RULE 36:

JUDGMENTS, FINAL ORDERS and ENTRY THEREOF

Table of Contents
1. Mercury Drug Corp. v. Spouses Huang, G.R. No. 197654, [August 30, 2017]..............................................................................2
2. De Ocampo v. Radio Philippines Network, Inc., G.R. No. 192947, [December 9, 2015].............................................................11
3. Mocorro, Jr. v. Ramirez, G.R. No. 178366, July 28, 2008............................................................................................................15
4. Intestate Estate of Sian v. Philippine National Bank, G.R. No. 168882, January 31, 2007.........................................................20
5. Khemani v. Heirs of Trinidad, G.R. No. 147340, December 13, 2007.........................................................................................23
6. Filinvest Land, Inc. v. Court of Appeals, G.R. No. 142439, December 6, 2006...........................................................................28
7. Dole Philippines v. Esteva, G.R. No. 161115, November 30, 2006.............................................................................................34
8. Calalang v. Register of Deeds of Quezon City, G.R. No. 76265 & 83280, March 11, 1994.........................................................52
9. Jarantilla v. Court of Appeals, G.R. No. 80194, March 21, 1989, citing People v. Olarte, G.R. No. L-22465, February 28, 1967
..................................................................................................................................................................................................... 60
10. Acosta v. Commission on Elections, G.R. No. 131488, [August 3, 1998]....................................................................................64
11. Maria vs Ubay, A.M No 595 CFI, December 11 1978.................................................................................................................. 66
12. De Leon v. Court of Appeals, G.R. No. 138884, [June 6, 2002]..................................................................................................70

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 Mercury Drug Corp. v. Spouses Huang, G.R. No. 197654, [August 30, 2017]

[ G.R. No. 197654. August 30, 2017 ]

MERCURY DRUG CORPORATION AND ROLANDO J. DEL ROSARIO, PETITIONERS, VS. SPOUSES RICHARD Y. HUANG &
CARMEN G. HUANG, AND STEPHEN G. HUANG, RESPONDENTS.

DECISION

LEONEN, J.:

A judgment that lapses into finality becomes immutable and unalterable. It can neither be modified nor disturbed by courts in any
manner even if the purpose of the modification is to correct perceived errors of fact or law. Parties cannot circumvent this principle by
assailing the execution of the judgment. What cannot be done directly cannot be done indirectly.

This is a Petition for Review on Certiorari1 arising from the execution of a final and executory judgment for damages. The Petition
particularly assails the January 20, 2011 Decision2 and the July 6, 2011 Resolution3 of the Court of Appeals in CA-GR. SP No.
106647, which sustained the denial of the Motion to Quash Writ of Execution, Motion for Inhibition, and Urgent Motion to Defer the
Implementation of Writ of Execution filed by Mercury Drug Corporation and Rolando J. Del Rosario.4

On April 29, 1997, Stephen Huang (Stephen) and his parents, Spouses Richard Y. Huang and Carmen G. Huang, filed a complaint
for damages based on quasi-delict against Mercury Drug Corporation (Mercury Drug) and Rolando J. Del Rosario (Del
Rosario).5 Mercury Drug was the registered owner of a six (6)-wheeler truck driven by Del Rosario, which figured in an accident with
Stephen's car on the night of December 20, 1996. As a result of the tragic incident, Stephen suffered serious spinal cord injuries. He is
now a paraplegic.6

After trial, the Regional Trial Court rendered a Decision7 dated September 29, 2004 finding Mercury Drug and Del Rosario jointly
and severally liable for actual damages, compensatory damages, moral damages, exemplary damages, and attorney's fees and
litigation expenses.8 The dispositive portion of this Decision stated:

WHEREFORE, judgment is rendered finding defendants Mercury Drug Corporation, Inc. and Rolando del Rosario, jointly and severally
liable to pay plaintiffs Spouses Richard Y. Huang and Carmen G. Huang, and Stephen Huang the following amounts:

1. Two Million Nine Hundred Seventy[-]Three Thousand Pesos (P2,973,000.00) actual damages;

2. As compensatory damages:

a. Twenty[-]Three Million Four Hundred Sixty[-]One Thousand, and Sixty-Two Pesos (P23,461,062.00) for life care cost of Stephen;

b. Ten Million Pesos (P10,000,000.00) as and for lost or impaired earning capacity of Stephen;

3. Four Million Pesos (P4,000,000.00) as moral damages;

4. Two Million Pesos (P2,000,000.00) as exemplary damages; and

5. One Million Pesos (P1,000,000.00) as attorney[']s fees and litigation expense[s].

The defendants' counterclaim is DISMISSED.

SO ORDERED.9

The Court of Appeals affirmed the Regional Trial Court Decision but reduced the award of moral damages from P4,000,000.00 to
P1,000,000.00. Mercury Drug and Del Rosario elevated the Court of Appeals Decision to this Court for review.10

On June 22, 2007, this Court in Mercury Drug Corporation v. Spouses Huang11 affirmed the Decision of the Court of
Appeals.12 Mercury Drug and Del Rosario moved for reconsideration and/or new trial arguing that Stephen

was not entitled to the entire monetary award because he had partially recovered from his injuries.13 The Motion was denied with
finality in the Resolution dated August 8, 2007.14 Entry of judgment was made on October 3, 2007.15

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 On February 1, 2008, Stephen and his parents moved for the execution of the judgment16 before the Regional Trial Court of
Makati to which Mercury Drug and Del Rosario filed an opposition.17

The Regional Trial Court granted the Motion for Execution in the Order18 dated July 21, 2008. The corresponding Writ of
Execution was then issued,19 thus:

You are commanded to demand from MERCURY DRUG CORPORATION and ROLANDO J. DEL ROSARIO at
#7 Mercury Avenue, Libis, Quezon City and C. Valle Street, Dolores. Taytay, Rizal, respectively, the judgment
obligors, the immediate payment in full of the sums of TWO MILLION NINE HUNDRED SEVENTY[-]THREE
THOUSAND PESOS (P2,973,000.00), Philippine Currency, as actual damages; TWENTY[-]THREE MILLION FOUR
HUNDRED SIXTY[-]ONE THOUSAND AND SIXTY[-]TWO PESOS (P23,461,062.00) for life care cost of Stephen;
TEN MILLION PESOS (P10,000,000.00) as and for lost or impaired earning capacity of Stephen; ONE MILLION
PESOS (P1,000,000.00) as moral damages; TWO MILLION PESOS (P2,000,000.00) as exemplary damages; and
ONE MILLION PESOS (P1,000,000.00) as attorney's fees and litigation expense, together with your lawful fees for
service of this execution, which SPOUSES RICHARD Y. HUANG & CARMEN G HUANG and STEPHEN G.
HUANG, the judgment obligees, recovered in this case against said judgment obligors, and to tender the same to
said judgment obligees and return this writ, with the lawful fees, to this Court within thirty (30) days from the date of
receipt hereof with your proceedings indorsed thereon.20

On August 26, 2008, Mercury Drug and Del Rosario moved to quash the Writ of Execution21 as it allegedly contravened the tenor
of the judgment.1aшphi1 They also moved for the inhibition of Presiding Judge22 Gina M. Bibat-Palamos.23 Pending the resolution of
these motions, the sheriff began to garnish Mercury Drug and Del Rosario's bank accounts.24 Mercury Drug and Del Rosario filed an
urgent motion to defer the implementation of the Writ of Execution.25 All three (3) motions were denied by the Regional Trial
Court.26 Mercury Drug and Del Rosario then moved for reconsideration but their motion was denied.27

As a result of the garnishment proceedings, Citibank N.A. issued in favor of Richard Y. Huang a Manager's Check in the amount of
P40,434,062.00.28 Afterwards, Stephen and his parents filed a Satisfaction of Judgment29 before the Regional Trial Court.

On December 18, 2008,30 Mercury Drug and Del Rosario filed a Petition for Certiorari31 before the Court of Appeals. They argued
that the Regional Trial Court committed grave abuse of discretion in allowing the execution of the judgment despite clerical errors in the
computation of life care cost and loss of earning capacity.32

In its January 20, 2011 Decision,33 the Court of Appeals denied the Petition for Certiorari holding that the Regional Trial Court did
not commit grave abuse of discretion.34 The Court of Appeals found that "the perceived error in the computation of the award and [its]
correction" entailed a substantial amendment of the judgment sought to be enforced.35 Under the doctrine on immutability of
judgments, courts are precluded from altering or modifying a final and executory judgment.36

Mercury Drug and Del Rosario moved for reconsideration but their Motion was denied in the Reso1ution37 dated July 6, 2011.

On September 1, 2011, Mercury Drug and Del Rosario (petitioners) filed this Petition for Review on Certiorari38 before this Court
to which Stephen and his parents (respondents) filed a Comment.39 Petitioners then filed a Rep1y40 on September 25, 2013.41

In the Resolution42 dated December 11, 2013, this Court gave due course to the Petition and required both parties to submit their
respective memoranda. The parties filed their respective Memoranda on March 14, 2014.43

Petitioners assert that the dispositive portion of the September 29, 2004 Decision and the corresponding Writ of Execution varied
the tenor of the judgment. They point out, in particular, that the amounts of life care cost and loss of earning capacity reflected in the
dispositive portion and the writ of execution do not correspond to those stated in the body of the decision.44

According to petitioners, respondent Stephen is only entitled to a life care cost of P7,102,640.00 instead of P23,461,062.00 based
on his average monthly expenses and his life expectancy.45 Petitioners also point out that the award of P10,000,000.00 as loss of
earning capacity is patently excessive.46 Based on respondent Stephen's life expectancy, projected monthly salary, and the time within
which he could have obtained gainful employment, the award of loss of earning capacity should only be P5,040,000.00.47 Petitioners
claim that there were clerical errors in the computation of life care cost and loss of earning capacity.48 However, at the same time, they
contend that the two (2) monetary awards were not "supported in the body of the decision [or in] the records of the case."49

Assuming that there were no clerical errors, petitioners assert that respondents cannot immediately collect the two (2) monetary
awards in full.50 The amounts of life care cost and loss of earning capacity should be paid in installments or "amortized over the
probable lifetime of Stephen."51 Petitioners, citing Advincula v. Advincula52 and Canonizado v. Benitez,53 argue that life care cost is
similar to judicial support.54 Hence, it should be paid monthly.55 Loss of earning capacity should likewise be amortized since it is akin
to a monthly income.56

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 On the other hand, respondents assert that petitioners are prohibited from questioning the propriety of the monetary awards under
the doctrine of immutability of final judgments.57 There are no clerical errors in the computation of the two (2) monetary
awards.58 Respondents contend that the reduction of these amounts would amount to a substantial amendment of a final and
executory judgment.59

Respondents add that petitioners are estopped from raising the issues in the present Petition because they have been considered
and passed upon by this Court.60 Lastly, respondents disagree that the two (2) monetary awards should be paid on installment
basis.61 The dispositive portion of the judgment sought to be enforced is silent regarding the manner of payment.62 Hence, Rule 39,
Section 9(a) of the Rules of Court63 should govern.64

This case presents the following issues for this Court's resolution:

First, whether or not the case falls under any of the exceptions to the doctrine of immutability of judgments. Subsumed in this issue
is whether or not a clerical error exists that would warrant the modification of the dispositive portion of the judgment;65

Second, whether or not the Writ of Execution conforms to the judgment sought to be enforced; and

Lastly, whether or not the monetary awards in dispute should be paid in installments or in lump sum.66

The Petition is denied.

A final and executory judgment produces certain effects. Winning litigants are entitled to the satisfaction of the judgment through a
writ of execution. On the other hand, courts are barred from modifying the rights and obligations of the parties, which had been
adjudicated upon. They have the ministerial duty to issue a writ of execution to enforce the judgment.

It is a fundamental principle that a judgment that lapses into finality becomes immutable and unalterable.67 The primary
consequence of this principle is that the judgment may no longer be modified or amended by any court in any manner even if the
purpose of the modification or amendment is to correct perceived errors of law or fact.68 This principle known as the doctrine of
immutability of judgment is a matter of sound public policy,69 which rests upon the practical consideration that every litigation must
come to an end.70

The rationale behind the rule was further explained in Social Security System v. Isip,71 thus:

The doctrine of immutability and inalterability of a final judgment has a two-fold purpose: (1) to avoid delay in the administration of
justice and thus, procedurally, to make orderly the discharge of judicial business and (2) to put an end to judicial controversies, at the
risk of occasional errors, which is precisely why courts exist. Controversies cannot drag on indefinitely. The rights and obligations of
every litigant must not hang in suspense for an indefinite period of time.72

The doctrine of immutability of judgment, however, is not an ironclad rule.73 It is subject to several exceptions, namely:

(1) [T]he correction of clerical errors;

(2) [T]he so-called nunc pro tunc entries which cause no prejudice to any party;

(3) [V]oid judgments; and

(4) [W]henever circumstances transpire after the finality of the decision rendering its execution unjust and inequitable.74

I.A

Clerical errors or ambiguities in the dispositive portion of a judgment may result from inadvertence. These errors can be rectified
without violating the doctrine of immutability of judgment provided that the modification does not affect the substance of the
controversy.75

Clerical errors are best exemplified by typographical errors or arithmetic miscalculations.76 They also include instances when
words are interchanged.77

Baguio v. Bandal78 was illustrative. The dispositive portion of the decision ordered the defendants "to deliver the possession of Lot
1868 . . . to [p]laintiffs."79 Upon motion, the trial court subsequently amended Lot 1868 to Lot 1898.80 This Court sustained the
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modification since it was patently clear that the subject of the controversy was Lot 1898.81 The error addressed by the lower court was
"merely clerical and typographical,"82 which did not affect the rights of the parties.

The same rule was applied in Filipino Legion Corporation v. Court of Appeals.83 The dispositive portion of the decision was
modified to reflect the proper description of the documents upon which Filipino Legion Corporation based its claim.84 This Court held
that the modification simply cured an ambiguity but did not operate to reduce the area adjudicated to the corporation:85

It is this last-mentioned rule which respondent Court of Appeals applied when it ordered the amendment of the
disputed portion of its judgment in CA-G.R. 9196-R, and We see no error in its action considering that all what
respondent Court did was to cure an ambiguity and rectify a mistake it had inadvertently made when it referred to the
tax declarations of real property marked as Annexes C, D, and E, as Exhibits C, D, and E instead of Exhibits F, G,
and H, respectively. As indicated earlier, it is obvious that the appellate Court was misguided by the markings
"Annex C", "Annex D", "Annex E", appearing respectively on the face of Exhibits F, G, and H, and these letterings C,
D and E were the ones the Court mistakenly used when it described the exhibits in question in the dispositive portion
of the decision.

The correction of a clerical error is an exception to the general rule that no amendment or correction may be made by the court in
its judgment once the latter had become final.86 (Emphasis in the original)

Clerical errors also contemplate inadvertent omissions that create ambiguity.1aшphi1

In Locsin v. Paredes and Hodges,87 the term "severally" was inserted in the dispositive portion of the judgment.88 Although the
modification changed the import of the judgment's dispositive portion, the allegations in the complaint and the conclusions of fact and
law contained in the decision show that the obligation was solidary.89 Hence, the dispositive portion of the judgment should have
stated that "the debt be paid severally[.]"90

Similarly, in Spouses Mahusay v. B.E. San Diego, Inc.,91 the lower court amended its decision to include payment of "all penalties
and interest due on the unpaid amortizations" under the contracts to sell.92 The modification, according to this Court) was not a
substantial amendment of the judgment,93 thus:

There was nothing substantial to vary, considering that the issues between the parties were deemed resolved
and laid to rest, It is unmistakably clear that petitioners do not deny the execution of the Contracts to Sell and, in fact,
admit their liability for the unpaid amortizations of the lots purchased. . . There was a compelling reason for the CA to
clarify its original Decision to include the payment of all penalties and interest due on the unpaid amortizations, as
provided in the contracts. Considering that the validity of the contracts was never put in question, and there is
nothing on record to suggest that the same may be contrary to law, morals, public order, or public policy, there is
nothing unlawful in the stipulation requiring the payment of interest/penalty at the rate agreed upon in the contract of
the parties.94 (Citation omitted)

In determining whether there are clerical errors or ambiguities in the dispositive portion of the judgment that should be rectified,
courts should refer primarily to "the court's findings of facts and conclusions of law as expressed in the body of the decision."95 The
parties' pleadings may also be consulted if necessary.96

I.B

"Nunc pro tunc" is a Latin phrase that means "now for then."97 A judgment nunc pro tunc is made to enter into
the record an act previously done by the court, which had been omitted either through inadvertence or mistake.98 It
neither operates to correct judicial errors nor to "supply omitted action by the court."99 Its sole purpose is to make a
present record of a "judicial action which has been actually taken."100

The concept of nunc pro tunc judgments was sufficiently explained in Lichauco v. Tan Pho,101 thus:

[A judgment nunc pro tunc] may be used to make the record speak the truth, but not to make it speak what it did not speak but
ought to have spoken. If the court has not rendered a judgment that it might or should have rendered, or if it has rendered an imperfect
or improper judgment, it has no power to remedy these errors or omissions by ordering the entry nunc pro tunc of a proper judgment.
Hence a court in entering a judgment nunc pro tunc has no power to construe what the judgment means, but only to enter of record
such judgment as had been formerly rendered, but which had not been entered of record as rendered. In all cases the exercise of the
power to enter judgments nunc pro tunc presupposes the actual rendition of a judgment, and a mere right to a judgment will not furnish
the basis for such an entry.

....

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 If the court has omitted to make an order, which it might or ought to have made, it cannot, at a subsequent term, be made nunc
pro tunc. According to some authorities, in all cases in which an entry nunc pro tunc is made, the record should show the facts which
authorize the entry, 'but other courts hold that in entering an order nunc pro tunc the court is not confined to an examination of the
judges minutes, or written evidence, but may proceed on any satisfactory evidence, including parol testimony. In the absence of a
statute or rule of court requiring it, the failure of the judge to sign the journal entries or the record does not affect the force of the order
grante[d].

....

The object of a judgment nunc pro tunc is not the rendering of a new judgment and the ascertainment and determination of new
rights, but is one placing in proper form on the record, the judgment that had been previously rendered, to make it speak the truth, so
as to make it show what the judicial action really was, not to correct judicial errors, such as to render a judgment which the court ought
to have rendered, in place of the one it did erroneously render, nor to supply nonaction by the court, however erroneous the judgment
may have been.102 (Emphasis supplied, citations omitted)

The exercise of issuing nunc pro tunc orders or judgments is narrowly confined to cases where there is a need to correct mistakes
or omissions arising from inadvertence so that the record reflects judicial action, which had previously been taken. Furthermore, nunc
pro tunc judgments or orders can only be rendered if none of the parties will be prejudiced.103

Parties seeking the issuance of nunc pro tunc judgments or orders must allege and prove that the court took a particular action and
that the action was omitted through inadvertence.104 On the other hand, courts must ensure that the matters sought to be entered are
supported by facts or data.105

This may be accomplished by referring to the records of the case. This requirement was emphasized in Lichauco, thus:

[F]or the entry of a nunc pro tunc order, it is required that the record present some visible data of the order
which it is sought to be supplied by said nunc pro tunc order, whether it is the data referring to the. whole of the order
or merely limited to such portion thereof, that the part lacking from the record constitutes a necessary part, an
inevitable and ordinary consequence of the portion appearing in the record.106

Hence, courts cannot render a judgment of order nunc pro tunc in the absence of data regarding the judicial act sought to be
recorded. In Lichauco, this Court invalidated the nunc pro tunc order issued by the trial court because there was "no data, partial or
integral, in the record regarding the judicial act . . . in question."107 There was no visible data appearing in the case records to
establish that the trial court actually approved the lease contract in dispute.108

The same standard was applied in Maramba v. Lozano,109 where a party sought the issuance of a nunc pro tunc order to strike
out the name of a deceased defendant in the judgment's dispositive portion.110 This Court rejected the prayer and underscored
that nunc pro tunc orders can only be issued when there is evidence that the judicial act in question was previously made.111

I.C

The doctrine of immutability of judgment is premised upon the existence of a final and executory judgment. It is, therefore,
inapplicable where the judgment never attains finality, as in the case of void judgments.

Void judgments produce "no legal [or] binding effect."112 Hence, they are deemed non-existent.113 They may result from the "lack
of jurisdiction over the subject matter" or a lack of jurisdiction over the person of either of the parties.114 They may also arise if they
were rendered with grave abuse of discretion amounting to lack or excess of jurisdiction.115

In Gomez v. Concepcion,116 this Court explained the nature and the effects of void judgments, thus:

A void judgment is in legal effect no judgment. B[y] it no rights are divested. From it no rights can be obtained. Being worthless in
itself, all proceedings founded upon, it [is] equally worthless. It neither binds nor bars any one. All acts performed under it and all claims
flowing out of it are void.117

A void judgment never acquires the status of a final and executory judgment.118 Parties may, therefore, challenge them without
running afoul of the doctrine of immutability of judgment. A direct attack may be brought either through a petition for annulment of
judgment under Rule 47 of the Rules of Court or through a petition for certiorari under Rule 65 of the Rules of Court.119 A void
judgment may also be challenged collaterally "by assailing its validity in another action where it is invoked."120

In Gonzales v. Solid Cement Corporation,121 this Court held that a judgment or order that was issued in excess of jurisdiction has
no legal effect and "cannot likewise be perpetuated by a simple reference to the principle of immutability of final judgment."122

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 I.D

The happening of a supervening event is likewise a ground to set aside or amend a final and executory judgment.

This exception was explained in Natalia Realty, Inc. v. Court of Appeals,123 thus:

One of the exceptions to the principle of immutability of final judgments is the existence of supervening events.
Supervening events refer to facts which transpire after judgment has become final and executory or to new
circumstances which developed after the judgment has acquired finality, including matters which the parties were not
aware of prior to or during the trial as they were not yet in existence at that time.124 (Citation omitted)

Parties must establish two (2) conditions in order to properly invoke the exception on supervening events. First, the fact
constituting the supervening event must have transpired after the judgment has become final and executory. It should not have existed
prior to the finality of the judgment.125 Second, it must be shown that the supervening event "affects or changes the substance of the
judgment and renders its execution inequitable."126

In Roman Catholic Archbishop of Caceres v. Heirs of Manuel Abella,127 a civil case for quieting of title was considered as a
supervening event that rendered a previous case for forcible entry unenforceable through execution.128 This Court held that the
judgment in the case for quieting of title is a "new circumstance which developed after the finality of the judgment in the forcible entry
[case] . . . [which] conclusively resolved the issue of ownership over the subject land, and the concomitant right of possession[.]" The
execution of the judgment in the forcible entry case would, therefore, be unjust and inequitable to the respondents "who had been
conclusively declared the owners and rightful possessors of the disputed land."129

Bani Rural Bank. Inc. v. De Guzman130 is another instance where the exception was applied. The development of strained
relations between the employer and the employee was considered as a supervening event that rendered the execution of the judgment,
ordering the reinstatement of the employee, impossible.131

On the other hand, the exception was found to be inapplicable in Javier v. Court of Appeals.132 The parties in Javier sought to bar
the enforcement of an alias writ of execution. They anchored their argument on a deed of sale that purportedly revoked a previous
one.133 In determining whether the case fell under the exception, this Court declared that:

The supervening event which would justify the suspension or nullification of the execution of a final and
executory judgment refers to facts and events transpiring after the judgment or order had become executory. These
circumstances affect or change the substance of the judgment and render its execution inequitable.

....

In the present cases, the execution or existence of the alleged deed of sale of 4 March 1975 cannot be
considered a supervening event that will alter the finality and the executory nature of the decisions in question. The
records show that Luz Javier filed the complaint for rescission of the Deed of Absolute Sale of 8 March 1972 on 5
August 1976. All throughout the proceedings from the lower court to the appellate courts in 1976 (specifically during
the lifetime of Luz Javier, who died on 9 June 1980), to this Court in 1987, Ursula and the legal heirs remained silent
about the existence of the alleged deed of sale of 4 March 1975.134 (Citations omitted)

Aside from these well-known exceptions, several cases have also been excluded from the application of the doctrine of
immutability of judgment in the interest of substantial justice. The exception sometimes applied when a party's liberty is involved or
when there are special and compelling circumstances.135 For instance, judgments of conviction that have attained finality were
modified to correct an erroneous penalty previously imposed.136

Judgments may also be modified or amended to supply operational matters that are deemed necessary to carry out the decision
into effect.137

I.E

In the present case, petitioners assert that the case falls under the first exception: that clerical errors attended the computation of
the amounts awarded as life care cost and loss of earning capacity.138 The resolution of the present petition would, therefore, require a
comparison between the dispositive portion and the body of the judgment.

The dispositive portion of the September 29, 2004 Decision provided:

WHEREFORE, judgment is rendered finding defendants Mercury Drug Corporation, Inc. and Rolando del Rosario, jointly and severally
liable to pay plaintiffs Spouses Richard Y. Huang and Carmen G. Huang, and Stephen Huang the following amounts:

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1. Two Million Nine Hundred Seventy[-]Three Thousand Pesos (P2,973,000.00) actual damages;

2. As compensatory damages:

a. Twenty[-]Three Million Four Hundred Sixty[-]One Thousand, and Sixty-Two Pesos (P23,461,062.00) for life care cost
of Stephen;

b. Ten Million Pesos (P10,000,000.00) as and for lost or impaired earning capacity of Stephen;

3. Four Million Pesos (P4,000,000.00) as moral damages;

4. Two Million Pesos (P2,000,000.00) as exemplary damages; and

5. One Million Pesos (P1,000,000.00) as attorney[']s fees and litigation expense.

The defendants' counterclaim is DISMISSED.

SO ORDERED.139

On the other hand, the pertinent portion of this decision stated:

Drs. Renato Sibayan, Eduardo Jamora, Evelyn Dy and Teresita Sanchez testified regarding the massive injuries suffered by
plaintiff Stephen and expenses that plaintiff will continue to incur. (TSN, July 5, 1999; TSN April 26, 1999, TSN, April 19, 1999; and
TSN, March 26, 1999).

Although Stephen survived the accident, the doctors are unanimous in saying that Stephen needs continuous rehabilitation for the
rest of his life. Dr. Sibayan's prognosis with regard to Stephen's future recovery is nil, or zero. The best thing that can be done for
Stephen is for the latter to maintain some kind of rehabilitation program with the aim of preventing complications, particularly bed sores,
infection of the bladder, inability to move. There are no dedicated and specific centers in the Philippines with spinal cord injury
rehabilitation program. Notwithstanding the presentation by plaintiffs of the rehabilitation programs which the plaintiff Stephen may avail
of at Kessler Institute for Rehabilitation, New Jersey, USA, together with the estimated expenses which may be incurred by plaintiffs,
(Exhibits Y, Z-3), this Court deems it proper not to include the said amount because as far as the records are concerned, the enrollment
of Stephen thereat remained a plan. The plaintiffs Spouses Richard and Carmen Huang merely contemplated the sending of their son,
Stephen to Kessler Institute.

Accordingly, the defendants must not only pay for the actual expenses incurred by plaintiffs for the hospitalization and medical
treatment of Stephen, they must also pay plaintiffs for the natural and probable expenses which the plaintiffs will in the future likely
incur as a result of the injuries he suffered. In 1997[,] Stephen[']s average monthly expense was P21,500.00 and for 1998 it was for
P16,280.00 more or less, (TSN, p. 11, January 11, 1999). It is expected that he will continue to incur these expenses for the rest of his
life. The chance of Stephen regaining his normal ability to walk and perform the most basic body movements is remote. Thus, he shall
be dependent financially and physically on the care, assistance, and support of his family throughout his life. Based on the actuarial
computation of the remaining years that Stephen is expected to live, the life care cost will amount to P23,461,062.00 more or less.
Plaintiffs must be compensated (Exhibits ZZ, ZZ-4 to ZZ-6).

Also part of the damages sustained by plaintiffs is the loss or in the least, impairment of Stephen's earning capacity. The massive
injury Stephen sustained disabled him from engaging in those pursuits and occupations for which, in the absence of said injury, he
would have qualified. To determine how much to be awarded for decreased earning capacity, the health of the injured party, and his
mental and physical ability to maintain himself before the injury as compared with his condition in this respect afterwards have to be
considered. The rule necessarily permits an inquiry into the capacity of plaintiff prior to the injury, including his physical condition, and
his ability to labor or follow his usual vocation, his age, his state of health, and his probable life expectancy. The plaintiff's ability and
disposition to labor or his business or professional habits may also be taken into consideration . . .

At the time of [the] accident, Stephen is a bright young man of 17, fourth year high school, a member of his school's varsity
basketball team. He passed the entrance examination of the University of the Philippines, De La Salle University, and the University of
Asia and the Pacific. In the actuarial study presented by plaintiff's witness, Aida Josef, she projected that Stephen's life expectancy is
only up to age 48.37 or more or less 20 years after the accident. Had Stephen not met the accident, he would have continued his
studies, finished his course in time, embarked on a banking career, initially earned a monthly income of at least P15,000.[00, gotten
married, raised children, and become a productive member of society. Based on her actuarial study, Ms. Josef opined that due to
serious physical injuries which caused him to be paraplegic for life, Stephen lost the opportunity to do all [of] the above. Stephen stood
to suffer loss of his earning capacity in the total amount of P41,982,764.00 from year 2003 to year 2004 (Exhibit[s] YY, ZZ and XX with
submarkings). However, considering the speculation involved, this Court places the loss or impairment of Stephen's earning capacity to
a conservative amount of Ten Million Pesos, for which he must be compensated.140 (Emphasis supplied)

8
 In this case, there are no clerical errors or ambiguities regarding the computation of life care cost and loss of earning capacity
awarded to respondent Stephen. The amounts indicated in the dispositive portion of the judgment faithfully correspond to the findings of
fact and conclusions of the trial court.

The trial court deemed it adequate and proper to award P23,461,062.00 as life care cost and P10,000,000.00 as loss of earning
capacity based on the evidence presented during trial. In awarding life care cost, the trial court did not limit itself to respondent
Stephen's actual expenses in 1997 and 1998 and his projected life expectancy.141 The trial court also considered the testimonies of
respondent Stephen's doctors regarding his future medical expenses.142 On the award of loss of earning capacity, the trial court did
not likewise limit itself to respondent Stephen's projected initial monthly salary and life expectancy. It considered other equally important
factors such as respondent Stephen's capacity prior to the injury, physical conditions, disposition to labor, and his professional
habits.143

These findings and conclusions were even affirmed by this Court in Mercury Drug Corporation,144 thus:

Petitioners are also liable for all damages which are the natural and probable consequences of the act or
omission complained of. The doctors who attended to respondent Stephen are one in their prognosis that his
chances of walking again and performing basic body functions are nil. For the rest of his life, he will need continuous
rehabilitation and therapy to prevent further complications such as pneumonia, bladder and rectum infection, renal
failure, sepsis and severe bed sores, osteoporosis and fractures, and other spinal cord injury-related conditions. He
will be completely dependent on the care and support of his family. We thus affirm the award of P23,461,062.00 for
the life care cost of respondent Stephen Huang, based on his average monthly expense and the actuarial
computation of the remaining years that he is expected to live; and the conservative amount of P10,000,000.00, as
reduced by the trial court, for the loss or impairment of his earning capacity, considering his age, probable life
expectancy, the state of his health, and his mental and physical condition before the accident. He was only
seventeen years old, nearly six feet tall and weighed 175 pounds. He was in fourth year high school, and a member
of the school varsity basketball team. He was also class president and editor-in-chief of the school annual. He had
shown very good leadership qualities. He was looking forward to his college life, having just passed the entrance
examinations of the University of the Philippines, De La Salle University, and the University of Asia and the Pacific.
The University of Sto. Tomas even offered him a chance to obtain an athletic scholarship, but the accident prevented
him from attending the basketball try-outs. Without doubt, he was an exceptional student. He excelled both in his
academics and extracurricular undertakings. He is intelligent and motivated, a go-getter, as testified by Francisco
Lopez, respondent Stephen Huang's godfather and a bank executive. Had the accident not happened, he had a rosy
future ahead of him. He wanted to embark on a banking career, get married and raise children. Taking into account
his outstanding abilities, he would have enjoyed a successful professional career in banking. But, as Mr. Lopez
stated, it is highly unlikely for someone like respondent to ever secure a job in a bank. To his knowledge, no bank
has ever hired a person suffering with the kind of disability as Stephen Huang's.145 (Citations omitted)

There being no clerical errors or ambiguities in the dispositive portion or body of the judgment, the amounts awarded as life care
cost and loss of earning capacity stand. There is no reason to disturb the trial court's findings and conclusions on the matter.

This Court notes that the amendments sought by petitioners affect the very substance of the controversy. While it appears on the
surface of the Petition that they merely seek the clarification of the judgment, a careful review of petitioners' assertions and arguments
reveal their true intention of appealing the merits of the case. This cannot be done without violating the doctrine on immutability of
judgments. A correction pertaining to the substance of the controversy is not a clerical error.

Furthermore, petitioners have previously raised their arguments in different fora, particularly in their Petition for Review before the
Court of Appeals146 and in their Motion for Reconsideration and/or New Trial147 before this Court. Their arguments have been
reviewed and passed upon twice.

Nevertheless, even if we were to indulge petitioners, their arguments deserve scant consideration. Petitioners insist that the
computation of life care cost should be limited to respondent Stephen's average monthly expenses in 1997 and 1998 and his projected
life expectancy.148 They also insist that the computation of loss of earning capacity should be limited to respondent Stephen's
estimated initial salary and his projected life expectancy.149

To limit the computation of life care cost and loss of earning capacity strictly to these variables glosses over other equally important
economic factors that the trial court has probably considered. Inflation, which is generally defined as the increase in the price of goods
and services over time,150 is a significant economic factor. Petitioners failed to consider that the cost of goods and services back then
would not be the same as today. Petitioners also glossed over the possibility that respondent Stephen might eventually be promoted
within the banking industry. This may lead to an increased basic salary and the grant of additional benefits on top of hefty bonuses that
are usually given to top-notch or high-ranking bank officers. Furthermore, petitioners overlook the health complications that may arise
from spinal cord injuries. While it may be true that respondent is able to function as a productive member of society today, this cannot
operate as a justification to reduce the monetary award granted to him. Reducing the monetary award granted to respondent Stephen
penalizes his recovery.

II
9
 Another effect of a final and executory judgment is that winning litigants are entitled to the satisfaction of the judgment through a
writ of execution.

