JURISDICTION ORTIGAS & COMPANY, LIMITED PARTNERSHIP vs. COURT OF APPEALS, HON. JESUS G.

BERSAMIRA as Judge-RTC of Pasig City, Branch 166 and the CITY OF PASIG,G.R. No. 129822, June 20, 2012. ABAD, J Ortigas & Company, Limited Partnership (Ortigas), developed the Ortigas Center that straddled the three cities of Mandaluyong, Quezon, and Pasig. This case concerns the Pasig City side of the commercial district known as the Ortigas Center, known in 1969 as Capitol VI Subdivision. In 1994, City of Pasig (the City) filed a complaint against Ortigas and Greenhills Properties, Inc. (GPI) for specific compliance before the RTC of Pasig. The City alleged that Ortigas failed to comply with Municipal Ordinance 5 (MO 5) which required it to designate appropriate recreational and playground facilities at its former Capitol VI Subdivision (regarded as a residential site), now the Pasig City side of the Ortigas Center. Further, the City alleged that despite the fact that the plan was only approved by the Municipal Council as to layout, petitioner proceeded to develop the property without securing a final approval. The City impleaded GPI as the party to whom Ortigas sold a piece of property within the subdivision. In answer, Ortigas alleged that its development plan for the subject land was for a commercial subdivision, outside the scope of MO 5 that applied only to residential subdivisions; that the City cannot assail the validity of that development plan after its approval 25 years ago. Its development plan had been approved: (1) by the DOJ through the Land Registration Commission on June 16, 1969; (2) by the Municipal Council of Pasig under Resolution 128 dated May 27, 1969; and (3) by the CFI of Rizal, Branch 25 in its Order dated July 11, 1969. Ortigas further alleged that only in 1984, 15 years after the approval of its plan, that the National Housing Regulatory Commission imposed the open space requirement for commercial subdivisions through its Rules and Regulations for Commercial Subdivision and Commercial Subdivision Development. The case was heard on pre-trial but before it could be terminated; Ortigas filed a motion to dismiss the case on the ground that the RTC had no jurisdiction over it, such jurisdiction being in the Housing and Land Use Regulatory Board (HLURB) for unsound real estate business practices. The RTC denied the motion to dismiss. It held that HLURBs jurisdiction pertained to disputes arising from transactions between buyers, salesmen, and subdivision and condominium developers. In this case, the City is a local government unit seeking to enforce compliance with a municipal ordinance, an action that is not within the scope of the disputes cognizable by the HLURB. With the denial of its motion for reconsideration, Ortigas filed a petition for certiorari before the CA to challenge the RTCs actions. The CA affirmed the RTCs denial of the motion to dismiss. The appellate court ruled that the City sought compliance with a statutory obligation enacted "to promote the general welfare (Section 16, Local Government Code) which invariably includes the preservation of open spaces for recreational purposes." Since the City was not a buyer or one entitled to refund for the price paid for a lot, the dispute must fall under the jurisdiction of the RTC pursuant to Section 19 of The Judiciary Reorganization Act of 1980. The

CA also denied Ortigas motion for reconsideration, prompting it to file the present petition for review. Issue: Whether or not the CA erred in affirming the lower courts ruling that jurisdiction over the Citys action lies with the RTC, not with the HLURB. Ruling: Ortigas maintains that the HLURB has jurisdiction over the complaint since a land developer's failure to comply with its statutory obligation to provide open spaces constitutes unsound real estate business practice that P.D. 1344 prohibits. Executive Order 648 empowers the HLURB to hear and decide claims of unsound real estate business practices against land developers. Ultimately, whether or not the HLURB has the authority to hear and decide a case is determined by the nature of the cause of action, the subject matter or property involved, and the parties. Section 1 of P.D. 1344 vests in the HLURB the exclusive jurisdiction to hear and decide the following cases: (a) unsound real estate business practices; (b) claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker, or salesman; and (c) cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lots or condominium units against the owner, developer, dealer, broker or salesman. Unlike paragraphs (b) and (c) above, paragraph (a) does not state which party can file a claim against an unsound real estate business practice. But, in the context of the evident objective of Section 1, it is implicit that the "unsound real estate business practice" would, like the offended party in paragraphs (b) and (c), be the buyers of lands involved in development. The policy of the law is to curb unscrupulous practices in real estate trade and business that prejudice buyers. This position is supported by the Courts statement in Delos Santos v. Sarmiento that not every case involving buyers and sellers of subdivision lots or condominium units can be filed with the HLURB. Its jurisdiction is limited to those cases filed by the buyer or owner of a subdivision lot or condominium unit and based on any of the causes of action enumerated in Section 1 of P.D. 1344. Obviously, the City had not bought a lot in the subject area from Ortigas which would give it a right to seek HLURB intervention in enforcing a local ordinance that regulates the use of private land within its jurisdiction in the interest of the general welfare. It has the right to bring such kind of action but only before a court of general jurisdiction such as the RTC.

RULE 2 LILY LIM, Petitioner, vs. KOU CO PING a.k.a. CHARLIE CO, Respondent. G.R. No. 175256 August 23, 2012 x - - - - - - - - - - - - - - - - - - - - - - - x KOU CO PING a.k.a. CHARLIE CO, Petitioner, vs. LILY LIM, Respondent. G.R. No. 179160. DEL CASTILLO, J. Is it forum shopping for a private complainant to pursue a civil complaint for specific performance and damages, while appealing the judgment on the civil aspect of a criminal case for estafa? Before the Court are consolidated Petitions for Review assailing the separate Decisions of the Second and Seventeenth Divisions of the Court of Appeals (CA) on the above issue. Lily Lims (Lim) Petition for Review 1 assails the October 20, 2005 Resolution 2 of the Second Division in CA-G.R. CV No. 85138, which ruled on the above issue in the affirmative: Due to the filing of the said civil complaint (Civil Case No. 5112396), Charlie Co filed the instant motion to dismiss [Lily Lims] appeal, alleging that in filing said civil case, Lily Lim violated the rule against forum shopping as the elements of litis pendentia are present. This Court agrees.3 xxxx IN VIEW OF THE FOREGOING, the appeal is DISMISSED. SO ORDERED.4 On the other hand, Charlie Cos (Co) Petition for Review5 assails the April 10, 2007 Decision6 of the Seventeenth Division in CA-G.R. SP No. 93395 for ruling on the same issue in the negative: We find no grave abuse of discretion committed by respondent judge. The elements of litis pendentia and forum-shopping were not met in this case.7 xxxx WHEREFORE, in view of the foregoing, the instant petition is DENIED. This case is REMANDED to the court of origin for further proceedings. SO ORDERED.8 Factual Antecedents In February 1999, FR Cement Corporation (FRCC), owner/operator of a cement manufacturing plant, issued several withdrawal authorities for the account of cement dealers and traders, Fil-

Cement Center and Tigerbilt. These withdrawal authorities state the number of bags that the dealer/trader paid for and can withdraw from the plant. Each withdrawal authority contained a provision that it is valid for six months from its date of issuance, unless revoked by FRCC Marketing Department. Fil-Cement Center and Tigerbilt, through their administrative manager, Gail Borja (Borja), sold the withdrawal authorities covering 50,000 bags of cement to Co for the amount of P3.15 million or P63.00 per bag.10 On February 15, 1999, Co sold these withdrawal authorities to Lim allegedly at the price of P64.00 per bag or a total of P3.2 million.11 Using the withdrawal authorities, Lim withdrew the cement bags from FRCC on a staggered basis. She successfully withdrew 2,800 bags of cement, and sold back some of the withdrawal authorities, covering 10,000 bags, to Co. Sometime in April 1999, FRCC did not allow Lim to withdraw the remaining 37,200 bags covered by the withdrawal authorities. Lim clarified the matter with Co and Borja, who explained that the plant implemented a price increase and would only release the goods once Lim pays for the price difference or agrees to receive a lesser quantity of cement. Lim objected and maintained that the withdrawal authorities she bought were not subject to price fluctuations. Lim sought legal recourse after her demands for Co to resolve the problem with the plant or for the return of her money had failed. The criminal case An Information for Estafa through Misappropriation or Conversion was filed against Co before Branch 154 of the Regional Trial Court (RTC) of Pasig City. The accusatory portion thereof reads: On or about between the months of February and April 1999, in San Juan, Metro Manila and within the jurisdiction of this Honorable Court, the accused, with intent to defraud Lily Lim, with grave abuse of confidence, with unfaithfulness, received in trust from Lily Lim cash money in the amount of P2,380,800.00 as payment for the 37,200 bags of cement, under obligation to deliver the 37,200 bags of cement to said Lily Lim, but far from complying with his obligation, misappropriated, misapplied and converted to his own personal use and benefit the said amount of P2,300,800.00 [sic] and despite demands, the accused failed and refused to return said amount, to the damage and prejudice of Lily Lim in the amount of P2,380,800.00. Contrary to Law.12 The private complainant, Lily Lim, participated in the criminal proceedings to prove her damages. She prayed for Co to return her money amounting to P2,380,800.00, foregone profits, and legal interest, and for an award of moral and exemplary damages, as well as attorneys fees.13 On November 19, 2003, the RTC of Pasig City, Branch 154, rendered its Order 14 acquitting Co of the estafa charge for insufficiency of evidence. The criminal courts Order reads:

The first and second elements of the crime of estafa [with abuse of confidence under Article 315, paragraph 1(b)] for which the accused is being charged and prosecuted were not established by the prosecutions evidence. xxxx In view of the absence of the essential requisites of the crime of estafa for which the accused is being charged and prosecuted, as above discussed, the Court has no alternative but to dismiss the case against the accused for insufficiency of evidence.15 WHEREFORE, in view of the foregoing, the Demurrer to Evidence is GRANTED, and the accused is hereby ACQUITTED of the crime of estafa charged against him under the present information for insufficiency of evidence. Insofar as the civil liability of the accused is concerned, however, set this case for the reception of his evidence on the matter on December 11, 2003 at 8:30 oclock [sic] in the morning. SO ORDERED.16 After the trial on the civil aspect of the criminal case, the Pasig City RTC also relieved Co of civil liability to Lim in its December 1, 2004 Order. 17 The dispositive portion of the Order reads as follows: WHEREFORE, premises considered, judgment is hereby rendered holding the accused CHARLIE CO not civilly liable to the private complainant Lily Lim. SO ORDERED.18 Lim sought a reconsideration of the above Order, arguing that she has presented preponderant evidence that Co committed estafa against her.19 The trial court denied the motion in its Order20 dated February 21, 2005. On March 14, 2005, Lim filed her notice of appeal 21 on the civil aspect of the criminal case. Her appeal was docketed as CA-G.R. CV No. 85138 and raffled to the Second Division of the CA. The civil action for specific performance On April 19, 2005, Lim filed a complaint for specific performance and damages before Branch 21 of the RTC of Manila. The defendants in the civil case were Co and all other parties to the withdrawal authorities, Tigerbilt, Fil-Cement Center, FRCC, Southeast Asia Cement, and La Farge Corporation. The complaint, docketed as Civil Case No. 05-112396, asserted two causes of action: breach of contract and abuse of rights. Her allegations read: ALLEGATIONS COMMON TO ALL CAUSES OF ACTION

xxxx 23. Charlie Co obligated himself to deliver to Lily Lim 50,000 bags of cement of P64.00 per bag on an x-plant basis within 3 months from the date of their transaction, i.e. February 15, 1999. Pursuant to said agreement, Lily Lim paid Charlie Co P3.2 Million while Charlie Co delivered to Lily Lim FR Cement Withdrawal Authorities representing 50,000 bags of cement. 24. The withdrawal authorities issued by FR Cement Corp. allowed the assignee or holder thereof to withdraw within a six-month period from date a certain amount of cement indicated therein. The Withdrawal Authorities given to Lily Lim were dated either 3 February 1999 or 23 February 1999. The Withdrawal Authorities were first issued to Tigerbilt and Fil-Cement Center which in turn assigned them to Charlie Co. Charlie Co then assigned the Withdrawal Authorities to Lily Lim on February 15, 1999. Through these series of assignments, Lily Lim acquired all the rights (rights to withdraw cement) granted in said Withdrawal Authorities. 25. That these Withdrawal Authorities are valid is established by the fact that FR Cement earlier allowed Lily Lim to withdraw 2,800 bags of cement on the basis thereof. 26. However, sometime 19 April 1999 (within the three (3)-month period agreed upon by Charlie Co and Lily Lim and certainly within the six (6)-month period indicated in the Withdrawal Authorities issued by FR Cement Corp.), Lily Lim attempted but failed to withdraw the remaining bags of cement on account of FR Cements unjustified refusal to honor the Withdrawal Authorities. x x x xxxx FIRST CAUSE OF ACTION: BREACH OF CONTRACT 30. Charlie Co committed and is therefore liable to deliver to Lily Lim 37,200 bags of cement. If he cannot, then he must pay her the current fair market value thereof. 31. FR Cement Corporation is also liable to deliver to Lily Lim the amount of cement as indicated in the Withdrawal Authorities it issued. xxx FR Cement Corporation has no right to impose price adjustments as a qualification for honoring the Withdrawal Authorities. 32. Fil-Cement Center, Tigerbilt and Gail Borja as the original holders/ assignees of the Withdrawal Authorities repeatedly assured Lily Lim that the same were valid and would be honored. They are liable to make good on their assurances. SECOND CAUSE OF ACTION: ABUSE OF RIGHTS AND UNJUST ENRICHMENT 33. Charlie Cos acts of falsely representing to Lily Lim that she may be able to withdraw the cement from FR Cement Corp. caused Lily Lim to incur expenses and losses. Such act was made without justice, without giving Lily Lim what is due her and without observing honesty and good

faith, all violative of the law, more specifically Articles 19 and 20 of the Civil Code. Such willful act was also made by Charlie Co in a manner contrary to morals, good customs or public policy, in violation of Article 21 of the Civil Code. 34. FR Cement Corporations unjust refusal to honor the Withdrawal Authorities they issued also caused damage to Lily Lim. Further, FR Cement Corporations act of withholding the 37,200 bags of cement despite earning income therefor constitutes as an unjust enrichment because FR Cement Corporation acquired income through an act or performance by another or any other means at the expense of another without just or legal ground in violation of Article 22 of the Civil Code. 35. Fil-Cement Center, Tigerbilt and Gail Borjas false assurances that Lily Lim would be able to withdraw the remaining 37,200 bags of cement caused Lily Lim to incur expenses and losses. x x x Moreover, Fil-Cement Center admitted receiving payment for said amount of cement, thus they are deemed to have come into possession of money at the expense of Lily Lim without just or legal ground, in violation of Article 22 of the Civil Code. THIRD CAUSE OF ACTION: MORAL AND EXEMPLARY DAMAGES and ATTORNEYS FEES AND COSTS OF SUIT22 Lim prayed for Co to honor his contractual commitments either by delivering the 37,200 bags of cement, making arrangements with FRCC to allow Lim to withdraw the cement, or to pay for their value. She likewise asked that the defendants be held solidarily liable to her for the damages she incurred in her failed attempts to withdraw the cement and for the damages they inflicted on her as a result of their abuse of their rights.23 Motions to dismiss both actions In reaction to the filing of the civil complaint for specific performance and damages, Co filed motions to dismiss the said civil case24 and Lims appeal in the civil aspect of the estafa case or CA-G.R. CV No. 85138.25 He maintained that the two actions raise the same issue, which is Cos liability to Lim for her inability to withdraw the bags of cement, 26 and should be dismissed on the ground of lis pendens and forum shopping. Ruling of the Court of Appeals Second Division in CA-G.R CV No. 85138 The appellate court (Second Division) favorably resolved Cos motion and dismissed Lims appeal from the civil aspect of the estafa case. In its Resolution dated October 20, 2005, the CA Second Division held that the parties, causes of action, and reliefs prayed for in Lims appeal and in her civil complaint are identical. Both actions seek the same relief, which is the payment of the value of the 37,200 bags of cement. 27 Thus, the CA Second Division dismissed Lims appeal for forum shopping.28 The CA denied29 Lims motion for reconsideration.30 Lim filed the instant petition for review, which was docketed as G.R. No. 175256.

Ruling of the Manila Regional Trial Court in Civil Case No. 05-112396 Meanwhile, the Manila RTC denied Cos Motion to Dismiss in an Order 31 dated December 6, 2005. The Manila RTC held that there was no forum shopping because the causes of action invoked in the two cases are different. It observed that the civil complaint before it is based on an obligation arising from contract and quasi-delict, whereas the civil liability involved in the appeal of the criminal case arose from a felony. Co filed a petition for certiorari,32 docketed as CA-G.R. SP No. 93395, before the appellate court. He prayed for the nullification of the Manila RTCs Order in Civil Case No. 05-112396 for having been issued with grave abuse of discretion.33 Ruling of the Court of Appeals Seventeenth Division in CA-G.R. SP No. 93395 The CA Seventeenth Division denied Cos petition and remanded the civil complaint to the trial court for further proceedings. The CA Seventeenth Division agreed with the Manila RTC that the elements of litis pendentia and forum shopping are not met in the two proceedings because they do not share the same cause of action.34 The CA denied35 Cos motion for reconsideration.36 Co filed the instant Petition for Review, which was docketed as G.R. No. 179160. Upon Cos motion,37 the Court resolved to consolidate the two petitions.38 Kou Co Pings arguments Co maintains that Lim is guilty of forum shopping because she is asserting only one cause of action in CA-G.R. CV No. 85138 (the appeal from the civil aspect of Criminal Case No. 116377) and in Civil Case No. 05-112396, which is for Cos violation of her right to receive 37,200 bags of cement. Likewise, the reliefs sought in both cases are the same, that is, for Co to deliver the 37,200 bags of cement or its value to Lim. That Lim utilized different methods of presenting her case a criminal action for estafa and a civil complaint for specific performance and damages should not detract from the fact that she is attempting to litigate the same cause of action twice.39 Co makes light of the distinction between civil liability ex contractu and ex delicto. According to him, granting that the two civil liabilities are independent of each other, nevertheless, the two cases arising from them would have to be decided using the same evidence and going over the same set of facts. Thus, any judgment rendered in one of these cases will constitute res judicata on the other.40 In G.R. No. 179160, Co prays for the annulment of the CA Decision and Resolution in CA-G.R. SP No. 93395, for a declaration that Lim is guilty of forum shopping, and for the dismissal of Civil Case No. 05-112396.41

In G.R. No. 175256, Co prays for the affirmation of the CA Decision in CA-G.R. CV No. 85138 (which dismissed Lims appeal from the trial courts decision in Criminal Case No. 116377).42 Lily Lims arguments Lim admits that the two proceedings involve substantially the same set of facts because they arose from only one transaction.43 She is quick to add, however, that a single act or omission does not always make a single cause of action.44 It can possibly give rise to two separate civil liabilities on the part of the offender (1) ex delicto or civil liability arising from crimes, and (2) independent civil liabilities or those arising from contracts or intentional torts. The only caveat provided in Article 2177 of the Civil Code is that the offended party cannot recover damages twice for the same act or omission. 45 Because the law allows her two independent causes of action, Lim contends that it is not forum shopping to pursue them.46 She then explains the separate and distinct causes of action involved in the two cases. Her cause of action in CA-G.R CV No. 85138 is based on the crime of estafa. Co violated Lims right to be protected against swindling. He represented to Lim that she can withdraw 37,200 bags of cement using the authorities she bought from him. This is a fraudulent representation because Co knew, at the time that they entered into the contract, that he could not deliver what he promised. 47 On the other hand, Lims cause of action in Civil Case No. 05-112396 is based on contract. Co violated Lims rights as a buyer in a contract of sale. Co received payment for the 37,200 bags of cement but did not deliver the goods that were the subject of the sale.48 In G.R. No. 179160, Lim prays for the denial of Cos petition. 49 In G.R. No. 175256, she prays for the reversal of the CA Decision in CA-G.R. CV No. 85138, for a declaration that she is not guilty of forum shopping, and for the reinstatement of her appeal in Criminal Case No. 116377 to the CA.50 Issue Did Lim commit forum shopping in filing the civil case for specific performance and damages during the pendency of her appeal on the civil aspect of the criminal case for estafa? Our Ruling DOCTRINE: ACTION DELICTO IS SEPARATE AND DISTINCT FROM CIVIL LIABILITY ARISING FROM OTHER SOURCES OF OBLIGATIONS A single act or omission that causes damage to an offended party may give rise to two separate civil liabilities on the part of the offender 51 - (1) civil liability ex delicto, that is, civil liability arising from the criminal offense under Article 100 of the Revised Penal Code, 52 and (2) independent civil liability, that is, civil liability that may be pursued independently of the criminal proceedings. The independent civil liability may be based on "an obligation not arising from the act or omission complained of as a felony," as provided in Article 31 of the Civil Code (such as for breach of contract or for tort 53). It may also be based on an act or omission that may

constitute felony but, nevertheless, treated independently from the criminal action by specific provision of Article 33 of the Civil Code ("in cases of defamation, fraud and physical injuries"). The civil liability arising from the offense or ex delicto is based on the acts or omissions that constitute the criminal offense; hence, its trial is inherently intertwined with the criminal action. For this reason, the civil liability ex delicto is impliedly instituted with the criminal offense. 54 If the action for the civil liability ex delicto is instituted prior to or subsequent to the filing of the criminal action, its proceedings are suspended until the final outcome of the criminal action. 55 The civil liability based on delict is extinguished when the court hearing the criminal action declares that "the act or omission from which the civil liability may arise did not exist."56 On the other hand, the independent civil liabilities are separate from the criminal action and may be pursued independently, as provided in Articles 31 and 33 of the Civil Code, which state that: ART. 31. When the civil action is based on an obligation not arising from the act or omission complained of as a felony, such civil action may proceed independently of the criminal proceedings and regardless of the result of the latter. (Emphasis supplied.) ART. 33. In cases of defamation, fraud, and physical injuries a civil action for damages, entirely separate and distinct from the criminal action, may be brought by the injured party. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence. (Emphasis supplied.) Because of the distinct and independent nature of the two kinds of civil liabilities, jurisprudence holds that the offended party may pursue the two types of civil liabilities simultaneously or cumulatively, without offending the rules on forum shopping, litis pendentia, or res judicata. 57 As explained in Cancio, Jr. v. Isip:58 One of the elements of res judicata is identity of causes of action. In the instant case, it must be stressed that the action filed by petitioner is an independent civil action, which remains separate and distinct from any criminal prosecution based on the same act. Not being deemed instituted in the criminal action based on culpa criminal, a ruling on the culpability of the offender will have no bearing on said independent civil action based on an entirely different cause of action, i.e., culpa contractual. In the same vein, the filing of the collection case after the dismissal of the estafa cases against the offender did not amount to forum-shopping. The essence of forum shopping is the filing of multiple suits involving the same parties for the same cause of action, either simultaneously or successively, to secure a favorable judgment. Although the cases filed by [the offended party] arose from the same act or omission of [the offender], they are, however, based on different causes of action. The criminal cases for estafa are based on culpa criminal while the civil action for collection is anchored on culpa contractual. Moreover, there can be no forum-shopping in the instant case because the law expressly allows the filing of a separate civil action which can proceed independently of the criminal action.59

Since civil liabilities arising from felonies and those arising from other sources of obligations are authorized by law to proceed independently of each other, the resolution of the present issue hinges on whether the two cases herein involve different kinds of civil obligations such that they can proceed independently of each other. The answer is in the affirmative. The first action is clearly a civil action ex delicto, it having been instituted together with the criminal action.60 On the other hand, the second action, judging by the allegations contained in the complaint, 61 is a civil action arising from a contractual obligation and for tortious conduct (abuse of rights). In her civil complaint, Lim basically alleges that she entered into a sale contract with Co under the following terms: that she bought 37,200 bags of cement at the rate of P64.00 per bag from Co; that, after full payment, Co delivered to her the withdrawal authorities issued by FRCC corresponding to these bags of cement; that these withdrawal authorities will be honored by FRCC for six months from the dates written thereon. Lim then maintains that the defendants breached their contractual obligations to her under the sale contract and under the withdrawal authorities; that Co and his co-defendants wanted her to pay more for each bag of cement, contrary to their agreement to fix the price at P64.00 per bag and to the wording of the withdrawal authorities; that FRCC did not honor the terms of the withdrawal authorities it issued; and that Co did not comply with his obligation under the sale contract to deliver the 37,200 bags of cement to Lim. From the foregoing allegations, it is evident that Lim seeks to enforce the defendants contractual obligations, given that she has already performed her obligations. She prays that the defendants either honor their part of the contract or pay for the damages that their breach has caused her. Lim also includes allegations that the actions of the defendants were committed in such manner as to cause damage to Lim without regard for morals, good customs and public policy. These allegations, if proven, would constitute tortious conduct (abuse of rights under the Human Relations provisions of the Civil Code).1wphi1 Thus, Civil Case No. 05-112396 involves only the obligations arising from contract and from tort, whereas the appeal in the estafa case involves only the civil obligations of Co arising from the offense charged. They present different causes of action, which under the law, are considered "separate, distinct, and independent"62 from each other. Both cases can proceed to their final adjudication, subject to the prohibition on double recovery under Article 2177 of the Civil Code.63 DOCTRINE: IF THERE IS NO CAUSE OF ACTION, COMPLAINT MUST BE DISMISSED. Q: IN A CASE, THE SB OF MABINI, BOHOL ENACTED A RESOLUTION ALLOWING PETITIONER TO OPERATE A COCKPIT SINCE THE WINNING BIDDER FROM JANUARY 1989 TO DECEMBER 1992 FAILED TO COMPLY WITH THE LEGAL REQUIREMENTS FOR OPERATING A COCKPIT. HE CONTINUED TO OPERATE UNTIL 1997 AFTER OBTAINING A BUSINESS PERMIT FROM THE MAYOR. THE SB SUSPENDED THE OPERATION BY ENACTING A RESOLUTION;

HENCE, HE FILED A PETITION FOR PROHIBITION TO PREVENT THE ENFORCEMENT OF THE RESOLUTION SUSPENDING HIS RESOLUTION. IS THE PETITION PROPER? WHY? DANILO A. DU, Petitioner, vs. VENANCIO R. JAYOMA, then Municipal Mayor of Mabini, Bohol, VICENTE GULLE, JR., JOVENIANO MIANO, WILFREDO MENDEZ, AGAPITO VALLESPIN, RENE BUCIO, JESUS TUTOR, CRESCENCIO BERNALES, EDGARDO YBANEZ, and REY PAGALAN, then members of the Sangguniang Bayan (SB) of Mabini, Bohol, Respondents. G.R. No. 175042, April 23, 2012 DECISION DEL CASTILLO, J.: In the absence of a legal right in favor of the plaintiff, there can be no cause of action. Factual Antecedents On July 7, 1988, the Sangguniang Bayan of the Municipality of Mabini, Bohol, enacted Municipal Ordinance No. 1, series of 1988,4 requiring the conduct of a public bidding for the operation of a cockpit in the said municipality every four years. For the period January 1, 1989 to December 31, 1992, the winning bidder was Engr. Edgardo Carabuena.5 However, due to his failure to comply with the legal requirements for operating a cockpit, the Sangguniang Bayan on December 1, 1988 adopted Resolution No. 127, series of 1988,6 authorizing petitioner Danilo Du to continue his cockpit operation until the winning bidder complies with the legal requirements.7 On July 9, 1997, upon discovering that petitioner has been operating his cockpit in violation of Municipal Ordinance No. 1, series of 1988, the Sangguniang Bayan passed Municipal Resolution No. 065, series of 1997,8 suspending petitioners cockpit operation effective upon approval.9 On July 11, 1997, pursuant to Municipal Resolution No. 065, series of 1997, respondent Venancio R. Jayoma, then Mayor of Mabini, in a letter, 10 ordered petitioner to desist from holding any cockfighting activity effective immediately.11 Feeling aggrieved, petitioner filed with Branch 51 of the Regional Trial Court (RTC) of Bohol, a Petition for Prohibition,12 docketed as Special Civil Action No. 4, against respondent mayor and nine members of the Sangguniang Bayan of Mabini, namely: Vicente Gulle, Jr., Joveniano Miano, Wilfredo Mendez, Agapito Vallespin, Rene Bucio, Jesus Tutor, Crescencio Bernales, Edgardo Ybanez and Rey Pagalan. Petitioner prayed that a preliminary injunction and/or a temporary restraining order be issued to prevent respondents from suspending his cockpit operation.13 Petitioner claimed that he has a business permit to operate until December 31, 1997;14 and that the Municipal Resolution No. 065, series of 1997, was unlawfully issued as it deprived him of due process.15

In their Answer,16 respondents interposed that under the Local Government Code (LGC) of 1991, the power to authorize and license the establishment, operation and maintenance of a cockpit is lodged in the Sangguniang Bayan;17 that respondent mayor, in ordering the suspension of petitioners cockpit operation, was merely exercising his executive power to regulate the establishment of cockpits in the municipality, pursuant to the ordinances and resolutions enacted by the Sangguniang Bayan;18 and that Municipal Resolution No. 065, series of 1997, does not need to be approved by the Sangguniang Panlalawigan because it is not an ordinance but an expression of sentiments of the Sangguniang Bayan of Mabini.19 On October 22, 1997, a Temporary Restraining Order 20 was issued by the RTC enjoining respondents from suspending the cockpit operation of petitioner until further orders from the court.21 The Petition for Prohibition was later amended22 to include damages, which the RTC admitted in an Order23 dated January 21, 1998. Ruling of the Regional Trial Court On October 5, 2004, the RTC rendered a Decision24 in favor of petitioner, to wit: WHEREFORE, and on the ground that petitioner was able to prove his case with preponderance of evidence, judgment is hereby rendered in favor of the petitioner and against the respondents, ordering the respondents jointly and severally to pay the petitioner: 1. The amount of Twenty Thousand Pesos (P20,000.00) in the concept of moral damages; 2. The amount of Sixty Thousand Pesos (P60,000.00) in the concept of unearned income considering the unrebutted testimony of the petitioner [that] he lost Four Thousand Pesos (P4,000.00) for each of the fifteen (15) Sundays that his cockpit was closed as its operation was ordered suspended by the respondent. By mathematical computation P4,000.00 x 15 amounts to P60,000.00; 3. The amount of Ten Thousand Pesos (P10,000.00) as exemplary damages to deter other public officials from committing similar acts; 4. The amount of Twenty Thousand Pesos (P20,000.00) as attorneys fees, and to pay the cost. SO ORDERED.25 Ruling of the Court of Appeals On appeal, the CA reversed the Decision of the RTC. According to the CA, petitioner did not acquire a vested right to operate a cockpit in the municipality as he was only granted a temporary

privilege by the Sangguniang Bayan.26 Hence, there being no right in esse, petitioner is not entitled to damages.27 Thus, the dispositive portion reads: WHEREFORE, premises considered, the instant appeal is hereby DENIED. The assailed decision granting petitioner the award of damages is SET ASIDE and the petition filed by petitioner against respondents is DISMISSED. SO ORDERED.28 Petitioner moved for reconsideration which was denied by the CA in a Resolution 29 dated October 4, 2006. Issue Hence, the instant petition raising the core issue of whether the CA erred in finding that petitioner is not entitled to damages.30 Petitioners Arguments Petitioner contends that Municipal Resolution No. 065, series of 1997, is ultra vires as it was maliciously, hastily, and unlawfully enforced by respondent mayor two days after its passage without the review or approval of the Sangguniang Panlalawigan of Bohol. 31 He alleges that respondents suspended the operation of his cockpit without due process and that the suspension was politically motivated.32 In addition, he claims that as a result of the incident, he is entitled to actual, moral and exemplary damages as well as attorneys fees.33 Respondents Arguments Echoing the ruling of the CA, respondents insist that petitioner is not entitled to damages because he did not acquire a vested right to operate a cockpit in the municipality. 34 They also maintain that the suspension of petitioners cockpit operation was pursuant to law and prevailing ordinance.35 Our Ruling ANSWER: The petition lacks merit. Petitioner has no legal right to operate a cockpit. In this case, we find that petitioner has no cause of action against the respondents as he has no legal right to operate a cockpit in the municipality. Under Resolution No. 127, series of 1988, the Sangguniang Bayan allowed him to continue to operate his cockpit only because the winning bidder for the period January 1, 1989 to December 31, 1992 failed to comply with the legal requirements for operating a cockpit. Clearly, under the said resolution, petitioners authority to

operate the cockpit would end on December 31, 1992 or upon compliance by the winning bidder with the legal requirements for operating a cockpit, whichever comes first. As we see it, the only reason he was able to continue operating until July 1997 was because the Sangguniang Bayan of Mabini failed to monitor the status of the cockpit in their municipality. And even if he was able to get a business permit from respondent mayor for the period January 1, 1997 to December 31, 1997, this did not give him a license to operate a cockpit. Under Section 447(a)(3)(v) of the LGC, it is the Sangguniang Bayan which is empowered to "authorize and license the establishment, operation and maintenance of cockpits, and regulate cockfighting and commercial breeding of gamecocks." Considering that no public bidding was conducted for the operation of a cockpit from January 1, 1993 to December 31, 1997, petitioner cannot claim that he was duly authorized by the Sangguniang Bayan to operate his cockpit in the municipality for the period January 1, 1997 to December 31, 1997. Respondent members of the Sangguniang Bayan, therefore, had every reason to suspend the operation of petitioners cockpit by enacting Municipal Resolution No. 065, series of 1997. As the chief executive of the municipal government, respondent mayor was duty-bound to enforce the suspension of the operation of petitioners cockpit pursuant to the said Resolution.( Judge Leynes vs. COA, 463 PHIL 557 [2003]) It bears stressing that no evidence was presented to show that upon review by the Sangguniang Panlalawigan of Bohol, the resolution was declared invalid or that the resolution was issued beyond the powers of the Sangguniang Bayan or mayor. Jurisprudence consistently holds that an ordinance, or in this case a resolution, is "presumed valid in the absence of evidence showing that it is not in accordance with the law." 38 Hence, we find no reason to invalidate Municipal Resolution No. 065, series of 1997. License to operate a cockpit is a mere privilege. In addition, it is well enshrined in our jurisprudence that "a license authorizing the operation and exploitation of a cockpit is not property of which the holder may not be deprived without due process of law, but a mere privilege that may be revoked when public interests so require." 39 Having said that, petitioners allegation that he was deprived of due process has no leg to stand on. Petitioner not entitled to damages Without any legal right to operate a cockpit in the municipality, petitioner is not entitled to damages. Injury alone does not give petitioner the right to recover damages; he must also have a right of action for the legal wrong inflicted by the respondents. 40 We need not belabor that "in order that the law will give redress for an act causing damage, there must be damnum et injuria that act must be not only hurtful, but wrongful.(Tan vs. Perena, 492 PHIL. 2000 [2005]) All told, we find no error on the part of the CA in dismissing petitioners case. A cause of action is defined as "the act or omission by which a party violates a right of another."

