agreement was also deemed pre-terminated.
CCA Holdings protested the termination of the agreement and
demanded that Riviera Golf settle its unpaid management and
royalty fees. Riviera Golf however refused on the ground that
CCA Holdings violated the terms of the agreement.
In April 2001, CCA Holdings filed before the Regional Trial Court
(RTC), Branch 146, Makati City, a complaint for sum of money
with damages docketed as Civil Case No. 01-611 (first
complaint) against Riviera Golf. During the pendency of the
case, the parties tried to extrajudicially settle their differences
and executed a Compromise Agreement.
On April 25, 2002, the RTC rendered a decision4 approving the
parties' Compromise Agreement. Paragraph 4 of the agreement
reads:
chanRoblesvirtualLaw libra ry
4) It is understood that the execution of this compromise
agreement or the payment of the aforementioned sum of
money shall not be construed as a waiver of or with
prejudice to plaintiffs rights/cause of action, if any,
arising from or relative to the pre-termination of the
parties' Management and Royalty Agreements by the
defendant subject to whatever claims and defenses may have
relative thereto; (Emphasis supplied.)
chanroblesvirtual lawlib rary
Subsequently, or on November 22, 2002, CCA Holdings again
sent a letter to Riviera Golf, this time, demanding the sum of
US$390,768.00 representing the projected net income or
expected business profits it was supposed to derive for the
unexpired two-year term of the Management Agreement. As its
demands went unheeded, CCA Holdings filed another complaint
for sum of money and damages docketed as Civil Case No. 03-
399 (second complaint) before Branch 57 of the RTC of Makati
City.
Noting that the first and second complaints involve the same
parties, the same subject matter, and the same causes of
action, Riviera Golf filed on August 6, 2003, a Motion to Dismiss
on the grounds of res judicata and violation of the rule against
splitting of causes of action. CCA Holdings opposed the motion
contending that there is no splitting of causes of action since
the two cases are entirely independent of each other. CCA
Holdings also justified its belated filing of the second complaint,
arguing that the needed financial records were in Riviera Golfs
possession.
The RTC Ruling
The RTC, Branch 57, Makati City granted the motion to dismiss,
holding that the first and second complaints have identical
causes of action and subject matter. Since the claims in Civil
Case No. 01-611 and Civil Case No. 03-399 arose from alleged
violations of the terms and conditions of the Management and
Royalty Agreements, the rules on res judicata and splitting of
causes of action apply.
The RTC also noted that CCA Holdings had every opportunity to
raise the issue of pre-termination when it filed Civil Case No.
01-611. That CCA Holdings did not do so and opted instead to
reserve it for future litigation only show that it was speculating
on the results of the litigation.
The RTC likewise pointed out that the reservation clause or the
"nonwaiver clause" that the parties inserted in the Compromise
Agreement was qualified by the phrase subject to whatever
claims and defenses the defendant may have relative thereto.
The RTC held that the defenses that Riviera Golf could raise are
not limited only to those relating to the legality of the pre-
termination of the agreements, but could also include all other
claims and defenses such as res judicata and splitting of a
single cause of action.
CCA Holdings appealed the dismissal of its complaint to the CA.
The CA Ruling
In its decision dated January 11, 2006, the CA set aside the
order granting the motion to dismiss, and remanded the case
to the RTC for adjudication on the merits. The CA held that res
judicata and splitting of a single cause of action were not
committed based on the following reasons:
First, there is no identity of causes of action in the two
civil cases.
The test to determine the identity of causes of action is to
ascertain whether the same evidence is necessary to sustain
the two suits. In this case, the sets of evidence in the two
complaints were different.
Second, there is no splitting of a single cause of
action because Riviera Golf violated separate primary rights of
CCA Holdings under the management contract.
Third, Riviera Golf recognized CCA Holdings' right to seek
damages arising from or relative to the premature termination
of the Management Agreement. This view is evident from the
literal interpretation of Paragraph 4 (or the "non waiver clause")
of the parties' compromise agreement.
Riviera Golf moved for the reconsideration of the decision, but
the CA denied its motion in its resolution of July 5, 2006; hence,
the present recourse to us pursuant to Rule 45 of the Rules of
Court.
The Petition
Riviera Golf asks the Court to set aside the CA decision,
contending that the appellate court committed a grave error in
not holding that the filing of the second complaint amounted
to res judicata and splitting of a single cause of action. Riviera
Golf submits that based on the allegations in the two
complaints, the facts that are necessary to support the second
case (Civil Case No. 03-399) would have been sufficient to
authorize recovery in the first case (Civil Case No. 01-611).
Moreover, the documentary evidence that CCA Holdings
submitted to support both complaints are also the same. Thus,
both civil cases involve not only the same facts and the same
subject matter, but also the same cause of action, i.e., breach
of the Management and Royalty Agreements.
Riviera Golf also argued that although there seems to be
several rights violated, there is only one delict or wrong
committed and consequently, only one cause of action that
should have been alleged in a single complaint. Since the
alleged breach of contract in this case was already total at
the time of the filing of Civil Case No. 01-611, the filing of
the second complaint for the recovery of damages for the pre-
termination of the Management and Royalty Agreements
constitutes splitting a single cause of action that is expressly
prohibited by the Rules of Court.
Riviera Golf likewise disagrees with the CA's interpretation of
the non-waiver clause. It argues that the phrase if any and the
condition that the causes of action are subject to whatever
claims and defenses the defendant may have relative thereto in
the non-waiver clause limited its recognition of CCA Holdings'
rights and causes of action. It also maintains that the filing of
the motion to dismiss based on res judicata and splitting of
causes of action clearly falls within the non-waiver clause's
limitation.
The Case for the Respondent
CCA Holdings reiterates that there was absolutely no identity of
subject matter and causes of action because the first case
sought the payment for the services it already rendered, while
the second case sought the recovery of damages representing
the projected net income that it failed to realize by reason of
the unilateral and premature termination of the Management
and Royalty Agreements. Thus, the principles of res
judicata and splitting of a single cause of action do not apply.
Even assuming that the prohibition against res
judicata operates in this case, CCA Holdings contends that
Riviera Golf is already estopped from questioning the filing of
the second complaint in view of the non-waiver clause inserted
in the compromise agreement.
The Issues
As defined by the parties, the issues before us are limited to:
1. Whether the CCA Holdings violated the prohibitions
against res judicata and splitting a single cause of action when
it filed the claim for damages for unrealized profits; and
2. Whether the CA's interpretation of paragraph 4 of the
compromise agreement is correct. If in the affirmative, whether
the parties may stipulate on an agreement violating the
prohibitions against res judicata and splitting a single cause of
action.
Our Ruling
We find the petition meritorious.
The Second Complaint is Barred by Res Judicata
Res judicata is defined as a matter adjudged; a thing judicially
acted upon or decided; or a thing or matter settled by
judgment. Under this rule, a final judgment or decree on the
merits by a court of competent jurisdiction is conclusive as to
the rights of the parties or their privies in all later suits, and on
all points and matters determined in the former suit.5 ChanRoblesVirtua lawl ibrary
The concept of res judicata is embodied in Section 47(b) and (c)
of Rule 39 of the Rules of Court, which reads:
chanRoblesvirtualLaw libra ry
SEC. 47. Effect of judgments or final orders. — The effect of a
judgment or final order rendered by a court of the Philippines,
having jurisdiction to pronounce the judgment or final order,
may be as follows:
(a) In case of a judgment or final order against a specific thing
or in respect to the probate of a will, or the administration of
the estate of a deceased person, or in respect to the personal,
political, or legal condition or status of a particular person or his
relationship to another, the judgment or final order is conclusive
upon the title to the thing, the will or administration, or the
condition, status or relationship of the person; however, the
probate of a will or granting of letters of administration shall
only be prima facie evidence of the death of the testator or
intestate;
(b) In other cases, the judgment or final order is, with respect
to the matter directly adjudged or as to any other matter that
could have been raised in relation thereto, conclusive between
the parties and their successors in interest by title subsequent
to the commencement of the action or special proceeding,
litigating for the same thing and under the same title and in the
same capacity; and,
(c) In any other litigation between the same parties or their
successors in interest, that only is deemed to have been
adjudged in a former judgment or final order which appears
upon its face to have been so adjudged, or which was actually
and necessarily included therein or necessary thereto.
chanroblesvirtual lawlib rary
Res judicata requires the concurrence of the following
requisites: (1) the former judgment must be final; (2) it must
have been rendered by a court having jurisdiction of the subject
matter and the parties; (3) it must be a judgment on the
merits; and (4) there must be, between the first and second
actions (a) identity of parties, (b) identity of subject matter,
and (c) identity of causes of action.6ChanRob lesVirtua lawl ibr ary
All the Elements of Res Judicata are Present
There is no dispute as to the presence of the first three
elements in the present case. The decision in Civil Case No. 01-
611 is a final judgment on the merits rendered by a court which
had jurisdiction over the subject matter and over the parties.
Since a judicial compromise operates as an adjudication on the
merits, it has the force of law and the effect of res judicata.7
With respect to the fourth element, a careful examination of the
allegations in the two complaints shows that the cases involve
the same parties and the same subject matter. While Civil Case
No. 01-611 is for the collection of unpaid management and
royalty fees, and Civil Case No. 03-399 on the other hand, is for
recovery of damages for the premature termination of the
parties' agreements, both cases were nevertheless filed on the
basis of the same Management and Royalty Agreements. Thus,
we agree that these two cases refer to the same subject matter.
The Court is also convinced that there is identity of causes of
action between the first and the second complaints.
A cause of action may give rise to several reliefs, but only one
action can be filed.8 A single cause of action or entire claim or
demand cannot be split up or divided into two or more different
actions. The rule on prohibiting the splitting of a single cause of
action is clear. Section 4, Rule 2 of the Rules of Court expressly
states:
chanRoblesvirtualLaw libra ry
Section 4. Splitting a single cause of action; effect of. - If two or
more suits are instituted on the basis of the same cause of
action, the filing of one or a judgment upon the merits in any
one is available as a ground for the dismissal of the others.
chanroblesvirtual lawlib rary
In both Civil Case No. 01-611 and Civil Case No. 03-399, CCA
Holdings imputed the same wrongful act - the alleged
violations of the terms and conditions of the Management
and Royalty Agreements. In Civil Case No. 01-611, CCA
Holdings' cause of action rests on Riviera Golfs failure to pay
the licensing fees, reimbursement claims, and monthly
management and incentive fees. In Civil Case No. 03-399 on
the other hand, CCA Holdings' cause of action hinges on the
damages it allegedly incurred as a result of Riviera Golfs
premature termination of the Management and Royalty
Agreements (i.e., the expected business profits it was supposed
to derive for the unexpired two-year term of the Management
Agreement). Although differing in form, these two cases are
ultimately anchored on Riviera Golfs breach of the Management
and Royalty Agreements. Thus, we conclude that they have
identical causes of action.
ChanRoblesVirt ualawl ibrary
Same Evidence Support and Establish Both the Present
and the Former Cause of Action
It is a settled rule that the application of the doctrine of res
judicata to identical causes of action does not depend on the
similarity or differences in the forms of the two actions. A party
cannot, by varying the form of the action or by adopting a
different method of presenting his case, escape the operation of
the doctrine of res judicata.9 The test of identity of causes of
action rests on whether the same evidence would support and
establish the former and the present causes of action.10
We held in Esperas v. The Court of Appeals11 that the ultimate
test in determining the presence of identity of cause of action is
to consider whether the same evidence would support the cause
of action in both the first and the second cases. Under
the same evidence test, when the same evidence support and
establish both the present and the former causes of action,
there is likely an identity of causes of action.12 ChanRoblesV irtua lawlib rary
The pleadings and record of the present case show that there
is a glaring similarity in the documentary evidence
submitted to prove the claims under the two complaints.
The pieces of evidence both in the collection of unpaid
management and royalty fees, and the recovery of damages for
the expected business profits aim at establishing the breach of
the Management and Royalty Agreements.
Furthermore, the evidence in the first complaint will have to be
reexamined to support the cause of action in the second
complaint. We specifically note that at least four (4) documents
were presented in both actions, namely:
chanRoblesvirtualLaw libra ry
(1) the Management Agreement between Riviera Golf and CCA
Holdings;
(2) the Royalty Agreement between Riviera Golf and CCA Holdings;
(3) the Fees Receivable Report of CCA Holdings as of October 1999,
amounting to USD 97,122.00; and
(4) the letter dated October 29, 1999, stating the termination of the
Management Agreement.
Based on the allegations in the two complaints, the facts that
are necessary to support the second complaint would have been
sufficient to allow CCA Holdings to recover in the first complaint.
The similarity in the pieces of evidence in these two cases
therefore strongly suggests the identity of their causes of
ChanRoblesV irtuala wlib rary
action.
We held in this regard in Stilianopulos v. The City of Legaspi:13 cralawlawlibra ry
The underlying objectives or reliefs sought in both the quieting-
of-title and the annulment-of-title cases are essentially the
same adjudication of the ownership of the disputed lot and
nullification of one of the two certificates of title. Thus, it
becomes readily apparent that the same evidence or set of facts
as those considered in the quieting-of-title case would also be
used in this Petition.
The difference in form and nature of the two actions is
immaterial and is not a reason to exempt petitioner from the
effects of res judicata. The philosophy behind this rule prohibits
the parties from litigating the same issue more than once.
When a right or fact has been judicially tried and determined by
a court of competent jurisdiction or an opportunity for such trial
has been given, the judgment of the court, as long as it remains
unreversed, should be conclusive upon the parties and those in
privity with them. Verily, there should be an end to litigation by
the same parties and their privies over a subject, once it is fully
and fairly adjudicated. (Citations omitted.)
chanroblesvirtual lawlib rary
At the Time the First Complaint was Filed
The Breach of the Agreements was Already Total
We likewise note that the non-payment of fees and the
premature termination of the contract occurred as early as
1999. In other words, the violation of both the Management and
Royalty Agreements preceded the filing of the first complaint.
Consequently, when CCA Holdings filed its first complaint in
2001, the breach of the agreements was already complete and
total; and the ground for the recovery of damages was
available and in existence. Thus, allowing CCA Holdings now to
file two separate and independent claims anchored on the same
breach of contract (i.e., breach of the Management and Royalty
Agreements), constitutes a blatant disregard of our prohibition
against res judicata and splitting of a single cause of action.
In contracts providing several obligations, each obligation may
give rise to a single and independent cause of action. But if
several obligations have matured, or if the entire
contract is breached at the time of the filing of the
complaint, all obligations are integrated into one cause of
action. Hence, the claim arising from such cause of action that
is not included in the complaint is barred forever. The Court's
explanation in Blossom and Company, Inc. v. Manila Gas
Corporation,14 citing US jurisprudence on the matter, is
instructive, viz:
chanRoblesvirtualLaw libra ry
34 Corpus Juris, p. 839, it is said:
chanRoblesvirtualLaw libra ry
As a general rule[,] a contract to do several things at several
times in its nature, so as to authorize successive actions; and a
judgment recovered for a single breach of a continuing contract
or covenant is no bar to a suit for a subsequent breach thereof.
But where the covenant or contract is entire, and the breach
total, there can be only one action, and [the] plaintiff must
therein recover all his damages.
chanroblesvirtual lawlib rary
In the case of Rhoelm v. Horst, 178 U. U., 1; 44 Law. ed., 953,
that court said:
chanRoblesvirtualLaw libra ry
An unqualified and positive refusal to perform a contract,
though the performance thereof is not yet due, may, if the
renunciation goes to the whole contract, be treated as a
complete breach which will entitle the injured party to bring his
action at once.
chanroblesvirtual lawlib rary
In the present case, CCA Holdings' claim for the unpaid
management and royalty fees as well as the damages for its
expected business profits constituted an indivisible demand.
Verily, CCA Holdings should have included and alleged the
recovery of damages for its expected business profits as a
second cause of action in Civil Case No. 01-611. CCA Holdings
cannot be permitted to split up a single cause of action and
make that single cause of action the basis of several suits.
All told, the Court finds that the filing of the second complaint is
barred by res judicata.
The "Non-Waiver Clause" Stipulated
in the Compromise Agreement is Null and Void
CCA Holdings contends that Riviera Golf is already estopped
from questioning the filing of the second complaint because the
non-waiver clause of the Compromise Agreement recognized
CCA Holdings' prerogative to seek damages arising from the
premature termination of the Management Agreement.
We do not see any merit in this contention.
A compromise is a contract whereby the parties, by making
reciprocal concessions, avoid a litigation or put an end to one
already commenced.15 Like any other contract, a compromise
agreement must be consistent with the requisites and principles
of contracts. While it is true that the agreement is binding
between the parties and becomes the law between them, it is
also a rule that to be valid, a compromise agreement must not
be contrary to law, morals, good customs, and public
policy.16 ChanRoblesV irtualaw library
In the present case, a reading of paragraph 4 of the
Compromise Agreement shows that it allows the filing of
complaints based on the same cause of action (i.e., breach
of the Management and Royalty Agreements), to wit:
chanRoblesvirtualLaw libra ry
4) It is understood that the execution of this compromise
agreement or the payment of the aforementioned sum of
money shall not be construed as a waiver of or with
prejudice to plaintiffs rights/cause of action, if any,
arising from or relative to the pre-termination of the
parties' Management and Royalty Agreements by the
defendant subject to whatever claims and defenses may have
relative thereto; (Emphasis supplied.)
chanroblesvirtual lawlib rary
Since paragraph 4 allows the splitting of causes of action
and res judicata, this provision of the Compromise Agreement
should be invalidated for being repugnant to our public policy.
The well-settled rule is that the principle or rule of res
judicata is primarily one of public policy. It is based on the
policy against multiplicity of suits,17 whose primary objective is
to avoid unduly burdening the dockets of the courts.
Speaking through Justice J.B.L. Reyes, the Court in Aguila v.
J.M. Tuason & Co., Inc.18 held that:
chanRoblesvirtualLaw libra ry
Public policy is firmly set against unnecessary
multiplicity of suits; the rule of res judicata, like that
against splitting causes of action, are all applications of
the same policy, that matters once settled by a Court's final
judgment should not thereafter be invoked against. Relitigation
of issues already settled merely burdens the Courts and the
taxpayers, creates uneasiness and confusion, and wastes
valuable time and energy that could be devoted to worthier
cases. As the Roman maxim goes, Non bis in idem.19 (Emphasis
supplied.)
Because it is contrary to our policy against multiplicity of suits,
we cannot uphold paragraph 4 of the Compromise Agreement to
be valid, for we would then render legitimate the splitting of
causes of action and negate the prohibition against res judicata.
Under Article 1409 of the Civil Code, contracts which are
contrary to public policy and those expressly prohibited or
declared void by law are considered inexistent and void from
the beginning.
In sum, we declare paragraph 4 of the Compromise Agreement
null and void for being contrary to public policy.
WHEREFORE, premises considered, we GRANT the petition.
The decision dated January 11, 2006, of the Court of Appeals in
CA-G.R. CV No. 83824 is hereby REVERSED and SET ASIDE.
Accordingly, the decision dated September 29, 2004, of the
Regional Trial Court, Branch 57, Makati City, in Civil Case No.
03-399 is REINSTATED.
SO ORDERED. cralawlawlibrary
G.R. No. 201892, July 22, 2015
NORLINDA S. MARILAG, Petitioner, v. MARCELINO B.
MARTINEZ, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the
Decision2 dated November 4, 2011 and the Resolution3 dated
May 14, 2012 of the Court of Appeals (CA) in CA-G.R. CV No.