A writ of execution must substantially conform to the judgment sought to be enforced.151 A writ of execution that exceeds the
tenor of the judgment is patently void and should be struck down.152 Upon a finding of its invalidity, the case may be remanded to the
lower court for the issuance of the proper writ.153

In this case, the Writ of Execution154 issued by the Regional Trial Court neither varied nor departed from the terms of the
judgment in any manner. It was faithful to what the trial court decreed, thus:

You are commanded to demand from MERCURY DRUG CORPORATION and ROLANDO J. DEL ROSARIO at
#7 Mercury Avenue, Libis, Quezon City and C. Valle Street, Dolores, Taytay, Rizal, respectively, the judgment
obligors, the immediate payment in full of the sums of TWO MILLION NINE HUNDRED SEVENTY[-]THREE
THOUSAND PESOS (P2,973,000.00), Philippine Currency, as actual damages; TWENTY[-]THREE MILLION FOUR
HUNDRED SIXTY[-]ONE THOUSAND, AND SIXTY[-]TWO PESOS (P23,461,062.00) for life care cost of Stephen;
TEN MILLION PESOS (P10,000,000.00) as and for lost or impaired earning capacity of Stephen; ONE MILLION
PESOS (P1,000,000.00) as moral damages; TWO MILLION PESOS (P2,000,000.00) as exemplary damages; and
ONE MILLION PESOS (P1,000,000.00) as attorney's fees and litigation expense, together with your lawful fees for
service of this execution, which SPOUSES RICHARD Y. HUANG & CARMEN G. HUANG and STEPHEN G.
HUANG, the judgment obligees, recovered in this case against said judgment obligors, and to tender the same to
said judgment obligees and return this writ, with the lawful fees, to this Court within thirty (30) days from the date of
receipt hereof with your proceedings indorsed thereon.155

III

The case not falling within any of the exceptions to the doctrine of immutability of judgments, it becomes the court's ministerial duty
to issue a writ of execution, which must "conform to that ordained or decreed in the dispositive part of the decision."156 The manner of
execution of a judgment cannot depend upon the choice or discretion of a party.157

In this case, the judgment did not indicate, in any manner, that the amounts of life care cost and loss of earning capacity should be
paid in installments or amortized. There is nothing in the decision that would substantiate petitioners' assertion that life care cost and
loss of earning capacity were awarded as judicial support.

The cases petitioners relied upon to support their arguments are inapplicable. Advincula158 and Canonizado159 are judgments for
support arising from family relations. In the present case, the two (2) monetary awards were given as the "natural and probable
expenses" that respondents would likely incur for rehabilitation and continued treatment.160 Although the court stated that respondent
Stephen would be "dependent financially and physically on the care, assistance, and support of his family throughout his life[,]"161 this
should not be construed to mean that the monetary awards were given as judicial support. They were awarded as damages arising
from quasi-delict.

In the absence of any directive in the body or in the dispositive portion of the decision that the judgment award should be
amortized or paid in periodic installments, the manner of its execution shall be subject to the Rules of Court. The manner of execution
of judgments for money is specifically governed by Rule 39, Section 9 of the Rules of Court.

WHEREFORE, the Petition for Review on Certiorari is DENIED. The Decision dated January 20, 2011 and Resolution dated July
6, 2011 of the Court of Appeals inCA-GR. SP No. 106647 are AFFIRMED.

SO ORDERED.

10
De Ocampo v. Radio Philippines Network, Inc., G.R. No. 192947, [December 9, 2015]

December 9, 2015

G.R. No. 192947

MELANIE E. DE OCAMPO, Petitioner

vs.
RPN-9 / RADIO PHILIPPINES NETWORK, INC., Respondent

DECISION

LEONEN, J.:

Unlike an appeal, a pending petition for certiorari shall not stay the judgment or order that it assails. Unless a restraining order or writ of
preliminary injunction is issued, the assailed decision lapses into finality. Thereafter, it can no longer be disturbed, altered, or modified,
and execution may ensue.

This Petition for Review on Certiorari, filed under Rule 45 of the 1997 Rules of Civil Procedure, prays that the assailed March 5, 2010
Decision1 and July 8, 2010 Resolution2 of the Court of Appeals in CA-G.R. SP No. 108457 be reversed and set aside. The Petition
further prays that the recomputation that petitioner Melanie De Ocampo (De Ocampo) sought in the monetary award she had already
received be permitted in order that she may receive additional backwages, separation pay, and 13th month pay, as well as 12%
interest per annum.3

In its assailed March 5, 2010 Decision, the Court of Appeals dismissed De Ocampo's Petition for Certiorari and affirmed the September
30, 2008 Decision4 and December 15, 2008 Resolution5 of the National Labor Relations Commission. In its assailed July 8, 2010
Resolution, the Court of Appeals denied De Ocampo's Motion for Reconsideration. 6

For its part, the National Labor Relations Commission affirmed the December 13, 2007 7 Order of Executive Labor Arbiter Manuel M.
Manansala (Executive Labor Arbiter Manansala), which denied De Ocampo's Motion to Recompute the Monetary Award with Motion to
Issue Alias Writ of Execution.8

De Ocampo was the complainant in a case for illegal dismissal, unpaid salaries, damages, and attorney's fees against respondent
Radio Philippines Network, Inc. (RPN-9) and several RPN-9 officers, namely: President Cerge Remonde; News and Current Affairs
Manager Rodolfo Lacuna; and Human Resources Manager Lourdes Angeles. This case was docketed as NLRC-NCR Case No. 00-05-
05 857-2003.9

On May 12, 2004, Executive Labor Arbiter Manansala rendered the Decision 10 finding De Ocampo to have been illegally dismissed.
RPN-9 was ordered to pay her separation pay in lieu of reinstatement and full backwages. The impleaded officers of RPN-9 were
absolved from liability. The dispositive portion of this Decision reads:

WHEREFORE, premises considered, judgment is hereby rendered:

1. Declaring respondent Radio Philippinesa

2. Directing respondent Radio Philippines Network, Inc. (RPNI) also known as RPN-9 to pay complainant Melanie De Ocampo the sum
of ₱54,600.00 representing her 13th Month Pay as computed [sic] by the Examination and Computation Unit of this Arbitration Branch
(See Annex "A", of this Arbitration Branch [sic]).

3. Directing the aforenamed respondent to pay complainant Melanie De Ocampo ten (10%) percent attorney's fees based on the total
monetary award for having been forced to prosecute and/or litigate the instant case/complaint by hiring the services of legal counsel
[sic].

4. Dismissing the claims for Holiday Pay and Service Incentive Leave Pay for lack of merit for the reasons above-cited.

5. Dismissing the other money claims and/or charges of complainant Melanie De Ocampo for lack of factual and legal basis.

6. Dismissing the charges against individual respondents Cerge Remonde, Rodolfo Lacuna, and Lourdes Angeles, as President,
Manager of News and Current Affairs, and Manager of Human Resources, respectively, of respondent RPN-9 for lack of merit.
11
SO ORDERED.11

In its Decision12 dated February 28, 2006, the National Labor Relations Commission affirmed the May 12, 2004 Decision of Executive
Labor Arbiter Manansala. In the Resolution dated April 28, 2006, RPN-9's Motion for Reconsideration was denied. 13

RPN-9 then filed before the Court of Appeals a Petition for Certiorari with prayer for temporary restraining order and/or preliminary
injunction. The Petition was docketed as C.A.-G.R. SP. No. 95229. 14

In the Resolution dated December 11, 2006, the Court of Appeals issued a temporary restraining order preventing the National Labor
Relations Commission from enforcing its ruling for a period of 60 days. The sixty-day period lapsed without a writ of preliminary
injunction being subsequently issued by the Court of Appeals.15 Accordingly, the ruling of Executive Labor Arbiter Manansala, as
affirmed by the National Labor Relations Commission, became final and executory on May 27, 2006. 16 Entry of Judgment was issued
on July 19, 2006.17

De Ocampo then filed a Motion for Issuance of Writ of Execution. 18 In the Order19 dated October 30, 2006, the National Labor Relations
Commission granted De Ocampo's Motion. Conformably, a Writ of Execution 20 was issued on May 7, 2007. This Writ directed the
Deputy Sheriff to collect from RPN-9 the total amount of ₱410,826.85. 21

This amount was fully satisfied through Banco de Oro Check No. 0087385, which was deposited at the National Labor Relations
Commission Cashier's Office on August 22, 2007.22 On the following day, or on August 23, 2007, De Ocampo filed a Motion to Release
the amount of ₱410,826.85.23

The full satisfaction of the original award notwithstanding, De Ocampo filed a Motion to Recompute the Monetary Award with Motion to
Issue Alias Writ of Execution24 on September 11, 2007. In the Motion, De Ocampo sought the increase of the monetary award given
her. Specifically, she sought the payment of an additional amount of ₱518,700.00 representing additional backwages, separation pay,
and 13th month pay. She also prayed for an additional amount of ₱53,188.83, representing 12% interest per annum on the original
monetary award.25

In the Order26 dated December 13, 2007, Executive Labor Arbiter Manansala denied De Ocampo's Motion to Recompute the Monetary
Award with Motion to Issue Alias Writ of Execution on the ground that the May 12, 2004 Decision fixing the amounts of the monetary
award due to De Ocampo had become final and executory.

In its September 30, 2008 Decision,27 the National Labor Relations Commission sustained Executive Labor Arbiter Manansala's
December 13, 2007 Decision.28 In its December 15, 2008 Resolution,29 the National Labor Relations Commission denied De Ocampo's
Motion for Reconsideration.

In its assailed March 5, 2010 Decision,30 the Court of Appeals dismissed De Ocampo's Petition for Certiorari and sustained the
September 30, 2008 Decision and December 15, 2008 Resolution of the National Labor Relations Commission. In its assailed July 8,
2010 Resolution,31 the Court of Appeals denied De Ocampo's Motion for Reconsideration.

Aggrieved, De Ocampo filed the present Petition32 insisting that she remains entitled to additional monetary awards, thereby warranting
a recomputation of the amount due to her.

For resolution is the sole issue of whether petitioner Melanie De Ocampo may still seek a recomputation of and an increase in the
monetary award given her.1avvphi1

She cannot.

It is basic that a judgment can no longer be disturbed, altered, or modified as soon as it becomes final and executory; 33 "[n]othing is
more settled in law."34 Once a case is decided with finality, "the controversy is settled and the matter is laid to rest." 35 Accordingly, a
final judgment may no longer be modified in any respect "even if the modification is meant to correct what is perceived to be an
erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by
the highest court of the land."36 Once a judgment becomes final, the court or tribunal loses jurisdiction, and any modified judgment that
it issues, as well as all proceedings taken for this purpose, is null and void. 37

This elementary rule finds basis in "public policy and sound practice that at the risk of occasional error, the judgment of courts and the
award of quasi-judicial agencies must become final at some definite date fixed by law." 38 Basic rationality dictates that there must be an
end to litigation. Any contrary posturing renders justice inutile and reduces to futility the winning party's capacity to benefit from a
resolution of the case.39

12
This rule, however, does admit of exceptions. As this court explained in Sacdalan v. Court of Appeals:40

The only exceptions to the general rule are the correction of clerical errors, the so-called nunc pro tunc entries which cause no
prejudice to any party, void judgments, and whenever circumstances transpire after the finality of the decision rendering its execution
unjust and inequitable.41 (Citations omitted)

Consistent with the principle of finality of judgments, it follows that no appeal may be taken from orders of execution of judgments. 42

II

As basic as the principle of finality of judgments is the rule that filing a petition for certiorari under Rule 65 of the 1997 Rules of Civil
Procedure "shall not interrupt the course of the principal case unless a temporary restraining order or a writ of preliminary injunction has
been issued against the public respondent from further proceeding in the case." 43 Unlike an appeal, a pending petition for certiorari shall
not stay the judgment or order that it assails.

The 2005 Rules of Procedure of the National Labor Relations Commission, which were in effect when the material incidents of this case
occurred, explicitly and specifically makes this principle applicable to decisions of labor arbiters and of the National Labor Relations
Commission. Rule XI, Section 10 of the 2005 Rules of Procedure of the National Labor Relations Commission states:

SECTION 10. Effect of Petition for Certiorari on Execution. — A petition for certiorari with the Court of Appeals or the Supreme Court
shall not stay the execution of the assailed decision unless a restraining order is issued by said courts.

In contrast, Rule XI, Section 9 states the following with respect to appeals:

SECTION 9. Effect of Perfection of Appeal on Execution. — The perfection of an appeal shall stay the execution of the decision of the
Labor Arbiter on appeal, except execution for reinstatement pending appeal.

Accordingly, where no restraining order or writ of preliminary injunction is issued, the assailed decision lapses into finality. Thereafter,
execution may ensue. As Rule XI, Section 1 of the 2005 Rules of Procedure of the National Labor Relations Commission states:

SECTION 1. Execution Upon Finality of Decision or Order. — a) A writ of execution may be issued motu proprio or on motion, upon a
decision or order that finally disposes of the action or proceedings after the parties and their counsels or authorized representatives are
furnished with copies of the decision or order in accordance with these Rules, but only after the expiration of the period to appeal if no
appeal has been filed, as shown by the certificate of finality. If an appeal has been filed, a writ of execution may be issued when there is
an entry of judgment as provided for in Section 14 of Rule VII.

b) No motion for execution shall be entertained nor a writ of execution be issued unless the Labor Arbiter or the Commission is in
possession of the records of the case which shall include an entry of judgment if the case was appealed; except that, as provided for in
Section 14 of Rule V and Section 6 of this Rule, and in those cases where partial execution is allowed by law, the Labor Arbiter shall
retain duplicate original copies of the decision to be implemented and proof of service thereof for the purpose of immediate
enforcement.

The pivotal facts of this case are also settled. After the filing before the Court of Appeals of RPN-9's Petition for Certiorari, the Court of
Appeals issued a temporary restraining order preventing, for a period of 60 days, the National Labor Relations Commission from
enforcing its ruling. However, the sixty-day period lapsed without a writ of preliminary injunction being subsequently issued by the Court
of Appeals.44 Thus, on May 27, 2006, the ruling of Executive Labor Arbiter Manansala, as affirmed by the National Labor Relations
Commission, became final and executory on May 27, 2006.45 Conformably, Entry of Judgment was made on July 19, 2006.46

None of the four exceptions mentioned in Sacdalan v. Court of Appeals47 that warrant a modification of judgments that have attained
finality is availing in this case.

What petitioner seeks is not a mere clerical correction. Rather, she seeks an overhaul of Executive Labor Arbiter Manansala's Decision
in order that it may award her a total additional sum of ₱571,888.83 representing backwages, separation pay, 13th month pay, and
accrued interest. Petitioner does not merely seek an entry into the records of acts done but not entered (i.e., nunc pro tunc entries).
Petitioner does not claim that Executive Labor Arbiter Manansala's Decision is void, only that its computation of monetary awards is
inadequate. Neither does petitioner allege that certain events transpired after May 27, 2006 rendering Executive Labor Arbiter
Manansala's Decision unjust or inequitable.

The Decision having attained finality, and as this case does not fall under any of the recognized exceptional circumstances, there
remains no opening for revisiting, amending, or modifying Executive Labor Arbiter Manansala's judgment.

III

13
Not only is Executive Labor Arbiter Manansala's Decision binding and conclusive as a matter of procedural law; it is as binding and
conclusive on petitioner because of both her inaction and her own actions. She is estopped from seeking a modification of Executive
Labor Arbiter Manansala's Decision.

Following the rendition of Executive Labor Arbiter Manansala's Decision on May 12, 2004, petitioner did not file a motion for
reconsideration, pursue an appeal before the National Labor Relations Commission, file a petition for certiorari before any court, or
otherwise assail the whole or any part of the Decision. This judgment, as well as its execution, was stayed not by petitioner's actions
but by those of respondent RPN-9. RPN-9 filed an appeal before the National Labor Relations Commission and, following the denial of
this appeal, filed a Rule 65 Petition before the Court of Appeals, where it sought preliminary injunctive relief.

By her inaction, petitioner made it appear that as far as she was concerned, Executive Labor Arbiter Manansala's Decision should have
stood as it did. Her inaction revealed that she saw no reason for the same Decision to be revisited or reconsidered by Executive Labor
Arbiter Manansala himself, by the National Labor Relations Commission, or by any court. She failed to act in a timely manner—that is,
by pursuing the appropriate remedy within the duration permitted by the rules. She failed "to assert a right within a reasonable time,
[and this] warrant[ed] a presumption that the party entitled to assert it [i.e., petitioner] either has abandoned it or declined to assert
it."48 Stated otherwise, to petitioner may be imputed estoppel by laches.

Moreover, as soon as Entry of Judgment was made, petitioner filed a Motion for Issuance of Writ of Execution. 49 After the Writ of
Execution was satisfied and the check representing payment of the monetary award was deposited with the Cashier's Office of the
National Labor Relations Commission, petitioner lost no time in seeking to have the monetary award in her hands: just a day after
deposit was made, petitioner was quick to file a Motion to Release the amount of ₱410,826.85. 50

Accordingly, petitioner's willful acceptance of the judgment rendered by Executive Labor Manansala is not only something that may be
implied from her omission or inaction. Rather, it is something explicitly affirmed by her own motions and submissions. Whatever doubt
there was, if any, as to her concession to the monetary award given her was dispelled by the positive assertions and pleas for relief that
petitioner herself made.

No recourse, whether in l. aw or equity, leaves room for petitioner to avail herself of the modifications she seeks.1awp++i1 The most
basic legal principles dictate that Executive Labor Arbiter Manansala's Decision—in all its aspects—has long attained finality and may
no longer be revisited. Principles of equity require that petitioner be bound by her own omissions and declarations.

WHEREFORE, the Petition for Review on Certiorari is DENIED. The assailed March 5, 2010 Decision and July 8, 2010 Resolution of
the Court of Appeals Former Sixth Division in CA-G.R. SP No. 108457 are AFFIRMED.

SO ORDERED.

14
Mocorro, Jr. v. Ramirez, G.R. No. 178366, July 28, 2008

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 178366 July 28, 2008

DOMINADOR A. MOCORRO, JR., Petitioner,

vs.
RODITO RAMIREZ, Respondent.

DECISION

VELASCO, JR., J.:

On January 25, 1990, in PGC Case No. 114, the Philippine Gamefowl Commission (PGC), acting on a petition on the issue of who
between petitioner Dominador A. Mocorro, Jr. and Rodolfo Azur is entitled to operate a cockpit in the Municipality of Caibiran, Leyte
(now Biliran Province), rendered a decision, the decretal portion of which partly reads:

WHEREFORE, x x x the Commission RESOLVED, as it hereby resolves to:

1. Declare and recognize petitioner Dominador A. Mocorro, Jr. to be the rightful cockpit operator in the Municipal[ity] of
Caibiran, Leyte, (now Biliran) for being the prior operator;

2. Cancel and revoke Registration Certificate No. C87-829 issued in the name of respondent Rodolfo Azur;

3. Order the issuance of a Registration Certificate in favor of, and in the name of Petitioner Dominador A. Mocorro, Jr.; x x x

Pursuant to the above decision, the PGC issued in favor of petitioner Registration Certificate No. P90-943 which, as later extended,
was to expire on December 31, 1991. Respondent Rodito Ramirez, then Caibiran municipal mayor, also issued Business Permit No.
015 authorizing petitioner to operate his cockpit, the Caibiran (Cockers) Gallera, up to 1991. For its part, the Sangguniang Bayan (SB)
of Caibiran passed a resolution authorizing petitioner to operate his cockpit for CY 1991.

On January 20, 1992, petitioner applied and paid the fees necessary for the renewal of the registration of his cockpit. Accompanying
the application were the requisite local government certificates/permits. For some reason, however, petitioner failed to operate since
respondent refused to issue him a business permit, prompting petitioner, through Ricardo Rostata, to address a letter-complaint to the
PGC Chairperson questioning respondent’s refusal action.

Later developments saw respondent issuing a special permit to one Edwin Rosario for the holding sometime in July 1992 of
a pintakasi (celebration of cockfighting) in Gallera, Caibiran. This was followed by the issuance of another permit authorizing, starting
August 2, 1992, and every Sunday thereafter, the holding of cockfights in Azur’s cockpit located also in Caibiran.

On August 10, 1992, petitioner filed with the Regional Trial Court (RTC) in Biliran a suit for injunction against respondent and Azur.
Docketed as Civil Case No. B-0837, the case, entitled Dominador A. Mocorro, Jr., represented by Ricardo Rostata v. Mayor Rodito
Ramirez and Rodolfo Azur, was later raffled to Branch 16 of the court.

On March 19, 1993, the RTC issued a writ of preliminary injunction enjoining respondent and Azur from holding any cockfight within
Caibiran until further orders of the court. Despite the injunction, cockfights continued to be staged in Caibiran, prompting petitioner to
file a motion to cite respondent and Azur in contempt of court.

In their Answer, respondent and Azur drew attention to the cancellation by the SB of petitioner’s 1991 business permit for repeated
violations of the terms thereof. They also pointed out that Azur, before operating the cockpit, had already complied with all the
requirements and secured the necessary business permit.

On November 25, 1993, the RTC issued an Order allowing petitioner to present evidence to support his contempt motion.

In the meantime, Azur continued with, and respondent allowed, the holding of Sunday cockfights in Caibiran.

15
On February 17, 1995, the RTC rendered a Decision,1 the fallo of which reads:

WHEREFORE, defendants Mayor Rodolfo Ramirez and Rodolfo Azur are therefore found guilty of indirect contempt for contumacious
disobedience of and resistance to the March 19, 1993 writ of preliminary injunction issued by this court and they are fined the sum of
P1,000.00. The March 19, 1993 writ of preliminary injunction is hereby made permanent and defendant Rodito Ramirez and Rodolfo
Azur are ordered to pay, jointly and severally, plaintiff Dominador Mocorro, Jr. actual damages the sum of P2,000.00 every Sunday of
each week from August 2, 1992 when defendants started to cause the holding of the cockfight in Pob. Caibaran, Biliran; plus P10,000
attorney’s fees; P5,000.00 litigation expenses; exemplary or corrective damages in the sum of P20,000.00 and [to] pay the costs.
(Emphasis added.)

Aggrieved, respondent and Azur interposed an appeal before the Court of Appeals (CA), docketed as CA-G.R. CV No. 48029. By a
Decision dated May 31, 2001, the CA denied the appeal for lack of merit and affirmed the RTC Decision.

On June 22, 2001, the CA’s May 31, 2001 Decision became final and executory as evidenced by the corresponding Entry of
Judgment.2

Subsequently, petitioner moved for the issuance of a writ of execution. On April 2, 2002, the RTC granted the motion and issued, on
May 27, 2002, the corresponding writ,3 to wit:

WHEREFORE, you are hereby commanded that of the goods and chattels of the defendants, Mayor Rodito Ramirez and Rodolfo Azur,
you cause to be made the sum of THIRTY EIGHT THOUSAND PESOS (P38,000.00) plus 2,000 every Sunday of each week from
August 2, 1992[,] when defendants started to cause the holding of the cockfight, together with your lawful fees for service of execution,
all in Philippine currencies, and to likewise, return this writ together with your proceedings within the period provided for under the
Rules.

But if sufficient personal properties cannot be found whereof t[o] satisfy this execution and lawful fees thereon, then you are
commanded that of the lands and buildings of said defendants, you cause to be made the said sum of money in the manner required by
law and the Rules of Court.

Sheriff Ludenilo S. Ador’s computation of the amount collectibles to implement the issued writ of execution contained the following
entries and breakdowns:

SHERIFF’S COMPUTATION4

CORRECTIVE DAMAGES------------------------------------------- 20,000.00

LITIGATION EXPENSES--------------------------------------------- 5,000.00
ATTORNEY’S FEES--------------------------------------------------- 10,000.00
Plus P2,000.00 every Sunday of each week
From August 2, 1992 when defendant started
To cause the holding of cockfight
(August 2, 1992 to June 22, 2001 finality of judgment)
August to December 1992------------------ = 21 weeks
January to December 1993------------------ = 52
January to December 1994------------------ = 52
January to December 1995------------------ = 52
1996------------------ = 52
1997------------------ = 52
1998------------------ = 52
1999------------------ = 52
2000------------------ = 52
January to June 22, 2001-------------------- = 22
458 WEEKS
x 2,000.00
P916,000.00

16
 TOTAL P951,000.00
Expenses and publication on notice of sale 8,000.00
TOTAL COLLECTIBLES 959,000.00

LUDENILO S. ADOR (Sgd.)

Sheriff IV
NOTED:
ENRIQUE C. ASIS (Sgd.)
Executive Judge

On June 11, 2002, the sheriff issued a Notice of Attachment, 5 therein apprising the Register of Deeds of Biliran of the levy on execution
made over the rights and participation of respondent on the two parcels of land indicated in the notice, to wit:

ARP No. 04-002-00128

Agricultural land situated at Palenke, Caibiran, Biliran, with survey no. 1224, having an area of 3619.20, with unit value of 195,000.00;
market value of 70,575.00; and assessed value at 11,295.00 PhP. Declared in the name of Rodito Ramirez, more particularly bounded
as follows: x x x

ARP No. 04-003-00209

Residential lot located at Bgy. Victory, Caibiran, with an area of 112.05, with unit value of 250.00; market value of 28,013.00, under
survey no. 1806-P, with PIN-074-04-003-04-071, assessed at 2,802.00, declared in the name of Rodito Ramirez, more particularly
bounded as follows: x x x

On October 23, 2002, the sheriff issued a Notice of Sale on Execution of Real Properties 6 and set a date for public auction.

Meanwhile, on August 7, 2002, respondent, joined by his wife, Gloria, filed a Petition to Exclude Properties from Execution 7 before the
RTC against the sheriff and petitioner. The petition yielded the following reasons for the desired exclusion: (1) the two parcels of land
do not belong to respondent; and (2) the persons liable under the RTC’s decision are Azur and the Municipality of Caibiran, Biliran, not
respondent, who was impleaded in the suit in his capacity as municipal mayor.

By Order of November 18, 2002, the RTC denied the petition.8

Taking a different tack, respondent filed, on January 9, 2003, an Omnibus Motion to Quash Writ of Execution and to Set Aside Sheriff’s
Computation,9 therein alleging that the writ of execution attempts to enforce an incomplete judgment and, in the process, substantially
modifies the decision of the RTC; and that the same writ seeks to enforce and execute a void judgment. Respondent argued that
the fallo of the RTC’s decision, while indicating a day, i.e., August 2, 1992, whence his liability shall commence to run, failed to state a
terminal date. And in a bid to cure this substantive defect in the fallo, Sheriff Ador considered June 22, 2001 as the termination date of
payments, a move which respondent viewed as amounting to a modification of an incomplete judgment. Moreover, respondent
maintained that the fallo of the RTC decision disposed that he and Azur are liable to pay petitioner PhP 10,000 for attorney’s fees, PhP
5,000 for litigation expenses, and PhP 20,000 for exemplary damages, but the body of the decision never discussed petitioner’s
entitlement to the said awards.

Petitioner filed his opposition10 to the omnibus motion.

On September 8, 2003, the RTC issued an Order11 denying respondent’s omnibus motion, holding that only this Court can nullify a
decision of the CA. The RTC also stated the observation that respondent, in his and Azur’s appeal to the CA in CA-G.R. CV No. 48029,
and even later in his petition to exclude real properties,12 never raised, in the assignment of errors, the propriety of the awards adverted
to.

Following the denial, per the RTC’s Order dated November 6, 2003, of his motion for reconsideration, respondent posthaste filed with
the CA a petition for certiorari under Rule 65 to nullify and set aside the September 8, 2003 and November 6, 2003 Orders of the RTC
as well as the Writ of Execution dated May 27, 2002. The petition was docketed as CA-G.R. SP No. 81074.

On August 8, 2006, the CA rendered a Decision13 effectively finding for respondent on the issue of actual damages. The dispositive
portion of the decision reads:

17
WHEREFORE, the instant petition is PARTIALLY GRANTED. The assailed Orders dated September 8, 2003 and the November 6,
2003 as well as the Writ of Execution dated May 27, 2002 insofar as said Orders and Writ required petitioner to pay private respondent
actual damages, are SET ASIDE. The assailed Orders and Writ are AFFIRMED in all other respects.

SO ORDERED.

The CA predicated its above ruling on the following premises:

(1) The fallo of the RTC decision rendered in Civil Case No. B-0837 lacks an important data, referring to the exact amount
awarded as actual damages. According to the CA, the fallo did not state when the said PhP 2,000 per Sunday liability will end;
hence, the amount of the award of actual damages cannot be determined;

(2) There is no basis for petitioner’s contention holding respondent and Azur liable for actual damages until such time that
petitioner can resume holding cockfights in his cockpit arena;

(3) When he ordered respondent to pay actual damages in the amount equivalent to PhP 2,000 x the number of Sundays
occurring from August 2, 1992 to June 22, 2001, the RTC judge substantially amended or modified the final and executory
February 17, 1995 RTC decision, an amendatory action which is null and void for lack of jurisdiction; and

(4) The adverted defect in the February 17, 1995 decision does not in any way avoid the entire disposition as such defect only
affects the award of actual damages. The other awards can be executed.

On May 25, 2007, the CA rejected petitioner’s motion for partial reconsideration.

Hence, this petition on the following issues:

I. CA erred in taking jurisdiction over the Petition for Certiorari (CA-G.R. SP No. 81074) of the respondent and in eliminating
the award of actual damages in favor of the petitioner;

II. CA erred in not finding that the date when the respondent should stop the payment of the weekly actual damage is
ascertainable from the decision itself;

III. CA erred in holding that the decision of the RTC, Branch 16, Naval, Biliran which was affirmed by the Ninth Division of the
CA was so defective—in failing to state the date when the respondent should stop paying the weekly actual damage of
P2,000.00 to the petitioner—that the said decision is void pro tanto and cannot be executed with respect to actual damages.

According to petitioner, respondent, by filing his petition for certiorari under Rule 65 in CA-G.R. SP No. 81074, in effect prayed for the
declaration of nullity of the final and executory May 31, 2001 Decision of the CA in CA-G.R. CV No. 48029 which, for reference,
affirmed the February 17, 1995 Decision of the RTC in Biliran in Civil Case No. B-0837.

Petitioner maintains that it was only on January 9, 2003 when respondent, via an Omnibus Motion to Quash Writ of Execution and to
Set Aside Sheriff’s Computation, raised the notion that the writ of execution attempted to enforce an incomplete and void judgment. In
net effect, petitioner adds, respondent was questioning the validity of the February 17, 1995 RTC Decision which had already attained
finality.

We find for petitioner.

CA-G.R. SP No. 81074, a petition for certiorari, which, on its face, sought to nullify the execution processes 14 issued by the Biliran RTC
and the underlying awards covered by the writ of execution, strikes the Court to be really a mere ploy, a subterfuge devised to modify a
final judgment of the Biliran RTC dated February 17, 1995. If allowed, such stratagem would trifle with and make a farce of a duly
promulgated decision that has become final and executory. The Court cannot allow such legal aberration. A definitive final judgment,
however erroneous, is no longer subject to change or revision.

A decision that has acquired finality becomes immutable and unalterable. This quality of immutability precludes the modification of a
final judgment, even if the modification is meant to correct erroneous conclusions of fact and law. And this postulate holds true whether
the modification is made by the court that rendered it or by the highest court in the land. 15 The orderly administration of justice requires
that, at the risk of occasional errors, the judgments/resolutions of a court must reach a point of finality set by the law. The noble purpose
is to write finis to dispute once and for all. This is a fundamental principle in our justice system, without which there would be no end to
litigations. Utmost respect and adherence to this principle must always be maintained by those who exercise the power of adjudication.
Any act, which violates such principle, must immediately be struck down. 16 Indeed, the principle of conclusiveness of prior adjudications
is not confined in its operation to the judgments of what are ordinarily known as courts, but extends to all bodies upon which judicial
powers had been conferred.171awphi1

18
The only exceptions to the rule on the immutability of final judgments are (1) the correction of clerical errors, (2) the so-called nunc pro
tunc entries which cause no prejudice to any party, and (3) void judgments. 18 Nunc pro tunc judgments have been defined and
characterized by the Court in the following manner:

The object of a judgment nunc pro tunc is not the rendering of a new judgment and the ascertainment and determination of
new rights, but is one placing in proper form on the record, the judgment that had been previously rendered, to make it speak
the truth, so as to make it show what the judicial action really was, not to correct judicial errors, such as to render a judgment
which the court ought to have rendered, in place of the one it did erroneously render, nor to supply nonaction by the court,
however erroneous the judgment may have been. (Wilmerding vs. Corbin Banking Co., 28 South., 640, 641; 126 Ala., 268.)

A nunc pro tunc entry in practice is an entry made now of something which was actually previously done, to have effect as of the former
date. Its office is not to supply omitted action by the court, but to supply an omission in the record of action really had, but
omitted through inadvertence or mistake. (Perkins vs. Haywood, 31 N. E., 670, 672.)19

Unquestionably, respondent and Azur were adjudged by the RTC jointly and severally liable for actual damages. But the fallo of the
RTC decision did not indicate how the amount of the actual damages award should be determined. While the decision stated that the
award of actual damages in the amount of PhP 2,000 per Sunday was to be computed from August 2, 1992, there is nothing in
the fallo suggesting at the very least when the PhP 2,000 per Sunday liability will end.

In accordance with the exception for modification of a final judgment, there is a need to amend the decision of the RTC pursuant to the
nunc pro tunc rule which, we hasten to add, will cause no prejudice to any party. In this regard, justice and equity dictate that
respondent and Azur should be held solidarily liable for actual damages in the amount of PhP 2,000 for every actual illegal cockfight
held, regardless of the staging date, in Azur’s cockpit in Caibiran, Biliran, reckoned from August 2, 1992 to June 22, 2001 when the
finality of the RTC Decision dated February 17, 1995 set in.

WHEREFORE, the instant petition is hereby GRANTED. Accordingly, the Decision dated August 8, 2006 of the CA in CA-G.R. SP No.
81074 is MODIFIED in the sense that respondent Rodito Ramirez and Rodolfo Azur are jointly and solidarily liable to petitioner for
actual damages in the amount of PhP 2,000 for every actual cockfight held in petitioner’s cockpit in Caibiran, Biliran reckoned from
August 2, 1992 to June 22, 2001 when the RTC Decision in Civil Case No. B-0837 became final. The RTC, Branch 16 in Naval, Biliran
is hereby ordered to issue an amended decision conformably with, or incorporating the modifications set forth in, this Decision.

No pronouncement as to costs.

SO ORDERED.

19
Intestate Estate of Sian v. Philippine National Bank, G.R. No. 168882, January 31, 2007

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 168882 January 31, 2007

INTESTATE ESTATE OF THE LATE NIMFA SIAN, Represented by its special administratrix, CHARITO J. SIAN-
PARREÑO, Petitioner,
vs.
PHILIPPINE NATIONAL BANK, Respondent.

DECISION

CARPIO MORALES, J.:

Nimfa Sian (Nimfa) filed a petition1 with the Regional Trial Court (RTC) of Himamaylan, Negros Occidental (docketed as Cadastral
Case No. 22), for cancellation of mortgage liens annotated on three titled properties against the Bacolod branch of the Philippine
National Bank-Republic Bank (PNB-RB), now Maybank Philippines, Inc. (Maybank), and the Register of Deeds of Negros Occidental.