Corollarily, the essential elements of a cause of action are: (1) a right in favor of the plaintiff; (2) an obligation on the part of the defendant to respect such right; and (3) an act or omission on the part of the defendant in violation of the plaintiffs right with a resulting injury or damage to the plaintiff for which the latter may file an action for the recovery of damages or other appropriate relief. (Soloiol Inc. vs. Philippine Cocomut Authority, August 11, 2010) INDEFEASIBILTY OF TITLE; REAL PARTIES IN INTEREST; REPRESENTATIVE PARTIES CARMENCITA GUIZANO, substituted by her heirs, namely: EUGENIO M. GUIZANO, JR., EMMANUEL M. GUIZANO, EDMUND M. GUIZANO, ERWIN M. GUIZANO, CARMINA M. GUIZANO, represented by their co-heir and attorney-in-fact ELMER GUIZANO, and ELMER M. GUIZANO, Petitioners, vs. REYNALDO S. VENERACION, Respondent. G.R. No. 191128, September 12, 2012 DECISION BRION, J.: We resolve the petition for review on certiorari 1 filed by Carmencita Guizano (now deceased), substituted by her heirs, namely Eugenio) M. Guizano, Jr., Emmanuel M. Guizano, Edmund M. Guizano, Erwin M. Guizano, and Carmina M. Guizano, represented by their co-heir and attorney-in-fact Elmer Guizano, and Elmer M. Guizano to reverse and set aside the decision 2 dated July 31, 2007 of the Court of Appeals ( CA) inCA-G.R. CV No. 77248, as well as its resolution dated January 27, 2010.3 These assailed CA issuances essentially ordered petitioner Carmencita Guizano to reconvey the subject property to respondent Reynaldo Veneracion. THE FACTS The facts of the case, as gathered from the decisions of the CA and the Regional Trial Court (RTC), are summarized below. This case involves two parcels of land in Barangay Kapihan, San Rafael, Bulacan that Lucia Santos (married to David Santos) and her brother, Nicasio Bernardino, inherited from their mother. Nicasio sold his share of the property, Lot No. 431 consisting of 6,445 square meters, to Dr. Eugenio and his wife Carmencita. The property was registered on February 22, 1985 under Transfer Certificate of Title (TCT) No. RT-18578, 4 in the name of Emmanuel Guizano, the son of the Guizano spouses. Lucia and her husband, for their part, sold a 656 sqm. portion of their land (subject property) in September 1995 to Reynaldo.5 Since the Santoses did not have any documentary proof of ownership over the subject property, Reynaldo had to rely on the Santoses representation that Lucia inherited the land from her parents. Before buying the subject property, Reynaldos father, Dr. Veneracion, hired a geodetic engineer to segregate the land being purchased from the land registered to Emmanuel.

Domingo Santos (son of the Santos spouses), Nicasio and Carmencita were all present during the survey when Nicasio pointed out the boundaries of his former lot, as well as Lucias share. Carmencita also pointed out the boundaries of her property, which were marked by bamboo trees, a madre de cacao tree and a pilapil. 6 The geodetic engineer drew up a sketch plan based on the survey and had all those present, including Carmencita, affix their signatures thereon.7 As an additional precautionary measure, when the Santoses and Reynaldo executed the deed of sale (Bilihan ng Tuluyan) in September 1995, the parties had Carmencita affix her signature to the deed of sale under the heading "Walang Tutol," signifying that she did not object to the sale.8 Thereafter, Carmencita discovered that the property sold to Reynaldo was actually part of the property that had already been registered in Emmanuels name under TCT No. RT-18578 on February 22, 1985. She thus placed the word "HOLD" on the subdivision plan signed by the geodetic engineer.9 On June 14, 1999, Reynaldo filed a complaint against Carmencita and the Santos spouses, praying that Carmencita, as owner or as the lawful attorney-in-fact of her son Emmanuel, be ordered to reconvey the 656 sqm. parcel of land in his (Reynaldos) favor. 10 The complaint was docketed as Civil Case No. 623-M-99 and raffled to Branch 81 of the RTC of Malolos, Bulacan. In her Answer, Carmencita claimed that the complaint was without merit since the property subject of the sale between Reynaldo and the Santos spouses is part of the property owned and registered in the name of her son Emmanuel, under TCT No. RT-18578. 11 Reynaldo, thus, had no cause of action against her. On July 24, 2002, the RTC dismissed Reynaldos complaint for lack of merit. The RTC observed that while the sale between the Santoses and Reynaldo was established, there was no evidence that the Santoses had the legal right to sell the lot. To begin with, the property sold to Reynaldo was already covered by TCT No. RT-18578, registered in the name of Emmanuel. In contrast, the Santoses had no evidence to support their alleged ownership of the subject property they never had the property surveyed, they never paid real estate taxes on the land, and they never declared the property for tax.12 The RTC also found that Emmanuels title had already attained the status of indefeasibility at the time Reynaldo filed his action. Furthermore, even if an action for reconveyance had not yet prescribed as Reynaldo remained in possession of the property, he is guilty of laches for filing the action 14 years after Emmanuels title had been issued. THE DECISION OF THE CA In resolving Reynaldos appeal, the CA, in a decision dated July 31, 2007, 13 reversed the RTC decision and ordered Carmencita to convey the subject property to Reynaldo. The CA observed that Carmencita told Dr. Veneracion that the small portion of land immediately adjacent to his property did not belong to her but to Lucia. In the absence of any document showing the technical description of the respective shares of Nicasio and Lucia, Lucia and her

son Domingo built an earthen dike and planted trees to show the demarcation line between the properties. This boundary was respected even by Carmencita when her family bought the property from Nicasio. Carmencita also participated in the survey conducted by the geodetic engineer by pointing out the boundaries of her lot, and signed the deed of sale between the Santoses and Reynaldo to signify her conformity to the sale. From Carmencitas acts and representations, it is clear that she believed that the subject property belonged to the Santoses and she was estopped from claiming ownership over the subject property. The dispositive portion of this decision reads: WHEREFORE, the foregoing considered, the instant appeal is hereby GRANTED and the assailed decision is REVERSED AND SET ASIDE. Accordingly, a new one is entered as follows: 1. Ordering defendant-appellee Carmencita Guizano as attorney-in-fact of her son Emmanuel Guizano to reconvey and execute a "Deed of Acknowledgement/Reconveyance" over the 656 square meter subject property in favor of plaintiff-appellant Reynaldo Veneracion, Jr. 2. Declaring as valid and legal the "Bilihan Tuluyan" executed by vendors/defendantappellee spouses over the subject property in favor of plaintiff-appellant. 3. Ordering the Registrar of Deeds of Bulacan to register the "BILIHAN TULUYAN" as encumbrance in favor of plaintiff-appellant on TCT No. 18578. 4. In the alternative, if the above remedies are no longer possible, ordering Carmencita Guizano and her principal, Emmanuel Guizano, to pay the fair market value of the 656 square meter land. 5. Ordering defendant-appellee Carmencita Guizano to pay plaintiff-appellant P 50,000.00 attorneys fees and cost of suit. Costs against defendant-appellee Carmencita Guizano.14 (emphases supplied) THE PETITION In their petition, Carmencitas heirs argue that since Emmanuels certificate of title had attained the status of indefeasibility, it was no longer open to review on the ground of actual fraud. Neither is the legal remedy of reconveyance available against Carmencita as laches had already set in when the Santoses, Reynaldos predecessors-in-interest, slept on their right to assert their ownership over the subject property. Lastly, the action should be dismissed as it was directed against Carmencita, who was not the real party-in-interest as she was not the registered owner of the property from where the 656 sqm. lot was taken. Emmanuel, the registered owner, was not even impleaded in the case.

In his Comment, Reynaldo avers that the petition should be denied for raising a question of fact, i.e., who is the owner of the subject property. He also insists that the petitioners are bound by their predecessor-in-interest Carmencitas acts in relation to the subject property and, thus, they are estopped from questioning his right to the property. THE RULING The Court GRANTS the petition. Complaint was not filed against the real party-in-interest The records from both the RTC and the CA reveal that the courts a quo arrived at the same factual considerations. Undoubtedly, the subject property that Reynaldo purchased from the Santos spouses is part of the land registered in the name of Emmanuel under TCT No. RT18578. The conflict arises when we take into consideration the acts and representations of Carmencita regarding the subject property, which show her recognition that the subject property is not part of her sons property, but was actually owned by the Santoses and was later purchased by Reynaldo. In determining entitlement to the subject property, the RTC emphasized that the Santoses never assailed the registration of their property in Emmanuels name. The trial court thus ruled in favor of Emmanuel after determining that the Santoses had been guilty of laches. In contrast, the CA highlighted the fact that the Santoses had been in open, peaceful, public, and adverse possession of the subject property in the concept of owners, and Carmencita never questioned this possession until after the sale to Reynaldo, when she discovered that this land was actually part of the land registered in her sons name. After examining the records, we find that both the RTC and the CA grievously erred when they overlooked a basic but fundamental issue that Carmencita timely raised in her Answer that the complaint states no cause of action against her.15 An action for reconveyance is an action available to a person whose property has been wrongfully registered under the Torrens system in anothers name.16 While it is a real action, it is an action in personam, for it binds a particular individual only, although it concerns the right to an intangible thing. Any judgment in this action is binding only upon the parties properly impleaded.17 This is in keeping with the principle that every action must be prosecuted or defended in the name of the real party-in-interest, i.e., the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit, 18 as embodied in Section 2, Rule 3 of the Rules of Court: Section 2. Parties in interest. A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party in interest. [italics supplied]

Any decision rendered against a person who is not a real party-in-interest in the case cannot be executed. Hence, a complaint filed against such a person should be dismissed for failure to state a cause of action.19 Reynaldo filed the present complaint to compel Carmencita to execute a Deed of Acknowledgement/Reconveyance over the subject property in his favor. Notably, he filed the present action only against Carmencita, despite his knowledge that the subject property is registered in Emmanuels name. As he stated in his complaint: 5. That defendant, GUISANO,20 now refuses to recognize the sale made by defendants SANTOS to plaintiff, with her consent and connivance, and now claims the said parcel of land as HERS; having been registered by her, or her deceased husband in the name of their son, Emmanuel Guisano, under TCT No. RT-18578 of the Registry of Deeds of Bulacan only for tax purposes; 6. That said defendant GUISANO also refuses to execute the necessary DEED OF ACKNOWLEDGEMENT/RECONVEYANCE to plaintiff, or cause the same to be executed by the nominal owner, her son, EMMANUEL, in order to set the record straight and quiet title to the aforesaid portion of land.21 In the prayer portion of his complaint, Reynaldo further asserted that he filed the present action against Carmencita as either the owner of the subject property or the lawful attorney-in-fact of Emmanuel. We quote the pertinent portion of the complaint: WHEREFORE, it is respectfully prayed that judgment be rendered: 1. Ordering defendant CARMENCITA GUISANO, as the alleged owner of the property and/or as the lawful attorney-in-fact of her son Emmanuel Guisano, to execute the necessary DEED OF ACKNOWLEDGEMENT/RECONVEYANCE over the parcel of land described in par. 3 of this Complaint, in favor of plaintiff; and/or in the alternative, ordering defendant GUISANO to pay plaintiff the sum of P 330,000.00, equivalent to the present value of the land, as actual damages.22 As Reynaldo himself recognized in his complaint, the subject property is registered under TCT No. RT-18578 in Emmanuels name alone; Carmencitas name does not appear anywhere on the title. While Reynaldo alleged that Carmencita was the owner of the property subject of dispute, with Emmanuel acting as a mere nominal owner, a Torrens certificate is the best evidence of ownership over registered land, 23 and serves as evidence of an indefeasible title to the property in favor of the person whose name appears on the title. 24 Absent any evidence to the contrary, Emmanuel is the real party-in-interest in any action that seeks to challenge ownership of the registered property. 1wphi1 Reynaldo should thus have filed his complaint for reconveyance against him. What makes Reynaldos error all the more inexcusable is the fact that Carmencita repeatedly raised this defect before the lower court in her Answer 25 and Pre-Trial Brief.26 Given Reynaldos

awareness of the defect of his complaint, and the opportunities afforded him to address the defect, his failure to implead Emmanuel in the action is untenable. While the lower courts considered Carmencita to be Emmanuels attorney-in-fact, we find no evidence on record that Emmanuel ever authorized his mother to represent him in this action. Even assuming that Carmencita did act as Emmanuels attorney-in-fact, it is well-established in our jurisdiction that an attorney-in-fact is not the real party-in-interest. Even if so authorized in the power of attorney, she cannot bring an action in her own name for an undisclosed principal. 27 Since Reynaldo was obviously aware of the fact that the subject property was registered in Emmanuels name, he should still have included Emmanuel as a defendant in the aware of the fact that the subject property was registered in Emmanuel's name, he should still have included Emmanuel as a defendant in the reconveyance case pursuant to Section 3, Rule 3 of the Rules of Civil Procedure, which reads: Section 3. Representatives as parties.- Where the action is allowed to be prosecuted or defended by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed to be the real party in interest. A representative may be a trustee of an express trust, a guardian, an executor or administrator, or a party authorized by law or these Rules. An agent acting in his own name and for the benefit of an undisclosed principal may sue or be sued without joining the principal except when the contract involves things belonging to the principal. [emphasis ours] RULE 2 CAUSE OF ACTION BELLE CORPORATION, Petitioner, vs. ERLINDA DE LEON-BANKS, RHODORA DE LEON-TIATCO, BETTY DE LEON-TORRES, GREGORIO DE LEON, ALBERTO DE LEON, EUFRONIO DE LEON,* and MARIA ELIZA DE LEON-DE GRANO, Respondents. G.R. No. 174669, September 19, 2012 DECISION PERALTA, J.: Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Decision 1 of the Court of Appeals (CA), dated May 18,2006 in CA-G.R. CV No. 74669. The assailed Decision nullified the Order of the Regional Trial Court (RTC) of Tanauan, Batangas, Branch 6 in Civil Case No. T-1 046, which dismissed herein petitioner's Amended Complaint. The petition also seeks to reverse and set aside the CAs Resolution denying petitioner's Motion for Reconsideration. The factual and procedural antecedents of the case, as summarized by the CA, are as follows: Plaintiffs-appellants herein respondents Erlinda De Leon-Banks, Rhodora De Leon-Tiatco, Betty De Leon-Torres, Gregorio De Leon, Alberto De Leon, Eufronio De Leon, Jr. and defendantappellee Nelia De Leon-Alleje were seven of the eight children of the late spouses Eufronio and Josefa De Leon (LATE SPOUSES), while plaintiff Maria Eliza De Leon-De Grano also one of

herein respondents was the daughter and sole heir of the late Angelina De Leon-De Grano, the eighth child. Defendant-appellee Alfredo Alleje was the husband of Nelia De Leon-Alleje (both hereinafter referred to as SPOUSES ALLEJE), both of whom were the principal stockholders and officers of defendant-appellee Nelfred Properties Corporation (NELFRED). Meanwhile, defendantappellee herein petitioner Belle Corporation BELLE was the purchaser of the disputed property. The disputed property was a 13.29 hectare parcel of unregistered land originally belonging to the late spouses Eufronio and Josefa De Leon. It is located at Paliparan, Talisay, Batangas and was covered by various tax declarations. On February 9, 1979, a Deed of Absolute Sale (1979 DEED) was executed between the LATE SPOUSES and NELFRED, represented therein by defendant-appellee Nelia De Leon-Alleje, wherein ownership of the property was conveyed to Nelia De Leon-Alleje for P 60,000.00. At that time, the disputed property was covered by Tax Declarations No. 0359 and No. 0361. On December 19, 1980, the 1979 DEED was registered with the Register of Deeds. As time passed, several tax declarations over the disputed property were obtained by NELFRED in its own name. On September 23, 1997, x x x herein petitioner BELLE, on one hand, and NELFRED and SPOUSES ALLEJE on the other, executed a Contract to Sell covering the disputed property for the purchase price of P 53,124,000.00 to be paid in four installments. When the final installment had been paid, a Deed of Absolute Sale (1998 DEED) was executed on June 24, 1998 between BELLE and NELFRED wherein the latter transferred ownership of the disputed property to the former. Meanwhile, on January 19, 1998, x x x herein respondents filed a Complaint for "Annulment of Deed of Sale, Reconveyance of Property with Prayer for Issuance of a Writ of Preliminary Injunction and Damages" against the SPOUSES ALLEJE, NELFRED and BELLE] wherein they sought the annulment of the Contract to Sell. They alleged that the 1979 DEED was simulated; that x x x NELFRED paid no consideration for the disputed property; that the disputed property was to be held in trust by x x x Nelia De Leon-Alleje, through, NELFRED, for the equal benefit of all of the LATE SPOUSES' children x x x herein respondents and x x x Nelia De LeonAlleje; that in the event of any sale, notice and details shall be given to all the children who must consent to the sale and that all amounts paid for the property shall be shared equally by the children; that on September 3, 1997, x x x SPOUSES ALLEJE gave x x x herein respondents P 10,400,000.00 in cash, representing a portion of the proceeds of the sale of the disputed property; that it was only then that they were given notice of the sale; that their inquiries were ignored by the SPOUSES ALLEJE; that a final payment was to be made by x x x BELLE to x x x SPOUSES ALLEJE sometime in January 1998; and that the x x x SPOUSES ALLEJE had refused to compromise. On February 2, 1998, x x x SPOUSES ALLEJE and NELFRED filed a Motion to Dismiss wherein they alleged that herein respondents' cause of action, the existence of an implied trust

between them and NELFRED on the one hand and the LATE SPOUSES on the other, was barred by prescription and laches because more than 10 years had passed since the execution of the 1979 DEED. On February 9, 1998, x x x BELLE filed a Motion to Dismiss wherein it alleged that the Complaint stated no cause of action against BELLE, which was an innocent purchaser for value; that assuming, for the sake of argument, that herein respondents had a cause of action against BELLE, the claim on which the Complaint is founded was unenforceable; and assuming that the cause of action was based on an implied trust, the same had already been barred by laches. On September 23, 1998, the RTC promulgated an Order that dismissed the Complaint against x x x BELLE for failure to state a cause of action on the ground that there was no allegation in the Complaint that BELLE was a purchaser in bad faith. Herein respondents then filed a Motion for Reconsideration. On November 11, 1998, pending the resolution of their Motion for Reconsideration of the September 23, 1998 Order, herein respondents filed a Manifestation/Motion to admit their Amended Complaint wherein they added the allegations that x x x NELFRED did not effect the registration of the disputed property, which remained unregistered land covered only by tax declarations; that at the time of the execution of the 1997 Contract to Sell, the disputed property was still unregistered land and remained unregistered; that a Deed of Absolute Sale (1998 DEED) had already been executed in favor of x x x BELLE; that x x x BELLE purchased the land with the knowledge that it was being claimed by other persons; and that x x x BELLE was in bad faith because when the 1998 DEED was executed between it and NELFRED on June 24, 1998, the Complaint in the case at bench had already been filed. On April 29, 1999, the RTC reconsidered its Order of September 23, 1998 and lifted the dismissal against BELLE. At the same time, the RTC admitted the Amended Complaint of the plaintiffs-appellants. On June 9, 1999, x x x BELLE filed a "Motion for Reconsideration or to Dismiss the Amended Complaint" wherein it alleged that the claim in the Amended Complaint was unenforceable; that the Amended Complaint still stated no cause of action against BELLE; and that the Amended Complaint was barred by prescription. xxx xxx xxx

On December 16, 1999, the RTC promulgated its assailed Order in Civil Case No. T-1046 dismissing the Amended Complaint.2 Aggrieved by the Order of the RTC, herein respondents filed an appeal with the CA. On May 18, 2006, the CA rendered its assailed Decision, the dispositive portion of which reads as follows:

WHEREFORE, premises considered, appeal is hereby GRANTED and the assailed December 16, 1999 Order of the RTC of Tanauan, Batangas, Branch 6, in Civil Case No. T-1046, is hereby REVERSED and SET ASIDE and defendant-appellee Belle Corporation is hereby DIRECTED within fifteen (15) days from finality of this Decision, to file its Answer. SO ORDERED.3 Herein petitioner filed a Motion for Reconsideration, but the CA denied it in its Resolution dated September 4, 2006. Hence, the instant petition based on the following assignment of errors: I THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN DECLARING THAT PETITIONER HYPOTHETICALLY ADMITTED RESPONDENTS' ALLEGATIONS THAT IT HAD FULL KNOWLEDGE OF THEIR CLAIM ON THE PROPERTY AND, THEREFORE, PURCHASED THE SAME IN BAD FAITH. II THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT THE TRUST CREATED BY THE LATE SPOUSES IN FAVOR OF NELFRED WAS AN IMPLIED TRUST INSTEAD OF AN EXPRESS TRUST. III THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT THE TEN-YEAR PRESCRIPTIVE PERIOD FOR AN IMPLIED TRUST SHOULD BE RECKONED FROM THE EXECUTION OF THE DEED OF SALE BY NELFRED IN FAVOR OF PETITIONER AND NOT FROM THE REGISTRATION OF THE SALE BETWEEN THE LATE SPOUSES AND NELFRED WITH THE REGISTER OF DEEDS. IV THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT BECAUSE THE SUBJECT OF THE SALE IS UNREGISTERED LAND, PETITIONER'S GOOD FAITH IS IMMATERIAL AND BOUGHT THE PROPERTY AT ITS OWN PERIL EVEN AS RESPONDENTS WERE RESPONSIBLE FOR CREATING SUCH PERIL. V THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT A TRUST WAS CREATED WHEN ITS VERY PURPOSE WAS TO AVOID

COMPLIANCE WITH TAX LAWS AND THE COMPREHENSIVE AGRARIAN REFORM LAW.4 The basic issue in the instant case is whether the CA was correct in reversing the Order of the RTC which dismissed respondents' Amended Complaint on the ground of failure to state a cause of action. The Court rules in the affirmative. Section 2, Rule 2 of the Rules of Court defines cause of action as the acts or omission by which a party violates a right of another. A cause of action is a formal statement of the operative facts that give rise to a remedial right. 5 The question of whether the complaint states a cause of action is determined by its averments regarding the acts committed by the defendant.6 Thus, it must contain a concise statement of the ultimate or essential facts constituting the plaintiffs cause of action. 7 Failure to make a sufficient allegation of a cause of action in the complaint warrants its dismissal.8 The essential elements of a cause of action are (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages or other appropriate relief.9 In determining whether a complaint states a cause of action, the RTC can consider all the pleadings filed, including annexes, motions, and the evidence on record. 10 The focus is on the sufficiency, not the veracity, of the material allegations. 11 Moreover, the complaint does not have to establish facts proving the existence of a cause of action at the outset; this will have to be done at the trial on the merits of the case.12 Thus, the first paragraph of Section 1, Rule 8 of the Rules of Court provides that "every pleading shall contain in a methodical and logical form, a plain, concise and direct statement of the ultimate facts on which the party pleading relies for his claim or defense, as the case may be, omitting the statement of mere evidentiary facts." Ultimate facts mean the important and substantial facts which either directly form the basis of the plaintiffs primary right and duty or directly make up the wrongful acts or omissions of the defendant.13 They refer to the principal, determinative, constitutive facts upon the existence of which the cause of action rests.14 In the instant case, pertinent portions of respondents' allegations in their Amended Complaint are as follows: xxxx

5. Plaintiffs herein respondents Erlinda De Leon-Banks, Rhodora De Leon-Tiatco, Betty De Leon-Torres, Gregorio De Leon, Alberto De Leon and Eufronio De Leon, Jr. and defendant Nelia De Leon-Alleje are seven (7) of the eight (8) children of the late spouses Eufronio and Josefa De Leon, while plaintiff [also one of herein respondents] Maria Eliza De Leon-De Grano is the daughter and sole heir of the late Angelina De Leon-De Grano, the eight[h] child. xxxx 9. During their lifetime, the late Eufronio and Josefa Acquired several tracts of land located in the Province of Batangas, the City of Manila, Tagaytay City and Baguio City. The properties acquired included a 13.29 hectare property located at Paliparan, Talisay, Batangas covered by Tax Declaration Nos. 0359 and 0361 issued by the Provincial Assessor of Batangas, Tanauan Branch ("Paliparan Property"). 10. The spouses Eufronio and Josefa, to protect and to ensure during their lifetime the interest of their children in the properties they acquired, planned and decided to transfer and in fact transferred without consideration several properties to their children to be held in trust by whoever the transferee is for the equal benefit of all of the late spouses' children with the specific instruction in the event of any subsequent sale, that notice and details of the sale shall be given to all the children who must consent to the sale and that all amounts paid for the property shall be shared equally by the children and the late spouses during their lifetime. xxxx 13. Sometime in 1979, in accordance with their already established plan and purpose of property disposition, the late spouses, during their lifetime, transferred to their daughter, defendant Nelia Alleje, the Paliparan Property, through NELFRED which was represented in said act by defendant Nelia Alleje, under a Deed of Absolute Sale, x x x. 14. Defendant NELFRED paid no consideration for the transfer of the Paliparan Property although the Deed of Absolute Sale mentioned P 60,000.00 as consideration for the alleged transfer, as defendant Nelia Alleje knew fully well the nature and purpose of the transfer and the condition that, as in the case of earlier transfers made by the decedent spouses, in the event of a subsequent sale by defendant Nelia Alleje, through NELFRED, the proceeds thereof shall be distributed equally among all the children, the herein plaintiffs and defendant Nelia Alleje. 15. After the transfer in trust to defendant Nelia Alleje, through NELFRED, the late Eufronio and Josefa continued to receive during their lifetime their share in the produce of the Paliparan Property as landowner and likewise continued the payment of the real estate taxes due thereon. In accordance with the transfer in trust to defendant Nelia Alleje, N[ELFRED] did not effect the registration of the Paliparan Property in its name and the same remained to be unregistered land covered only by tax declarations.

16. In flagrant violation of the trust reposed on her and with intent to defraud the plaintiffs of their rightful share in the proceeds of the sale of the Paliparan Property, defendant Spouses Alleje surreptitiously sold the Paliparan Property to defendant Belle Corporation. At the time of the sale to Belle Corporation in September 1997, the Paliparan Property was unregistered land covered only by tax declarations. Up to the present, the subject property is unregistered. xxxx 23. By their acts, defendant Spouses Alleje clearly acted and continues to act to deprive herein plaintiffs of their lawful distributive share in the proceeds of the sale of the Paliparan Property. Moreover, defendant Nelia Alleje repudiated the trust created over the Paliparan Property when said property was sold to Belle Corporation in September 1997. Plaintiffs were put on notice of this act of repudiation only when defendant Nelia Alleje tendered a total amount of P 10,400,000.00 to plaintiffs and their children on 3 September 1997. Said amount turned out to be part of the proceeds of the sale of the Paliparan Property to Belle Corporation. 24. On the other hand, Belle Corporation knowingly purchased unregistered land covered only by tax declarations and knew that persons other than the individual defendants were paying for the land taxes. It should not have disregarded such knowledge, as well as other circumstances which pointed to the fact that its vendors were not the true owners of the property. Since the Paliparan Property is unregistered, Belle Corporation should have inquired further into the true ownership of the property. 25. Belle Corporation was likewise in bad faith when, despite having had notice of plaintiffs' claim over the Paliparan Property on 19 January 1998 when it was impleaded as a co-defendant in this civil case, Belle Corporation still entered into a Deed of Absolute Sale with defendant Spouses Alleje and NELFRED on 24 June 1998. Thus, Belle Corporation finalized its purchase of the subject property from its co defendants with knowledge that some other persons are claiming and actually own the same. x x x x15 It is evident from the above allegations in the Amended Complaint that respondents specifically alleged that they are owners of the subject property being held in trust by their sister, Nelia Alleje, and that petitioner acted in bad faith when it bought the property from their sister, through her company, Nelfred, knowing that herein respondents claim ownership over it. Assuming the above allegations to be true, respondents can, therefore, validly seek the nullification of the sale of the subject property to petitioner because the same effectively denied them their right to give or withhold their consent if and when the subject property is intended to be sold, which right was also alleged by respondents to have been provided for in the trust agreement between their parents and their sister, Nelia Alleje. The Court, thus, finds no error on

the part of the CA in ruling that the allegations in the complaint are sufficient to establish a cause of action for the nullification of the sale of the subject property to herein petitioner. Petitioner contends that "it may be held liable ONLY IF it is proven by preponderance of evidence that [it] indeed acted in bad faith in dealing with the [subject] property." 16 Indeed, bad faith is a question of fact and is evidentiary.17 Bad faith has to be established by the claimant with clear and convincing evidence, and this necessitates an examination of the evidence of all the parties.18 This is best passed upon after a full-blown trial on the merits. Stated differently, the determination of whether or not petitioner is guilty of bad faith cannot be made in a mere motion to dismiss. An issue that requires the contravention of the allegations of the complaint, as well as the full ventilation, in effect, of the main merits of the case, should not be within the province of a mere motion to dismiss.19 The parties have gone to great lengths in discussing their respective positions on the merits of the main case. However, there is yet no need to do so in the instant petition. There will be enough time for these disputations in the lower court after responsive pleadings are filed and issues are joined for eventual trial of the case.1wphi1 Indeed, the other assigned errors in the instant petition dwell on issues which are matters of defense on the part of petitioner. The questions of whether or not there is an implied or express trust and whether the said trust is null and void are assertions that go into the merits of the main case and still need to be proven or disproven by the parties and resolved by the RTC. In the same manner, the issues on prescription and estoppel raised in petitioner's Opposition to Manifestation/Motion with Supplemental Motion to Dismiss ,20 as well as in its Motion for Reconsideration or to Dismiss the Amended Complaint ,21 are matters of defense not proper in a motion to dismiss for failure to state a cause of action. They should be pleaded in the answer, to be resolved after the trial on the basis of the arguments and evidence submitted by the parties. As jurisprudence holds, so rigid is the norm prescribed that if the court should doubt the truth of the facts averred, it must not dismiss the complaint but require an answer and proceed to hear the case on the merits.22 This dictum is in line with the policy that motions to dismiss should not be lightly granted where the ground invoked is not indubitable, as in the present case. 23 In such a situation, the objections to the complaint must be embodied in the answer as denials or special and affirmative defenses and threshed out in a full-blown trial on the merits.24 In sum, this Court finds that the CA did not commit error in reversing and setting aside the assailed Order of the RTC. WHEREFORE, the instant petition Is DENIED. The assailed Decision and Resolution of the Court of Appeals, dated May 18, 2006 and September 4, 2006, respectively, in CA-G.R. CV No. 74669, are AFFIRMED. RULE ON SUMMARY PROCEDURE DOCTRINE: PETITION FROM RELIEF OF JUDGMENT IS PROHIBITED UNDER THE SUMMARY PROCEDURE

QUESTIONS: a. A COMPLAINT FOR EJECTEMENT WAS FILED WITH THE MTC. AFTER JUDGMENT WAS RENDERED THERE WAS A PETITION FOR RELIEF FROM JUDGMENT FILED WITH THE RTC WICH THE LATTER DISMISSED FOR LACK OF JURISDICTION IS THE DISMISSAL CORRECT? WHY? b. THE DEFENDANTS WERE NOT PROPERLY SERVED WITH SUMMONS AS THE RETURN MERELY SHOWED THAT IT WAS SIGNED BY ONE GARY ACOB (A RELATIVE) AND THE OTHER RETURNED SHOWED THAT IT WAS DULY SERVED BUT REFUSED TO SIGN WITHOUT SPECIFYING TO WHOM IT WAS SERVED. JUDGMENT WAS RENDERED AGAINST THE DEFENDANTS, WHO FILED A PETITION FOR RELIEF FROM JUDGMENT WITH THE RTC, WHICH DISMISSED THE PETITION. UNDER THE CIRCUMSTANCES, WHAT IS THE APPROPRIATE REMEDY? EXPLAIN. ABUBAKAR A. AFDAL and FATIMA A. AFDAL, Petitioners, vs. ROMEO CARLOS, Respondent. G.R. No. 173379, December 1, 2010 DECISION CARPIO, J.: The Case This is a petition for review1 of the 3 January 20052 and 16 June 20063 Orders of the Regional Trial Court, Branch 25, Bian, Laguna (RTC) in Civil Case No. B-6721. In its 3 January 2005 Order, the RTC ordered the dismissal of petitioners Abubakar A. Afdal and Fatima A. Afdals (petitioners) petition for relief from judgment. In its 16 June 2006 Order, the RTC denied petitioners motion for reconsideration. The Facts On 18 December 2003, respondent Romeo Carlos (respondent) filed a complaint for unlawful detainer and damages against petitioners, Zenaida Guijabar (Guijabar), John Doe, Peter Doe, Juana Doe, and all persons claiming rights under them docketed as Civil Case No. 3719 before the Municipal Trial Court, Bian, Laguna (MTC). Respondent alleged that petitioners, Guijabar, and all other persons claiming rights under them were occupying, by mere tolerance, a parcel of land in respondents name covered by Transfer Certificate of Title No. T-530139 4 in the Registry of Deeds Calamba, Laguna. Respondent claimed that petitioner Abubakar Afdal (petitioner Abubakar) sold the property to him but that he allowed petitioners to stay in the property. On 25 August 2003, respondent demanded that petitioners, Guijabar, and all persons claiming rights under them turn over the property to him because he needed the property for his personal use. 5 Respondent further alleged that petitioners refused to heed his demand and he was constrained to file a complaint before the Lupon ng Tagapamayapa (Lupon). According to respondent, petitioners ignored the notices and the Lupon issued a "certificate to file action." 6 Then, respondent filed the complaint before the MTC.