81258 which recalled and set aside the Orders dated November
3, 20034 and January 14, 20045 of the Regional Trial Court
(RTC) of Las Piñas City, Branch 202 (court a quo) in Civil Case
No. 98-0156, and reinstated the Decision6 dated August 28,
2003 directing petitioner Norlinda S. Marilag (petitioner) to
return to respondent Marcelino B. Martinez (respondent) the
latter's excess payment, plus interest, and to pay attorney's
fees and the costs of suit.
The Facts
On July 30, 1992, Rafael Martinez (Rafael), respondent's father,
obtained from petitioner a loan in the amount of P160,000.00,
with a stipulated monthly interest of five percent (5%), payable
within a period of six (6) months. The loan was secured by a
real estate mortgage over a parcel of land covered by Transfer
Certificate of Title (TCT) No. T-208400. Rafael failed to settle
his obligation upon maturity and despite repeated demands,
prompting petitioner to file a Complaint for Judicial Foreclosure
of Real Estate Mortgage before the RTC of Imus, Cavite, Branch
907 (RTC-Imus) on November 10, 1995,8 docketed as Civil Case
No. 1208-95 Gudicial foreclosure case).
Rafael failed to file his answer and, upon petitioner's motion,
was declared in default. After an ex parte presentation of
petitioner's evidence, the RTC-Imus issued a Decision9 dated
January 30, 1998, (January 30, 1998 Decision) in the
foreclosure case, declaring the stipulated 5% monthly interest
to be usurious and reducing the same to 12% per annum (p.a.).
Accordingly, it ordered Rafael to pay petitioner the amount of
P229,200.00, consisting of the principal of P160,000.00 and
accrued interest of P59,200.00 from July 30, 1992 to
September 30, 1995.10 Records do not show that this Decision
had already attained finality.
Meanwhile, prior to Rafael's notice of the above decision,
respondent agreed to pay Rafael's obligation to petitioner which
was pegged at P689,000.00. After making a total payment of
P400,000.00,11 he executed a promissory note12 dated February
20, 1998 (subject PN), binding himself to pay on or before
March 31, 1998 the amount of P289,000.00, "representing the
balance of the agreed financial obligation of [his] father to
[petitioner]."13 After learning of the January 30, 1998 Decision,
respondent refused to pay the amount covered by the subject
PN despite demands, prompting petitioner to file a
complaint14 for sum of money and damages before the court a
quo on July 2, 1998, docketed as Civil Case No. 98-0156
(collection case).
Respondent filed his answer,15 contending that petitioner has no
cause of action against him. He averred that he has fully settled
Rafael's obligation and that he committed a mistake in paying
more than the amount due under the loan, i.e., the amount of
P229,200.00 as adjudged by the RTC-Imus in the judicial
foreclosure case which, thus, warranted the return of the excess
payment. He therefore prayed for the dismissal of the
complaint, and interposed a compulsory counterclaim for the
release of the mortgage, the return of the excess payment, and
the payment of moral and exemplary damages, attorney's fees
and litigation expenses.16
redarclaw
The Court A Quo's Ruling
In a Decision17 dated August 28, 2003 (August 28, 2003
Decision), the court a quo denied recovery on the subject PN. It
found that the consideration for its execution was Rafael's
indebtedness to petitioner, the extinguishment of which
necessarily results in the consequent extinguishment of the
cause therefor. Considering that the RTC-Imus had adjudged
Rafael liable to petitioner only for the amount of P229,200.00,
for which a total of P400,000.00 had already been paid, the
court a quo found no valid or compelling reason to allow
petitioner to recover further on the subject PN. There being an
excess payment of P171,000.00, it declared that a quasi-
contract (in the concept of solutio indebiti) exists between the
parties and, accordingly, directed petitioner to return the said
amount to respondent, plus 6% interest p.a.18 reckoned from
the date of judicial demand19 on August 6, 1998 until fully paid,
and to pay attorney's fees and the costs of suit.20redarclaw
In an Order21 dated November 3, 2003 (November 3, 2003
Order), however, the court a quo granted petitioner's motion for
reconsideration, and recalled and set aside its August 28, 2003
Decision. It declared that the causes of action in the collection
and foreclosure cases are distinct, and respondent's failure to
comply with his obligation under the subject PN justifies
petitioner to seek judicial relief. It further opined that the
stipulated 5% monthly interest is no longer usurious and is
binding on respondent considering the suspension of the Usury
Law pursuant to Central Bank Circular 905, series of 1982.
Accordingly, it directed respondent to pay the amount of
P289,000.00 due under the subject PN, plus interest at the legal
rate reckoned from the last extra-judicial demand on May 15,
1998, until fully paid, as well as attorney's fees and the costs of
suit.22
redarclaw
Aggrieved, respondent filed a motion for reconsideration23 which
was denied in an Order24 dated January 14, 2004, prompting
him to elevate the matter to the CA.25 redarclaw
The CA Ruling
In a Decision26 dated November 4, 2011, the CA recalled and
set aside the court a quo's November 3, 2003 and January 14,
2004 Orders, and reinstated the August 28, 2003 Decision. It
held that the doctrine of res judicata finds application in the
instant case,27 considering that both the judicial foreclosure and
collection cases were filed as a consequence of the non-
payment ofRafael's loan, which was the principal obligation
secured by the real estate mortgage and the primary
consideration for the execution of the subject PN. Since res
judicata only requires substantial, not actual, identity of causes
of action and/or identity of issue,28 it ruled that the judgment in
the judicial foreclosure case relating to Rafael's obligation to
petitioner is final and conclusive on the collection case.
Petitioner's motion for reconsideration was denied in a
Resolution29 dated May 14, 2012; hence, this petition.
The Issue Before the Court
The essential issue for the Court's resolution is whether or not
the CA committed reversible error in upholding the dismissal of
the collection case.
The Court's Ruling
The petition lacks merit.
A case is barred by prior judgment or res judicata when the
following elements concur: (a) the judgment sought to bar the
new action must be final; (b) the decision must have been
rendered by a court having jurisdiction over the subject matter
and the parties; (c) the disposition of the case must be a
judgment on the merits; and (d) there must be as between the
first and second action, identity of parties, subject matter, and
causes of action.30redarclaw
After a punctilious review of the records, the Court finds the
principle of res judicata to be inapplicable to the present case.
This is because the records are bereft of any indication that the
August 28, 2003 Decision in the judicial foreclosure case had
already attained finality, evidenced, for instance, by a copy of
the entry of judgment in the said case. Accordingly, with the
very first element of res judicata missing, said principle cannot
be made to obtain.
This notwithstanding, the Court holds that petitioner's
prosecution of the collection case was barred, instead, by the
principle of litis pendentia in view of the substantial identity of
parties and singularity of the causes of action in the foreclosure
and collection cases, such that the prior foreclosure case barred
petitioner's recourse to the subsequent collection case.
To lay down the basics, litis pendentia, as a ground for the
dismissal of a civil action, refers to that situation
wherein another action is pending between the same
parties for the same cause of action, such that the
second action becomes unnecessary and vexatious. For
the bar of litis pendentia to be invoked, the following requisites
must concur: (a) identity of parties, or at least such parties as
represent the same interests in both actions; (b) identity of
rights asserted and relief prayed for, the relief being founded on
the same facts; and (c) the identity of the two preceding
particulars is such that any judgment rendered in the pending
case, regardless of which party is successful would amount
to res judicata in the other.31 The underlying principle of litis
pendentia is the theory that a party is not allowed to vex
another more than once regarding the same subject matter and
for the same cause of action. This theory is founded on the
public policy that the same subject matter should not be the
subject of controversy in courts more than once, in order that
possible conflicting judgments may be avoided for the sake of
the stability of the rights and status of persons, and also to
avoid the costs and expenses incident to numerous
suits.32 Consequently, a party will not be permitted to split up a
single cause of action and make it a basis for several suits as
the whole cause must be determined in one action.33To be
sure, splitting a cause of action is a mode of forum
shopping by filing multiple cases based on the same
cause of action, but with different prayers, where the
round of dismissal is litis pendentia for res judicata, as
the case may be).34 redarclaw
In this relation, it must be noted that the question of whether a
cause of action is single and entire or separate is not always
easy to determine and the same must often be resolved, not by
the general rules, but by reference to the facts and
circumstances of the particular case. The true rule, therefore,
is whether the entire amount arises from one and the
same act or contract which must, thus, be sued for in one
action, or the several parts arise from distinct and
different acts or contracts, for which a party may
maintain separate suits.35 redarclaw
In loan contracts secured by a real estate mortgage, the rule is
that the creditor-mortgagee has a single cause of
action against the debtor mortgagor, i.e., to recover the
debt, through the filing of a personal action for collection
of sum of money or the institution of a real action to
foreclose on the mortgage security. The two remedies
are alternative,36 not cumulative or successive,37 and each
remedy is complete by itself. Thus, if the creditor-mortgagee
opts to foreclose the real estate mortgage, he waives the action
for the collection of the unpaid debt,38except only for the
recovery of whatever deficiency may remain in the outstanding
obligation of the debtor-mortgagor after deducting the bid
price in the public auction sale of the mortgaged
properties.39 Accordingly, a deficiency judgment shall only
issue after it is established that the mortgaged property was
sold at public auction for an amount less than the outstanding
obligation.
In the present case, records show that petitioner, as creditor
mortgagee, instituted an action for judicial foreclosure pursuant
to the provisions of Rule 68 of the Rules of Court in order to
recover on Rafael's debt. In light of the foregoing discussion,
the availment of such remedy thus bars recourse to the
subsequent filing of a personal action for collection of the same
debt, in this case, under the principle of litis pendentia,
considering that the foreclosure case only remains pending as it
was not shown to have attained finality.
While the ensuing collection case was anchored on the
promissory note executed by respondent who was not the
original debtor, the same does not constitute a separate and
distinct contract of loan which would have given rise to a
separate cause of action upon breach. Notably, records are
bereft of any indication that respondent's agreement to pay
Rafael's loan obligation and the execution of the subject PN
extinguished by novation40 the contract of loan between Rafael
and petitioner, in the absence of express agreement or any act
of equal import. Well-settled is the rule that novation is never
presumed, but must be clearly and unequivocally shown. Thus,
in order for a new agreement to supersede the old one, the
parties to a contract must expressly agree that they are
abrogating their old contract in favor of a new one,41 which was
not shown here.
On the contrary, it is significant to point out that: (a) the
consideration for the subject PN was the same consideration
that supported the original loan obligation of Rafael; (b)
respondent merely assumed to pay Rafael's remaining unpaid
balance in the latter's behalf, i.e., as Rafael's agent or
representative;42 and (c) the subject PN was executed after
respondent had assumed to pay Rafael's obligation and made
several payments thereon. Case law states that the fact that
the creditor accepts payments from a third person, who has
assumed the obligation, will result merely in the addition of
debtors, not novation, and the creditor may enforce the
obligation against both debtors.43 For ready reference, the
subject PN reads in full:
ChanRob lesVirtua lawl ibrary
February 20, 1998
PROMISSORY NOTE
P289,000.00
I, MARCELINO B. MARTINEZ, son of Mr. RAFAEL MARTINEZ, of
legal age, Filipino, married and a resident of No. 091 Anabu I-A,
Imus, Cavite, by these presents do hereby specifically and
categorically PROMISE, UNDERTAKE and bind myself in behalf
of my father, to pay to Miss NORLINDA S. MARILAG,
Mortgagee-Creditor of my said father, the sum of TWO
HUNDRED EIGHTY NINE THOUSAND PESOS (P289,000.00),
Philippine Currency, on or before MARCH 31,
1998, representing the balance of the agreed financial
obligation of my said father to her. (Emphases supplied)
Executed at Pamplona I, Las Piñas City, Metro Manila, this
20th day of February, 1998.
Sgd.
MARCELINO B. MARTINEZ
Promissor44
Petitioner's contention that the judicial foreclosure and
collection cases enforce independent rights45 must, therefore,
fail because the Deed of Real Estate Mortgage46 and the subject
PN both refer to one and the same obligation, i.e., Rafael's loan
obligation. As such, there exists only one cause of action for
a single breach of that obligation. Petitioner cannot split her
cause of action on Rafael's unpaid loan obligation by filing a
petition for the judicial foreclosure of the real estate mortgage
covering the said loan, and, thereafter, a personal action for the
collection of the unpaid balance of said obligation not
comprising a deficiency arising from foreclosure, without
violating the proscription against splitting a single cause of
action, where the ground for dismissal is either res
judicata or litis pendentia, as in this case.
As elucidated by this Court in the landmark case of Bachrach
Motor Co., Inc. v. Icarangal.47
ChanRob lesVirtua lawl ibrary
For non-payment of a note secured by mortgage, the
creditor has a single cause of action against the
debtor. This single cause of action consists in the recovery of
the credit with execution of the security. In other words, the
creditor in his action may make two demands, the payment of
the debt and the foreclosure of his mortgage. But both demands
arise from the same cause, the non-payment of the debt, and,
for that reason, they constitute a single cause of
action. Though the debt and the mortgage constitute
separate agreements, the latter is subsidiary to the
former, and both refer to one and the same obligation.
Consequently, there exists only one cause of action for a
single breach of that obligation. Plaintiff, then, by
applying the rule above stated, cannot split up his single
cause of action by filing a complaint for payment of the
debt, and thereafter another complaint for foreclosure of
the mortgage. If he does so, the filing of the first complaint
will bar the subsequent complaint. By allowing the creditor to
file two separate complaints simultaneously or successively, one
to recover his credit and another to foreclose his mortgage, we
will, in effect, be authorizing him plural redress for a single
breach of contract at so much cost to the courts and with so
much vexation and oppression to the debtor. (Emphases and
underscoring supplied)
Further on the point, the fact that no foreclosure sale appears
to have been conducted is of no moment because the remedy of
foreclosure of mortgage is deemed chosen upon the filing of the
complaint therefor.48 In Suico Rattan & Buri Interiors, Inc. v.
CA,49 it was explained:
ChanRob lesVirtua lawl ibrary
LawlibraryofCRAlaw
x x x x In sustaining the rule that prohibits mortgage creditors
from pursuing both the remedies of a personal action for debt
or a real action to foreclose the mortgage, the Court held in the
case of Bachrach Motor Co., Inc. v. Esteban Icarangal, et al.
that a rule which would authorize the plaintiff to bring a
personal action against the debtor and simultaneously or
successively another action against the mortgaged property,
would result not only in multiplicity of suits so offensive to
justice and obnoxious to law and equity, but also in subjecting
the defendant to the vexation of being sued in the place of his
residence or of the residence of the plaintiff, and then again in
the place where the property lies. Hence, a remedy is deemed
chosen upon the filing of the suit for collection or upon
the filing of the complaint in an action for foreclosure of
mortgage, pursuant to the provisions of Rule 68 of the
Rules of Court. As to extrajudicial foreclosure, such remedy is
deemed elected by the mortgage creditor upon filing of the
petition not with any court of justice but with the office of the
sheriff of the province where the sale is to be made, in
accordance with the provisions of Act No. 3135, as amended by
Act No. 4118. (Emphases supplied)
As petitioner had already instituted judicial foreclosure
proceedings over the mortgaged property, she is now
barred from availing herself of an ordinary action for
collection, regardless of whether or not the decision in the
foreclosure case had attained finality. In fine, the dismissal of
the collection case is in order. Considering, however, that
respondent's claim for return of excess payment partakes of the
nature of a compulsory counterclaim and, thus, survives the
dismissal of petitioner's collection suit, the same should be
resolved based on its own merits and evidentiary support.50
redarclaw
Records show that other than the matter of interest, the
principal loan obligation and the payments made were not
disputed by the parties. Nonetheless, the Court finds the
stipulated 5% monthly interest to be excessive and
unconscionable. In a plethora of cases, the Court has affirmed
that stipulated interest rates of three percent (3%) per
month and higher are excessive, iniquitous,
unconscionable, and exorbitant,51hence, illegal52and void
for being contrary to morals.53 In Agner v. BPI Family
Savings Bank, Inc.,54 the Court had the occasion to rule:
LawlibraryofCRA law Thus, as of January 30, 1998, only the amount of P265,600.00
was due under the loan contract, and the receipt of an amount
ChanRob lesVirtua lawl ibrary

Settled is the principle which this Court has affirmed in a

number of cases that stipulated interest rates of three percent
(3%) per month and higher are excessive, iniquitous,
unconscionable, and exorbitant. While Central Bank Circular No.
905-82, which took effect on January 1, 1983, effectively
removed the ceiling on interest rates for both secured and
unsecured loans, regardless of maturity, nothing in the said
circular could possibly be read as granting carte
blanche authority to lenders to raise interest rates to levels
which would either enslave their borrowers or lead to a
hemorrhaging of their assets. Since the stipulation on the
interest rate is void for being contrary to morals, if not
against the law, it is as if there was no express contract
on said interest rate; thus, the interest rate may be
reduced as reason and equity demand. (Emphases
supplied)
As such, the stipulated 5% monthly interest should be equitably
reduced to 1% per month or 12% p.a. reckoned from the
execution of the real estate mortgage on July 30, 1992. In
order to determine whether there was any overpayment as
claimed by respondent, we first compute the interest until
January 30, 199855 when he made a payment in the amount of
P300,000.00 on Rafael's loan obligation. Accordingly, the
amount due on the loan as of the latter date is hereby
computed as follows:
LawlibraryofCRAlaw
more than that renders petitioner liable for the return of the
excess. Respondent, however, made further payment in the
amount of P100,000.0057 on the belief that the subject loan
obligation had not yet been satisfied. Such payments were,
therefore, clearly made by mistake, giving rise to the quasi-
contractual obligation of solutio indebiti under Article 215458 in
relation to Article 216359 of the Civil Code. Not being a loan or
forbearance of money, an interest of 6% p.a. should be
imposed on the amount to be refunded and on the damages
and attorney's fees awarded, if any, computed from the time of
demand60 until its satisfaction.61 Consequently, petitioner must
return to respondent the excess payments in the total amount
of P134,400.00, with legal interest at the rate of 6% p.a. from
the filing of the Answer on August 6, 199862 interposing a
counterclaim for such overpayment, until fully settled.
However, inasmuch as the court a quo failed to state in the
body of its decision the factual or legal basis for the award of
attorney's fees to the respondent, as required under Article
220863 of the New Civil Code, the Court resolves to delete the
same. The rule is well-settled that the trial court must clearly
state the reasons for awarding attorney's fees in the body of its
decision, not merely in its dispositive portion, as the appellate
courts are precluded from supplementing the bases for such
award.64

ChanRob lesVirtua lawl ibrary

redarclaw

Principal P160,000.00
Interest from Finally, in the absence of showing that the court a quo's award
07/30/1992 of the costs of suit in favor of respondent was patently
Add:
to capricious,65 the Court finds no reason to disturb the same.
01/30/1998
(P160,000.00 WHEREFORE, the petition is DENIED. The Decision dated
X 12% X 5.5 105,600.00 November 4, 2011 and the Resolution dated May 14, 2012 of
yrs.) the Court of Appeals in CA-G.R. CV No. 81258 reinstating the
Amount due on court a quo's Decision dated August 28, 2003 in Civil Case No.
the loan
P265,600.00 98-0156 are hereby AFFIRMED with the MODIFICATIONS:
(a) directing petitioner Norlinda S. Marilag to return to
Less: Payment (
respondent Marcelino B. Martinez the latter's excess payments
made on 01/30/98 300,000.00)
in the total amount of P134,400.00, plus legal interest at the
Overpayment as (P rate of 6% p.a. from the filing of the Answer on August 6, 1998
of 01/30/98 34,400.00)56 until full satisfaction; and (b) deleting the award of attorney's
fees.
SO ORDERED. cralawlawlibrary
G.R. No. 173331 December 11, 2013
FLORPINA BENAVIDEZ, Petitioner,
vs.