Summons was served on Maybank. On Maybank’s Motion, Branch 55 of the RTC granted it time to file responsive pleading up to
August 23, 2001.2

On August 23, 2001, the last day for Maybank to file responsive pleading, PNB filed a "Motion for Substitution and Motion to
Dismiss,"3 alleging that Maybank referred the case to it "for handling inasmuch as the properties involved . . . were already transferred
to [it] by virtue of a dacion en pago executed by and between the two banks"; and it having acquired a legal interest over the subject
properties, it, not Maybank, would be adversely affected by an unfavorable judgment.

PNB cited Section 19, Rule 3 of the Rules of Court in support of its Motion for Substitution, adding that under the circumstances, it had
become an indispensable party under Section 7, Rule 3 of the Rules of Court.

In its Motion to Dismiss, PNB raised the absence in the complaint of verification and certification against forum shopping. 4

Nimfa filed her Opposition to PNB’s motions.

Maybank confirmed, in its Comment5 on PNB’s Motion for Substitution, that PNB had acquired legal interest over the properties subject
of the petition and thus joined PNB’s prayer for substitution.

Meanwhile, Nimfa died6 and was substituted by her estate, Intestate Estate represented by her sister, Charito J. Sian-Parreño, as
special administratrix, herein petitioner.7 The estate filed a Rejoinder-Opposition to [PNB’s] Motion for Substitution and Motion to
Dismiss Petition8 on January 16, 2002.

On July 8, 2002, petitioner filed a Motion for Early Resolution 9 of PNB’s "Motion for Substitution and Motion to Dismiss," setting said
Motion for Early Resolution for hearing on August 8, 2002.

The trial court accordingly sent Notice of Hearing on August 8, 2002 to the parties. A day before the scheduled hearing on August 8,
2002 of the Motion for Early Resolution or on August 7, 2002, petitioner through counsel and PNB through counsel filed a Joint
Manifestation,10 the pertinent portion of which reads:

4. Having made known their respective stand[s] on the issue of whether or not PNB should be permitted to substitute Maybank in this
case, both parties hereby manifest that they will submit the pending incident for the resolution of the Honorable Court without further
oral argument and request that the hearing scheduled on 08 August 2002 be cancelled. (Emphasis and underscoring supplied)

By Order11 of August 15, 2002, the trial court denied PNB’s Motion for Substitution on the ground that it "lacks basis considering that
there were no documents to support the dacion en pago agreement and/or deed of assignment between PNB and PNB-RB that asset
Pool I accounts of the petitioner were transferred to PNB." By the same Order, the trial court, finding that a certification on non-forum
shopping appeared on Nimfa’s petition, denied PNB’s motion to dismiss. Still by the same Order, the trial court, noting that "the parties

20
[sic]. . . filed a joint manifestation that they were submitting the pending petition (sic) for resolution of the court without need for oral
arguments," granted the petition to cancel the mortgage liens.

PNB filed a Motion for Reconsideration of the denial of its motions 12 which the trial court denied by Order of October 29, 2002.13

On July 9, 2003, PNB filed with the Court of Appeals a Petition 14 for annulment of judgment (the trial court’s Order of August 15, 2002)
with prayer for temporary restraining order and preliminary injunction. By Decision 15 dated January 25, 2005, the Court of Appeals
granted PNB’s petition in this wise:

The case before the Regional Trial Court was a cadastral case for the cancellation of mortgage liens annotated at the back of three
transfer certificates of titles. Without any trial conducted and based on the pleadings submitted, which comprised only of the petition
and various motions, the respondent judge issued an order and decided the case based on the merits. This we find to be highly not in
order.

. . . By considering the case as submitted for resolution without giving the parties opportunity to present evidence to support their claims
is tantamount to denial of due process.

xxxx

With the above incidents and in conjunction with the ruling of the Supreme Court regarding the need for an adversarial proceeding on
the matter of canceling and passing upon property rights, we find that . . . PNB was denied of opportunity to present evidence against
the claims of private respondent. This resulted to the cancellation of the mortgage liens to the prejudice of petitioner
PNB.16 (Underscoring supplied)

The appellate court accordingly set aside the trial court’s Order of August 15, 2002 and that of October 29, 2002. Thus it disposed:

WHEREFORE, in view of all the foregoing premises, judgment is hereby rendered by us GRANTING the petition filed in this case
and SETTING ASIDE the questioned final orders dated August 15, 2002 and October 29, 2002, without prejudice to the original action
being refiled in the proper court. (Underscoring supplied)

SO ORDERED. 17

Its Motion for Reconsideration18 having been denied by Order of August 15, 2002,19 petitioner filed the instant Petition20 for Review on
Certiorari, contending that

I. THE PETITION FOR ANNULMENT OF JUDGMENT . . . IS NO LONGER AVAILABLE TO . . . PNB SINCE IT FAILED TO
AVAIL OF THE REMEDY OF APPEAL FROM THE ORDER DATED AUGUST 15, 2002 THROUGH ITS OWN FAULT OR
NEGLIGENCE . . .

II. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED BY HOLDING THAT LACK OF DUE PROCESS IS AN
ADDITIONAL GROUND FOR ANNULMENT OF JUDGMENT . . .

III. . . . THE HONORABLE COURT OF APPEALS ERRED BY HOLDING THAT THERE IS LACK OF DUE PROCESS IN THE
INSTANT CASE . . . 21 (Underscoring supplied)

The petition fails.

Although Section 2 of Rule 47 of the Rules of Court provides that annulment of a final judgment or order of an RTC may be based "only
on the grounds of extrinsic fraud and lack of jurisdiction," jurisprudence recognizes as additional ground therefor denial of due
process.22 So Arcelona v. Court of Appeals23 teaches:

It is clear then that to set aside a final and executory judgment, there are three remedies available to a litigant: first, a petition for relief
from judgment under Rule 38 of the Rules of Court on grounds of fraud, accident, mistake and excusable negligence filed within sixty
(60) days from the time petitioner learns of the judgment but not more than six months from the entry thereof; second, a direct action to
annul for a judgment on the ground of extrinsic fraud; and third, a direct action for certiorari or collateral attack to annul a judgment that
is void upon its face or void by virtue of its own recitals. Thus, Macabingkil did not preclude the setting aside of a decision that
is patently void where mere inspection of the judgment is enough to demonstrate its nullity on grounds of want of jurisdiction or non-
compliance with due process of law. [Emphasis in original]. This doctrine is recognized in other cases:

"x x x There is no question that a final judgment may be annulled. There are, however, certain requisites which must be established
before a judgment can be the subject of an action for annulment. Under the present procedure, aside form the reliefs provided in these
two sections (Secs. 1 & 2, Rule 38), there is no other means whereby the defeated party may procure final and executory judgment to
21
be set aside with a view to the renewal of the litigation, unless (a) the judgment is void for want of jurisdiction or for lack of due process
of law, or (b) it has been obtained by fraud x x x . [Emphasis omitted.]"

On the one hand, extrinsic fraud is the ground to annul a voidable judgment; the declaration of nullity of a patently void final judgment,
on the other, is based on grounds other than extrinsic fraud. To say, then, that petitioners can avail themselves only of the ground
of extrinsic fraud and no other is to fail to appreciate the true meaning and ramifications of annulment/nullity.24 (Citations
omitted; emphasis and underscoring supplied)

The Joint Manifestation of "the parties"25 which the trial court noted in its questioned Order of August 15, 2002, submitted for resolution
without further oral argument the pending incident, which was PNB’s motion for substitution, not the pending "petition for cancellation of
mortgage liens as the trial judge incorrectly read or understood. 26

Section 19 of Rule 3 of Rules of Court which provides:

SEC. 19. Transfer of interest. ─ In case of any transfer of interest, the action may be continued by or against the original party, unless
the court upon motion directs the person to whom the interest is transferred to be substituted in the action. (Emphasis supplied),

uses the word "may" to denote that the substitution of parties on account of transfer of interest from the original party to another is
discretionary. The trial judge’s denial of PNB’s Motion for Substitution may not, under the circumstances, thus be seriously assailed.

The trial court’s order granting the petition for cancellation even while the therein respondent Maybank had not been given the chance
to file an Answer and, therefore, there was yet no joinder of issues, deprived Maybank, predecessor-in-interest of PNB, of due process
of law, thus rendering said order void.

Thus, in Bacolod City Water District v. Labayen where the trial court decided a case after it denied the defendant’s Motion to Dismiss,
this Court held:

xxxx

The short circuiting of the procedural process denied the petitioner due process of law. It was not able to allege its defenses in an
answer and prove them in a hearing. . . . Over and above every desideratum in litigation is fairness. All doubts should be resolved in
favor of fairness.27

x x x x (Underscoring supplied)

Petitioner’s argument that PNB could no longer avail of a petition for annulment of judgment due to its failure to appeal the trial court’s
Order dated August 15, 2002 fails. For, since the Motion for Substitution of PNB was denied, PNB had no personality to assail the said
order.

The trial court’s order being null and void, it may be assailed at any time either collaterally or in a direct action or by resisting the same
in any action or proceeding whenever it is invoked, unless barred by laches. 28 That laches had not set in, there is no doubt.

En passant, one need not be a party to the judgment sought to be annulled. What is essential is that it can prove his allegation that the
judgment was obtained by the use of fraud and collusion and it would be adversely affected thereby. 29 Even where there was no fraud
and collusion, however, this Court has allowed parties to file petitions for annulment of judgment to question precisely their non-
inclusion as parties to the original case.30 E.g., in National Housing Authority v. Evangelista31 where this Court upheld the annulment of
the trial court judgment, at the instance of a person who was not impleaded in the original case, this Court held:

Petitioner argues that it should not bear the consequence of the trial court’s denial of its motion to include respondent as defendant in
Civil Case No. Q-91-10071. True, it was not petitioner’s fault that respondent was not made a party to the case. But likewise, it was not
respondent’s fault that he was not given the opportunity to present his side of the story. Whatever prompted the trial court to deny
petitioner’s motion to include respondent as defendant is not for the Court to reason why. xxx Be that as it may, the undeniable fact
remains – respondent is not a party to Civil Case No. Q-91-10071 and xxx any portion of the trial court ‘s judgment xxx cannot be
binding on him.32

WHEREFORE, the petition is DENIED.

Costs against petitioner.

SO ORDERED.

22
Khemani v. Heirs of Trinidad, G.R. No. 147340, December 13, 2007

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 147340 December 13, 2007

CYNTHIA CRUZ KHEMANI and SHANKER N. KHEMANI, petitioners,

vs.
THE HEIRS OF ANASTACIO TRINIDAD, represented by NAPOLEON and ROLANDO TRINIDAD, respondents.

DECISION

YNARES-SANTIAGO, J.:

This petition for review on certiorari1 assails the July 31, 2000 Decision2 of the Court of Appeals in CA-G.R. SP No. 55581, which
affirmed the May 24, 1999 Order3 of the Regional Trial Court, Branch 24, Koronadal, South Cotabato in Civil Case No. 1122, entitled
"Heirs of Anastacio and Francisca Trinidad, et al. v. Heirs of Jose Peña, et al." Also assailed is the January 8, 2001 Resolution4 denying
the motion for reconsideration.

The factual antecedents are as follows:

Petitioner Cynthia Cruz Khemani is the registered owner of Lot No. 107, Ts-1032 (Lot No. 107), which is covered by Transfer Certificate
of Title (TCT) No. 58976 issued on March 10, 1994.5 Khemani purchased the lot from the heirs of Jose B. Peña (the Peña Heirs) on
February 17, 1994. Shanker N. Khemani is her brother-in-law and duly authorized representative.

Subject of the instant case is a 340 square meter portion (the Disputed Property) of Lot No. 107 over which respondents Heirs of
Anastacio Trinidad, represented by Napoleon and Rolando Trinidad, are claiming ownership. Respondents allege that they and their
predecessors-in-interest, Spouses Anastacio and Francisca Trinidad, have openly, peacefully, publicly and adversely possessed the
Disputed Property in the concept of owner since 1950.

Lot No. 107 and Lot Nos. 108 and 109, constitute Lot No. 355 which was part of the public domain. On July 10, 1950, Lot No. 355 with
an original area of 1,500 square meters was awarded to Jesus M. Larrabaster by the National Land Settlement Administration (NLSA)
who subsequently sold his rights and interests over the said property to Jose B. Peña (Peña) on June 29, 1956.

Thereafter, the original area of Lot No. 355 which was 1,500 square meters increased to 3,616.93 square meters due to accretion.
Peña then requested the Bureau of Lands (BOL) to adjust the area of the lot awarded to him but the BOL denied the request on the
ground that the accretion belonged to the government.

Aggrieved, Peña appealed to the Office of the President. The BOL recommended that Lot No. 355 be subdivided into three parts, to wit,
Lot Nos. 107, 108 and 109, and that Lot No. 108 with an area of 1,500 square meters, be awarded to Peña, instead of the whole of Lot
No. 355. Meanwhile, Lot Nos. 107 and 109 would be allocated to Basilio Mendoza (Mendoza) and Arturo Roxas, respectively.

The Office of the President initially adopted the recommendation of the BOL. Upon reconsideration, however, it modified its decision
and held that the entire area of Lot No. 355, including the accretion, belonged to Peña and not to the government. Thus, Lot Nos. 107,
108, and 109 were awarded to him.

On January 27, 1970, Mendoza filed a special civil action for certiorari against the Assistant Executive Secretary for Legal Affairs of the
Office of the President, the BOL, the Director of Lands, and Peña before Branch 24 of the Court of First Instance of South Cotabato,
which was docketed as Civil Case No. 98. Claiming that he was denied due process, Mendoza assailed the decision of the Office of the
President awarding the entire area of Lot No. 355 to Peña. He asserted ownership over Lot No. 107 on the strength of a Miscellaneous
Sales Application he allegedly filed with the BOL on November 6, 1962.

On May 10, 1985, the trial court rendered a decision dismissing Mendoza’s petition for certiorari but the same was reversed by the
Court of Appeals on appeal. Hence, Mendoza filed a petition for review on certiorari before the Supreme Court.

In the case of Assistant Executive Secretary for Legal Affairs of the Office of the President v. Court of Appeals 6 which was decided on
January 9, 1989, the Supreme Court rejected Mendoza’s claim over Lot No. 107 and found the Miscellaneous Sales Application without

23
legal force and effect since the object thereof was no longer public land. Thus, Peña’s right of ownership over the entire area of Lot No.
355, which consists of Lot Nos. 107, 108 and 109, was affirmed.

On September 20, 1993, the Peña Heirs were awarded a patent by the Department of Environment and Natural Resources (DENR),
and on September 21, 1993, Original Certificate of Title No. P-33658 7 covering Lot No. 107 was issued in their name.

On January 27, 1994, respondents filed with the Regional Trial Court, Branch 24, Koronadal, South Cotabato a verified
complaint8 against the Peña Heirs,9 the DENR Region IX Office, and the BOL for "Review of Decree of Registration and/or
Reconveyance with Prayer for Issuance of Writ of Preliminary Prohibitory Injunction and Temporary Restraining Order," which was
docketed as Civil Case No. 1122. Respondents filed the complaint on the strength of their own and their predecessors’ open, peaceful,
public and adverse possession of the Disputed Property in the concept of owner since 1950.

Respondents also claimed that on July 16, 1976, their predecessor-in-interest, Anastacio, applied for a Miscellaneous Sales Application
over the Disputed Property which was designated as a portion of Lot No. 107, Ts-1032. 10 On March 2, 1979, the BOL allegedly issued
Certification No. 3445 certifying that the Disputed Property was awarded to Anastacio and that the transfer had been duly investigated
and approved per Board Resolution No. 133, Series of 1979.

Instead of an answer, the Peña Heirs filed a Motion to Dismiss 11 alleging that the Regional Trial Court lacks jurisdiction over the nature
of the action or the suit; that respondents have no legal capacity to sue as only the government may seek nullification of the land grant
in their favor; and that the cause of action is barred by prior judgment or the statute of limitations. They asserted that the issue of
ownership over the Disputed Property has long been settled in the Assistant Executive Secretary case. Further, they argued that
respondents’ predecessor-in-interest, Anastacio, was a mere squatter who had been allowed by Mendoza to occupy a portion of Lot
No. 107 sometime in 1960.

In respondents’ Comment/Opposition,12 they claimed that the Disputed Property had long ceased to be public land by virtue of their
open, public, continuous, adverse and exclusive possession in the concept of owner for more than 40 years, and that they were never
parties in the Assistant Executive Secretary case involving Mendoza.

On September 3, 1997, Judge Rodolfo C. Soledad (Judge Soledad) granted petitioner’s motion to dismiss and held that respondents
are bound by the ruling of this Court in the Assistant Executive Secretary case.13

Respondents filed a motion for reconsideration14 alleging that res judicata does not apply and that their action is not barred by
the Assistant Executive Secretary case. They argued that neither they, nor Anastacio, were parties in the said case and that there is no
identity of causes of action.

In 1998, Judge Soledad died without resolving the motion for reconsideration filed by respondents. Judge Francisco S. Ampig (Judge
Ampig) was designated Acting Judge. On May 24, 1999, Judge Ampig granted the motion for reconsideration, reinstated Civil Case No.
1122, and directed the Peña Heirs to file an answer.

The Peña Heirs, together with herein petitioner as the new owner of Lot No. 107, filed a petition for certiorari15 before the Court of
Appeals which was docketed as CA-G.R. SP No. 55581.

On July 31, 2000, the Court of Appeals rendered the assailed decision dismissing the petition. It ruled that a petition for certiorari is not
the proper remedy against an order denying a motion to dismiss. Further, it held that there is no res judicata. Thus:

Moreover, petitioners have plain, speedy and adequate remedy in the ordinary course of law. The remedy against an adverse
interlocutory order, such as the assailed orders, is not 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. x x x

With the denial of the motion to dismiss and reinstatement of the case, petitioners will still answer the complaint. Upon joinder
of issues, the parties will enter into trial, after which, the lower court will render a verdict. And if adverse to them, petitioners
may appeal the decision together with the assailed orders. The case at bench does not fall under any of the exceptional
circumstances where the extraordinary writ of certiorari may be resorted to despite availability of appeal.

xxxx

Private respondents are not parties in the first action. Neither are they the successors-in-interest of any of the parties therein.
The first action is in personam. The final judgment in said action is only binding and conclusive upon the parties therein and
their successors-in-interest.

xxxx

24
 Mendoza, the petitioner in the first action, laid claim in Lot 107 on the basis of his possession thereof and Miscellaneous Sales
Application. On the other hand, private respondents’ interest in the contested property is anchored on their own possession
and Miscellaneous Sales Application. In other words, private respondents are not asserting rights under Mendoza.
Consequently, they have no community of interests in the contested property; in fact, their interests are antagonistic to each
other.

On the other hand, "the test often used in determining whether causes of action are identical is to ascertain whether the same
evidence which is necessary to sustain the second action would have been sufficient to authorize recovery in the first, even if
the forms or nature of the two actions be different" (Carlet vs. Court of Appeals, 275 SCRA 97). Considering that the
foundation of private respondents’ action is different from that of Mendoza, the evidence necessary to sustain the latter’s claim
in the first action would be separate and distinct from that required to establish private respondents’ cause of action.

Since not all requisites of res judicata are present, respondent judge acted rightly in issuing the assailed orders. In short, he
committed no abuse of discretion.

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED.16

The motion for reconsideration of the foregoing decision was denied hence, this petition.

Petitioner claims that the case of Assistant Executive Secretary bars the filing of Civil Case No. 1122, and that a petition
for certiorari under Rule 65 of the Rules of Court is the proper remedy in assailing the order of the Regional Trial Court denying the
motion to dismiss.

Respondents argue that they have been in open, peaceful, public and adverse possession of the Disputed Property in the concept of
owner since 1950; that the patent and original certificate of title were fraudulently issued in favor of the Peña Heirs; and that their action
for review of decree of registration and/or reconveyance is not barred by the Court’s ruling in Assistant Executive Secretary.

The issues for resolution are as follows: 1) whether a petition for certiorari under Rule 65 is the proper remedy in assailing an order
denying a motion to dismiss; and 2) whether Judge Ampig committed grave abuse of discretion in denying petitioner’s motion to dismiss
and reinstating Civil Case No. 1122.

The petition lacks merit.

It has long been settled that an order denying a motion to dismiss is an interlocutory order. It neither terminates nor finally disposes of a
case, as it leaves something to be done by the court before the case is finally decided on the merits. As such, the general rule is that
the denial of a motion to dismiss cannot be questioned in a special civil action for certiorari.17

However, there are exceptions to the general rule. In Velarde v. Lopez, Jr.,18 the Court held that resort to a special civil action
for certiorari is allowed when the ground for the motion to dismiss is improper venue, lack of jurisdiction, or res judicata as in the case
at bar.19 Thus, petitioner did not commit a procedural error in filing a petition for certiorari before the Court of Appeals.

Nevertheless, as to the substantive issue raised herein, the petition must fail. We find that Judge Ampig did not commit grave abuse of
discretion in denying petitioner’s motion to dismiss and reinstating Civil Case No. 1122.

In Oropeza Marketing Corp. v. Allied Banking Corp.,20 we held that res judicata literally means "a matter adjudged; a thing judicially
acted upon or decided; a thing or matter settled by judgment." It lays the rule that an existing final judgment or decree rendered on the
merits, and without fraud or collusion, by a court of competent jurisdiction, upon any matter within its jurisdiction, is conclusive of the
rights of the parties or their privies, in all other actions or suits in the same or any other judicial tribunal of concurrent jurisdiction on the
points and matters in issue in the first suit.21

A case is barred by prior judgment or res judicata when the following requisites concur: (1) the former judgment is final; (2) it is
rendered by a court having jurisdiction over the subject matter and the parties; (3) it is a judgment or an order on the merits; and (4)
there is – between the first and the second actions – identity of parties, subject matter, and causes of action. 22

In this case, it is not disputed that the first three elements are present. Likewise, there is no controversy regarding the identity of the
subject matter. The question, therefore, is whether there is identity of parties and causes of action. We find that there is none.

Civil Case No. 98 was a special civil action for certiorari filed by Mendoza against the Assistant Executive Secretary for Legal Affairs of
the Office of the President, the BOL, the Director of Lands, and Peña. On the other hand, Civil Case No. 1122 is an action for review of

25
decree of registration and/or reconveyance. The parties are respondents Trinidad, the Peña Heirs, the DENR Region IX Office, and the
BOL.

Mendoza’s action in Civil Case No. 98 was based on alleged grave abuse of discretion of the Office of the President in awarding the
entire area of Lot No. 355 to Peña. He claimed ownership over Lot No. 7 and in support thereof, presented the Miscellaneous Sales
Application he filed with the BOL on November 6, 1962. Meanwhile, respondents’ action in Civil Case No. 1122 was based on their
continued possession of the Disputed Property in the concept of owner for over 40 years, and the alleged fraudulent issuance of a
patent and certificate of title to the Peña Heirs.

True, res judicata does not require absolute but only substantial identity of parties. However, there is substantial identity only when the
"additional" party acts in the same capacity or is in privity with the parties in the former action. 23 This is not so in the present case. It
must be emphasized that respondents are not asserting rights under Mendoza. Indeed, the records will show that the parties in the two
cases have their own rights and interests in relation to the subject matter in litigation.

Moreover, as correctly found by the Court of Appeals, the basis of respondents’ action was different from that of Mendoza; the evidence
necessary to sustain the latter’s claim is separate and distinct from that required to establish respondents’ cause of action. 24 While
Mendoza relied on the Miscellaneous Sales Application as evidence to support his claim, herein respondents would have to present
proof of their alleged continuous possession of the Disputed Property as well as fraud in the issuance of the patent and title in favor of
the Peña Heirs. In Morato v. Court of Appeals,25 we held that the test of identity of causes of action lies not in the form of action but in
whether the same facts or evidence would support and establish the former and present causes of action. 26

Thus, res judicata does not apply in the instant case there being no identity of parties and causes of action. Nevertheless, the public
policy underlying the principle of res judicata must be considered together with the policy that a party shall not be deprived of a fair
adversary proceeding wherein to present his case.27 It bears stressing that respondents’ action for review of decree of registration is
sanctioned under Section 32 of Presidential Decree No. 1529,28 which provides that a person deprived of his land through actual fraud
may institute an action to reopen or review a decree of registration within one year from entry of such decree. It states:

Section 32. Review of decree of registration; Innocent purchaser for value. The decree of registration shall not be reopened or
revised by reason of absence, minority, or other disability of any person adversely affected thereby, nor by any proceeding in
any court for reversing judgments, subject, however, to the right of any person, including the government and the branches
thereof, deprived of land or of any estate or interest therein by such adjudication or confirmation of title obtained by actual
fraud, to file in the proper Court of First Instance a petition for reopening and review of the decree of registration not later than
one year from and after the date of the entry of such decree of registration, but in no case shall such petition be entertained by
the court where an innocent purchaser for value has acquired the land or an interest therein, whose rights may be prejudiced.
Whenever the phrase "innocent purchaser for value" or an equivalent phrase occurs in this Decree, it shall be deemed to
include an innocent lessee, mortgagee, or other encumbrancer for value.

The Court has repeatedly applied the foregoing provision of law to a patent issued by the Director of Lands, approved by the Secretary
of Natural Resources, under the signature of the President of the Philippines. The date of the issuance of the patent corresponds to the
date of the issuance of the decree in ordinary cases.29

In this case, the patent was issued in favor of the Peña Heirs on September 20, 1993. Respondents filed Civil Case No. 1122 for
"Review of Decree of Registration and/or Reconveyance with Prayer for Issuance of Writ of Preliminary Prohibitory Injunction and
Temporary Restraining Order" on January 27, 1994, or well within the prescribed one-year period. Likewise, records show that TCT No.
58976 under petitioner’s name bears a Notice of Lis Pendens.30 Thus, it cannot be said that petitioner is an innocent purchaser for
value as she was well aware of respondents’ claim over the Disputed Property.

Further, even assuming arguendo that respondents filed their action after one year, they may still be entitled to relief. An aggrieved
party may file an action for reconveyance based on implied or constructive trust, which prescribes in ten years from the date of the
issuance of the certificate of title over the property provided that the property has not been acquired by an innocent purchaser for
value.31

Respondents clearly asserted in their complaint that they and their predecessors-in-interest have long been the owners of the Disputed
Property and that they were fraudulently deprived of ownership thereof when the Peña Heirs obtained a patent and certificate of title in
their favor. These allegations certainly measure up to the requisite statement of facts to constitute an action for reconveyance. 32

A final note. It appears from the records that after our ruling in the Assistant Executive Secretary case in 1989, the BOL issued a Patent
on September 20, 1993 in favor of the Peña Heirs which became the basis for the issuance of OCT No. P-33658 covering Lot No. 107.
However, as held in the Assistant Executive Secretary case, Lot No. 107 – as accretions to the original lot (Lot No. 355) awarded to
Larrabaster on July 10, 1950 – "no longer belonged to the Government[,] the subdivision thereof by the Bureau of Lands into three lots
(Lot No. 107, Lot No. 108 and Lot No. 109), as well as the allocation of said lots to two other individuals, was beyond the scope of its
authority."33 As a result, while Lot No. 107 may no longer be acquired under the provisions of the Public Land Act, it does not absolutely
foreclose the possibility that, as a private property, a portion thereof (the Disputed Property) may have been acquired by respondents

26
through acquisitive prescription under the Civil Code. These matters, however, are the proper subject of a separate action should one
be filed subject, of course, to such claims and defenses that either party may have under relevant laws.

All told, it would be premature to order the dismissal of respondents’ complaint as they have yet to be given an opportunity to
substantiate their claims. We note that respondents are in actual physical possession of the Disputed Property up to this date, and the
fact of their physical possession over many years is not disputed by petitioner. 34 Under the circumstances, it would be more in keeping
with the standards of fairness to have a full-blown trial where the evidentiary matters are threshed out.

WHEREFORE, the petition is DENIED. The July 31, 2000 Decision, and the January 8, 2001 Resolution of the Court of Appeals in CA-
G.R. SP No. 55581 are AFFIRMED. The trial court is ORDERED to resume trial in Civil Case No. 1122 and to resolve the same with
dispatch.

SO ORDERED.

27
Filinvest Land, Inc. v. Court of Appeals, G.R. No. 142439, December 6, 2006

G.R. No. 142439 December 6, 2006

FILINVEST LAND, INC., petitioner,

vs.
HON. COURT OF APPEALS and ROMEO, ANTONIO, JOSEFINA, RICARDO (JR.), all surnamed ALVAREZ and VENANCIA R.
Vda. de ALVAREZ, for herself as guardian ad litem for her minor children, RAMON, VERONICA, and FLORDELIZA, all
surnamed ALVAREZ, and as necessary and indispensable party plaintiffs JAIME, VICTORIA, and MANUEL, all surnamed
ALVAREZ, and ROSARIO PARAM Vda. de ALVAREZ, respondents.

DECISION

CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Court, as amended, seeking to set aside a Decision 1 of
the Court of Appeals dated 11 November 1998 in CA–G.R. SP No. 48396 annulling the sale of a parcel of land specified as Lot No.
329, GSS-877 of the Laguna Resettlement Project, to the late Ricardo Alvarez and the subsequent transfers to Mercedes Oliver and
petitioner Filinvest Land Inc. (Filinvest); and the reversion of the subject property to the ownership of the government. The Court of
Appeals in its assailed Decision affirmed the Decision2 of the Department of Agrarian Reform Adjudication Board (DARAB) dated 1 July
1998.

The subject matter in this case is a parcel of land registered as Lot No. 329 of the Laguna Resettlement Project, located in Barrio San
Vicente, San Pedro, Laguna, with an area of 16,495 square meters. The Department of Agrarian Reform (DAR) awarded to Ricardo
Alvarez the right to purchase the land in question, pursuant to an Order of Award dated 9 October 1973. 3 On 15 August 1977, Ricardo
Alvarez, with the consent of his wife, respondent Rosario Param, purchased the land, evidenced by a Deed of Sale executed by the
DAR.4 This Deed of Sale specifically prohibited the transfer of the land within ten (10) years from the issuance of the certificate of title to
any person other than the vendee’s relatives within the third civil degree by consanguinity or affinity who are, at the same time, qualified
beneficiaries.5 This restriction was in accordance with Section 62 of Republic Act No. 3844, or the Agricultural Land Reform Code. 6

However, pending the issuance of the certificate of title of the said land, Presidential Decree No. 1474, Declaring the San Pedro
Tunasan Estate (also known as the Laguna Resettlement Project) of the Department of Agrarian Reform Suitable for Residential,
Commercial, or Industrial, or other Non-Agricultural Purposes, was enacted on 11 June 1978 and published in the Official Gazette on
27 November 1978. This effectively repealed the ten-year prohibition on the transfer of agrarian lands situated in the Laguna
Resettlement Project. Presidential Decree No. 1474 provided that:

Section 1. The Department of Agrarian Reform, as Administrator of the San Pedro Tunasan Estate, is hereby ordered to
convert such estate into a commercial, industrial and residential site and to transfer the same to the National Housing
Authority.

Section 2. Individuals who have legally acquired farm lots in the Estate under Orders of Award or Certificates of Land Transfer
or Agreement to Sell or Deeds of Sale, may sell or transfer their lots covered thereby or convert the same for the purposes
mentioned in Section 1 hereof.

The Register of Deeds of the Province of Laguna issued Transfer Certificate of Title (TCT) No. 62731, covering the subject land, in the
name of Ricardo Alvarez on 25 May 1979. On 10 June 1979, only 16 days after the title was issued, Ricardo Alvarez and his wife,
Rosario Param, sold the said land to Mercedes Oliver for Ten Thousand Pesos (P10, 000.00). Oliver was not a relative within the third
degree of consanguinity and had no capacity to personally cultivate the land, as required of a qualified beneficiary. Thus, TCT No.
62731 was cancelled, and TCT No. 64967 was issued in the name of Mercedes Oliver. 7

On 22 December 1989, Mercedes Oliver sold the subject land to Filinvest, resulting in the issuance of TCT No. 201836 on 23 January
1990 in the name of Filinvest.8

On 7 March 1982, the heirs of the late Ricardo Alvarez filed a case for reconveyance, redemption and damages against Mercedes
Oliver, Avelino Ramos and Jose Nunez, before the Regional Trial Court (RTC) of Biñan, Laguna. 9 Respondents filed an Amended
Complaint for Annulment of Title with Reconveyance, dated 4 December 1985, wherein they claim that the sale of the subject land was
made without their knowledge, and it was only in the 1980’s that they learned of such sale. They alleged that their mother and father,
both illiterate, were deceived by the defendants into executing the Deed of Sale covering the subject land in favor of Mercedes Oliver.
Respondents also argued that such sale was void since the Deed of Sale was executed in violation of the law which enjoins the sale of
the subject land.10 This case was, however, dismissed for failure of the respondents and counsel to appear during the hearing for the
reception of their evidence, despite due notice and after eight postponements 11. The RTC, in its Order,12 dated 17 February 1989, ruled
that:

28
 Further considering that without the evidence of said witness and the plaintiffs not having presented any evidence on record,
upon motion of counsel for defendants that this case be dismissed and further manifestation by the defendants that they are
waiving their right to a counterclaim, the Court hereby orders the dismissal of this case (both the complaint and counterclaim).

Let copy of this Order be furnished party plaintiff.

The order became final and executory when the respondents failed to file a motion for reconsideration of this Order, despite receipt
thereof.13

On 26 March 1990, respondents filed a complaint against Mercedes Oliver and Filinvest before the Provincial Agrarian Reform
Adjudication (PARAD) of Sta. Cruz, Laguna, seeking to annul the Deed of Sale between the Spouses Alvarez and Mercedes Oliver and
the subsequent transfer between Mercedes Oliver and Filinvest, on grounds similar to the complaint filed before the RTC of Biñan.
They also sought the issuance of a restraining order enjoining Filinvest from bulldozing the subject land, which was occupied and
cultivated by the respondents. Mercedes Oliver filed a Motion to Dismiss on the grounds of res judicata and that the PARAD had no
jurisdiction over the subject matter of the case. Filinvest similarly filed a motion to dismiss on the grounds of res judicata and laches. It
also alleged, in its defense, that it was a purchaser for value and in good faith. In its Position Paper, Filinvest likewise asserted that the
restriction against selling the subject land within ten years, provided under the Deed of Sale executed by DAR in favor of the Spouses
Alvarez had already been superseded by Presidential Decree No. 1474, which took effect in 1978. 14

On 25 August 1993, the PARAD of Sta. Cruz, Laguna, dismissed the complaint on the ground of res judicata. Moreover, it ruled that the
sale between the Spouses Alvarez and Mercedes Oliver was valid.15 The dispositive part of this Decision16 reads:

WHEREFORE, in view therefrom, Judgment is hereby rendered dismissing the instant case for lack of merit.