According to the records, there were three attempts to serve the summons and complaint on petitioners 14 January, 3 and 18 February 2004.7 However, petitioners failed to file an answer. On 2 June 2004, respondent filed an ex-parte motion and compliance with position paper submitting the case for decision based on the pleadings on record.8 In its 23 August 2004 Decision,9 the MTC ruled in favor of respondent. The dispositive portion of the 23 August 2004 Decision reads: WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendants as follows: 1. Ordering defendants Abubakar Afdal, Zenaida Guijabar and all persons claiming rights under them to vacate the subject property and peacefully turn-over possession of the same to plaintiff; 2. Ordering defendants to pay plaintiff the amount of TEN THOUSAND PESOS (P10,000.00) as rental arrears from August 25, 2003 up to the date of decision; 3. Ordering defendants to pay plaintiff the amount of TEN THOUSAND PESOS (P10,000.00) a month thereafter, as reasonable compensation for the use of the subject premises until they finally vacate the same; 4. Ordering defendants to pay plaintiff the amount of FIFTY THOUSAND PESOS (P50,000.00) as and for attorneys fees plus ONE THOUSAND FIVE HUNDRED PESOS (P1,500.00) appearance fee; 5. Ordering defendants to pay the costs of suit. SO ORDERED.10 On 1 October 2004, the MTC issued a writ of execution.11 On 30 October 2004, petitioners filed a petition for relief from judgment with the MTC.12 Respondent filed a motion to dismiss or strike out the petition for relief. 13 Subsequently, petitioners manifested their intention to withdraw the petition for relief after realizing that it was a prohibited pleading under the Revised Rule on Summary Procedure. On 10 November 2004, the MTC granted petitioners request to withdraw the petition for relief.14 On 6 December 2004, petitioners filed the petition for relief before the RTC. 15 Petitioners alleged that they are the lawful owners of the property which they purchased from spouses Martha D.G. Ubaldo and Francisco D. Ubaldo. Petitioners denied that they sold the property to respondent. Petitioners added that on 15 December 2003, petitioner Abubakar filed with the Commission on Elections his certificate of candidacy as mayor in the municipality of Labangan, Zamboanga del Sur, for the 10 May 2004 elections. Petitioners said they only learned of the MTCs 23 August 2004 Decision on 27 October 2004. Petitioners also pointed out that they never received

respondents demand letter nor were they informed of, much less participated in, the proceedings before the Lupon. Moreover, petitioners said they were not served a copy of the summons and the complaint. On 3 January 2005, the RTC issued the assailed Order dismissing the petition for relief. The RTC said it had no jurisdiction over the petition because the petition should have been filed before the MTC in accordance with Section 1 of Rule 38 of the Rules of Court which provides that a petition for relief should be filed "in such court and in the same case praying that the judgment, order or proceeding be set aside." Petitioners filed a motion for reconsideration. In its 16 June 2006 Order, the RTC denied petitioners motion. Hence, this petition. The Issue Petitioners raise the sole issue of whether the RTC erred in dismissing their petition for relief from judgment. The Ruling of the Court Petitioners maintain that the RTC erred in dismissing their petition for relief. Petitioners argue that they have no other recourse but to file the petition for relief with the RTC. Petitioners allege the need to reconcile the apparent inconsistencies with respect to the filing of a petition for relief from judgment under Rule 38 of the Rules of Court and the prohibition under the Revised Rule on Summary Procedure. Petitioners suggest that petitions for relief from judgment in forcible entry and unlawful detainer cases can be filed with the RTC provided that petitioners have complied with all the legal requirements to entitle him to avail of such legal remedy. Section 13(4) of Rule 70 of the Rules of Court provides: SEC. 13. Prohibited pleadings and motions. - The following petitions, motions, or pleadings shall not be allowed: x x x 4. Petition for relief from judgment; x x x Section 19(d) of the Revised Rule on Summary Procedure also provides: SEC. 19. Prohibited pleadings and motions. - The following pleadings, motions, or petitions shall not be allowed in the cases covered by this Rule: x x x (d) Petition for relief from judgment; x x x a. ANWER: YES

Clearly, a petition for relief from judgment in forcible entry and unlawful detainer cases, as in the present case, is a prohibited pleading. The reason for this is to achieve an expeditious and inexpensive determination of the cases subject of summary procedure.16 Moreover, Section 1, Rule 38 of the Rules of Court provides: SEC. 1. Petition for relief from judgment, order or other proceedings . - When a judgment or final order is entered, or any other proceeding is thereafter taken against a party in any court through fraud, accident, mistake or excusable negligence, he may file a petition in such court and in the same case praying that the judgment, order or proceeding be set aside . (Emphasis supplied) b. ANWER: THE DEFENDANT CAN FILE A SPECIAL CIVIL ACTION FOR CERTIOTARI BEFORE THE RTC AS THERE WAS A SHOWING OF GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION. THE COURT DID NOT ACQUIRE JURISDICTION OVER THE PERSONS OF THE DEFENDANTS DUE TO IMPROPER SERVICE OF SUMMONS. A petition for relief from judgment, if allowed by the Rules and not a prohibited pleading, should be filed with and resolved by the court in the same case from which the petition arose. In the present case, petitioners cannot file the petition for relief with the MTC because it is a prohibited pleading in an unlawful detainer case. Petitioners cannot also file the petition for relief with the RTC because the RTC has no jurisdiction to entertain petitions for relief from judgments of the MTC. Therefore, the RTC did not err in dismissing the petition for relief from judgment of the MTC. The remedy of petitioners in such a situation is to file a petition for certiorari with the RTC under Rule 6518 of the Rules of Court on the ground of lack of jurisdiction of the MTC over the person of petitioners in view of the absence of summons to petitioners. Here, we shall treat petitioners petition for relief from judgment as a petition for certiorari before the RTC. An action for unlawful detainer or forcible entry is a real action and in personam because the plaintiff seeks to enforce a personal obligation on the defendant for the latter to vacate the property subject of the action, restore physical possession thereof to the plaintiff, and pay actual damages by way of reasonable compensation for his use or occupation of the property. 19 In an action in personam, jurisdiction over the person of the defendant is necessary for the court to validly try and decide the case.20 Jurisdiction over the defendant is acquired either upon a valid service of summons or the defendants voluntary appearance in court.21 If the defendant does not voluntarily appear in court, jurisdiction can be acquired by personal or substituted service of summons as laid out under Sections 6 and 7 of Rule 14 of the Rules of Court, which state: Sec. 6. Service in person on defendant. - Whenever practicable, the summons shall be served by handing a copy thereof to the defendant in person, or, if he refuses to receive and sign for it, by tendering it to him.

Sec. 7. Substituted Service. - If, for justifiable causes, the defendant cannot be served within a reasonable time as provided in the preceding section, service may be effected (a) by leaving copies of the summons at the defendants residence with some person of suitable age and discretion then residing therein, or (b) by leaving the copies at defendants office or regular place of business with some competent person in charge thereof. Any judgment of the court which has no jurisdiction over the person of the defendant is null and void.22 The 23 August 2004 Decision of the MTC states: Record shows that there were three attempts to serve the summons to the defendants. The first was on January 14, 2004 where the same was unserved. The second was on February 3, 2004 where the same was served to one Gary Akob and the last was on February 18, 2004 where the return was duly served but refused to sign.23 A closer look at the records of the case also reveals that the first indorsement dated 14 January 2004 carried the annotation that it was "unsatisfied/given address cannot be located." 24 The second indorsement dated 3 February 2004 stated that the summons was "duly served as evidenced by his signature of one Gary Acob25 (relative)."26 While the last indorsement dated 18 February 2004 carried the annotation that it was "duly served but refused to sign" without specifying to whom it was served.27 Service of summons upon the defendant shall be by personal service first and only when the defendant cannot be promptly served in person will substituted service be availed of. 28 In Samartino v. Raon,29 we said: We have long held that the impossibility of personal service justifying availment of substituted service should be explained in the proof of service; why efforts exerted towards personal service failed. The pertinent facts and circumstances attendant to the service of summons must be stated in the proof of service or Officers Return; otherwise, the substituted service cannot be upheld.30 In this case, the indorsements failed to state that prompt and personal service on petitioners was rendered impossible. It failed to show the reason why personal service could not be made. It was also not shown that efforts were made to find petitioners personally and that said efforts failed. These requirements are indispensable because substituted service is in derogation of the usual method of service. It is an extraordinary method since it seeks to bind the defendant to the consequences of a suit even though notice of such action is served not upon him but upon another whom the law could only presume would notify him of the pending proceedings. Failure to faithfully, strictly, and fully comply with the statutory requirements of substituted service renders such service ineffective.31 Likewise, nowhere in the return of summons or in the records of the case was it shown that Gary Acob, the person on whom substituted service of summons was effected, was a person of suitable age and discretion residing in petitioners residence. In Manotoc v. Court of Appeals,32 we said:

If the substituted service will be effected at defendants house or residence, it should be left with a person of "suitable age and discretion then residing therein." A person of suitable age and discretion is one who has attained the age of full legal capacity (18 years old) and is considered to have enough discernment to understand the importance of a summons. "Discretion" is defined as "the ability to make decisions which represent a responsible choice and for which an understanding of what is lawful, right or wise may be presupposed." Thus, to be of sufficient discretion, such person must know how to read and understand English to comprehend the import of the summons, and fully realize the need to deliver the summons and complaint to the defendant at the earliest possible time for the person to take appropriate action. Thus, the person must have the "relation of confidence" to the defendant, ensuring that the latter would receive or at least be notified of the receipt of the summons. The sheriff must therefore determine if the person found in the alleged dwelling or residence of defendant is of legal age, what the recipients relationship with the defendant is, and whether said person comprehends the significance of the receipt of the summons and his duty to immediately deliver it to the defendant or at least notify the defendant of said receipt of summons. These matters must be clearly and specifically described in the Return of Summons.33 (Emphasis supplied) In this case, the process server failed to specify Gary Acobs age, his relationship to petitioners and to ascertain whether he comprehends the significance of the receipt of the summons and his duty to deliver it to petitioners or at least notify them of said receipt of summons. In sum, petitioners were not validly served with summons and the complaint in Civil Case No. 3719 by substituted service. Hence, the MTC failed to acquire jurisdiction over the person of the petitioners and, thus, the MTCs 23 August 2004 Decision is void. 34 Since the MTCs 23 August 2004 Decision is void, it also never became final.35 RULE 5 DOCTRINE: ARBITRATION IN THE BARANGAY IS COMPULSORY Q: THE CRIME OF SLANDER WAS COMMITTED AT THE WORKPLACE OF TWO (2) EMPLOYEES AT THE RTC, LAS PINAS CITY. THE COMPLAINT WAS FILED IN THE COURT WITHOUT UNDERGOING A BARANGAY ARBITRATION PROCESS. MAY THE COURT DISMISS THE SAME? EXPLAIN. LETICIA B. AGBAYANI, Petitioner, vs. COURT OF APPEALS, DEPARTMENT OF JUSTICE and LOIDA MARCELINA J. GENABE, Respondents. G.R. No. 183623, June 25, 2012 DECISION REYES, J.: On petition for review under Rule 45 of the 1997 Rules of Court is the Decision 1 dated March 27, 2008 of the Court of Appeals (CA) dismissing the petition for certiorari and the Resolution2 dated July 3, 2008 denying the motion for reconsideration thereof in CA-G.R. SP No. 99626. Petitioner Leticia B. Agbayani (Agbayani) assails the resolution of the Department of

Justice (DOJ) which directed the withdrawal of her complaint for grave oral defamation filed against respondent Loida Marcelina J. Genabe (Genabe). Antecedent Facts Agbayani and Genabe were both employees of the Regional Trial Court (RTC), Branch 275 of Las Pias City, working as Court Stenographer and Legal Researcher II, respectively. On December 29, 2006, Agbayani filed a criminal complaint for grave oral defamation against Genabe before the Office of the City Prosecutor of Las Pias City, docketed as I.S. No. 07-0013, for allegedly uttering against her, in the presence of their fellow court employees and while she was going about her usual duties at work, the following statements, to wit: "ANG GALING MO LETY, SINABI MO NA TINAPOS MO YUNG MARVILLA CASE, ANG GALING MO. FEELING LAWYER KA KASI, BAKIT DI KA MAGDUTY NA LANG, STENOGRAPHER KA MAGSTENO KA NA LANG, ANG GALING MO, FEELING LAWYER KA TALAGA. NAGBEBENTA KA NG KASO, TIRADOR KA NG JUDGE. SIGE HIGH BLOOD DIN KA, MAMATAY KA SANA SA HIGH BLOOD MO."3 In a Resolution4 rendered on February 12, 2007, the Office of the City Prosecutor of Las Pias City5 found probable cause for the filing of the Information for grave oral defamation against Genabe. However, upon a petition for review filed by Genabe, the DOJ Undersecretary Ernesto L. Pineda (Pineda) found that: After careful evaluation and consideration of the evidence on record, we find merit in the instant petition. Contrary to the findings in the assailed resolution, we find that the subject utterances of respondent constitute only slight oral defamation. As alleged by the [petitioner] in paragraphs 2, 3 and 4 of her complaint-affidavit, respondent uttered the remarks subject matter of the instant case in the heat of anger. This was also the tenor of the sworn statements of the witnesses for complainant. The Supreme Court, in the case of Cruz vs. Court of Appeals, G.R. Nos. L-56224-26, November 25, 1982, x x x held that although abusive remarks may ordinarily be considered as serious defamation, under the environmental circumstances of the case, there having been provocation on complainants part, and the utterances complained of having been made in the heat of unrestrained anger and obfuscation, such utterances constitute only the crime of slight oral defamation. Notwithstanding the foregoing, we believe that the instant case should nonetheless be dismissed for non-compliance with the provisions of Book III, Title I, Chapter 7 (Katarungang Pambarangay), of Republic Act No. 7160 (The Local Government Code of 1991). As shown by the records, the parties herein are residents of Las Pias City. x x x

The complaint-affidavit, however, failed to show that the instant case was previously referred to the barangay for conciliation in compliance with Sections 408 and 409, paragraph (d), of the Local Government Code, which provides: Section 408. Subject Matter for Amicable Settlement; Exception Thereto. The lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: xxx Section 409. Venue. x x x (d) Those arising at the workplace where the contending parties are employed or xxx shall be brought in the barangay where such workplace or institution is located. The records of the case likewise show that the instant case is not one of the exceptions enumerated under Section 408 of the Local Government Code. Hence, the dismissal of the instant petition is proper. It is well-noted that the Supreme Court held that where the case is covered by P.D. 1508 (Katarungang Pambarangay Law), the compulsory process of arbitration required therein is a pre-condition for filing a complaint in court. Where the complaint (a) did not state that it is one of the excepted cases, or (b) it did not allege prior availment of said conciliation process, or (c) did not have a certification that no conciliation or settlement had been reached by the parties, the case should be dismissed x x x. While the foregoing doctrine is handed down in civil cases, it is submitted that the same should apply to criminal cases covered by, but filed without complying with, the provisions of P.D. 1508 x x x.6 Thus, in a Resolution7 dated May 17, 2007, the DOJ disposed, to wit: WHEREFORE, premises considered, the assailed resolution is hereby REVERSED and SET ASIDE. Accordingly, the City Prosecutor of Las Pias City is directed to move for the withdrawal of the information for grave oral defamation filed against respondent Loida Marcelina J. Genabe, and report the action taken thereon within ten (10) days from receipt hereof. SO ORDERED.8 The petitioner filed a motion for reconsideration, which was denied in a Resolution 9 dated June 25, 2007. Consequently, Agbayani filed a petition for certiorari with the CA alleging that the DOJ committed grave abuse of discretion in setting aside the Resolution dated February 12, 2007 of the City Prosecutor of Las Pias City in I.S. Case No. 07-0013. She averred that the respondents petition for review filed with the DOJ did not comply with Sections 5 and 6 of DOJ Circular No. 70, or the "2000 National Prosecution Service (NPS) Rules on Appeal," and maintained that her evidence supported a finding of probable cause for grave oral defamation against respondent Genabe.

On March 27, 2008, the CA dismissed the petition after finding no grave abuse of discretion on the part of the DOJ. Citing Punzalan v. Dela Pea,10 the CA stated that for grave abuse of discretion to exist, the complained act must constitute a capricious and whimsical exercise of judgment as it is equivalent to lack of jurisdiction, or when the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent and gross as to amount to an evasion of positive duty enjoined or to act at all in contemplation of law. It is not sufficient that a tribunal, in the exercise of its power, abused its discretion; such abuse must be grave. On motion for reconsideration by the petitioner, the CA denied the same in its Resolution 11 dated July 3, 2008. Hence, the instant petition. Assignment of Errors Maintaining her stance, Agbayani raised the following, to wit: I. RESPONDENT COURT GRAVELY ERRED IN HOLDING THAT THE RESPONDENT DOJ DID NOT ABUSE ITS DISCRETION WHEN THE LATTER REVERSED AND SET ASIDE THE RESOLUTION OF THE CITY PROSECUTOR OF LAS PIAS CITY. II. RESPONDENT COURT GRAVELY ERRED IN AFFIRMING RESPONDENT DOJ'S FINDING THAT WHAT PRIVATE RESPONDENT COMMITTED WAS ONLY SLIGHT ORAL DEFAMATION. III. RESPONDENT COURT GRAVELY ERRED IN AFFIRMING RESPONDENT DOJ'S DISMISSAL OF THE COMPLAINT DUE TO NON-COMPLIANCE WITH THE PROVISIONS OF THE LOCAL GOVERNMENT CODE OF 1991. IV. RESPONDENT COURT GRAVELY ERRED WHEN IT HELD THAT THE REQUIREMENTS UNDER DOJ CIRCULAR NO. 70 (2000 NPS Rule on Appeal) ARE NOT MANDATORY.12 Ruling and Discussions The petition is bereft of merit. We shall first tackle Agbayani's arguments on the first two issues raised in the instant petition. 1. Petitioner Agbayani alleged that Undersecretary Pineda unfairly heeded only to the arguments interposed by respondent Genabe in her comment; and the CA, in turn, took his findings and reasoning as gospel truth. Agbayanis comment was completely disregarded and suppressed in the records of the DOJ. Agbayani discovered this when she went to the DOJ to examine the records, as soon as she received a copy of the DOJ Resolution of her motion for reconsideration.

2. Further, petitioner Agbayani maintained that respondent Genabes Petition for Review13 should have been dismissed outright, since it failed to state the name and address of the petitioner, nor did it show proof of service to her, pursuant to Sections 5 and 6 of DOJ Circular No. 70. Also, the petition was not accompanied with the required attachments, i.e. certified copies of the complaint, affidavits of witnesses, petitioner's reply to respondent's counter-affidavit, and documentary evidences of petitioner. Thus, a grave irregularity was committed by the DOJ in allowing the surreptitious insertion of these and many other documents in the records of the case, after the petition had been filed. In particular, petitioner Agbayani alleged that when the petition was filed on March 22, 2007, only five (5) documents were attached thereto, namely: (a) the Resolution of the City Prosecutor; (b) the respondent's Counter-affidavit; (c) Letter of the staff dated January 2, 2005; (d) her Answer; and (e) the Information filed against respondent Genabe with the Office of the City Prosecutor of Las Pias City. However, at the time the Resolution of the DOJ was issued, a total of forty-one (41) documents14 formed part of the records of the petition. Besides, respondent Genabe's Motion to Defer Arraignment (Document No. 40) and the court order relative to the granting of the same (Document No. 41) were both dated March 23, 2007, or a day after the petition was filed. Agbayani asserted that these thirty-six (36) documents were surreptitiously and illegally attached to the records of the case, an act constituting extrinsic fraud and grave misconduct.15 At the very least, the DOJ should have required respondent Genabe to formalize the "insertion" of the said documents. Petitioner Agbayani reiterated that her version of the incident was corroborated by several witnesses (officemates of Agbayani and Genabe), while that of Genabe was not. And since the crime committed by respondent Genabe consisted of her exact utterances, the DOJ erred in downgrading the same to slight oral defamation, completely disregarding the finding by the Investigating Prosecutor of probable cause for the greater offense of grave oral defamation. She denied that she gave provocation to respondent Genabe, insisting that the latter committed the offense with malice aforethought and not in the heat of anger. We find no merit in the above arguments. It is well to be reminded, first of all, that the rules of procedure should be viewed as mere instruments designed to facilitate the attainment of justice. They are not to be applied with severity and rigidity when such application would clearly defeat the very rationale for their conception and existence. Even the Rules of Court reflects this principle.16 Anent the charge of non-compliance with the rules on appeal, Sections 5 and 6 of the aforesaid DOJ Circular provide: SECTION 5. Contents of petition. - The petition shall contain or state: (a) the names and addresses of the parties; (b) the Investigation Slip number (I.S. No.) and criminal case number, if any, and title of the case, including the offense charged in the complaint; (c) the venue of the preliminary investigation; (d) the specific material dates showing that it was filed on time; (e) a clear and concise statement of the facts, the assignment of errors, and the reasons or arguments

relied upon for the allowance of the appeal; and (f) proof of service of a copy of the petition to the adverse party and the Prosecution Office concerned. The petition shall be accompanied by legible duplicate original or certified true copy of the resolution appealed from together with legible true copies of the complaint, affidavits/sworn statements and other evidence submitted by the parties during the preliminary investigation/ reinvestigation. If an information has been filed in court pursuant to the appealed resolution, a copy of the motion to defer proceedings filed in court must also accompany the petition. The investigating/reviewing/approving prosecutor shall not be impleaded as party respondent in the petition.1wphi1 The party taking the appeal shall be referred to in the petition as either "Complainant-Appellant" or "Respondent-Appellant." SECTION 6. Effect of failure to comply with the requirements. The failure of petitioner to comply WITH ANY of the foregoing requirements shall constitute sufficient ground for the dismissal of the petition. Contrary to petitioner Agbayani's claim, there was substantial compliance with the rules. Respondent Genabe actually mentioned on page 2 of her petition for review to the DOJ the name of the petitioner as the private complainant, as well as indicated the latters address on the last page thereof as "RTC Branch 275, Las Pias City." The CA also noted that there was proper service of the petition as required by the rules since the petitioner was able to file her comment thereon. A copy thereof, attached as Annex "L" in the instant petition, bears a mark that the comment was duly received by the Prosecution Staff, Docket Section of the DOJ. Moreover, a computer verification requested by the petitioner showed that the prosecutor assigned to the case had received a copy of the petitioners comment.17 As to the charge of extrinsic fraud, which consists of the alleged suppression of Agbayani's Comment and the unauthorized insertion of documents in the records of the case with the DOJ, we agree with the CA that this is a serious charge, especially if made against the Undersecretary of Justice; and in order for it to prosper, it must be supported by clear and convincing evidence. However, petitioner Agbayani's only proof is her bare claim that she personally checked the records and found that her Comment was missing and 36 new documents had been inserted. This matter was readily brought to the attention of Undersecretary Pineda by petitioner Agbayani in her motion for reconsideration, who however must surely have found such contention without merit, and thus denied the motion.18 Section 5 of the 2000 NPS Rules on Appeal also provides that the petition for review must be accompanied by a legible duplicate original or certified true copy of the resolution appealed from, together with legible true copies of the complaint, affidavits or sworn statements and other evidence submitted by the parties during the preliminary investigation or reinvestigation. Petitioner Agbayani does not claim that she was never furnished, during the preliminary investigation, with copies of the alleged inserted documents, or that any of these documents were fabricated. In fact, at least seven (7) of these documents were copies of her own submissions to

the investigating prosecutor.19 Presumably, the DOJ required respondent Genabe to submit additional documents produced at the preliminary investigation, along with Document Nos. 40 and 41, for a fuller consideration of her petition for review. As for Document Nos. 40 and 41, which were dated a day after the filing of the petition, Section 5 of the 2000 NPS Rules on Appeal provides that if an Information has been filed in court pursuant to the appealed resolution, a copy of the Motion to Defer Proceedings must also accompany the petition. Section 3 of the above Rules states that an appeal to the DOJ must be taken within fifteen (15) days from receipt of the resolution or of the denial of the motion for reconsideration. While it may be presumed that the motion to defer arraignment accompanying the petition should also be filed within the appeal period, respondent Genabe can not actually be faulted if the resolution thereof was made after the lapse of the period to appeal. In Guy vs. Asia United Bank,20 a motion for reconsideration from the resolution of the Secretary of Justice, which was filed four (4) days beyond the "non-extendible period of ten (10) days", was allowed under Section 13 of the 2000 NPS Rules on Appeal. The Supreme Court held that the authority of the Secretary of Justice to review and order the withdrawal of an Information in instances where he finds the absence of a prima facie case is not time-barred, albeit subject to the approval of the court, if its jurisdiction over the accused has meanwhile attached. 21 We further explained: [I]t is not prudent or even permissible for a court to compel the Secretary of Justice or the fiscal, as the case may be, to prosecute a proceeding originally initiated by him on an information, if he finds that the evidence relied upon by him is insufficient for conviction. Now, then, if the Secretary of Justice possesses sufficient latitude of discretion in his determination of what constitutes probable cause and can legally order a reinvestigation even in those extreme instances where an information has already been filed in court, is it not just logical and valid to assume that he can take cognizance of and competently act on a motion for reconsideration, belatedly filed it might have been, dealing with probable cause? And is it not a grievous error on the part of the CA if it virtually orders the filing of an information, as here, despite a categorical statement from the Secretary of Justice about the lack of evidence to proceed with the prosecution of the petitioner? The answer to both posers should be in the affirmative. As we said in Santos v. Go: "[C]ourts cannot interfere with the discretion of the public prosecutor in evaluating the offense charged. He may dismiss the complaint forthwith, if he finds the charge insufficient in form or substance, or without any ground. Or, he may proceed with the investigation if the complaint in his view is sufficient and in proper form. The decision whether to dismiss a complaint or not, is dependent upon the sound discretion of the prosecuting fiscal and, ultimately, that of the Secretary of Justice. Findings of the Secretary of Justice are not subject to review unless made with grave abuse of discretion. xxx [T]o strike down the April 20, 2006 DOJ Secretary's Resolution as absolutely void and without effect whatsoever, as the assailed CA decision did, for having been issued after the Secretary had

supposedly lost jurisdiction over the motion for reconsideration subject of the resolution may be reading into the aforequoted provision a sense not intended. For, the irresistible thrust of the assailed CA decision is that the DOJ Secretary is peremptorily barred from taking a second hard look at his decision and, in appropriate cases, reverse or modify the same unless and until a motion for reconsideration is timely interposed and pursued. The Court cannot accord cogency to the posture assumed by the CA under the premises which, needless to stress, would deny the DOJ the authority to motu proprio undertake a review of his own decision with the end in view of protecting, in line with his oath of office, innocent persons from groundless, false or malicious prosecution. As the Court pointed out in Torres, Jr. v. Aguinaldo, the Secretary of Justice would be committing a serious dereliction of duty if he orders or sanctions the filing of an information based upon a complaint where he is not convinced that the evidence warrants the filing of the action in court.22 (Citations omitted and underscoring supplied) The Court further stated in Guy that when the DOJ Secretary took cognizance of the petitioner's motion for reconsideration, he "effectively excepted such motion from the operation of the aforequoted Section 13 of DOJ Circular No. 70, s. 2000. This show of liberality is, to us, within the competence of the DOJ Secretary to make. The Court is not inclined to disturb the same absent compelling proof, that he acted out of whim and that petitioner was out to delay the proceedings to the prejudice of respondent in filing the motion for reconsideration."23 The case of First Women's Credit Corporation v. Perez,24 succinctly summarizes the general rules relative to criminal prosecution: that criminal prosecution may not be restrained or stayed by injunction, preliminary or final, albeit in extreme cases, exceptional circumstances have been recognized; that courts follow the policy of non-interference in the conduct of preliminary investigations by the DOJ, and of leaving to the investigating prosecutor sufficient latitude of discretion in the determination of what constitutes sufficient evidence as will establish probable cause for the filing of an information against a supposed offender; and, that the court's duty in an appropriate case is confined to a determination of whether the assailed executive or judicial determination of probable cause was done without or in excess of jurisdiction or with grave abuse of discretion amounting to want of jurisdiction. But while prosecutors are given sufficient latitude of discretion in the determination of probable cause, their findings are still subject to review by the Secretary of Justice. Surely, this power of the Secretary of Justice to review includes the discretion to accept additional evidence from the investigating prosecutor or from herein respondent Genabe, evidence which nonetheless appears to have already been submitted to the investigating prosecutor but inadvertently omitted by her when she filed her petition. 3. Coming now to the DOJ's finding that the complaint fails to state a cause of action, the CA held that the DOJ committed no grave abuse of discretion in causing the dismissal thereof on the ground of non-compliance with the provisions of the Local Government Code of 1991, on the Katarungang Pambarangay conciliation procedure. Undeniably, both petitioner Agbayani and respondent Genabe are residents of Las Pias City and both work at the RTC, and the incident which is the subject matter of the case happened in their workplace.25 Agbayanis complaint should have undergone the mandatory barangay conciliation

for possible amicable settlement with respondent Genabe, pursuant to Sections 408 and 409 of Republic Act No. 7160 or the Local Government Code of 1991 which provide: Sec. 408. Subject Matter for Amicable Settlement; Exception thereto. The lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes, except: x x x Sec. 409. Venue. x x x (d) Those arising at the workplace where the contending parties are employed or x x x shall be brought in the barangay where such workplace or institution is located. Administrative Circular No. 14-93,26 issued by the Supreme Court on July 15, 1993 states that: xxx I. All disputes are subject to Barangay conciliation pursuant to the Revised Katarungang Pambarangay Law [formerly P.D. 1508, repealed and now replaced by Secs. 399-422, Chapter VII, Title I, Book III, and Sec. 515, Title I, Book IV, R.A. 7160, otherwise known as the Local Government Code of 1991], and prior recourse thereto is a pre-condition before filing a complaint in court or any government offices, except in the following disputes: [1] Where one party is the government, or any subdivision or instrumentality thereof; [2] Where one party is a public officer or employee and the dispute relates to the performance of his official functions; [3] Where the dispute involves real properties located in different cities and municipalities, unless the parties thereto agree to submit their difference to amicable settlement by an appropriate Lupon; [4] Any complaint by or against corporations, partnerships or juridical entities, since only individuals shall be parties to Barangay conciliation proceedings either as complainants or respondents [Sec. 1, Rule VI, Katarungang Pambarangay Rules]; [5] Disputes involving parties who actually reside in barangays of different cities or municipalities, except where such barangay units adjoin each other and the parties thereto agree to submit their differences to amicable settlement by an appropriate Lupon; [6] Offenses for which the law prescribes a maximum penalty of imprisonment exceeding one [1] year or a fine of over five thousand pesos ([P]5,000.00); [7] Offenses where there is no private offended party; [8] Disputes where urgent legal action is necessary to prevent injustice from being committed or further continued, specifically the following:

[a] Criminal cases where accused is under police custody or detention [See Sec. 412(b)(1), Revised Katarungang Pambarangay Law]; [b] Petitions for habeas corpus by a person illegally deprived of his rightful custody over another or a person illegally deprived of or on acting in his behalf; [c] Actions coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property and support during the pendency of the action; and [d] Actions which may be barred by the Statute of Limitations. [9] Any class of disputes which the President may determine in the interest of justice or upon the recommendation of the Secretary of Justice; [10] Where the dispute arises from the Comprehensive Agrarian Reform Law (CARL) [Secs. 46 & 47, R. A. 6657]; [11] Labor disputes or controversies arising from employer-employee relations [Montoya vs. Escayo, 171 SCRA 442; Art. 226, Labor Code, as amended, which grants original and exclusive jurisdiction over conciliation and mediation of disputes, grievances or problems to certain offices of the Department of Labor and Employment]; [12] Actions to annul judgment upon a compromise which may be filed directly in court [See Sanchez vs. [Judge] Tupaz, 158 SCRA 459]." xxx ANSWER: YES. The compulsory process of arbitration is a pre-condition for the filing of the complaint in court. Where the complaint (a) did not state that it is one of excepted cases, or (b) it did not allege prior availment of said conciliation process, or (c) did not have a certification that no conciliation had been reached by the parties, the case should be dismissed.27 Here, petitioner Agbayani failed to show that the instant case is not one of the exceptions enumerated above. Neither has she shown that the oral defamation caused on her was so grave as to merit a penalty of more than one year. Oral defamation under Article 358 of the Revised Penal Code, as amended, is penalized as follows: "Article 358. Slander. Oral defamation shall be punished by arresto mayor in its maximum period to prision correccional in its minimum period if it is of a serious and insulting nature; otherwise, the penalty shall be arresto menor or a fine not exceeding 200 pesos." Apparently, the DOJ found probable cause only for slight oral defamation. As defined in Villanueva v. People,28 oral defamation or slander is the speaking of base and defamatory words

which tend to prejudice another in his reputation, office, trade, business or means of livelihood. It is grave slander when it is of a serious and insulting nature. The gravity depends upon: (1) the expressions used; (2) the personal relations of the accused and the offended party; and (3) the special circumstances of the case, the antecedents or relationship between the offended party and the offender, which may tend to prove the intention of the offender at the time. In particular, it is a rule that uttering defamatory words in the heat of anger, with some provocation on the part of the offended party constitutes only a light felony.29 We recall that in the morning of December 27, 2006 when the alleged utterances were made, Genabe was about to punch in her time in her card when she was informed that she had been suspended for failing to meet her deadline in a case, and that it was Agbayani who informed the presiding judge that she had missed her deadline when she left to attend a convention in Baguio City, leaving Agbayani to finish the task herself. According to Undersecretary Pineda, the confluence of these circumstances was the immediate cause of respondent Genabe's emotional and psychological distress. We rule that his determination that the defamation was uttered while the respondent was in extreme excitement or in a state of passion and obfuscation, rendering her offense of lesser gravity than if it had been made with cold and calculating deliberation, is beyond the ambit of our review.30 The CA concurred that the complained utterances constituted only slight oral defamation, having been said in the heat of anger and with perceived provocation from Agbayani. Respondent Genabe was of a highly volatile personality prone to throw fits (sumpongs), who thus shared a hostile working environment with her co-employees, particularly with her superiors, Agbayani and Hon. Bonifacio Sanz Maceda, the Presiding Judge of Branch 275, whom she claimed had committed against her "grievous acts that outrage moral and social conduct." That there had been a long-standing animosity between Agbayani and Genabe is not denied. 4. Lastly, petitioner Agbayani insists that the DOJ should have dismissed respondent Genabe's petition for review outright pursuant to Sections 5 and 6 of DOJ Circular No. 70. It is true that the general rule in statutory construction is that the words "shall," "must," "ought," or "should" are words of mandatory character in common parlance and in their in ordinary signification, 31 yet, it is also well-recognized in law and equity as a not absolute and inflexible criterion. 32 Moreover, it is well to be reminded that DOJ Circular No. 70 is a mere tool designed to facilitate, not obstruct, the attainment of justice through appeals taken with the National Prosecution Service. Thus, technical rules of procedure like those under Sections 5 and 6 thereof should be interpreted in such a way to promote, not frustrate, justice. Besides, Sections 7 and 10 of DOJ Circular No. 70 clearly give the Secretary of Justice, or the Undersecretary in his place, wide latitude of discretion whether or not to dismiss a petition. Section 6 of DOJ Circular No. 70, invoked by petitioner Agbayani, is clearly encompassed within this authority, as shown by a cursory reading of Sections 7 and 10, to wit: SECTION 7. Action on the petition. The Secretary of Justice may dismiss the petition outright if he finds the same to be patently without merit or manifestly intended for delay, or when the issues raised therein are too unsubstantial to require consideration.