NESTOR SALVADOR, Respondent.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari assailing the November 22, 2005
Decision1 and the June 8, 2006 Amended Decision2 of the Court of
Appeals (CA). in CA-G.R. CV No. 73487, which affirmed and modified the
June 1, 2001 Decision3 of the Regional Trial Court. Branch 74, Anti polo
City (RTC-Antipolo) in Civil Case No. 00-5660.
The Facts:
Sometime in February 1998, pet1t1oner Florpina
Benavidez (Benavidez) approached and asked respondent Nestor
Salvador (Salvador) for a loan that she would use to repurchase her
property in Tanay, Rizal which was foreclosed by the Farmers Savings
and Loan Bank, Inc. (Farmers Savings). After inspecting the said
property, Salvador agreed to lend the money subject to certain
conditions. To secure the loan, Benavidez was required to execute a real
estate mortgage, a promissory note and a deed of sale. She was also
required to submit a special power of attorney (SPA) executed and
signed by Benavidez’s daughter, Florence B. Baning (Baning), whom she
named as the vendee in the deed of absolute sale of the repurchased
property. In the SPA, Baning would authorize her mother to obtain a loan
and to constitute the said property as security of her indebtedness to
Salvador.
Pursuant to the agreement, Salvador issued a manager’s check in favor
of Benavidez in the amount of One Million Pesos (₱1,000,000.00) and
released Five Hundred Thousand Pesos (₱500,000.00) in cash. For the
loan obtained, Benavidez executed a promissory note, dated March 11,
1998.
Benavidez, however, failed to deliver the required SPA. She also
defaulted in her obligation under the promissory note. All the postdated
checks which she had issued to pay for the interests were dishonored.
This development prompted Salvador to send a demand letter with a
corresponding statement of account, dated January 11, 2000.
Unfortunately, the demand fell on deaf ears which constrained Salvador
to file a complaint for sum of money with damages with prayer for
issuance of preliminary attachment.
On May 4, 2000, Benavidez filed a motion to dismiss on the ground
of litis pendentia. She averred that prior to the filing of the case before the
RTC-Antipolo, she had filed a Complaint for Collection for Sum of Money,
Annulment of Contract and Checks with Prayer for Preliminary Injunction
and Temporary Restraining Order against Salvador; his counsel, Atty.
Nepthalie Segarra; Almar Danguilan; and Cris Marcelino, before the
Regional Trial Court, Branch 80, Morong, Rizal (RTC-Morong). The
motion to dismiss, however, was denied by RTC-Antipolo on July 31,
2000. On September 15, 2000, Benavidez filed her answer with
counterclaim. A pre-trial conference was scheduled on May 2, 2001 but
she and her counsel failed to appear despite due notice. Resultantly,
upon motion, Salvador was allowed by the trial court to present
evidence ex parte.
On June 1, 2001, RTC-Antipolo decided the subject case for Salvador. It
found that indeed Benavidez obtained a loan from Salvador in the
amount of ₱1,500,000.00. It also noted that up to the time of the rendition
of the judgment, she had failed to settle her obligation despite having
received oral and written demands from Salvador. Also, the trial court
pointed out that the evidence had shown that as of January 11, 2000,
Benavidez’s obligation had already reached the total amount of
₱4,810,703.21.4 Thus, the fallo of the said decision reads:
WHEREFORE, in view of the foregoing premises, defendant is hereby
directed to pay plaintiff the following:
1. The amount of ₱4,810,703.21, covering the period from June
11, 1998 to January 11, 2000, exclusive of interest and penalty
charges until the said amount is fully paid;
2. The amount of ₱50,000.00 as exemplary damages;
 3. The sum of 25% of the total obligation as and by way of
attorney’s fees; and,
4. Cost of suit.
SO ORDERED.5
Benavidez filed a motion for reconsideration but unfortunately for her,
RTC-Antipolo, in its August 10, 2001 Order,6 denied her motion for lack of
merit.
Frustrated, Benavidez appealed the June 1, 2001 Decision and the
August 10, 2001 Order of RTC-Antipolo to the CA. She argued, in chief,
that early on, the trial court should have dismissed the complaint for
collection of sum of money filed by Salvador on grounds of litis
pendentia and erroneous certification against forum shopping. She
claimed that prior to the filing of the said complaint against her, she had
already filed a complaint for the annulment of the promissory note
evidencing her obligation against Salvador. According to her, there was
substantial identity in the causes of action and any result of her complaint
for annulment would necessarily affect the complaint for collection of sum
of money filed against her. She added that Salvador never informed
RTC-Antipolo about the pending case before RTC-Morong, rendering his
certification on forum shopping erroneous. 7
Benavidez also argued that RTC-Antipolo erred in refusing to re-open the
case for pre-trial conference and disallowing her to present evidence.
She added that the absence of her counsel on the scheduled pre-trial
conference caused her substantial prejudice. Though she was not
unmindful of the general rule that a client was bound by the mistake or
negligence of her counsel, she insisted that since the incompetence or
ignorance of her counsel was so great and the error committed was so
serious as it prejudiced her and denied her day in court, the litigation
should have been reopened to give her the opportunity to present her
case.8
The CA was not moved.
The CA reasoned out that RTC-Antipolo did not err in allowing Salvador
to present his evidence ex-parte in accordance with Section 5, Rule 18 of
the 1997 Rules of Court.9 Benavidez and her counsel failed to show a
valid reason for their non-appearance at the pre-trial and so their
absence was not excusable. Her counsel’s negligence, as Benavidez
cited, was not among the grounds for new trial or reconsideration as
required under Section 1, Rule 37 of the Rules of Civil Procedure. The
CA emphasized that well-entrenched was the rule that negligence of
counsel bound his client. She was bound by the action of his counsel in
the conduct of the trial. The appellate court also took note that she
herself was guilty of negligence because she was also absent during the
pre-trial despite due notice. Thus, Benavidez’s position that the trial court
should have reopened the case was untenable. 10
With regards to the grounds of litis pendentia and forum shopping cited
by Benavidez, the CA wrote that there was no identity of the rights
asserted in the cases filed before RTC-Morong and RTC-Antipolo. The
reliefs prayed for in those cases were different. One case was for the
annulment of the promissory note while the other one was a complaint for
sum of money. There could be identity of the parties, but all the other
requisites to warrant the dismissal of the case on the ground of litis
pendentia were wanting.11 Thus, on November 22, 2005, the CA
affirmed in toto the decision of RTC-Antipolo.12
Feeling aggrieved by the affirmance, Benavidez filed a motion for
reconsideration on the ground that the same was contrary to law and
jurisprudence; that litis pendentia existed which resultantly made his
certification on non-forum shopping untruthful; and, that her absence
during the pre-trial was justified.
On June 08, 2006, the CA issued the Amended Decision, holding that the
motion was partly meritorious. Accordingly, it modified its earlier decision
by deleting the award of exemplary damages and attorney’s fees
because the award thereof was not supported by any factual, legal and
equitable justification. Thus, the decretal portion of the Amended
Decision reads:
WHEREFORE, the motion for reconsideration is PARTIALLY
GRANTED. The Decision dated November 22, 2005
is MODIFIED by DELETING the award of exemplary damages and
attorney’s fees.
SO ORDERED. 13
Still unsatisfied, Benavidez comes before the Court via a petition for
review under Rule 45 of the Rules of Court, raising the following issues: 14
 1. Whether or not the present case is barred by Civil Case
No. 00-05660 which is pending before the RTC-Morong, Rizal.
2. Whether or not the case is dismissible because the
certification against forum shopping was defective.
3. Whether or not the executed promissory note is void for
being unconscionable and shocking to the conscience.
4. Whether or not the CA erred in holding that the order
allowing respondent to present evidence ex-parte and
submitting the case for decision is valid despite the fact that
default judgment is looked upon with disfavor by this Court.
In fine, the core issue is whether or not the present case should have
been dismissed on the ground of litis pendentia.
Benavidez argues that the outcome of the case, before RTC-Morong,
where the annulment of the promissory note was sought, would have
been determinative of the subject case before RTC-Antipolo where the
enforcement of the promissory note was sought. If RTC-Morong would
rule that the promissory note was null and void, then the case with RTC-
Antipolo would have no more leg to stand on. He concludes that the
requisites of litis pendentia were indeed present: first, both Benavidez
and Salvador were parties to both complaints; second, both complaints
were concerned with the promissory note; and third, the judgment in
either of the said complaints would have been determinative of the
other.15
Benavidez further claims that the case should have been dismissed
because the certification on forum shopping which accompanied
Salvador’s complaint was defective. He declared therein that he was not
aware of any pending case before any court similar to the one he was
filing, when in truth and in fact, there was one. This fact could not be
denied because summons in the case before RTC-Morong was served
on him and he even filed his answer to the said complaint. 16
Benavidez also pushes the argument that RTC-Antipolo committed an
error of law when it allowed Salvador to present evidence ex-parte and
eventually decided the case without waiting to hear her side. The trial
court should have been more lenient. If there was any one to be blamed
for her predicament, it should have been his counsel, Atty. Rogelio
Jakosalem (Jakosalem). His counsel was negligent in his duties when he
did not bother to file the necessary pre-trial brief and did not even appear
at the pre-trial conference. He did not assist her either in filing a motion
for reconsideration. Benavidez explains that Atty. Jakosalem did not
appear on the scheduled pre-trial conference because he got mad at her
when she refused to heed his advice to settle when the trial court granted
Salvador’s motion for issuance of preliminary attachment. Under the
circumstances, she should have been exempted from the rule that the
negligence of counsel binds the client. 17
For her part, she failed to appear because she was then suffering from
illness. Contrary to the finding of the CA, her medical certificate was not
belatedly submitted. She submitted it within a reasonable period after she
received the order allowing Salvador to present evidence ex-parte and
considering the case for resolution thereafter. 18
The Court’s Ruling
In litis pendentia, there is no
hard and fast rule in
determining which of the two
actions should be abated
Litis pendentia is a Latin term, which literally means "a pending suit" and
is variously referred to in some decisions as lis pendens and auter action
pendant. As a ground for the dismissal of a civil action, it refers to the
situation where two actions are pending between the same parties for the
same cause of action, so that one of them becomes unnecessary and
vexatious. It is based on the policy against multiplicity of suits. 19
Litis pendentia exists when the following requisites are present: identity of
the parties in the two actions; substantial identity in the causes of action
and in the reliefs sought by the parties; and the identity between the two
actions should be such that any judgment that may be rendered in one
case, regardless of which party is successful, would amount to res
judicata in the other.20
On the other hand, forum shopping exists when, as a result of an adverse
decision in one forum, or in anticipation thereof, a party seeks a favorable
opinion in another forum through means other than appeal or certiorari.21
There is forum shopping when the elements of litis pendentia are present
or where a final judgment in one case will amount to res judicata in
another.22
In the present controversy, the Court is of the view that litis
pendentia exists. All the elements are present: first, both Benavidez and
Salvador are parties in both cases; second, both complaints are
concerned with the same promissory note; and third, the judgment in
either case would be determinative of the other.
With the foregoing, which case then should be dismissed? At first glance,
it would seem that Civil Case No. 00-5660 or the complaint filed with
RTC-Antipolo should have been dismissed applying the "priority-in-time
rule." This rule, however, is not ironclad. The rule is not applied if the first
case was filed merely to pre-empt the later action or to anticipate its filing
and lay the basis for its dismissal. A crucial consideration is the good
faith of the parties. In recent rulings, the more appropriate case is
preferred and survives. In Spouses Abines v. BPI,23 it was written:
There is no hard and fast rule in determining which of the actions should
be abated on the ground of litis pendentia, but through time, the Supreme
Court has endeavored to lay down certain criteria to guide lower courts
faced with this legal dilemma. As a rule, preference is given to the first
action filed to be retained. This is in accordance with the maxim Qui prior
est tempore, potior est jure. There are, however, limitations to this rule.
Hence, the first action may be abated if it was filed merely to pre-empt
the later action or to anticipate its filing and lay the basis for its dismissal.
Thus, the bona fides or good faith of the parties is a crucial element. A
later case shall not be abated if not brought to harass or vex; and the first
case can be abated if it is merely an anticipatory action or, more
appropriately, an anticipatory defense against an expected suit – a clever
move to steal the march from the aggrieved party.
Another exception to the priority in time rule is the criterion of the more
appropriate action. Thus, an action, although filed later, shall not be
dismissed if it is the more appropriate vehicle for litigating the issues
between the parties. [Underscoring supplied]
In the relatively recent case of Dotmatrix Trading v. Legaspi,24 the Court
had the occasion to extensively discuss the various rules and
consideration in determining which case to dismiss in such situations. It
included its analysis of Abines. Thus:
Early on, we applied the principle of Qui prior est tempore, potior est
jure (literally, he who is before in time is better in right) in dismissing a
case on the ground of litis pendentia. This was exemplified in the
relatively early case of Del Rosario v. Jacinto where two complaints for
reconveyance and/or recovery of the same parcel of land were filed by
substantially the same parties, with the second case only impleading
more party-plaintiffs. The Court held that "parties who base their
contention upon the same rights as the litigants in a previous suit are
bound by the judgment in the latter case." Without expressly saying so
in litis pendentia terms, the Court gave priority to the suit filed earlier.
In Pampanga Bus Company, Inc. v. Ocfemia, complaints for damages
arising from a collision of a cargo truck and a bus were separately filed by
the owners of the colliding vehicles. The complaint of the owners of the
cargo truck prevailed and the complaint of the owners of the bus had to
yield, as the cargo truck owners first filed their complaint. Notably, the
first and prevailing case was far advanced in development, with an
answer with counterclaim and an answer to the counterclaim having been
already filed, thus fully joining the issues.
In Lamis Ents. v. Lagamon, the first case was a complaint for specific
performance of obligations under a Memorandum of Agreement, while
the second case was a complaint for sums of money arising from
obligations under a promissory note and a chattel mortgage, and
damages. We dismissed the second case because the claims for sums of
money therein arose from the Memorandum of Agreement sued upon in
the first case.
Ago Timber Corporation v. Ruiz offered an insightful reason after both
parties had each pleaded the pendency of another action between the
same parties for the same cause. The Court ruled that the second action
should be dismissed, "not only as a matter of comity with a coordinate
and co-equal court (Laureta & Nolledo, Commentaries & Jurisprudence
on Injunction, p. 79, citing Harrison v. Littlefield, 57 Tex. Div. A. 617, 619,
124 SW 212), but also to prevent confusion that might seriously hinder
the administration of justice. (Cabigao, et al. v. Del Rosario, et al., 44
Phil. 182)."
In all these cases, we gave preference to the first action filed to be
retained. The "priority-in-time rule," however, is not absolute.
In the 1956 case of Teodoro v. Mirasol, we deviated from the "priority-in-
time rule" and applied the "more appropriate action test" and
the "anticipatory test."
The "more appropriate action test" considers the real issue raised
by the pleadings and the ultimate objective of the parties; the more
appropriate action is the one where the real issues raised can be
fully and completely settled. In Teodoro, the lessee filed an action for
declaratory relief to fix the period of the lease, but the lessor moved for its
dismissal because he had subsequently filed an action for ejectment
against the lessee. We noted that the unlawful detainer suit was the more
appropriate action to resolve the real issue between the parties - whether
or not the lessee should be allowed to continue occupying the land under
the terms of the lease contract; this was the subject matter of the second
suit for unlawful detainer, and was also the main or principal purpose of
the first suit for declaratory relief.
In the "anticipatory test," the bona fides or good faith of the parties is
the critical element. If the first suit is filed merely to preempt the later
1âwphi1
action or to anticipate its filing and lay the basis for its dismissal,
then the first suit should be dismissed. In Teodoro, we noted that the
first action, declaratory relief, was filed by the lessee to anticipate the
filing of the second action, unlawful detainer, considering the lessor's
letter informing the lessee that the lease contract had expired.
We also applied the "more appropriate action test" in Ramos v.
Peralta. In this case, the lessee filed an action for consignation of lease
rentals against the new owner of the property, but the new owner moved
to dismiss the consignation case because of the quieting of title case he
had also filed against the lessee. Finding that the real issue between the
parties involved the right to occupy/possess the subject property, we
ordered the dismissal of the consignation case, noting that the quieting of
title case is the more appropriate vehicle for the ventilation of the issues
between them; the consignation case raised the issue of the right to
possession of the lessee under the lease contract, an issue that was
effectively covered by the quieting of title case which raised the issue of
the validity and effectivity of the same lease contract.
In University Physician Services, Inc. v. Court of Appeals, we applied
both the "more appropriate action test" and "anticipatory test." In this
case, the new owner of an apartment sent a demand letter to the lessee
to vacate the leased apartment unit. When the lessee filed an action for
damages and injunction against the new owner, the new owner moved
for the dismissal of the action for damages on account of the action for
ejectment it had also filed. We noted that ejectment suit is the more
appropriate action to resolve the issue of whether the lessee had the right
to occupy the apartment unit, where the question of possession is
likewise the primary issue for resolution. We also noted that the lessee,
after her unjustified refusal to vacate the premises, was aware that an
ejectment case against her was forthcoming; the lessee's filing of the
complaint for damages and injunction was but a canny and preemptive
maneuver intended to block the new owner's action for ejectment.
We also applied the "more appropriate action test" in the 2003
case Panganiban v. Pilipinas Shell Petroleum Corp., where the lessee
filed a petition for declaratory relief on the issue of renewal of the lease of
a gasoline service station, while the lessor filed an unlawful detainer case
against the lessee. On the question of which action should be dismissed,
we noted that the interpretation of a provision in the lease contract as to
when the lease would expire is the key issue that would determine the
lessee's right to possess the gasoline service station. The primary issue –
the physical possession of the gasoline station - is best settled in the
ejectment suit that directly confronted the physical possession issue, and
not in any other case such as an action for declaratory relief.
A more recent case - Abines v. Bank of the Philippine Islands in 2006 -
saw the application of both the "priority-in-time rule" and the "more
appropriate action test." In this case, the respondent filed a complaint for
collection of sum of money against the petitioners to enforce its rights
under the promissory notes and real estate mortgages, while the
petitioners subsequently filed a complaint for reformation of the
promissory notes and real estate mortgages. We held that the first case,
the collection case, should subsist because it is the first action filed and
the more appropriate vehicle for litigating all the issues in the
controversy. We noted that in the second case, the reformation case, the
petitioners acknowledged their indebtedness to the respondent; they
merely contested the amounts of the principal, interest and the remaining
balance. We observed, too, that the petitioners' claims in the reformation
case were in the nature of defenses to the collection case and should be
asserted in this latter case.
Under this established jurisprudence on litis pendentia, the following
considerations predominate in the ascending order of importance in
determining which action should prevail: (1) the date of filing, with
preference generally given to the first action filed to be
retained; (2) whether the action sought to be dismissed was filed merely
to preempt the later action or to anticipate its filing and lay the basis for
its dismissal; and (3) whether the action is the appropriate vehicle for
litigating the issues between the parties. 25 [Underscoring supplied]
In the complaint filed before RTC-Morong, Benavidez alleged, among
others, that it was defendant Atty. Nepthalie Segarra (Atty. Segarra) who
arranged the loan in the amount of ₱1,500,000.00 for her at his own
initiative; that he was the one who received the amount for her on or
about March 10, 1998 from defendant Salvador; that he paid Farmers
Bank the amount of ₱1,049,266.12 leaving a balance of more than
₱450,000.00 in his possession; and that he made her sign a promissory
note. Benavidez prayed, among others, that Atty. Segarra be ordered to
give her the balance of the amount loaned and that the promissory note
that Salvador allegedly executed be declared null and void because she
was just duped into signing the said document through machinations and
that the stipulated interest therein was shocking to the conscience.