On appeal, the DARAB reversed and set aside the Decision dismissing the complaint, and ordered the reversion of the subject property
to the government. The dispositive portion of the said Order,17 dated 1 July 1998 reads:

WHEREFORE, premises considered, the challenged decision dated August 25, 1993 is hereby REVERSED and SET ASIDE
and a new judgment is hereby rendered as follows:

1. Annulling the transfer of the land in question to the late Ricardo Alvarez and its subsequent transfers to defendant Mercedes
Oliver and defendant Filinvest Land Incorporated;

2. Ordering the cancellation of Transfer Certificate of Title No. 201836, covering the subject land, issued by the Register of
Deeds for the Province of Laguna, Calamba branch, in the name of defendant Filinvest; and

3. Directing the Register of Deeds for the Province of Laguna, Calamba branch, to issue in lieu of TCT No. 201836, a
Certificate of Title in the name of the Republic of the Philippines, through DAR, for distribution to qualified farmer-beneficiary in
accordance with Administrative Order No. 01, Series of 1992, which is the Revised Rules and Procedures Governing the
Disposition of Homelots and other Lots in Barangay Sites and Residential, Commercial, and Industrial Lots in Townsites within
DAR Settlement Project and Similar Other Areas under DAR Jurisdiction.

The DARAB ruled, too, that res judicata as a bar against filing a complaint with the PARAD is not applicable in this case since there
was no adjudication of the merits before the RTC of Biñan.

The DARAB considered as self-serving and unsupported by evidence the allegations of the respondents that the consent of the
Spouses Alvarez was obtained through fraud in connection with the sale made in favor of Mercedes Oliver. It also ruled that the sale
between Ricardo Alvarez and Mercedes Oliver was a violation of the ten-year prohibition against the transfer of the land imposed by the
Deed of Sale between the government and Ricardo Alvarez, in accordance with Section 62 of Republic Act No. 3844. Such act
rendered the Deed of Sale executed by the DAR in favor of Ricardo Alvarez void, and, therefore, the subsequent transfers to Mercedes
Oliver and Filinvest were, likewise, void.18

In negating Filinvest’s claim that Presidential Decree No. 1474 has superseded Section 62 of Republic Act No. 3844, the DARAB cited
the case of Tipon v. Intermediate Appellate Court,19 where the Court upheld the validity of the ten-year prohibition on the transfer of land
given by the government to farmer-beneficiaries. The DARAB added that the restriction on transfer of land is contained in our present
agrarian laws, particularly Republic Act No. 6675.20

The petitioners then filed a Petition for Certiorari under Section 43 of the 1997 Rules of Court before the Court of Appeals, but on 11
November 1998, the appeal was again dismissed for lack of merit and the assailed Decision of the DARAB was affirmed. 21

The petitioners filed a Motion for Reconsideration, which was subsequently denied in a Resolution dated 8 February 1999. 22

29
Hence this petition, wherein Filinvest raised the following issues:

WHETHER OR NOT THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AND COMMITTED REVERSIBLE
ERROR IN HOLDING THAT THE SALE OF THE SUBJECT PARCEL OF LAND BY RICARDO ALVAREZ TO MERCEDES
OLIVER VIOLATED THE TRANSFER RESTRICTION CONTAINED IN THE PRIOR DEED OF SALE OF THE SAME
PROPERTY EXECUTED BY THE DEPARTMENT OF AGRARIAN REFORM IN FAVOR OF RICARDO ALVAREZ AND
SECTION 62, ARTICLE II, CHAPTER III OF REPUBLIC ACT NO. 3844

II

WHETHER OR NOT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION AND COMMITTED
REVERSIBLE ERROR IN APPLYING SECTION 1 (C), RULE II OF THE NEW RULES OF PROCEDURE OF THE
DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD (DARAB), CONFERRING JURISDICTION OF THE
DARAB OVER THE INSTANT CASE, IN DISREGARD OF THE PROVISIONS OF PRESIDENTIAL DECREE NO. 1474

III

WHETHER OR NOT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION AND COMMITTED
REVERSIBLE ERROR IN RULING THAT THE DOCTRINE OF RES JUDICATA DOES NOT APPLY TO BAR
RESPONDENTS’ COMPLAINT IN DARAB CASE NO. IV-032-L

IV

WHETHER OR NOT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION AND COMMITTED
REVERSIBLE ERROR IN NOT RULING THAT PETITIONER IS A BUYER IN GOOD FAITH WHO SHOULD BE ENTITLED
TO PROTECTION AGAINST THE ALLEGED CLAIM OF THE RESPONDENT HEREIN, PURSUANT TO THIS HONORABLE
COURT’S RULING IN AGRICULTURAL AND HOME EXTENSION DEVELOPMENT GROUP VS. COURT OF APPEALS, ET
AL., G.R. NO. 92319, SEPTEMBER 3, 199223

This petition is meritorious.

The first issue raised by Filinvest is whether the sale between Ricardo Alvarez and Mercedes Oliver was void because it violated the
prohibitory condition contained in the Deed of Sale between Ricardo Alvarez and the Government, to wit:

2. That from the date of the pertinent Order of Award and within TEN (10) years from the date of issuance by the proper
Register of Deeds of the certificate of title, the land subject hereof shall not, except by hereditary succession, be subdivided,
sold or in any manner transferred or encumbered except in favor of any of the VENDEE’S relative within the third civil degree
by consanguinity or affinity who fulfill the four (4) requirements in Section 6 Land Authority Administrative Order No. 4, Series
of 1967, or in favor of the Government and its financial or banking institutions or rural banks, and only upon prior written
consent of the Secretary of the Department of Agrarian Reform; and any sale, transfer, encumberance or alienation made in
violation hereof shall be null and void: x x x24

This condition is in accordance with Section 62 of Republic Act No. 3844, The Agricultural Land Reform Code, which provided that:

Section 62. Limitation on Land Rights. - Except in case of hereditary succession by one heir, landholdings acquired under this Code
may not be resold, mortgaged, encumbered, or transferred until after the lapse of ten years from the date of full payment and
acquisition and after such ten-year period, any transfer, sale or disposition may be made only in favor of persons qualified to acquire
economic family-size farm units in accordance with the provisions of this Code: Provided, That a purchaser who acquired his
landholding under a contract to sell may secure a loan on the same from any private lending institution or individual for an amount not
exceeding his equity on said landholding upon a guaranty by the Land Bank.

Filinvest, however, contends that these restrictions were already revoked by the issuance of Presidential Decree No. 1474, Declaring
the San Pedro Tunasan Estate of the Department of Agrarian Reform Suitable for Residential, Commercial or Industrial, or Other Non-
Agricultural Purposes. This law reclassifies the San Pedro Tunasan Estate, known as and hereinafter referred to as the Laguna
Resettlement Project, into a commercial, industrial and residential site as it is no longer conducive to agricultural development.

The position taken by Filinvest is justified. Section 2 of Presidential Decree No. 1474 25 categorically empowers "individuals who have
legally acquired lots in the (San Pedro Tunasan) Estate" under Orders of Awards or Deeds of Sale, among others things, to "sell or
transfer their lots covered thereby." Therefore, transfers of land located within the Laguna Resettlement Project, made after the law
took effect, are valid and the restriction on transfer of the land within ten years after its registration is no longer applicable.

30
In the present case, the government, through the DAR had already issued an Order of Award and a Deed of Sale in favor of Ricardo
Alvarez covering a parcel of land located within the Laguna Resettlement Project, when Presidential Decree No. 1474 was enacted on
11 June 1978. In 1979, Alvarez, with the consent of his spouse, Rosario Param, transferred the same parcel of land to Mercedes
Oliver. Such transfer was clearly sanctioned. As earlier adverted to, Section 2 of Presidential Decree No. 1474 revoked the application
of Section 62 of Republic Act No. 3844 and the condition prohibiting the transfer of the land contained in the Deed of Sale executed by
the DAR in favor of Alvarez, in so far as land within the Laguna Resettlement Project was concerned. Since the transfer made by
Ricardo Alvarez to Mercedes Oliver was valid, the subsequent transfer made by Mercedes Oliver to Filinvest is also valid.

DARAB’s reliance on the ruling of the Court in Tipon v. Intermediate Appellate Court,26 upholding the ten-year prohibition on the transfer
of land distributed by the government in favor of its beneficiaries, is misplaced. This case is not applicable for it did not take into account
Presidential Decree No. 1474 because of different factual circumstances. It is true that the Tipon case shares some similarities with the
present case - the subject property was part of the Laguna Resettlement Project, and the Deed of Sale between the DAR and the
farmer-beneficiary, Renato Tipon, was executed before the enactment of Presidential Decree No. 1474 in 1978. However, there is a
crucial difference. Unlike the present case where the subsequent transfer by the farmer-beneficiary, Ricardo Alvarez, to Mercedes
Oliver was made in 1979 after Presidential Decree No. 1474 took effect, the subsequent transfer by farmer-beneficiary Renato Tipon to
Atty. Umiral Matic, was made in 1976 before the enactment of Presidential Decree No. 1474. The factual background of the Tipon case,
as recounted by the Court, are thus:

Petitioner Renato Tipon acquired the lot in question (Lot No. 386 of the Laguna Settlement Project) from the government by
virtue of a Deed of Sale executed in his favor by the Department of Agrarian Reform on November 23, 1976, for the price
of P1,251.20. x x x.

xxxx

On the day the Deed of Sale was executed in his favor, Tipon filed a request with the Department of Agrarian Reform for
permission to transfer his rights and interest over the lot in question in favor of Atty. Umiral P. Matic (respondent herein). This
request was granted by the Regional Director of Region IV of the Department of Agrarian Reform on December 9, 1976
"subject to the condition that the Deed of Transfer is submitted to this department for verification and final approval.

On December 10, 1976, Tipon submitted the Deed of Absolute Sale in favor of Matic for approval and, on the same day, it was
approved by the Regional Director of Region IV of the Department of Agrarian Reform. Thereafter, Matic caused the titling of
the property in the name of Tipon to whom was issued Transfer Certificate of Title No. 50617 and later, had the same
transferred to his name under Transfer Certificate of Title No. 53850 dated July 12, 1977, of the Registry of Deeds for the
Province of Laguna.27

A basic principle of statutory construction mandates that general legislation must give way to special legislation on the same subject,
and generally be so interpreted as to embrace only cases in which the special provisions are not applicable. 28 There is no question that
Section 2 of Presidential Decree No. 1474 is inconsistent with Section 62 of Republic Act No. 3844. The former authorizes the sale or
transfer of agricultural lands within the Laguna Resettlement Project, while the latter law prohibits the transfer of agricultural lands
distributed by the government to farmer-beneficiaries, at least for a limited period. Presidential Decree No. 1474 as a special law should
govern lands within the Laguna Resettlement Project, while Republic Act No. 3844 is a law generally applied to agrarian lands.

The second issue Filinvest raised is whether the DARAB had jurisdiction over a case involving the subject land. Rule II, Section 1, of
the DARAB Revised Rules of Procedure provides that the DARAB shall have primary jurisdiction, both original and appellate over:

(c) Cases involving the annulment or cancellation of orders or decisions of DAR officials other than the Secretary, lease
contracts or deeds of sale or their amendments under the administration and disposition of the DAR and LBP; x x x.

However, Filinvest argued that under Section 1 of Presidential Decree No. 1474, the Laguna Resettlement Project was no longer
agricultural land but was effectively converted into a commercial, industrial and residential site, and was therefore outside the
jurisdiction of the DARAB. Section 1 of Presidential Decree No. 1474 reads:

Section 1. The Department of Agrarian Reform, as Administrator of the San Pedro Tunasan Estate, is hereby ordered to
convert such estate into a commercial, industrial and residential site and to transfer the same to the National Housing
Authority.

From the aforecited provision, it is clear that the DAR had lost jurisdiction over government lands located in the Laguna Resettlement
Project formerly under its administration which it was ordered to transfer to the National Housing Authority (NHA). More importantly, the
DARAB can no longer annul the Deed of Sale between the government and Ricardo Alvarez, or the subsequent transfers, on the
ground that Alvarez violated Section 62 of Republic Act No. 3844 and the conditions laid down in the Deed of Sale regarding the ten-
year restriction on the transfer of the same land. At that time, the transfer between Alvarez and Oliver was made, these aforementioned
rules were repealed by the provisions of Presidential Decree No. 1474. These rules were no longer applicable to the land in question,
as it was no longer under the administration of the DAR nor agrarian in character. The validity of the subsequent transfer of the subject
land between Ricardo Alvarez and Mercedes Oliver, or even the later transfer between Mercedes Oliver and Filinvest, was no longer
31
subject to agrarian laws, as the land was already commercial, industrial, or residential in nature at the time of the transfer. Therefore,
any proceeding which attacks the validity of the subsequent transfers are within the jurisdiction of regular courts.

Clearly, the respondents filed the case before the PARAD, not because the case involved a dispute that would be properly resolved by
the PARAD, but because they were already barred from filing the case before the proper forum. The allegations and relief found in the
Complaint filed by the respondents before the PARAD are conspicuously similar to those in the Amended Complaint which they had
earlier filed before the trial court of Biñan.29 As earlier discussed, the trial court ordered the dismissal of the case for failure to prosecute.
When the respondents failed to file a motion for reconsideration, despite due notice, such order became final.

This Court cannot countenance the party-litigant’s recourse to such measures. The foundation principle upon which the doctrine of res
judicata rests is that parties should not be permitted to litigate 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, so
long as it is not reversed, should be conclusive upon the parties and those in privity with them in law or estate. 30

The following requisites must concur in order that a prior judgment may bar a subsequent action: (1) the former judgment or order must
be final; (2) it must be a judgment or order on the merits, that is, it was rendered after a consideration of the evidence or stipulations
submitted by the parties at the trial of the case; (3) it must have been rendered by a court having jurisdiction over the subject matter and
the parties; and (4) there must be, between the first and second actions, identity of parties, of subject matter and of cause of action. 31

A perusal of the records easily shows that the first, third and fourth requirements have been complied with in this case. The Order
rendered by Branch XXIV of the RTC of Biñan, dated 17 February 1989, dismissing the case, is clearly final, as it disposed of all the
rights and obligations of the parties before it.32 There was never any question raised on the jurisdiction of Branch XXIV of the RTC to
hear and decide the question of whether the sale executed between Ricardo Alvarez and Mercedes Oliver was valid. It is also obvious
that the allegations of the respondents in their Amended Complaint filed before the RTC of Biñan are substantially identical to the
Complaint filed before the PARAD; involved the same subject matter, and raised the same causes of action. 33 Filinvest was named as a
party only in the complaint before the PARAD, since it acquired the property from Mercedes Oliver only on 22 December 1989, 34 after
the case before the RTC was dismissed on 17 February 1997. Moreover, the fact that its predecessor-in interest, Mercedes Oliver, was
a party in the case filed before the RTC of Biñan satisfies the requirement on the identity of parties. In the case of Camara v. Court of
Appeals,35 this Court has ruled that, "[t]here is identity of parties not only where the parties are the same, but also those in privity with
them, as between their successors-in-interest by title subsequent to the commencement of the action, litigating for the same thing and
under the same title and in the same capacity."

The only contention between the parties was whether the second requirement, that the decision or order must have been based on the
merits of the case, was met. In situations contemplated in Section 3, Rule 17 of the Rules of Court, 36 where a complaint is dismissed for
failure of the plaintiff to comply with a lawful order of the court, such dismissal has the effect of an adjudication upon the merits. 37 A
dismissal for failure to prosecute has the effect of an adjudication on the merits, and operates as res judicata, particularly when the
court did not direct that the dismissal was without prejudice.38

Having complied with the four requisites needed for the doctrine of res judicata to operate, the Order rendered by the RTC of Biñan
dismissing Civil Case No. B-1941 finally determined the ownership of the subject land, the heirs of the late Ricardo Alvarez, Mercedes
Oliver, and her successor-in-interest, Filinvest, as no motion for reconsideration on this Order was filed. Moreover, this would bar any
dispute over the subject land from being brought before any judicial forum. Rule 39, Section 47 of the Rules of Court 39 provides that in
case of a judgment or final order over a specific thing, rendered by a court having jurisdiction, the judgment or final order is conclusive
upon the title to the thing and binding upon the parties and their successors-in-interest.

Furthermore, the allegations of the private respondents of their counsel’s negligence cannot be given any credence. In the Affidavit of
private respondent Romeo Alvarez, and reiterated in the Comment filed by the private respondents before the Court of Appeals, it was
alleged that on 12 December 1986, their counsel, Atty. Rosendo O. Chavez, executed a Notice of Withdrawal, which was not filed
before the trial court and did not bear the conformity of the private respondents. 40 Thereafter, Atty. Chavez allegedly stopped attending
the hearings before the trial court. As a result thereof, the private respondents were not notified of the 17 February 1989 hearing, when
the Order dismissing the case was issued.

Records clearly show that Atty. Chavez could not have withdrawn from the case on 12 December 1986. As of 14 December 1987, Atty.
Chavez presented as his witness, Rosario Param, one of the private respondents. 41 Since he requested for continuance, he was
required to bring the witness on the next hearing date. However, seven postponements later, he was unable to bring the witness he
presented.42 On 17 October 1988, Atty. Chavez attended the hearing. He failed to attend the next hearing on 20 January 1989.
Nevertheless, he was still at that time the counsel of the private respondents and therefore the notice to him was binding upon the
parties. Moreover, the private respondent Rosario Param was perfectly aware that her testimony was far from finished, and that she still
needed to appear before the Court. Given the foregoing facts, private respondent’s allegations that their counsel was grossly negligent
and that he had deceived them is not credible.

Even if the allegations of the private respondents are to be believed, they should have raised them in a Motion for Reconsideration, or a
petition to annul the Order of the trial court dismissing the case. While they alleged that they did not receive the Order requiring them to
appear on the 17 February 1989 hearing, they never denied receiving the Order of dismissal. As the records stand, the counsel for the
respondents received the Order dismissing the case on 28 February 1989, 43 and the respondents never filed a Motion for
32
Reconsideration or even a belated appeal to question the Order dismissing case. Instead, they waited for a full year and filed with the
DARAB a case which was under the jurisdiction of the regular courts.

WHEREFORE, premises considered, this Court GRANTS this petition and REVERSES the Decision of the Court of Appeals in CA-
G.R. SP No. 48396, dated 11 November 1998, affirming the Order of the DARAB nullifying the transfer certificate titles issued in the
names of Ricardo Alvarez, Mercedes Oliver and Filinvest Land Inc. since the DARAB was without jurisdiction to issue the said Order.
No costs.

SO ORDERED.

33
Dole Philippines v. Esteva, G.R. No. 161115, November 30, 2006

G.R. No. 161115 November 30, 2006

DOLE PHILIPPINES, INC., Petitioner,

vs.
MEDEL ESTEVA, HENRY SILVA, GILBERT CABILAO, LORENZO GAQUIT, DANIEL PABLO, EDWIN CAMILO, BENJAMIN
SAKILAN, RICHARD PENUELA, ARMANDO PORRAS, EDUARDO FALDAS, NILO DONDOYANO, MIGUEL DIAZ, ROMEL BAJO,
ARTEMIO TENERIFE, EDDIE LINAO, JERRY LIGTAS, SAMUEL RAVAL, WILFREDO BLANDO, LORENZO MONTERO, JR.,
JAIME TESIPAO, GEORGE DERAL, ERNESTO ISRAEL, JR., AGAPITO ESTOLOGA, JOVITO DAGUIO, ARSENIO LEONCIO,
MARLON BLANDO, JOSE OTELO CASPILLO, ARNOLD LIZADA, JERRY DEYPALUBOS, STEVEN MADULA, ROGELIO
CABULAO, JR., ALVIN COMPOC, EUGENIO BRITANA, RONNIE GUELOS, EMMANUEL JIMENA, GERMAN JAVA, JESUS
MEJICA, JOEL INVENTADO, DOMINGO JABULGO, RAMIL ENAD, RAYMUNDO YAMON, RITCHIE MELENDRES, JACQUEL
ORGE, RAMON BARCELONA, ERWIN ESPIA, NESTOR DELIDELI, JR., ALLAN GANE, ROMEO PORRAS, RITCHIE BOCOG,
JOSELITO ACEBES, DANNY TORRES, JIMMY NAVARRO, RALPH PEREZ, SONNY SESE, RONALD RODRIQUES, ROBERTO
ALLANEC, ERNIE GIGANTANA, NELSON SAMSON, REDANTE DAVILA, EDDIE BUSLIG, ALLAN PINEDA, JESUS BELGERA,
VICENTE LABISTE, CARMENCITA FELISILDA, GEORGE DERLA, RUBEN TORMON, NEIL TAJALE, ORLANDO ESPENILLA,
RITCHEL MANEJAR, JOEL QUINTANA, ERWIN ALDE, JOEL CATALAN, ELMER TIZON, ALLAN ESPADA, EUGENE BRETANA,
RAMIL ENAD, RENE INGALLA, STEVEN MADULLA, RANDY REBUTAZO, NEIL BAGATILLA, ARSENIO LEONCIO, ROLANDO
VILLEGAS and JUSLIUS TESIPAO, herein represented by MEDEL ESTEVA, Authorized Representative, Respondents.

DECISION

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the revised Rules of Civil Procedure seeking the reversal of the
Decision,1 dated 20 May 2002, and the Amended Decision,2 dated 27 November 2003, both rendered by the Court of Appeals in CA-
G.R. SP No. 63405, which declared herein petitioner Dole Philippines, Inc. as the employer of herein respondents, Medel Esteva and
86 others; found petitioner guilty of illegal dismissal; and ordered petitioner to reinstate respondents to their former positions and to pay
the latter backwages.

The antecedent facts of the case are recounted as follows:

Petitioner is a corporation duly organized and existing in accordance with Philippine laws, engaged principally in the production and
processing of pineapple for the export market.3 Its plantation is located in Polomolok, South Cotabato.4

Respondents are members of the Cannery Multi-Purpose Cooperative (CAMPCO). CAMPCO was organized in accordance with
Republic Act No. 6938, otherwise known as the Cooperative Code of the Philippines, and duly-registered with the Cooperative
Development Authority (CDA) on 6 January 1993.5 Members of CAMPCO live in communities surrounding petitioner’s plantation and
are relatives of petitioner’s employees.

On 17 August 1993, petitioner and CAMPCO entered into a Service Contract. 6 The Service Contract referred to petitioner as "the
Company," while CAMPCO was "the Contractor." Relevant portions thereof read as follows –

1. That the amount of this contract shall be or shall not exceed TWO HUNDRED TWENTY THOUSAND ONLY (₱220,000.00) PESOS,
terms and conditions of payment shall be on a per job basis as specified in the attached schedule of rates; the CONTRACTOR shall
perform the following services for the COMPANY;

1.1 Assist the COMPANY in its daily operations;

1.2 Perform odd jobs as may be assigned.

2. That both parties shall observe the following terms and conditions as stipulated, to wit:

2.1 CONTRACTOR must carry on an independent legitimate business, and must comply with all the pertinent laws of the
government both local and national;

2.2 CONTRACTOR must provide all hand tools and equipment necessary in the performance of their work.

However, the COMPANY may allow the use of its fixed equipment as a casual facility in the performance of the contract;

34
 2.3 CONTRACTOR must comply with the attached scope of work, specifications, and GMP and safety practices of the
company;

2.4 CONTRACTOR must undertake the contract work under the following manner:

a. on his own account;

b. under his own responsibility;

c. according to his manner and method, free from the control and direction of the company in all matters connected
with the performance of the work except as to the result thereof;

3. CONTRACTOR must pay the prescribed minimum wage, remit SSS/MEDICARE premiums to proper government agencies, and
submit copies of payroll and proof of SSS/MEDICARE remittances to the COMPANY;

4. This contract shall be for a specific period of Six (6) months from July 1 to December 31, 1993; x x x.

Pursuant to the foregoing Service Contract, CAMPCO members rendered services to petitioner. The number of CAMPCO members
that report for work and the type of service they performed depended on the needs of petitioner at any given time. Although the Service
Contract specifically stated that it shall only be for a period of six months, i.e., from 1 July to 31 December 1993, the parties had
apparently extended or renewed the same for the succeeding years without executing another written contract. It was under these
circumstances that respondents came to work for petitioner.

Investigation by DOLE

Concomitantly, the Sangguniang Bayan of Polomolok, South Cotabato, passed Resolution No. 64, on 5 May 1993, addressed to then
Secretary Ma. Nieves R. Confessor of the Department of Labor and Employment (DOLE), calling her attention to the worsening working
conditions of the petitioner’s workers and the organization of contractual workers into several cooperatives to replace the individual
labor-only contractors that used to supply workers to the petitioner. Acting on the said Resolution, the DOLE Regional Office No. XI in
Davao City organized a Task Force that conducted an investigation into the alleged labor-only contracting activities of the cooperatives
in Polomolok.7

On 24 May 1993, the Senior Legal Officer of petitioner wrote a letter addressed to Director Henry M. Parel of DOLE Regional Office No.
XI, supposedly to correct the misinformation that petitioner was involved in labor-only contracting, whether with a cooperative or any
private contractor. He further stated in the letter that petitioner was not hiring cooperative members to replace the regular workers who
were separated from service due to redundancy; that the cooperatives were formed by the immediate dependents and relatives of the
permanent workers of petitioner; that these cooperatives were registered with the CDA; and that these cooperatives were authorized by
their respective constitutions and by-laws to engage in the job contracting business. 8

The Task Force submitted a report on 3 June 1993 identifying six cooperatives that were engaged in labor-only contracting, one of
which was CAMPCO. The DOLE Regional Office No. XI held a conference on 18 August 1993 wherein the representatives of the
cooperatives named by the Task Force were given the opportunity to explain the nature of their activities in relation to petitioner.
Subsequently, the cooperatives were required to submit their position papers and other supporting documents, which they did on 30
August 1993. Petitioner likewise submitted its position paper on 15 September 1993. 9

On 19 October 1993, Director Parel of DOLE Regional Office No. XI issued an Order 10 in which he made the following findings –

Records submitted to this Office show that the six (6) aforementioned cooperatives are all duly registered with the Cooperative
Development Authority (CDA). These cooperatives were also found engaging in different activities with DOLE PHILIPPINES, INC. a
company engaged in the production of pineapple and export of pineapple products. Incidentally, some of these cooperatives were also
found engaging in activities which are directly related to the principal business or operations of the company. This is true in the case of
the THREE (3) Cooperatives, namely; Adventurer’s Multi Purpose Cooperative, Human Resource Multi Purpose Cooperative and
Cannery Multi Purpose Cooperative.

From the foregoing findings and evaluation of the activities of Adventurer’s Multi Purpose Cooperative, Human Resource Multi Purpose
Cooperative and Cannery Multi Purpose Cooperative, this Office finds and so holds that they are engaging in Labor Only Contracting
Activities as defined under Section 9, Rule VIII, Book III of the rules implementing the Labor Code of the Philippines, as amended which
we quote:

"Section 9 Labor Only Contracting – a) Any person who undertakes to supply workers to an employer shall be deemed to be engaged
in labor-only contracting where such person:

35
 1) Does not have substantial capital or investment in the form of tools, equipment, machineries, work premises and other
materials; and

2) The workers recruited and placed by such person are performing activities which are directly related to the principal
business or operation of the employer to which workers are habitually employed.

b) Labor-only contracting as defined herein is hereby prohibited and the person acting as contractor shall be considered
merely as an agent or intermediary of the employer who shall be responsible to the workers in the same manner and extent as
if the latter were directly employed by him."

WHEREFORE, premises considered, ADVENTURER’S MULTI PURPOSE COOPERATIVE, HUMAN RESOURCE MULTI PURPOSE
COOPERATIVE and CANNERY MULTI PURPOSE COOPERATIVE are hereby declared to be engaged in labor only contracting which
is a prohibited activity. The same cooperatives are therefore ordered to cease and desist from further engaging in such activities.

The three (3) other cooperatives, namely Polomolok Skilled Workers Multi Purpose Cooperative, Unified Engineering and Manpower
Service Multi Purpose Cooperative and Tibud sa Katibawasan Multi Purpose Cooperative whose activities may not be directly related to
the principal business of DOLE Philippines, Inc. are also advised not to engage in labor only contracting with the company.

All the six cooperatives involved appealed the afore-quoted Order to the Office of the DOLE Secretary, raising the sole issue that DOLE
Regional Director Director Parel committed serious error of law in directing the cooperatives to cease and desist from engaging in labor-
only contracting. On 15 September 1994, DOLE Undersecretary Cresencio B. Trajano, by the authority of the DOLE Secretary, issued
an Order11 dismissing the appeal on the basis of the following ratiocination –

The appeal is devoid of merit.

The Regional Director has jurisdiction to issue a cease and desist order as provided by Art. 106 of the Labor Code, as amended, to wit:

"Art. 106. Contractor or subcontractor. x x x

xxxx

The Secretary of Labor may, by appropriate regulations, restrict or prohibit the contracting out of labor to protect the rights of workers
established under this Code. In so prohibiting or restricting, he may make appropriate distinctions between labor only contracting and
job contracting as well as differentiations within these types of contracting and determine who among the parties involved shall be
considered the employer for purposes of this Code, to prevent any violation or circumvention of any provision of this Code (Emphasis
supplied)

There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in
the forms of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are
performing activities which are directly related to the principal business of the employer. In such cases, the person or the intermediary
shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if
the latter were directly employed by him."

in relation to Article 128(b) of the Labor Code, as amended by Republic Act No. 7730, which reads:

"Art. 128. Visitorial and Enforcement Power.

b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-
employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue
compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor
employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly
authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases
where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by
documentary proof which were not considered in the course of inspection.

An order issued by the duly authorized representative of the Secretary of Labor and Employment under this article may be appealed to
the latter. In case said order involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash
bond issued by a reputable bonding company duly accredited by the Secretary of Labor and Employment in the amount equivalent to
the monetary award in the order appealed from."

The records reveal that in the course of the inspection of the premises of Dolefil, it was found out that the activities of the members of
the [cooperatives] are necessary and desirable in the principal business of the former; and that they do not have the necessary

36
investment in the form of tools and equipments. It is worthy to note that the cooperatives did not deny that they do not have enough
capital in the form of tools and equipment. Under the circumstances, it could not be denied that the [cooperatives] are considered as
labor-only contractors in relation to the business operation of DOLEFIL, INC.

Thus, Section 9, Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code, provides that:

"Sec. 9. Labor-only contracting. – (a) Any person who undertakes to supply workers to an employer shall be deemed to be engaged in
labor-only contracting where such person:

(1) Does not have substantial capital or investment in the form of tools, equipment, machineries, work premises and other
materials; and

(2) The workers recruited and placed by such person are performing activities which are directly related to the principal
business or operations of the employer in which workers are habitually employed.

(b) Labor-only contracting as defined herein is hereby prohibited and the person acting as a contractor shall be considered
merely as an agent or intermediary of the employer who shall be responsible to the workers in the same manner and extent as
if the latter were directly employed by him.

x x x x"

Violation of the afore-quoted provision is considered a labor standards violation and thus, within the visitorial and enforcement powers
of the Secretary of Labor and Employment (Art. 128).

The Regional Director’s authority to issue a cease and desist order emanates from Rule I, Section 3 of the Rules on Disposition of
Labor Standard Cases in the Regional Offices, to wit:

"Section 3. Authorized representative of the Secretary of Labor and Employment. – The Regional Directors shall be the duly authorized
representatives of the Secretary of Labor and Employment in the administration and enforcement of the labor standards within their
respective territorial jurisdiction."

The power granted under Article 106 of the Labor Code to the Secretary of Labor and Employment to restrict or prohibit the contracting
out of labor to protect the rights of workers established under the Code is delegated to the Regional Directors by virtue of the above-
quoted provision.

The reason why "labor-only" contracting is prohibited under the Labor Code is that it encourages circumvention of the provisions of the
Labor Code on the workers’ right to security of tenure and to self-organization.

WHEREFORE, the respondents’ Appeal is hereby DISMISSED for lack of merit. The Order of the Regional Director, Regional Office
No. XI, Davao City, is AFFIRMED.

After the motion for reconsideration of the foregoing Order was denied, no further motion was filed by the parties, and the Order, dated
15 September 1994, of DOLE Undersecretary Trajano became final and executory. A Writ of Execution 12 was issued by DOLE Regional
Office No. XI only on 27 July 1999, years after the issuance of the order subject of the writ. The DOLE Regional Office No. XI was
informed that CAMPCO and two other cooperatives "continued to operate at DOLE Philippines, Inc. despite the cease and desist
Order" it had issued. It therefore commanded the Sheriff to proceed to the premises of CAMPCO and the two other cooperatives and
implement its Order dated 19 October 1993.

Respondent’s Complaint before the NLRC

Respondents started working for petitioner at various times in the years 1993 and 1994, by virtue of the Service Contract executed
between CAMPCO and petitioner. All of the respondents had already rendered more than one year of service to petitioner. While some
of the respondents were still working for petitioner, others were put on "stay home status" on varying dates in the years 1994, 1995, and
1996 and were no longer furnished with work thereafter. Together, respondents filed a Complaint, 13 on 19 December 1996, with the
National Labor Relations Commission (NLRC), for illegal dismissal, regularization, wage differentials, damages and attorney’s fees.

In their Position Paper,14 respondents reiterated and expounded on the allegations they previously made in their Complaint –

Sometime in 1993 and 1994, [herein petitioner] Dolefil engaged the services of the [herein respondents] through Cannery Multi-purpose
Cooperative. A cooperative which was organized through the initiative of Dolefil in order to fill in the vacuum created as a result of the
dismissal of the regular employees of Dolefil sometime in 1990 to 1993.

37
The [respondents] were assigned at the Industrial Department of respondent Dolefil. All tools, implements and machineries used in
performing their task such as: can processing attendant, feeder of canned pineapple at pineapple processing, nata de coco
processing attendant, fruit cocktail processing attendant, and etc. were provided by Dolefil. The cooperative does not have
substantial capital and does not provide the [respondents] with the necessary tools to effectively perform their assigned task as the
same are being provided by Dolefil.

The training and instructions received by the [respondents] were provided by Dolefil. Before any of the [respondents] will be allowed to
work, he has to undergo and pass the training prescribed by Dolefil. As a matter of fact, the trainers are employees of Dolefil.

The [respondents] perform their assigned task inside the premises of Dolefil. At the job site, they were given specific task and
assignment by Dolefil’s supervisors assigned to supervise the works and efficiency of the complainants. Just like the regular employees
of Dolefil, [respondents] were subjected to the same rules and regulations observe [sic] inside company premises and to some extent
the rules applied to the [respondents] by the company through its officers are even stricter.