SECTION 12. Disposition of the appeal. The Secretary may reverse, affirm or modify the appealed resolution. He may, motu proprio or upon motion, dismiss the petition for review on any of the following grounds: That the petition was filed beyond the period prescribed in Section 3 hereof; That the procedure or any of the requirements herein provided has not been complied with; That there is no showing of any reversible error; That the appealed resolution is interlocutory in nature, except when it suspends the proceedings based on the alleged existence of a prejudicial question; That the accused had already been arraigned when the appeal was taken; That the offense has already prescribed; and That other legal or factual grounds exist to warrant a dismissal. We reiterate what we have stated in Yao v. Court of Appeals33 that: In the interest of substantial justice, procedural rules of the most mandatory character in terms of compliance, may be relaxed.1wphi1 In other words, if strict adherence to the letter of the law would result in absurdity and manifest injustice, or where the merit of a party's cause is apparent and outweighs consideration of non-compliance with certain formal requirements, procedural rules should definitely be liberally construed. A party-litigant is to be given the fullest opportunity to establish the merits of his complaint or defense rather than for him to lose life, liberty, honor or property on mere technicalities.34 (Citations omitted) All told, we find that the CA did not commit reversible error in upholding the Resolution dated May 17, 2007 of the DOJ as we, likewise, find the same to be in accordance with law and jurisprudence. WHEREFORE, premises considered, the petition for review is hereby DENIED. Accordingly, the Decision dated March 27, 2008 and the Resolution dated July 3, 2008 of the Court of Appeals in CA-G.R. SP No. 99626 are AFFIRMED in toto. SO ORDERED.

RULE 7 VERIFICATION

Q: IN AN APPEAL FROM A DECISION IN A FORCIBLE ENTRY CASE, IT WAS CONTENDED THAT THE VERIFICATION WAS DEFECTIVE AS IT SHOULD BE BASED ON PERSONAL KNOWLEDGE OR ON AUTHENTIC RECORD AND NOT SIMPLY UPON KNOWLEDGE, INFORMATION AND BELIEF. IS THE CONTENTION CORRECT? WHY?

FIRST DIVISION

NATIONAL AUTHORITY,

HOUSING

G.R. No. 149121

Petitioner,

Present:

PUNO, C.J., Chairperson, - versus CARPIO,* LEONARDO-DE CASTRO, BERSAMIN, and VILLARAMA, JR., JJ. AUGUSTO BASA, JR., LUZ BASA and EDUARDO S. BASA,
Respondents.

Promulgated:

April 20, 2010 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

LEONARDO-DE CASTRO, J.:

This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside the Amended Decision 1[1] of the Court of Appeals dated November 27, 2000 and its Resolution dated July 19, 2001 denying the motion for reconsideration of the National Housing Authority (NHA).

On April 19, 1983, spouses Augusto and Luz Basa loaned from NHA the amount of P556,827.10 secured by a real estate mortgage over their properties covered by Transfer Certificates of Title (TCTs) Nos. 287008 and 285413, located at No. 30 San Antonio St., San Francisco del Monte, Quezon City. 2[2] Spouses Basa did not pay the loan despite repeated demands . To collect its credit, the NHA, on August 9, 1990, filed a verified petition for extrajudicial foreclosure of mortgage before the Sheriffs Office in Quezon City, pursuant to Act No. 3135, as amended.3[3]

1 2 3

After notice and publication, the properties were sold at public auction where NHA emerged as the highest bidder.4[4] On April 16, 1991, the sheriffs certificate of sale was registered and annotated only on the owners duplicate copies of the titles in the hands of the respondents, since the titles in the custody of the Register of Deeds were among those burned down when a fire gutted the City Hall of Quezon City on June 11, 1988.5[5]

On April 16, 1992, the redemption period expired,6[6] without respondents having redeemed the properties. Shortly thereafter, on April 24, 1992, NHA executed an Affidavit of Consolidation of Ownership7[7] over the foreclosed properties, and the same was inscribed by the Register of Deeds on the certificates of title in the hand of NHA under Entry No. 6572/T-287008-PR-29207.8[8]

On June 18, 1992, NHA filed a petition for the issuance of a Writ of Possession. The said petition was granted by the Regional Trial Court (RTC) in an Order9[9] dated August 4, 1992.

4 5 6 7 8 9

A Writ of Possession10[10] was issued on March 9, 1993 by the RTC, ordering spouses Augusto and Luz Basa to vacate the subject lots. The writ, however, remained unserved. This compelled NHA to move for the issuance of an alias writ of possession on April 28, 1993.

Before the RTC could resolve the motion for the issuance of an alias writ of possession, respondents spouses Basa and Eduardo Basa, on June 2, 1993, filed a Motion for Leave to Intervene and Petition in Intervention (with Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction).11[11] Respondents anchored said petition for intervention on Section 812[12] of Act No. 3135, as amended, which gives the debtor/mortgagor the remedy to petition that the sale be set aside and the writ of possession be cancelled. In the said petition for intervention, respondents averred that the extrajudicial foreclosure of the subject properties was a nullity since notices were not posted and published, written notices of foreclosure were not given to them, and notices of sale were not tendered to the occupants of the sold properties, thereby denying them the opportunity to ventilate their rights.13[13] Respondents likewise insisted that even assuming arguendo that the foreclosure sale were valid, they were still entitled to redeem the same since the one-year redemption period from the registration of the sheriffs certificate of foreclosure sale had not yet prescribed.14[14]
10 11 12 13 14

Citing

Bernardez v. Reyes15[15] and Bass v. De la Rama,16[16] respondents theorized that the instrument is deemed registered only upon actual inscription on the certificate of title in the custody of the civil registrar. 17[17] Since the sheriffs certificate was only inscribed on the owners duplicate certificate of title, and not on the certificate of title in the possession of the Register of Deeds, then there was no effective registration and the one-year redemption period had not even begun to run. Thus, respondents asked the RTC, among others, to declare the foreclosure sale null and void, to allow the respondents to redeem the mortgaged properties in the amount of P21,160.00, and to cancel the Writ of Possession dated March 9, 1993.

NHA opposed respondents petition for intervention.18[18] It countered that the extrajudicial foreclosure sale was conducted validly and made in accordance with Act No. 3135 as evidenced by the publication of the Notice of Sheriffs Sale in the Manila Times in its issues dated July 14, 21 and 28, 1990.19[19] NHA also said that respondents had been furnished with a copy of the Notice of Sheriffs Sale as shown at the bottom portion of said notice.20[20] NHA maintained that respondents right of redemption had long expired on April 15, 1992 since the certificate of sale was inscribed on their TCT Nos. 285413 and 287008 a year earlier, or on April 16, 1991. It pointed out that the RTC, via its Order dated August 4, 1992, had already ruled that respondents right of redemption was
15 16 17 18 19 20

already gone without them exercising said right. Since said order had already attained finality, the ruling therein could no longer be disturbed.

On January 2, 1995, the RTC issued the first assailed Order 21[21] with the following directives: 1) granting the issuance of the alias writ of possession which allowed NHA to take possession of the subject properties; 2) admitting the Petition in Intervention and treating the same as the petition to set aside sale mentioned in [Sec. 8] of Act No. 3155; and 3) granting the issuance of a Writ of Preliminary Injunction in favor of respondents that ordered NHA to refrain from selling or disposing of the contested properties. The pertinent portion of the order reads:

After examining the record and following precedents x x x this Court hereby orders: 1. The issuance of an alias writ of possession; 2. Admission of the Petition in Intervention, treating the same as the petition to set aside sale, etc., mentioned in [Sec. 8] of Act No. 3155; 3. The issuance of a writ of preliminary injunction, after a BOND in the amount of P20,000.00 had been duly filed by intervenors, ordering movant National Housing Authority, its agents and/or any other person acting under its command, to desist and refrain from selling or in any manner from disposing of the subject properties covered by TCT Nos. 287008 and 285413 and located at No. 30, San Antonio Street, San Francisco del Monte, Quezon City, pending the termination of this proceeding and/or unless a contrary order is issued by this Court; 4. Setting the hearing of the petition in intervention (to set aside) on March 17, 1995, at 8:30 a.m.22[22]
21 22

NHA filed a motion for reconsideration 23[23] assailing the RTCs Order insofar as it admitted respondents motion for intervention and issued a writ of preliminary injunction. NHA argued that respondents should have assailed the foreclosure sale during the hearing in the petition for the issuance of a Writ of Possession, and not during the hearing in the petition for the issuance of an alias writ of possession since the petition referred to in Section 8 of Act No. 3135 pertains to the original petition for the issuance of the Writ of Possession and not the Motion for the Issuance of an Alias Writ of Possession. NHA stressed that another reason why the petition for intervention should be denied was the finality of the Order dated August 4, 1992 declaring respondents right of redemption barred by prescription. Lastly, NHA asserted that the writ of possession was issued as a matter of course upon filing of the proper motion and thereby, the court was bereft of discretion.

In the second assailed Order24[24] dated September 4, 1995, the RTC denied NHAs motion for reconsideration reasoning that the admission of the intervention was sanctioned by Section 8 of Act No. 3135. As to the grant of preliminary injunction, the RTC made the justification that if the NHA was not restrained, the judgment which may be favorable to respondents would be ineffectual. The order partly provides:

23 24

The motion is without merit. The admission of the intervention is sanctioned by Sec. 8 of Act No. 3135. And, because, otherwise or if no preliminary injunction is issued, the movant NHA may, before final judgment, do or continue the doing of the act with the intervenor asks the court to restrain, and thus make ineffectual the final judgment rendered afterwards which may grant the relief sought by the intervenor. ACCORDINGLY, the motion for reconsideration is DENIED. 25[25]

Undaunted, NHA filed on November 24, 1995, a special civil action for certiorari and prohibition before the Court of Appeals.

The Court of Appeals rendered a Decision 26[26] dated February 24, 2000, in favor of the NHA. It declared null and void the assailed orders of the RTC dated January 2, 1995 and September 4, 1995, to the extent that the said orders admitted the petition in intervention and granted the issuance of the preliminary injunction; but it upheld the grant of the alias writ of possession, thus:

WHEREFORE, the petition is GRANTED, and the assailed order of January 2, 1995 is declared NULL AND VOID except for the portion directing the issuance of an alias writ of possession. Likewise declared NULL AND VOID is the second assailed order of September 4, 1995 denying the petitioners motion for reconsideration. Let an alias writ of possession be issued and executed/implemented by the public respondent without further delay.27[27]

25 26 27

The Court of Appeals defended its affirmation of the RTCs grant of the alias writ of possession in NHAs favor by saying that it was a necessary consequence after the earlier writ was left unserved to the party. after the lapse of the redemption period. It further explained that NHA was entitled to the writ of possession as a matter of course

As to the RTCs admission of respondents petition for intervention, the appellate court opined that it was improperly and erroneously made. The Court of Appeals believed that the only recourse available to a mortgagor, in this case the respondents, in a foreclosure sale is to question the validity of the sale through a petition to set aside the sale and to cancel the writ of possession, a summary procedure provided for under Section 112 of the Land Registration Act. It also observed that the grant of the preliminary injunction by the RTC was uncalled for as it would effectively defeat the right of NHA to possession, the latter having been entitled by virtue of the grant of the alias writ of possession.

Respondents filed a motion for reconsideration.28[28] They alleged that since they raised the issue that their right of redemption had not prescribed, said fact should have changed the whole scenario such that the issuance of a writ of possession ceased to be summary in nature and was no longer ministerial. Respondents then concluded that their right to redeem the properties against NHAs right to the writ of possession must be threshed out in a hearing of the case on its merits.
28

With regard to the RTC Order dated August 4, 1992 granting the writ of possession which, according to the NHA, became final and executory, respondents argued that said order did not constitute res judicata so as to bar the filing of the petition for intervention since the said order was not a judgment on the merits that could attain finality.

Also, respondents would like the Court of Appeals to treat the petition for intervention not only as an opposition to the issuance of the alias writ of possession, but also as a proper remedy under Section 8 of Act No. 3135, as amended, in view of the various issues raised.

On November 27, 2000, the Court of Appeals, in its Amended Decision, reconsidered its earlier stance. It declared that the period of redemption had not expired as the certificate of sale had not been registered or annotated in the original copies of the titles supposedly kept with the Register of Deeds since said titles were earlier razed by fire. Taking its cue from Bass v. De la Rama where the Court purportedly made a ruling that entry of a document, such as sale of real property, in the entry book is insufficient to treat such document as registered, unless the same had been annotated on the certificate of title; the Court of Appeals went on to say that the entry of the certificate of sale in the owners duplicate of the titles could not have been sufficient to register the same since anyone who would wish to check with the Register of Deeds would not see any annotation. Thus, entry made on the owners duplicate of the titles cannot be considered notice

that would bind the whole world. Having been deprived of their right of redemption, the Court of Appeals deemed it proper to allow respondents to intervene. The dispositive part of the amended decision decrees:

WHEREFORE, the motion for reconsideration is GRANTED. Our decision dated February 24, 2000, is RECONSIDERED and SET ASIDE and the petition DISMISSED.29[29]

Unfazed, NHA filed a motion for reconsideration, which the Court of Appeals denied in its July 19, 2001 Resolution, to wit:

ACCORDINGLY, the Motion for Reconsideration dated February 24, 2000 is DENIED for lack of merit.30[30]

Hence, the instant petition.

In its memorandum, NHA tendered the following issues:

1.

WHETHER OR NOT THE ANNOTATION OF THE SHERIFFS CERTIFICATE OF SALE IN THE PRIMARY ENTRY BOOK OF THE REGISTER OF DEEDS AND ON THE OWNERS DUPLICATE TITLE IS SUFFICIENT COMPLIANCE WITH THE REQUIREMENT OF LAW ON REGISTRATION.

29 30

2.

WHETHER OR NOT THE CASE OF BASS VS. DE LA RAMA HAS BEEN SUPERSEDED.31[31]

Respondents, on the other hand, offered the following as issues:

I WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT THE LOWER COURT DID NOT ACT WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN ADMITTING THE RESPONDENTS INTERVENTION AND GRANTING THE EQUITABLE WRIT OF INJUNCTION THEREBY DISMISSING THE PETITION FOR CERTIORARI AND PROHIBITION.

II WHETHER OR NOT THE INSTANT PETITION COMPLIES WITH THE REQUIREMENTS OF RULE 45 OF THE RULES OF COURT.32[32]

On the procedural aspect, respondents question NHAs alleged failure to include in its petition copies of material portions of the record such as pleadings filed in the RTC and the Court of Appeals as required under Section 4, Rule 45 of the Rules of Court. Respondents also pointed out the purported defective verification of NHA in view of the fact that it merely stated that the one verifying had read the allegations of the petition and that the same were true and correct to the best of his knowledge. According to respondents, such declarations were not in accordance with the rules which require that a verified pleading must state that the
31 32

affiant had read the pleading and that the allegations therein were true and correct based on his personal knowledge and not only to the best of his knowledge.

As to the merits, NHA stresses that the annotation and entry in the owners duplicate certificate of titles of the sheriffs certificate of sale are sufficient compliance with the requirement of law on registration. To support this, NHA refers to Land Registration Administration Circular No. 3 dated December 6, 1988, entitled Entry and Provisional Registration of Instruments Pending Reconstitution of Title which allegedly authorized all Registers of Deeds to accept for entry and provisional registration instruments affecting lost or destroyed certificates of title pending reconstitution of the original. The legality and validity of the disputed registration on its duplicate copies of the sheriffs certificate of sale, NHA insists, are backed by this Courts ruling in Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija,33[33] where purportedly, this Court made a favorable interpretation of Section 56 of Presidential Decree No. 1529. NHA says that the inscription of the sheriffs certificate of sale only to the owners duplicate copies, but not to those in the custody of the register of deeds is justified as the latter were burned down. Thus, it could not be blamed for the non-registration of the sale in the original copies.

NHA faults the Court of Appeals reliance on Bass v. De la Rama since the ruling therein stating that entry and annotation of a sale instrument on the owners duplicate copy only as insufficient registration, was already abandoned in Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija ,
33

where it was allegedly ruled that the primary entry alone of the transaction produces the effect of registration so long as the registrant has complied with all that is required of him for purposes of entry and annotation.

In contrast, respondents submit that annotation of the sheriffs certificate of sale on the owners copy is inadequate to propel the running of the redemption period. They firmly believe that for the sale instrument to be considered as registered, the inscription must be made on the reconstituted titles.

Respondents disagree with NHAs opinion that Bass v. De la Rama was superceded by Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija. They are of the persuasion that the ruling in DBP pertains exclusively to the unique factual milieu and the issues attendant therein, but not to the instant case where Bass purportedly applies. Respondents also assail NHAs citation of Sta. Ignacia Rural Bank, Inc. v. Court of Appeals.34[34] According to them, said case finds no application to the instant controversy because the issue involved in the former was whether the redemption period should be reckoned from the date of the auction sale or the registration of the certificate of sale, which ostensibly is not the bone of contention in this case.

Ascribing NHAs inaction to have the burned titles reconstituted, respondents assert that such neglect should not be used as a justification for the
34

non-inscription in the original titles of the certificate of sale.

Additionally,

respondents insist that the question of whether the redemption period should be reckoned from the inscription on the owners duplicate copies is a factual and legal issue that is appropriately adjudicated in a hearing on the merits of their petition in intervention, and not in the instant special civil action for certiorari and prohibition which is limited in scope, namely, whether the RTC committed grave abuse of discretion amounting to lack of jurisdiction in admitting their petition in intervention.

Respondents reiterate that the issuance of the writ of possession prayed for by NHA before the RTC is no longer ministerial since it raised the issue of whether their period of redemption has already expired. They cite Barican v. Intermediate Appellate Court35[35] as the authority to this argument.

We dwell first with the procedural issues before the main controversy. Respondents contend that the instant petition is dismissible on the ground that NHA failed to attach pleadings filed in the RTC and the Court of Appeals as required under Section 4, Rule 45 of the Rules of Court which partly provides:

SEC. 4. Contents of petition. The petition shall be filed in eighteen (18) copies, with the original copy intended for the court being indicated as such by the petitioner, and shall x x x (d) be accompanied by a clearly legible duplicate original, or a certified true copy of the judgment or final order or resolution certified by the clerk of court of the court a quo and the requisite number of plain
35

copies thereof, and such material portions of the record as would support the petition; x x x.

In its petition, NHA attached the February 24, 2000 Decision, the November 27, 2000 Amended Decision, and the July 19, 2001 Resolution all of the Court of Appeals; copies of the transfer certificates of title of the disputed properties; and the June 13, 1994 Order of the Quezon City RTC ordering the reconstitution of the said titles. This Court finds that NHA substantially complied with the requirements under Section 4 of Rule 45. The same conclusion was arrived at by this Court in Development Bank of the Philippines v. Family Foods Manufacturing Co., Ltd.36[36] when it was faced with the same procedural objection, thus:

As held by this Court in Air Philippines Corporation v. Zamora: [E]ven if a document is relevant and pertinent to the petition, it need not be appended if it is shown that the contents thereof can also [be] found in another document already attached to the petition. Thus, if the material allegations in a position paper are summarized in a questioned judgment, it will suffice that only a certified true copy of the judgment is attached. Third, a petition lacking an essential pleading or part of the case record may still be given due course or reinstated (if earlier dismissed) upon showing that petitioner later submitted the documents required, or that it will serve the higher interest of justice that the case be decided on the merits. Nevertheless, even if the pleadings and other supporting documents were not attached to the petition, the dismissal is unwarranted because the CA records containing the promissory notes and the real estate and chattel mortgages were elevated to this Court. Without a doubt, we have sufficient basis to actually and completely dispose of the case.

36

We must stress that cases should be determined on the merits, after all parties have been given full opportunity to ventilate their causes and defenses, rather than on technicalities or procedural imperfections. In that way, the ends of justice would be served better. Rules of procedure are mere tools designed to expedite the decision or resolution of cases and other matters pending in court. A strict and rigid application of rules, resulting in technicalities that tend to frustrate rather than promote substantial justice, must be avoided. In fact, Section 6 of Rule 1 states that the Rules shall be liberally construed in order to promote their objective of ensuring the just, speedy and inexpensive disposition of every action and proceeding.

Contrary to respondents assertion, NHAs verification conforms to the rule. Section 4, Rule 7 of the Rules of Court states:

SEC. 4. Verification. Except when otherwise specifically required by law or rule, pleadings need not be under oath, verified or accompanied by affidavit. A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his personal knowledge or based on authentic records. A pleading required to be verified which contains a verification based on information and belief, or upon knowledge, information and belief, or lacks a proper verification, shall be treated as an unsigned pleading.

The reason for requiring verification in the petition is to secure an assurance that the allegations of a pleading are true and correct; are not speculative or merely imagined; and have been made in good faith.37[37] To achieve this purpose, the verification of a pleading is made through an affidavit or sworn statement

37

confirming that the affiant has read the pleading whose allegations are true and correct of the affiant's personal knowledge or based on authentic records.38[38]

The General Manager of NHA verified the petition as follows:

3. I have read the allegations contained therein and that the same are true and correct to the best of my own personal knowledge.39[39]

A reading of the above verification reveals nothing objectionable about it. ANSWER: NO. The affiant confirmed that he had read the allegations in the petition which were true and correct based on his personal knowledge. The addition of the words to the best before the phrase of my personal knowledge did not violate the requirement under Section 4 of Rule 7, it being sufficient that the affiant declared that the allegations in the petition are true and correct based on his personal knowledge.

Now, as to the merits of the case. The main issue before us is whether the annotation of the sheriffs certificate of sale on the owners duplicate certificate of

38 39

titles is sufficient registration considering that the inscription on the original certificates could not be made as the same got burned.

Jurisprudence is replete with analogous cases. Of foremost importance is Development Bank of the Philippines v. Acting Register of Deeds of Nueva Ecija40[40] where the Court listed cases where the transaction or instrument was annotated not on the original certificate but somewhere else. In that case, DBP, following the extrajudicial foreclosure sale where it emerged as the highest bidder, registered with the Register of Deeds the sheriffs certificate of sale in its favor. After it had paid the required fees, said transaction was entered in the primary entry book. However, the annotation of the said transaction to the originals of the certificates of title could not be done because the same titles were missing from the files of the Registry. This prompted DBP to commence reconstitution proceedings of the lost titles. Four years had passed before the missing certificates of title were reconstituted. When DBP sought the inscription of the four-year old sale transaction on the reconstituted titles, the Acting Register of Deeds, being in doubt of the proper action to take, referred the matter to the Commissioner of the Land Registration Authority by consulta, the latter resolved against the annotation of the sale transaction and opined that said entry was ineffective due to the impossibility of accomplishing registration at the time the document was entered because of the non-availability of the certificate (sic) of title involved. 41[41] In other words, annotation on the primary book was deemed insufficient registration. The Court disagreed with this posture. Considering that DBP had paid all the fees and complied with all the requirements for purposes of both primary entry and
40 41

annotation of the certificate of sale, the Court declared that mere entry in the primary book was considered sufficient registration since [DBP] cannot be blamed that annotation could not be made contemporaneously with the entry because the originals of the subject certificates of title were missing and could not be found, since it had nothing to do with their safekeeping. If anyone was responsible for failure of annotation, it was the Register of Deeds who was chargeable with the keeping and custody of those documents. 42[42] To buttress its conclusion, the Court reviewed the relevant jurisprudence starting from 1934. The Court noted that before the Second World War, particularly in Government of the Philippine Islands v. Aballe,43[43] the prevailing doctrine was an inscription in the book of entry even without the notation on the certificate of title was considered as satisfactory and produced all the effects which the law gave to its registration. During the war, however, the Court observed that there was apparent departure from said ruling since in Bass v. De la Rama, the holding was that entry of an instrument in the primary entry book does not confer any legal effect without a memorandum thereof inscribed on the certificate of title. 44[44] DBP noted that Bass v. De la Rama, however, survived only for a little while since later cases appear to have applied the Aballe ruling that entry in the day book, even without the corresponding annotation on the certificate of title, is equivalent to, or produces the effect of, registration to voluntary transactions, provided the requisite fees are paid and the owners duplicates of the certificates of title affected are presented.45[45]

42 43 44 45

These later cases are Levin v. Bass46[46] and Potenciano v. Dineros,47[47] both of which involve the issue of whether entry in the day book of a deed of sale, payment of the fees, and presentation of the owners duplicate certificate of title constitute a complete act of registration.48[48]

Simply, respondents resort to Bass v. De la Rama is futile as the same was abandoned by the later cases, i.e., Bass, Potenciano and DBP.

In the recent case of Autocorp Group v. Court of Appeals,49[49] the respondent was awarded the foreclosed parcels of land. A sheriffs certificate of sale was thereafter issued in its favor. Thereafter, petitioners in that case filed a complaint before the RTC with a prayer for the issuance of an ex parte TRO aimed at preventing the Register of Deeds from registering the said certificate of sale in the name of the respondent and from taking possession of the subject properties. 50 [50] Before the RTC could issue a TRO, respondent presented the sheriffs certificate of sale to the Register of Deeds who entered the same certificate in the primary book, even if the registration fee was paid only the following day. Four days after, the RTC issued a TRO directing the Register of Deeds to refrain from
46 47 48 49 50

registering the said sheriffs certificate of sale. A preliminary injunction was thereafter issued as the TRO was about to expire. The preliminary injunction was questioned by therein respondent. One of the main issues raised there was whether the entry of the certificate of sale in the primary book was equivalent to registration such that the TRO and the preliminary injunction issues would not lie anymore as the act sought to be restrained had become an accomplished act. The Court held that the TRO and the preliminary injunction had already become moot and academic by the earlier entry of the certificate of sale in the primary entry book which was tantamount to registration, thus:

In fine, petitioners prayer for the issuance of a writ of injunction, to prevent the register of deeds from registering the subject certificate of sale, had been rendered moot and academic by the valid entry of the instrument in the primary entry book. Such entry is equivalent to registration . Injunction would not lie anymore, as the act sought to be enjoined had already become a fait accompli or an accomplished act.51[51]

Indeed, the prevailing rule is that there is effective registration once the registrant has fulfilled all that is needed of him for purposes of entry and annotation, so that what is left to be accomplished lies solely on the register of deeds. The Court thus once held:

Current doctrine thus seems to be that entry alone produces the effect of registration, whether the transaction entered is a voluntary or an involuntary one, so long as the registrant has complied with all that is required of him for purposes of entry and annotation, and nothing more remains to be done but a duty incumbent solely on the register of deeds.52[52]
51

In the case under consideration, NHA presented the sheriffs certificate of sale to the Register of Deeds and the same was entered as Entry No. 2873 and said entry was further annotated in the owners transfer certificate of title. 53[53] A year later and after the mortgagors did not redeem the said properties, respondents filed with the Register of Deeds an Affidavit of Consolidation of Ownership 54[54]after which the same instrument was presumably entered into in the day book as the same was annotated in the owners duplicate copy.55[55] Just like in DBP, Levin, Potenciano and Autocorp, NHA followed the procedure in order to have its sheriffs certificate of sale annotated in the transfer certificates of title. There would be, therefore, no reason not to apply the ruling in said cases to this one. It was not NHAs fault that the certificate of sale was not annotated on the transfer certificates of title which were supposed to be in the custody of the Registrar, since the same were burned. Neither could NHA be blamed for the fact that there were no reconstituted titles available during the time of inscription as it had taken the necessary steps in having the same reconstituted as early as July 15, 1988. 56[56] NHA did everything within its power to assert its right.

While it may be true that, in DBP, the Court ruled that in the particular situation here obtaining, annotation of the disputed entry on the reconstituted
52 53 54 55 56

originals of the certificates of title to which it refers is entirely proper and justified, this does not mean, as respondents insist, that the ruling therein applies exclusively to the factual milieu and the issue obtaining in said case, and not to similar cases. There is nothing in the subject declaration that categorically states its pro hac vice character. For in truth, what the said statement really conveys is that the current doctrine that entry in the primary book produces the effect of registration can be applied in the situation obtaining in that case since the registrant therein complied with all that was required of it, hence, it was fairly reasonable that its acts be given the effect of registration, just as the Court did in the past cases. In fact the Court there continued with this pronouncement:

To hold said entry ineffective, as does the appealed resolution, amounts to declaring that it did not, and does not, protect the registrant (DBP) from claims arising, or transactions made, thereafter which are adverse to or in derogation of the rights created or conveyed by the transaction thus entered. That, surely, is a result that is neither just nor can, by any reasonable interpretation of Section 56 of Presidential Decree No. 1529 be asserted as warranted by its terms.57[57]

What is more, in Autocorp Group v. Court of Appeals,58[58] the pertinent DBP ruling was applied, thereby demonstrating that the said ruling in DBP may be applied to other cases with similar factual and legal issues, viz:

Petitioners contend that the aforecited case of DBP is not apropos to the case at bar. Allegedly, in DBP, the bank not only paid the registration fees but also presented the owners duplicate certificate of title. We find no merit in petitioners posture x x x.
57 58

xxxx Like in DBP v. Acting Register of Deeds of Nueva Ecija, the instrument involved in the case at bar, is a sheriffs certificate of sale, We hold now, as we held therein, that the registrant is under no necessity to present the owners duplicates of the certificates of title affected, for purposes of primary entry, as the transaction sought to be recorded is an involuntary transaction. xxxx x x x Such entry is equivalent to registration. Injunction would not lie anymore, as the act sought to be enjoined had already become a fait accompli or an accomplished act.59[59]

Moreover, respondents stand on the non-applicability of the DBP case to other cases, absent any statement thereof to such effect, contravenes the principle of stare decisis which urges that courts are to apply principles declared in prior decisions that are substantially similar to a pending case.60[60]

Since entry of the certificate of sale was validly registered, the redemption period accruing to respondents commenced therefrom, since the one-year period of redemption is reckoned from the date of registration of the certificate of sale. 61[61] It must be noted that on April 16, 1991, the sheriffs certificate of sale was registered and annotated only on the owners duplicate copies of the titles and on April 16, 1992, the redemption period expired, without respondents having redeemed the properties. In fact, on April 24, 1992, NHA executed an Affidavit of

59 60 61

Consolidation of Ownership. Clearly, respondents have lost their opportunity to redeem the properties in question.

As regards respondents allegation on the defect in the publication and notice requirements of the extrajudicial foreclosure sale, the same is unavailing. The rule is that it is the mortgagor who alleges absence of a requisite who has the burden of establishing such fact.62[62] This is so because foreclosure proceedings have in their favor the presumption of regularity and the burden of evidence to rebut the same is on the party who questions it. 63[63] Here, except for their bare allegations, respondents failed to present any evidence to support them. In addition, NHA stated in its Comment to Motion for Leave of Court to Intervene that it had complied with the publication of the Notice of Sheriffs Sale in the Manila Times in the latters issues dated July 14, 21 and 28, 1990. 64[64] It also claimed that an Affidavit of Publication of said newspaper was attached as Annex B in the said comment.65[65] NHA also said that respondents had been furnished with a copy of the Notice of Sheriffs Sale as shown at the bottom portion of said notice.66[66] From all these, it would tend to show that respondents aspersion of non-compliance with the requirements of foreclosure sale is a futile attempt to salvage its statutory right to redeem their foreclosed properties, which right had long been lost by inaction.
62 63 64 65 66

Considering that the foreclosure sale and its subsequent registration with the Register of Deeds were done validly, there is no reason for the non-issuance of the writ of possession. A writ of possession is an order directing the sheriff to place a person in possession of a real or personal property, such as when a property is extrajudicially foreclosed.67[67] Section 7 of Act No. 3135 provides for the rule in the issuance of the writ of possession involving extrajudicial foreclosure sales of real estate mortgage, to wit:

Sec. 7. In any sale made under the provisions of this Act, the purchaser may petition the [Regional Trial Court] of the province or place where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of this Act. Such petition shall be made under oath and filed in the form of an ex parte motion in the registration or cadastral proceedings if the property is registered, or in special proceedings in the case of property registered under the Mortgage Law or under section one hundred and ninety-four of the Administrative Code, or of any other real property encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any existing law, and in each case the clerk of the court shall, upon the filing of such petition, collect the fees specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four Hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately.

This provision of law authorizes the purchaser in a foreclosure sale to apply for a writ of possession during the redemption period by filing an ex parte motion under oath for that purpose in the corresponding registration or cadastral
67

proceeding in the case of property with Torrens title. 68[68] Upon the filing of such motion and the approval of the corresponding bond, the law also in express terms directs the court to issue the order for a writ of possession.69[69]

The time-honored precept is that after the consolidation of titles in the buyers name, for failure of the mortgagor to redeem, the writ of possession becomes a matter of right.70[70] Its issuance to a purchaser in an extrajudicial foreclosure is merely a ministerial function.71[71] The writ of possession issues as a matter of course upon the filing of the proper motion and the approval of the corresponding bond. The judge issuing the writ following these express provisions of law neither exercises his official discretion nor judgment. 72[72] As such, the court granting the writ cannot be charged with having acted without jurisdiction or with grave abuse of discretion.73[73] To accentuate the writs ministerial character, the Court disallowed injunction to prohibit its issuance despite a pending action for annulment of mortgage or the foreclosure itself.74[74]

68 69 70 71 72 73 74

Believing that the instant case does not come within the penumbra of the foregoing rule, respondents resort to the ruling in Barican v. Intermediate Appellate Court.75[75] Unfortunately for them, the instant case does not even come close to the cited case. There, the Court deemed it inequitable to issue a writ of possession in favor of the purchaser in the auction sale considering that the property involved was already in the possession of a third person by virtue of a deed of sale with assumption of mortgage even before the purchaser could register the sheriffs certificate of sale. Also, the auction buyer therein unreasonably These deferred to exercise its right to acquire possession over the property. circumstances are not present in the instant case.