Salvador, on the other hand, filed the subject case for the collection of a
sum of money before RTC-Antipolo to enforce his rights under the
promissory note.
Considering the nature of the transaction between the parties, the Court
believes that the case for collection of sum of money filed before RTC-
Antipolo should be upheld as the more appropriate case because the
judgment therein would eventually settle the issue in the controversy -
whether or not Benavidez should be made accountable for the subject
loan. In the complaint that she filed with RTC- Morong, Benavidez never
denied that she contracted a loan with Salvador. Under her second cause
of action, she alleged:
SECOND CAUSE OF ACTION
11. Defendant Atty. Nepthalie Segarra arranged a loan in the
amount of ONE MILLION AND FIVE HUNDRED THOUSAND
(₱1,500,000.00) PESOS for plaintiff at his own initiative;
12. Defendant Atty. Nepthalie Segarra received the
₱1,500,000.00 on or about March 10, 1998 from defendant
Nestor Salvador in behalf of and for delivery to plaintiff;
13. Defendant Atty. Nepthalie Segarra paid Farmers Bank the
amount of ₱1,049,266.12 leaving a balance of more than
₱450,000.00 in his possession. A copy of the receipt evidencing
payment is herewith attached as Annex "A" and made an integral
part hereof;
14. Defendant Atty. Nepthalie Segarra made plaintiff sign a
Promissory Note evidencing the loan of ₱1,500,000.00. A copy of
said Promissory Note is herewith attached as Annex "B" and
made an integral part hereof; 26 [Underscoring supplied]
From the foregoing, it is clear that there was an amount of money
borrowed from Salvador which was used in the repurchase of her
foreclosed property. Whether or not it was Atty. Segarra who arranged
the loan is immaterial. The fact stands that she borrowed from Salvador
and she benefited from it. Her insistence that the remaining balance of
₱450,000.00 of the money loaned was never handed to her by Atty.
Segarra is a matter between the two of them. As far as she and Salvador
are concerned, there is admittedly an obligation. Whether the promissory
note was void or not could have been proven by her during the trial but
she forfeited her right to do so when she and her lawyer failed to submit a
pre-trial brief and to appear at the pre-trial as will be discussed hereafter.
At this point, to dismiss Civil Case No. 00-5660 would only result in
needless delay in the resolution of the parties' dispute and bring them
back to square one. This consequence will defeat the public policy
reasons behind litis pendentia which, like the rule on forum shopping, aim
to prevent the unnecessary burdening of our courts and undue taxing of
the manpower and financial resources of the Judiciary; to avoid the
situation where co-equal courts issue conflicting decisions over the same
cause; and to preclude one party from harassing the other party through
the filing of an unnecessary or vexatious suit. 27
The failure of a party to file a
pre-trial brief or to appear at a
pre-trial conference shall be
cause to allow the other party
to present evidence ex parte.
Benavidez basically contends that she should not be made to suffer the
irresponsibility of her former counsel, Atty. Jakosalem, and that the trial
court should have relaxed the application of the Rules of Court, reopened
the case and allowed her to present evidence in her favor.
The Court is not moved.
Section 4, Rule 18 of the Rules of Court provides that it is the duty of the
parties and their counsel to appear at the pre-trial conference. The effect
of their failure to appear is provided by Section 5 of the same rule where
it states:
Sec. 5. Effect of failure to appear.- The failure of the plaintiff to appear
when so required pursuant to the next preceding section shall be cause
for dismissal of the action. The dismissal shall be with prejudice, unless
otherwise ordered by the court. A similar failure on the part of the
defendant shall be cause to allow the plaintiff to present his
evidence ex parte and the court to render judgment on the basis
thereof. [Emphasis supplied]
Furthermore, Section 6 thereof provides:
Sec. 6. Pre-trial brief.-The parties shall file with the court and serve on the
adverse party, in such manner as shall ensure their receipt thereof at
least three (3) days before the date of the pre-trial, their respective pre-
trial briefs which shall contain, among others:
xxx
Failure to file the pre-trial brief shall have the same effect as failure to
appear at the pre-trial.
From the foregoing, it is clear that the failure of a party to appear at the
pre-trial has adverse consequences. If the absent party is the plaintiff,
then his case shall be dismissed. If it is the defendant who fails to
appear, then the plaintiff is allowed to present his evidence ex parte and
the court shall render judgment on the basis thereof. Thus, the plaintiff is
given the privilege to present his evidence without objection from the
defendant, the likelihood being that the court will decide in favor of the
plaintiff, the defendant having forfeited the opportunity to rebut or present
its own evidence.28
RTC-Antipolo then had the legal basis to allow Salvador to present
evidence ex parte upon motion. Benavidez and her counsel were not
present at the scheduled pre-trial conference despite due notice. They
did not file the required pre-trial brief despite receipt of the Order. The
rule explicitly provides that both parties and their counsel are mandated
to appear thereat except for: (1) a valid excuse; and (2) appearance of a
representative on behalf of a party who is fully authorized in writing to
enter into an amicable settlement, to submit to alternative modes of
dispute resolution, and to enter into stipulations or admissions of facts
and documents.29 In this case, Benavidez’s lawyer was already negligent,
but she compounded this by being negligent herself. She was aware of
the scheduled pre-trial conference, but she did not make any move to
prevent the prejudicial consequences of her absence or that of her
counsel. If she knew that her lawyer would not appear and could not
because she was ill, she should have sent a representative in court to
inform the judge of her predicament.
Also, her failure to file the pre-trial brief warranted the same effect
because the rules dictate that failure to file a pre-trial brief shall have the
same effect as failure to appear at the pre-trial. Settled is the rule that the
negligence of a counsel binds his clients. 30 Neither Benavidez nor her
counsel can now evade the effects of their misfeasance.
Stipulated interest should be
reduced for being iniquitous
and unconscionable.
This Court is not unmindful of the fact that parties to a loan contract have
wide latitude to stipulate on any interest rate in view of the Central Bank
Circular No. 905 s. 1982 which suspended the Usury Law ceiling on
interest effective January I, 1983. It is, however, worth stressing that
interest rates whenever unconscionable may still be declared illegal.
There is nothing in said circular which grants lenders carte
blanche authority to raise interest rates to levels which will either enslave
their borrowers or lead to a hemorrhaging of their assets. 31 In Menchavez
v. Bermudez,32 the interest rate of 5% per month, which when summed up
would reach 60% per annum, is null and void for being excessive,
iniquitous, unconscionable and exorbitant, contrary to morals, and the
law.33
Accordingly, in this case, the Court considers the compounded interest
rate of 5% per month as iniquitous and unconscionable and void and
inexistent from the beginning. The debt is to be considered without the
stipulation of the iniquitous and unconscionable interest rate.34 In line with
the ruling in the recent case of Nacar v. Gallery Frames,35 the legal
interest of 6% per annum must be imposed in lieu of the excessive
interest stipulated in the agreement.
WHEREFORE, the petition is DENIED. The November 22, 2005 Decision
and the June 8, 2006 Amended Decision of the Court of Appeals
are AFFIRMED with MODIFICATION. The interest rate of 5% per month
which was the basis in computing Benavidez's obligation is reduced to
6% per annum.
SO ORDERED.
JOSE CATRAL MENDOZA
Associate Justice
G.R. No. L-66620 September 24, 1986
REMEDIO V. FLORES, petitioner,
vs.
HON. JUDGE HEILIA S. MALLARE-PHILLIPPS, IGNACIO
BINONGCAL & FERNANDO CALION, respondents.
Lucio A. Dixon for respondent F. Calion.
FERIA, J.:
The Court rules that the application of the totality rule under Section 33(l)
of Batas Pambansa Blg. 129 and Section 11 of the Interim Rules is
subject to the requirements for the permissive joinder of parties under
Section 6 of Rule 3 which provides as follows:
Permissive joinder of parties.-All persons in whom or
against whom any right to relief in respect to or arising out
of the same transaction or series of transactions is
alleged to exist, whether jointly, severally, or in the
alternative, may, except as otherwise provided in these
rules, join as plaintiffs or be joined as defendants in one
complaint, where any question of law or fact common to
all such plaintiffs or to all such defendants may arise in
the action; but the court may make such orders as may
be just to prevent any plaintiff or defendant from being
embarrassed or put to expense in connection with any
proceedings in which he may have no interest.
Petitioner has appealed by certiorari from the order of Judge Heilia S.
Mallare-Phillipps of the Regional Trial Court of Baguio City and Benguet
Province which dismissed his complaint for lack of jurisdiction. Petitioner
did not attach to his petition a copy of his complaint in the erroneous
belief that the entire original record of the case shall be transmitted to this
Court pursuant to the second paragraph of Section 39 of BP129. This
provision applies only to ordinary appeals from the regional trial court to
the Court of Appeals (Section 20 of the Interim Rules). Appeals to this
Court by petition for review on certiorari are governed by Rule 45 of the
Rules of Court (Section 25 of the Interim Rules).
However, the order appealed from states that the first cause of action
alleged in the complaint was against respondent Ignacio Binongcal for
refusing to pay the amount of P11,643.00 representing cost of truck tires
which he purchased on credit from petitioner on various occasions from
August to October, 1981; and the second cause of action was against
respondent Fernando Calion for allegedly refusing to pay the amount of
P10,212.00 representing cost of truck tires which he purchased on credit
from petitioner on several occasions from March, 1981 to January, 1982.
On December 15, 1983, counsel for respondent Binongcal filed a Motion
to Dismiss on the ground of lack of jurisdiction since the amount of the
demand against said respondent was only P11,643.00, and under
Section 19(8) of BP129 the regional trial court shall exercise exclusive
original jurisdiction if the amount of the demand is more than twenty
thousand pesos (P20,000.00). It was further averred in said motion that
although another person, Fernando Calion, was allegedly indebted to
petitioner in the amount of P10,212.00, his obligation was separate and
distinct from that of the other respondent. At the hearing of said Motion to
Dismiss, counsel for respondent Calion joined in moving for the dismissal
of the complaint on the ground of lack of jurisdiction. Counsel for
petitioner opposed the Motion to Dismiss. As above stated, the trial court
dismissed the complaint for lack of jurisdiction.
Petitioner maintains that the lower court has jurisdiction over the case
following the "novel" totality rule introduced in Section 33(l) of BP129 and
Section 11 of the Interim Rules.
The pertinent portion of Section 33(l) of BP129 reads as follows:
... Provided,That where there are several claims or
causes of action between the same or different parties,
embodied in the same complaint, the amount of the
demand shall be the totality of the claims in all the causes
of action, irrespective of whether the causes of action
arose out of the same or different transactions. ...
Section 11 of the Interim Rules provides thus:
Application of the totality rule.-In actions where the
jurisdiction of the court is dependent on the amount
involved, the test of jurisdiction shall be the aggregate
sum of all the money demands, exclusive only of interest
and costs, irrespective of whether or not the separate
 claims are owned by or due to different parties. If any
demand is for damages in a civil action, the amount
thereof must be specifically alleged.
Petitioner compares the above-quoted provisions with the pertinent
portion of the former rule under Section 88 of the Judiciary Act of 1948 as
amended which reads as follows:
... Where there are several claims or causes of action
between the same parties embodied in the same
complaint, the amount of the demand shall be the totality
of the demand in all the causes of action, irrespective of
whether the causes of action arose out of the same or
different transactions; but where the claims or causes of
action joined in a single complaint are separately owned
by or due to different parties, each separate claim shall
furnish the jurisdictional test. ...
and argues that with the deletion of the proviso in the former rule, the
totality rule was reduced to clarity and brevity and the jurisdictional test is
the totality of the claims in all, not in each, of the causes of action,
irrespective of whether the causes of action arose out of the same or
different transactions.
This argument is partly correct. There is no difference between the former
and present rules in cases where a plaintiff sues a defendant on two or
more separate causes of action. In such cases, the amount of the
demand shall be the totality of the claims in all the causes of action
irrespective of whether the causes of action arose out of the same or
different transactions. If the total demand exceeds twenty thousand
pesos, then the regional trial court has jurisdiction. Needless to state, if
the causes of action are separate and independent, their joinder in one
complaint is permissive and not mandatory, and any cause of action
where the amount of the demand is twenty thousand pesos or less may
be the subject of a separate complaint filed with a metropolitan or
municipal trial court.
On the other hand, there is a difference between the former and present
rules in cases where two or more plaintiffs having separate causes of
action against a defendant join in a single complaint. Under the former
rule, "where the claims or causes of action joined in a single complaint
are separately owned by or due to different parties, each separate claim
shall furnish the jurisdictional test" (Section 88 of the Judiciary Act of
1948 as amended, supra). This was based on the ruling in the case of
Vda. de Rosario vs. Justice of the Peace, 99 Phil. 693. As worded, the
former rule applied only to cases of permissive joinder of parties plaintiff.
However, it was also applicable to cases of permissive joinder of parties
defendant, as may be deduced from the ruling in the case of Brillo vs.
Buklatan, thus:
Furthermore, the first cause of action is composed of
separate claims against several defendants of different
amounts each of which is not more than P2,000 and falls
under the jurisdiction of the justice of the peace court
under section 88 of Republic Act No, 296. The several
claims do not seem to arise from the same transaction or
series of transactions and there seem to be no questions
of law or of fact common to all the defendants as may
warrant their joinder under Rule 3, section 6. Therefore, if
new complaints are to be filed in the name of the real
party in interest they should be filed in the justice of the
peace court. (87 Phil. 519, 520, reiterated in Gacula vs.
Martinez, 88 Phil. 142, 146)
Under the present law, the totality rule is applied also to cases where two
or more plaintiffs having separate causes of action against a defendant
join in a single complaint, as well as to cases where a plaintiff has
separate causes of action against two or more defendants joined in a
single complaint. However, the causes of action in favor of the two or
more plaintiffs or against the two or more defendants should arise out of
the same transaction or series of transactions and there should be a
common question of law or fact, as provided in Section 6 of Rule 3.
The difference between the former and present rules in cases of
permissive joinder of parties may be illustrated by the two cases which
were cited in the case of Vda. de Rosario vs. Justice of the Peace
(supra) as exceptions to the totality rule. In the case of Soriano y Cia vs.
Jose (86 Phil. 523), where twenty-nine dismissed employees joined in a
complaint against the defendant to collect their respective claims, each of
which was within the jurisdiction of the municipal court although the total
exceeded the jurisdictional amount, this Court held that under the law
then the municipal court had jurisdiction. In said case, although the
plaintiffs' demands were separate, distinct and independent of one
another, their joint suit was authorized under Section 6 of Rule 3 and
each separate claim furnished the jurisdictional test. In the case of
International Colleges, Inc. vs. Argonza (90 Phil. 470), where twenty-five
dismissed teachers jointly sued the defendant for unpaid salaries, this
Court also held that the municipal court had jurisdiction because the
amount of each claim was within, although the total exceeded, its
jurisdiction and it was a case of permissive joinder of parties plaintiff
under Section 6 of Rule 3.
Under the present law, the two cases above cited (assuming they do not
fall under the Labor Code) would be under the jurisdiction of the regional
trial court. Similarly, in the abovecited cases of Brillo vs. Buklatan and
Gacula vs. Martinez (supra), if the separate claims against the several
defendants arose out of the same transaction or series of transactions
and there is a common question of law or fact, they would now be under
the jurisdiction of the regional trial court.
In other words, in cases of permissive joinder of parties, whether as
plaintiffs or as defendants, under Section 6 of Rule 3, the total of all the
claims shall now furnish the jurisdictional test. Needless to state also, if
instead of joining or being joined in one complaint separate actions are
filed by or against the parties, the amount demanded in each complaint
shall furnish the jurisdictional test.
In the case at bar, the lower court correctly held that the jurisdictional test
is subject to the rules on joinder of parties pursuant to Section 5 of Rule 2
and Section 6 of Rule 3 of the Rules of Court and that, after a careful
scrutiny of the complaint, it appears that there is a misjoinder of parties
for the reason that the claims against respondents Binongcal and Calion
are separate and distinct and neither of which falls within its jurisdiction.
WHEREFORE, the order appealed from is affirmed, without
pronouncement as to costs.
SO ORDERED.
G.R. No. 159912 August 17, 2007
UNITED COCONUT PLANTERS BANK, Petitioner,
vs.
SPOUSES SAMUEL and ODETTE BELUSO, Respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court, which seeks to annul the Court of Appeals Decision1 dated 21
January 2003 and its Resolution2 dated 9 September 2003 in CA-G.R.
CV No. 67318. The assailed Court of Appeals Decision and Resolution
affirmed in turn the Decision3 dated 23 March 2000 and Order4 dated 8
May 2000 of the Regional Trial Court (RTC), Branch 65 of Makati City, in
Civil Case No. 99-314, declaring void the interest rate provided in the
promissory notes executed by the respondents Spouses Samuel and
Odette Beluso (spouses Beluso) in favor of petitioner United Coconut
Planters Bank (UCPB).
The procedural and factual antecedents of this case are as follows:
On 16 April 1996, UCPB granted the spouses Beluso a Promissory Notes
Line under a Credit Agreement whereby the latter could avail from the
former credit of up to a maximum amount of ₱1.2 Million pesos for a term
ending on 30 April 1997. The spouses Beluso constituted, other than
their promissory notes, a real estate mortgage over parcels of land in
Roxas City, covered by Transfer Certificates of Title No. T-31539 and T-
27828, as additional security for the obligation. The Credit Agreement
was subsequently amended to increase the amount of the Promissory
Notes Line to a maximum of ₱2.35 Million pesos and to extend the term
thereof to 28 February 1998.
The spouses Beluso availed themselves of the credit line under the
following Promissory Notes:
Amount
PN # Date of PN Maturity Date
Secured
8314-96- 27 August
29 April 1996 ₱ 700,000
00083-3 1996
 8314-96- 30 August 97- ₱ 700,000 30.17% 32.786% ₱ 795,294.72
2 May 1996 ₱ 500,000
00085-0 1996 00366-6 (7 days) (102
8314-96- 20 November 20 March days)
₱ 800,000
000292-2 1996 1997 97- ₱ 1,300,000 28% 30.41% ₱
00368-2 (2 days) (102 1,462,124.54
The three promissory notes were renewed several times. On 30 April days)
1997, the payment of the principal and interest of the latter two 98- ₱ 150,000 33% 36% ₱ 170,034.71
promissory notes were debited from the spouses Beluso’s account with 00002-4 (102
UCPB; yet, a consolidated loan for ₱1.3 Million was again released to the days)
spouses Beluso under one promissory note with a due date of 28
February 1998. The spouses Beluso, however, failed to make any payment of the
foregoing amounts.
To completely avail themselves of the ₱2.35 Million credit line extended
to them by UCPB, the spouses Beluso executed two more promissory On 2 September 1998, UCPB demanded that the spouses Beluso pay
notes for a total of ₱350,000.00: their total obligation of ₱2,932,543.00 plus 25% attorney’s fees, but the
spouses Beluso failed to comply therewith. On 28 December 1998,
Amount UCPB foreclosed the properties mortgaged by the spouses Beluso to
PN # Date of PN Maturity Date
Secured secure their credit line, which, by that time, already ballooned to
11 December 28 February ₱3,784,603.00.
97-00363-1 ₱ 200,000
1997 1998
On 9 February 1999, the spouses Beluso filed a Petition for Annulment,
2 January 28 February
98-00002-4 ₱ 150,000 Accounting and Damages against UCPB with the RTC of Makati City.