The functions performed by the [respondents] are the same functions discharged by the regular employees of Dolefil. In fact, at the job
site, the [respondents] were mixed with the regular workers of Dolefil. There is no difference in so far as the job performed by the
regular workers of Dolefil and that of the [respondents].

Some of the [respondents] were deprived of their employment under the scheme of "stay home status" where they were advised to
literally stay home and wait for further instruction to report anew for work. However, they remained in this condition for more than six
months. Hence, they were constructively or illegally dismissed.

Respondents thus argued that they should be considered regular employees of petitioner given that: (1) they were performing jobs that
were usually necessary and desirable in the usual business of petitioner; (2) petitioner exercised control over respondents, not only as
to the results, but also as to the manner by which they performed their assigned tasks; and (3) CAMPCO, a labor-only contractor, was
merely a conduit of petitioner. As regular employees of petitioner, respondents asserted that they were entitled to security of tenure and
those placed on "stay home status" for more than six months had been constructively and illegally dismissed. Respondents further
claimed entitlement to wage differential, moral damages, and attorney’s fees.

In their Supplemental Position Paper,15 respondents presented, in support of their Complaint, the Orders of DOLE Regional Director
Parel, dated 19 October 1993, and DOLE Undersecretary Trajano, dated 15 September 1994, finding that CAMPCO was a labor-only
contractor and directing CAMPCO to cease and desist from any further labor-only contracting activities.

Petitioner, in its Position Paper16 filed before the NLRC, denied that respondents were its employees.

Petitioner explained that it found the need to engage external services to augment its regular workforce, which was affected by peaks in
operation, work backlogs, absenteeism, and excessive leaves. It used to engage the services of individual workers for definite periods
specified in their employment contracts and never exceeding one year. However, such an arrangement became the subject of a labor
case,17 in which petitioner was accused of preventing the regularization of such workers. The Labor Arbiter who heard the case,
rendered his Decision18 on 24 June 1994 declaring that these workers fell squarely within the concept of seasonal workers as
envisaged by Article 280 of the Labor Code, as amended, who were hired by petitioner in good faith and in consonance with sound
business practice; and consequently, dismissing the complaint against petitioner. The NLRC, in its Resolution, 19 dated 14 March 1995,
affirmed in toto the Labor Arbiter’s Decision and further found that the workers were validly and legally engaged by petitioner for "term
employment," wherein the parties agreed to a fixed period of employment, knowingly and voluntarily, without any force, duress or
improper pressure being brought to bear upon the employees and absent any other circumstance vitiating their consent. The said
NLRC Resolution became final and executory on 18 June 1996. Despite the favorable ruling of both the Labor Arbiter and the NLRC,
petitioner decided to discontinue such employment arrangement. Yet, the problem of petitioner as to shortage of workforce due to the
peaks in operation, work backlogs, absenteeism, and excessive leaves, persisted. Petitioner then found a solution in the engagement
of cooperatives such as CAMPCO to provide the necessary additional services.

Petitioner contended that respondents were owners-members of CAMPCO; that CAMPCO was a duly-organized and registered
cooperative which had already grown into a multi-million enterprise; that CAMPCO was engaged in legitimate job-contracting with its
own owners-members rendering the contract work; that under the express terms and conditions of the Service Contract executed
between petitioner (the principal) and CAMPCO (the contractor), the latter shall undertake the contract work on its own account, under
its own responsibility, and according to its own manner and method free from the control and direction of the petitioner in all matters
connected with the performance of the work, except as to the result thereof; and since CAMPCO held itself out to petitioner as a
legitimate job contractor, respondents, as owners-members of CAMPCO, were estopped from denying or refuting the same.

Petitioner further averred that Department Order No. 10, amending the rules implementing Books III and VI of the Labor Code, as
amended, promulgated by the DOLE on 30 May 1997, explicitly recognized the arrangement between petitioner and CAMPCO as
permissible contracting and subcontracting, to wit –

Section 6. Permissible contracting and subcontracting. – Subject to the conditions set forth in Section 3(d) and (e) and Section 5 hereof,
the principal may engage the services of a contractor or subcontractor for the performance of any of the following;
38
 (a) Works or services temporarily or occasionally needed to meet abnormal increase in the demand of products or services,
provided that the normal production capacity or regular workforce of the principal cannot reasonably cope with such demands;

(b) Works or services temporarily or occasionally needed by the principal for undertakings requiring expert or highly technical
personnel to improve the management or operations of an enterprise;

(c) Services temporarily needed for the introduction or promotion of new products, only for the duration of the introductory or
promotional period;

(d) Works or services not directly related or not integral to the main business or operation of the principal, including casual
work, janitorial, security, landscaping, and messengerial services, and work not related to manufacturing processes in
manufacturing establishments;

(e) Services involving the public display of manufacturer’s products which does not involve the act of selling or issuance of
receipts or invoices;

(f) Specialized works involving the use of some particular, unusual, or peculiar skills, expertise, tools or equipment the
performance of which is beyond the competence of the regular workforce or production capacity of the principal; and

(g) Unless a reliever system is in place among the regular workforce, substitute services for absent regular employees,
provided that the period of service shall be coextensive with the period of absence and the same is made clear to the
substitute employee at the time of engagement. The phrase "absent regular employees" includes those who are serving
suspensions or other disciplinary measures not amounting to termination of employment meted out by the principal, but
excludes those on strike where all the formal requisites for the legality of the strike have been prima facie complied with based
on the records filed with the National Conciliation and Mediation Board.

According to petitioner, the services rendered by CAMPCO constituted permissible job contracting under the afore-quoted paragraphs
(a), (c), and (g), Section 6 of DOLE Department Order No. 10, series of 1997.

After the parties had submitted their respective Position Papers, the Labor Arbiter promulgated its Decision 20 on 11 June 1999, ruling
entirely in favor of petitioner, ratiocinating thus –

After judicious review of the facts, narrated and supporting documents adduced by both parties, the undersigned finds [and] holds that
CAMPCO is not engaged in labor-only contracting.

Had it not been for the issuance of Department Order No. 10 that took effect on June 22, 1997 which in the contemplation of Law is
much later compared to the Order promulgated by the Undersecretary Cresencio Trajano of Department of [L]abor and Employment,
the undersigned could safely declared [sic] otherwise. However, owing to the principle observed and followed in legal practice that the
later law or jurisprudence controls, the reliance to Secretary Trajano’s order is overturned.

Labor-only contracting as amended by Department [O]rder No. 10 is defined in this wise:

"Labor-only contracting is prohibited under this Rule is an arrangement where the contractor or subcontractor merely recruits, supplied
[sic] or places workers to perform a job, work or service for a principal, and the following elements are present:

i) The contractor or sub-contractor does not have substantial capital or investment to actually perform the job, work, or service
under its own account & responsibility, and

ii) The employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly
related to the main business of the principal."

Verification of the records reveals that per Annexes "J" and "K" of [herein petitioner DolePhil’s] position paper, which are the yearly
audited Financial Statement and Balance Sheet of CAMPCO shows [sic] that it has more than substantial capital or investment in order
to qualify as a legitimate job contractor.

We likewise recognize the validity of the contract entered into and between CAMPCO and [petitioner] for the former to assists [sic] the
latter in its operations and in the performance of odd jobs – such as the augmentation of regular manning particularly during peaks in
operation, work back logs, absenteeism and excessive leave availment of respondent’s regular employees. The rule is well-settled that
labor laws discourage interference with an employer’s judgment in the conduct of his business. Even as the law is solicitors [sic] of the
welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free
will of management to conduct its own business affairs to achieve its purpose cannot be denied (Yuco Chemical Industries vs. Ministry
of [L]abor, GR No. 75656, May 28, 1990).

39
CAMPCO being engaged in legitimate contracting, cannot therefore declared [sic] as guilty of labor-only contracting which [herein
respondents] want us to believe.

The second issue is likewise answered in the negative. The reason is plain and simple[,] section 12 of Department [O]rder No. 10
states:

"Section 12. Employee-employer relationship. Except in cases provided for in Section 13, 14, 15 & 17, the contractor or subcontractor
shall be considered the employer of the contractual employee for purposes of enforcing the provisions of the Code."

The Resolution of NLRC 5th division, promulgated on March 14, 1 1995 [sic] categorically declares:

"Judging from the very nature of the terms and conditions of their hiring, the Commission finds the complainants to have been engaged
to perform work, although necessary or desirable to the business of respondent company, for a definite period or what is community
called TERM EMPLOYMENT. It is clear from the evidence and record that the nature of the business and operation of respondent
company has its peaks and valleys and therefore, it is not difficult to discern, inclement weather, or high availment by regular workers of
earned leave credits, additional workers categorized as casuals, or temporary, are needed to meet the exigencies." (Underlining in the
original)

The validity of fixed-period employment has been consistently upheld by the Supreme [C]ourt in a long line of cases, the leading case
of which is Brent School, Inc. vs. Zamora & Alegre, GR No. 48494, February 5, 1990. Thus at the end of the contract the employer-
employee relationship is terminated. It behooves upon us to rule that herein complainants cannot be declared regular rank and file
employees of the [petitioner] company.

Anent the third issue, [respondents] dismally failed to provide us the exact figures needed for the computation of their wage
differentials. To simply alleged [sic] that one is underpaid of his wages is not enough. No bill of particulars was submitted. Moreover, the
Order of RTWPB Region XI, Davao City dated February 21, 1996 exempts [petitioner] company from complying Wage Order No. 04
[sic] in so far as such exemption applies only to workers who are not covered by the Collective Bargaining Agreement, for the period
January 1 to December 31, 1995,. [sic] In so far as [respondents] were not privies to the CBA, they were the workers referred to by
RTWPB’s Order. [H]ence, [respondents’] claims for wage differentials are hereby dismissed for lack of factual basis.

We find no further necessity in delving into the issues raised by [respondents] regarding moral damages and attorney’s fees for being
moot and academic because of the findings that CAMPCO does not engaged [sic] in labor-only contracting and that [respondents]
cannot be declared as regular employees of [petitioner].

WHEREFORE, premises considered, judgment is hereby rendered in the above-entitled case, dismissing the complaint for lack of
merit.

Respondents appealed the Labor Arbiter’s Decision to the NLRC, reiterating their position that they should be recognized as regular
employees of the petitioner since CAMPCO was a mere labor-only contractor, as already declared in the previous Orders of DOLE
Regional Director Parel, dated 19 October 1993, and DOLE Undersecretary Trajano, dated 15 September 1994, which already became
final and executory. The NLRC, in its Resolution,21 dated 29 February 2000, dismissed the appeal and affirmed the Labor Arbiter’s
Decision, reasoning as follows –

We find no merit in the appeal.

The concept of conclusiveness of judgment under the principle of "res judicata" means that where between the first case wherein
judgment is rendered and the second case wherein such judgment is invoked, there is identity of parties, but there is no identity of
cause of action, the judgment is conclusive in the second case, only as to those matters actually and directly controverted and
determined and not as to matters merely involved therein (Viray, etc. vs. Marinas, et al., 49 SCRA 44). There is no denying that the
order of the Department of Labor and Employment, Regional Office No. XI in case No. RI100-9310-RI-355, which the complainants
perceive to have sealed the status of CAMPCO as labor-only contractor, proceeded from the visitorial and enforcement power of the
Department Secretary under Article 128 of the Labor Code. Acting on reports that the cooperatives, including CAMPCO, that operated
and offered services at [herein petitioner] company were engaging in labor-only contracting activities, that Office conducted a routinary
inspection over the records of said cooperatives and consequently, found the latter to be engaging in labor-only contracting activities.
This being so, [petitioner] company was not a real party-in-interest in said case, but the cooperatives concerned. Therefore, there is no
identity of parties between said case and the present case which means that the afore-said ruling of the DOLE is not binding and
conclusive upon [petitioner] company.

It is not correct, however, to say, as the Labor Arbiter did, that the afore-said ruling of the Department of Labor and Employment has
been overturned by Department Order No. 10. It is a basic principle that "once a judgment becomes final it cannot be disturbed, except
for clerical errors or when supervening events render its execution impossible or unjust" (Sampaguita Garmens [sic] Corp. vs. NLRC,
G. R. No. 102406, June 7, 1994). Verily, the subsequent issuance of Department Order No. 10 cannot be construed as supervening
event that would render the execution of said judgment impossible or unjust. Department Order No. 10 refers to the ramification of

40
some provisions of the Rules Implementing Articles 106 and 109 of the Labor Code, without substantially changing the definition of
"labor-only" or "job’ contracting.

Well-settled is the rule that to qualify as an independent job contractor, one has either substantial capital "or" investment in the form of
tools, equipment and machineries necessary to carry out his business (see Virginia Neri, et al. vs. NLRC, et al., G.R. Nos. 97008-89,
July 23, 1993). CAMPCO has admittedly a paid-up capital of P4,562,470.25 and this is more than enough to qualify it as an
independent job contractor, as aptly held by the Labor Arbiter.

WHEREFORE, the appeal is DISMISSED for lack of merit and the appealed decision is AFFIRMED.

Petition for Certiorari with the Court of Appeals

Refusing to concede defeat, respondents filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the revised Rules of
Civil Procedure, asserting that the NLRC acted without or in excess of its jurisdiction and with grave abuse of discretion amounting to
lack of jurisdiction when, in its Resolution, dated 29 February 2000, it (1) ruled that CAMPCO was a bona fide independent job
contractor with substantial capital, notwithstanding the fact that at the time of its organization and registration with CDA, it only had a
paid-up capital of ₱6,600.00; and (2) refused to apply the doctrine of res judicata against petitioner. The Court of Appeals, in its
Decision,22 dated 20 May 2002, granted due course to respondents’ Petition, and set aside the assailed NLRC Decision. Pertinent
portions of the Court of Appeals Decision are reproduced below –

In the case at bench, it was established during the proceedings before the [NLRC] that CAMPCO has a substantial capital. However,
having a substantial capital does not per se qualify CAMPCO as a job contractor. In order to be considered an independent contractor it
is not enough to show substantial capitalization or investment in the form of tools, equipment, machinery and work premises. The
conjunction "and," in defining what a job contractor is, means that aside from having a substantial capital or investment in the form of
tools, equipment, machineries, work premise, and other materials which are necessary in the conduct of his business, the contractor
must be able to prove that it also carries on an independent business and undertakes the contract work on his own account under his
own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all
matters connected with the performance of the work except as to the results thereof. [Herein petitioner DolePhil] has failed to prove,
except for the substantial capital requirement, that CAMPCO has met the other requirements. It was not established that CAMPCO is
engaged or carries on an independent business. In the performance of the respective tasks of workers deployed by CAMPCO with
[petitioner], it was not established that CAMPCO undertook the contract of work it entered with [petitioner] under its own account and its
own responsibility. It is [petitioner] who provides the procedures to be followed by the workers in the performance of their assigned
work. The workers deployed by CAMPCO to [petitioner] performed activities which are directly related to the principal business or
operations of the employer in which workers are habitually employed since [petitioner] admitted that these workers were engaged to
perform the job of other regular employees who cannot report for work.

Moreover, [NLRC] likewise gravely erred in not giving weight to the Order dated 19 October 1993 issued by the Office of the Secretary
of the Department of Labor and Employment, through Undersecretary Cresencio Trajano, which affirmed the findings of the Department
of Labor and Employment Regional Office, Region XI, Davao City that Cannery Multi-Purpose Cooperative is one of the cooperatives
engaged in labor-only contracting activities.

In the exercise of the visitorial and enforcement power of the Department of Labor and Employment, an investigation was conducted
among the cooperatives organized and existing in Polomolok, South Cotabato, relative to labor-only contracting activities. One of the
cooperatives investigated was Cannery Multi-Purpose Cooperative. After the investigation, the Department of Labor and Employment,
Regional Office No. XI, Davao City, through its Regional Director, issued the Order dated 19 October 1993, stating:

"WHEREFORE, premises considered, ADVENTURER’S MULTI PURPOSE COOPERATIVE, HUMAN RESOURCE MULTI PURPOSE
SKILLED COOPERATIVE and CANNERY MULTI PURPOSE COOPERATIVE are hereby declared to be engaged in labor only
contracting which is a prohibited activity. The same cooperatives are therefore ordered to cease and desist from further engaging in
such activities.

xxxx

SO ORDERED."

Cannery Multi Purpose Cooperative, together with the other cooperatives declared as engaged in labor-only contracting activity, appeal
the above-findings to the Secretary of the Department of Labor and Employment. Their appeal was dismissed for lack of merit as
follows:: [sic]

xxxx

[NLRC] held that CAMPCO, being not a real party-in interest in the above-case, the said ruling is not binding and conclusive upon
[petitioner]. This Court, however, finds the contrary.

41
CAMPCO was one of the cooperatives investigated by the Department of Labor and Employment, Regional Office No. XI, Davao City,
pursuant to Article 128 of the Labor Code. It was one of the appellants before the Secretary of the Department of Labor questioning the
decision of the Regional Director of DOLE, Regional Office No. XI, Davao City. This Court noted that in the proceedings therein, and as
mentioned in the decision rendered by Undersecretary Cresencio B. Trajano of the Department of Labor and Employment, Manila,
regarding the cooperatives’ appeal thereto, the parties therein, including Cannery Multi-Purpose Cooperative, submitted to the said
office their position papers and Articles of Cooperatives and Certification of Registrations [sic] on 30 August 1993. This is a clear indicia
that CAMPCO participated in the proceedings therein. [NLRC], therefore, committed grave abuse of discretion amounting to lack or
excess of jurisdiction when it held that CAMPCO was never a party to the said case.

[Petitioner] invokes Section 6 of Department Order No. 10, series of 1997, issued by the Department of Labor and Employment which
took effect on 22 June 1997. The said section identified the circumstances which are permissible job contracting, to wit:

xxxx

[Petitioner’s] main contention is based on the decisions rendered by the labor arbiter and [NLRC] which are both anchored on
Department Order No. 10 issued by the Department of Labor and Employment. The said department order provided for several flexible
working relations between a principal, a contractor or subcontractor and the workers recruited by the latter and deployed to the former.
In the case at bench, [petitioner] posits that the engagement of [petitioner] of the workers deployed by CAMPCO was pursuant to D.O.
No. 10, Series of 1997.

However, on 8 May 2001, the Department of Labor and Employment issued Department Order No. 3, series of 2001, revoking
Department Order No. 10, series of 1997. The said department order took effect on 29 May 2001.

xxxx

Under Department Order No. 3, series of 2001, some contracting and outsourcing arrangements are no longer legitimate modes of
employment relation. Having revoked Department Order No. 10, series of 1997, [petitioner] can no longer support its argument by
relying on the revoked department order.

Considering that [CAMPCO] is not a job contractor, but one engaged in labor-only contracting, CAMPCO serves only as an agent of
[petitioner] pursuant to par. (b) of Sec. 9, Rule VIII, Book III of the Implementing Rules and Regulations of the Labor Code, stating,

xxxx

However, the Court cannot declare that [herein respondents] are regular employees of [petitioner]. x x x

xxxx

In the case at bench, although [respondents] were engaged to perform activities which are usually necessary or desirable in the usual
business or trade of private respondent, it is apparent, however, that their services were engaged by [petitioner] only for a definite
period. [Petitioner’s] nature of business and operation has its peaks. In order to meet the demands during peak seasons they
necessarily have to engage the services of workers to work only for a particular season. In the case of [respondents], when they were
deployed by CAMPCO with [petitioner] and were assigned by the latter at its cannery department, they were aware that they will be
working only for a certain duration, and this was made known to them at the time they were employed, and they agreed to the same.

xxxx

The non-rehiring of some of the petitioners who were allegedly put on a "floating status’ is an indication that their services were no
longer needed. They attained their "floating status" only after they have finished their contract of employment, or after the duration of
the season that they were employed. The decision of [petitioner] in not rehiring them means that their services were no longer needed
due to the end of the season for which they were hired. And this Court reiterates that at the time they were deployed to [petitioner’s]
cannery division, they knew that the services they have to render or the work they will perform are seasonal in nature and consequently
their employment is only for the duration of the season.

ACCORDINGLY, in view of the foregoing, the instant petition for certiorari is hereby GRANTED DUE COURSE. The decision dated 29
February 2000 and Resolution dated 19 December 2000 rendered by [NLRC] are hereby SET ASIDE. In place thereof, it is hereby
rendered that:

1. Cannery Multi-Purpose Cooperative is a labor-only contractor as defined under the Labor Code of the Philippines and its
implementing rules and regulations; and that

2. DOLE Philippines Incorporated is merely an agent or intermediary of Cannery Multi-Purpose Cooperative.

42
All other claims of [respondents] are hereby DENIED for lack of basis.

Both petitioner and respondents filed their respective Motions for Reconsideration of the foregoing Decision, dated 20 May 2002,
prompting the Court of Appeals to promulgate an Amended Decision on 27 November 2003, in which it ruled in this wise:

This court examined again the documentary evidence submitted by the [herein petitioner] and we rule not to disturb our findings in our
Decision dated May 20, 2002. It is our opinion that there was no competent evidence submitted that would show that CAMPCO is
engaged to perform a specific and special job or service which is one of the strong indicators that an entity is an independent
contractor. The articles of cooperation and by-laws of CAMPCO do not show that it is engaged in performing a specific and special job
or service. What is clear is that it is a multi-purpose cooperative organized under RA No. 6938, nothing more, nothing less.

As can be gleaned from the contract that CAMPCO entered into with the [petitioner], the undertaking of CAMPCO is to provide
[petitioner] with workforce by assisting the company in its daily operations and perform odd jobs as may be assigned. It is our opinion
that CAMPCO merely acted as recruitment agency for [petitioner]. CAMPCO by supplying manpower only, clearly conducted itself as
‘labor-only" contractor. As can be gleaned from the service contract, the work performed by the [herein respondents] are directly related
to the main business of the [petitioner]. Clearly, the requisites of "labor-only" contracting are present in the case at bench.

In view of the above ruling, we find it unnecessary to discuss whether the Order of Undersecretary Trajano finding that CAMPCO is a
"labor-only" contractor is a determining factor or constitutes res judicata in the case at bench. Our findings that CAMPCO is a "labor-
only" contractor is based on the evidence presented vis-à-vis the rulings of the Supreme Court on the matter.

Since, the argument that the [petitioner] is the real employer of the [respondents], the next question that must be answered is – what is
the nature of the employment of the petitioners?

xxxx

The afore-quoted [Article 280 of the Labor Code, as amended] provides for two kinds of employment, namely: (1) regular (2) casual. In
our Decision, we ruled that the [respondents] while performing work necessary and desirable to the business of the [petitioner] are
seasonal employees as their services were engaged by the [petitioner] for a definite period or only during peak season.

In the most recent case of Hacienda Fatima v. National Federation of Sugarcane Workers Food and General Trade, the Supreme
Court ruled that for employees to be excluded from those classified as regular employees, it is not enough that they perform work or
services that are seasonal in nature. They must have also been employed only for the duration of one season. It is undisputed that the
[respondents’] services were engaged by the [petitioner] since 1993 and 1994. The instant complaint was filed in 1996 when the
[respondents] were placed on floating status. Evidently, [petitioner] employed the [respondents] for more than one season. Therefore,
the general rule on regular employment is applicable. The herein petitioners who performed their jobs in the workplace of the
[petitioner] every season for several years, are considered the latter’s regular employees for having performed works necessary and
desirable to the business of the [petitioner]. The [petitioner’s] eventual refusal to use their services—even if they were ready, able and
willing to perform their usual duties whenever these were available—and hiring other workers to perform the tasks originally assigned to
[respondents] amounted to illegal dismissal of the latter. We thus, correct our earlier ruling that the herein petitioners are seasonal
workers. They are regular employees within the contemplation of Article 280 of the Labor Code and thus cannot be dismissed except
for just or authorized cause. The Labor Code provides that when there is a finding of illegal dismissal, the effect is that the employee
dismissed shall be reinstated to his former position without loss of seniority rights with backwages from the date of his dismissal up to
his actual reinstatement.

This court however, finds no basis for the award of damages and attorney’s fees in favor of the petitioners.

WHEREFORE, the Decision dated May 20, 2002 rendered by this Court is hereby AMENDED as follows:

1) [Petitioner] DOLE PHILIPPINES is hereby declared the employer of the [respondents].

2) [Petitioner] DOLE PHILIPPINES is hereby declared guilty of illegal dismissal and ordered to immediately reinstate the
[respondents] to their former position without loss of seniority rights and other benefits, and to pay each of the [respondents]
backwages from the date of the filing of illegal dismissal on December 19, 1996 up to actual reinstatement, the same to be
computed by the labor arbiter.

3) The claims for damages and attorney’s fees are hereby denied for lack of merit.

No costs.23

The Petition at Bar

43
Aggrieved by the Decision, dated 20 May 2002, and the Amended Decision, dated 27 November 2003, of the Court of Appeals,
petitioner filed the instant Petition for Review on Certiorari under Rule 45 of the revised Rules of Civil Procedure, in which it made the
following assignment of errors –

I.

THE COURT OF APPEALS HAS DEPARTED FROM THE USUAL COURSE OF JUDCIAL PROCEEDINGS WHEN IT MADE
ITS OWN FACTUAL FINDINGS AND DISREGARDED THE UNIFORM AND CONSISTENT FACTUAL FINDINGS OF THE
LABOR ARBITER AND THE NLRC, WHICH MUST BE ACCORDED GREAT WEIGHT, RESPECT AND EVEN FINALITY. IN
SO DOING, THE COURT OF APPEALS EXCEEDED ITS AUTHORITY ON CERTIORARI UNDER RULE 65 OF THE RULES
OF COURT.

II.

THE COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH THE
CONSTITUTION, LAW, APPLICABLE RULES AND REGULATIONS AND DECISIONS OF THE SUPREME COURT
IN NOT HOLDING THAT DEPARTMENT ORDER NO. 10, SERIES OF 1997 IS THE APPLICABLE REGULATION IN THIS
CASE. IN GIVING RETROACTIVE APPLICATION TO DEPARTMENT ORDER NO. 3, SERIES OF 2001, THE COURT OF
APPEALS VIOLATED THE CONSTITUTIONAL PROVISION AGAINST IMPAIRMENT OF CONTRACTS AND DEPRIVED
PETITIONER OF THE DUE PROCESS OF THE LAW.

III.

THE COURT OF APPEALS HAS DETERMINED A QUESTION OF SUBSTANCE NOT IN ACCORD WITH LAW AND
JURISPRUDENCE IN GIVING WEIGHT TO THE ORDER DATED 19 OCTOBER 1993 ISSUED BY THE OFFICE OF
SECRETARY OF LABOR, WHICH AFFIRMED THE FINDINGS OF THE DOLE REGIONAL OFFICE (REGION XI, DAVAO
CITY) THAT CAMPCO IS ONE OF THE COOPERATIVES ENGAGED IN LABOR-ONLY CONTRACTING ACTIVITIES.

IV.

THE COURT OF APPEALS HAS DETERMINED A QUESTION OF SUBSTANCE NOT IN ACCORD WITH LAW AND
JURISPRUDENCE IN NOT RULING THAT RESPONDENTS, BY ACTIVELY REPRESENTING THEMSELVES AND
WARRANTING THAT THEY ARE ENGAGED IN LEGITIMATE JOB CONTRACTING, ARE BARRED BY THE EQUITABLE
PRINCIPLE OF ESTOPPEL FROM ASSERTING THAT THEY ARE REGULAR EMPLOYEES OF PETITIONER.

V.

THE COURT OF APPEALS HAS DETERMINED A QUESTION OF SUBSTANCE NOT IN ACCORD WITH LAW AND
JURISPRUDENCE IN RULING THAT CAMPCO IS ENGAGED IN THE PROHIBITED ACT OF "LABOR-ONLY
CONTRACTING" DESPITE THERE BEING SUBSTANTIAL EVIDENCE TO THE CONTRARY.

VI.

THE COURT OF APPEALS HAS DETERMINED A QUESTION OF SUBSTANCE NOT IN ACCORD WITH LAW AND
JURISPRUDENCE IN RULING THAT PETITIONER IS THE EMPLOYER OF RESPONDENTS AND THAT PETITIONER IS
GUILTY OF ILLEGAL DISMISSAL.24

This Court’s Ruling

Anent the first assignment of error, petitioner argues that judicial review under Rule 65 of the revised Rules of Civil Procedure is limited
only to issues concerning want or excess or jurisdiction or grave abuse of discretion. The special civil action for certiorari is a remedy
designed to correct errors of jurisdiction and not mere errors of judgment. It is the contention of petitioner that the NLRC properly
assumed jurisdiction over the parties and subject matter of the instant case. The errors assigned by the respondents in their Petition
for Certiorari before the Court of Appeals do not pertain to the jurisdiction of the NLRC; they are rather errors of judgment supposedly
committed by the the NLRC, in its Resolution, dated 29 February 2000, and are thus not the proper subject of a petition for certiorari.
Petitioner also posits that the Petition for Certiorari filed by respondents with the Court of Appeals raised questions of fact that would
necessitate a review by the appellate court of the evidence presented by the parties before the Labor Arbiter and the NLRC, and that
questions of fact are not a fit subject for a special civil action for certiorari.

44
It has long been settled in the landmark case of St. Martin Funeral Home v. NLRC,25 that the mode for judicial review over decisions of
the NLRC is by a petition for certiorari under Rule 65 of the revised Rules of Civil Procedure. The different modes of appeal, namely,
writ of error (Rule 41), petition for review (Rules 42 and 43), and petition for review on certiorari (Rule 45), cannot be availed of because
there is no provision on appellate review of NLRC decisions in the Labor Code, as amended. 26 Although the same case recognizes that
both the Court of Appeals and the Supreme Court have original jurisdiction over such petitions, it has chosen to impose the strict
observance of the hierarchy of courts. Hence, a petition for certiorari of a decision or resolution of the NLRC should first be filed with the
Court of Appeals; direct resort to the Supreme Court shall not be allowed unless the redress desired cannot be obtained in the
appropriate courts or where exceptional and compelling circumstances justify an availment of a remedy within and calling for the
exercise by the Supreme Court of its primary jurisdiction.

The extent of judicial review by certiorari of decisions or resolutions of the NLRC, as exercised previously by the Supreme Court and,
now, by the Court of Appeals, is described in Zarate v. Olegario,27 thus –

The rule is settled that the original and exclusive jurisdiction of this Court to review a decision of respondent NLRC (or Executive Labor
Arbiter as in this case) in a petition for certiorari under Rule 65 does not normally include an inquiry into the correctness of its evaluation
of the evidence. Errors of judgment, as distinguished from errors of jurisdiction, are not within the province of a special civil action
for certiorari, which is merely confined to issues of jurisdiction or grave abuse of discretion. It is thus incumbent upon petitioner to
satisfactorily establish that respondent Commission or executive labor arbiter acted capriciously and whimsically in total disregard of
evidence material to or even decisive of the controversy, in order that the extraordinary writ of certiorari will lie. By grave abuse of
discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, and it must be shown that
the discretion was exercised arbitrarily or despotically. For certiorari to lie, there must be capricious, arbitrary and whimsical exercise of
power, the very antithesis of the judicial prerogative in accordance with centuries of both civil law and common law traditions.

The Court of Appeals, therefore, can grant the Petition for Certiorari if it finds that the NLRC, in its assailed decision or resolution,
committed grave abuse of discretion by capriciously, whimsically, or arbitrarily disregarding evidence which is material or decisive of the
controversy; and the Court of Appeals can not make this determination without looking into the evidence presented by the parties.
Necessarily, the appellate court can only evaluate the materiality or significance of the evidence, which is alleged to have been
capriciously, whimsically, or arbitrarily disregarded by the NLRC, in relation to all other evidence on record.

As this Court elucidated in Garcia v. National Labor Relations Commission28 --

[I]n Ong v. People, we ruled that certiorari can be properly resorted to where the factual findings complained of are not supported by the
evidence on record. Earlier, in Gutib v. Court of Appeals, we emphasized thus:

[I]t has been said that a wide breadth of discretion is granted a court of justice in certiorari proceedings. The cases in which certiorari
will issue cannot be defined, because to do so would be to destroy its comprehensiveness and usefulness. So wide is the discretion of
the court that authority is not wanting to show that certiorari is more discretionary than either prohibition or mandamus. In the exercise
of our superintending control over inferior courts, we are to be guided by all the circumstances of each particular case "as the ends of
justice may require." So it is that the writ will be granted where necessary to prevent a substantial wrong or to do substantial justice.

And in another case of recent vintage, we further held:

In the review of an NLRC decision through a special civil action for certiorari, resolution is confined only to issues of jurisdiction and
grave abuse of discretion on the part of the labor tribunal. Hence, the Court refrains from reviewing factual assessments of lower courts
and agencies exercising adjudicative functions, such as the NLRC. Occasionally, however, the Court is constrained to delve into factual
matters where, as in the instant case, the findings of the NLRC contradict those of the Labor Arbiter.

In this instance, the Court in the exercise of its equity jurisdiction may look into the records of the case and re-examine the questioned
findings. As a corollary, this Court is clothed with ample authority to review matters, even if they are not assigned as errors in their
appeal, if it finds that their consideration is necessary to arrive at a just decision of the case. The same principles are now necessarily
adhered to and are applied by the Court of Appeals in its expanded jurisdiction over labor cases elevated through a petition for
certiorari; thus, we see no error on its part when it made anew a factual determination of the matters and on that basis reversed the
ruling of the NLRC.

II

The second assignment of error delves into the significance and application to the case at bar of the two department orders issued by
DOLE. Department Order No. 10, series of 1997, amended the implementing rules of Books III and VI of the Labor Code, as amended.
Under this particular DOLE department order, the arrangement between petitioner and CAMPCO would qualify as permissible
contracting. Department Order No. 3, series of 2001, revoked Department Order No. 10, series of 1997, and reiterated the prohibition
on labor-only contracting.

Attention is called to the fact that the acts complained of by the respondents occurred well before the issuance of the two DOLE
department orders in 1997 and 2001. The Service Contract between DOLE and CAMPCO was executed on 17 August 1993.
45
Respondents started working for petitioner sometime in 1993 and 1994. While some of them continued to work for petitioner, at least
until the filing of the Complaint, others were put on "stay home status" at various times in 1994, 1995, and 1996. Respondents filed their
Complaint with the NLRC on 19 December 1996.

A basic rule observed in this jurisdiction is that no statute, decree, ordinance, rule or regulation shall be given retrospective effect
unless explicitly stated.29 Since there is no provision at all in the DOLE department orders that expressly allowed their retroactive
application, then the general rule should be followed, and the said orders should be applied only prospectively.

Which now brings this Court to the question as to what was the prevailing rule on labor-only contracting from 1993 to 1996, the period
when the occurrences subject of the Complaint before the NLRC took place.