Moreover, in Fernandez v. Espinoza,76[76] the Court refused to apply the ruling in Barican v. Intermediate Appellate Court77[77] and Cometa v. Intermediate Appellate Court,78[78] two cases which are exemptions to the stated rule, reasoning that:

In Cometa, which actually involved execution of judgment for the prevailing party in a damages suit, the subject properties were sold at the public auction at an unusually lower price, while in Barican, the mortgagee bank took five years from the time of foreclosure before filing the petition for the issuance of writ of possession. We have considered these equitable and peculiar circumstances in Cometa and Barican to justify the relaxation of the otherwise absolute rule. None of these exceptional circumstances, however, attended herein so as to place the instant case in the same stature as that of Cometa and Barican. Instead, the ruling
75 76 77 78

in Vaca v. Court of Appeals is on all fours with the present petition. In Vaca, there is no dispute that the property was not redeemed within one year from the registration of the extrajudicial foreclosure sale; thus, the mortgagee bank acquired an absolute right, as purchaser, to the issuance of the writ of possession. Similarly, UOB, as the purchaser at the auction sale in the instant case, is entitled as a matter of right, to the issuance of the writ of possession.

Just as in Fernandez, this Court does not see any compelling reason to veer away from the established rule.

In fine, this Court finds that the Court of Appeals committed reversible error in ruling that the annotation of NHAs sheriffs certificate of sale on the duplicate certificates of title was not effective registration and in holding that respondents redemption period had not expired.

WHEREFORE, premises considered, the instant petition is hereby GRANTED. The Amended Decision of the Court of Appeals dated November 27, 2000 is SET ASIDE.

SO ORDERED.
CITING THE CASES OF NELLIE VDA. DE FORMOSO and her children, namely, MA. THERESA FORMOSOPESCADOR, ROGER FORMOSO, MARY JANE FORMOSO, BERNARD FORMOSO and PRIMITIVO MALCABA, Petitioners, vs. PHILIPPINE NATIONAL BANK, FRANCISCO ARCE, ATTY. BENJAMIN BARBERO, and ROBERTO NAVARRO, Respondents. G.R. No. 154704 June 1, 2011

DECISION MENDOZA, J.: Assailed in this petition are the January 25, 2002 Resolution 1 and the August 8, 2002 Resolution 2 of the Court of Appeals (CA) which dismissed the petition for certiorari filed by the petitioners on the ground that the verification and certification of non-forum shopping was signed by only one of the petitioners in CA G.R. SP No. 67183, entitled " Nellie P. Vda. De Formoso, et al. v. Philippine National Bank, et al." The Factual and Procedural Antecedents Records show that on October 14, 1989, Nellie Panelo Vda. De Formoso (Nellie) and her children namely: Ma. Theresa Formoso-Pescador, Roger Formoso, Mary Jane Formoso, Bernard Formoso, and Benjamin Formoso, executed a special power of attorney in favor of Primitivo Malcaba (Malcaba) authorizing him, among others, to secure all papers and documents including the owners copies of the titles of real properties pertaining to the loan with real estate mortgage originally secured by Nellie and her late husband, Benjamin S. Formoso, from Philippine National Bank, Vigan Branch (PNB) on September 4, 1980. On April 20, 1990, the Formosos sold the subject mortgaged real properties to Malcaba through a Deed of Absolute Sale. Subsequently, on March 22, 1994, Malcaba and his lawyer went to PNB to fully pay the loan obligation including interests in the amount of 2,461,024.74. PNB, however, allegedly refused to accept Malcabas tender of payment and to release the mortgage or surrender the titles of the subject mortgaged real properties. On March 24, 1994, the petitioners filed a Complaint for Specific Performance against PNB before the Regional Trial Court of Vigan, Ilocos Sur (RTC) praying, among others, that PNB be ordered to accept the amount of 2,461,024.74 as full settlement of the loan obligation of the Formosos. After an exchange of several pleadings, the RTC finally rendered its decision 3 on October 27, 1999 favoring the petitioners. The petitioners prayer for exemplary or corrective damages, attorneys fees, and annual interest and daily interest, however, were denied for lack of evidence. PNB filed a motion for reconsideration but it was denied for failure to comply with Rule 15, Section 5 of the 1997 Rules of Civil Procedure. PNB then filed a Notice of Appeal but it was dismissed for being filed out of time. The petitioners received their copy of the decision on November 26, 1999, and on January 25, 2001, they filed their Petition for Relief from Judgment 4 questioning the RTC decision that there

was no testimonial evidence presented to warrant the award for moral and exemplary damages. They reasoned out that they could not then file a motion for reconsideration because they could not get hold of a copy of the transcripts of stenographic notes. In its August 6, 2001 Order, the RTC denied the petition for lack of merit.5 On September 7, 2001, the petitioners moved for reconsideration but it was denied by the RTC in its Omnibus Order of September 26, 2001.6 Before the Court of Appeals On November 29, 2001, the petitioners filed a petition for certiorari before the CA challenging the RTC Order of August 6, 2001 and its Omnibus Order dated September 26, 2001. In its January 25, 2002 Resolution, the CA dismissed the petition stating that: The verification and certification of non-forum shopping was signed by only one (Mr. Primitivo Macalba) of the many petitioners. In Loquias v. Office of the Ombudsman, G.R. No. 139396, August 15, 2000, it was ruled that all petitioners must be signatories to the certification of nonforum shopping unless the one who signed it is authorized by the other petitioners. In the case at bar, there was no showing that the one who signed was empowered to act for the rest. Therefore, it cannot be presumed that the one who signed knew to the best of his knowledge whether his copetitioners had the same or similar claims or actions filed or pending. The ruling in Loquias further declared that substantial compliance will not suffice in the matter involving strict observance of the Rules. Likewise, the certification of non-forum shopping requires personal knowledge of the party who executed the same and that petitioners must show reasonable cause for failure to personally sign the certification. Utter disregard of the Rules cannot just be rationalized by harping on the policy of liberal construction. Aggrieved, after the denial of their motion for reconsideration, the petitioners filed this petition for review anchored on the following GROUNDS THE COURT OF APPEALS PATENTLY ERRED IN RULING THAT ALL THE PETITIONERS MUST SIGN THE VERIFICATION AND CERTIFICATION OF NONFORUM SHOPPING IN A PETITION FOR CERTIORARI WHEREIN ONLY QUESTIONS OF LAW ARE INVOLVED. ALTERNATIVELY, THE COURT OF APPEALS PATENTLY ERRED IN DISMISSING THE WHOLE PETITION WHEN AT THE VERY LEAST THE PETITION INSOFAR AS PETITIONER MALCABA IS CONCERNED BEING THE SIGNATORY THEREOF SHOULD HAVE BEEN GIVEN DUE COURSE. THE COURT OF APPEALS PATENTLY ERRED IN GIVING MORE WEIGHT ON TECHNICALITIES WHEN THE PETITION BEFORE IT WAS CLEARLY MERITORIOUS. 7

The petitioners basically argue that they have substantially complied with the requirements provided under the 1997 Rules of Civil Procedure on Verification and Certification of NonForum Shopping. The petitioners are of the view that the rule on Verification and Certification of Non-Forum Shopping that all petitioners must sign should be liberally construed, since only questions of law are raised in a petition for certiorari and no factual issues that require personal knowledge of the petitioners. The petitioners further claim that they have a meritorious petition because contrary to the ruling of the RTC, their Petition for Relief clearly showed that, based on the transcript of stenographic notes, there was enough testimonial evidence for the RTC to grant them damages and attorneys fees as prayed for. On the other hand, PNB counters that the mandatory rule on the certification against forum shopping requires that all of the six (6) petitioners must sign, namely: Nellie Vda. De Formoso and her children Ma. Theresa Formoso-Pescador, Roger Formoso, Mary Jane Formoso, and Bernard Formoso, and Primitivo Malcaba. Therefore, the signature alone of Malcaba on the certification is insufficient. PNB further argues that Malcaba was not even a party or signatory to the contract of loan entered into by his co-petitioners. Neither was there evidence that Malcaba is a relative or a co-owner of the subject properties. It likewise argues that, contrary to the stance of the petitioners, the issue raised before the CA, as to whether or not the petitioners were entitled to moral and exemplary damages as well as attorneys fees, is a factual one. Finally, PNB asserts that the body of the complaint filed by the petitioners failed to show any allegation that Macalba alone suffered damages for which he alone was entitled to reliefs as prayed for. PNB claims that the wordings of the complaint were clear that all the petitioners were asking for moral and exemplary damages and attorneys fees. OUR RULING The petition lacks merit. Certiorari is an extraordinary, prerogative remedy and is never issued as a matter of right. Accordingly, the party who seeks to avail of it must strictly observe the rules laid down by law. 8 Section 1, Rule 65 of the 1997 Rules of Civil Procedure provides: SECTION 1. Petition for certiorari.- When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of Section 3, Rule 46. [Emphasis supplied] Under Rule 46, Section 3, paragraph 3 of the 1997 Rules of Civil Procedure, as amended, petitions for certiorari must be verified and accompanied by a sworn certification of non-forum shopping. SECTION 3. Contents and filing of petition; effect of non-compliance with requirements. The petition shall contain the full names and actual addresses of all the petitioners and respondents, a concise statement of the matters involved, the factual background of the case, and the grounds relied upon for the relief prayed for. In actions filed under Rule 65, the petition shall further indicate the material dates showing when notice of the judgment or final order or resolution subject thereof was received, when a motion for new trial or reconsideration, if any, was filed and when notice of the denial thereof was received. It shall be filed in seven (7) clearly legible copies together with proof of service thereof on the respondent with the original copy intended for the court indicated as such by the petitioner, and shall be accompanied by a clearly legible duplicate original or certified true copy of the judgment, order, resolution, or ruling subject thereof, such material portions of the record as are referred to therein, and other documents relevant or pertinent thereto. The certification shall be accomplished by the proper clerk of court or his duly authorized representative, or by the proper officer of the court, tribunal, agency or office involved or by his duly authorized representative. The other requisite number of copies of the petition shall be accompanied by clearly legible plain copies of all documents attached to the original. The petitioner shall also submit together with the petition a sworn certification that he has not theretofore commenced any other action involving the same issues in the Supreme Court, the Court of Appeals or different divisions thereof, or any other tribunal or agency; if there is such other action or proceeding, he must state the status of the same; and if he should thereafter learn that a similar action or proceeding has been filed or is pending before the Supreme Court, the Court of Appeals, or different divisions thereof, or any other tribunal or agency, he undertakes to promptly inform the aforesaid courts and other tribunal or agency thereof within five (5) days therefrom. The petitioner shall pay the corresponding docket and other lawful fees to the clerk of court and deposit the amount of P500.00 for costs at the time of the filing of the petition. The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for the dismissal of the petition. [Emphases supplied] The acceptance of a petition for certiorari as well as the grant of due course thereto is, in general, addressed to the sound discretion of the court. Although the Court has absolute discretion to

reject and dismiss a petition for certiorari, it does so only (1) when the petition fails to demonstrate grave abuse of discretion by any court, agency, or branch of the government; or (2) when there are procedural errors, like violations of the Rules of Court or Supreme Court Circulars.9 [Emphasis supplied] In the case at bench, the petitioners claim that the petition for certiorari that they filed before the CA substantially complied with the requirements provided for under the 1997 Rules of Civil Procedure on Verification and Certification of Non-Forum Shopping. The Court disagrees. Sections 4 and 5 of Rule 7 of the 1997 Rules of Civil Procedure provide: SEC. 4. Verification. Except when otherwise specifically required by law or rule, pleadings need not be under oath, verified or accompanied by affidavit. A pleading is verified by an affidavit that the affiant has read the pleadings and that the allegations therein are true and correct of his personal knowledge or based on authentic records. A pleading required to be verified which contains a verification based on "information and belief" or upon "knowledge, information and belief" or lacks a proper verification, shall be treated as an unsigned pleading. SEC. 5. Certification against forum shopping. The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed. Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing. The submission of a false certification or non-compliance with any of the undertakings therein shall constitute indirect contempt of court, without prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall constitute direct contempt, as well as a cause for administrative sanctions. x x x. In this regard, the case of Oldarico S. Traveno v. Bobongon Banana Growers Multi-Purpose Cooperative,10 is enlightening:

Respecting the appellate courts dismissal of petitioners appeal due to the failure of some of them to sign the therein accompanying verification and certification against forum-shopping, the Courts guidelines for the bench and bar in Altres v. Empleo, which were culled "from jurisprudential pronouncements," are instructive: For the guidance of the bench and bar, the Court restates in capsule form the jurisprudential pronouncements already reflected above respecting non-compliance with the requirements on, or submission of defective, verification and certification against forum shopping: 1) A distinction must be made between non-compliance with the requirement on or submission of defective verification, and non-compliance with the requirement on or submission of defective certification against forum shopping. 2) As to verification, non-compliance therewith or a defect therein does not necessarily render the pleading fatally defective. The Court may order its submission or correction or act on the pleading if the attending circumstances are such that strict compliance with the Rule may be dispensed with in order that the ends of justice may be served thereby. 3) Verification is deemed substantially complied with when one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the petition have been made in good faith or are true and correct. 4) As to certification against forum shopping, non-compliance therewith or a defect therein, unlike in verification, is generally not curable by its subsequent submission or correction thereof, unless there is a need to relax the Rule on the ground of "substantial compliance" or presence of "special circumstances or compelling reasons." 5) The certification against forum shopping must be signed by all the plaintiffs or petitioners in a case; otherwise, those who did not sign will be dropped as parties to the case. Under reasonable or justifiable circumstances, however, as when all the plaintiffs or petitioners share a common interest and invoke a common cause of action or defense, the signature of only one of them in the certification against forum shopping substantially complies with the Rule. 6) Finally, the certification against forum shopping must be executed by the partypleader, not by his counsel. If, however, for reasonable or justifiable reasons, the partypleader is unable to sign, he must execute a Special Power of Attorney designating his counsel of record to sign on his behalf. The petition for certiorari filed with the CA stated the following names as petitioners: Nellie Panelo Vda. De Formoso, Ma. Theresa Formoso-Pescador, Roger Formoso, Mary Jane Formoso, Bernard Formoso, Benjamin Formoso, and Primitivo Malcaba. Admittedly, among the seven (7) petitioners mentioned, only Malcaba signed the verification and certification of non-forum shopping in the subject petition. There was no proof that Malcaba was

authorized by his co-petitioners to sign for them. There was no special power of attorney shown by the Formosos authorizing Malcaba as their attorney-in-fact in filing a petition for review on certiorari. Neither could the petitioners give at least a reasonable explanation as to why only he signed the verification and certification of non-forum shopping. In Athena Computers, Inc. and Joselito R. Jimenez v. Wesnu A. Reyes, the Court explained that: The verification of the petition and certification on non-forum shopping before the Court of Appeals were signed only by Jimenez. There is no showing that he was authorized to sign the same by Athena, his co-petitioner. Section 4, Rule 7 of the Rules states that a pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his knowledge and belief. Consequently, the verification should have been signed not only by Jimenez but also by Athenas duly authorized representative. In Docena v. Lapesura, we ruled that the certificate of non-forum shopping should be signed by all the petitioners or plaintiffs in a case, and that the signing by only one of them is insufficient. The attestation on non-forum shopping requires personal knowledge by the party executing the same, and the lone signing petitioner cannot be presumed to have personal knowledge of the filing or non-filing by his co-petitioners of any action or claim the same as similar to the current petition. The certification against forum shopping in CA-G.R. SP No. 72284 is fatally defective, not having been duly signed by both petitioners and thus warrants the dismissal of the petition for certiorari. We have consistently held that the certification against forum shopping must be signed by the principal parties. With respect to a corporation, the certification against forum shopping may be signed for and on its behalf, by a specifically authorized lawyer who has personal knowledge of the facts required to be disclosed in such document. While the Rules of Court may be relaxed for persuasive and weighty reasons to relieve a litigant from an injustice commensurate with his failure to comply with the prescribed procedures, nevertheless they must be faithfully followed. In the instant case, petitioners have not shown any reason which justifies relaxation of the Rules. We have held that procedural rules are not to be belittled or dismissed simply because their non-observance may have prejudiced a partys substantive rights. Like all rules, they are required to be followed except for the most persuasive of reasons when they may be relaxed. Not one of these persuasive reasons is present here. In fine, we hold that the Court of Appeals did not err in dismissing the petition for certiorari in view of the procedural lapses committed by petitioners.11 [Emphases supplied] Furthermore, the petitioners argue that the CA should not have dismissed the whole petition but should have given it due course insofar as Malcaba is concerned because he signed the certification. The petitioners also contend that the CA should have been liberal in the application of the Rules because they have a meritorious case against PNB. The Court, however, is not persuaded.

The petitioners were given a chance by the CA to comply with the Rules when they filed their motion for reconsideration, but they refused to do so. Despite the opportunity given to them to make all of them sign the verification and certification of non-forum shopping, they still failed to comply. Thus, the CA was constrained to deny their motion and affirm the earlier resolution.12 Indeed, liberality and leniency were accorded in some cases. 13 In these cases, however, those who did not sign were relatives of the lone signatory, so unlike in this case, where Malcaba is not a relative who is similarly situated with the other petitioners and who cannot speak for them. In the case of Heirs of Domingo Hernandez, Sr. v. Plaridel Mingoa, Sr.,14 it was written: In the instant case, petitioners share a common interest and defense inasmuch as they collectively claim a right not to be dispossessed of the subject lot by virtue of their and their deceased parents construction of a family home and occupation thereof for more than 10 years. The commonality of their stance to defend their alleged right over the controverted lot thus gave petitioners xxx authority to inform the Court of Appeals in behalf of the other petitioners that they have not commenced any action or claim involving the same issues in another court or tribunal, and that there is no other pending action or claim in another court or tribunal involving the same issues. Here, all the petitioners are immediate relatives who share a common interest in the land sought to be reconveyed and a common cause of action raising the same arguments in support thereof. There was sufficient basis, therefore, for Domingo Hernandez, Jr. to speak for and in behalf of his co-petitioners when he certified that they had not filed any action or claim in another court or tribunal involving the same issues. Thus, the Verification/Certification that Hernandez, Jr. executed constitutes substantial compliance under the Rules. [Emphasis supplied] The same leniency was accorded to the petitioner in the case of Oldarico S. Traveno v. Bobongon Banana Growers Multi-Purpose Cooperative,15 where it was stated: The same leniency was applied by the Court in Cavile v. Heirs of Cavile, because the lone petitioner who executed the certification of non-forum shopping was a relative and co-owner of the other petitioners with whom he shares a common interest. x x x16 Considering the above circumstances, the Court does not see any similarity at all in the case at bench to compel itself to relax the requirement of strict compliance with the rule regarding the certification against forum shopping. At any rate, the Court cannot accommodate the petitioners request to re-examine the testimony of Malcaba in the transcript of stenographic notes of the April 25, 1999 hearing concerning his alleged testimonial proof of damages for obvious reasons. Primarily, Section 1, Rule 45 of the Rules of Court categorically states that the petition filed shall raise only questions of law, which must be distinctly set forth. A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented

by the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact.17 In this case, the petition clearly raises a factual issue.1avvphil As correctly argued by PNB, the substantive issue of whether or not the petitioners are entitled to moral and exemplary damages as well as attorneys fees is a factual issue which is beyond the province of a petition for review on certiorari. Secondly, even if the Court glosses over the technical defects, the petition for relief cannot be granted. A perusal of the Petition for Relief of Judgment discloses that there is no fact constituting fraud, accident, mistake or excusable negligence which are the grounds therefor. From the petition itself, it appears that the petitioners counsel had a copy of the transcript of stenographic notes which was in his cabinet all along and only discovered it when he was disposing old and terminated cases.18 If he was only attentive to his records, he could have filed a motion for reconsideration or a notice of appeal in behalf of the petitioners. GEORGIA T. ESTEL, Petitioner, vs. RECAREDO P. DIEGO, SR. and RECAREDO R. DIEGO, JR., Respondents. G.R. No. 174082, January 16, 2012 DECISION PERALTA, J. Before the Court is a petition for review on certiorari seeking to annul and set aside the Decision1 promulgated on September 30, 2005 and Resolution 2 dated August 10, 2006 by the Court of Appeals (CA) in CA-G.R. SP No. 77197. The assailed Decision affirmed the Decision dated October 7, 2002 of the Regional Trial Court (RTC) of Gingoog City, Branch 27, Misamis Oriental, while the questioned Resolution denied petitioner's Motion for Reconsideration. The factual and procedural antecedents of the case are as follows: The present petition originated from a Complaint for Forcible Entry, Damages and Injunction with Application for Temporary Restraining Order filed by herein respondents Recaredo P. Diego, Sr., and Recaredo R. Diego, Jr. with the Municipal Trial Court in Cities (MTCC) of Gingoog City, Misamis Oriental. Respondents alleged that on April 16, 1991, they entered into a contract of sale of a 306 square-meter parcel of land, denominated as Lot 19, with petitioner; after receiving the amount of P17,000.00 as downpayment, petitioner voluntarily delivered the physical and material possession of the subject property to respondents; respondents had been in actual, adverse and uninterrupted possession of the subject lot since then and that petitioner never disturbed, molested, annoyed nor vexed respondents with respect to their possession of the said property; around 8:30 in the morning of July 20, 1995, petitioner, together with her two grown-up sons and five other persons, uprooted the fence surrounding the disputed lot, after which they entered its premises and then cut and destroyed the trees and plants found therein; respondent Recaredo R. Diego, Jr. witnessed the incident but found himself helpless at that time. Respondents prayed for the restoration of their possession, for the issuance of a permanent injunction against petitioner as well as payment of damages, attorney's fees and costs of suit.3

On July 26, 1995, the MTCC issued a Temporary Restraining Order 4 against petitioner and any person acting in her behalf. In her Answer with Special/Affirmative Defenses and Counterclaims, petitioner denied the material allegations in the Complaint contending that respondents were never in physical, actual, public, adverse and uninterrupted possession of the subject lot; full possession and absolute ownership of the disputed parcel of land, with all improvements thereon, had always been that of petitioner and her daughter; the agreement she entered into with the wife of respondent Recaredo P. Diego, Sr. for the sale of the subject lot had been abrogated; she even offered to return the amount she received from respondents, but the latter refused to accept the same and instead offered an additional amount of P12,000.00 as part of the purchase price but she also refused to accept their offer; the subject of the deed of sale between petitioner and respondents and what has been delivered to respondents was actually Lot 16 which is adjacent to the disputed Lot 19; that they did not destroy the improvements found on the subject lot and, in fact, any improvements therein were planted by petitioner's parents.5 On February 16, 2002, the MTCC rendered a Decision, the dispositive portion of which reads as follows: WHEREFORE, viewed in the light of the foregoing, judgment is hereby rendered in favor of the plaintiffs [herein respondents], dismissing defendant's [herein petitioner's] counterclaim and ordering the defendant, her agents and representatives: 1. To vacate the premises of the land in question and return the same to the plaintiffs; 2. To pay plaintiffs, the following, to wit: a) P100.00 a month as rentals for the use of the litigated property reckoned from the filing of the complaint until the defendant vacates the property; b) P5,000.00 representing the value of the fence and plants damaged by the defendants as actual damages; c) P20,000.00 as and for attorney's fees; d) P2,000.00 for litigation expenses; 3. Ordering the defendant to pay the cost of suit; Execution shall immediately issue upon motion unless an appeal has been perfected and the defendant to stay execution files a supersedeas bond which is hereby fixed at P10,000.00 approved by this Court and executed in favor of the plaintiffs, to pay the rents, damages and costs accruing down to the time of the judgment appealed from and unless, during the pendency of the appeal, defendant deposits with the appellate court the amount of P100.00 as monthly rental due from time to time on or before the 10th day of each succeeding month or period.

SO ORDERED.6 Aggrieved, petitioner appealed to the RTC of Gingoog City.7 On October 7, 2002, the RTC rendered its Decision 8 affirming the assailed Decision of the MTCC. Petitioner then filed a petition for review with the CA. On September 30, 2005, the CA promulgated its Decision which affirmed the Decision of the RTC. Petitioner filed a Motion for Reconsideration, but the CA denied it in its Resolution dated August 10, 2006. Hence, the instant petition based on the following arguments: [THE] COURT OF APPEALS, 23rd DIVISION, ERRED IN FAILING TO CONSIDER THAT THE RTC BRANCH 27 OF GINGOOG CITY ERRONEOUSLY CONCLUDED THAT THE MTCC OF GINGOOG CITY HAS JURISDICTION OVER THE SUBJECT MATTER OF THE ACTION. [THE] COURT OF APPEALS ERRED IN NOT RECOGNIZING THAT THE RTC BRANCH 27 OF GINGOOG CITY FAILED TO MAKE A FINDING OF FACT THAT THE COMPLAINT STATES NO CAUSE OF ACTION. THE COURT OF APPEALS ERRED LIKEWISE IN AFFIRMING THE DECISION OF THE REGIONAL TRIAL COURT BRANCH 27 OF GINGOOG CITY OVERLOOKING THE FACT THAT ITS FINDING OF FACTS AND CONCLUSIONS ARE AGAINST OR NOT SUPPORTED BY COMPETENT MATERIAL EVIDENCE.9 Petitioner contends that since respondents failed to allege the location of the disputed parcel of land in their complaint, the MTCC did not acquire jurisdiction over the subject matter of the said complaint. Petitioner also avers that the MTCC did not acquire jurisdiction over the case for failure of respondents to specifically allege facts constitutive of forcible entry. On the bases of these two grounds, petitioner argues that the MTCC should have dismissed the complaint motu proprio. Petitioner also avers that the complaint states no cause of action because the verification and certificate of non-forum shopping accompanying the complaint are defective and, as such, the complaint should be treated as an unsigned pleading. As to the verification, petitioner contends that it should be based on respondent's personal knowledge or on authentic record and not simply upon "knowledge, information and belief." With respect to the certificate of non-forum shopping, petitioner claims that its defect consists in respondents' failure to make an undertaking therein that if they should learn that a similar action or proceeding has been filed or is pending before the Supreme Court, the Court of Appeals or any other tribunal or agency, they shall report

that fact within five (5) days therefrom to the court or agency wherein the original pleading and sworn certification have been filed. The Court does not agree. A review of the records shows that petitioner did not raise the issue of jurisdiction or venue in her Answer filed with the MTCC. The CA correctly held that even if the geographical location of the subject property was not alleged in the Complaint, petitioner failed to seasonably object to the same in her Affirmative Defense, and even actively participated in the proceedings before the MTCC. In fact, petitioner did not even raise this issue in her appeal filed with the RTC. Thus, she is already estopped from raising the said issue in the CA or before this Court. Estoppel sets in when a party participates in all stages of a case before challenging the jurisdiction of the lower court.10 One cannot belatedly reject or repudiate the lower court's decision after voluntarily submitting to its jurisdiction, just to secure affirmative relief against one's opponent or after failing to obtain such relief.11 The Court has, time and again, frowned upon the undesirable practice of a party submitting a case for decision and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction when adverse.12 In any case, since the Complaint is clearly and admittedly one for forcible entry, the jurisdiction over the subject matter of the case is, thus, upon the MTCC of Gingoog City. Section 33 of Batas Pambansa Bilang 129, as amended by Section 3 of Republic Act (R.A.) No. 7691, as well as Section 1, Rule 70 of the Rules of Court, clearly provides that forcible entry and unlawful detainer cases fall within the exclusive original jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts. Hence, as the MTCC has jurisdiction over the action, the question whether or not the suit was brought in the place where the land in dispute is located was no more than a matter of venue and the court, in the exercise of its jurisdiction over the case, could determine whether venue was properly or improperly laid. 13 There having been no objection on the part of petitioner and it having been shown by evidence presented by both parties that the subject lot was indeed located in Gingoog City, and that it was only through mere inadvertence or oversight that such information was omitted in the Complaint, petitioner's objection became a pure technicality. As to respondents' supposed failure to allege facts constitutive of forcible entry, it is settled that in actions for forcible entry, two allegations are mandatory for the municipal court to acquire jurisdiction.14 First, the plaintiff must allege his prior physical possession of the property. 15 Second, he must also allege that he was deprived of his possession by any of the means provided for in Section 1, Rule 70 of the Revised Rules of Court, namely, force, intimidation, threats, strategy, and stealth.16 In the present case, it is clear that respondents sufficiently alleged in their Complaint the material facts constituting forcible entry, as they explicitly claimed that they had prior physical possession of the subject property since its purchase from petitioner, who voluntarily delivered the same to them. They also particularly described in their complaint how petitioner, together with her two sons and five other persons, encroached upon the subject property and dispossessed them of the same. Respondents' complaint contains the allegations that petitioner, abetting and conspiring with other persons, without respondents' knowledge and consent and through the use of force and

intimidation, entered a portion of their land and, thereafter, uprooted and destroyed the fence surrounding the subject lot, as well as cut the trees and nipa palms planted thereon. Unlawfully entering the subject property and excluding therefrom the prior possessor would necessarily imply the use of force and this is all that is necessary. 17 In order to constitute force, the trespasser does not have to institute a state of war. 18 No other proof is necessary.19 In the instant case, it is, thus, irrefutable that respondents sufficiently alleged that the possession of the subject property was wrested from them through violence and force. Anent respondents' alleged defective verification, the Court again notes that this issue was not raised before the MTCC. Even granting that this matter was properly raised before the court a quo, the Court finds that there is no procedural defect that would have warranted the outright dismissal of respondents' complaint as there is compliance with the requirement regarding verification. Section 4, Rule 7 of the Rules of Court, as amended by A.M. No. 00-2-10-SC provides: Sec. 4. Verification. Except when otherwise specifically required by law or rule, pleadings need not be under oath, verified or accompanied by affidavit. A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his personal knowledge or based on authentic records. A pleading required to be verified which contains a verification based on "information and belief" or upon "knowledge, information and belief" or lacks a proper verification, shall be treated as an unsigned pleading. A reading of respondents verification reveals that they complied with the abovequoted procedural rule.1awp++i1 Respondents confirmed that they had read the allegations in the Complaint which were true and correct based on their personal knowledge. 1wphi1 The addition of the words "to the best" before the phrase "of our own personal knowledge" did not violate the requirement under Section 4, Rule 7, it being sufficient that the respondents declared that the allegations in the complaint are true and correct based on their personal knowledge.20 Verification is deemed substantially complied with when, as in the instant case, one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the petition have been made in good faith or are true and correct.21 As to respondents' certification on non-forum shopping, a reading of respondents Verification/Certification reveals that they, in fact, certified therein that they have not commenced any similar action before any other court or tribunal and to the best of their knowledge no such other action is pending therein. The only missing statement is respondents' undertaking that if they should thereafter learn that the same or similar action has been filed or is pending, they shall report such fact to the court. This, notwithstanding, the Court finds that there has been substantial compliance on the part of respondents.