1998 1998
On 23 March 2000, the RTC ruled in favor of the spouses Beluso,
However, the spouses Beluso alleged that the amounts covered by these disposing of the case as follows:
last two promissory notes were never released or credited to their
account and, thus, claimed that the principal indebtedness was only ₱2 PREMISES CONSIDERED, judgment is hereby rendered declaring the
Million. interest rate used by [UCPB] void and the foreclosure and Sheriff’s
Certificate of Sale void. [UCPB] is hereby ordered to return to [the
In any case, UCPB applied interest rates on the different promissory spouses Beluso] the properties subject of the foreclosure; to pay [the
notes ranging from 18% to 34%. From 1996 to February 1998 the spouses Beluso] the amount of ₱50,000.00 by way of attorney’s fees;
spouses Beluso were able to pay the total sum of ₱763,692.03. and to pay the costs of suit. [The spouses Beluso] are hereby ordered to
pay [UCPB] the sum of ₱1,560,308.00.5
From 28 February 1998 to 10 June 1998, UCPB continued to charge
interest and penalty on the obligations of the spouses Beluso, as follows: On 8 May 2000, the RTC denied UCPB’s Motion for
Reconsideration,6 prompting UCPB to appeal the RTC Decision with the
PN # Amount Interest Penalty Total Court of Appeals. The Court of Appeals affirmed the RTC Decision, to
Secured wit:
97- ₱ 200,000 31% 36% ₱ 225,313.24
WHEREFORE, premises considered, the decision dated March 23, 2000
00363-1
of the Regional Trial Court, Branch 65, Makati City in Civil Case No. 99-
314 is hereby AFFIRMED subject to the modification that defendant-
appellant UCPB is not liable for attorney’s fees or the costs of suit. 7
On 9 September 2003, the Court of Appeals denied UCPB’s Motion for
Reconsideration for lack of merit. UCPB thus filed the present petition,
submitting the following issues for our resolution:
I The Court of Appeals held that the imposition of interest in the following
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
COMMITTED SERIOUS AND REVERSIBLE ERROR WHEN IT
AFFIRMED THE DECISION OF THE TRIAL COURT WHICH
DECLARED VOID THE PROVISION ON INTEREST RATE AGREED
UPON BETWEEN PETITIONER AND RESPONDENTS
II
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
COMMITTED SERIOUS AND REVERSIBLE ERROR WHEN IT
AFFIRMED THE COMPUTATION BY THE TRIAL COURT OF
RESPONDENTS’ INDEBTEDNESS AND ORDERED RESPONDENTS
TO PAY PETITIONER THE AMOUNT OF ONLY ONE MILLION FIVE
HUNDRED SIXTY THOUSAND THREE HUNDRED EIGHT PESOS
(₱1,560,308.00)
III
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
COMMITTED SERIOUS AND REVERSIBLE ERROR WHEN IT
AFFIRMED THE DECISION OF THE TRIAL COURT WHICH
ANNULLED THE FORECLOSURE BY PETITIONER OF THE SUBJECT
PROPERTIES DUE TO AN ALLEGED "INCORRECT COMPUTATION"
OF RESPONDENTS’ INDEBTEDNESS
IV
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
COMMITTED SERIOUS AND REVERSIBLE ERROR WHEN IT
AFFIRMED THE DECISION OF THE TRIAL COURT WHICH FOUND
PETITIONER LIABLE FOR VIOLATION OF THE TRUTH IN LENDING
ACT
V
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
COMMITTED SERIOUS AND REVERSIBLE ERROR WHEN IT FAILED
TO ORDER THE DISMISSAL OF THE CASE BECAUSE THE
RESPONDENTS ARE GUILTY OF FORUM SHOPPING8
Validity of the Interest Rates
provision found in the promissory notes of the spouses Beluso is void, as
the interest rates and the bases therefor were determined solely by
petitioner UCPB:
FOR VALUE RECEIVED, I, and/or We, on or before due date, SPS.
SAMUEL AND ODETTE BELUSO (BORROWER), jointly and severally
promise to pay to UNITED COCONUT PLANTERS BANK (LENDER) or
order at UCPB Bldg., Makati Avenue, Makati City, Philippines, the sum of
______________ PESOS, (P_____), Philippine Currency, with interest
thereon at the rate indicative of DBD retail rate or as determined by the
Branch Head.9
UCPB asserts that this is a reversible error, and claims that while the
interest rate was not numerically quantified in the face of the promissory
notes, it was nonetheless categorically fixed, at the time of execution
thereof, at the "rate indicative of the DBD retail rate." UCPB contends that
said provision must be read with another stipulation in the promissory
notes subjecting to review the interest rate as fixed:
The interest rate shall be subject to review and may be increased or
decreased by the LENDER considering among others the prevailing
financial and monetary conditions; or the rate of interest and charges
which other banks or financial institutions charge or offer to charge for
similar accommodations; and/or the resulting profitability to the LENDER
after due consideration of all dealings with the BORROWER.10
In this regard, UCPB avers that these are valid reference rates akin to a
"prevailing rate" or "prime rate" allowed by this Court in Polotan v. Court
of Appeals.11 Furthermore, UCPB argues that even if the proviso "as
determined by the branch head" is considered void, such a declaration
would not ipso facto render the connecting clause "indicative of DBD
retail rate" void in view of the separability clause of the Credit Agreement,
which reads:
Section 9.08 Separability Clause. If any one or more of the provisions
contained in this AGREEMENT, or documents executed in connection
herewith shall be declared invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired.12
According to UCPB, the imposition of the questioned interest rates did
not infringe on the principle of mutuality of contracts, because the
spouses Beluso had the liberty to choose whether or not to renew their
credit line at the new interest rates pegged by petitioner. 13 UCPB also
claims that assuming there was any defect in the mutuality of the contract
at the time of its inception, such defect was cured by the subsequent
conduct of the spouses Beluso in availing themselves of the credit line
from April 1996 to February 1998 without airing any protest with respect
to the interest rates imposed by UCPB. According to UCPB, therefore,
the spouses Beluso are in estoppel.14
We agree with the Court of Appeals, and find no merit in the contentions
of UCPB.
Article 1308 of the Civil Code provides:
Art. 1308. The contract must bind both contracting parties; its validity or
compliance cannot be left to the will of one of them.
We applied this provision in Philippine National Bank v. Court of
Appeals,15 where we held:
In order that obligations arising from contracts may have the force of law
between the parties, there must be mutuality between the parties based
on their essential equality. A contract containing a condition which makes
its fulfillment dependent exclusively upon the uncontrolled will of one of
the contracting parties, is void (Garcia vs. Rita Legarda, Inc., 21 SCRA
555). Hence, even assuming that the P1.8 million loan agreement
between the PNB and the private respondent gave the PNB a license
(although in fact there was none) to increase the interest rate at will
during the term of the loan, that license would have been null and void for
being violative of the principle of mutuality essential in contracts. It would
have invested the loan agreement with the character of a contract of
adhesion, where the parties do not bargain on equal footing, the weaker
party's (the debtor) participation being reduced to the alternative "to take
it or leave it" (Qua vs. Law Union & Rock Insurance Co., 95 Phil. 85).
Such a contract is a veritable trap for the weaker party whom the courts
of justice must protect against abuse and imposition.
The provision stating that the interest shall be at the "rate indicative of
DBD retail rate or as determined by the Branch Head" is indeed
dependent solely on the will of petitioner UCPB. Under such provision,
petitioner UCPB has two choices on what the interest rate shall be: (1) a
rate indicative of the DBD retail rate; or (2) a rate as determined by the
Branch Head. As UCPB is given this choice, the rate should be
categorically determinable in both choices. If either of these two choices
presents an opportunity for UCPB to fix the rate at will, the bank can
easily choose such an option, thus making the entire interest rate
provision violative of the principle of mutuality of contracts.
Not just one, but rather both, of these choices are dependent solely on
the will of UCPB. Clearly, a rate "as determined by the Branch Head"
gives the latter unfettered discretion on what the rate may be. The
Branch Head may choose any rate he or she desires. As regards the rate
"indicative of the DBD retail rate," the same cannot be considered as
valid for being akin to a "prevailing rate" or "prime rate" allowed by this
Court in Polotan. The interest rate in Polotan reads:
The Cardholder agrees to pay interest per annum at 3% plus the prime
rate of Security Bank and Trust Company. x x x.16
In this provision in Polotan, there is a fixed margin over the reference
rate: 3%. Thus, the parties can easily determine the interest rate by
applying simple arithmetic. On the other hand, the provision in the case
at bar does not specify any margin above or below the DBD retail rate.
UCPB can peg the interest at any percentage above or below the DBD
retail rate, again giving it unfettered discretion in determining the interest
rate.
The stipulation in the promissory notes subjecting the interest rate to
review does not render the imposition by UCPB of interest rates on the
obligations of the spouses Beluso valid. According to said stipulation:
The interest rate shall be subject to review and may be increased or
decreased by the LENDER considering among others the prevailing
financial and monetary conditions; or the rate of interest and charges
which other banks or financial institutions charge or offer to charge for
similar accommodations; and/or the resulting profitability to the LENDER
after due consideration of all dealings with the BORROWER.17
It should be pointed out that the authority to review the interest rate was
given UCPB alone as the lender. Moreover, UCPB may apply the
considerations enumerated in this provision as it wishes. As worded in
the above provision, UCPB may give as much weight as it desires to
each of the following considerations: (1) the prevailing financial and
monetary condition; (2) the rate of interest and charges which other
banks or financial institutions charge or offer to charge for similar
accommodations; and/or (3) the resulting profitability to the LENDER
(UCPB) after due consideration of all dealings with the BORROWER (the
spouses Beluso). Again, as in the case of the interest rate provision,
there is no fixed margin above or below these considerations.
In view of the foregoing, the Separability Clause cannot save either of the
two options of UCPB as to the interest to be imposed, as both options
violate the principle of mutuality of contracts.
UCPB likewise failed to convince us that the spouses Beluso were in
estoppel.
Estoppel cannot be predicated on an illegal act. As between the parties
to a contract, validity cannot be given to it by estoppel if it is prohibited by
law or is against public policy.18
The interest rate provisions in the case at bar are illegal not only because
of the provisions of the Civil Code on mutuality of contracts, but also, as
shall be discussed later, because they violate the Truth in Lending Act.
Not disclosing the true finance charges in connection with the extensions
of credit is, furthermore, a form of deception which we cannot
countenance. It is against the policy of the State as stated in the Truth in
Lending Act:
Sec. 2. Declaration of Policy. – It is hereby declared to be the policy of
the State to protect its citizens from a lack of awareness of the true cost
of credit to the user by assuring a full disclosure of such cost with a view
of preventing the uninformed use of credit to the detriment of the national
economy.19
Moreover, while the spouses Beluso indeed agreed to renew the credit
line, the offending provisions are found in the promissory notes
themselves, not in the credit line. In fixing the interest rates in the
promissory notes to cover the renewed credit line, UCPB still reserved to
itself the same two options – (1) a rate indicative of the DBD retail rate; or
(2) a rate as determined by the Branch Head.
Error in Computation
UCPB asserts that while both the RTC and the Court of Appeals voided
the interest rates imposed by UCPB, both failed to include in their
computation of the outstanding obligation of the spouses Beluso the legal
rate of interest of 12% per annum. Furthermore, the penalty charges
were also deleted in the decisions of the RTC and the Court of Appeals.
Section 2.04, Article II on "Interest and other Bank Charges" of the
subject Credit Agreement, provides:
Section 2.04 Penalty Charges. In addition to the interest provided for in
Section 2.01 of this ARTICLE, any principal obligation of the CLIENT
hereunder which is not paid when due shall be subject to a penalty
charge of one percent (1%) of the amount of such obligation per month
computed from due date until the obligation is paid in full. If the bank
accelerates teh (sic) payment of availments hereunder pursuant to
ARTICLE VIII hereof, the penalty charge shall be used on the total
principal amount outstanding and unpaid computed from the date of
acceleration until the obligation is paid in full. 20
Paragraph 4 of the promissory notes also states:
In case of non-payment of this Promissory Note (Note) at maturity, I/We,
jointly and severally, agree to pay an additional sum equivalent to twenty-
five percent (25%) of the total due on the Note as attorney’s fee, aside
from the expenses and costs of collection whether actually incurred or
not, and a penalty charge of one percent (1%) per month on the total
amount due and unpaid from date of default until fully paid. 21
Petitioner further claims that it is likewise entitled to attorney’s fees,
pursuant to Section 9.06 of the Credit Agreement, thus:
If the BANK shall require the services of counsel for the enforcement of
its rights under this AGREEMENT, the Note(s), the collaterals and other
related documents, the BANK shall be entitled to recover attorney’s fees
equivalent to not less than twenty-five percent (25%) of the total amounts
due and outstanding exclusive of costs and other expenses. 22
Another alleged computational error pointed out by UCPB is the negation
of the Compounding Interest agreed upon by the parties under Section
2.02 of the Credit Agreement:
Section 2.02 Compounding Interest. Interest not paid when due shall
form part of the principal and shall be subject to the same interest rate as
herein stipulated.23 and paragraph 3 of the subject promissory notes:
Interest not paid when due shall be added to, and become part of the
principal and shall likewise bear interest at the same rate. 24
UCPB lastly avers that the application of the spouses Beluso’s payments
in the disputed computation does not reflect the parties’ agreement. The
1avvphi1
RTC deducted the payment made by the spouses Beluso amounting to
₱763,693.00 from the principal of ₱2,350,000.00. This was allegedly
inconsistent with the Credit Agreement, as well as with the agreement of
the parties as to the facts of the case. In paragraph 7 of the spouses
Beluso’s Manifestation and Motion on Proposed Stipulation of Facts and
Issues vis-à-vis UCPB’s Manifestation, the parties agreed that the
amount of ₱763,693.00 was applied to the interest and not to the
principal, in accord with Section 3.03, Article II of the Credit Agreement
on "Order of the Application of Payments," which provides:
Section 3.03 Application of Payment. Payments made by the CLIENT
shall be applied in accordance with the following order of preference:
1. Accounts receivable and other out-of-pocket expenses
2. Front-end Fee, Origination Fee, Attorney’s Fee and other
expenses of collection;
3. Penalty charges;
4. Past due interest;
5. Principal amortization/Payment in arrears;
6. Advance interest;
7. Outstanding balance; and
8. All other obligations of CLIENT to the BANK, if any. 25
Thus, according to UCPB, the interest charges, penalty charges, and
attorney’s fees had been erroneously excluded by the RTC and the Court
of Appeals from the computation of the total amount due and
demandable from spouses Beluso.
The spouses Beluso’s defense as to all these issues is that the demand
made by UCPB is for a considerably bigger amount and, therefore, the
demand should be considered void. There being no valid demand,
according to the spouses Beluso, there would be no default, and
therefore the interests and penalties would not commence to run. As it
was likewise improper to foreclose the mortgaged properties or file a
case against the spouses Beluso, attorney’s fees were not warranted.
We agree with UCPB on this score. Default commences upon judicial or
extrajudicial demand.26 The excess amount in such a demand does not
nullify the demand itself, which is valid with respect to the proper amount.
A contrary ruling would put commercial transactions in disarray, as
validity of demands would be dependent on the exactness of the
computations thereof, which are too often contested.
There being a valid demand on the part of UCPB, albeit excessive, the
spouses Beluso are considered in default with respect to the proper
amount and, therefore, the interests and the penalties began to run at
that point.
As regards the award of 12% legal interest in favor of petitioner, the RTC
actually recognized that said legal interest should be imposed, thus:
"There being no valid stipulation as to interest, the legal rate of interest
shall be charged."27 It seems that the RTC inadvertently overlooked its
non-inclusion in its computation.
The spouses Beluso had even originally asked for the RTC to impose this
legal rate of interest in both the body and the prayer of its petition with the
RTC:
12. Since the provision on the fixing of the rate of interest by the sole will
of the respondent Bank is null and void, only the legal rate of interest
which is 12% per annum can be legally charged and imposed by the
bank, which would amount to only about P599,000.00 since 1996 up to
August 31, 1998.
xxxx
WHEREFORE, in view of the foregoing, petiitoners pray for judgment or
order:
xxxx
2. By way of example for the public good against the Bank’s taking unfair
advantage of the weaker party to their contract, declaring the legal rate of
12% per annum, as the imposable rate of interest up to February 28,
1999 on the loan of 2.350 million.28
All these show that the spouses Beluso had acknowledged before the
RTC their obligation to pay a 12% legal interest on their loans. When the
RTC failed to include the 12% legal interest in its computation, however,
the spouses Beluso merely defended in the appellate courts this non-
inclusion, as the same was beneficial to them. We see, however,
sufficient basis to impose a 12% legal interest in favor of petitioner in the
case at bar, as what we have voided is merely the stipulated rate of
interest and not the stipulation that the loan shall earn interest.
We must likewise uphold the contract stipulation providing the
compounding of interest. The provisions in the Credit Agreement and in
the promissory notes providing for the compounding of interest were
neither nullified by the RTC or the Court of Appeals, nor assailed by the
spouses Beluso in their petition with the RTC. The compounding of
interests has furthermore been declared by this Court to be legal. We
have held in Tan v. Court of Appeals, 29 that:
Without prejudice to the provisions of Article 2212, interest due and
unpaid shall not earn interest. However, the contracting parties may by
stipulation capitalize the interest due and unpaid, which as added
principal, shall earn new interest.
As regards the imposition of penalties, however, although we are likewise
upholding the imposition thereof in the contract, we find the rate
iniquitous. Like in the case of grossly excessive interests, the penalty
stipulated in the contract may also be reduced by the courts if it is
iniquitous or unconscionable.30
We find the penalty imposed by UCPB, ranging from 30.41% to 36%, to
be iniquitous considering the fact that this penalty is already over and
above the compounded interest likewise imposed in the contract. If a
36% interest in itself has been declared unconscionable by this
Court,31 what more a 30.41% to 36% penalty, over and above the
payment of compounded interest? UCPB itself must have realized this,
as it gave us a sample computation of the spouses Beluso’s obligation if
both the interest and the penalty charge are reduced to 12%.
As regards the attorney’s fees, the spouses Beluso can actually be liable
therefor even if there had been no demand. Filing a case in court is the
judicial demand referred to in Article 116932 of the Civil Code, which
would put the obligor in delay.
The RTC, however, also held UCPB liable for attorney’s fees in this case,
as the spouses Beluso were forced to litigate the issue on the illegality of
the interest rate provision of the promissory notes. The award of
attorney’s fees, it must be recalled, falls under the sound discretion of the
court.33 Since both parties were forced to litigate to protect their
respective rights, and both are entitled to the award of attorney’s fees
from the other, practical reasons dictate that we set off or compensate
both parties’ liabilities for attorney’s fees. Therefore, instead of awarding
attorney’s fees in favor of petitioner, we shall merely affirm the deletion of
the award of attorney’s fees to the spouses Beluso.
In sum, we hold that spouses Beluso should still be held liable for a
compounded legal interest of 12% per annum and a penalty charge of
12% per annum. We also hold that, instead of awarding attorney’s fees in
favor of petitioner, we shall merely affirm the deletion of the award of
attorney’s fees to the spouses Beluso.
Annulment of the Foreclosure Sale
Properties of spouses Beluso had been foreclosed, titles to which had
already been consolidated on 19 February 2001 and 20 March 2001 in
the name of UCPB, as the spouses Beluso failed to exercise their right of
redemption which expired on 25 March 2000. The RTC, however,
annulled the foreclosure of mortgage based on an alleged incorrect
computation of the spouses Beluso’s indebtedness.
UCPB alleges that none of the grounds for the annulment of a
foreclosure sale are present in the case at bar. Furthermore, the
annulment of the foreclosure proceedings and the certificates of sale
were mooted by the subsequent issuance of new certificates of title in the
name of said bank. UCPB claims that the spouses Beluso’s action for
annulment of foreclosure constitutes a collateral attack on its certificates
of title, an act proscribed by Section 48 of Presidential Decree No. 1529,
otherwise known as the Property Registration Decree, which provides:
Section 48. Certificate not subject to collateral attack. – A certificate of
title shall not be subject to collateral attack. It cannot be altered, modified
or cancelled except in a direct proceeding in accordance with law.