Article 106 of the Labor Code, as amended, permits legitimate job contracting, but prohibits labor-only contracting. The said provision
reads –

ART. 106. Contractor or subcontractor. – Whenever an employer enters into a contract with another person for the performance of the
former’s work, the employees of the contractor and of the latter’s subcontractor, if any, shall be paid in accordance with the provisions
of this Code.

In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer
shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the
contract, in the same manner and extent that he is liable to employees directly employed by him.

The Secretary of Labor may, by appropriate regulations, restrict or prohibit the contracting out of labor to protect the rights of workers
established under this Code. In so prohibiting or restricting, he may make appropriate distinctions between labor-only contracting and
job contracting as well as differentiations within these types of contracting and determine who among the parties involved shall be
considered the employer for purposes of this Code, to prevent any violation or circumvention of any provision of this Code.

There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in
the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such persons are
performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary
shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if
the latter were directly employed by him.

To implement the foregoing provision of the Labor Code, as amended, Sections 8 and 9, Rule VIII, Book III of the implementing rules, in
force since 1976 and prior to their amendment by DOLE Department Order No. 10, series of 1997, provided as follows –

Sec. 8. Job contracting. – There is job contracting permissible under the Code if the following conditions are met;

(1) The contractor carries on an independent business and undertakes the contract work on his own account under his own
responsibility according to his own manner and method, free from the control and direction of his employer or principal in all
matters connected with the performance of the work except as to the results thereof; and

(2) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other
materials which are necessary in the conduct of his business.

Sec. 9. Labor-only contracting. – (a) Any person who undertakes to supply workers to an employer shall be deemed to be engaged in
labor-only contracting where such person:

(1) Does not have substantial capital or investment in the form of tools, equipment, machineries, work premises and other
materials; and

(2) The workers recruited and placed by such persons are performing activities which are directly related to the principal
business or operations of the employer in which workers are habitually employed.

(b) Labor-only contracting as defined herein is hereby prohibited and the person acting as contractor shall be
considered merely as an agent or intermediary of the employer who shall be responsible to the workers in the same
manner and extent as if the latter were directly employed by him.

(c) For cases not falling under this Article, the Secretary of Labor shall determine through appropriate orders whether
or not the contracting out of labor is permissible in the light of the circumstances of each case and after considering
the operating needs of the employer and the rights of the workers involved. In such case, he may prescribe
conditions and restrictions to insure the protection and welfare of the workers.

46
Since these statutory and regulatory provisions were the ones in force during the years in question, then it was in consideration of the
same that DOLE Regional Director Parel and DOLE Undesrsecretary Trajano issued their Orders on 19 September 1993 and 15
September 1994, respectively, both finding that CAMPCO was engaged in labor-only contracting. Petitioner, in its third assignment of
error, questions the weight that the Court of Appeals gave these orders in its Decision, dated 20 May 2002, and Amended Decision,
dated 27 November 2003.

III

The Orders of DOLE Regional Director Parel, dated 19 September 1993, and of DOLE Undersecretary Trajano, dated 15 September
1994, were issued pursuant to the visitorial and enforcement power conferred by the Labor Code, as amended, on the DOLE Secretary
and his duly authorized representatives, to wit –

ART. 128. Visitorial and enforcement power. – (a) The Secretary of Labor or his duly authorized representatives, including labor
regulation officers, shall have access to employer’s records and premises at any time of the day or night whenever work is being
undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter which may
be necessary to determine violations or which may aid in the enforcement of this Code and of any labor law, wage order or rules and
regulations pursuant thereto.

(b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-
employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue
compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor
employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly
authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases
where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by
documentary proofs which were not considered in the course of inspection.

An order issued by the duly authorized representative of the Secretary of Labor and Employment under this article may be appealed to
the latter. In case said order involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash
or surety bond issued by a reputable bonding company duly accredited by the Secretary of Labor and Employment in the amount
equivalent to the monetary award in the order appealed from. (Emphasis supplied.)

Before Regional Director Parel issued his Order, dated 19 September 1993, a Task Force investigated the operations of cooperatives in
Polomolok, South Cotabato, and submitted a report identifying six cooperatives that were engaged in labor-only contracting, one of
which was CAMPCO. In a conference before the DOLE Regional Office, the cooperatives named by the Task Force were given the
opportunity to explain the nature of their activities in relation to petitioner; and, the cooperatives, as well as petitioner, submitted to the
DOLE Regional Office their position papers and other supporting documents to refute the findings of the Task Force. It was only after
these procedural steps did Regional Director Parel issued his Order finding that three cooperatives, including CAMPCO, were indeed
engaged in labor-only contracting and were directed to cease and desist from further engaging in such activities. On appeal, DOLE
Undersecretary Trajano, by authority of the DOLE Secretary, affirmed Regional Director Parel’s Order. Upon denial of the Motion for
Reconsideration filed by the cooperatives, and no further appeal taken therefrom, the Order of DOLE Undersecretary Trajano, dated 15
September 1994, became final and executory.

Petitioner avers that the foregoing Orders of the authorized representatives of the DOLE Secretary do not constitute res judicata in the
case filed before the NLRC. This Court, however, believes otherwise and finds that the final and executory Orders of the DOLE
Secretary or his authorized representatives should bind the NLRC.

It is obvious that the visitorial and enforcement power granted to the DOLE Secretary is in the nature of a quasi-judicial power. Quasi-
judicial power has been described by this Court in the following manner –

Quasi-judicial or administrative adjudicatory power on the other hand is the power of the administrative agency to adjudicate the rights
of persons before it. It is the power to hear and determine questions of fact to which the legislative policy is to apply and to
decide in accordance with the standards laid down by the law itself in enforcing and administering the same law. The
administrative body exercises its quasi-judicial power when it performs in a judicial manner an act which is essentially of an executive or
administrative nature, where the power to act in such manner is incidental to or reasonably necessary for the performance of
the executive or administrative duty entrusted to it. In carrying out their quasi-judicial functions the administrative officers or bodies
are required to investigate facts or ascertain the existence of facts, hold hearings, weigh evidence, and draw conclusions
from them as basis for their official action and exercise of discretion in a judicial nature. Since rights of specific persons are
affected it is elementary that in the proper exercise of quasi-judicial power due process must be observed in the conduct of the
proceedings.30 (Emphasis supplied.)

The DOLE Secretary, under Article 106 of the Labor Code, as amended, exercise quasi-judicial power, at least, to the extent necessary
to determine violations of labor standards provisions of the Code and other labor legislation. He can issue compliance orders and writs
of execution for the enforcement of his orders. As evidence of the importance and binding effect of the compliance orders of the DOLE
Secretary, Article 128 of the Labor Code, as amended, further provides –

47
ART. 128. Visitorial and enforcement power. –

xxxx

(d) It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise render ineffective the orders of the Secretary of
Labor or his duly authorized representatives issued pursuant to the authority granted under this article, and no inferior court or entity
shall issue temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case involving the
enforcement orders issued in accordance with this article.

The Orders of DOLE Regional Director Parel, dated 19 September 1993, and of DOLE Undersecretary Trajano, dated 15 September
1994, consistently found that CAMPCO was engaging in labor-only contracting. Such finding constitutes res judicata in the case filed by
the respondents with the NLRC.

It is well-established in this jurisdiction that the decisions and orders of administrative agencies, rendered pursuant to their quasi-judicial
authority, have upon their finality, the force and binding effect of a final judgment within the purview of the doctrine of res judicata. The
rule of res judicata, which forbids the reopening of a matter once judicially determined by competent authority, applies as well to the
judicial and quasi-judicial acts of public, executive or administrative officers and boards acting within their jurisdiction as to the
judgments of courts having general judicial powers. The orderly administration of justice requires that the judgments or resolutions of a
court or quasi-judicial body must reach a point of finality set by the law, rules and regulations, so as to write finis to disputes once and
for all. This is a fundamental principle in the Philippine justice system, without which there would be no end to litigations. 31

Res judicata has dual aspects, "bar by prior judgment" and "conclusiveness of judgment." This Court has previously clarified the
difference between the two –

Section 49, Rule 39 of the Revised Rules of Court lays down the dual aspects of res judicata in actions in personam. to wit:

"Effect of judgment. - The effect of a judgment or final order rendered by a court or judge of the Philippines, having jurisdiction to
pronounce the judgment or order, may be as follows:

xxxx

(b) In other cases the judgment or 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;

(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 which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or
necessary thereto."

Section 49(b) enunciates the first concept of res judicata known as "bar by prior judgment," whereas, Section 49(c) is referred to as
"conclusiveness of judgment."

There is "bar by former judgment" when, between the first case where the judgment was rendered, and the second case where such
judgment is invoked, there is identity of parties, subject matter and cause of action. When the three identities are present, the judgment
on the merits rendered in the first constitutes an absolute bar to the subsequent action. But where between the first case wherein
Judgment is rendered and the second case wherein such judgment is invoked, there is only identity of parties but there is no identity of
cause of action, the judgment is conclusive in the second case, only as to those matters actually and directly controverted and
determined, and not as to matters merely involved therein. This is what is termed "conclusiveness of judgment."

The second concept of res judicata, conclusiveness of judgment, is the one applicable to the case at bar.

The same parties who participated in the proceedings before the DOLE Regional Office are the same parties involved in the case filed
before the NLRC. CAMPCO, on behalf of its members, attended the conference before the DOLE Regional Office; submitted its
position paper; filed an appeal with the DOLE Secretary of the Order of DOLE Regional Director Parel; and moved for reconsideration
of the subsequent Order of DOLE Undersecretary Trajano. Petitioner, although not expressly named as a respondent in the DOLE
investigation, was a necessary party thereto, considering that CAMPCO was rendering services to petitioner solely. Moreover,
petitioner participated in the proceedings before the DOLE Regional Office, intervening in the matter through a letter sent by its Senior
Legal Officer, dated 24 May 1993, and submitting its own position paper.

While the causes of action in the proceedings before the DOLE and the NLRC differ, they are, in fact, very closely related. The DOLE
Regional Office conducted an investigation to determine whether CAMPCO was violating labor laws, particularly, those on labor-only
contracting. Subsequently, it ruled that CAMPCO was indeed engaging in labor-only contracting activities, and thereafter ordered to

48
cease and desist from doing so. Respondents came before the NLRC alleging illegal dismissal by the petitioner of those respondents
who were put on "stay home status," and seeking regularization of respondents who were still working for petitioner. The basis of their
claims against petitioner rests on the argument that CAMPCO was a labor-only contractor and, thus, merely an agent or intermediary of
petitioner, who should be considered as respondents’ real employer. The matter of whether CAMPCO was a labor-only contractor was
already settled and determined in the DOLE proceedings, which should be conclusive and binding upon the NLRC. What were left for
the determination of the NLRC were the issues on whether there was illegal dismissal and whether respondents should be regularized.

This Court also notes that CAMPCO and DOLE still continued with their Service Contract despite the explicit cease and desist orders
rendered by authorized DOLE officials. There is no other way to look at it except that CAMPCO and DOLE acted in complete defiance
and disregard of the visitorial and enforcement power of the DOLE Secretary and his authorized representatives under Article 128 of
the Labor Code, as amended. For the NLRC to ignore the findings of DOLE Regional Director Parel and DOLE Undersecretary Trajano
is an unmistakable and serious undermining of the DOLE officials’ authority.

IV

In petitioner’s fourth assignment of error, it points out that the Court of Appeals erred in not holding respondents estopped from
asserting that they were regular employees of petitioner since respondents, as owners-members of CAMPCO, actively represented
themselves and warranted that they were engaged in legitimate job contracting.

This Court cannot sustain petitioner’s argument.

It is true that CAMPCO is a cooperative composed of its members, including respondents. Nonetheless, it cannot be denied that a
cooperative, as soon as it is registered with the CDA, attains a juridical personality of its own, 32 separate and distinct from its members;
much in the same way that a corporation has a juridical personality separate and distinct from its stockholders, known as the doctrine of
corporate fiction. The protection afforded by this doctrine is not absolute, but the exception thereto which necessitates the piercing of
the corporate veil can only be made under specified circumstances. In Traders Royal Bank v. Court of Appeals,33 this Court ruled that –

Petitioner cannot put up the excuse of piercing the veil of corporate entity, as this is merely an equitable remedy, and maybe awarded
only in cases when the corporate fiction is used to defeat public convenience, justify wrong, protect fraud or defend crime or where a
corporation is a mere alter ego or business conduit of a person.

Piercing the veil of corporate entity requires the court to see through the protective shroud which exempts its stockholders from
liabilities that ordinarily, they could be subject to, or distinguishes one corporation from a seemingly separate one, were it not for the
existing corporate fiction. But to do this, the court must be sure that the corporate fiction was misused, to such an extent that injustice,
fraud, or crime was committed upon another, disregarding, thus, his, her, or its rights. It is the corporate entity which the law aims to
protect by this doctrine.

Using the above-mentioned guidelines, is petitioner entitled to a piercing of the "cooperative identity" of CAMPCO? This Court thinks
not.

It bears to emphasize that the piercing of the corporate veil is an equitable remedy, and among the maxims of equity are: (1) he who
seeks equity must do equity, and (2) he who comes into equity must come with clean hands. Hence, a litigant may be denied relief by a
court of equity on the ground that his conduct has been inequitable, unfair, dishonest, fraudulent, or deceitful as to the controversy in
issue.34

Petitioner does not come before this Court with clean hands. It is not an innocent party in this controversy.

Petitioner itself admitted that it encouraged and even helped the establishment of CAMPCO and the other cooperatives in Polomolok,
South Cotabato. These cooperatives were established precisely to render services to petitioner. It is highly implausible that the
petitioner was lured into entering into the Service Contract with CAMPCO in 1993 on the latter’s misrepresentation and false warranty
that it was an independent job contractor. Even if it is conceded that petitioner was indeed defrauded into believing that CAMPCO was
an independent contractor, then the DOLE proceedings should have placed it on guard. Remember that petitioner participated in the
proceedings before the DOLE Regional Office, it cannot now claim ignorance thereof. Furthermore, even after the issuance of the
cease and desist order on CAMPCO, petitioner still continued with its prohibited service arrangement with the said cooperative. If
petitioner was truly defrauded by CAMPCO and its members into believing that the cooperative was an independent job contractor, the
more logical recourse of petitioner was to have the Service Contract voided in the light of the explicit findings of the DOLE officials that
CAMPCO was engaging in labor-only contracting. Instead, petitioner still carried on its Service Contract with CAMPCO for several more
years thereafter.

As previously discussed, the finding of the duly authorized representatives of the DOLE Secretary that CAMPCO was a labor-only
contractor is already conclusive. This Court cannot deviate from said finding.

49
This Court, though, still notes that even an independent review of the evidence on record, in consideration of the proper labor statutes
and regulations, would result in the same conclusion: that CAMPCO was engaged in prohibited activities of labor-only contracting.

The existence of an independent and permissible contractor relationship is generally established by the following criteria: whether or
not the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of
the relationship; the right to assign the performance of a specified piece of work; the control and supervision of the work to another; the
employer's power with respect to the hiring, firing and payment of the contractor's workers; the control of the premises; the duty to
supply the premises tools, appliances, materials and labor; and the mode, manner and terms of payment. 35

While there is present in the relationship of petitioner and CAMPCO some factors suggestive of an independent contractor relationship
(i.e., CAMPCO chose who among its members should be sent to work for petitioner; petitioner paid CAMPCO the wages of the
members, plus a percentage thereof as administrative charge; CAMPCO paid the wages of the members who rendered service to
petitioner), many other factors are present which would indicate a labor-only contracting arrangement between petitioner and
CAMPCO.36

First, although petitioner touts the multi-million pesos assets of CAMPCO, it does well to remember that such were amassed in
the years following its establishment. In 1993, when CAMPCO was established and the Service Contract between petitioner
and CAMPCO was entered into, CAMPCO only had ₱6,600.00 paid-up capital, which could hardly be considered
substantial.37 It only managed to increase its capitalization and assets in the succeeding years by continually and defiantly
engaging in what had been declared by authorized DOLE officials as labor-only contracting.

Second, CAMPCO did not carry out an independent business from petitioner. It was precisely established to render services to
petitioner to augment its workforce during peak seasons. Petitioner was its only client. Even as CAMPCO had its own office
and office equipment, these were mainly used for administrative purposes; the tools, machineries, and equipment actually
used by CAMPCO members when rendering services to the petitioner belonged to the latter.

Third, petitioner exercised control over the CAMPCO members, including respondents. Petitioner attempts to refute control by
alleging the presence of a CAMPCO supervisor in the work premises. Yet, the mere presence within the premises of a
supervisor from the cooperative did not necessarily mean that CAMPCO had control over its members. Section 8(1), Rule VIII,
Book III of the implementing rules of the Labor Code, as amended, required for permissible job contracting that the contractor
undertakes the contract work on his account, under his own responsibility, according to his own manner and method, free from
the control and direction of his employer or principal in all matters connected with the performance of the work except as to the
results thereof. As alleged by the respondents, and unrebutted by petitioner, CAMPCO members, before working for the
petitioner, had to undergo instructions and pass the training provided by petitioner’s personnel. It was petitioner who
determined and prepared the work assignments of the CAMPCO members. CAMPCO members worked within petitioner’s
plantation and processing plants alongside regular employees performing identical jobs, a circumstance recognized as an
indicium of a labor-only contractorship.38

Fourth, CAMPCO was not engaged to perform a specific and special job or service. In the Service Contract of 1993, CAMPCO
agreed to assist petitioner in its daily operations, and perform odd jobs as may be assigned. CAMPCO complied with this
venture by assigning members to petitioner. Apart from that, no other particular job, work or service was required from
CAMPCO, and it is apparent, with such an arrangement, that CAMPCO merely acted as a recruitment agency for petitioner.
Since the undertaking of CAMPCO did not involve the performance of a specific job, but rather the supply of manpower only,
CAMPCO clearly conducted itself as a labor-only contractor.39

Lastly, CAMPCO members, including respondents, performed activities directly related to the principal business of petitioner.
They worked as can processing attendant, feeder of canned pineapple and pineapple processing, nata de coco processing
attendant, fruit cocktail processing attendant, and etc., functions which were, not only directly related, but were very vital to
petitioner’s business of production and processing of pineapple products for export.

The findings enumerated in the preceding paragraphs only support what DOLE Regional Director Parel and DOLE Undersecretary
Trajano had long before conclusively established, that CAMPCO was a mere labor-only contractor.

VI

The declaration that CAMPCO is indeed engaged in the prohibited activities of labor-only contracting, then consequently, an employer-
employee relationship is deemed to exist between petitioner and respondents, since CAMPCO shall be considered as a mere agent or
intermediary of petitioner.

Since respondents are now recognized as employees of petitioner, this Court is tasked to determine the nature of their employment. In
consideration of all the attendant circumstances in this case, this Court concludes that respondents are regular employees of petitioner.

Article 280 of the Labor Code, as amended, reads –

50
ART. 280. Regular and Casual Employment. – The provisions of written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform
activities which are usually necessary and desirable in the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement
of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the
season.

An employment shall be deemed to be casual if its is not covered by the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while such activity exists.

This Court expounded on the afore-quoted provision, thus –

The primary standard, therefore, of determining a regular employment is the reasonable connection between the particular activity
performed by the employee in relation to the usual business or trade of the employer. The test is whether the former is usually
necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of
the work performed and its relation to the scheme of the particular business or trade in its entirety. Also, if the employee has been
performing the job for at least one year, even if her performance is not continuous or merely intermittent, the law deems the repeated
and continuing need for its performance as sufficient evidence of the necessity if not indispensability of the activity to the business.
Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists. 40

In the instant Petition, petitioner is engaged in the manufacture and production of pineapple products for export.1âwphi1 Respondents
rendered services as processing attendant, feeder of canned pineapple and pineapple processing, nata de coco processing attendant,
fruit cocktail processing attendant, and etc., functions they performed alongside regular employees of the petitioner. There is no doubt
that the activities performed by respondents are necessary or desirable to the usual business of petitioner.

Petitioner likewise want this Court to believe that respondents’ employment was dependent on the peaks in operation, work backlogs,
absenteeism, and excessive leaves. However, bearing in mind that respondents all claimed to have worked for petitioner for over a
year, a claim which petitioner failed to rebut, then respondent’s continued employment clearly demonstrates the continuing necessity
and indispensability of respondents’ employment to the business of petitioner.

Neither can this Court apply herein the ruling of the NLRC in the previous case involving petitioner and the individual workers they used
to hire before the advent of the cooperatives, to the effect that the employment of these individual workers were not regular, but rather,
were valid "term employments," wherein the employer and employee knowingly and voluntarily agreed to employment for only a limited
or specified period of time. The difference between that case and the one presently before this Court is that the members of CAMPCO,
including respondents, were not informed, at the time of their engagement, that their employment shall only be for a limited or specified
period of time. There is absence of proof that the respondents were aware and had knowingly and voluntarily agreed to such term
employment. Petitioner did not enter into individual contracts with the CAMPCO members, but executed a Service Contract with
CAMPCO alone. Although the Service Contract of 1993 stated that it shall be for a specific period, from 1 July to 31 December 1993,
petitioner and CAMPCO continued the service arrangement beyond 1993. Since there was no written renewal of the Service
Contract,41 there was no further indication that the engagement by petitioner of the services of CAMPCO members was for another
definite or specified period only.

Respondents, as regular employees of petitioner, are entitled to security of tenure. They could only be removed based on just and
authorized causes as provided for in the Labor Code, as amended, and after they are accorded procedural due process. Therefore,
petitioner’s acts of placing some of the respondents on "stay home status" and not giving them work assignments for more than six
months were already tantamount to constructive and illegal dismissal. 42

In summary, this Court finds that CAMPCO was a labor-only contractor and, thus, petitioner is the real employer of the respondents,
with CAMPCO acting only as the agent or intermediary of petitioner. Due to the nature of their work and length of their service,
respondents should be considered as regular employees of petitioner. Petitioner constructively dismissed a number of the respondents
by placing them on "stay home status" for over six months, and was therefore guilty of illegal dismissal. Petitioner must accord
respondents the status of regular employees, and reinstate the respondents who it constructively and illegally dismissed, to their
previous positions, without loss of seniority rights and other benefits, and pay these respondents’ backwages from the date of filing of
the Complaint with the NLRC on 19 December 1996 up to actual reinstatement.

WHEREFORE, in view of the foregoing, the instant Petition is DENIED and the Amended Decision, dated 27 November 2003, rendered
by the Court of Appeals in CA-G.R. SP No. 63405 is AFFIRMED.

Costs against the petitioner.

SO ORDERED.

51
Calalang v. Register of Deeds of Quezon City, G.R. No. 76265 & 83280, March 11, 1994

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-76265 March 11, 1994

VIRGINIA CALALANG, petitioner,

vs.
REGISTER OF DEEDS OF QUEZON CITY, ADMINISTRATOR OF NATIONAL LAND TITLES AND DEEDS REGISTRATION, LUCIA
DE LA CRUZ, CONSTANCIO SIMANGAN, and IGLESIA NI KRISTO, respondents.

G.R. No. L-83280 March 11, 1994

AUGUSTO M. DE LEON, JOSE M. DE CASTRO, JOSE A. PANLILEO, FELICIDAD VERGARA VDA. DE PINEDA, FERNANDO L.
VITUG I, FERNANDO M. VITUG II, FERNANDO M. VITUG III, FAUSTINO TOBIA, ELENO M. OSTREA and FELISA C. CRISTOBAL-
GENEROSO, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and BISHOP ERANO-MANALO, respondents.

Alampay & Manhit Law Office for petitioner in G.R. 83280.

Araceli Bavieraa for petitioner in G.R. 76265.

Cuevas, De la Cuesta & De las Alas for respondents INC and Manalo.

Balgos & Perez Law Offices for intervenors.

Eliseo M. Cruz for the heirs of Lucia de la Cruz.

Cruz, Tafalla, Castillo, Jr., Peren & Associates for private respondent INC.

RESOLUTION

MELO, J.:

The Decision of the Second Division of this Court promulgated April 22, 1992 (208 SCRA 215) dismissing, for lack of merit,
these two (2) consolidated petitions, is assailed by petitioners in their separate motions for reconsideration.

The assailed Decision states:

With this Court's ruling promulgated in 1984, it is our considered view that the petitioners can not raise anew
the question of ownership of Lucia de la Cruz over Lot 671 which had been determined by the Court of
Appeals and affirmed by the Supreme Court in the de la Cruz case. Well-settled in the rule enunciated
in Church Assistance Program, Inc. v. Sibulo, 171 SCRA 408 [1989] that:

When a right or fact has been judicially tried and determined by a court of competent
jurisdiction, so long as it remains unreversed, it should be conclusive upon the parties and
those in privity with them in law or estate.

The Court's ruling has long been final and the issue on ownership of Lot 671 finally disposed of several
years ago. This declaration must be respected and followed in the instant case applying the principle of res
judicata or, otherwise, the rule on conclusiveness of judgment. The less familiar concept of less

52
 terminological usage of res judicata as a rule on conclusiveness of judgment refers to the situation where
the judgment in the prior action operates as an estoppel only as to the matters actually determined therein or
which were necessarily included therein. (De la Cruz v. Court of Appeals, 187 SCRA 165 [1990]).

Inevitably, the de la Cruz ruling should be applied to the present petitions since the facts on which such
decision was predicated continue to be the facts of the case before us now (See Rivas v. SEC, 190 SCRA 295
[1990]). Even the petitioners substantially adopt the same findings of facts in their pleadings. The factual
inquiry with regards to the history of Lot 671 has already been laid to rest and may no longer be disturbed.

xxx xxx xxx

In our capacity as the court of last resort, the petitioners try to convince us to look or inquire into the validity
of the reconstitution proceedings initiated by Lucia de la Cruz ruling, contending that the implementation
of de la Cruz ruling would deprive them of their properties without due process of law. We have looked long
and hard into the records of the case but the facts and circumstances plus law and jurisprudence on the
matter do not warrant such action from the Court. INK's title over Lot 671 which necessarily included Lot 671-
A had already become incontrovertible and indefeasible. To reopen or to question the legality of INK's title
would defeat the purpose of our Torrens system which seeks to insure stability by quieting titled lands and
putting to a stop forever any question of the legality of the registration in the certificate or questions which
may arise therefrom. (de la Cruz v. de la Cruz, supra.) In fairness to INK, as registered owner it is entitled to
rest secure in its land title.

In view of all the foregoing, it would be for the public interest and the maintenance of the integrity and
stability of the Torrens system of land registration that all transfer certificates of title derived from the
reconstituted title of Eugenia de la Paz and Dorotea de la Cruz be annulled in order to prevent the
proliferation of derivative titles which are null and void. The legality or validity of INK's title over Lot 671 has
been settled. The Court has spoken and it has done so with finality, logically and rightly so as to assure
stability in legal relations and avoid confusion. (See Ver v. Quetulio, 163 SCRA 80 [1988]).

(pp. 224-225; 229-230.)

In G.R. No. 76265, petitioners seek a reconsideration of the aforesaid decision because allegedly, the same is contrary to the
following settled principles of law and doctrines laid down this Court, to wit:

1. That a judgment rendered in an action in personam binds only the parties to the action;

2. That a petition for "reconstitution" of a certificate of title filed in 1971, thirty years after the sale to respondent Lucia de la
Cruz in 1941, without personal notice to petitioners and other title holders of Lot 671-A, whose titles date from 1952, is void
and can be collaterally attacked;

3. That the registration of the sale to respondent Lucia de la Cruz in the Primary Entry Book of the Register of Deeds of Manila
in 1943 of a land located in Caloocan, Rizal, cannot be the operative act to convey said property to the vendee, as the record
of the title to said property was then in Pasig, Rizal and then transferred to Quezon City, after the war;

4. That the indefeasibility of a Torrens title after one year from issuance, refers to the indefeasibility of a decree of registration
after one year from entry thereof in an original registration or cadastral proceeding, and by analogy, the principle is extended
to a patent issued in an administrative proceeding, but not to a reconstitution of a certificate of title allegedly lost, nor to the
issuance of subsequent transfer certificate of title; and

5. That respondent Iglesia ni Kristo cannot be considered as an innocent purchaser for value as far as petitioners and other
title holders to Lot 671-A are concerned, because the titles of respondent Iglesia ni Kristo are derived from the "reconstituted"
title of respondent Lucia de la Cruz issued in 1971. Respondent Iglesia ni Kristo is deemed to have actual and constructive
knowledge of the rights of more than 80 buyers of Lot 671-A who were issued transfer certificates of title dating from 1952.

In G.R. No. 83280, petitioners assail the decision on the following grounds:

1. The decision in the de la Cruz case does not bind the petitioners.

2. The Iglesia ni Kristo, represented by public respondent, is not an innocent purchaser for value of the parcels of land in
dispute.

53
3. Petitioners, as duly registered owners of land under the Torrens system, are purchasers in good faith whose titles have
become indefeasible.

Aware of the importance of the case, the Court granted the request of petitioners to have their motions for reconsideration be
considered by the Court en banc.

At the core of the controversy is the case of Agustina de la Cruz et al. vs. Lucia de la Cruz, Iglesia ni Kristo and Hon. Court of
Appeals (130 SCRA 666 [1984]) which has settled once and for all the question of ownership of Lot 671 of the Piedad Estate in
Barrio Culiat, Quezon City. A portion of this lot, Lot 671-A, is the subject of these two (2) consolidated petitions at bar.

In said de la Cruz case, the Court found and held:

1. The mother title of Lot 671 is OCT. No. 614 registered on March 12, 1912 in the name of the Philippine Government. When
Lot 671, with an area of 184,268 square meters, more or less, was segregated the original title was partially cancelled and
TCT-40355 T-201 was issued to Eugenia de la Paz and Dorotea de la Cruz by virtue of Entry No. 3241 which reads:

. . . Vendido a Eugenia de la Paz y Dorotea de la Paz y Dorotea de la Cruz el Lote No. 671 del terreno en este
certificado de titulo, mediante escritura ratificada al 27 de Julio de 1931 en Manila, ante Vicente Garcia,
Notario Publico, se cancela parcialmente al presente certificado de titulo, en cuanto al lote mencianado y se
expide otro a nombre de las compradoras con el No. 40355, folio 5, Tomo T-201 del libro de transferencias;
archivandose la escritura de que se ha hecho referencia en el Legajo
T-No. 40355.

2. On November 29, 1941 Eugenia de la Paz and Dorotea de la Cruz sold Lot 671 to Lucia de la Cruz and TCT No. 40355 T-201
was cancelled by virtue of Entry No. 258, Page 7, volume 7, Primary Entry Book of the Registry of Deeds of Manila. Said entry
reads as follows:

1. Number of Entry 258

2. Date of filing:
Month, day & year July 17, 1943
Hour and Minute 10:15 A.M.
3. Nature of Contract Sale
4. Executed by Doroteo (sic)
de la Cruz, et al.
5. In favor of Lucia de la Cruz
6. Date of Instrument 11-29-41
7. Relative to:
Certificate of
Title No 40355
Book T-201
8. Papers presented by:
Name Regino Cleofas
Address Pasong Tamo,
Quezon City
9. Contract value P2,500.00
10. Remark Caloocan

3. In 1971, Lucia de la Cruz petitioned for the reconstitution of her title in the Court of First Instance of Manila. The court
granted the petition and the Register of Deeds of Manila issued to her TCT No. RT-58, thereby cancelling TCT 40355 T-201. (at
p. 698.)

4. The petition for reconstitution was duly published and proper notices posted in accordance with law; and after due hearing,
was granted by the court in the exercise of its authority and jurisdiction. "Hence, We reject petitioners' assignment of error
that the Court of Appeals erred in not declaring that the reconstituted title of Lucia de la Cruz is absolutely null and void." (at
p. 698.).

5. "With respect to the reconstituted title of Dorotea de la which was granted by the Court of First Instance of Rizal on
December 14, 1945 and TCT 5284 of the Register of Deeds of Quezon City was issued in substitution and/or reconstitution of
TCT 40355 of the Register of Deeds of Rizal, . . . it may be true that the order granting reconstitution was null and void by
reason of the failure to cause the necessary publication of the petition, and, therefore, the reconstituted title was ineffective.
More than that, it is established that Dorotea de la Cruz and Eugenia de la Paz had previously sold the land to Lucia de la Cruz
on November 29, 1941 as indicated in Entry No. 258 so that Dorotea de la Cruz was no longer the owner at the time she
petitioned for reconstitution." (at pp. 298-699.)

54
6. "Nonetheless, it is not disputed that Dorotea de la Cruz together with Eugenia de la Paz were the registered owners of Lot
671 under TCT 40355, T-201 of the Register of Deeds of Rizal and they could legally transfer the same to Lucia de la Cruz who
thereafter sold in favor of Iglesia ni Kristo." (at p. 699.)

7. Under Section 38 of the Land Registration Act, "the registered title of Lucia de la Cruz reconstituted as TCT No. RT-58 in
1971 became indefeasible and incontrovertible one year from its issuance. As registered owner, Lucia de la Cruz had the
perfect and legal right to sell, assign, and convey the property to respondent Iglesia ni Kristo who as purchaser for value in
good faith hold the same free from all encumbrances except those noted in said certificate (Sec. 39 Land Registration Act).
The Iglesia may then safely rely on the correctness of the certificate of title issued therefor and the will in no way oblige him
to go behind the certificate to determine the condition of the property". (at p. 7063.)

The rule is well-settled that once a decision becomes final, the Court can no longer amend, modify, much less, set aside the
same (Adez Realty Inc. vs. Court of Appeals, 212 SCRA 625 [1992]); otherwise, endless litigation will result (Fabular vs. Court
of Appeals, 119 SCRA 329 [1982])

In fact, in Duenas vs. Mandi (151 SCRA 530 [1987]) cited in Adez, we held that the trial court and the appellate court may have
committed error in the assignment or partition of the eight (8) parcels of land to the parties in said case, but considering that
their judgments are already final, the error, assuming one was committed, can no longer be amended or corrected.

In Icao vs. Apalisok (180 SCRA 680 [1989]), likewise cited in Adez, we ruled that even the subsequent discovery of an
erroneous imposition of a penalty will not justify correction of the judgment after it has become final.

Our decision in these two consolidated petitions is an application of this well-established rule, that once a decision becomes
final, the Court can no longer modify, amend, much less, set aside the same. To grant a reconsideration of this decision
would also reconsider, reverse, and set aside our 1984 decision which was long become final. For, while the 1984 decision
declared the reconstituted title RT-58 of Lucia de la Cruz valid and legal, petitioners would want us to reach 10 years back and
declare the same title null and void; while the 1984 decision declared the Iglesia ni Kristo a purchaser in good faith and for
value, petitioners would want us to do a complete turn around and find the Iglesia ni Kristo a purchaser in bad faith.