It is settled that with respect to the contents of the certification against forum shopping, the rule of substantial compliance may be availed of.22 This is because the requirement of strict compliance with the provisions regarding the certification of non-forum shopping merely underscores its mandatory nature in that the certification cannot be altogether dispensed with or its requirements completely disregarded.23 It does not thereby interdict substantial compliance with its provisions under justifiable circumstances, as the Court finds in the instant case.24 WHEREFORE, the instant petition is DENIED. The assailed Decision and Resolution of the Court of Appeals are AFFIRMED. SO ORDERED. DIOSDADO Associate Justice M. PERALTA

Q: NON-FORUM SHOPPING CERTIFICATE, VERIFICATION/CERTIFICATION REVEALS THAT THEY, IN FACT, CERTIFIED THEREIN THAT THEY HAVE NOT COMMENCED ANY SIMILAR ACTION BEFORE ANY OTHER COURT OR TRIBUNAL AND TO THE BEST OF THEIR KNOWLEDGE NO SUCH OTHER ACTION IS PENDING THEREIN. THE ONLY MISSING STATEMENT IS RESPONDENTS UNDERTAKING THAT IF THEY SHOULD THEREAFTER LEARN THAT THE SAME OR SIMILAR ACTION HAS BEEN FILED OR IS PENDING, THEY SHALL REPORT SUCH FACT TO THE COURT. STATE THE EFFECT OF THE FAILURE TO STATE SUCH UNDERTAKING. EXPLAIN. A: THERE IS SUBSTANTIAL COMPLIANCE WITH THE REQUIREMENTS OF THE RULES. MA. LIGAYA B. SANTOS, Petitioner, vs. LITTON MILLS INCORPORATED and/or ATTY. RODOLFO MARIO,** Respondents. G.R. No. 170646, June 22, 2011 DECISION DEL CASTILLO, J.: "Once again, we must stress that the technical rules of procedure should be used to promote, not frustrate, the cause of justice. While the swift unclogging of court dockets is a laudable aim, the just resolution of cases on their merits, however, cannot be sacrificed merely in order to achieve that objective. Rules of procedure are tools designed not to thwart but to facilitate the attainment of justice; thus, their strict and rigid application may, for good and deserving reasons, have to give way to, and be subordinated by, the need to aptly dispense substantial justice in the normal course."1 This Petition for Review on Certiorari2 assails the March 10, 2005 Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 88601, which dismissed petitioner Ma. Ligaya B. Santos (petitioner) Petition for Certiorari filed therewith for being defective in form, as well as the

November 29, 2005 Resolution4 which denied her Motion for Reconsideration. Likewise sought to be set aside are the August 27, 2004 and November 30, 2004 Resolutions 5 of the National Labor Relations Commission (NLRC) and the November 28, 2003 Decision 6 of Labor Arbiter Pablo C. Espiritu, Jr. in NLRC NCR Case No. 00-02-01560-2003, which dismissed petitioners complaint for illegal dismissal against respondents Litton Mills, Inc. (respondent Litton Mills) and/or Atty. Rodolfo Mario (respondent Atty. Mario). Factual Antecedents Petitioner was hired on December 5, 1989 by respondent Litton Mills, a company engaged in the business of manufacturing textile materials. It used to sell its used sludge oil and other waste materials through its Plant Administration and Services Department, wherein petitioner was assigned as clerk. On September 28, 2002,7 respondent Atty. Mario, personnel manager of respondent Litton Mills, directed petitioner to explain in writing why no disciplinary action should be imposed on her after having been caught engaging in an unauthorized arrangement with a waste buyer. Allegedly, petitioner has been demanding money from a certain Leonardo A. Concepcion (Concepcion) every time he purchases scrap and sludge oil from the company and threatening to withhold the release of the purchased materials by delaying the release of official delivery receipt and gate pass if he would not oblige. Respondent Atty. Mario also informed petitioner that she will be placed under preventive suspension for 15 days pending investigation of her case. In her letter-reply,8 petitioner denied the accusation and explained that her job is merely clerical in nature and that she has no authority to hold the release of purchased waste items. Petitioner averred that the P2,000.00 she obtained from Concepcion was in payment for the loan she had extended to Concepcions wife; and, that her practice of lending money to increase her income cannot be considered as an irregularity against her employer. Meanwhile, a criminal complaint for robbery/extortion was lodged before the City Prosecutor of Pasig City against petitioner which was eventually filed in court.9 On October 1, 2002, respondent Atty. Mario notified petitioner that an administrative investigation is scheduled on October 4, 2002 and requested her to appear and present her defenses on the charges. During the hearing, petitioner, represented by three officers of the union of which she was a member, submitted a Motion for Reinvestigation 10 (which she also filed in the criminal case for extortion), with a Counter-Affidavit 11 attached therein. She pointed out that it is not within her power to intimidate or threaten any buyer regarding the release of the companys waste items. Petitioner also presented a copy of her handwritten notes 12 showing a list of entries representing the debts owed to her by different debtors including Concepcions wife. On October 11, 2002, petitioner received a Letter of Termination 13 from respondents for obtaining or accepting money as a result of an unauthorized arrangement with a waste buyer, an act considered as affecting company interests, in violation of Section 2.04 of the companys Code of Conduct for Employee Discipline. 14 On February 4, 2003, petitioner filed a Complaint 15

for illegal dismissal against respondents which was later amended to include a prayer for moral and exemplary damages and attorneys fees. Ruling of the Labor Arbiter In a Decision dated November 28, 2003, the Labor Arbiter dismissed the complaint after finding that there was just cause for dismissal and proper observance of due process. The Labor Arbiter ruled that the pendency of the criminal case for extortion is an indication that there is sufficient evidence that petitioner is responsible for the offense charged, and that only substantial evidence and not proof beyond reasonable doubt is necessary for a valid dismissal. The Labor Arbiter was not convinced that the money which petitioner received from Concepcion was intended as payment for a loan and even if it was, it is still unauthorized and prohibited by the company rules. The claim for damages was likewise dismissed for lack of merit. Ruling of the National Labor Relations Commission On appeal, petitioner argued that the Labor Arbiter erred in relying on the pending criminal case in finding her dismissal as valid and claimed that the charge should first be proven. She thereafter filed an Urgent Manifestation16 to inform the tribunal that on April 20, 2004, the Regional Trial Court of Pasig City, Branch 167 has rendered a Decision 17 acquitting her of the criminal charge and declaring that she merely demanded payment for a loan and thus did not illegally exact money from Concepcion. The NLRC, however, affirmed the findings of the Labor Arbiter in its Resolution dated August 27, 2004.18 It held that petitioners acquittal in the criminal case has no bearing on the illegal dismissal case since she was dismissed for accepting money by reason of an unauthorized arrangement with a client. This, according to the NLRC, is an infraction of the companys Code of Conduct for employees punishable by dismissal even for the first violation. In its Resolution dated November 30, 2004,19 the NLRC denied petitioners Motion for Reconsideration. Ruling of the Court of Appeals Petitioner filed a Petition for Certiorari20 with the CA. However, in a Resolution dated March 10, 2005, the CA dismissed the petition for failure of the petitioner to indicate in the petition the actual addresses of the parties and to state in the Verification and Certification of non-forum shopping that there were no other pending cases between the parties at the time of filing. The March 10, 2005 Resolution reads: Petition is hereby DISMISSED due to the following jurisdictional flaws: 1. Actual addresses of the parties were not disclosed in the petition in contravention of Sec. 3, Rule 46, 1997 Rules of Civil Procedure;

2. Non-conformity to the required verification and certification of non-forum shopping by failure to state that there were no other pending cases between the parties at the time of filing (See Sections 4 and 5, Rule 7 and Sec. 1, Rule 65 in relation to Sec. 3, Rule 46 of the 1997 Rules of Civil Procedure). Deficiency is equivalent to the non-filing thereof. SO ORDERED.21 Petitioner filed a Motion for Reconsideration 22 explaining that her petition substantially complied with the provisions of Section 3, Rule 46 of the Rules of Court because it indicated that the parties may be served with notices and processes of the Court through their respective counsels whose addresses were specifically mentioned therein. She also insisted that although the Verification and Certification attached to the petition was an abbreviated version, the same still substantially complied with the Rules. Nonetheless, she submitted her faithful compliance with the Rules by indicating the complete addresses of the parties and of their counsels and submitting a revised Verification and Certification of non-forum shopping. At the same time, she contended that her excusable lapse is not enough reason to dismiss her meritorious petition. On November 29, 2005,23 the CA rendered its Resolution denying the motion for reconsideration. The said Resolution reads: Instead of [rectifying] the deficiencies of the petition, the petitioner chose to avoid compliance, arguing more than revising the mistakes explicitly pointed out. WHEREFORE, for lack of merit, petitioners March 31, 2005 Motion for Reconsideration is hereby DENIED. SO ORDERED.24 Issues Hence, this petition anchored on the following grounds: WITH DUE RESPECT, THE COURT OF APPEALS HAD SHOWN HOSTILITY AGAINST THE PETITIONER AND ACTED DESPOTICALLY BECAUSE THE DEFICIENCIES IN THE PETITION WERE DULY CORRECTED AND THE EXPLANATION MADE FOR THE ALLOWANCE OF THE PETITION IS MERELY TO POINT OUT THAT THIS HONORABLE SUPREME COURT HAD SHOWN LENIENCY EVEN IN MORE SERIOUS CASES AND THAT PETITIONER HAS A MERITORIOUS CASE. WITH DUE RESPECT, THE NLRC AND THE LABOR ARBITER COMMITTED A SERIOUS ERROR AND ABUSED THEIR DISCRETION IN FINDING THAT PETITIONER OBTAINED OR ACCEPTED MONEY CONSEQUENT OF AN UNAUTHORIZED ARRANGEMENT WITH A WASTE BUYER DESPITE CLEAR EVIDENCE TO THE CONTRARY AND THE FINDINGS OF THE REGIONAL

TRIAL COURT THAT THE P2,000.00 DEMANDED BY THE PETITIONER IS FOR THE PAYMENT OF A LOAN.25 Petitioner questions the propriety of the CAs dismissal of her petition despite correction of the deficiencies in faithful compliance with the rules. She prays for liberality and leniency for the minor lapses she committed so that substantial justice would not be sacrificed at the altar of technicalities. Petitioner also questions the propriety of the labor tribunals declaration that her dismissal from employment was legal. She contends that her act of extending a loan to a person and consequently demanding payment for the same should not be considered as sufficient ground for the imposition of the supreme penalty of dismissal. Our Ruling We partly grant the petition. Rules of procedure should be relaxed when there is substantial and subsequent compliance. Under Section 3, Rule 46 of the Rules of Court, petitions for certiorari shall contain, among others, the full names and actual addresses of all the petitioners and respondents. The petitioner should also submit together with the petition a sworn certification that (a) he has not theretofore commenced any other action involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, he must state the status of the same; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall promptly inform the court within five days therefrom. The Rule explicitly provides that failure to comply with these requirements shall be sufficient ground to dismiss the petition. In the petition for certiorari filed before the CA, petitioner indeed failed to indicate the actual addresses of the parties. However, she clearly mentioned that the parties may be served with the Courts notices or processes through their respective counsels whose addresses were clearly specified, viz: Petitioner is of legal age, married, Filipino and may be served with notices, resolutions, decisions and other processes at the office address of the undersigned counsel. Public respondent National Labor Relations Commission (NLRC) is a quasi-judicial government agency clothed by law with exclusive appellate jurisdiction over all cases decided by labor arbiters (Article 217, b, P.D. 442, as amended). Respondent Labor Arbiter Pablo Espiritu, Jr. is a Labor Arbiter at the National Capital Region of the NLRC and clothed by law [with] the authority to hear and decide termination disputes and all claims arising from employer-employee relations (Article 217, Labor Code, as amended). They may be served with notices, resolutions, decisions and other processes at PPSTA Building, Banawe Street, Quezon City.lawphi1

Private respondent Litton Mills, Inc. (Company for short) is a domestic corporation engaged in the business of manufacturing textile materials. Individual respondent Atty. Rodolfo Marino is its personnel manager. They may be served with notices, resolutions, decisions and other processes through their counsel, Baizas Magsino Recinto Law Offices, Suite 212 Cityland Pioneer, 128 Pioneer Street, Highway Hills, Mandaluyong City.26 To us, the mention of the parties respective counsels addresses constitutes substantial compliance with the requirements of Section 3, Rule 46 of the Rules of Court which provides in part that "[t]he petition shall contain the full names and actual addresses of all the petitioners and respondents." Our observation further finds support in Section 2, Rule 13 which pertinently provides that "[i]f any party has appeared by counsel, service upon him shall be made upon his counsel or one of them, unless service upon the party himself is ordered by the Court." As we held in Garrucho v. Court of Appeals, 27 "[n]otice or service made upon a party who is represented by counsel is a nullity. Notice to the client and not to his counsel of record is not notice in law." Moreover, in her motion for reconsideration, petitioner explained that she was of the honest belief that the mention of the counsels address was sufficient compliance with the rules. At any rate, she fully complied with the same when she indicated in her Motion for Reconsideration the actual addresses of the parties.28 Hence, we are at a loss why the CA still proceeded to deny petitioners petition for certiorari and worse, even declared that: "Instead of [rectifying] the deficiencies of the petition, the petitioner chose to avoid compliance, arguing more than revising the mistakes explicitly pointed out."29 The second ground for the CAs denial of petitioners petition for certiorari was her alleged failure to indicate in her Verification and Certification of non-forum shopping that there were no other pending cases between the parties at the time of filing thereof. For reference, we reproduce below the pertinent portions of the said petition for certiorari, viz: Verification With Certification I, LIGAYA B. SANTOS, subscribing under oath, depose and state: 1. I am the petitioner in the above-entitled case; 2. I have caused the preparation and filing of the foregoing petition; 3. I have read the contents of the same and declare that they are true and correct of my personal knowledge; 4. I certify that I have not caused the filing to the Court of Appeals, to the Supreme Court or to any other Court or body of a case similar to the instant petition and should I learn that the existence or pendency of a similar case at the Court of Appeals, the Supreme Court or any other Court or body, I undertake to inform this Court within five (5) days from knowledge.

(Sgd.) LIGAYA B. SANTOS30 A reading of said Verification with Certification reveals that petitioner nonetheless certified therein that she has not filed a similar case before any other court or tribunal and that she would inform the court if she learns of a pending case similar to the one she had filed therein. This, to our mind is more than substantial compliance with the requirements of the Rules. It has been held that "with respect to the contents of the certification[,] x x x the rule on substantial compliance may be availed of."31 Besides, in her Motion for Reconsideration, petitioner rectified the deficiency in said Verification with Certification, viz: VERIFICATION OF NON-FORUM SHOPPING & CERTIFICATION

I, LIGAYA SANTOS, resident of 261 B Rodriguez Avenue, Manggahan, Pasig City, after being sworn in accordance with law, depose and state: I am the petitioner in the above-entitled case; I have caused the preparation and filing of the foregoing Motion for Reconsideration; I have read the contents of the same and declare that they are true and correct of my personal knowledge; I certify that I have not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and to the best of my knowledge, no such other action is pending therein and should I learn that the same or similar action or claim has been filed or is pending, I [shall] immediately inform this Honorable Court within five (5) days from knowledge or notice. (Sgd.) Affiant32 LIGAYA B. SANTOS

It is settled that "subsequent and substantial compliance may call for the relaxation of the rules of procedure."33 The Court has time and again relaxed the rigid application of the rules to offer full opportunity for parties to ventilate their causes and defenses in order to promote rather than frustrate the ends of justice.34 Because there was substantial and subsequent compliance in this case, we resolve to apply the liberal construction of the rules if only to secure the greater interest of justice. Thus, the CA should have given due course to the petition. Anent the arguments raised by petitioner pertaining to the merits of the case, we deem it proper to remand the adjudication thereof to the CA. WHEREFORE, the Petition for Review on Certiorari is PARTLY GRANTED. The assailed March 10, 2005 and November 29, 2005 Resolutions of the Court of Appeals in CA-G.R. SP No. 88601, are hereby SET ASIDE. The case is REMANDED to the Court of Appeals which is directed to give due course to the petition and adjudicate the same on the merits with dispatch.

SO ORDERED.

G.R. No. 163208

August 13, 2008

HEIRS OF JUAN VALDEZ, SPS. POTENCIANO MALVAR and LOURDES MALVAR, petitioners, vs. THE HONORABLE COURT OF APPEALS and L.C. LOPEZ RESOURCES, INC., respondents. DECISION BRION, J.: Two conflicting resolutions were issued on the same date in the same case. The first resolution dismissed the case without prejudice for violation of the provision against forum shopping. The other required the respondent (petitioner herein) to comment. What is the effect, under the unique circumstances of this case, of these twin resolutions? This is the question that the petitioners Heirs of Juan Valdez, Spouses Potenciano Malvar and Lourdes Malvar (heirs and spouses Malvar) pose for our consideration in this Petition for Review on certiorari under Rule 45 of the Rules of Court after the Court of Appeals (CA) ruled that CA-G.R. SP No. 76286 that the private respondent (petitioner at the CA, and referred to herein as "Lopez Resources") filed, was not effectively dismissed. The heirs and spouses Malvar seek to reverse the following resolutions in the following cases filed by Lopez Resources before the CA: (a) In CA-G.R. SP No. 76286 (1) Resolution dated May 5, 20031 (first May 5, 2003 Resolution) which dismissed without prejudice the petition for certiorari and prohibition on the ground that the verification and certification against forum shopping was not signed by a duly authorized representative of L.C. Lopez Resources; (2) Resolution dated May 5, 20032 (second May 5, 2003 Resolution) which required the heirs and spouses Malvar to file their comment to CA-G.R. SP No. 76286 and Lopez Resources to rectify the deficiency in its non-forum shopping certification; (3) Resolution dated August 1, 20033 (August 1, 2003 Resolution) which clarified the conflicting May 5, 2003 resolutions, directing the heirs and spouses Malvar to file their comment on CA-G.R. SP No. 76286 within ten days, and Lopez Resources to file its reply to the comment.

(4) Resolution dated April 2, 20044 (April 2, 2004 Resolution) which denied the motion for reconsideration filed by the heirs and spouses Malvar of the Resolution dated December 12, 2003 that granted them 10 days from notice to file their comment; and (b) In CA-G.R. SP No. 77615 (5) Resolution dated July 15, 20035 (July 15, 2003 Resolution) requiring the heirs and spouses Malvar to comment on the petition for certiorari and prohibition and Lopez Resources to file its reply to the comment. This resolution ordered Lopez Resources to submit a true copy of the May 5, 2003 Resolution dismissing its petition in CA-G.R. SP No. 76286. THE ANTECEDENTS The controversy has its roots in Civil Case No. 00-6015 ( civil case) entitled, "Manila Construction Development Corporation of the Philippines v. Spouses Dela Rosa, et al. "- an action for quieting of title and declaration of nullity of transfer certificates of title before the Regional Trial Court (RTC), Branch 71 of Antipolo City. 6 The heirs and spouses Malvar were among the plaintiffs7 in the civil case. The RTC granted them an injunction order (order) dated December 16, 2002 and, subsequently, a writ of preliminary mandatory injunction (writ) dated March 6, 2003 to place them in possession of the parcel of land disputed in the case. 8 On March 24, 2003, the sheriff of the RTC together with several armed men implemented the order and writ in Lopez Resources property; they tore down the fence that enclosed the Lopez property although Lopez Resources succeeded in maintaining possession. Lopez Resources went to the CA to question the application of the order and writ that the RTC issued in the civil case. Its petition for certiorari and prohibition was docketed as CA-G.R. SP No. 76286 (first petition) and was assigned to the Ninth Division. 9 For the reasons detailed below, Lopez Resources filed another similar petition ( re-filed petition) - docketed as CA-G.R. SP No. 77615 and assigned to the Seventh Division 10 - after the first petition was dismissed without prejudice. Proceedings in CA-G.R. SP No. 76286 Lopez Resources filed this petition for certiorari and prohibition before the CA on April 3, 2003, alleging grave abuse of discretion and the commission of acts without or in excess of jurisdiction by the RTC when it deprived Lopez Resources of its property without due process of law; Lopez Resources was not a party in Civil Case No. 00-6015 where the assailed order and writ were granted; also, the writ was enforced against Lopez Resources' property although this property was not a part of the land disputed in the civil case.11 In its first action on the first petition, the CA issued on May 5, 2003 the disputed conflicting resolutions. As previously mentioned, one resolution dismissed the petition without prejudice for violation of the provision against forum shopping, while the other required the heirs and spouses

Malvar and other respondents to file their comments to the petition while also requiring Lopez Resources to rectify the deficiency in its non-forum shopping certification. Lopez Resources and the heirs and spouses Malvar received the resolution of dismissal but the heirs and spouses Malvar's co-respondents did not. Lopez Resources received the resolution on May 9, 2003 and re-filed the same petition with appropriate correction of the non-forum shopping deficiency on May 23, 2003. The re-filed petition was docketed as CA-G.R. SP No. 77615 and was raffled to the Seventh Division of the CA. CA records show that the spouses Malvar's co-respondents who did not receive the first May 5, 2003 resolution, received the second May 5, 2003 Resolution requiring them to comment on the Lopez Resources petition. Because of the conflict in the contents of the two May 5, 2003 resolutions, the CA issued on August 1, 2003 (or 86 days after the issuance of the conflicting resolutions) a Resolution clarifiying its action in CA-G.R. SP No. 76286 and rectifying what it labeled as a 'clerical error'. This resolution states: It was also brought to Our attention by the Division Clerk, after scrutiny of the records, that there has been a clerical error in what was supposed to be delivered as thin copies for the three (3) thick copies of the Resolution We actually promulgated on May 5, 2003 x x x The inadvertently delivered thin copy of the said resolution received by the petitioner's counsel was the one dismissing the petition without prejudice, and the same copy pertained to the draft resolution which We did not approve. The copy of the resolution received by private respondent Cristeta dela Rosa's counsel is the one requiring comment and which corresponds to Our actual Resolution dated May 5, 2003. The foregoing explains why there is a re-filing of the petition with this Court, because of the inadvertently delivered copy of the draft resolution received by the petitioner, dismissing the case without prejudice. As such, the error needs to be rectified since the petition docketed as CA-G.R. SP No. 77615 is actually the same as the case at bar.12 The Ninth Division duly furnished the ponente of the re-filed petition (from the Seventh Division) a copy of its August 1, 2003 resolution. The heirs and spouses Malvar subsequently sought a reconsideration of another resolution from the Ninth Division dated December 12, 2003 that, among others, granted them 10 days to file their comment. The CA denied the motion in its April 2, 2004 Resolution in light of its August 1, 2003 Resolution. Proceedings in CA-G.R. SP No. 77615 In response to the first May 5, 2003 Resolution dismissing its petition without prejudice, Lopez Resources opted to re-file on May 23, 2003 a similar petition with corrections duly made for the non-forum shopping deficiency in the first petition. The Seventh Division, to which the re-filed petition was raffled, required the heirs and spouses Malvar and the other respondents to file their

comment to the re-filed petition, while Lopez Resources was ordered to submit a copy of the first May 5, 2003 Resolution dismissing CA- G.R. SP No. 76286. In lieu of comment,13 the heirs and spouses Malvar moved for the dismissal of the petition on two grounds: first, the CA has no jurisdiction over the re-filed petition as an exact petition in CA-G.R. SP No. 76286 was earlier dismissed under the first May 5, 2003 Resolution and the dismissal had become final; and second, even if the CA had jurisdiction, the re-filed petition should be dismissed by reason of litis pendentia because the appellate court has not terminated the proceedings in the first petition. Subsequently, the CA14 resolved to cancel the raffle of CA-G.R. SP No. 7761515 since the first petition and the re-filed petition are one and the same. The CA also ordered that the contents of the rollo of CA-G.R. SP No. 77615 to be incorporated with the rollo of CA-G.R. SP No. 76286. THE ISSUES Dissatisfied with the above CA resolutions and arguing that both cases should be dismissed, the petitioners raise the following issues: 1. whether the CA committed grave abuse of discretion in CA-G.R.SP No. 76286 when it issued on the same date the two conflicting May 5, 2003 resolutions; 2. whether the August 1, 2003 resolution is valid; and 3. whether the refiling of the same petition before the CA constituted a palpable act of forum shopping justifying the dismissal of both petitions. THE COURT'S RULING We deny the petition for lack of merit. The fact that the Ninth Division of the CA committed a monumental error cannot be erased. But the error was not in the court's intent on what to do with the forum shopping violation it found. In both resolutions, what is clear is that the court intended to allow a rectification of the deficiency in Lopez Resources' non-forum shopping certification in view perhaps of what it perceived to be the merits that the face of the petition showed. Thus, in the first May 5, 2003 resolution, the CA resolved to dismiss the petition but without prejudice to its re-filing. In the second resolution, it ordered the filing of comment by the respondents, with the obligation on the part of Lopez Resources to rectify the deficiency in its non-forum shopping certification. We have no doubt that it was within the CA's power and prerogative to issue what either resolution decreed without committing an abuse of discretion amounting to lack or excess of jurisdiction. In the first May 5, 2003 Resolution, the CA correctly dismissed the petition for the deficiency it found in the non-forum shopping certification. Section 5, Rule 7 of the Revised Rules of Court provides that "Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for

the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing." On the other hand, the requirement specific to petitions filed with the appellate court simply provides as a penalty that the failure of the petitioner to comply with the listed requirements, among them the need for a certification against forum shopping, "shall be sufficient ground for the dismissal of the petition". Thus, the Ninth Division correctly dismissed the petition without prejudice. That the CA could also require the respondents to comment, with the obligation on the part of the petitioner to undertake rectification, is not without support from established jurisprudence. In several cases,16 we allowed initiatory pleadings or petitions with initially defective verifications and certifications of non-forum shopping on the ground of substantial compliance. 17 We reasoned that strict compliance with the requirement merely underscores its mandatory nature, in that, it cannot be dispensed with or its requirements altogether disregarded.18 Thus, we have held that the subsequent submission of the required documents (such as the secretary's certificate) constituted substantial compliance with the procedural rules that justified relaxation of the requirements in the interest of justice.19 Thus, either way, the CA would have been correct. To our mind, it is important to make this determination to establish that other than the CA's mistake in releasing two conflicting resolutions in the same case and on the same date, the CA action was legally above board. This determination is particularly material for purposes of the grave abuse of discretion the petitioners impute against the Court of Appeals for issuing two conflicting resolutions in initially acting on the case. In the absence of any showing that the twin issuance was attended by partiality, or by hostility to one party as against another, or in open and patent disregard of the applicable laws, no grave abuse of discretion amounting to lack or excess of jurisdiction exists in the CA action. The twin issuance was, as the CA Ninth Division admitted, the result of a mistake. The exercise of discretion in the CA's action came into play in the consideration of what action to take in light of the deficiency in the petition's certification against forum shopping. That a resolution that was not intended to be issued, was issued, does not at all involve an exercise of discretion, much less its abuse. Because the mistake was on the part of the court, it is axiomatic that none of the parties should suffer for the mistake. This is particularly true given that the parties all acted pursuant to the resolution they respectively received. To be sure, Lopez Resources could have filed a motion for reconsideration upon its receipt of the resolution of dismissal on May 9, 2003. The option it took, however, was well within the legitimate choices it had and could not be legally faulted; it accepted the dismissal and chose to re-file its petition, this time supplying the deficiency that tainted its first petition. We note in this regard that the re-filing was done on May 23, 2003, i.e., prior to the finality of the resolution of dismissal. This prompt action indicates to us that while the order of dismissal technically lapsed to finality, such finality is in fact legally immaterial since Lopez Resources immediately acted on the condition that attended the dismissal, i.e. to refile the petition because the dismissal was without prejudice. By this act, Lopez Resources effectively kept its petition legally alive. To look at the matter from another perspective, the issuance of two conflicting resolutions - one for dismissal, the other for the continuation of the case, with one canceling out the other - can

only mean that no definite, specific determination was made by the court; at least, there was uncertainty on what the court really intended to do. Under this situation, we find it fallacious to conclude that one resolution lapsed to finality while the other did not. In legal effect, there was effectively no definite resolution that could have lapsed to finality because of the mistake the court committed. This status continued until a clarification was made by the issuing court. Even granting that the first May 5, 2003 Resolution became final and executory, the rule on immutability of judgment does not apply in cases where what is to be modified or altered involves: (a) the correction of clerical errors; (b) the so-called nunc pro tunc entries which cause no prejudice to any party; (c) void judgments [such as a dismissal without prejudice that was not intended to be issued] and those where circumstances transpire after the finality that render the execution or enforcement, as in this case, of the judgment unjust or inequitable. 20 To be sure, the rule does not apply in cases where a supervening event - such as the mistake undisputably committed by the court (i.e., the unintended release of one of the resolutions, thus resulting in the conflict and confusion) - took place.21 Faced with the mistake it committed, the CA readily acknowledged its lapse and acted to rectify it through its August 1, 2003 order. That CA-G.R. No. SP 76286 remained the viable case is only to be expected because it is the "mother" case that inadvertently gave rise to the re-filed case. This can best be understood from the point of view of, and applying by analogy, the rules on consolidation which Rule 31 of the Revised Rules of Court provides. Under the Internal Rules of the Court of Appeals, there may be consolidation at the instance of the Justice to whom the case is assigned, and with the conformity of the Justice to whom the cases shall be consolidated, upon notice to the parties when the cases involve the same parties and/or related questions of fact and/or law. Consolidated cases shall pertain to the Justice to whom the case with the lowest docket number is assigned, if they are of the same kind .22 Consolidation has to apply by analogy because of the unusual attendant circumstances that required that the re-filed case be collapsed, not merely consolidated, to form an integral part of the first petition. For all the foregoing reasons and the fact the CA can issue such orders or resolutions necessary in the exercise of its jurisdiction. we hold that the Ninth Division's clarificatory resolution of August 1, 2003 is valid. The CA never lost jurisdiction over the case despite the re-filing of the petition; jurisdiction, once acquired, is not lost except for reasons that are not present in this case and need not be fully discussed here. The Sixth Division, to where the ponente of the re-filed petition was transferred, ultimately removed all uncertainties when it ordered the cancellation of the raffle of the case and ordered the incorporation of the contents of its rollo with the rollo of the first petition - CA-G.R. SP No. 76286. This move is likewise valid under the circumstances as the re-filing was a direct off-shoot of the CA's mistake; it carries the same justification attendant to the remedial measures addressing the mistake. The question of whether Lopez Resources forum shopped when it re-filed its petition is largely rendered moot and academic by the terms of the assailed May 5, 2003 order which dismissed the case without prejudice. Lopez Resources, who cannot be blamed for the CA's mistake, only followed what the assailed order allowed. Thus, we cannot say that it forum shopped by filing another petition while the first petition was pending. Insofar as it was concerned, its first petition had been dismissed without prejudice; hence, there was no bar, either by way of forum shopping,

litis pendentia or res adjudicata, to the petition it re-filed.23 We note that it has not been lacking in good faith in its dealing with the appellate court in this regard. After its re-filed petition and after receipt of the August 1, 2003 Resolution of the Ninth Division, it immediately filed on August 12, 2003 a Manifestation and Motion for Clarification to seek guidance on which of the two petitions should subsist. In an abundance of caution, it likewise filed on August 21, 2003 a Manifestation and Compliance in the first petition, attaching therewith the Secretary's Certificate that the second May 5, 2003 Resolution required. It cannot be blamed if it acted with utmost caution as the circumstances under which it found itself were highly unusual and were not at all within the direct contemplation of the Rules. As a final note, we cannot help but be disturbed by the carelessness exhibited in the handling of the conflicting May 5, 2003 resolutions. Had the CA exercised due care and attention in the performance of their duties, the present petition would have been avoided. Truly, as public officers, we are bound by our oath to bring to the discharge of our duties the prudence, caution, and attention which careful men usually exercise in the management of their affairs.24 To do less affects not only the substance of our actions, but the all-important perception of the public we serve of the kind of justice we dispense. The image of a court of justice is necessarily mirrored in the conduct, official or otherwise, of the people manning the courts - from the justices, judges, the clerks of court, to the lowest-ranked personnel. It is the duty of each one of us to maintain the judiciary's good name and standing as a true temple of justice.25

ANTONIO T. DONATO, petitioner, vs. COURT OF APPEALS, FILOMENO ARCEPE, TIMOTEO BARCELONA, IGNACIO BENDOL, THELMA P. BULICANO, ROSALINDA CAPARAS, ROSITA DE COSTO, FELIZA DE GUZMAN, LETICIA DE LOS REYES, ROGELIO GADDI, PAULINO GAJARDO, GERONIMO IMPERIAL, HOMER IMPERIAL, ELVIRA LESLIE, CEFERINO LUGANA, HECTOR PIMENTEL, NIMFA PIMENTEL, AURELIO G. ROCERO, ILUMINADA TARA, JUANITO VALLESPIN, AND NARCISO YABUT, respondents. [G.R. No. 129638. December 8, 2003] DECISION AUSTRIA-MARTINEZ, J.: Before us is a petition for review on certiorari filed on July 17, 1997 which should be a petition for certiorari under Rule 65 of the Rules of Court. It assails the Resolutions [1] dated March 21, 1997 and June 23, 1997 issued by the Court of Appeals in CA-G.R. SP No. 41394. [2]
79 80

The factual background of the case is as follows: Petitioner Antonio T. Donato is the registered owner of a real property located at Ciriaco Tuason Street, San Andres, Manila, covered by Transfer Certificate of Title No. 131793 issued by the
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Register of Deeds of the City of Manila on November 24, 1978. On June 7, 1994, petitioner filed a complaint before the Metropolitan Trial Court (Branch 26) of Manila (MeTC) for forcible entry and unlawful detainer against 43 named defendants and all unknown occupants of the subject property. [3]
81

Petitioner alleges that: private respondents had oral contracts of lease that expired at the end of each month but were impliedly renewed under the same terms by mere acquiescence or tolerance; sometime in 1992, they stopped paying rent; on April 7, 1994, petitioner sent them a written demand to vacate; the non-compliance with said demand letter constrained him to file the ejectment case against them. [4]
82

Of the 43 named defendants, only 20 (private respondents, [5] for brevity) filed a consolidated Answer dated June 29, 1994 wherein they denied non-payment of rentals. They contend that they cannot be evicted because the Urban Land Reform Law guarantees security of tenure and priority right to purchase the subject property; and that there was a negotiation for the purchase of the lots occupied by them but when the negotiation reached a passive stage, they decided to continue payment of rentals and tendered payment to petitioners counsel and thereafter initiated a petition for consignation of the rentals in Civil Case No. 144049 while they await the outcome of the negotiation to purchase.
83

Following trial under the Rule on Summary Procedure, the MeTC rendered judgment on September 19, 1994 against the 23 non-answering defendants, ordering them to vacate the premises occupied by each of them, and to pay jointly and severally P10,000.00 per month from the date they last paid their rent until the date they actually vacate, plus interest thereon at the legal rate allowed by law, as well as P10,000.00 as attorneys fees and the costs of the suit. As to the 20 private respondents, the MeTC issued a separate judgment [6] on the same day sustaining their rights under the Land Reform Law, declaring petitioners cause of action as not duly warranted by the facts and circumstances of the case and dismissing the case without prejudice.
84

Not satisfied with the judgment dismissing the complaint as against the private respondents, petitioner appealed to the Regional Trial Court (Branch 47) of Manila (RTC). [7] In a Decision [8] dated July 5, 1996, the RTC sustained the decision of the MeTC.
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Undaunted, petitioner filed a petition for review with the Court of Appeals (CA for brevity), docketed as CA-G.R. SP No. 41394. In a Resolution dated March 21, 1997, the CA dismissed the petition on two grounds: (a) the certification of non-forum shopping was signed by
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petitioners counsel and not by petitioner himself, in violation of Revised Circular No. 28-91; [9] and, (b) the only annex to the petition is a certified copy of the questioned decision but copies of the pleadings and other material portions of the record as would support the allegations of the petition are not annexed, contrary to Section 3, paragraph b, Rule 6 of the Revised Internal Rules of the Court of Appeals (RIRCA). [10]
87 88

On April 17, 1997, petitioner filed a Motion for Reconsideration, [11] attaching thereto a photocopy of the certification of non-forum shopping duly signed by petitioner himself [12] and the relevant records of the MeTC and the RTC. [13] Five days later, or on April 22, 1997, petitioner filed a Supplement [14] to his motion for reconsideration submitting the duly authenticated original of the certification of non-forum shopping signed by petitioner. [15]
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In a Resolution [16] dated June 23, 1997 the CA denied petitioners motion for reconsideration and its supplement, ruling that petitioners subsequent compliance did not cure the defect in the instant petition. [17]
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Hence, the present petition anchored on the following grounds: I. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE PETITION BASED ON HYPER-TECHNICAL GROUNDS BECAUSE: A. PETITIONER HAS SUBSTANTIALLY COMPLIED WITH SUPREME COURT CIRCULAR NO. 28-91. MORE, PETITIONER SUBSEQUENTLY SUBMITTED DURING THE PENDENCY OF THE PROCEEDINGS A DULY AUTHENTICATED CERTIFICATE OF NON-FORUM SHOPPING WHICH HE HIMSELF SIGNED AND EXECUTED IN THE UNITED STATES.

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B.

PETITIONER HAS SUBSTANTIALLY COMPLIED WITH SECTION 3, RULE 6 OF THE REVISED INTERNAL RULES OF THE COURT OF APPEALS. MORE, PETITIONER SUBSEQUENTLY SUBMITTED DURING THE PENDENCY OF THE PROCEEDINGS COPIES OF THE RELEVANT DOCUMENTS IN THE CASES BELOW. PETITIONER HAS A MERITORIOUS APPEAL, AND HE STANDS TO LOSE SUBSTANTIAL PROPERTY IF THE APPEAL IS NOT GIVEN DUE COURSE. THE RULES OF PROCEDURE MUST BE LIBERALLY CONSTRUED TO DO SUBSTANTIAL JUSTICE.

C.

II. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT RULING THAT ALL THE ELEMENTS OF UNLAWFUL DETAINER ARE PRESENT IN THE CASE AT BAR. III. RESPONDENT COURT OF APPEALS ERRED IN NOT RULING THAT THE RTC MANILA, BRANCH 47, COMMITTED REVERSIBLE ERROR IN AFFIRMING THE FINDING OF MTC MANILA, BRANCH 26, THAT PRIVATE RESPONDENTS CANNOT BE EJECTED FROM THE SUBJECT PROPERTY WITHOUT VIOLATING THEIR SECURITY OF TENURE EVEN IF THE TERM OF THE LEASE IS MONTH-TO-MONTH WHICH EXPIRES AT THE END OF EACH MONTH. IN THIS REGARD, A. RESPONDENT COURT OF APPEALS SHOULD HAVE RULED THAT THE RTC MANILA COMMITTED REVERSIBLE ERROR IN NOT RULING THAT TENANTS UNDER P.D. 1517 MAY BE EVICTED FOR NONPAYMENT OF RENT, TERMINATION OF LEASE OR OTHER GROUNDS FOR EJECTMENT. RESPONDENT COURT OF APPEALS SHOULD HAVE RULED THAT THE RTC MANILA COMMITTED REVERSIBLE ERROR IN NOT RULING THAT THE ALLEGED PRIORITY RIGHT TO BUY THE LOT THEY OCCUPY DOES NOT APPLY WHERE THE LANDOWNER DOES NOT INTEND TO SELL THE SUBJECT PROPERTY, AS IN THE CASE AT BAR. RESPONDENT COURT OF APPEALS SHOULD HAVE RULED THAT THE RTC MANILA COMMITTED REVERSIBLE ERROR IN RULING THAT THE SUBJECT PROPERTY IS LOCATED WITHIN A ZONAL IMPROVEMENT AREA OR APD. RESPONDENT COURT OF APPEALS SHOULD HAVE RULED THAT THE RTC MANILA COMMITTED REVERSIBLE ERROR IN NOT RULING THAT PRIVATE RESPONDENTS NON-COMPLIANCE WITH THE

B.

C.

D.

CONDITIONS UNDER THE LAW RESULT IN THE WAIVER OF PROTECTION AGAINST EVICTION. E. RESPONDENT COURT OF APPEALS SHOULD HAVE RULED THAT THE RTC MANILA COMMITTED REVERSIBLE ERROR IN NOT RULING THAT PRIVATE RESPONDENTS CANNOT BE ENTITLED TO PROTECTION UNDER P.D. 2016 SINCE THE GOVERNMENT HAS NO INTENTION OF ACQUIRING THE SUBJECT PROPERTY. RESPONDENT COURT OF APPEALS SHOULD HAVE RULED THAT THE RTC MANILA COMMITTED REVERSIBLE ERROR IN FINDING THAT THERE IS AN ON-GOING NEGOTIATION FOR THE SALE OF THE SUBJECT PROPERTY AND THAT IT RENDERS THE EVICTION OF PRIVATE RESPONDENTS PREMATURE. RESPONDENT COURT OF APPEALS SHOULD HAVE RULED THAT THE RTC MANILA COMMITTED REVERSIBLE ERROR IN NOT RULING THAT THE ALLEGED CASE FOR CONSIGNATION DOES NOT BAR THE EVICTION OF PRIVATE RESPONDENTS.

F.

G.

IV. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT RESPONDENTS SHOULD PAY PETITIONER A REASONABLE COMPENSATION FOR THEIR USE AND OCCUPANCY OF THE SUBJECT PROPERTY IN THE AMOUNT OF AT LEAST P10,000.00 PER MONTH FROM THE DATE THEY LAST PAID RENT UNTIL THE TIME THEY ACTUALLY VACATE THE SAME, WITH LEGAL INTEREST AT THE MAXIMUM RATE ALLOWED BY LAW UNTIL PAID. V. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT RESPONDENTS SHOULD PAY PETITIONER ATTORNEYS FEES AND EXPENSES OF LITIGATION OF AT LEAST P20,000.00, PLUS COSTS. [18]
96

Petitioner submits that a relaxation of the rigid rules of technical procedure is called for in view of the attendant circumstances showing that the objectives of the rule on certification of nonforum shopping and the rule requiring material portions of the record be attached to the petition have not been glaringly violated and, more importantly, the petition is meritorious. The proper recourse of an aggrieved party from a decision of the CA is a petition for review on certiorari under Rule 45 of the Rules of Court. However, if the error, subject of the recourse, is one of jurisdiction, or the act complained of was perpetrated by a court with grave abuse of discretion amounting to lack or excess of jurisdiction, the proper remedy available to the
96

aggrieved party is a petition for certiorari under Rule 65 of the said Rules. As enunciated by the Court in Fortich vs. Corona: [19]
97

Anent the first issue, in order to determine whether the recourse of petitioners is proper or not, it is necessary to draw a line between an error of judgment and an error of jurisdiction. An error of judgment is one which the court may commit in the exercise of its jurisdiction, and which error is reviewable only by an appeal. On the other hand, an error of jurisdiction is one where the act complained of was issued by the court, officer or a quasi-judicial body without or in excess of jurisdiction, or with grave abuse of discretion which is tantamount to lack or in excess of jurisdiction. This error is correctible only by the extraordinary writ of certiorari. [20] (Emphasis supplied).
98

Inasmuch as the present petition principally assails the dismissal of the petition on ground of procedural flaws involving the jurisdiction of the court a quo to entertain the petition, it falls within the ambit of a special civil action for certiorari under Rule 65 of the Rules of Court. At the time the instant petition for certiorari was filed, i.e., on July 17, 1997, the prevailing rule is the newly promulgated 1997 Rules of Civil Procedure. However, considering that the CA Resolution being assailed was rendered on March 21, 1997, the applicable rule is the threemonth reglementary period, established by jurisprudence. [21] Petitioner received notice of the assailed CA Resolution dismissing his petition for review on April 4, 1997. He filed his motion reconsideration on April 17, 1997, using up only thirteen days of the 90-day period. Petitioner received the CA Resolution denying his motion on July 3, 1997 and fourteen days later, or on July 17, 1997, he filed a motion for 30-day extension of time to file a petition for review which was granted by us; and petitioner duly filed his petition on August 15, 1997, which is well-within the period of extension granted to him.
99

We now go to the merits of the case. We find the instant petition partly meritorious. The requirement regarding the need for a certification of non-forum shopping in cases filed before the CA and the corresponding sanction for non-compliance thereto are found in the then prevailing Revised Circular No. 28-91. [22] It provides that the petitioner himself must make the certification against forum shopping and a violation thereof shall be a cause for the summary dismissal of the multiple petition or complaint. The rationale for the rule of personal execution of the certification by the petitioner himself is that it is only the petitioner who has actual knowledge of whether or not he has initiated similar actions or proceedings in other courts or tribunals; even counsel of record may be unaware of such fact. [23] The Court has ruled that with respect to the contents of the certification, the rule on substantial compliance may be availed of.
100 101

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This is so because the requirement of strict compliance with the rule regarding the certification of non-forum shopping simply underscores its mandatory nature in that the certification cannot be altogether dispensed with or its requirements completely disregarded, but it does not thereby interdict substantial compliance with its provisions under justifiable circumstances. [24]
102

The petition for review filed before the CA contains a certification against forum shopping but said certification was signed by petitioners counsel. In submitting the certification of non-forum shopping duly signed by himself in his motion for reconsideration, [25] petitioner has aptly drawn the Courts attention to the physical impossibility of filing the petition for review within the 15-day reglementary period to appeal considering that he is a resident of 1125 South Jefferson Street, Roanoke, Virginia, U.S.A. were he to personally accomplish and sign the certification.
103

We fully agree with petitioner that it was physically impossible for the petition to have been prepared and sent to the petitioner in the United States, for him to travel from Virginia, U.S.A. to the nearest Philippine Consulate in Washington, D.C., U.S.A., in order to sign the certification before the Philippine Consul, and for him to send back the petition to the Philippines within the 15-day reglementary period. Thus, we find that petitioner has adequately explained his failure to personally sign the certification which justifies relaxation of the rule. We have stressed that the rules on forum shopping, which were precisely designed to promote and facilitate the orderly administration of justice, should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective [26] which is simply to prohibit and penalize the evils of forum-shopping. [27] The subsequent filing of the certification duly signed by the petitioner himself should thus be deemed substantial compliance, pro hac vice.
104 105

In like manner, the failure of the petitioner to comply with Section 3, paragraph b, Rule 6 of the RIRCA, that is, to append to his petition copies of the pleadings and other material portions of the records as would support the petition, does not justify the outright dismissal of the petition. It must be emphasized that the RIRCA gives the appellate court a certain leeway to require parties to submit additional documents as may be necessary in the interest of substantial justice. Under Section 3, paragraph d of Rule 3 of the RIRCA, [28] the CA may require the parties to complete the annexes as the court deems necessary, and if the petition is given due course, the CA may require the elevation of a complete record of the case as provided for under Section 3(d) (5) of Rule 6 of the RIRCA. [29] At any rate, petitioner attached copies of the pleadings and other
106 107

101 102 103 104 105 106

material portions of the records below with his motion for reconsideration. [30] In Jaro vs. Court of Appeals, [31] the Court reiterated the doctrine laid down in Cusi-Hernandez vs. Diaz [32] and Piglas-Kamao vs. National Labor Relations Commission [33] that subsequent submission of the missing documents with the motion for reconsideration amounts to substantial compliance which calls for the relaxation of the rules of procedure. We find no cogent reason to depart from this doctrine.
108 109 110 111

Truly, in dismissing the petition for review, the CA had committed grave abuse of discretion amounting to lack of jurisdiction in putting a premium on technicalities at the expense of a just resolution of the case. Needless to stress, "a litigation is not a game of technicalities." [34] When technicality deserts its function of being an aid to justice, the Court is justified in exempting from its operations a particular case. [35] Technical rules of procedure should be used to promote, not frustrate justice. While the swift unclogging of court dockets is a laudable objective, granting substantial justice is an even more urgent ideal. [36]
112 113 114

The Courts pronouncement in Republic vs. Court of Appeals [37] is worth echoing: cases should be determined on the merits, after full opportunity to all parties for ventilation of their causes and defenses, rather than on technicality or some procedural imperfections. In that way, the ends of justice would be better served . [38] Thus, what should guide judicial action is that a party litigant is given the fullest opportunity to establish the merits of his action or defense rather than for him to lose life, honor or property on mere technicalities. [39] This guideline is especially true when the petitioner has satisfactorily explained the lapse and fulfilled the requirements in his motion for reconsideration, [40] as in this case.
115 116 117 118

107 108 109 110 111 112 113 114 115 116 117 118

In addition, petitioner prays that we decide the present petition on the merits without need of remanding the case to the CA. He insists that all the elements of unlawful detainer are present in the case. He further argues that the alleged priority right to buy the lot they occupy does not apply where the landowner does not intend to sell the subject property, as in the case; that respondents cannot be entitled to protection under P.D. No. 2016 since the government has no intention of acquiring the subject property, nor is the subject property located within a zonal improvement area; and, that assuming that there is a negotiation for the sale of the subject property or a pending case for consignation of rentals, these do not bar the eviction of respondents. We are not persuaded. We shall refrain from ruling on the foregoing issues in the present petition for certiorari. The issues involved are factual issues which inevitably require the weighing of evidence. These are matters that are beyond the province of this Court in a special civil action for certiorari. These issues are best addressed to the CA in the petition for review filed before it. As an appellate court, it is empowered to require parties to submit additional documents, as it may find necessary, or to receive evidence, to promote the ends of justice, pursuant to the last paragraph of Section 9, B.P. Blg. 129, otherwise known as The Judiciary Reorganization Act of 1980, to wit: The Intermediate Appellate Court shall have the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or further proceedings. WHEREFORE, the petition is PARTLY GRANTED. The Resolutions dated March 21, 1997 and June 23, 1997 of the Court of Appeals in CA-G.R. SP No. 41394 are REVERSED and SET ASIDE. The case is REMANDED to the Court of Appeals for further proceedings in CA-G.R. No. 41394, entitled, Antonio T. Donato vs. Hon. Judge of the Regional Trial Court of Manila, Branch 47, Filomeno Arcepe, et al. SO ORDERED. Puno, (Chairman), Quisumbing, Callejo, Sr., and Tinga, JJ., concur. ROBERTO S. BENEDICTO and TRADERS ROYAL BANK, Petitioners, vs. MANUEL LACSON, A & A MONTELIBANO HIJOS, INC., ROBERTO ABELLO, DOMINADOR AGRAVANTE, LUISA ALANO, ALEXANDER FARMS, INC., ANGELA ESTATE, INC., GUILLERMO and DOROTHY ARANETA, LETECIA ARANETA, ARCEO RAMOS & SONS, INC., SPOUSES GEORGE & LOURDES ARGUELLES, ASOSACION DE HACENDEROS DE SILAY-SARAVIA, INC. (AHSSI), SALVADOR BAUTISTA, BJB AGRO-INDUSTRIAL CORP., EUGENIO BAUTISTA, LUZ RAMOS BAYOT, CYNTHIA BENEDICTO, EVA BENEDICTO, LEOPOLDO BENEDICTO, MARY JANE BENEDICTO, FLORO BONGCO, FRANCISCO BONGCO, GERARDO BONGCO, MAXCY BORROMEO, QUIRICO CAMUS, CELSO AGRO INDUSTRIAL CORP., JULIA SO DE UYCHIAT, ARTURO UYCHIAT, LUIS UYCHIAT, ELISE UYCHIAT, CIRO LOCSIN AGRICULTURAL CORPORATION, CLAMONT FARMS, INC.,

SAGRARIO CLAPAROLS, JAIME CLAPAROLS, CLAUDIO LOPEZ, INC., RAMON CLEMENTE, SPOUSES ROMY CONLU and ASUCENA DIASATA, SPOUSES CORNELIO and DOLORES CONSING, LOPE CONSING, SPOUSES RAFAEL and JULIETA CONSOLACION, BALCONER CORDOVA, CONSOLING CORDOVA, RAFAEL COSCULLUELA, CLK AGRO DEVELOPMENT CORP., EMILIO CUAYCONG, JR., SPOUSES JOSE ROBERTO and PATRICIO CUAYCONG, ROMELI CUAYCONG, SONYA CUAYCONG, FELIPE DALIMO-OS, UBERTA DALIMO-OS, DELARICA REALTY, DOLL AGRICULTURAL CORP., DR. ANTONIO LIZARES CO., INC., SPOUSES BONIFACIO and URBANA DUJON, ELAR AGRO INDUSTRIAL CORP., ELCEE FARMS, INC., ESTATE OF FERNANDO ERENETA, SPOUSES BENJAMIN and TERESITA ESTACIO, EUSEBIO INCORPORATED, FARMLAND INCORPORATED, FELICIA AGRI DEVELOPMENT CORP., FELISA AGRI CORPORATION, SPOUSES ROLANDO and NELLY FERMIN, FERTI-ACRES AGRICULTURAL CORPORATION, FRANCISCO JAVIER LACSON Y HERMANOS, GAMBOA HERMANOS, INC., HONORATO GAMBOA, ESTATE OF REMEDIOS GAMBOA, ANTONIO GASTON, HEIRS OF GERARDO GASTON, ESTATE OF JOSE MA. GASTON, VICTOR MA. GASTON, JOSE MA. GASTON, JOSE MA. GOLEZ, ANTONIO GONZAGA, ERNESTO GONZAGA, JESUS GONZAGA, LUIS GONZAGA, GONZAGA REAL ESTATE ENTERPRISES, INC., ROBERT GONZAGA, GREEN SOILS AGRICULTURE, INC., ESTATE OF REMEDIOS L. VDA. DE GUINTO, WARLITO USTILO, G.V. & SONS, INC., ENCARNACION HERNAEZ, SPOUSES MIGUEL and CECILIA MAGSAYSAY, ADELINO HERNANDEZ, SPOUSES ABELARDO and EMILY HILADO, SPOUSES ALFREDO and TERESITA HILADO, RAMON HILADO, SPOUSES REMO and ELSIE HINLO, SPOUSES DANILO and NIMFA HINLO, MA. CRISTINA HOJILLA, DIOSDADO and DIONISIO HOSALLA, JALIMONT REALTY, INC., ALBERTO and BENJAMIN JALANDONI, DANIEL JALANDONI, JALKK CORPORATION, LEONOR JAVELLANA, ERIBERTO JESENA, PISON JESUSA and SISTERS, JISARA AGRI DEVELOPMENT CORPORATION, J.H. TAMPINCO AGRICULTURAL CORP., LILIA LOPEZ DE JISON, ROBERTO JISON, JOMILLA AGRO INDUSTRIAL VENTURES, INC., BENIGNA JONOTA, JOSEFINA RODRIGUEZ AGRICULTURAL CORP., JT ALUNAN AGRI. CORP., ANTONIO JUGO, SPOUSES JUANITO JUMILLA and SANTAS DALIMO-OS, ESTATE OF CASILDA JUSTINIANI, SPOUSES ALEJANDRO and ANTONIO KANA-AN, AGUSTIN KILAYCO, SPOUSES RODOLFO and EMMA LACSON, EMMANUEL LACSON, ESTATE OF ERNESTO LACSON, LACSON HERMANOS, INC., ESTATE OF FELIPE LACSON, MANUEL LACSON, ESTATE OF MANUELA VDA. DE LACSON, PEDRO LACSON, RAMON LACSON, SR., TERESA LACSON, RODRIGO LACSON, LACTOR ESTATE DEVELOPMENT CORP., LIBERTINO AGUTANG, CARMEN CONSING LA'O, JOSE LA'O, JULIA LA'O, LA SALVACION AGRICULTURAL CORP., ENRIQUE LEDESMA, LEDESMA HERMANOS, INC., JESUS LEDESMA, SPOUSES JOSE MA. and EVA LEDESMA, LEGA FARMS, CORP., ESTATE OF ANASTACIO LEGARDE, LIMJAP-ALUNAN AGRI, JESUS LIZARES, JOSE LIZARES, LUIS LIZARES, NILO LIZARES, SR. and JR., SPOUSES JOSE and PERLA LIZARES, ROBERTO LIZARES, ANTONIO LOCSIN, FEDERICO LOCSIN, JR., SPS. ROBERT and JEAN MARIE WINEBURGER, ESTATE OF JOSE LOCSIN, OSCAR LOCSIN, SPOUSES JOSE MA. and MARGARITA

LOCSIN, VICENTE LOCSIN, LONOY AGRICULTURAL CORP., DOLORES LOLITA VDA. DE LOPEZ, FORTUNATO LOPEZ, NER LOPEZ, ESTATE OF NIEVES LOPEZ, POMPEYO LOPEZ, ROSENDO LOPEZ, ARTURO DE LUZURIAGA, CLAUDIO DE LUZURIAGA, CATALINA VDA. DE MAKILAN, BENITO MALAN, BASILIO MANALO, MANCY & SONS, INC., MANILAC AGRO COMMERCIAL CORP., SPOUSES MANUEL and LUISA MANOSA, JULIO and GENEVIEVE MAPA, MAPLE AGRI-CORP., INC., MARLAND AGRICULTURAL CORP., MARVIA & CO., INC., ANTONIO MENDOZA, BERNARDO MENDOZA, JR., SPOUSES BERNARDO and ROSARIO MENDOZA, MALAURIE AGRICULTURAL DEVELOPMENT CORP., HEIRS OF MANUEL and CEFERINO MONFORT, ESTATE OF MANUEL MONFORT, JR., SPOUSES EMILIO and LINDA MONTALVO, MONTILLA SISTERS AGRICULTURAL CORP., ANTONIO MONTINOLA, NIEVES AGRO-INDUSTRIAL DEVELOPMENT CORP., MAMERTO DE OCA, O. LEDESMA & CO., INC., HEIRS OF MERCEDES PABIANA, TEODULO PABIANA, ESTATE OF ROSARIO PALENZUELA, ESTATE OF ENCARNACION PANLILIO, JOSE PASCUAL, JOHNNY DE LA PENA, ANICETA PERDIGUEROS, AQUILES PERDIGUEROS, LUISA PEREZ, CRISTINA PERTIERRA, PHISON FARMS, INC., ESTATE OF JOSEFINA PICCIO, PISON-LOCSIN KAUTURAN, NICOLAS POLINARIO, PUYAS AGRO, INC., ESTATE OF LEONOR DE LA RAMA, LUIS RAMA, RAMON DE LA RAMA AGRO DEVELOPMENT CORP., REMO RAMOS, BENJAMIN RAMOS, MARIANO RAMOS, SPOUSES ENRIQUE and TERESITA REGALADO, SPS. JOSE MA. and AMELIA REGALADO, MANUEL REGALADO, AQUILINO REONIR, RHE & SONS AGRO INDUSTRIAL CORP., ROAM AGRICULTURAL CORP., AMANDO ROBILLO, ROMALUX AGRI FARMS, INC., LETECIA DEL ROSARIO, MANUEL DEL ROSARIO, EULALIA ROSELLO, ROSENDO H. DE LA RAMA & CO., BIBIANO SABINO, SPOUSES REINHARDT and CORAZON SAGEMULLER, PEDRO SAJO, SPOUSES AQUILES and MA. CRISTINA SAJO, SAN ANTONIO FARMS, JOSE MA. SANTOS, MARCELINO SAUSI, STA. CLARA ESTATE, INC., SPOUSES FRANCISCO and JULITA SERRIOS, ANTONIO SIAN, SIASON-DITCHING AGRO INDUSTRIAL CORP., SPOUSES LUCRECIO SORIANO and LIBERATA DALIMO-OS, IMELDA TAMPINCO, T. GENSOLI & CO., TINIHABAN AGRICULTURAL CORP., SPOUSES LINO and THELMA TOLEDO, FRANCISCO TORIANO, GODOFREDO TORIANO, LUCRECIO TORIANO, MOISES TORIANO, TOTA, INC., DEMOCRITO TRECHO, JESUSA TRECHO, PABIO TRECHO, RUFINO TRECHO, ESTATE OF FLORENTINO TREYES, ESTATE OF VICTOR TREYES, FERNANDO TREYES, LILIA TREYES, SOCORRO TUVILLA, FRANCIS TUVILLA, SPS. JOE MARIE and VICTORIA TUVILLA, JOSE URBANOZO, JR., ESTATE OF ROSARIO VALENCIA, EDUARDO DE VENECIA, VICTORIAS MILLING, CO., INC., SPOUSES EDSEL and RITA VILLACIN, JOSEFA VILLAERA, VILLALAYA AGRO DEVELOPMENT, SERAFIN VILLANUEVA, IRVING VILLASOR, DOMINICIANO VINARTA, ROSENDO and CANDIDO VINARTA, BERNARD YBIERNAS, ESTRELLA YBIERNAS, SPOUSES CARLOS and EDITH YLANAN, BENITO YOUNG, SPOUSES RENATO and VICTORIA YULO, and JESUS YUSAY, Respondents. G.R. No. 141508, May 5, 2010

DECISION PERALTA, J.: Before this Court is a Petition for Review on certiorari, 1 under Rule 45 of the Rules of Court, seeking to set aside the September 30, 1999 Decision 2 and January 10, 2000 Resolution 3 of the Court of Appeals (CA) in CA-G.R. CV No. 53841. The facts of the case are as follows: Under Presidential Decree No. 388,4 the Philippine Sugar Commission (PHILSUCOM) was created and vested with the power to act as the single buying and selling agency of sugar in the Philippines. On September 7, 1977, PHILSUCOM further organized the National Sugar Trading Corporation (NASUTRA) as its buying marketing arm. Petitioner Robert S. Benedicto 5 was the concurrent Chairman and President of Traders Royal Bank6 and NASUTRA. The case stems from a Complaint,7 docketed as Civil Case No. 95-9137 (Bacolod Case), filed by respondents, individual sugar planters and agricultural corporations Manuel Lacson et al., on November 23, 1995, in the Regional Trial Court (RTC) of Bacolod City, Branch 44. Respondents complaint was premised on a claim for unpaid shares based on Sugar Order No. 2, series of 1979-19808 and Sugar Order No. 1, series of 1980-1981 9 issued by PHILSUCOM. The claims cover the sugar export sales10 supposedly undervalued by NASUTRA and coursed through Traders Royal Bank, the total amount of which is claimed by respondents to be $33,907,172. 47, to wit: SUMMARY OF CLAIMS UNDER THE FIRST TO FIFTEENTH CAUSES OF ACTION 92. As tabulated in Annex C hereof, while the total amount actually paid by the buyers and collected by the PHILSUCOM and the Defendants NASUTRA, BENEDICTO, MONTEBON and TRB on the sales of export sugar subject of the preceding Causes of Action, amounted to US$ 94,146,954.03, the PHILSUCOM and the said Defendants recorded and reported a total collection of only US$60,239,781.56, resulting in an undervaluation of Defendant NASUTRAs export sales by US$ 33, 907,172.74 and, correspondingly, in an equivalent understatement of the amount due the Plaintiffs and other sugar producers in the profits realized from such sales, pursuant to the directive of then President Marcos as implemented in the PHILSUCOM SUGAR ORDERS hereto attached as Annexes B and B-1 hereof. 93. Accordingly, on the basis of their respective production of "A" and "C" sugar for the 19801981 crop year vis--vis the national production of 20,474,653 piculs of the same classes of sugar for the same crop year, the Plaintiffs are entitled to the payment by Defendants of their pro rata share, in the amounts indicated opposite their respective names in Annex C-1 hereof, in the undeclared profit of US$33,907,172.74 realized from the export sales, subject of the preceding Causes of Action, during the said crop year.11

Petitioner, as President and concurrent Chairman of both Traders Royal Bank and NASUTRA, was charged by respondents with fraud and bad faith, not only in refusing to furnish them accurate data on NASUTRAs export sugar sales, but, more importantly, in under-reporting and under-declaring the true prices of the shipments.12 Respondents, thus, prayed for a refund of their shares in the undervalued shipments. On December 27, 1995, petitioner filed a Motion to Dismiss, 13 arguing therein (1) that respondents had violated the rule on forum shopping; (2) that respondents have no cause of action; (3) that the issues involved are res judicata or rendered moot by case law; and (4) that the claim or demand has already been paid. On the issue of forum shopping, petitioner argued that respondents have already filed the following cases beforehand, viz.: (a) Civil Case No. 4301, before Branch 51 of the RTC of Bacolod, entitled Hector Lacson, et al. v. NASUTRA et al., (Hector Lacson Case); (b) Civil Case No. 88-46368, before Branch 23 of the RTC of Manila, entitled Ramon Monfort et al. v. NASUTRA et al. (Ramon Monfort Case); and (c) Civil Case No. 65156, before Branch 264 of the RTC of Pasig, entitled Manuel Lacson, et al. v. NASUTRA, et al. (Pasig Case).14 On the issue of no cause of action, petitioner argued that: (a) not being their agent, NASUTRA had no obligation to share its profits with respondents; (b) the questioned transactions were already perfected and consummated both with respect to the delivery of the sugar and full payment of the price; (c) respondents are estopped from questioning the subject transactions, having executed in favor of NASUTRA a "Chattel Mortgage on Standing Crop" which authorized the latter, among others, to sell or dispose of the same at the time, place, and for the price which it may deem convenient and reasonable; and (d) NASUTRA had long been dissolved and liquidated under Presidential Decree No. 2005 and Executive Order No. 114.15 Lastly, petitioner argued that the issues posed by respondents are barred by res judicata and/or rendered moot by the decisions in the following cases, viz.: (a) G.R. No. 55798, entitled Corazon Zayco, et al. v. NASUTRA et al.; (b) Civil Case No. Q- 33723, entitled Hortensia Starke v. NASUTRA, et al.; (c) Civil Case No. 3265, entitled Cecilia Magsaysay, et al. v. NASUTRA et al.; and (d) Civil Case No. 16439, entitled John Keng Seng v. NASUTRA, et al.16 On March 26, 1996, respondents filed a Consolidated Opposition to Motion to Dismiss. 17 Simultaneous thereto, respondents also filed an "Amended Certification" to the following effect: xxxx 2. That, except for the case entitled Manuel Lacson v. Roberto S. Benedicto, et al., Civil Case 65156, Pasig, RTC Branch 264, filed by some of the Plaintiffs on June 20, 1995 and subsequently withdrawn by them without prejudice on November 14, 1995 pursuant to Sec. 1, Rule 17 prior to the filing of the present suit, Plaintiffs have not commenced any other action or proceeding involving the same issues in the Supreme Court, the Court of Appeals, or any other tribunal or agency; that to the best of my knowledge, no such action or proceeding is pending the Supreme Court, the Court of Appeals, or any other tribunal or agency; and if I or they should hereafter learn that a similar action or proceeding has been filed or pending before the Supreme

Court , Court of Appeals, or any other tribunal or agency, Plaintiffs and I hereby undertake to report such fact within five (5) days therefrom to this Honorable Court.18 On June 5, 1996, the RTC issued an Order19 granting petitioners motion to dismiss the complaint, the dispositive portion of which reads: WHEREFORE, premises considered, the Motions to Dismiss are hereby GRANTED. The case against all the defendants is ordered DISMISSED. Furnish copies of this Order all counsel on record for their information. SO ORDERED.20 The RTC ruled that a perusal of the copies of the complaints in two cases, namely: Hector Lacson Case and Ramon Monfort Case show similarities with the present Bacolod Case such that different decisions or rulings would give rise to conflicting rules on law on similar issues. 21 The RTC also held that respondents were guilty of forum shopping for failure to report in their original anti-forum shopping certification in the Bacolod Case that they had filed a similar case with the RTC of Pasig notwithstanding that the same had been withdrawn by them. The RTC ruled that even if the Pasig Case had been withdrawn, the same had already been commenced. 22 Thus, the RTC held that there was a need to report the same in the anti-forum shopping certification in the Bacolod Case. Lastly, the RTC ruled that NASUTRA had already been dissolved and hence, respondents have no cause of action against NASUTRA.23 The other grounds raised, however, by petitioner in support of its motion to dismiss were denied by the RTC, as the same did not appear to be indubitable without further evidence.24 Respondents appealed the RTC Order to the CA. On September 30, 1999, the CA rendered a Decision reversing the assailed RTC Order. The CA found merit in respondents appeal and ordered for the remand of the case to the RTC. The dispositive portion of the Decision reads: WHEREFORE, the appeal is GRANTED and the Assailed Order dated June 5, 1996 is REVERSED and SET ASIDE, and in lieu thereof, a new one is entered ordering the REMAND of the case to the court of origin for further proceedings. SO ORDERED.25 Aggrieved by the CA Decision, petitioner filed a Motion for Reconsideration 26, which was, however, denied by the CA in a Resolution dated January 10, 2000. Hence, herein petition, with petitioner raising the following errors committed by the CA, to wit: 5.1. WHEN IT ABSOLVED THE PRIVATE RESPONDENTS OF ANY VIOLATION OF THE ANTI-FORUM SHOPPING RULE NOTWITHSTANDING THEIR (CONCEDED) FAILURE TO SEASONABLY APPRISE THE BACOLOD COURT OF THE EARLIER FILING OF A