The spouses Beluso retort that since they had the right to refuse payment
of an excessive demand on their account, they cannot be said to be in
default for refusing to pay the same. Consequently, according to the
spouses Beluso, the "enforcement of such illegal and overcharged
demand through foreclosure of mortgage" should be voided.
We agree with UCPB and affirm the validity of the foreclosure
proceedings. Since we already found that a valid demand was made by
UCPB upon the spouses Beluso, despite being excessive, the spouses
Beluso are considered in default with respect to the proper amount of
their obligation to UCPB and, thus, the property they mortgaged to
secure such amounts may be foreclosed. Consequently, proceeds of the
foreclosure sale should be applied to the extent of the amounts to which
UCPB is rightfully entitled.
As argued by UCPB, none of the grounds for the annulment of a
foreclosure sale are present in this case. The grounds for the proper
annulment of the foreclosure sale are the following: (1) that there was
fraud, collusion, accident, mutual mistake, breach of trust or misconduct
by the purchaser; (2) that the sale had not been fairly and regularly
conducted; or (3) that the price was inadequate and the inadequacy was
so great as to shock the conscience of the court. 34
Liability for Violation of Truth in Lending Act
The RTC, affirmed by the Court of Appeals, imposed a fine of ₱26,000.00
for UCPB’s alleged violation of Republic Act No. 3765, otherwise known
as the Truth in Lending Act.
UCPB challenges this imposition, on the argument that Section 6(a) of
the Truth in Lending Act which mandates the filing of an action to recover
such penalty must be made under the following circumstances:
Section 6. (a) Any creditor who in connection with any credit transaction
fails to disclose to any person any information in violation of this Act or
any regulation issued thereunder shall be liable to such person in the
amount of ₱100 or in an amount equal to twice the finance charge
required by such creditor in connection with such transaction, whichever
is greater, except that such liability shall not exceed ₱2,000 on any credit
transaction. Action to recover such penalty may be brought by such
person within one year from the date of the occurrence of the violation, in
any court of competent jurisdiction. x x x (Emphasis ours.)
According to UCPB, the Court of Appeals even stated that "[a]dmittedly
the original complaint did not explicitly allege a violation of the ‘Truth in
Lending Act’ and no action to formally admit the amended petition [which
expressly alleges violation of the Truth in Lending Act] was made either
by [respondents] spouses Beluso and the lower court. x x x." 35
UCPB further claims that the action to recover the penalty for the
violation of the Truth in Lending Act had been barred by the one-year
prescriptive period provided for in the Act. UCPB asserts that per the
records of the case, the latest of the subject promissory notes had been
executed on 2 January 1998, but the original petition of the spouses
Beluso was filed before the RTC on 9 February 1999, which was after the
expiration of the period to file the same on 2 January 1999.
On the matter of allegation of the violation of the Truth in Lending Act, the
Court of Appeals ruled:
Admittedly the original complaint did not explicitly allege a violation of the
‘Truth in Lending Act’ and no action to formally admit the amended
petition was made either by [respondents] spouses Beluso and the lower
court. In such transactions, the debtor and the lending institutions do not
deal on an equal footing and this law was intended to protect the public
from hidden or undisclosed charges on their loan obligations, requiring a
full disclosure thereof by the lender. We find that its infringement may be
inferred or implied from allegations that when [respondents] spouses
Beluso executed the promissory notes, the interest rate chargeable
thereon were left blank. Thus, [petitioner] UCPB failed to discharge its
duty to disclose in full to [respondents] Spouses Beluso the charges
applicable on their loans.36
We agree with the Court of Appeals. The allegations in the complaint,
much more than the title thereof, are controlling. Other than that stated by
the Court of Appeals, we find that the allegation of violation of the Truth in
Lending Act can also be inferred from the same allegation in the
complaint we discussed earlier:
b.) In unilaterally imposing an increased interest rates (sic) respondent
bank has relied on the provision of their promissory note granting
respondent bank the power to unilaterally fix the interest rates, which rate
was not determined in the promissory note but was left solely to the will of
the Branch Head of the respondent Bank, x x x. 37
The allegation that the promissory notes grant UCPB the power to
unilaterally fix the interest rates certainly also means that the promissory
notes do not contain a "clear statement in writing" of "(6) the finance
charge expressed in terms of pesos and centavos; and (7) the
percentage that the finance charge bears to the amount to be financed
expressed as a simple annual rate on the outstanding unpaid balance of
the obligation."38 Furthermore, the spouses Beluso’s prayer "for such
other reliefs just and equitable in the premises" should be deemed to
include the civil penalty provided for in Section 6(a) of the Truth in
Lending Act.
UCPB’s contention that this action to recover the penalty for the violation
of the Truth in Lending Act has already prescribed is likewise without
merit. The penalty for the violation of the act is ₱100 or an amount equal
to twice the finance charge required by such creditor in connection with
such transaction, whichever is greater, except that such liability shall not
exceed ₱2,000.00 on any credit transaction.39 As this penalty depends on
the finance charge required of the borrower, the borrower’s cause of
action would only accrue when such finance charge is required. In the
case at bar, the date of the demand for payment of the finance charge is
2 September 1998, while the foreclosure was made on 28 December
1998. The filing of the case on 9 February 1999 is therefore within the
one-year prescriptive period.
UCPB argues that a violation of the Truth in Lending Act, being a criminal
offense, cannot be inferred nor implied from the allegations made in the
complaint.40 Pertinent provisions of the Act read:
Sec. 6. (a) Any creditor who in connection with any credit transaction fails
to disclose to any person any information in violation of this Act or any
regulation issued thereunder shall be liable to such person in the amount
of ₱100 or in an amount equal to twice the finance charge required by
such creditor in connection with such transaction, whichever is the
greater, except that such liability shall not exceed ₱2,000 on any credit
transaction. Action to recover such penalty may be brought by such
person within one year from the date of the occurrence of the violation, in
any court of competent jurisdiction. In any action under this subsection in
which any person is entitled to a recovery, the creditor shall be liable for
reasonable attorney’s fees and court costs as determined by the court.
xxxx
(c) Any person who willfully violates any provision of this Act or any
regulation issued thereunder shall be fined by not less than ₱1,000 or
more than ₱5,000 or imprisonment for not less than 6 months, nor more
than one year or both.
As can be gleaned from Section 6(a) and (c) of the Truth in Lending Act,
the violation of the said Act gives rise to both criminal and civil liabilities.
Section 6(c) considers a criminal offense the willful violation of the Act,
imposing the penalty therefor of fine, imprisonment or both. Section 6(a),
on the other hand, clearly provides for a civil cause of action for failure to
disclose any information of the required information to any person in
violation of the Act. The penalty therefor is an amount of ₱100 or in an
amount equal to twice the finance charge required by the creditor in
connection with such transaction, whichever is greater, except that the
liability shall not exceed ₱2,000.00 on any credit transaction. The action
to recover such penalty may be instituted by the aggrieved private person
separately and independently from the criminal case for the same
offense.
In the case at bar, therefore, the civil action to recover the penalty under
Section 6(a) of the Truth in Lending Act had been jointly instituted with (1)
the action to declare the interests in the promissory notes void, and (2)
the action to declare the foreclosure void. This joinder is allowed under
Rule 2, Section 5 of the Rules of Court, which provides:
SEC. 5. Joinder of causes of action.—A party may in one pleading
assert, in the alternative or otherwise, as many causes of action as he
may have against an opposing party, subject to the following conditions:
(a) The party joining the causes of action shall comply with the
rules on joinder of parties;
(b) The joinder shall not include special civil actions or actions
governed by special rules;
(c) Where the causes of action are between the same parties but
pertain to different venues or jurisdictions, the joinder may be
allowed in the Regional Trial Court provided one of the causes of
action falls within the jurisdiction of said court and the venue lies
therein; and
 (d) Where the claims in all the causes of action are principally for
recovery of money, the aggregate amount claimed shall be the
test of jurisdiction.
In attacking the RTC’s disposition on the violation of the Truth in Lending
Act since the same was not alleged in the complaint, UCPB is actually
asserting a violation of due process. Indeed, due process mandates that
a defendant should be sufficiently apprised of the matters he or she
would be defending himself or herself against. However, in the 1 July
1999 pre-trial brief filed by the spouses Beluso before the RTC, the claim
for civil sanctions for violation of the Truth in Lending Act was expressly
alleged, thus:
Moreover, since from the start, respondent bank violated the Truth in
Lending Act in not informing the borrower in writing before the execution
of the Promissory Notes of the interest rate expressed as a percentage of
the total loan, the respondent bank instead is liable to pay petitioners
double the amount the bank is charging petitioners by way of sanction for
its violation.41
In the same pre-trial brief, the spouses Beluso also expressly raised the
following issue:
b.) Does the expression indicative rate of DBD retail (sic) comply with the
Truth in Lending Act provision to express the interest rate as a simple
annual percentage of the loan?42
These assertions are so clear and unequivocal that any attempt of UCPB
to feign ignorance of the assertion of this issue in this case as to prevent
it from putting up a defense thereto is plainly hogwash.
Petitioner further posits that it is the Metropolitan Trial Court which has
jurisdiction to try and adjudicate the alleged violation of the Truth in
Lending Act, considering that the present action allegedly involved a
single credit transaction as there was only one Promissory Note Line.
We disagree. We have already ruled that the action to recover the
penalty under Section 6(a) of the Truth in Lending Act had been jointly
instituted with (1) the action to declare the interests in the promissory
notes void, and (2) the action to declare the foreclosure void. There had
been no question that the above actions belong to the jurisdiction of the
RTC. Subsection (c) of the above-quoted Section 5 of the Rules of Court
on Joinder of Causes of Action provides:
(c) Where the causes of action are between the same parties but pertain
to different venues or jurisdictions, the joinder may be allowed in the
Regional Trial Court provided one of the causes of action falls within the
jurisdiction of said court and the venue lies therein.
Furthermore, opening a credit line does not create a credit transaction of
loan or mutuum, since the former is merely a preparatory contract to the
contract of loan or mutuum. Under such credit line, the bank is merely
obliged, for the considerations specified therefor, to lend to the other
party amounts not exceeding the limit provided. The credit transaction
thus occurred not when the credit line was opened, but rather when the
credit line was availed of. In the case at bar, the violation of the Truth in
Lending Act allegedly occurred not when the parties executed the Credit
Agreement, where no interest rate was mentioned, but when the parties
executed the promissory notes, where the allegedly offending interest
rate was stipulated.
UCPB further argues that since the spouses Beluso were duly given
copies of the subject promissory notes after their execution, then they
were duly notified of the terms thereof, in substantial compliance with the
Truth in Lending Act.
Once more, we disagree. Section 4 of the Truth in Lending Act clearly
provides that the disclosure statement must be furnished prior to the
consummation of the transaction:
SEC. 4. Any creditor shall furnish to each person to whom credit is
extended, prior to the consummation of the transaction, a clear statement
in writing setting forth, to the extent applicable and in accordance with
rules and regulations prescribed by the Board, the following information:
(1) the cash price or delivered price of the property or service to
be acquired;
(2) the amounts, if any, to be credited as down payment and/or
trade-in;
(3) the difference between the amounts set forth under clauses
(1) and (2)
(4) the charges, individually itemized, which are paid or to be paid
by such person in connection with the transaction but which are
not incident to the extension of credit;
 (5) the total amount to be financed;
(6) the finance charge expressed in terms of pesos and centavos;
and
(7) the percentage that the finance bears to the total amount to be
financed expressed as a simple annual rate on the outstanding
unpaid balance of the obligation.
The rationale of this provision is to protect users of credit from a lack of
awareness of the true cost thereof, proceeding from the experience that
banks are able to conceal such true cost by hidden charges, uncertainty
of interest rates, deduction of interests from the loaned amount, and the
like. The law thereby seeks to protect debtors by permitting them to fully
appreciate the true cost of their loan, to enable them to give full consent
to the contract, and to properly evaluate their options in arriving at
business decisions. Upholding UCPB’s claim of substantial compliance
would defeat these purposes of the Truth in Lending Act. The belated
discovery of the true cost of credit will too often not be able to reverse the
ill effects of an already consummated business decision.
In addition, the promissory notes, the copies of which were presented to
the spouses Beluso after execution, are not sufficient notification from
UCPB. As earlier discussed, the interest rate provision therein does not
sufficiently indicate with particularity the interest rate to be applied to the
loan covered by said promissory notes.
Forum Shopping
UCPB had earlier moved to dismiss the petition (originally Case No. 99-
314 in RTC, Makati City) on the ground that the spouses Beluso
instituted another case (Civil Case No. V-7227) before the RTC of Roxas
City, involving the same parties and issues. UCPB claims that while Civil
Case No. V-7227 initially appears to be a different action, as it prayed for
the issuance of a temporary restraining order and/or injunction to stop
foreclosure of spouses Beluso’s properties, it poses issues which are
similar to those of the present case.43 To prove its point, UCPB cited the
spouses Beluso’s Amended Petition in Civil Case No. V-7227, which
contains similar allegations as those in the present case. The RTC of
Makati denied UCPB’s Motion to Dismiss Case No. 99-314 for lack of
merit. Petitioner UCPB raised the same issue with the Court of Appeals,
and is raising the same issue with us now.
The spouses Beluso claim that the issue in Civil Case No. V-7227 before
the RTC of Roxas City, a Petition for Injunction Against Foreclosure, is
the propriety of the foreclosure before the true account of spouses
Beluso is determined. On the other hand, the issue in Case No. 99-314
before the RTC of Makati City is the validity of the interest rate provision.
The spouses Beluso claim that Civil Case No. V-7227 has become moot
because, before the RTC of Roxas City could act on the restraining
order, UCPB proceeded with the foreclosure and auction sale. As the act
sought to be restrained by Civil Case No. V-7227 has already been
accomplished, the spouses Beluso had to file a different action, that of
Annulment of the Foreclosure Sale, Case No. 99-314 with the RTC,
Makati City.
Even if we assume for the sake of argument, however, that only one
cause of action is involved in the two civil actions, namely, the violation of
the right of the spouses Beluso not to have their property foreclosed for
an amount they do not owe, the Rules of Court nevertheless allows the
filing of the second action. Civil Case No. V-7227 was dismissed by the
RTC of Roxas City before the filing of Case No. 99-314 with the RTC of
Makati City, since the venue of litigation as provided for in the Credit
Agreement is in Makati City.
Rule 16, Section 5 bars the refiling of an action previously dismissed only
in the following instances:
SEC. 5. Effect of dismissal.—Subject to the right of appeal, an order
granting a motion to dismiss based on paragraphs (f), (h) and (i) of
section 1 hereof shall bar the refiling of the same action or claim. (n)
Improper venue as a ground for the dismissal of an action is found in
paragraph (c) of Section 1, not in paragraphs (f), (h) and (i):
SECTION 1. Grounds.—Within the time for but before filing the answer to
the complaint or pleading asserting a claim, a motion to dismiss may be
made on any of the following grounds:
(a) That the court has no jurisdiction over the person of the
defending party;
(b) That the court has no jurisdiction over the subject matter of
the claim;
(c) That venue is improperly laid;
 (d) That the plaintiff has no legal capacity to sue;
(e) That there is another action pending between the same
parties for the same cause;
(f) That the cause of action is barred by a prior judgment or by the
statute of limitations;
(g) That the pleading asserting the claim states no cause of
action;
(h) That the claim or demand set forth in the plaintiff’s pleading
has been paid, waived, abandoned, or otherwise extinguished;
(i) That the claim on which the action is founded is unenforceable
under the provisions of the statute of frauds; and
(j) That a condition precedent for filing the claim has not been
complied with.44 (Emphases supplied.)
When an action is dismissed on the motion of the other party, it is only
when the ground for the dismissal of an action is found in paragraphs (f),
(h) and (i) that the action cannot be refiled. As regards all the other
grounds, the complainant is allowed to file same action, but should take
care that, this time, it is filed with the proper court or after the
accomplishment of the erstwhile absent condition precedent, as the case
may be.
UCPB, however, brings to the attention of this Court a Motion for
Reconsideration filed by the spouses Beluso on 15 January 1999 with the
RTC of Roxas City, which Motion had not yet been ruled upon when the
spouses Beluso filed Civil Case No. 99-314 with the RTC of Makati.
Hence, there were allegedly two pending actions between the same
parties on the same issue at the time of the filing of Civil Case No. 99-
314 on 9 February 1999 with the RTC of Makati. This will still not change
our findings. It is indeed the general rule that in cases where there are
two pending actions between the same parties on the same issue, it
should be the later case that should be dismissed. However, this rule is
not absolute. According to this Court in Allied Banking Corporation v.
Court of Appeals45 :
In these cases, it is evident that the first action was filed in anticipation of
the filing of the later action and the purpose is to preempt the later suit or
provide a basis for seeking the dismissal of the second action.
Even if this is not the purpose for the filing of the first action, it may
nevertheless be dismissed if the later action is the more appropriate
vehicle for the ventilation of the issues between the parties. Thus, in
Ramos v. Peralta, it was held:
[T]he rule on litis pendentia does not require that the later case should
yield to the earlier case. What is required merely is that there be another
pending action, not a prior pending action. Considering the broader
scope of inquiry involved in Civil Case No. 4102 and the location of the
property involved, no error was committed by the lower court in deferring
to the Bataan court's jurisdiction.
Given, therefore, the pendency of two actions, the following are the
relevant considerations in determining which action should be dismissed:
(1) the date of filing, with preference generally given to the first action
filed to be retained; (2) whether the action sought to be dismissed was
filed merely to preempt the later action or to anticipate its filing and lay
the basis for its dismissal; and (3) whether the action is the appropriate
vehicle for litigating the issues between the parties.
In the case at bar, Civil Case No. V-7227 before the RTC of Roxas City
was an action for injunction against a foreclosure sale that has already
been held, while Civil Case No. 99-314 before the RTC of Makati City
includes an action for the annulment of said foreclosure, an action
certainly more proper in view of the execution of the foreclosure sale. The
former case was improperly filed in Roxas City, while the latter was filed
in Makati City, the proper venue of the action as mandated by the Credit
Agreement. It is evident, therefore, that Civil Case No. 99-314 is the more
appropriate vehicle for litigating the issues between the parties, as
compared to Civil Case No. V-7227. Thus, we rule that the RTC of Makati
City was not in error in not dismissing Civil Case No. 99-314.
WHEREFORE, the Decision of the Court of Appeals is hereby
AFFIRMED with the following MODIFICATIONS:
1. In addition to the sum of ₱2,350,000.00 as determined by the
courts a quo, respondent spouses Samuel and Odette Beluso are
also liable for the following amounts:
 a. Penalty of 12% per annum on the amount due46 from
the date of demand; and
b. Compounded legal interest of 12% per annum on the
amount due47 from date of demand;
2. The following amounts shall be deducted from the liability of
the spouses Samuel and Odette Beluso:
a. Payments made by the spouses in the amount of
₱763,692.00. These payments shall be applied to the
date of actual payment of the following in the order that
they are listed, to wit:
i. penalty charges due and demandable as of the
time of payment;
ii. interest due and demandable as of the time of
payment;
iii. principal amortization/payment in arrears as of
the time of payment;
iv. outstanding balance.
b. Penalty under Republic Act No. 3765 in the amount of
₱26,000.00. This amount shall be deducted from the
liability of the spouses Samuel and Odette Beluso on 9
February 1999 to the following in the order that they are
listed, to wit:
i. penalty charges due and demandable as of time
of payment;
ii. interest due and demandable as of the time of
payment;
iii. principal amortization/payment in arrears as of
the time of payment;
iv. outstanding balance.