In the case of Legarda vs. Savellano (158 SCRA 194 [1988] the Court stated:

. . . It is a general rule common to all civilized system of jurisprudence, that the solemn and deliberate
sentence of the law, pronounced by its appointed organs, upon a disputed fact or a state of facts, should be
regarded as a final and conclusive determination of the question litigated, and should forever set the
controversy at rest. Indeed, it has been well said that this maxim is more than a mere rule of law, more than
an important principle of public policy; and that it is not too much to say that it is a fundamental concept in
the organization of every jural system. Public policy and sound practice demand that at the risk of
occasional errors, judgments of courts should become final at some definite date fixed by law. The very
object for which courts were constituted was to put an end to controversies.

If we were to allow repeated suits seeking to nullify OCT Nos. 1348-1355 issued to Benito Legarda, Sr. in
1907, the indefeasibility of titles issued under the Torrens systems and land registration, which the
Philippines has adopted, will be defeated and set to naught. (at p. 200.)

The Court, speaking through Justice Nocon, in Swan vs. Court of Appeals (212 SCRA 114 [1992]) stated:

It is high time that we write finis to a litigation that has been pending for years not only to the prejudice of the
prevailing parties, but also to the prompt determination of controversies, and in violation of the fundamental
concept that public policy and sound practice demand that judgments of courts shall become final at some
definite date fixed by law. (at p. 124)

Petitioners contend that the de la Cruz case is not applicable and that the doctrine of res judicata should not have been
applied. We do not agree.

The doctrine res judicata actually embraces two different concepts: (1) bar by former judgment and (b) conclusiveness of
judgment.

The second concept — conclusiveness of judgment — states that a fact or question which was in issue in a former suit and
was there judicially passed upon and determined by a court of competent jurisdiction, is conclusively settled by the judgment
therein as far as the parties to the action and persons in privity with them are concerned and cannot be again litigated in any
future action between such parties or their privies, in the same court or any other court of concurrent jurisdiction on either
the same or different cause of action, while the judgment remains unreversed by proper authority. It has been held that in
order that a judgment in one action can be conclusive as to a particular matter in another action between the same parties or

55
their privies, it is essential that the issue be identical. If a particular point or question is in issue in the second action, and the
judgment will depend on the determination of that particular point or question, a former judgment between the same parties
or their privies will be final and conclusive in the second if that same point or question was in issue and adjudicated in the
first suit (Nabus vs. Court of Appeals, 193 SCRA 732 [1991]). Identity of cause of action is not required but merely identity of
issue.

Justice Feliciano, in Smith Bell & Company (Phils.), Inc. vs. Court of Appeals (197 SCRA 201, 210 [1991]), reiterated Lopez vs.
Reyes (76 SCRA 179 [1977]) in regard to the distinction between bar by former judgment which bars the prosecution of a
second action upon the same claim, demand, or cause of action, and conclusiveness of judgment which bars the relitigation
of particular facts or issues in another litigation between the same parties on a different claim or cause of action.

The general rule precluding the relitigation of material facts or questions which were in issue and
adjudicated in former action are commonly applied to all matters essentially connected with the subject
matter of the litigation. Thus, it extends to questions necessarily implied in the final judgment, although no
specific finding may have been made in reference thereto and although such matters were directly referred
to in the pleadings and were not actually or formally presented. Under this rule, if the record of the former
trial shows that the judgment could not have been rendered without deciding the particular matter, it will be
considered as having settled that matter as to all future actions between the parties and if a judgment
necessarily presupposes certain premises, they are as conclusive as the judgment itself . . .

(at pp. 186-187.)

The issue of the validity of the reconstituted title of Lucia de la Cruz over Lot 671 of the Piedad Estate, the issue of whether or
not the Iglesia ni Kristo was an innocent purchaser for value and in good faith, and the issue of the validity of the
reconstituted title of Dorotea de la Cruz and Eugenia de la Paz (herein petitioners' predecessors-in-interest) were actually,
directly, and expressly raised, controverted, litigated and resolved in our 1984 decision. Applying the rule on conclusiveness
of judgment, these issue may no longer be relitigated in these present petitions.

Petitioners cannot evade the conclusive effect of the 1984 decision, merely because they were not impleaded parties in the
said case. It has been said that the foundation principle upon which the doctrine of res judicata rests is that parties ought no
to be permitted to litigate the same issue more than once; that, when a right or fact has been judicially tried and determined
by a court of competent jurisdiction, or an opportunity for such trials has been given, the judgment of the court, so long as it
remains unreversed, should be conclusive upon the parties those in privity with them in law or estate. (Nabus vs. Court of
Appeals, supra).

In the case of Vda. de Medina vs. Cruz (161 SCRA 36 [1988]), the Court stated:

The crucial issue in this case is whether or not the decision in Civil Case No. C-120 which has long become
final and executory can be enforced against the petitioner who is not a party to the aforementioned case.

Petitioner alleged in her memorandum that she is not affected by the decision in C-120 as persons who are
not parties to a suit are not bound by the judgment and that she purchased the lot in good faith from an
entirely different person — the Heirs of Don Mariano San Pedro y Esteban and not from either the plaintiffs or
defendants of the aforesaid case.

It is a generally accepted principle "that no man shall be affected by any proceeding to which he is a stranger
...

[but] being a privy, the petitioner can be reached by the order of execution and Writ of Demolition.

(at pp. 43-44.)

Also, in the case of Varsity Hills, Inc. vs. Navarro (43 SCRA 503 [1972]), the Court ruled:

In the face of these declarations in a final decisions of the highest Court of the land, it becomes indubitable
that the action in the court below was definitely barred: for while present private respondents were not
parties in the 1993 cause, their predecessor-in-interest Quintin Mejia was such a party and the final judgment
against him concludes and bars his successors and privies as well.

(at pp. 510-511.)

56
Admittedly, petitioners derived their title from Amando Clemente and/or Clemville Subdivision. Amando Clemente derived his
title from Dorotea de la Cruz and Eugenia de la Paz. Being privies and/or successors in interest to the parties in the 1984
decision, petitioners are bound by said decision.

Likewise untenable is petitioners' contention that the reconstituted titled of Lucia de la Cruz, RT-58, is void.

Proceedings for judicial reconstitution or certificates of title are proceedings in rem. Thus, notice of hearing by proper
publication is sufficient to clothe the Court with jurisdiction and the mere fact that a person purporting to have a legitimate
claim in the property did not receive personal notice is not sufficient ground to invalidate the proceedings.

In Adez Realty, Inc. vs. Court of Appeals (212 SCRA 625 [1992]), the Court, through Justice Bellosillo, held:

Besides, as early as 1910, in Grey Alba v. de la Cruz (17 Phil. 41) We already ruled that the land registration
proceedings are proceedings in rem, not in personam, and therefore it is not necessary to give personal
notice to the owners or claimants of the land sought to be registered, in order to vest the courts with power
and authority over the res. Thus, while, it may be true that no notice was sent by registered mail to
petitioners when the judicial reconstitution of title was sought, such failure, however, did not amount to a
jurisdictional defect. (See PNR vs. De la Vina & Zamacona, 109 Phil. 342). In Register of Deeds of Malabon vs.
RTC, Malabon, Metro Manila, Br. 170 (G.R. No. 886623, February 5, 1990, 181 SCRA 788), We said that "the
purpose of the publication of the notice of the petition for reconstitution in the Official Gazette is to apprise
the whole world that such a petition has been filed and that whoever is minded to oppose it for good cause
may do so within thirty (30) days before the date set by the court for hearing the petition. It is the publication
of such notice that brings in the whole word as a party in the case and vests the court with jurisdiction to
hear and decide it." Thus, notice of hearing by proper publication in the Official Gazette is sufficient to clothe
the court with jurisdiction, and the mere fact that a person purporting to have a legitimate claim in the
property did not receive personal notice is not sufficient ground to invalidate the proceedings. (at p. 628.)

Besides, the official records of the Quezon City Municipal Hall, as certified to by the Office of the City Assessor of Quezon
City (pp. 456-556, Rollo of G.R. No. 83280) show that there are no improvements whatsoever on the property in question thus
signifying that the property is unoccupied. Therefore, it would have been impossible for Lucia de la Cruz to notify petitioners.

Be this as it may, the issue of the validity of the 1971 reconstitution proceedings is no longer a valid issue in these petitions
at bar, its validity having already been resolved with finality in the 1984 decision.

The contention that the registration of the November 29, 1941 sale by Dorotea de la Cruz and Eugenia de la Paz to Lucia de la
Cruz, with the Register of Deeds of Manila is irregular deserves scant consideration.

As certified to by the Administrator of the Land. Registration Authority (p. 448, Rollo of G.R. No. 83280) the City of Manila and
the nearby towns and cities were treated as a single political unit, that is Greater Manila, during the Japanese Occupation.
Thus, the Excerpts from volume 7 of the Registry Book of Manila, year 1943 (p. 447, Rollo of G.R. No. 83280), show, among
other things, the following entries:

(a) The sale of a parcel of land located in Quezon City executed by Magdalena Estates, Inc. in favor of
Dionisio Bravo;

(b) The mortgage of a parcel of land in Quezon City by Antonio Zuzuareggui in favor of Elena Africa, et al.;
and

(c) The sale of a parcel of land in Quezon City to Lucia de la Cruz by Dorotea de la Cruz, et al.

clearly indicating that transactions involving parcels of land located in Quezon City were indeed recorded and registered in
the Registry of Manila.

Under the law, it is the act of registration of the deed of conveyance that serves as the operative act to convey the land
registered under the Torrens system. The act of registration creates constructive notice to the whole world of the fact of such
conveyance. (Quilisadio vs. Court of Appeals, 182 SCRA 401 [1990]; De la Calzada-Cierras vs. Court of Appeals, 212 SCRA
390 [1992]).

We cannot go along with petitioners' position that their titles, because they were issued in 1952, must prevail over the title of
the Iglesia ni Kristo.

57
The titles issued to petitioners are derived from TCT No. 5284. This title, TCT No. 5284 is the reconstituted title of Dorotea de
la Cruz which was declared null and void in the 1984 decision.

3. With respect to the reconstituted title of Dorotea de la Cruz which was granted by the Court of First
Instance of Rizal on December 14, 1945 and TCT 5284 of the Register of Deeds of Quezon City was issued in
substitution and/or reconstitution of TCT 40355 of the Register of Deeds of Rizal by virtue of the following
inscription on TCT 40335, to wit:

Se expide otra copia para el dueno del presente certificado de titulo en sustitucion del
duplicado que se alega haberse quemado, en virtud de na orden del juzgado de Primera
Instancia de Rizal dictada el 14 de Deciembre, 1945, en Expediente G.L.R.O. Rec. No. 5975, y
en donde se declara nulo y ninguna valor dicho duplicado quemado.

MAMERTO TINGKUNGKO

Register of Deeds Interino it may be true that the order granting reconstitution was null and
void by reason of the failure to cause the necessary publication of the petition, and
therefore, the reconstituted title was ineffective. More than that, it is established that
Dorotea de la Cruz and Eugenia de la Paz had previously sold the land to Lucia de la Cruz
executed on November 29, 1941 as indicated in Entry No. 258 so that Dorotea de la Cruz was
no longer the owner at the time she petitioned for reconstitution. Nonetheless, it is not
disputed that Dorotea de la Cruz together with Eugenia de la Paz were the registered owners
of Lot 671 under TCT 40355, T-201 of the Register of Deeds of Rizal, and they could legally
transfer the same to Lucia de la Cruz who thereafter sold in favor of respondent Iglesia ni
Kristo.

(at pp. 698-699.)

Needless to state, all subsequent certificates of title including petitioners' titles are also void because of the legal truism that
the spring cannot rise higher than its source (De Santos vs. Intermediate Appellate Court, 157 SCRA 295 [1988].) The law must
protect and prefer the lawful holder of registered title over the transferee of a vendor bereft of any transmissible rights
(Baltazar vs. Court of Appeals, 168 SCRA 354 [1988]).

Finally, both petitions are procedurally erroneous because certiorari is not the proper remedy.

G.R. No. 76265 stemmed from a letter in consulta addressed by the then Acting Register of Deeds of Quezon City to the
Administrator of the National Land Titles and Deeds Registration Administration involving the registrability of a deed of sale
presented for registration. by Mr. Constancio Simangan.

The Administrator issued a resolution dated April 4, 1988 ordering the Register of Deeds to register the deed of sale subject
of the consulta.

The Register of Deeds moved for reconsideration. Herein petitioner Virginia Calalang moved to intervene.

The Acting Administrator denied both motions. Calalang filed a motion for reconsideration but the same was denied, and
forthwith, Calalang filed the present petition.

The proper remedy available to Calalang is an appeal to the Court of Appeals pursuant to Section 117 of Presidential Decree
No. 1529 and Republic Act No. 5434, and not certiorari or prohibition.

Sec. 117, PD 1529 (Property Registration Decree) Procedure — . . . the party in interest who disagrees with
the final resolution, ruling or order of the Commission relative to the consultas may appeals to the Court of
Appeals within the period and in the manner provided in Republic Act No. 5434.

Sec. 2, RA 5434 (Uniform Procedure for Appeals) Appeals to Court of Appeals. — Appeals to the Court of
Appeals shall be filed within fifteen (15) days from notice of the ruling, award, order, decision or judgment or
from the date of its last publication, if publication is required by law for its effectivity; . . . If no appeal is filed
within the periods here fixed, the ruling, award, order, decision or judgment shall become final and may be
executed as provided by existing law.

The other case, G.R. No. 83280, stemmed from an injunction suit filed by Augusto de Leon et al. against the Iglesia ni Kristo
and Bishop Manalo.

58
The case was dismissed by the Regional Trial Court. Instead of appealing the order of dismissal, petitioners filed with the
Court of Appeals the following.

1. A "Motion for Reconsideration Ad Cautelam"; and

2. An "Omnibus Motion Incident to Execution of the Decision"

The Court of Appeals denied both motions. Hence, the other herein petition.

It is elementary that a petition for certiorari can not substitute for a lost appeal. The order of the Regional Trial Court
dismissing the case was appealable. Petitioners in the second petition failed to appeal the same, consequently the order has
already become final and may no longer be reviewed on certiorari.

Moreover, these petitions amount to a collateral attack on the title of the Iglesia ni Kristo. Well-settled is the rule that a
certificate of title cannot be altered, modified or cancelled except in a direct proceeding in accordance with law. (Section 48,
PD No. 1529.)

IN VIEW OF THE FOREGOING, petitioners' Motion for Reconsiderations are hereby DENIED.

59
Jarantilla v. Court of Appeals, G.R. No. 80194, March 21, 1989, citing People v. Olarte, G.R. No. L-22465, February 28, 1967

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 80194 March 21, 1989

EDGAR JARANTILLA, petitioner,

vs.
COURT OF APPEALS and JOSE KUAN SING, respondents.

Corazon Miraflores and Vicente P. Billena for petitioner.

Manuel S. Gemarino for private respondent.

REGALADO, J.:

The records show that private respondent Jose Kuan Sing was "side-swiped by a vehicle in the evening of July 7, 1971 in lznart Street,
Iloilo City" 1 The respondent Court of Appeals concurred in the findings of the court a quo that the said vehicle which figured in the
mishap, a Volkswagen (Beetle type) car, was then driven by petitioner Edgar Jarantilla along said street toward the direction of the
provincial capitol, and that private respondent sustained physical injuries as a consequence. 2

Petitioner was accordingly charged before the then City Court of Iloilo for serious physical injuries thru reckless imprudence in Criminal
Case No. 47207 thereof. 3 Private respondent, as the complaining witness therein, did not reserve his right to institute a separate civil
action and he intervened in the prosecution of said criminal case through a private prosecutor. 4 Petitioner was acquitted in said
criminal case "on reasonable doubt".5

On October 30, 1974, private respondent filed a complaint against the petitioner in the former Court of First Instance of Iloilo, Branch
IV, 6 docketed therein as Civil Case No. 9976, and which civil action involved the same subject matter and act complained of in
Criminal Case No. 47027. 7 In his answer filed therein, the petitioner alleged as special and affirmative detenses that the private
respondent had no cause of action and, additionally, that the latter's cause of action, if any, is barred by the prior judgment in Criminal
Case No. 47207 inasmuch as when said criminal case was instituted the civil liability was also deemed instituted since therein plaintiff
failed to reserve the civil aspect and actively participated in the criminal case. 8

Thereafter, acting on a motion to dismiss of therein defendant, the trial court issued on April 3, 1975 an order of denial, with the
suggestion that "(t)o enrich our jurisprudence, it is suggested that the defendant brings (sic) this ruling to the Supreme Court
by certiorari or other appropriate remedy, to review the ruling of the court". 9

On June 17, 1975, petitioner filed in this Court a petition for certiorari, prohibition and mandamus, which was docketed as G.R. No. L-
40992, 10 assailing the aforesaid order of the trial court. Said petition was dismissed for lack of merit in the Court's resolution of July
23, 1975, and a motion for reconsideration thereof was denied for the same reason in a resolution of October 28, 1975. 11

After trial, the court below rendered judgment on May 23, 1977 in favor of the herein private respondent and ordering herein petitioner
to pay the former the sum of P 6,920.00 for hospitalization, medicines and so forth, P2,000.00 for other actual expenses, P25,000.00
for moral damages, P5,000.00 for attorney's fees, and costs. 12

On July 29, 1987, the respondent Court of Appeals 13 affirmed the decision of the lower court except as to the award for moral
damages which it reduced from P25,000.00 to P18,000.00. A motion for reconsideration was denied by respondent court on September
18, 1987. 14

The main issue for resolution by Us in the present recourse is whether the private respondent, who was the complainant in the criminal
action for physical injuries thru reckless imprudence and who participated in the prosecution thereof without reserving the civil action
arising from the act or omission complained of, can file a separate action for civil liability arising from the same act or omission where
the herein petitioner was acquitted in the criminal action on reasonable doubt and no civil liability was adjudicated or awarded in the
judgment of acquittal.

60
Prefatorily, We note that petitioner raises a collateral issue by faulting the respondent court for refusing to resolve an assignment of
error in his appeal therein, said respondent court holding that the main issue had been passed upon by this Court in G.R. No. L-40992
hereinbefore mentioned. It is petitioner's position that the aforesaid two resolutions of the Court in said case, the first dismissing the
petition and the second denying the motion for reconsideration, do not constitute the "law of the case' which would control the
subsequent proceed ings in this controversy.

1. We incline favorably to petitioner's submission on this score.

The "doctrine of the law of the case" has no application at the aforesaid posture of the proceedings when the two resolutions were
handed down. While it may be true that G.R. No. L-40992 may have involved some of the issues which were thereafter submitted for
resolution on the merits by the two lower courts, the proceedings involved there was one for certiorari, prohibition and mandamus
assailing an interlocutory order of the court a quo, specifically, its order denying therein defendants motion to dismiss. This Court,
without rendering a specific opinion or explanation as to the legal and factual bases on which its two resolutions were predicated,
simply dismissed the special civil action on that incident for lack of merit. It may very well be that such resolution was premised on the
fact that the Court, at that stage and on the basis of the facts then presented, did not consider that the denial order of the court a
quo was tainted with grave abuse of discretion. 15 To repeat, no rationale for such resolutions having been expounded on the merits of
that action, no law of the case may be said to have been laid down in G.R. No. L-40992 to justify the respondent court's refusal to
consider petitioner's claim that his former acquittal barred the separate action.

'Law of the case' has been defined as the opinion delivered on a former appeal. More specifically, it means that
whatever is once irrevocably established, as the controlling legal rule of decision between the same parties in the
same case continues to be the law of the case, whether correct on general principles or not, so long as the facts on
which such decision was predicated continue to be the facts of the case before the court (21 C.J.S. 330). (Emphasis
supplied). 16

It need not be stated that the Supreme Court being the court of last resort, is the final arbiter of all legal questions
properly brought before it and that its decision in any given case constitutes the law of that particular case . . .
(Emphasis supplied). 17

It is a rule of general application that the decision of an appellate court in a case is the law of the case on the points
presented throughout all the subsequent proceedings in the case in both the trial and the appellate courts, and no
question necessarily involved and decided on that appeal will be considered on a second appeal or writ of error in the
same case, provided the facts and issues are substantially the same as those on which the first question rested and,
according to some authorities, provided the decision is on the merits . . . 18

2. With the foregoing ancillary issue out of the way, We now consider the principal plaint of petitioner.

Apropos to such resolution is the settled rule that the same act or omission (in this case, the negligent sideswiping of private
respondent) can create two kinds of liability on the part of the offender, that is, civil liability ex delicto and civil liability ex quasi delicto.
Since the same negligence can give rise either to a delict or crime or to a quasi-delict or tort, either of these two types of civil liability
may be enforced against the culprit, subject to the caveat under Article 2177 of the Civil Code that the offended party cannot recover
damages under both types of liability. 19

We also note the reminder of petitioner that in Roa vs. De la Cruz, et al., 20 it was held that where the offended party elected to claim
damages arising from the offense charged in the criminal case through her intervention as a private prosecutor, the final judgment
rendered therein constituted a bar to the subsequent civil action based upon the same cause. It is meet, however, not to lose sight of
the fact that the criminal action involved therein was for serious oral defamation which, while within the contemplation of an independent
civil action under Article 33 of the Civil Code, constitutes only a penal omen and cannot otherwise be considered as a quasi-delict
or culpa aquiliana under Articles 2176 and 2177 of the Civil Code. And while petitioner draws attention to the supposed reiteration of
the Roa doctrine in the later case of Azucena vs. Potenciano, et al., 21 this time involving damage to property through negligence as to
make out a case of quasi-delict under Articles 2176 and 2180 of the Civil Code, such secondary reliance is misplaced since the therein
plaintiff Azucena did not intervene in the criminal action against defendant Potenciano. The citation of Roa in the later case
of Azucena was, therefore, clearly obiter and affords no comfort to petitioner.

These are aside from the fact that there have been doctrinal, and even statutory, 22 changes on the matter of civil actions arising from
criminal offenses and quasi-delicts. We will reserve our discussion on the statutory aspects for another case and time and, for the
nonce, We will consider the doctrinal developments on this issue.

In the case under consideration, private respondent participated and intervened in the prosecution of the criminal suit against petitioner.
Under the present jurisprudential milieu, where the trial court acquits the accused on reasonable doubt, it could very well make a
pronounce ment on the civil liability of the accused 23 and the complainant could file a petition for mandamus to compel the trial court to
include such civil liability in the judgment of acquittal. 24

61
Private respondent, as already stated, filed a separate civil aciton after such acquittal. This is allowed under Article 29 of the Civil Code.
We have ruled in the relatively recent case of Lontoc vs. MD Transit & Taxi Co., Inc., et al. 25 that:

In view of the fact that the defendant-appellee de la Cruz was acquitted on the ground that 'his guilt was not proven
beyond reasonable doubt' the plaintiff-appellant has the right to institute a separate civil action to recover damages
from the defendants-appellants (See Mendoza vs. Arrieta, 91 SCRA 113). The well-settled doctrine is that a person,
while not criminally liable may still be civilly liable. 'The judgment of acquittal extinguishes the civil liability of the
accused only when it includes a declaration that the facts from which the civil liability might arise did not exist'.
(Padilla vs. Court of Appeals, 129 SCRA 558 cited in People vs. Rogelio Ligon y Tria, et al., G.R. No. 74041, July 29,
1987; Filomeno Urbano vs. Intermediate Appellate Court, G.R. No. 72964, January 7, 1988). The ruling is based on
Article 29 of the Civil Code which provides:

When the accused in a criminal prosecution is acquitted on the ground that his guilt has not
been proved beyond reasonable doubt, a civil action for damages for the same act or omission may
be instituted. Such action requires only a preponderance of evidence ... 26

Another consideration in favor of private respondent is the doctrine that the failure of the court to make any pronouncement, favorable
or unfavorable, as to the civil liability of the accused amounts to a reservation of the right to have the civil liability litigated and
determined in a separate action. The rules nowhere provide that if the court fails to determine the civil liability it becomes no longer
enforceable. 27

Furthermore, in the present case the civil liability sought to be recovered through the application of Article 29 is no longer that based on
or arising from the criminal offense. There is persuasive logic in the view that, under such circumstances, the acquittal of the accused
foreclosed the civil liability based on Article 100 of the Revised Penal Code which presupposes the existence of criminal liability or
requires a conviction of the offense charged. Divested of its penal element by such acquittal, the causative act or omission becomes in
effect a quasi-delict, hence only a civil action based thereon may be instituted or prosecuted thereafter, which action can be proved by
mere preponderance of evidence. 28 Complementary to such considerations, Article 29 enunciates the rule, as already stated, that a
civil action for damages is not precluded by an acquittal on reasonable doubt for the same criminal act or omission.

The allegations of the complaint filed by the private respondent supports and is constitutive of a case for a quasi-delict committed by the
petitioner, thus:

3. That in the evening of July 7, 197l at about 7:00 o'clock, the plaintiff crossed Iznart Street from
his restaurant situated at 220 lznart St., Iloilo City, Philippines, on his way to a meeting of the
Cantonese Club at Aldeguer Street, Iloilo City and while he was standing on the middle of the street
as there were vehicles coming from the Provincial Building towards Plazoleta Gay, Iloilo City, he
was bumped and sideswiped by Volkswagen car with plate No. B-2508 W which was on its way
from Plazoleta Gay towards the Provincial Capitol, Iloilo City, which car was being driven by the
defendant in a reckless and negligent manner, at an excessive rate of speed and in violation of the
provisions of the Revised Motor Vehicle (sic) as amended, in relation to the Land Transportation
and Traffic Code as well as in violation of existing city ordinances, and by reason of his inexcusable
lack of precaution and failure to act with due negligence and by failing to take into consideration
(sic) his degree of intelligence, the atmospheric conditions of the place as well as the width, traffic,
visibility and other conditions of lznart Street; 29

Since this action is based on a quasi-delict, the failure of the respondent to reserve his right to file a separate civil case and his
intervention in the criminal case did not bar him from filing such separate civil action for damages. 30 The Court has also heretofore
ruled in Elcano vs. Hill 31 that —

... a separate civil action lies against the offender in a criminal act whether or not he is criminally prosecuted and
found guilty or acquitted, provided that the offended party is not allowed, if he is also actually charged criminally, to
recover damages on both scores; and would be entitled in such eventuality only to the bigger award of the two,
assuming the awards made in the two cases vary. In other words, the extinction of civil liability referred to in Par. (c)
of Sec. 3 Rule 111, refers exclusively to civil liability founded on Article 100 of the Revised Penal Code; whereas the
civil liability for the same act considered as a quasi-delict only and not as a crime is not extinguished even by a
declaration in the criminal case that the criminal act charged has not happened or has not been committed by the
accused . . .

The aforecited case of Lontoc vs. MD Transit & Taxi Co., Inc., et al. involved virtually the same factual situation. The Court, in arriving at
the conclusion hereinbefore quoted, expressly declared that the failure of the therein plaintiff to reserve his right to file a separate civil
case is not fatal; that his intervention in the criminal case did not bar him from filing a separate civil action for damages, especially
considering that the accused therein was acquitted because his guilt was not proved beyond reasonable doubt; that the two cases were
anchored on two different causes of action, the criminal case being on a violation of Article 365 of the Revised Penal Code while the
subsequent complaint for damages was based on a quasi-delict; and that in the judgment in the criminal case the aspect of civil liability
was not passed upon and resolved. Consequently, said civil case may proceed as authorized by Article 29 of the Civil Code.
62
Our initial adverse observation on a portion of the decision of respondent court aside, We hold that on the issues decisive of this case it
did not err in sustaining the decision a quo.

WHEREFORE, the writ prayed for is hereby DENIED and the decision of the respondent Court of Appeals is AFFIRMED, without costs.

SO ORDERED.

63
Acosta v. Commission on Elections, G.R. No. 131488, [August 3, 1998]

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 131488 August 3, 1998

ESPIRITA N. ACOSTA, petitioner,

vs.
THE COMMISSION ON ELECTIONS, JUDGE GENOVEVA COCHING MARAMBA, in her capacity as Presiding Judge of the
Municipal Circuit Trial Court, San Fabian/San Jacinto, Pangasinan and RAYMUNDO I. RIVERA, respondents.

ROMERO, J.:

For the Court's resolution is the instant petition for certiorari with prayer for the issuance of a writ of preliminary injunction and/or
temporary restraining order assailing the December 2, 1997, resolution of the Commission on Elections (COMELEC) En Banc in SPR
No. 13-97, entitled "Espirita N. Acosta v. Hon. Genoveva Coching-Maramba in her capacity as Presiding Judge, 4th Municipal Circuit
Trial Court, San Fabian-San Jacinto, Pangasinan, and Raymundo I. Rivera."

The parties herein were candidates for the position of Punong Barangay in Bgy. Sobol, San Fabian, Pangasinan, during the May 12,
1997, barangay election. By a winning margin of four votes, petitioner was proclaimed as the duly elected Punong Barangay. On May
15, 1997, Rivera filed an election protest with the Municipal Circuit Trial Court of San Fabian-San Jacinto, alleging that the votes cast
for him in Precincts No. 22-A, No. 22-A-1, No. 22-B, and No. 22-B-1 were not duly and properly accounted for due to "misreading, non-
reading, mistallying, and misappreciation of ballots/votes," and praying for a recount of the votes. The following day, the court a
quo summoned Acosta who, on May 19, 1997, filed a Motion for Time to File Answer. In an order dated May 21, 1997, the court denied
said motion and concluded that the election protest was sufficient in form and substance. Furthermore, considering that from the
allegations in the protest revision of ballots was necessary, the court also ordered the COMELEC Election Registrar and/or the
Municipal Treasurer of San Fabian to bring to court the ballot boxes of Bgy. Sobol, together with their keys, list of voters with voting
records, book of voters and other election documents.

On May 29, 1997, petitioner filed with the COMELEC a petition for certiorari and prohibition with prayer for the issuance of a temporary
restraining order and/or writ of preliminary injunction, questioning the May 21, 1997, order of the MCTC. This was docketed as SPR No.
13-97.

The following day, May 30th, after determining that Rivera should have garnered 408 votes, three votes more than Acosta's 405, the
lower court rendered a decision nullifying petitioner's proclamation and declaring Rivera as the duly elected Punong Barangay of Bgy.
Sobol. Petitioner filed a notice of appeal on June 11, 1997, which respondent Judge granted in an order of even date. Said appeal was
assigned UNDK No. 5-97 before the COMELEC.

On December 2, 1997, the COMELEC issued an en banc Resolution in SPR No. 13-97 dismissing the petition for lack of merit, and
affirming the assailed order dated May 21, 1997, as well as the trial court's decision dated May 20, 1997 (should be May 30, 1997).
Aggrieved by said ruling, petitioner went to this Court for relief.

The Court finds the instant petition meritorious.

The COMELEC indeed exceeded the bounds of its authority when it affirmed the trial court's decision when said judgment was not the
subject of SPR No. 13-97, a special civil action assailing an interlocutory order of the same lower court. The fact that the decision was
eventually elevated to the COMELEC on appeal does not cure the defect since said appeal was not consolidated with SPR No. 13-97.
In fact, it was still undocketed at the time and the parties had not yet submitted any evidence relating to the election protest.

Due process dictates that before any decision can be validly rendered in a case, the following safeguards must be met: (a) the court or
tribunal must be clothed with judicial authority to hear and determine the matter before it; (b) it must have jurisdiction over the person of
the party or over the property subject of the controversy; (c) the parties thereto must have been given an opportunity to adduce
evidence in their behalf, and (d) such evidence must be considered by the tribunal in deciding the case. 1 While the COMELEC cannot
be faulted for resolving the issue raised by petitioner in SPR No. 13-97, namely, the propriety of the lower court's order dated May 21,
1997, it exceeded its authority and thereby gravely abused its discretion when, in the same resolution, it affirmed said court's decision
dated May 30, 1997, which was the subject of petitioner's appeal, UNDK No. 5-97.

64
Furthermore, the Court notes that the assailed resolution was issued by the COMELEC en banc, again in excess of its jurisdiction.
Under Article IX-C, Section 3 of the Constitution, the COMELEC must hear and decide election cases "in division, provided that motions
for reconsideration of decision shall be decided by the Commission en banc." 2 This Constitutional mandate was clearly violated by the
COMELEC in the case at bar.

WHEREFORE, the instant petition for certiorari is GRANTED. The assailed resolution of the COMELEC en banc dated December 2,
1997, is hereby NULLIFIED and SET ASIDE, and the records of this case are ordered REMANDED to a Division of the COMELEC for
proper disposition of SPR No. 13-97 and UNDK No. 5-97. No pronouncement as to costs.

SO ORDERED.

65
Maria vs Ubay, A.M No 595 CFI, December 11 1978.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

A.M. No. 595-CFI December 11, 1978

QUINTIN STA. MARIA, complainant,

vs.
HON. ALBERTO UBAY, respondent.

RESOLUTION

CASTRO, C.J.:

On October 15, 1973, Quintin R. Sta. Maria (hereinafter referred to as the complainant), attorney-in-fact of the defendant Valeriana R.
Sta. Maria in Civil Case C-2052 of the Court of First Instance of Rizal, filed with the Supreme Court a letter-complaint against the
Honorable Alberto Q. Ubay (hereinafter referred to as the respondent Judge), in whose sala the said case fell, imputing to the latter (1)
violation of the provisions of subsection 1, section 11 of Article X of the 1973 Constitution, in that he promulgated his decision in Civil
Case C-2052 more than three months from the date of the submission of the case for decision; (2) violation of the provisions of Article
204 of the Revised Penal Code, in that he knowingly rendered an unjust judgment by promulgating a decision in Civil Case C-2052
contrary to the decisions of the Supreme Court in previous related proceedings involving the same parties and (3) falsification, by
antedating his decision in Civil Case C-2052 in order to make it appear that he rendered the same within the statutory three-month
period. The complainant also charges the respondent Judge with "putting every obstacle to the approval of the Record on Appeal [in
Civil Case C-2052] in spite of lack of opposition duly filed on time."

Subsequently, in another letter-complaint dated November 15, 1973, the complainant charged Atty. Paz G. Palanca, Branch Clerk of
Court of the respondent Judge's sala, with infidelity in the custody of judicial records and, likewise, with "putting all obstacles to the
approval of the Record on Appeal" in Civil Case C-2052. 1 Then, the complainant, in response to a letter dated November 8, 1973 of the
Assistant to the Judicial Consultant informing him that his charges could not be given due course unless sworn to, submitted an affidavit
dated November 24, 1973 wherein he attested to the truth of the allegations in his previous letter-complaint. He also submitted
documentary evidence to substantiate his allegations.

The letter-complaints were indorsed by the Assistant to the Judicial Consultant to the respondent Judge for comment. In compliance,
the respondent Judge submitted his comments in a Second Indorsement dated January 16, 1974, with the following annexes: (1) a
certification of Atty. Palanca that the respondent Judge filed with her office on July 14, 1973 the decision in Civil Case C-2052 "with
instruction to withhold its promulgation until he could check on the questions involved in the case," and that the "said decision was
promulgated on August 8, 1973, upon his order;" and (2) copies of the certificates of the respondent Judge as to work completed for the
months of July and August, 1973. Atty. Palanca likewise submitted her comments on the second letter-complaint in a Third Indorsement
dated January 17, 1974, with the affidavit of Juanito Alejo (an employee of the court a quo in charge of receiving pleadings) relative to
the circumstances surrounding the receipt of a pleading of the defendants in Civil Case C-2052, which pleading the complainant
alleged Atty. Palanca lost or concealed, appended as an annex.

The complainant subsequently submitted two letters, both dated July 8, 1974, wherein he commented on the exculpatory explanations
profferred by the respondent Judge and Atty. Palanca in their respective comments on his charges in one of these letters, he charges
Atty. Palanca, for the first time, With a violation of the provisions not only of the Anti-Graft Law (Republic Act No. 1379) or the Anti-Graft
and Corrupt Practices Act (Republic Act No. 3019) but also of the Civil Service Law and the tenets of the New Society.

Parenthetically, the complainant, in both of the aforementioned letters, mentions that the Second Indorsement of the respondent Judge
"is very much ante-dated" for, although it bears the date January 16, 1974, "it was actually filed with the Records Control Center of the
Supreme Court on June 21, 1974, "and that, in a similar vein. the Third Indorsement of Atty. Palanca, "[a]lthough it is dated January
17,1974 ... appears to have been filed on June 21, 1974 with the Records Control Center of the Supreme Court." Suffice it to state,
simply to set the complainant alright, that the record Shows January 18, 1974 as the definitive date of receipt by the Court of the
respondent Judge's Second Indorsement commenting on the complainant's allegations as well of his Fourth Indorsement transmitting
Atty. Palanca's Third Indorsement.

A careful reading of the allegations in the letter-complaints, the comments thereon, and the documents presented, makes it quite
evident that the cumbersome time-consuming procedure of investigation need not be resorted to. The letter-complaints, the

66
indorsements and the various documents-all part of the record-provide ample basis for a resolution of the complainant's charges
against both the respondent Judge and Atty. Palanca.

I. The complainant predicates his first charge against the respondent Judge on the provisions of subsection 1, section 11 of Article X of
the 1973 Constitution, which subsection states:

Section 11, (1) Upon the effectivity of this Constitution, the maximum period within which a case or matter shall be
decided or resolved from the date of its submission, shall be eighteen months for the Supreme Court, and, unless
reduced by the Supreme Court, twelve months for all inferior collegiate courts, and three months for all other inferior
courts.

Anent the first recusation, the record reveals the following facts: (1) Civil Case C-2052, then pending in the sala of the respondent
Judge, was submitted for decision on April 17, 1973; (2) the decision in Civil Case C-2052 was signed by the respondent Judge on July
14, 1973; (3) the said decision was filed by the respondent Judge with Atty. Palanca, Branch Clerk of Court, on the same day-July 14,
1973-with instructions to withhold the promulgation thereof "in order that certain aspects of the said decision may still be mulled over;"
and (4) the said decision was finally promulgated on August 8, 1973.

The complainant proffers the proposition that the date of the promulgation of the decision should be considered" as the date when the
case shag be deemed to have been decided." He argues that since the decision in Civil Case C-2052 was promulgated only on August
8, 1973, the said case must be considered to have been decided only on that date or 113 days after April 17, 1973, far beyond the
three-month period fixed by the 1973 Constitution. The fact that the said case was reported to have been disposed of by the
respondent Judge only in his report of filed and decided cases for the month of August 1973, the complainant avers, bolsters his
contention.

In answer, the respondent Judge insists that Civil Case C-2052 should be considered decided as of the time he signed and filed the
decision therein with the Branch Clerk of Court on July 14, 1973, and not on the date it was promulgated on August 8, 1973. Hence, he
vehemently states, the case was decided well within the period contemplated.

Both the complainant and the respondent Judge agree that a case should be considered as decided at the time of the rendition of the
judgment therein. Their disagreement relates to the question on when a judgment should be considered as rendered. The complainant
maintains that a judgment should be considered as rendered at the time of the promulgation thereof; the respondent Judge contends
differently.

On the matter, there exists no need for an extended discussion. For, in Ago vs. Court of Appeals, et al, 2 and subsequent cases, 3 this
Court, in clear, definite and terse terms, stated that "it is the filing of the signed decision with the clerk of court that constitutes signed
decision with the clerk of court that constitutes rendition." More emphatically, the Court ruled thus:

It is only when the judgment signed by the judge is actually filed with the clerk of court that it becomes a valid and
binding judgment.

This rule constitutes but an application of the procedural principle spelled out by the provisions of section 1, Rule 36 of the Rules of
Court, which section reads:

SECTION 1. Rendition of judgments.— All judgments determining the merits of cases shall be in writing personally
and directly prepared by the judge, stating clearly and distinctly the facts and the law on which it is based, signed by
him, and filed with the clerk of the court.

In the case at bar, the decision in Civil Case C-2052 was signed by the respondent Judge on July 14, 1973 and filed on same day with
the Branch Clerk of Court. These facts the documents in the record, particularly the copy of the decision in Civil Case C-2052 and the
certification dated January 16, 1974 submitted by the Branch Clerk of Court, substantiate. Following the Ago rule on rendition of
judgments, no other conclusion can follow except that the respondent Judge rendered his decision in Civil Case C-2052 well within the
three-month period fixed by the 1973 Constitution. The circumstance that the promulgation of the decision was deferred to a later date
upon instructions of the respondent Judge "in order that certain aspects of the said decision may still be mulled over" does not alter the
fact that the said decision was actually rendered on July 14, 1973. The same observation applies to the circumstance that the said
decision was included in the respondent Judge's report of filed and decided cases for the month of August 1973.

Anent the suspension of the promulgation of the decision in Civil Case C-2052 upon instructions of the respondent Judge "in order that
certain aspects of the said decision may still be mulled over," there can be no valid objection thereto. Indeed, courts have the inherent
power to amend and control their processes and orders so as to make them comfortable to law and justice. 4 Certainly, "[a] judge has
an inherent right, while his judgment is still under his control, to correct errors, mistakes, or injustices. After the judgment becomes final
of course, he loses his right to change or modify it in the slightest degree, except for the purpose of correcting clerical errors." 5 To
deprive the judge of power to amend his own judgment to make it conformable to law and justice, before the expiration of the statutory
period for appeal, would limit his power without authority of statute, in disregard of sound rules of practice and in violation of the
provisions of the Rules of Court.
67
The charge, therefore, that the respondent Judge violated the provisions of subsection 1, section 11 of Article X of the 1973
Constitution fails in the face of the finding that the respondent Judge rendered his decision in Civil Case C-2052 on July 14, 1973, well
within the period of three months set by the 1973 Constitution.

The Court deems it proper to confine itself to a discussion only of, in the first instance, whether or not the respondent Judge rendered
his decision within the three-month period stated by the 1973 Constitution. Finding that he did, the Court deems it unnecessary to treat
the question relating to whether the provisions of subsection 1, section 11 of Article X of the 1973 Constitution should be characterized
as directory or mandatory.

II. The complainant bases his second charge against the respondent Judge on the provisions of Article 204 of the Revised Penal Code,
which article reads;

Art. 204. Knowingly rendering unjust judgment. — Any judgment who shall knowingly render an unjust judgment in
any case submitted to him for decision shall be punished by prision mayor and perpetual absolute disqualification.

The compliant alleges that the respondent Judge promulgated a decision in Civil Case C-2052 contrary to the decisions of the Supreme
Court in the following previous related proceedings involving the same parties:

1. Associate Insurance and Surety Co., Inc. vs. Banzon and Balmaceda,
L-23971, November 29, 1968 (26 SCRA 268);

2. Philippine National Bank vs. Sta. Maria, et al, L-24765, August 29, 1969 (29 SCRA 303); and

3. Banzon and Balmaceda vs. Hon. Fernando Cruz, et al., L-31789, June 29, 1972 (45 SCRA 475).

The complainant states that the respondent Judge, "in awarding to the plaintiffs (in Civil Case C-2052) in toto what they prayed for in
their complaint and amended complaint did so in bad faith and with full knowledge that said plaintiffs are not entitled thereto."

To dispose of the second charge, the Court reiterates the rule that "[i]n order that a judge may be held liable for knowingly rendering an
unjust judgment, it must be shown beyond doubt that the judgment is unjust in the sense that it is contrary to law or is not supported by
the evidence and the same was made with conscious and deliberate intent to do an unjustice." 6

The rule requires that the judgment should be unjust for being contrary to law and for not being supported by the evidence. In the case
at bar, to determine whether or not the decision of the respondent Judge in Civil Case C-2052 constitutes an unjust judgment would
involve more than a mere cursory reading of the decision itself or its comparison with this Court's decisions invoked by the complainant.
To delve into the different factors bearing on the issues raised in Civil Case C-2052 considered by the respondent Judge in arriving at
his conclusions set forth in the decision in question for purposes of ascertaining the factual, legal and jurisprudential bases of the said
decision, would be tantamount to pre-empting the Court of Appeals of its appellate jurisdiction over the case, considering that the same
is pending before it. Indeed, this Court stated in Gahol vs. Hon. Riodique 7 that "only after the appellate court holds in a final judgment
that a trial judge's alleged errors were committed deliberately and in bad faith may a charge of knowingly rendering an unjust decision
be levelled against a trial judge." For, through an appeal, an aggrieved party can always point out, for rectification by the appellate
court, the errors in the alleged unjust judgment affecting him.

The rule also requires that the judgment should be rendered by the judge with conscious and deliberate intent to do an unjustice. In the
case at bar, the complainant failed to show any unmistakable indication that bad faith motivated the alleged unjust actuations of the
respondent judge in Civil Case C-2052. Absent, thus, any positive evidence on record that the respondent Judge rendered the
judgment in question with conscious and deliberate intent to do an injustice, the second charge of the compliant must fall.

III. The complainant charges the respondent Judge with falsification by antedating his decision in Civil Case C-2052 in order to make it
appear that he rendered the same within the three-month period set by the 1973 Constitution. Presumably for this reason, the
complainant alleges, the respondent Judge had not, as of October 15, 1973, submitted his Certificates of Service and Monthly Reports
for July and August, 1973.

In view of the conclusion arrived at that the respondent Judge rendered his decision in Civil Case C-2052 wen within the three-month
period fixed by the 1973 Constitution, this charge must perforce be rejected. In addition, the copies of the Certificates of Service of the
respondent Judge for the months of July and August 1973 (filed with and received by the Judicial Reports Section, Office of the
Executive Officer, per the dates stamped thereon, on August 2, 1973 and September 4, 1973, respectively) 8 as well as the copies of
the report of cases filed and disposed of for the months of July and August, 1973 (likewise filed with and received by the Judicial
Reports Section, same Office, per the dates stamped thereon, on August 2, 1973 and September 4, 1973, respectively) 9 completely
belie the complainant's assertion that the respondent Judge had not, as of October 15, 1973, submitted the said documents to the
Court.

68
IV. The complainant also charges the respondent Judge and Atty. Palanca with "putting every obstacle to the approval of the Record on
Appeal" in Civil Case C-2052 "in spite of lack of opposition duly filed on time." In simpler terms, the complainant alleges that the
respondent Judge and Atty. Palanca delayed the approval of the Record on Appeal for, although the Record on Appeal was filed on
August 28, 1973, the hearing thereon was set for September 8, 1973, the adverse party was furnished a copy thereof on August 28,
1973, and no objection was interposed thereto within five days from August 28, 1973, the respondent Judge acted on the said Record
only "until after forty-four (44) days from September 8, 1973 as shown by the Order dated October 22. 1973 directing the defendants to
amend their Record on Appeal."

In explanation, Atty. Palanca states that on September 7, 1973 (the day before the date set for the hearing on the Record on Appeal),
the counsel for the plaintiffs filed an "Urgent Ex-parte Motion for Time to Proofread and Check Record on Appeal." This motion the
court a quo granted in an Order dated September 8, 1973, with notice thereof served on the counsel for the defendants on September
19, 1973.

Atty. Palanca also states that on September 15, 1973, the counsel for the plaintiffs filed an "Opposition to 'Record on Appeal', " which
opposition the counsel for the defendants countered with a reply filed on September 17, 1973. On the same day, the counsel for the
defendants also filed an Ex-parte Motion to Approve Record on Appeal and Disregard Opposition." On October 22, 1973, the court a
quo ordered the amendments of the defendants' Record on Appeal. The counsel for the defendants sought the reconsideration of this
order on October 31, 1973. At the hearing on the said motion on November 3,1973, the court a quo approved the Record on Appeal
after the counsel for the defendants effected the corrections and deletions in open court.

The Court finds the explanation for the delay in the approval of the Record on Appeal in Civil Case C-2052 more than satisfactory.
Consequently, the complainant has no valid cause to charge the respondent Judge and Atty. Palanca with "putting every obstacle" to
the approval of the said Record on Appeal.

Another charge against Atty. Palanca relates to infidelity in the custody of judicial records for the loss or misplacement of a pleading,
"Notice of Hearing of Application for Damages in Accordance with Section 20 of Rule 57 of the Rules of Court," allegedly filed by the
counsel for the defendants on January 16, 1973. A copy of this pleading which the counsel for the defendants exhibited at the hearing
on November 3, 1973 the court a quo ordered included in the Record on Appeal after due authentication.

Atty. Palanca makes no denial either of the loss or the misplacement of the pleading in question. However, Atty. Palanca submits, more
in avoidance of an explanation rather than in disclaimer of the said loss or misplacement, an affidavit of the court employee charged
with the task of receiving pleadings, Juanito Alejo, which affidavit narrates the circumstances surrounding the receipt of the pleading in
question, the subsequent discovery of its loss or misplacement, and the consequent efforts to locate the same.

To dispose of the charge of infidelity in the custody of judicial records, the Court deems it unnecessary to probe the minutiae of the
circumstances attendant to the loss or misplacement of the pleading in question. Even if the loss or misplacement of the said pleading
could be attributed to Alejo, Atty. Palanca cannot be fully exonerated for she was remiss in the supervision of her subordinate. Atty.
Palanca cannot be held entirely blameless for she failed to exercise proper supervision over her subordinate. 10

The complainant also ascribes to Atty. Palanca violation of the provisions not only of the Anti-Graft Law or the Anti-Graft and Corrupt
Practices Act but as well the Civil Service Law and the tenets of the New Society. However, the complainant fails to specify the
provisions of the said law which he accuses Atty. Palanca of violating. Also, this charge the complainant mentioned for the first time in
one of his letters dated July 8, 1974, wherein he commented on the explanation of Atty. Palanca relating to his earlier charges. In
addition, the complainant omits to particularize allegations to support this charge.

The Court finds that this charge deserves no serious consideration. The complainant not only fails to allege with particularity and clarity
the fact complained of as constituting the violation of the provisions of the Anti- Graft Law, Anti-Graft and Corrupt Practices Act, Civil
Service Law and tenets of the New Society, but' also has failed to substantiate his ambigous charge.

ACCORDINGLY, Atty. Paz G. Palanca is hereby admonished to exercise closer supervision over her subordinates in the performance
of their duties, with the warning that the same or similar inaction in the future will be dealt with more severely. Finding no sufficient basis
to warrant further proceedings relative to the charges against the Honorable Alberto Q. Ubay and the other charges against Atty.
Palanca, the same charges are hereby dismissed.

Barredo, Makasiar, Antonio, Aquino, Concepcion, Jr., Santos, Fernandez and Guerrero, concur.

Fernando, J., took no part.

69
De Leon v. Court of Appeals, G.R. No. 138884, [June 6, 2002]

G.R. No. 138884 June 6, 2002

RODOLFO DE LEON, petitioner,

vs.
COURT OF APPEALS and SPOUSES ESTELITA and AVELINO BATUNGBACAL, respondents.

QUISUMBING, J.:

Before us is a special civil action for certiorari and prohibition under Rule 65 of the Rules of Court. It seeks to annul and set aside the
resolution1 dated January 13, 1999 of the Court of Appeals, in CA-G.R. CV No. 57989, denying petitioner’s motion (a) to dismiss the
appeals of private respondents, and (b) to suspend the period to file appellee’s brief. Also assailed is the CA resolution 2 dated April 19,
1999, denying petitioner’s motion for reconsideration.

The antecedent facts are as follows:

On March 11, 1996, petitioner Rodolfo de Leon filed with the Regional Trial Court of Bataan, Branch 3, a complaint 3 for a sum of money
plus damages, with a prayer for preliminary attachment, against herein private respondents Avelino and Estelita Batungbacal. The
complaint averred that private respondent Estelita Batungbacal executed a promissory note 4 in favor of herein petitioner for
her P500,000 loan with stipulated interest at 5 percent monthly. The loan and interest remained unpaid allegedly because the check
issued by Estelita was dishonored. Private respondents filed an answer with counterclaim. Estelita admitted the loan obligation, but
Avelino denied liability on the ground that his wife was not the designated administrator and therefore had no authority to bind the
conjugal partnership. Avelino further averred that his wife contracted the debt without his knowledge and consent.

Based on Estelita’s admission, petitioner filed a motion for partial judgment against Estelita, which the trial court granted in an
order5 dated May 14, 1996:

WHEREFORE, the Motion for Partial Judgment on the Pleadings is hereby granted in accordance with Sec. 4 of Rule 36,
Rules of Court. As prayed for, judgment is hereby rendered against Estelita Q. Batungbacal, ordering her to pay plaintiff
Rodolfo de Leon the principal amount of the loan obligation of P500,000.00 plus the stipulated interest which has accrued
thereon at 5% per month since May 1995 until now, plus interest at the legal rate on said accrued interest from date of judicial
demand until the obligation is fully paid.

SO ORDERED.

Counsel for private respondent spouses received a copy of the partial judgment on May 21, 1996, but no appeal was taken therefrom.
Thus, petitioner filed a motion for execution of said judgment on June 6, 1996. Counsel for private respondents was furnished a copy of
the motion on the same date. As private respondents interposed no objection, a writ of execution was correspondingly issued. The
sheriff then proceeded to execute the writ and partially satisfied the judgment award against the paraphernal property of Estelita and
the conjugal properties of the private respondents with due notice to the latter and their counsel. Again, private respondents interposed
no objection.

Pre-trial was held and trial proceeded on two main issues: (1) whether the loan was secured with the knowledge and consent of the
husband and whether the same redounded to the benefit of the conjugal partnership; and (2) whether the capital of the husband would
be liable if the conjugal assets or the paraphernal property of the wife were insufficient to satisfy the loan obligation. On June 2, 1997,
the trial court rendered judgment6 ordering private respondent Avelino Batungbacal to pay the amount of the loan plus interest and
other amounts in accordance with Article 121 of the Family Code.

Counsel for private respondent spouses received a copy of the decision on June 6, 1997. Avelino through counsel, filed a notice of
appeal7 on June 19, 1997. In a notice of appearance8 dated June 25, 1997 bearing the conformity solely of Estelita, a new counsel
appeared in collaboration with the counsel of record for the private respondents. On the same date, Estelita through said new counsel,
served a notice that she is appealing both decisions promulgated on May 14, 1996, and June 2, 1997, to the Court of Appeals.
However, the trial court, in an order9 dated July 7, 1997 denied the notice of appeal10 filed by Estelita on the ground that said notice was
filed beyond the reglementary period to appeal.

Private respondents’ appeal was docketed with the respondent Court of Appeals as CA-G.R. CV No. 57989. Petitioner then filed with
the Court of Appeals a Motion to Dismiss the Appeal with Motion to Suspend period to file Appellee’s Brief 11 on October 21, 1998.
Petitioner based his motion to dismiss on the following grounds: (1) that the statement of the case as well as the statement of the facts
in the appellants’ brief do not have page references to the record, and that the authorities relied upon in the arguments are not cited by
the page of the report at which the case begins and the page of the report on which the citation is found; (2) that no copy of the
appealed decision of the lower court was attached to the appellants’ brief, in violation of the Internal Rules of the Court of Appeals; (3)
that private respondents furnished only one copy of the appellants’ brief to the petitioner, also in violation of the Rules of Court; (4) that

70
the decision promulgated against Estelita on May 14, 1996 is no longer appealable; and (5) that the notice of appeal filed on June 25,
1996 by Estelita concerning the decision of the trial court against Avelino was filed beyond the reglementary period to appeal. 12 The
motion also prayed that the period for filing the appellee’s brief be suspended in view of the pendency of the motion to dismiss. 13

Private respondents, in their opposition,14 insisted that the statements of the case as well as the statement of facts in their brief
contained page references to the record, and that Estelita had seasonably filed her appeal. Private respondent spouses also stated that
they had filed an Amended Appellants’ Brief15 on November 27, 1998 and that two copies thereof had been served on petitioner
together with copies of the trial court’s decisions.

On January 13, 1999, the Court of Appeals issued the assailed resolution 16 denying petitioner’s motion to dismiss and virtually admitting
the Amended Appellants’ Brief as follows:

As submitted by appellants, they adopted pertinent portions of the appealed Decision in the Statement of the Case, indicated
specific pages in the appealed decision where the quoted portions are found. In the bottom of page 2 of the brief, is the quoted
portions of the decision, referring to pages 1 and 2 thereof. On page 3 of the brief is the dispositive portion, taken on page 11
of the decision. The rest of the narration in the Statement of the Case are the specific dates of the pleadings, orders, and
portions of the decision citing the page references where they are found.

Two (2) copies of the Amended Brief were served upon appellee with the appealed Decision attached as Annex "A", and "B".

Appellant Estellita Batungbacal explained that her appeal was filed on time. She cited Guevarra, et. al. vs. Court of Appeals,
et. al., L-49017 and 49024, that a partial judgment may be appealed only together with the judgment in the main case. She
personally received a copy of the main Decision, dated June 2, 1997 on June 10, 1997, and filed her notice of appeal dated
June 25, 1995 (sic) sent by registered mail on even date, per Registry Receipt No. 2618, attached as Annex "C" hereof,
thereby showing that the notice of appeal was filed within 15 days from receipt of the Decision appealed from. At any rate, the
merit of appellee’s contention that appellant Estellita Batungbacal can no longer appeal from the decision may be resolved
after the case is considered ready for study and report.

WHEREFORE, the motion to dismiss is hereby DENIED, and appellee is required to file his appellee’s brief within forty-five
(45) days from receipt hereof.

SO ORDERED.

On January 22, 1999, petitioner filed a Motion for Reconsideration 17 of the aforesaid resolution but said motion was denied by the Court
of Appeals in a resolution18 dated April 19, 1999, the pertinent portion of which reads as follows:

The resolution promulgated on January 13, 1999 required appellee to file his appellee’s brief within forty-five (45) days from
receipt of that resolution, or up to March 4, 1999. Up to this date no appellee’s brief has been submitted.

WHEREFORE, the appeal by appellants is deemed submitted for decision without the benefit of appellee’s brief, and the
records of this case is hereby transmitted to the Raffle Committee, for re-raffle, for study and report.

SO ORDERED.

Hence, this Petition for Certiorari and Prohibition19 wherein petitioner contends that respondent Court of Appeals acted:

(1) WITHOUT JURISDICTION IN ENTERTAINING THE APPEAL OF PRIVATE RESPONDENT ESTELITA BATUNGBACAL;

(2) WITH GRAVE ABUSE OF DISCRETION AND IN DISREGARD OF THE EXPRESS MANDATORY REQUIREMENTS OF
THE RULES AS WELL AS AGAINST SETTLED JURISPRUDENCE WHEN IT DENIED THE PETITIONER’S MOTION TO
DISMISS THE APPEAL OF THE PRIVATE RESPONDENT SPOUSES;

(3) WITH GRAVE ABUSE OF DISCRETION AND IN GRAVE VIOLATION OF DUE PROCESS OF LAW IN ADMITTING THE
AMENDED APPELLANT’S BRIEF FILED BY PRIVATE RESPONDENTS AND IN REQUIRING THE PETITIONER AS
APPELLEE TO FILE HIS APPELLEE’S BRIEF;

(4) WITHOUT DUE PROCESS OF LAW WHEN IT RESOLVED TO HAVE THE APPEAL OF THE APPELLANT PRIVATE
RESPONDENTS DEEMED SUBMITTED FOR DECISION WITHOUT BENEFIT OF APPELLEE’S BRIEF…. 20

Simply put, the following are the issues presented before this Court for resolution: (1) whether or not the appellate court erred in taking
cognizance of the appeal; and (2) whether or not the appellate court erred or committed grave abuse of discretion when it considered
the appeal as submitted for decision without petitioner’s brief.
71
On the first issue, petitioner contends that the decisions of the trial court in Civil Case No. 6480 promulgated on May 14, 1996 and June
2, 1997 had become final and executory as to private respondent Estelita Batungbacal. This is because Estelita never appealed the
partial judgment promulgated on May 14, 1996. In fact, there has been a partial execution of said judgment with notice to and without
objection from private respondent spouses. As regards the decision dated June 2, 1997, petitioner contends that the same had become
final for failure to file the notice of appeal within 15 days, counted from the time counsel of record for private respondent spouses
received a copy on June 6, 1997 and not from the time Estelita received a copy on June 10, 1997. Petitioner points to Section 2 of Rule
13 of the Rules of Court and argues that since the trial court never ordered that service of the judgment be made upon Estelita, she was
not entitled to service of the judgment. The fact that she received a copy of the judgment separately from her counsel cannot prejudice
the legal consequences arising out of prior receipt of copy of the decision by her counsel. It was thus clear error for the Court of
Appeals to accept Estelita’s argument that the reglementary period commenced not from receipt of a copy of the decision by counsel of
record but from the time she received a copy of the decision. The appeal having been filed out of time, the Court of Appeals did not
have jurisdiction to entertain the appeal of Estelita.

Petitioner also assails the appellants’ brief for certain formal defects. As pointed out in his motion to dismiss filed before the public
respondent, there are no page references to the record in the statements of the case and of the facts in the appellants’ brief submitted
by private respondents. Petitioner asserts that while there are many pleadings and orders mentioned in said statements, only the
decision dated June 2, 1997 is cited, and the citation is limited only to the particular page or pages in said decision where the citation or
quotation is taken, without any reference to the pages in the record where the decision can be found. Neither is there reference to the
pages in the record where the particular cited or quoted portions of the decision can be found.

Petitioner likewise alleges that the authorities relied upon in the appellants’ brief of private respondents are also not cited by the page
on which the citation is found, as required in Sec. 13 (f) of Rule 44 of the Rules of Court. Page references to the record are also
required in Section 13, paragraphs (c), (d) and (f) of Rule 44 and absence thereof is a ground for dismissal of the appeal, pursuant to
Sec. 1 (f) of Rule 50 of the Rules of Court. Petitioner also harps on the failure of private respondents to furnish petitioner with two
copies of the original appellants’ brief, to submit proof of service of two copies of the brief on the appellee, and to furnish the petitioner
with two copies of the amended appellants’ brief as required by the Rules of Court. Additionally, petitioner asserts that the failure of
private respondents to append copies of the appealed decisions to their appellants’ brief constitutes a violation of the Internal Rules of
the Court of Appeals and is likewise a ground for dismissal under Section 1 of Rule 50 of the Rules of Court.

Lastly, petitioner contends that the virtual admission into the record by the respondent court of the amended appellants’ brief of the
private respondents under the resolution dated January 13, 1999 and its corresponding action to require the petitioner to respond
thereto, constitute grave abuse of discretion and blatant disregard of due process of law because the amended brief was filed without
leave of court.

Private respondents, for their part, argue that the resolutions being assailed by petitioner are interlocutory in character because the
Court of Appeals still has to decide the appeal on the merits; hence, certiorari does not lie in his favor. Private respondents allege that
petitioner has another adequate and speedy remedy, i.e., to file his brief raising all issues before the Court of Appeals. Once the appeal
is resolved on the merits, all proper issues may be elevated to the Supreme Court. An order denying a motion to dismiss being merely
interlocutory, it cannot be the basis of a petition for certiorari. The proper remedy is to appeal in due course after the case is decided on
the merits.

We find the petition devoid of merit.

On the first issue, we find that the Court of Appeals did not act without jurisdiction in entertaining the appeal filed by private respondent
Estelita Batungbacal. Contrary to petitioner’s apparent position, the judgments rendered by the trial court in this case are not several
judgments under the Rules of Court so that there would be multiple periods of finality.

A several judgment is proper only when the liability of each party is clearly separable and distinct from that of his co-parties, such that
the claims against each of them could have been the subject of separate suits, and judgment for or against one of them will not
necessarily affect the other.21 Where a common cause of action exists against the defendants, as in actions against solidary debtors, a
several judgment is not proper. In this case, private respondents are sued together under a common cause of action and are sought to
be held liable as solidary debtors for a loan contracted by Estelita. This is the clear import of the allegation in the complaint that the
proceeds of the loan benefited the conjugal partnership.

Thus, between the two judgments rendered by the trial court, there could only be one judgment that finally disposes of the case on the
merits. Receipt of notice of this final judgment marks the point when the reglementary period is to begin running. In this case, that
judgment is the decision22 rendered by the trial court on June 2, 1997 and it is only from the date of notice of this decision that the
reglementary period began to run. The partial judgment dated May 14, 1996 was rendered only with respect to one issue in the case
and is not the final and appealable order or judgment that finally disposes of the case on the merits. 23 It must, therefore, only be
appealed together with the decision dated June 2, 1997.

A final order is that which gives an end to the litigation. 24 When the order or judgment does not dispose of the case completely but
leaves something to be done upon the merits, it is merely interlocutory. 25 Quite obviously, the partial judgment ordering Estelita to pay
petitioner is an interlocutory order because it leaves other things for the trial court to do and does not decide with finality the rights and
obligations of the parties. Specifically, at the time the partial judgment was rendered, there remained other issues including whether the
72
husband Avelino had any liability under Article 121 of the Family Code. However, as the partial judgment disposed of one of the issues
involved in the case, it is to be taken in conjunction with the decision dated June 2, 1997. Together, these two issuances form one
integrated decision.

The question now is when the period to appeal should actually commence, from June 6, 1997, as petitioner contends; or from June 10,
1997, as private respondent Estelita Batungbacal claims? We hold that the period began to run on June 6, 1997 when counsel for
private respondents received a copy of the decision dated June 2, 1997. When a party is represented by counsel of record, service of
orders and notices must be made upon said attorney and notice to the client and to any other lawyer, not the counsel of record, is not
notice in law.26 The exception to this rule is when service upon the party himself has been ordered by the court. 27 In this case, it does
not appear that there was any substitution of counsel or that service upon private respondent Estelita Batungbacal had been
specifically ordered by the trial court; hence, the counsel of record for the private respondents is presumed to be their counsel on
appeal and the only one authorized to receive court processes. Notice of the judgment upon such counsel, therefore, was notice to the
clients for all legal intents and purposes.

Private respondents’ appeal had been taken within the reglementary period since Avelino Batungbacal had filed a notice of appeal on
June 19, 1997 or 13 days from their counsel’s receipt of the decision on June 6, 1997. Respondent spouses having been jointly sued
under a common cause of action, an appeal made by the husband inures to the benefit of the wife. The notice of appeal filed by Estelita
was a superfluity, the appeal having been perfected earlier by her husband.

We come now to petitioner’s contention that the appellants’ brief suffers from fatal defects.

Worth stressing, the grounds for dismissal of an appeal under Section 1 of Rule 50 28 of the Rules of Court are discretionary upon the
Court of Appeals. This can be seen from the very wording of the Rules which uses the word ‘may’ instead of ‘shall.’ This Court has held
in Philippine National Bank vs. Philippine Milling Co., Inc.29 that Rule 50, Section 1 which provides specific grounds for dismissal of
appeal manifestly "confers a power and does not impose a duty." "What is more, it is directory, not mandatory." 30 With the exception of
Sec. 1(b), the grounds for the dismissal of an appeal are directory and not mandatory, and it is not the ministerial duty of the court to
dismiss the appeal.31 The discretion, however, must be a sound one to be exercised in accordance with the tenets of justice and fair
play having in mind the circumstances obtaining in each case.32

The Court of Appeals rightly exercised its discretion when, in denying petitioner’s motion to dismiss, it ruled that the citations contained
in the appellants’ brief were in substantial compliance with the rules. Where the citations found in the appellants’ brief could sufficiently
enable the appellate court to locate expeditiously the portions of the record referred to, there is substantial compliance with the
requirements of Section 13(c) and (d), Rule 46 of the Rules of Court. Such determination was properly within the appellate court’s
discretion. Nothing in the records indicate that it was exercised capriciously, whimsically, or with a view of permitting injury upon a party
litigant. For the same reasons, we hold that the respondent Court of Appeals also did not err when it did not dismiss the appeal based
on the allegation that appellants’ brief failed to comply with the internal rules of said court.

However, the Court of Appeals erred in requiring petitioner to file the appellee’s brief in response to the amended appellants’ brief. Note
that the amended brief was filed without the proper motion for leave to do so and corresponding order from the respondent court. Even
more significant, it was filed beyond the extensions of time granted to appellants. The discretion in accepting late briefs conferred upon
respondent court which this Court applied in the cases of Maqui vs. CA33 and Vda. de Haberer vs. CA,34 finds no application under the
present circumstances because, unlike in these two cases, here no valid reason was advanced for the late filing of the amended brief.
While the amended brief35 might contain no substantial and prejudicial changes, it was error for the respondent court to accept the
amended brief as filed and then require petitioner to file appellee’s brief because admittedly the amended brief was filed beyond August
31, 1998, the last period of extension granted to private respondents.

On the second issue, we hold that the Court of Appeals did not commit grave abuse of discretion in considering the appeal submitted
for decision. The proper remedy in case of denial of the motion to dismiss is to file the appellee’s brief and proceed with the appeal.
Instead, petitioner opted to file a motion for reconsideration which, unfortunately, was pro forma. All the grounds raised therein have
been discussed in the first resolution of the respondent Court of Appeals. There is no new ground raised that might warrant reversal of
the resolution. A cursory perusal of the motion would readily show that it was a near verbatim repetition of the grounds stated in the
motion to dismiss; hence, the filing of the motion for reconsideration did not suspend the period for filing the appellee’s brief. Petitioner
was therefore properly deemed to have waived his right to file appellee’s brief.

WHEREFORE, the petition is DENIED. The resolutions dated January 13, 1999 and April 19, 1999 of the Court of Appeals in CA-G.R.
CV No. 57989 are AFFIRMED, and the Court of Appeals is ordered to proceed with the appeal and decide the case with dispatch . No
pronouncement as to costs.

SO ORDERED.

73