3. The foreclosure of mortgage is hereby declared VALID.
Consequently, the amounts which the Regional Trial Court and
the Court of Appeals ordered respondents to pay, as modified in
this Decision, shall be deducted from the proceeds of the
foreclosure sale.
SO ORDERED.
MINITA V. CHICO-NAZARIO
Associate Justice
G.R. No. 153829 August 17, 2011
ROMAN CATHOLIC ARCHBISHOP OF SAN FERNANDO,
PAMPANGA represented herein by the incumbent
Archbishop, Petitioner,
vs.
EDUARDO SORIANO, JR., EDNA YALUN, EVANGELINA ABLAZA,
FELICIDAD Y. URBINA, FELIX SALENGA, REYNALDO I. MALLARI,
MARCIANA B. BARCOMA, BIENVENIDO PANGANIBAN, BRIGIDA
NAVARRO, EUFRANCIA T. FLORES, VICTORIA B. SUDSOD,
EUFRONIO CAPARAS, CRISANTO MANANSALA, LILY
MASANGCAY, BENJAMIN GUINTO, JR., MARTHA G. CASTRO and
LINO TOLENTINO, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 160909
BENJAMIN GUINTO, JR.,1 Petitioner,
vs.
ROMAN CATHOLIC ARCHBISHOP OF SAN FERNANDO,
PAMPANGA represented herein by the incumbent
Archbishop, Respondent.
DECISION
VILLARAMA, JR., J.:
Before this Court are two petitions for resolution: the first, a Petition for
Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure,
as amended, filed by the Roman Catholic Archbishop (RCA) of San
Fernando, Pampanga, assailing the March 18, 2002 Decision2 and the
May 30, 2002 Resolution3 of the Court of Appeals (CA) in CA-G.R. SP
No. 66974; and the second, a Petition for Injunction under Rule 58, filed
by Benjamin Guinto, Jr. (Guinto), seeking to enjoin the implementation of
the Writ of Execution4 dated October 14, 2003, issued by the Municipal
Circuit Trial Court (MCTC) of Macabebe-Masantol, Pampanga in Civil
Case No. 2000(23).
The facts follow:
The RCA of San Fernando, Pampanga, represented by Most Rev.
Paciano B. Aniceto, D.D., claimed that it is the owner of a vast tract of
land located near the Catholic Church at Poblacion, Macabebe,
Pampanga and covered by Original Certificate of Title (OCT) No. 17629
issued by the Registry of Deeds of San Fernando on February 21,
1929.5 The RCA alleged that several individuals unlawfully occupied the
subject land and refused to vacate despite repeated demands. Having no
other recourse, the RCA filed an ejectment case, docketed as Civil Case
No. 2000(23), before the MCTC of Macabebe-Masantol, Pampanga
against the alleged intruders, namely, Leocadio and Rufina Reyes, Jose
Balagtas, Marcial and Victoria Balagtas, Levita Naluz, Dionisio Barcoma,
Felicidad Urbina, Justiniano Reyes, Lawrence Muniz, Eduardo Soriano,
Cosmer Vergara, Perlita Bustos, Brigida Navarro, Leonoda Cruz, Leonida
Manansala, Angelito Juliano, Eduardo Ibay, Edna Yalung, Reynaldo
Mallari, Lily Masangcay, Evangelina Ablaza, Crisanto Manansala, Feliza
Esguerra, Gloria Manansala, Bienvenido and Felicisima Panganiban,
Ofroneo Caparas, Tino Enriquez, Elizabeth and Benjamin Guinto, Felix
Salenga, Eleno and Rosala Salenga, Luisa and Domingo Sison, Francia
Flores, Eduardo and Rosita Gutierrez, Zosima and Ener Basilio, Andy
and Loreto Bonifacio, Peter and Felicisima Villajuan. 6
On the other hand, defendants countered that the RCA has no cause of
action against them because its title is spurious. They contended that the
subject land belonged to the State, but they have already acquired the
same by acquisitive prescription as they and their predecessors-in-
interest have been in continuous possession of the land for more than
thirty (30) years.
After considering the pleadings submitted by the parties, the MCTC
rendered decision on September 28, 2001 in favor of the RCA. The trial
court held that OCT No. 17629 in the name of the RCA remains valid and
binding against the whole world until it is declared void by a court of
competent jurisdiction. Thus, defendants were ordered to vacate the
premises and to pay reasonable monthly rentals from August 15, 2000
until they shall have finally vacated the premises.7
Defendants appealed to the Regional Trial Court (RTC). However, the
appeal was dismissed because of their failure to file the appeal
memorandum. When defendants elevated the case to the CA, their
petition for certiorari was not given due course for failure to file the same
within the extended period. Hence, the decision ejecting the defendants
from the premises became final.
Pursuant to Section 21,8 Rule 70 of the 1997 Rules of Civil Procedure, as
amended, the RCA filed an Urgent Motion for Immediate Issuance of a
Writ of Execution, which the MCTC granted in an Order 9 dated February
10, 2003, as follows:
WHEREFORE, on the basis of the rules and jurisprudence aforecited, the
Motion for Execution filed by plaintiff is hereby granted. Let a writ of
execution be issued in connection with this case which is a ministerial
duty of the Court.
Defendants’ Motion for Inhibition is denied for lack of merit.
SO ORDERED.10
Thereafter, the MCTC issued another Order dated October 6, 2003, the
pertinent portion of which states:
Let a writ of execution be issued to implement the Decision dated
September 28, 2001.
No further defendants’ motion to stay execution shall be entertained.
SO ORDERED.11
Accordingly, a writ of execution12 was issued commanding the sheriff or
his deputies to implement the MCTC Decision. Thus, Sheriff Edgar
Joseph C. David sent the defendants a Notice to Vacate13 dated
December 8, 2003.
Seeking to enjoin the implementation of the writ of execution and the
notice to vacate, Guinto filed the instant Petition for Injunction with Prayer
for Issuance of a Temporary Restraining Order (TRO), 14 docketed as
G.R. No. 160909.
Meanwhile, during the pendency of the ejectment case at the MCTC,
some of the defendants therein, namely, Eduardo Soriano, Jr., Edna
Yalun, Evangelina Ablaza, Felicidad Y. Urbina, Felix Salenga, Reynaldo
I. Mallari, Marciana B. Barcoma, Bienvenido Panganiban, Brigida
Navarro, Eufrancia T. Flores, Victoria B. Sodsod, Eufronio Caparas,
Crisanto Manansala, Lily Masangcay, Benjamin Guinto, Jr., Martha G.
Castro and Lino Tolentino filed Civil Case No. 01-1046(M) against the
RCA for Quieting of Title and Declaration of Nullity of Title before the
RTC of Macabebe, Pampanga.15 They claimed that they are in actual
possession of the land in the concept of owners and alleged that OCT
No. 17629 in the name of RCA is spurious and fake.
Before filing its Answer, the RCA moved to dismiss the case on grounds
of noncompliance with a condition precedent, laches, and for being a
collateral attack on its title. The RCA likewise later filed a supplement to
its motion to dismiss.
In an Order16 dated June 4, 2001, the RTC denied the motion to dismiss
reasoning that when the rules speak of noncompliance with a condition
precedent, it could refer only to the failure of a party to secure the
appropriate certificate to file action under the Local Government Code, or
the failure to exert earnest efforts towards an amicable settlement when
the suit involves members of the same family. The RTC also found that
plaintiffs have a cause of action. Furthermore, the trial court held that
RCA’s argument – that the property cannot be acquired by prescription
because it has title over it – is a matter of evidence which may be
established during the trial on the merits.
Aggrieved, the RCA filed a motion for reconsideration, which the trial
court denied in an Order17 dated July 24, 2001. Thereafter, the RCA filed
with the CA a petition for certiorari with prayer for preliminary injunction. 18
On March 18, 2002, the CA promulgated the assailed Decision,19 the
dispositive portion of which reads:
WHEREFORE, for lack of merit, the petition is hereby DISMISSED.
SO ORDERED.20
A motion for reconsideration21 of the Decision was filed by the RCA.
However, in the Resolution22 dated May 30, 2002, the CA denied the
motion for lack of merit. Hence, the RCA filed the present petition for
review on certiorari,23 docketed as G.R. No. 153829, assailing the
Decision of the CA, as well as its Resolution denying the motion for
reconsideration.
On January 14, 2004, we resolved to consolidate G.R. Nos. 160909 and
153829.24 Subsequently, the Court resolved to treat the petition for
injunction with prayer for the issuance of a TRO in G.R. No. 160909 as a
motion for the issuance of a TRO and/or writ of preliminary injunction in
G.R. No. 153829.25
The RCA raises the following issues:
(A) WHETHER OR NOT CIVIL CASE NO. 01-1046(M) FOR QUIETING
OF TITLE AND DECLARATION OF NULLITY OF TITLE IS LEGALLY
DISMISSIBLE FOR VIOLATION OF THE VARIOUS PROVISIONS OF
THE RULES OF COURT;
and
(B) WHETHER OR NOT THE CIVIL ACTION (THE ABOVE MENTIONED
CIVIL CASE NO. 01-1046[M]) FILED BY PRIVATE RESPONDENTS
CONSTITUTES A COLLATERAL ATTACK ON PETITIONER'S TITLE.26
Essentially, the issue before us is whether the CA erred in not holding
that the RTC committed grave abuse of discretion in denying the motion
to dismiss filed by the RCA.
We affirm the ruling of the CA.
Well-entrenched in our jurisdiction is the rule that the trial court’s denial of
a motion to dismiss cannot be questioned in a certiorari proceeding under
Rule 65 of the 1997 Rules of Civil Procedure, as amended. This is
because a certiorari writ is a remedy designed to correct errors of
jurisdiction and not errors of judgment. The appropriate course of action
of the movant in such event is to file an answer and interpose as
affirmative defenses the objections raised in the motion to dismiss. If,
later, the decision of the trial judge is adverse, the movant may then
elevate on appeal the same issues raised in the motion. 27
The only exception to this rule is when the trial court gravely abused its
discretion in denying the motion.28 This exception is, nevertheless,
applied sparingly, and only in instances when there is a clear showing
that the trial court exercised its judicial power in an arbitrary or despotic
manner by reason of passion or personal hostility. 29 Further, the abuse of
the court's discretion must be so patent and gross as to amount to an
evasion of a positive duty or a virtual refusal to perform the duty enjoined
by, or to act at all in contemplation of, law. 30
Here, in dismissing the petition for certiorari, the CA did not find grave
abuse of discretion on the part of the RTC. The appellate court was not
convinced with the RCA’s argument that plaintiffs failed to comply with
the condition precedent provided in Article 47731 of the Civil
Code because they allegedly did not have legal or equitable title to, or
interest in the real property. The CA explained that the requirement
stated in Article 477 is not a condition precedent before one can file an
action for quieting of title. Rather, it is a requisite for an action to quiet title
to prosper and the existence or nonexistence of the requisite should be
determined only after trial on the merits. The CA also agreed with the trial
court in ruling that the RCA cannot raise in a motion to dismiss the
ground that the complaint is already barred by laches for it still remains to
be established during trial how long the plaintiffs have slept on their
rights, if such be the case. Evidently, the CA is correct in finding that the
denial by the RTC of the RCA’s motion to dismiss is not tainted with
grave abuse of discretion.
Next, the RCA submits that an action for quieting of title is a special civil
action covered by Rule 63, while an action for declaration of nullity of title
is governed by ordinary rules. Thus, it contends that these cases should
have been dismissed for violation of the rule on joinder of actions under
Section 5, Rule 2 of the 1997 Rules of Civil Procedure, as amended,
which requires that the joinder shall not include special civil actions
governed by special rules. Such contention, however, is utterly bereft of
merit and insufficient to show that the CA erred in upholding the trial
court’s decision. Section 6 of Rule 2 explicitly provides that misjoinder of
causes of action is not a ground for dismissal of an action.
The RCA likewise asserts that the case for quieting of title is a collateral
attack on its title which is prohibited by law. However, we agree with the
CA in holding that the complaint against the RCA does not amount to a
collateral attack because the action for the declaration of nullity of OCT
No. 17629 is a clear and direct attack on its title.
An action is deemed an attack on a title when its objective is to nullify the
title, thereby challenging the judgment pursuant to which the title was
decreed. The attack is direct when the objective is to annul or set aside
such judgment, or enjoin its enforcement. On the other hand, the attack is
indirect or collateral when, in an action to obtain a different relief, an
attack on the judgment is nevertheless made as an incident thereof. 32
The complaint filed with the RTC pertinently alleged that the claim of
ownership by the RCA is spurious as its title, denominated as OCT No.
17629, is fake for the following reasons: (1) that the erasures are very
apparent and the title itself is fake; (2) it was made to appear under
Memorandum of Encumbrance Entry No. 1007 that the title is a
reconstituted title when in truth, it is not; and (3) the verification reveals
that there was no petition filed before any court where an order was
issued for the reconstitution and re-issuance of an owner’s duplicate
copy.33 It is thus clear from the foregoing that the case filed questioning
the genuineness of OCT No. 17629 is a direct attack on the title of the
RCA.
As regards the petition docketed as G.R. No. 160909 which this Court
treated as motion for the issuance of a TRO and/or writ of preliminary
injunction, Guinto insists that there is a need to enjoin the sheriff from
enforcing the writ of execution as it would cause grave and irreparable
damage to Guinto, while the RCA would not suffer any damage if it would
later be proved that indeed its title is genuine.
We disagree.
Section 3, Rule 58 of the 1997 Rules of Civil Procedure, as amended,
enumerates the grounds for the issuance of preliminary injunction, viz:
SEC. 3. Grounds for issuance of preliminary injunction. – A preliminary
injunction may be granted when it is established:
(a) That the applicant is entitled to the relief demanded, and the
whole or part of such relief consists in restraining the commission
or continuance of the act or acts complained of, or in requiring the
performance of an act or acts, either for a limited period or
perpetually;
(b) That the commission, continuance or nonperformance of the
act or acts complained of during the litigation would probably
work injustice to the applicant; or
 (c) That a party, court, agency or a person is doing, threatening,
or is attempting to do, or is procuring or suffering to be done,
some act or acts probably in violation of the rights of the applicant
respecting the subject of the action or proceeding, and tending to
render the judgment ineffectual.
And as clearly explained in Ocampo v. Sison Vda. de Fernandez:34
To be entitled to the injunctive writ, the applicant must show that there
exists a right to be protected which is directly threatened by an act sought
to be enjoined. Furthermore, there must be a showing that the invasion of
the right is material and substantial and that there is an urgent and
paramount necessity for the writ to prevent serious damage. The
applicant’s right must be clear and unmistakable. In the absence of a
clear legal right, the issuance of the writ constitutes grave abuse of
discretion. Where the applicant’s right or title is doubtful or disputed,
injunction is not proper. The possibility of irreparable damage without
proof of an actual existing right is not a ground for injunction.
A clear and positive right especially calling for judicial protection must be
shown. Injunction is not a remedy to protect or enforce contingent,
1avvphi1
abstract, or future rights; it will not issue to protect a right not in esse and
which may never arise, or to restrain an act which does not give rise to a
cause of action. There must exist an actual right. There must be a patent
showing by the applicant that there exists a right to be protected and that
the acts against which the writ is to be directed are violative of said right.
In this case, the defendants in the ejectment case possess no such legal
rights that merit the protection of the courts through the writ of preliminary
injunction. The MCTC has already rendered a decision in favor of the
RCA and ordered the defendants therein to vacate the premises. Their
appeal to the RTC was dismissed and the decision has become final.
Evidently, their right to possess the property in question has already been
declared inferior or inexistent in relation to the right of the RCA in the
MCTC decision which has already become final and executory.35
WHEREFORE, the petition in G.R. No. 153829 is DENIED. The Decision
dated March 18, 2002 and the Resolution dated May 30, 2002 of the
Court of Appeals in CA-G.R. SP No. 66974 are AFFIRMED. The motion
for the issuance of a TRO and/or writ of preliminary injunction to enjoin
the sheriff from enforcing the writ of execution in Civil Case No. 2000(23)
is likewise DENIED for lack of merit.
No costs.
SO ORDERED.
MARTIN S. VILLARAMA, JR.
Associate Justice
G.R. No. 156117 May 26, 2005
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
JEREMIAS AND DAVID HERBIETO, respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari, under Rule 45 of
the 1997 Rules of Civil Procedure, seeking the reversal of the Decision of
the Court of Appeals in CA-G.R. CV No. 67625, dated 22 November
2002,1 which affirmed the Judgment of the Municipal Trial Court (MTC) of
Consolacion, Cebu, dated 21 December 1999, 2 granting the application
for land registration of the respondents.
Respondents in the present Petition are the Herbieto brothers, Jeremias
and David, who filed with the MTC, on 23 September 1998, a single
application for registration of two parcels of land, Lots No. 8422 and
8423, located in Cabangahan, Consolacion, Cebu (Subject Lots). They
claimed to be owners in fee simple of the Subject Lots, which they
purchased from their parents, spouses Gregorio Herbieto and Isabel
Owatan, on 25 June 1976.3 Together with their application for
registration, respondents submitted the following set of documents:
(a) Advance Survey Plan of Lot No. 8422, in the name of
respondent Jeremias; and Advance Survey Plan of Lot No. 8423,
in the name of respondent David;4
 (b) The technical descriptions of the Subject Lots; 5
(c) Certifications by the Department of Environment and Natural
Resources (DENR) dispensing with the need for Surveyor's
Certificates for the Subject Lots;6
(d) Certifications by the Register of Deeds of Cebu City on the
absence of certificates of title covering the Subject Lots;7
(e) Certifications by the Community Environment and Natural
Resources Office (CENRO) of the DENR on its finding that the
Subject Lots are alienable and disposable, by virtue of Forestry
Administrative Order No. 4-1063, dated 25 June 1963;8
(f) Certified True Copies of Assessment of Real Property (ARP)
No. 941800301831, in the name of Jeremias, covering Lot No.
8422, issued in 1994; and ARP No. 941800301833, in the name
of David, covering Lot No. 8423, also issued in 1994;9 and
(g) Deed of Definite Sale executed on 25 June 1976 by spouses
Gregorio Herbieto and Isabel Owatan selling the Subject Lots and
the improvements thereon to their sons and respondents herein,
Jeremias and David, for P1,000. Lot No. 8422 was sold to
Jeremias, while Lot No. 8423 was sold to David. 10
On 11 December 1998, the petitioner Republic of the Philippines
(Republic) filed an Opposition to the respondents' application for
registration of the Subject Lots arguing that: (1) Respondents failed to
comply with the period of adverse possession of the Subject Lots
required by law; (2) Respondents' muniments of title were not genuine
and did not constitute competent and sufficient evidence of bona
fide acquisition of the Subject Lots; and (3) The Subject Lots were part of
the public domain belonging to the Republic and were not subject to
private appropriation.11
The MTC set the initial hearing on 03 September 1999 at 8:30 a.m. 12 All
owners of the land adjoining the Subject Lots were sent copies of the
Notice of Initial Hearing.13 A copy of the Notice was also posted on 27
July 1999 in a conspicuous place on the Subject Lots, as well as on the
bulletin board of the municipal building of Consolacion, Cebu, where the
Subject Lots were located.14 Finally, the Notice was also published in the
Official Gazette on 02 August 199915 and The Freeman Banat News on
19 December 1999.16
During the initial hearing on 03 September 1999, the MTC issued an
Order of Special Default,17 with only petitioner Republic opposing the
application for registration of the Subject Lots. The respondents, through
their counsel, proceeded to offer and mark documentary evidence to
prove jurisdictional facts. The MTC commissioned the Clerk of Court to
receive further evidence from the respondents and to submit a Report to
the MTC after 30 days.
On 21 December 1999, the MTC promulgated its Judgment ordering the
registration and confirmation of the title of respondent Jeremias over Lot
No. 8422 and of respondent David over Lot No. 8423. It subsequently
issued an Order on 02 February 2000 declaring its Judgment, dated 21
December 1999, final and executory, and directing the Administrator of
the Land Registration Authority (LRA) to issue a decree of registration for
the Subject Lots.18
Petitioner Republic appealed the MTC Judgment, dated 21 December
1999, to the Court of Appeals.19 The Court of Appeals, in its Decision,
dated 22 November 2002, affirmed the appealed MTC Judgment
reasoning thus:
In the case at bar, there can be no question that the land sought
to be registered has been classified as within the alienable and
disposable zone since June 25, 1963. Article 1113 in relation to
Article 1137 of the Civil Code, respectively provides that "All
things which are within the commerce of men are susceptible of
prescription, unless otherwise provided. Property of the State or
any of its subdivisions of patrimonial character shall not be the
object of prescription" and that "Ownership and other real rights
over immovables also prescribe through uninterrupted adverse
possession thereof for thirty years, without need of title or of good
faith."
As testified to by the appellees in the case at bench, their parents
already acquired the subject parcels of lands, subject matter of
this application, since 1950 and that they cultivated the same and
planted it with jackfruits, bamboos, coconuts, and other trees
(Judgment dated December 21, 1999, p. 6). In short, it is
undisputed that herein appellees or their predecessors-in-interest
had occupied and possessed the subject land openly,
continuously, exclusively, and adversely since 1950.
Consequently, even assuming arguendo that appellees'
possession can be reckoned only from June 25, 1963 or from the
time the subject lots had been classified as within the alienable
 and disposable zone, still the argument of the appellant does not
hold water.
As earlier stressed, the subject property, being alienable since
1963 as shown by CENRO Report dated June 23, 1963, may
now be the object of prescription, thus susceptible of private
ownership. By express provision of Article 1137, appellees are,
with much greater right, entitled to apply for its registration, as
provided by Section 14(4) of P.D. 1529 which allows individuals
to own land in any manner provided by law. Again, even
considering that possession of appelless should only be reckoned
from 1963, the year when CENRO declared the subject lands
alienable, herein appellees have been possessing the subject
parcels of land in open, continuous, and in the concept of an
owner, for 35 years already when they filed the instant application
for registration of title to the land in 1998. As such, this court finds
no reason to disturb the finding of the court a quo.20
The Republic filed the present Petition for the review and reversal of the
Decision of the Court of Appeals, dated 22 November 2002, on the basis
of the following arguments:
First, respondents failed to establish that they and their predecessors-in-
interest had been in open, continuous, and adverse possession of the
Subject Lots in the concept of owners since 12 June 1945 or earlier.
According to the petitioner Republic, possession of the Subject Lots prior
to 25 June 1963 cannot be considered in determining compliance with
the periods of possession required by law. The Subject Lots were
classified as alienable and disposable only on 25 June 1963, per
CENRO's certification. It also alleges that the Court of Appeals, in
applying the 30-year acquisitive prescription period, had overlooked the
ruling in Republic v. Doldol,21 where this Court declared that
Commonwealth Act No. 141, otherwise known as the Public Land Act, as
amended and as it is presently phrased, requires that possession of land
of the public domain must be from 12 June 1945 or earlier, for the same
to be acquired through judicial confirmation of imperfect title.
Second, the application for registration suffers from fatal infirmity as the
subject of the application consisted of two parcels of land individually and
separately owned by two applicants. Petitioner Republic contends that it
is implicit in the provisions of Presidential Decree No. 1529, otherwise
known as the Property Registration Decree, as amended, that the
application for registration of title to land shall be filed by a single
applicant; multiple applicants may file a single application only in case
they are co-owners. While an application may cover two parcels of land, it
is allowed only when the subject parcels of land belong to the same
applicant or applicants (in case the subject parcels of land are co-owned)
and are situated within the same province. Where the authority of the
courts to proceed is conferred by a statute and when the manner of
obtaining jurisdiction is mandatory, it must be strictly complied with or the
proceedings will be utterly void. Since the respondents failed to comply
with the procedure for land registration under the Property Registration
Decree, the proceedings held before the MTC is void, as the latter did not
acquire jurisdiction over it.
I
Jurisdiction
Addressing first the issue of jurisdiction, this Court finds that the MTC had
no jurisdiction to proceed with and hear the application for registration
filed by the respondents but for reasons different from those presented by
petitioner Republic.
A. The misjoinder of causes of action and parties does not affect the
jurisdiction of the MTC to hear and proceed with respondents' application
for registration.
Respondents filed a single application for registration of the Subject Lots
even though they were not co-owners. Respondents Jeremias and David
were actually seeking the individual and separate registration of Lots No.
8422 and 8423, respectively.
Petitioner Republic believes that the procedural irregularity committed by
the respondents was fatal to their case, depriving the MTC of jurisdiction
to proceed with and hear their application for registration of the Subject
Lots, based on this Court's pronouncement in Director of Lands v. Court
of Appeals,22 to wit:
. . . In view of these multiple omissions which constitute non-
compliance with the above-cited sections of the Act, We rule that
said defects have not invested the Court with the authority or
jurisdiction to proceed with the case because the manner or
mode of obtaining jurisdiction as prescribed by the statute which
is mandatory has not been strictly followed, thereby rendering all
proceedings utterly null and void.
This Court, however, disagrees with petitioner Republic in this regard.
This procedural lapse committed by the respondents should not affect the
jurisdiction of the MTC to proceed with and hear their application for
registration of the Subject Lots.
The Property Registration Decree23 recognizes and expressly allows the
following situations: (1) the filing of a single application by several
applicants for as long as they are co-owners of the parcel of land sought
to be registered;24 and (2) the filing of a single application for registration
of several parcels of land provided that the same are located within the
same province.25 The Property Registration Decree is silent, however, as
to the present situation wherein two applicants filed a single application
for two parcels of land, but are seeking the separate and individual
registration of the parcels of land in their respective names.
Since the Property Registration Decree failed to provide for such a
situation, then this Court refers to the Rules of Court to determine the
proper course of action. Section 34 of the Property Registration Decree
itself provides that, "[t]he Rules of Court shall, insofar as not inconsistent
with the provisions of this Decree, be applicable to land registration and
cadastral cases by analogy or in a suppletory character and whenever
practicable and convenient."
Considering every application for land registration filed in strict
accordance with the Property Registration Decree as a single cause of
action, then the defect in the joint application for registration filed by the
respondents with the MTC constitutes a misjoinder of causes of action
and parties. Instead of a single or joint application for registration,
respondents Jeremias and David, more appropriately, should have filed
separate applications for registration of Lots No. 8422 and 8423,
respectively.
Misjoinder of causes of action and parties do not involve a question of
jurisdiction of the court to hear and proceed with the case.26 They are not
even accepted grounds for dismissal thereof. 27 Instead, under the Rules
of Court, the misjoinder of causes of action and parties involve an implied
admission of the court's jurisdiction. It acknowledges the power of the
court, acting upon the motion of a party to the case or on its own
initiative, to order the severance of the misjoined cause of action, to be
proceeded with separately (in case of misjoinder of causes of action);
and/or the dropping of a party and the severance of any claim against
said misjoined party, also to be proceeded with separately (in case of
misjoinder of parties).
The misjoinder of causes of action and parties in the present Petition may
have been corrected by the MTC motu propio or on motion of the
petitioner Republic. It is regrettable, however, that the MTC failed to
detect the misjoinder when the application for registration was still
pending before it; and more regrettable that the petitioner Republic did
not call the attention of the MTC to the fact by filing a motion for
severance of the causes of action and parties, raising the issue of
misjoinder only before this Court.
B. Respondents, however, failed to comply with the publication
requirements mandated by the Property Registration Decree, thus, the
MTC was not invested with jurisdiction as a land registration court.
Although the misjoinder of causes of action and parties in the present
Petition did not affect the jurisdiction of the MTC over the land registration
proceeding, this Court, nonetheless, has discovered a defect in the
publication of the Notice of Initial Hearing, which bars the MTC from
assuming jurisdiction to hear and proceed with respondents' application
for registration.
A land registration case is a proceeding in rem,28 and jurisdiction in
rem cannot be acquired unless there be constructive seizure of the land
through publication and service of notice. 29
Section 23 of the Property Registration Decree requires that the public be
given Notice of the Initial Hearing of the application for land registration
by means of (1) publication; (2) mailing; and (3) posting. Publication of
the Notice of Initial Hearing shall be made in the following manner:
1. By publication. –
Upon receipt of the order of the court setting the time for initial
hearing, the Commissioner of Land Registration shall cause a
notice of initial hearing to be published once in the Official
Gazette and once in a newspaper of general circulation in the
Philippines: Provided, however, that the publication in the Official
Gazette shall be sufficient to confer jurisdiction upon the court.
Said notice shall be addressed to all persons appearing to have
an interest in the land involved including the adjoining owners so
far as known, and "to all whom it may concern." Said notice shall
also require all persons concerned to appear in court at a certain
date and time to show cause why the prayer of said application
shall not be granted.
Even as this Court concedes that the aforequoted Section 23(1) of the
Property Registration Decree expressly provides that publication in the
Official Gazette shall be sufficient to confer jurisdiction upon the land
registration court, it still affirms its declaration in Director of Lands v.
Court of Appeals30 that publication in a newspaper of general circulation
is mandatory for the land registration court to validly confirm and register
the title of the applicant or applicants. That Section 23 of the Property
Registration Decree enumerated and described in detail the requirements
of publication, mailing, and posting of the Notice of Initial Hearing, then all
such requirements, including publication of the Notice in a newspaper of
general circulation, is essential and imperative, and must be strictly
complied with. In the same case, this Court expounded on the reason
behind the compulsory publication of the Notice of Initial Hearing in a
newspaper of general circulation, thus –
It may be asked why publication in a newspaper of general
circulation should be deemed mandatory when the law already
requires notice by publication in the Official Gazette as well as by
mailing and posting, all of which have already been complied with
in the case at hand. The reason is due process and the reality
that the Official Gazette is not as widely read and circulated as
newspaper and is oftentimes delayed in its circulation, such that
the notices published therein may not reach the interested parties
on time, if at all. Additionally, such parties may not be owners of
neighboring properties, and may in fact not own any other real
estate. In sum, the all encompassing in rem nature of land
registration cases, the consequences of default orders issued
against the whole world and the objective of disseminating the
notice in as wide a manner as possible demand a mandatory
construction of the requirements for publication, mailing and
posting.31
In the instant Petition, the initial hearing was set by the MTC, and was in
fact held, on 03 September 1999 at 8:30 a.m. While the Notice thereof
was printed in the issue of the Official Gazette, dated 02 August 1999,
and officially released on 10 August 1999, it was published in The
Freeman Banat News, a daily newspaper printed in Cebu City and
circulated in the province and cities of Cebu and in the rest of Visayas
and Mindanao, only on 19 December 1999, more than three months after
the initial hearing.
Indubitably, such publication of the Notice, way after the date of the initial
hearing, would already be worthless and ineffective. Whoever read the
Notice as it was published in The Freeman Banat News and had a claim
to the Subject Lots was deprived of due process for it was already too
late for him to appear before the MTC on the day of the initial hearing to
oppose respondents' application for registration, and to present his claim
and evidence in support of such claim. Worse, as the Notice itself states,
should the claimant-oppositor fail to appear before the MTC on the date
of initial hearing, he would be in default and would forever be barred from
contesting respondents' application for registration and even the
registration decree that may be issued pursuant thereto. In fact, the MTC
did issue an Order of Special Default on 03 September 1999.
The late publication of the Notice of Initial Hearing in the newspaper of
general circulation is tantamount to no publication at all, having the same
ultimate result. Owing to such defect in the publication of the Notice, the
MTC failed to constructively seize the Subject Lots and to acquire
jurisdiction over respondents' application for registration thereof.
Therefore, the MTC Judgment, dated 21 December 1999, ordering the
registration and confirmation of the title of respondents Jeremias and
David over Lots No. 8422 and 8423, respectively; as well as the MTC
Order, dated 02 February 2000, declaring its Judgment of 21 December
1999 final and executory, and directing the LRA Administrator to issue a
decree of registration for the Subject Lots, are both null and void for
having been issued by the MTC without jurisdiction.
II
Period of Possession
Respondents failed to comply with the required period of possession of
the Subject Lots for the judicial confirmation or legalization of imperfect or
incomplete title.
While this Court has already found that the MTC did not have jurisdiction
to hear and proceed with respondents' application for registration, this
Court nevertheless deems it necessary to resolve the legal issue on the
required period of possession for acquiring title to public land.
Respondents' application filed with the MTC did not state the statutory
basis for their title to the Subject Lots. They only alleged therein that they
obtained title to the Subject Lots by purchase from their parents, spouses
Gregorio Herbieto and Isabel Owatan, on 25 June 1976. Respondent
Jeremias, in his testimony, claimed that his parents had been in
possession of the Subject Lots in the concept of an owner since 1950. 32
Yet, according to the DENR-CENRO Certification, submitted by
respondents themselves, the Subject Lots are "within Alienable and
Disposable, Block I, Project No. 28 per LC Map No. 2545 of Consolacion,
Cebu certified under Forestry Administrative Order No. 4-1063, dated
June 25, 1963. Likewise, it is outside Kotkot-Lusaran Mananga
Watershed Forest Reservation per Presidential Proclamation No. 932
dated June 29, 1992."33 The Subject Lots are thus clearly part of the
public domain, classified as alienable and disposable as of 25 June 1963.
As already well-settled in jurisprudence, no public land can be acquired
by private persons without any grant, express or implied, from the
government;34 and it is indispensable that the person claiming title to
public land should show that his title was acquired from the State or any
other mode of acquisition recognized by law. 35
The Public Land Act, as amended, governs lands of the public domain,
except timber and mineral lands, friar lands, and privately-owned lands
which reverted to the State.36 It explicitly enumerates the means by which
public lands may be disposed, as follows:
(1) For homestead settlement;
(2) By sale;
(3) By lease;
(4) By confirmation of imperfect or incomplete titles;
(a) By judicial legalization; or
(b) By administrative legalization (free patent). 37
Each mode of disposition is appropriately covered by separate chapters
of the Public Land Act because there are specific requirements and
application procedure for every mode.38 Since respondents herein filed
their application before the MTC,39 then it can be reasonably inferred that
they are seeking the judicial confirmation or legalization of their imperfect
or incomplete title over the Subject Lots.
Judicial confirmation or legalization of imperfect or incomplete title to
land, not exceeding 144 hectares,40 may be availed of by persons
identified under Section 48 of the Public Land Act, as amended by
Presidential Decree No. 1073, which reads –
Section 48. The following-described citizens of the Philippines,
occupying lands of the public domain or claiming to own any such
lands or an interest therein, but whose titles have not been
perfected or completed, may apply to the Court of First Instance
of the province where the land is located for confirmation of their
claims and the issuance of a certificate of title thereafter, under
the Land Registration Act, to wit:
(a) [Repealed by Presidential Decree No. 1073].
(b) Those who by themselves or through their
predecessors-in-interest have been in open, continuous,
exclusive, and notorious possession and occupation of
agricultural lands of the public domain, under a bona
fide claim of acquisition of ownership, since June 12,
1945, or earlier, immediately preceding the filing of the
applications for confirmation of title, except when
prevented by war or force majeure. These shall be
conclusively presumed to have performed all the
conditions essential to a Government grant and shall be
entitled to a certificate of title under the provisions of this
chapter.
(c) Members of the national cultural minorities who by
themselves or through their predecessors-in-interest have
been in open, continuous, exclusive and notorious
possession and occupation of lands of the public domain
suitable to agriculture whether disposable or not, under
a bona fide claim of ownership since June 12, 1945 shall
be entitled to the rights granted in subsection (b) hereof.
Not being members of any national cultural minorities, respondents may
only be entitled to judicial confirmation or legalization of their imperfect or
incomplete title under Section 48(b) of the Public Land Act, as amended.
Section 48(b), as amended, now requires adverse possession of the land
since 12 June 1945 or earlier. In the present Petition, the Subject Lots
became alienable and disposable only on 25 June 1963. Any period of
possession prior to the date when the Subject Lots were classified as
alienable and disposable is inconsequential and should be excluded from
the computation of the period of possession; such possession can never
ripen into ownership and unless the land had been classified as alienable
and disposable, the rules on confirmation of imperfect title shall not apply
thereto.41 It is very apparent then that respondents could not have
complied with the period of possession required by Section 48(b) of the
Public Land Act, as amended, to acquire imperfect or incomplete title to the Public Land Act and the procedural requirements under the Property
the Subject Lots that may be judicially confirmed or legalized. Registration Decree.

The confirmation of respondents' title by the Court of Appeals was based
on the erroneous supposition that respondents were claiming title to the
Subject Lots under the Property Registration Decree. According to the
Decision of the Court of Appeals, dated 22 November 2002, Section
14(4) of the Property Registration Decree allows individuals to own land
in any other manner provided by law. It then ruled that the respondents,
having possessed the Subject Lots, by themselves and through their
predecessors-in-interest, since 25 June 1963 to 23 September 1998,
when they filed their application, have acquired title to the Subject Lots by
extraordinary prescription under Article 1113, in relation to Article 1137,
both of the Civil Code.42
The Court of Appeals overlooked the difference between the Property
Registration Decree and the Public Land Act. Under the Property
Registration Decree, there already exists a title which is confirmed by the
court; while under the Public Land Act, the presumption always is that the
land applied for pertains to the State, and that the occupants and
possessors only claim an interest in the same by virtue of their imperfect
title or continuous, open, and notorious possession. 43 As established by
this Court in the preceding paragraphs, the Subject Lots respondents
wish to register are undoubtedly alienable and disposable lands of the
public domain and respondents may have acquired title thereto only
under the provisions of the Public Land Act.
Moreover, provisions of the Civil Code on prescription of ownership and
other real rights apply in general to all types of land, while the Public
Land Act specifically governs lands of the public domain. Relative to one
another, the Public Land Act may be considered a special law45 that must
take precedence over the Civil Code, a general law. It is an established
rule of statutory construction that between a general law and a special
law, the special law prevails – Generalia specialibus non derogant.46
WHEREFORE, based on the foregoing, the instant Petition is GRANTED.
The Decision of the Court of Appeals in CA-G.R. CV No. 67625, dated 22
November 2002, is REVERSED. The Judgment of the MTC of
Consolacion, Cebu in LRC Case No. N-75, dated 21 December 1999,
and its Order, dated 02 February 2000 are declared NULL AND VOID.
Respondents' application for registration is DISMISSED.
SO ORDERED.
Puno, Acting C.J., (Chairman), Austria-Martinez, and Callejo, Sr.,
JJ., concur.
Tinga, J., out of the country.

However, it must be clarified herein that even though respondents may

acquire imperfect or incomplete title to the Subject Lots under the Public
Land Act, their application for judicial confirmation or legalization thereof
must be in accordance with the Property Registration Decree, for Section
50 of the Public Land Act reads –

SEC. 50. Any person or persons, or their legal representatives or

successors in right, claiming any lands or interest in lands under
the provisions of this chapter, must in every case present an
application to the proper Court of First Instance, praying that the
validity of the alleged title or claim be inquired into and that a
certificate of title be issued to them under the provisions of the
Land Registration Act.44

Hence, respondents' application for registration of the Subject Lots must

have complied with the substantial requirements under Section 48(b) of