SIMILAR CASE BEFORE THE PASIG COURT, THE SAME BEING A MATERIAL INFORMATION THE NON-DISCLOSURE OR CONCEALMENT THEREOF CONSTITUTING AN INEXCUSABLE OMISSION CLEARLY PENALIZED UNDER THE PERTINENT SC CIRCULARS AND SECTION 5, RULE 7 OF THE NEW RULES OF CIVIL PROCEDURE; 5.2. WHEN IT REFUSED TO APPLY THE PRINCIPLE OF LITIS PENDENTIA NOTWITHSTANDING THE (CONCEDED) SIMILARITIES IN THE CIRCUMSTANCES OF THE PLAINTIFFS, THE IDENTITIES OF THE DEFENDANTS AND, MOREOVER, THE SIMILARITIES IN SOME OF THE ANTECEDENT ISSUES IN CIVIL CASE NO. 95-9137 AND IN THE OTHER PENDING CASES AGAINST THE HEREIN PETITIONERS; and 5.3. WHEN IT FAILED TO CONSIDER THAT CIVIL CASE NO. 95-9137 DESERVES DISMISSAL, AT ANY RATE, BASED ON THE OTHER GROUNDS INVOKED BY THE HEREIN PETITIONERS, NAMELY, LACK OF CAUSE OF ACTION, RES JUDICATA, PAYMENT AND PRESCRIPTION.27 The petition is not meritorious. On Forum Shopping: Civil Case No. 95-9137 (Bacolod Case) vis-a-vis Civil Case No. 65156 (Pasig Case) Petitioner contends that respondents are guilty of forum shopping because they failed to disclose, at the time of the filing of the Bacolod Case, the fact that some of the respondents had earlier commenced a similar action in Pasig. Petitioner claims that respondents should have informed the RTC of Bacolod of the commencement and subsequent withdrawal of the Pasig Case in the certificate of non-forum shopping. Petitioner insists that even if the Pasig Case was subsequently withdrawn, the same still constituted a "commenced action," which is required to be disclosed under the rules of forum shopping. Section 5, Rule 7 of the 1997 Rules of Civil Procedure provides that: SEC. 5. Certification against forum shopping. The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed. Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing. The submission of a false certification or non-compliance with any of the undertakings therein shall constitute indirect

contempt of court, without prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall constitute direct contempt as well as a cause for administrative sanctions. A perusal of the records shows that, with the exception of additional party-plaintiffs, the Pasig Case actually has a strong resemblance to the Bacolod Case. The Pasig Case, however, was dismissed upon the instance of the plaintiffs even before the Bacolod Case was filed. The RTC Order28 allowing the dismissal of the complaint in the Pasig Case is hereunder reproduced, to wit: xxxx On November 14, 1995, A Notice of Dismissal was filed by plaintiffs thru counsel, Attys. Ricardo G. Nepomuceno, Jr. and Epifanio Sedigo, Jr., pursuant to Section 1, Rule 17 of the Rules of Court. According to the said Rule, plaintiff may, at any time before service of answer, dismiss an action by filing a notice of dismissal. Records show that no answer has yet been filed by defendants. Being in conformity to the Rules, the same is hereby granted. WHEREFORE, herein complaint is hereby DISMISSED and without prejudice to the re-filing thereof. Notify parties and counsel of this Order. SO ORDERED.29 The essence of forum shopping is the filing by a party against whom an adverse judgment has been rendered in one forum, seeking another and possibly favorable opinion in another suit other than by appeal or special civil action for certiorari;30 the act of filing of multiple suits involving the same parties for the same cause of action, either simultaneously or successively for the purpose of obtaining a favorable judgment.31 Forum shopping exists where the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in the action under consideration.32 There is no dispute that the dismissal of the complaint in the Pasig case, upon notice of the plaintiffs therein, was sanctioned by Section 1, Rule 17 of the Revised Rules of Court. 33 Quite clearly, the Order declared that the dismissal of the complaint was without prejudice to the refiling thereof. Moreover, even if the same were tested under the rules on litis pendentia and res judicata, the danger of conflicting decisions cannot be present, since the Pasig case was dismissed even before a responsive pleading was filed by petitioner. Since a party resorts to forum shopping in order to increase his chances of obtaining a favorable decision or action, it has

been held that a party cannot be said to have sought to improve his chances of obtaining a favorable decision or action where no unfavorable decision has even been rendered against him in any of the cases he has brought before the courts.34 While the RTC may have been of the opinion that the Pasig Case was nevertheless "commenced" and, therefore, the same should have been stated by respondents in their certification of nonforum shopping in the Bacolod case, this Court does not share the same view. In Roxas v. Court of Appeals,35 this Court had on occasion ruled that when a complaint is dismissed without prejudice at the instance of the plaintiff, pursuant to Section 1, Rule 17 of the 1997 Rules of Civil Procedure, there is no need to state in the certificate of non-forum shopping in a subsequent re-filed complaint the fact of the prior filing and dismissal of the former complaint, thus: Considering that the complaint in Civil Case No. 97-0523 was dismissed without prejudice by virtue of the plaintiffs (herein petitioners) Notice of Dismissal dated November 20, 1997 filed pursuant to Section 1, Rule 17 of the 1997 Rules of Civil Procedure, there is no need to state in the certificate of non-forum shopping in Civil Case No. 97-0608 about the prior filing and dismissal of Civil Case No. 97-0523. In Gabionza v. Court of Appeals, we ruled that it is scarcely necessary to add that Circular No. 28-91 (now Section 5, Rule 7 of the 1997 Rules of Civil Procedure) must be so interpreted and applied as to achieve the purposes projected by the Supreme Court when it promulgated that Circular. Circular No. 28-91 was designed to serve as an instrument to promote and facilitate the orderly administration of justice and should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective or the goal of all rules or procedure which is to achieve substantial justice as expeditiously as possible. The fact that the Circular requires that it be strictly complied with merely underscores its mandatory nature in that it cannot be dispensed with or its requirements altogether disregarded, but it does not thereby interdict substantial compliance with its provisions under justifiable circumstances.1avvphi1 Thus, an omission in the certificate of non-forum shopping about any event that would not constitute res judicata and litis pendencia as in the case at bar, is not fatal as to merit the dismissal and nullification of the entire proceedings considering that the evils sought to be prevented by the said certificate are not present. It is in this light that we ruled in Maricalum Mining Corp. v. National Labor Relations Commission that a liberal interpretation of Supreme Court Circular No. 04-94 on non-forum shopping would be more in keeping with the objectives of procedural rules which is to "secure a just, speedy and inexpensive disposition of every action and proceeding."36 Verily, in numerous occasions, this Court has relaxed the rigid application of the rules to afford the parties the opportunity to fully ventilate their cases on the merits. This is in line with the time-honored principle that cases should be decided only after giving all parties the chance to argue their causes and defenses. Technicality and procedural imperfection should thus not serve as basis of decisions.37 Technicalities should never be used to defeat the substantive rights of the other party.38 Every party-litigant must be afforded the amplest opportunity for the proper and just determination of his cause, free from the constraints of technicalities. 39 In that way, the ends

of justice would be better served. 40 For, indeed, the general objective of procedure is to facilitate the application of justice to the rival claims of contending parties, bearing always in mind that procedure is not to hinder but to promote the administration of justice. 41 In the case at bar, considering that the same involves the various claims of 371 respondents, this Court finds that justice and equity are best served by allowing respondents to prove their case on the merits rather than denying them their day in court on a strict application of the rules. On Litis Pendentia: Bacolod Case, Hector Lacson Case, Ramon Monfort Case Petitioner contends that the CA erred when it refused to apply the principle of litis pendentia notwithstanding the similarities in the circumstances of the plaintiffs, the identities of the defendants and the similarities in some of the antecedent issues in the Bacolod Case, the Hector Lacson Case and Ramon Monfort Case. The requisites of litis pendentia are: (a) the identity of parties, or at least, such as representing the same interests in both actions; (b) the identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity of the two cases, such that judgment in one, regardless of which party is successful, would amount to res judicata in the other.42 The underlying principle of litis pendentia is the theory that a party is not allowed to vex another more than once regarding the same subject matter and for the same cause of action. 43 This theory is founded on the public policy that the same subject matter should not be the subject of controversy in courts more than once, in order that possible conflicting judgments may be avoided for the sake of the stability of the rights and status of persons.44 The CA was correct when it opined that: Our perusal of the record reveals that forum shopping cannot, indeed, be attributed to the appellants. While it may be readily conceded that the plaintiffs in the instant case are more or less similarly situated as the plaintiffs in the cases previously filed and that the defendants, or at least the interest they represent, are basically the same, the fact remains that there is no identity of causes of action and issues in the cases so far filed against the latter. The instant suit, as may be gleaned from the complaint, concerns the supposed undervaluation by the appellees of fifteen (15) sugar export sales of the appellants export sugar production for the crop years 1979-1980 and 1980-1981 (pp. 3-32, Orig. Rec.). In contrast, Civil Case No. 4301, entitled "Hector Lacson, et al. vs. National Sugar Trading Corporation, et al." concerns the overcharging of trading costs for the plaintiffs export sugar production for the crop years 1981-1982 and 1982-1983, underpayment resulting from the defendants use of an erroneous peso-dollar exchange rate and reimbursement for amounts alleged to have been wrongfully withheld by the latter (pp. 163-171, ibid.) On the other hand, Civil Case No. 88-46368 entitled "Ramon Monfort, et al. vs. Philippine Sugar Commission, et al." concerned the deficiency due the plaintiffs therein from sugar export sales for which a lower exchange rate was allegedly used by the defendants, the recovery, among others, of excessive trading costs charged, unauthorized deductions, damages, premiums and other sums supposedly still due from the defendants, as well as a detailed accounting of the sales of the export sugar produced by the plaintiffs therein. While the amended complaint filed in the case also sought to claim differentials for three (3) under-valued/under-declared NASUTRA

export sales from the crop year 1980-1981 harvest, the same significantly pertained to different shipments and were coursed not through appellee Traders Royal Bank but through the Republic Planters Bank (pp. 246-271, ibid). The variance in the subject matters of the instant case and the aforesaid cases are even conceded in the brief filed by appellee Roberto Benedicto (pp. 153-155, Rollo).45 The test to determine identity of causes of action is to ascertain whether the same evidence necessary to sustain the second cause of action is sufficient to authorize a recovery in the first, even if the forms or the nature of the two (2) actions are different from each other. If the same facts or evidence would sustain both, the two (2) actions are considered the same within the rule that the judgment in the former is a bar to the subsequent action; otherwise, it is not. This method has been considered the most accurate test as to whether a former judgment is a bar in subsequent proceedings between the same parties. It has even been designated as infallible.46 While the plaintiffs in the Bacolod Case are more or less similarly situated as the plaintiffs in the Hector Lacson Case and Ramon Monfort Case, the CA was correct when it ruled that there was no identity of causes of action and issues 47 as it cannot be said that exactly the same evidence are needed to prove the causes of action in all three cases. Thus, in the Bacolod Case, the evidence needed to prove that petitioner undervalued fifteen sugar export sales of respondents export sugar production for the crop years 1979-1980 and 19801981 is not the same evidence needed in the Hector Lacson Case to prove the over-charging of trading costs for respondents export sugar production for the crop years 1981-1982 and 19821983, underpayment resulting from the petitioners use of an erroneous peso-dollar exchange rate and reimbursement for amounts alleged to have been wrongfully withheld by the latter. The same holds true for the Ramon Monfort Case where the same significantly pertained to different shipments and were coursed not thru the Traders Royal Bank, but thru the Republic Planters Bank. The Court of Appeals, therefore, did not abuse its discretion in finding that no litis pendentia existed in the case at bar. On the "other grounds" which warrant the dismissal of the action It is the position of petitioner that the CA erred when it chose not to dismiss the case based on the "other grounds" petitioner had earlier raised in its motion to dismiss. More specifically, petitioner claims that the grounds of lack of cause of action, res judicata, payment and prescription warrant the dismissal of the complaint. The same deserves scant consideration. It bears to stress that the RTC, in its June 5, 1996 Order, did not also consider the other grounds now raised by petitioner, to wit: In view of the sufficiency of the grounds for dismissal discussed above, the other grounds invoked by the defendants in their Motion to Dismiss, which do not appear to be indubitable without additional evidence need not be considered.48

While petitioners Motion to Dismiss was granted by the RTC in its June 5, 1996 Order, the same Order, however, effectively denied the other grounds raised by petitioner as the same did not appear to be indubitable without additional evidence. It is a settled rule that an Order denying a motion to dismiss is merely interlocutory and, therefore, not appealable, nor can it be subject of a petition for review on certiorari. Such order may only be reviewed in the ordinary course of law by an appeal from the judgment after trial. The ordinary procedure to be followed in that event is to file an answer, go to trial, and if the decision is adverse, reiterate the issue on appeal from the final judgment.49 While the rule refers to instances when a motion to dismiss is completely denied, this Court finds no reason not to apply the same in instances when some of the grounds raised in a motion to dismiss are denied by the lower court. The "other grounds" now raised by petitioner were not before the CA because the same were not put in issue by respondents when they chose to assail the RTCs Order to dismiss the complaint. This is understandable especially since the "other grounds" were not made the basis of the RTCs Order. Procedurally then, the proper remedy of petitioner, should he choose to reassert the "other grounds," is to interpose the same as defenses in his answer and not to put them in issue in this appeal. GEORGIA T. ESTEL, Petitioner, vs. RECAREDO P. DIEGO, SR. and RECAREDO R. DIEGO, JR., Respondents. G.R. No. 174082, January 16, 2012 It is settled that with respect to the contents of the certification against forum shopping, the rule of substantial compliance may be availed of.22 This is because the requirement of strict compliance with the provisions regarding the certification of non-forum shopping merely underscores its mandatory nature in that the certification cannot be altogether dispensed with or its requirements completely disregarded.23 It does not thereby interdict substantial compliance with its provisions under justifiable circumstances, as the Court finds in the instant case.24 RULE 10 AMENDED AND SUPPLEMENTAL PLEADINGS AMENDMENT TO CONFORM TO EVIDENCE SPOUSES MINIANO B. DELA CRUZ and LETA L. DELA CRUZ, Petitioners, vs. ANA MARIE CONCEPCION, Respondent. G.R. No. 172825, October 11, 2012 DECISION PERALTA, J.: Assailed in this petition for review on certiorari under Rule 45 of the Rules of Court filed by petitioners spouses Miniano B. Dela Cruz and Leta L. Dela Cruz against respondent Ana Marie Concepcion are the Court of Appeals (CA) Decision1 dated March 31, 2005 and Resolution2 dated May 24, 2006 in CA-G.R. CV No. 83030. The facts of the case are as follows:

On March 25, 1996, petitioners (as vendors) entered into a Contract to Sell 3 with respondent (as vendee) involving a house and lot in Cypress St., Phase I, Town and Country Executive Village, Antipolo City for a consideration of P2,000,000.00 subject to the following terms and conditions: a) That an earnest money of P100,000.00 shall be paid immediately; b) That a full down payment of Four Hundred Thousand Pesos (P400,000.00) shall be paid on February 29, 1996; c) That Five Hundred Thousand Pesos (P500,000.00) shall be paid on or before May 5, 1996; and d) That the balance of One Million Pesos (P1,000,000.00) shall be paid on installment with interest of Eighteen Percent (18%) per annum or One and a half percent (1-1/2 %) interest per month, based on the diminishing balance, compounded monthly, effective May 6, 1996. The interest shall continue to run until the whole obligation shall have been fully paid. The whole One Million Pesos shall be paid within three years from May 6, 1996; e) That the agreed monthly amortization of Fifty Thousand Pesos (P50,000.00), principal and interest included, must be paid to the Vendors, without need of prior demand, on or before May 6, 1996, and every month thereafter. Failure to pay the monthly amortization on time, a penalty equal to Five Percent (5%) of the amount due shall be imposed, until the account is updated. In addition, a penalty of One Hundred Pesos per day shall be imposed until the account is updated; f) That after receipt of the full payment, the Vendors shall execute the necessary Absolute Deed of Sale covering the house and lot mentioned above x x x4 Respondent made the following payments, to wit: (1) P500,000.00 by way of downpayment; (2) P500,000.00 on May 30, 1996; (3) P500,000.00 paid on January 22, 1997; and (4) P500,000.00 bounced check dated June 30, 1997 which was subsequently replaced by another check of the same amount, dated July 7, 1997. Respondent was, therefore, able to pay a total of P2,000,000.00.5 Before respondent issued the P500,000.00 replacement check, she told petitioners that based on the computation of her accountant as of July 6, 1997, her unpaid obligation which includes interests and penalties was only P200,000.00.6 Petitioners agreed with respondent and said "if P200,000.00 is the correct balance, it is okay with us."7 Meanwhile, the title to the property was transferred to respondent. Petitioners later reminded respondent to pay P209,000.00 within three months.8 They claimed that the said amount remained unpaid, despite the transfer of the title to the property to respondent. Several months later, petitioners made further demands stating the supposed correct computation of respondents liabilities.9 Despite repeated demands, petitioners failed to collect the amounts they claimed from

respondent. Hence, the Complaint for Sum of Money With Damages10 filed with the Regional Trial Court (RTC)11 of Antipolo, Rizal. The case was docketed as Civil Case No. 98-4716. In her Answer with Compulsory Counterclaim,12 respondent claimed that her unpaid obligation to petitioners is only P200,000.00 as earlier confirmed by petitioners and not P487,384.15 as later alleged in the complaint. Respondent thus prayed for the dismissal of the complaint. By way of counterclaim, respondent prayed for the payment of moral damages and attorneys fees. During the presentation of the parties evidence, in addition to documents showing the statement of her paid obligations, respondent presented a receipt purportedly indicating payment of the remaining balance of P200,000.00 to Adoracion Losloso (Losloso) who allegedly received the same on behalf of petitioners.13 On March 8, 2004, the RTC rendered a Decision14 in favor of respondent, the dispositive portion of which reads: WHEREFORE, premises considered, this case is hereby DISMISSED. The plaintiff is hereby ordered to pay the defendants counterclaim, amounting to wit: a) P300,000 as moral damages; and b) P100,000 plus P2,000 per court appearance as attorneys fees. SO ORDERED.15 The RTC noted that the evidence formally offered by petitioners have not actually been marked as none of the markings were recorded. Thus, it found no basis to grant their claims, especially since the amount claimed in the complaint is different from that testified to. The court, on the other hand, granted respondents counterclaim.16 On appeal, the CA affirmed the decision with modification by deleting the award of moral damages and attorneys fees in favor of respondent.17 It agreed with the RTC that the evidence presented by petitioners cannot be given credence in determining the correct liability of respondent.18 Considering that the purchase price had been fully paid by respondent ahead of the scheduled date agreed upon by the parties, petitioners were not awarded the excessive penalties and interests.19 The CA thus maintained that respondents liability is limited to P200,000.00 as claimed by respondent and originally admitted by petitioners.20 This amount, however, had already been paid by respondent and received by petitioners representative.21 Finally, the CA pointed out that the RTC did not explain in its decision why moral damages and attorneys fees were awarded. Considering also that bad faith cannot be attributed to petitioners when they instituted the collection suit, the CA deleted the grant of their counterclaims.22 Aggrieved, petitioners come before the Court in this petition for review on certiorari under Rule 45 of the Rules of Court raising the following errors: I.

"THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT ON THE GROUND THAT PLAINTIFF FAILED TO FORMALLY OFFER THEIR EVIDENCE AS DEFENDANT JUDICIALLY ADMITTED IN HER ANSWER WITH COMPULS[O]RY COUNTERCLAIM HER OUTSTANDING OBLIGATION STILL DUE TO PLAINTIFFS AND NEED NO PROOF. II. THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT FOR ALLEGED FAILURE OF PLAINTIFFS TO PRESENT COMPUTATION OF THE AMOUNT BEING CLAIMED AS DEFENDANT JUDICIALLY ADMITTED HAVING RECEIVED THE DEMAND LETTER DATED OCTOBER 22, 1997 WITH COMPUTATION OF THE BALANCE DUE. III. THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT ON THE GROUND THAT THE DEFENDANT FULLY PAID THE CLAIMS OF PLAINTIFFS BASED ON THE ALLEGED RECEIPT OF PAYMENT BY ADORACION LOSLOSO FROM ANA MARIE CONCEPCION MAGLASANG WHICH HAS NOTHING TO DO WITH THE JUDICIALLY ADMITTED OBLIGATION OF APPELLEE." 23 Invoking the rule on judicial admission, petitioners insist that respondent admitted in her Answer with Compulsory Counterclaim that she had paid only a total amount of P2 million and that her unpaid obligation amounts to P200,000.00.24 They thus maintain that the RTC and the CA erred in concluding that said amount had already been paid by respondent. Petitioners add that respondents total liability as shown in the latters statement of account was erroneously computed for failure to compound the monthly interest agreed upon.25 Petitioners also claim that the RTC and the CA erred in giving credence to the receipt presented by respondent to show that her unpaid obligation had already been paid having been allegedly given to a person who was not armed with authority to receive payment.26 The petition is without merit. It is undisputed that the parties entered into a contract to sell a house and lot for a total consideration of P2 million. Considering that the property was payable in installment, they likewise agreed on the payment of interest as well as penalty in case of default. It is likewise settled that respondent was able to pay the total purchase price of P2 million ahead of the agreed term. Afterwhich, they agreed on the remaining balance by way of interest and penalties which is P200,000.00. Considering that the term of payment was not strictly followed and the purchase price had already been fully paid by respondent, the latter presented to petitioners her computation of her liabilities for interests and penalties which was agreed to by petitioners. Petitioners also manifested their conformity to the statement of account prepared by respondent. In paragraph (9) of petitioners Complaint, they stated that:

9) That the Plaintiffs answered the Defendant as follows: "if P200,000 is the correct balance, it is okay with us." x x x.27 But in paragraph (17) thereof, petitioners claimed that defendants outstanding liability as of November 6, 1997 was P487,384.15.28 Different amounts, however, were claimed in their demand letter and in their testimony in court. With the foregoing factual antecedents, petitioners cannot be permitted to assert a different computation of the correct amount of respondents liability. It is noteworthy that in answer to petitioners claim of her purported unpaid obligation, respondent admitted in her Answer with Compulsory Counterclaim that she paid a total amount of P2 million representing the purchase price of the subject house and lot. She then manifested to petitioners and conformed to by respondent that her only balance was P200,000.00. Nowhere in her Answer did she allege the defense of payment. However, during the presentation of her evidence, respondent submitted a receipt to prove that she had already paid the remaining balance. Both the RTC and the CA concluded that respondent had already paid the remaining balance of P200,000.00. Petitioners now assail this, insisting that the court should have maintained the judicial admissions of respondent in her Answer with Compulsory Counterclaim, especially as to their agreed stipulations on interests and penalties as well as the existence of outstanding obligations. It is, thus, necessary to discuss the effect of failure of respondent to plead payment of its obligations. Section 1, Rule 9 of the Rules of Court states that "defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived." Hence, respondent should have been barred from raising the defense of payment of the unpaid P200,000.00. However, Section 5, Rule 10 of the Rules of Court allows the amendment to conform to or authorize presentation of evidence, to wit: Section 5. Amendment to conform to or authorize presentation of evidence. When issues not raised by the pleadings are tried with the express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure to amend does not affect the result of the trial of these issues. If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so with liberality if the presentation of the merits of the action and the ends of substantial justice will be subserved thereby. The court may grant a continuance to enable the amendment to be made. The foregoing provision envisions two scenarios, namely, when evidence is introduced in an issue not alleged in the pleadings and no objection was interjected; and when evidence is offered on an issue not alleged in the pleadings but this time an objection was raised. 29 When the issue is tried without the objection of the parties, it should be treated in all respects as if it had been

raised in the pleadings.30 On the other hand, when there is an objection, the evidence may be admitted where its admission will not prejudice him.31 Thus, while respondent judicially admitted in her Answer that she only paid P2 million and that she still owed petitioners P200,000.00, respondent claimed later and, in fact, submitted an evidence to show that she already paid the whole amount of her unpaid obligation. It is noteworthy that when respondent presented the evidence of payment, petitioners did not object thereto. When the receipt was formally offered as evidence, petitioners did not manifest their objection to the admissibility of said document on the ground that payment was not an issue. Apparently, petitioners only denied receipt of said payment and assailed the authority of Losloso to receive payment. Since there was an implied consent on the part of petitioners to try the issue of payment, even if no motion was filed and no amendment of the pleading has been ordered, 32 the RTC cannot be faulted for admitting respondents testimonial and documentary evidence to prove payment.33 As stressed by the Court in Royal Cargo Corporation v. DFS Sports Unlimited, Inc.,34 The failure of a party to amend a pleading to conform to the evidence adduced during trial does not preclude adjudication by the court on the basis of such evidence which may embody new issues not raised in the pleadings. x x x Although, the pleading may not have been amended to conform to the evidence submitted during trial, judgment may nonetheless be rendered, not simply on the basis of the issues alleged but also on the issues discussed and the assertions of fact proved in the course of the trial. The court may treat the pleading as if it had been amended to conform to the evidence, although it had not been actually amended. x x x Clearly, a court may rule and render judgment on the basis of the evidence before it even though the relevant pleading had not been previously amended, so long as no surprise or prejudice is thereby caused to the adverse party. Put a little differently, so long as the basic requirements of fair play had been met, as where the litigants were given full opportunity to support their respective contentions and to object to or refute each other's evidence, the court may validly treat the pleadings as if they had been amended to conform to the evidence and proceed to adjudicate on the basis of all the evidence before it. (Emphasis supplied) 35 To be sure, petitioners were given ample opportunity to refute the fact of and present evidence to prove payment. With the evidence presented by the contending parties, the more important question to resolve is whether or not respondents obligation had already been extinguished by payment. We rule in the affirmative as aptly held by the RTC and the CA. PAYMENT; WHEN THERE IS PAYMENT Respondents obligation consists of payment of a sum of money. In order to extinguish said obligation, payment should be made to the proper person as set forth in Article 1240 of the Civil Code, to wit:

Article 1240. Payment shall be made to the person in whose favor the obligation has been constituted, or his successor in interest, or any person authorized to receive it. (Emphasis supplied) The Court explained in Cambroon v. City of Butuan, 36 cited in Republic v. De Guzman,37 to whom payment should be made in order to extinguish an obligation: Payment made by the debtor to the person of the creditor or to one authorized by him or by the law to receive it extinguishes the obligation. When payment is made to the wrong party, however, the obligation is not extinguished as to the creditor who is without fault or negligence even if the debtor acted in utmost good faith and by mistake as to the person of the creditor or through error induced by fraud of a third person. In general, a payment in order to be effective to discharge an obligation, must be made to the proper person. Thus, payment must be made to the 127blige himself or to an agent having authority, express or implied, to receive the particular payment. Payment made to one having apparent authority to receive the money will, as a rule, be treated as though actual authority had been given for its receipt. Likewise, if payment is made to one who by law is authorized to act for the creditor, it will work a discharge. The receipt of money due on a judgment by an officer authorized by law to accept it will, therefore, satisfy the debt.38 Admittedly, payment of the remaining balance of P200,000.00 was not made to the creditors themselves. Rather, it was allegedly made to a certain Losloso. Respondent claims that Losloso was the authorized agent of petitioners, but the latter dispute it. Loslosos authority to receive payment was embodied in petitioners Letter 39 addressed to respondent, dated August 7, 1997, where they informed respondent of the amounts they advanced for the payment of the 1997 real estate taxes. In said letter, petitioners reminded respondent of her remaining balance, together with the amount of taxes paid. Taking into consideration the busy schedule of respondent, petitioners advised the latter to leave the payment to a certain Dori who admittedly is Losloso, or to her trusted helper. This is an express authority given to Losloso to receive payment. Moreover, as correctly held by the CA: Furthermore, that Adoracion Losloso was indeed an agent of the appellant spouses is borne out by the following admissions of plaintiff-appellant Atty. Miniano dela Cruz, to wit: Q: You would agree with me that you have authorized this Doiry Losloso to receive payment of whatever balance is due you coming from Ana Marie Concepcion, that is correct? A: In one or two times but not total authority, sir. Q: Yes, but you have authorized her to receive payment? A: One or two times, yes x x x. (TSN, June 28, 1999, pp. 16-17)40

Thus, as shown in the receipt signed by petitioners agent and pursuant to the authority granted by petitioners to Losloso, payment made to the latter is deemed payment to petitioners. We find no reason to depart from the RTC and the CA conclusion that payment had already been made and that it extinguished respondents obligations. RULE 9 EFFECT OF FAILURE TO PLEAD DOCTRINE: GRANT OF 5% MONTHLY INTEREST IS WAY BEYOND THE 12% PER ANNUM INTEREST SOUGHT IN THE COMPLAINT AND SMACKS OF VIOLATION OF DUE PROCESS Q: THE REAL ESTATE MORTGAGE EXECUTED BY THE PARTIES DOES NOT INCLUDE ANY PROVISION ON INTEREST. WHEN PETITIONER FILED HER COMPLAINT BEFORE THE RTC, SHE ALLEGED THAT RESPONDENTS BORROWED FROM HER THE SUM OF 45,000 PESOS, WITH INTEREST THEREON AT THE RATE OF 12% PER ANNUM AND SOUGHT PAYMENT THEROF. SHE DID NOT ALLEGE OR PRAY FOR THE DISPUTED 5% MONTHKY INTEREST. DEFENDANT DID NOT FILE AN ANSWER, HENCE, A DEFAULT ORDER WAS ISSUED. NEITHER DID SHE PRESENT EVIDENCE NOR TESTIFIED THEREON. YET, THE RTCS AWARD OF 5% INTEREST OR 60% PER ANNUM. IS THE RULING OF THE COURT CORRECT? WHY? LETICIA DIONA, represented by her Attorney-in-Fact, MARCELINA DIONA, Petitioner, vs. ROMEO A. BALANGUE, SONNY A. BALANGUE, REYNALDO A. BALANGUE, and ESTEBAN A. BALANGUE, JR., Respondents. G.R. No. 173559, January 7, 2013 DECISION DEL CASTILLO, J.: The great of a relief neither sought by the party in whose favor it was given not supported by the evidence presented violates the opposing partys right to due process and may be declared void ab initio in a proper proceeding. This Petition for Review on Certiorari 1 assails the November 24, 2005 Resolution 2 of the Court of Appeals (CA) issued in G.R. SP No. 85541 which granted the Petition for Annulment of Judgment3 filed by the respondents seeking to nullify that portion of the October 17, 2000 Decision4 of the Regional Trial Court (RTC), Branch 75, Valenzuela City awarding petitioner 5% monthly interest rate for the principal amount of the loan respondent obtained from her. This Petition likewise assails the CAs June 26, 2006 Resolution 5 denying petitioners Motion for Reconsideration. Factual Antecedents The facts of this case are simple and undisputed.

On March 2, 1991, respondents obtained a loan of P45,000.00 from petitioner payable in six months and secured by a Real Estate Mortgage 6 over their 202-square meter property located in Marulas, Valenzuela and covered by Transfer Certificate of Title (TCT) No. V-12296.7 When the debt became due, respondents failed to pay notwithstanding demand. Thus, on September 17, 1999, petitioner filed with the RTC a Complaint8 praying that respondents be ordered: (a) To pay petitioner the principal obligation of P45,000.00, with interest thereon at the rate of 12% per annum, from 02 March 1991 until the full obligation is paid. (b) To pay petitioner actual damages as may be proven during the trial but shall in no case be less than P10,000.00; P25,000.00 by way of attorneys fee, plus P2,000.00 per hearing as appearance fee. (c) To issue a decree of foreclosure for the sale at public auction of the aforementioned parcel of land, and for the disposition of the proceeds thereof in accordance with law, upon failure of the respondents to fully pay petitioner within the period set by law the sums set forth in this complaint. (d) Costs of this suit. Other reliefs and remedies just and equitable under the premises are likewise prayed for. 9 (Emphasis supplied) Respondents were served with summons thru respondent Sonny A. Balangue (Sonny). On October 15, 1999, with the assistance of Atty. Arthur C. Coroza (Atty. Coroza) of the Public Attorneys Office, they filed a Motion to Extend Period to Answer. Despite the requested extension, however, respondents failed to file any responsive pleadings. Thus, upon motion of the petitioner, the RTC declared them in default and allowed petitioner to present her evidence ex parte.10 Ruling of the RTC sought to be annulled. In a Decision11 dated October 17, 2000, the RTC granted petitioners Complaint. The dispositive portion of said Decision reads: WHEREFORE, judgment is hereby rendered in favor of the petitioner, ordering the respondents to pay the petitioner as follows: a) the sum of FORTY FIVE THOUSAND (P45,000.00) PESOS, representing the unpaid principal loan obligation plus interest at 5% per month [sic] reckoned from March 2, 1991, until the same is fully paid; b) P20,000.00 as attorneys fees plus cost of suit; c) in the event the [respondents] fail to satisfy the aforesaid obligation, an order of foreclosure shall be issued accordingly for the sale at public auction of the subject

property covered by Transfer Certificate of Title No. V-12296 and the improvements thereon for the satisfaction of the petitioners claim. SO ORDERED.12 (Emphasis supplied) Subsequently, petitioner filed a Motion for Execution, 13 alleging that respondents did not interpose a timely appeal despite receipt by their former counsel of the RTCs Decision on November 13, 2000. Before it could be resolved, however, respondents filed a Motion to Set Aside Judgment14 dated January 26, 2001, claiming that not all of them were duly served with summons. According to the other respondents, they had no knowledge of the case because their co-respondent Sonny did not inform them about it. They prayed that the RTCs October 17, 2000 Decision be set aside and a new trial be conducted. But on March 16, 2001, the RTC ordered15 the issuance of a Writ of Execution to implement its October 17, 2000 Decision. However, since the writ could not be satisfied, petitioner moved for the public auction of the mortgaged property,16 which the RTC granted.17 In an auction sale conducted on November 7, 2001, petitioner was the only bidder in the amount of P420,000.00. Thus, a Certificate of Sale18 was issued in her favor and accordingly annotated at the back of TCT No. V-12296. Respondents then filed a Motion to Correct/Amend Judgment and To Set Aside Execution Sale 19 dated December 17, 2001, claiming that the parties did not agree in writing on any rate of interest and that petitioner merely sought for a 12% per annum interest in her Complaint. Surprisingly, the RTC awarded 5% monthly interest (or 60% per annum) from March 2, 1991 until full payment. Resultantly, their indebtedness inclusive of the exorbitant interest from March 2, 1991 to May 22, 2001 ballooned from P124,400.00 to P652,000.00. In an Order20 dated May 7, 2002, the RTC granted respondents motion and accordingly modified the interest rate awarded from 5% monthly to 12% per annum. Then on August 2, 2002, respondents filed a Motion for Leave To Deposit/Consign Judgment Obligation 21 in the total amount of P126,650.00.22 Displeased with the RTCs May 7, 2002 Order, petitioner elevated the matter to the CA via a Petition for Certiorari23 under Rule 65 of the Rules of Court. On August 5, 2003, the CA rendered a Decision24 declaring that the RTC exceeded its jurisdiction in awarding the 5% monthly interest but at the same time pronouncing that the RTC gravely abused its discretion in subsequently reducing the rate of interest to 12% per annum. In so ruling, the CA ratiocinated: Indeed, We are convinced that the Trial Court exceeded its jurisdiction when it granted 5% monthly interest instead of the 12% per annum prayed for in the complaint. However, the proper remedy is not to amend the judgment but to declare that portion as a nullity. Void judgment for want of jurisdiction is no judgment at all. It cannot be the source of any right nor the creator of any obligation (Leonor vs. CA, 256 SCRA 69). No legal rights can emanate from a resolution that is null and void (Fortich vs. Corona, 312 SCRA 751).

From the foregoing, the remedy of the respondents is to have the Court declare the portion of the judgment providing for a higher interest than that prayed for as null and void for want of or in excess of jurisdiction. A void judgment never acquire[s] finality and any action to declare its nullity does not prescribe (Heirs of Mayor Nemencio Galvez vs. CA, 255 SCRA 672). WHEREFORE, foregoing premises considered, the Petition having merit, is hereby GIVEN DUE COURSE. Resultantly, the challenged May 7, 2002 and September 5, 2000 orders of Public Respondent Court are hereby ANNULLED and SET ASIDE for having been issued with grave abuse of discretion amounting to lack or in excess of jurisdiction. No costs. SO ORDERED.25 (Emphases in the original; italics supplied.) Proceedings before the Court of Appeals Taking their cue from the Decision of the CA in the special civil action for certiorari, respondents filed with the same court a Petition for Annulment of Judgment and Execution Sale with Damages.26 They contended that the portion of the RTC Decision granting petitioner 5% monthly interest rate is in gross violation of Section 3(d) of Rule 9 of the Rules of Court and of their right to due process. According to respondents, the loan did not carry any interest as it was the verbal agreement of the parties that in lieu thereof petitioners family can continue occupying respondents residential building located in Marulas, Valenzuela for free until said loan is fully paid. Ruling of the Court of Appeals Initially, the CA denied due course to the Petition. 27 Upon respondents motion, however, it reinstated and granted the Petition. In setting aside portions of the RTCs October 17, 2000 Decision, the CA ruled that aside from being unconscionably excessive, the monthly interest rate of 5% was not agreed upon by the parties and that petitioners Complaint clearly sought only the legal rate of 12% per annum. Following the mandate of Section 3(d) of Rule 9 of the Rules of Court, the CA concluded that the awarded rate of interest is void for being in excess of the relief sought in the Complaint. It ruled thus: WHEREFORE, respondents motion for reconsideration is GRANTED and our resolution dated October 13, 2004 is, accordingly, REVERSED and SET ASIDE. In lieu thereof, another is entered ordering the ANNULMENT OF: (a) public respondents impugned October 17, 2000 judgment, insofar as it awarded 5% monthly interest in favor of petitioner; and (b) all proceedings relative to the sale at public auction of the property titled in respondents names under Transfer Certificate of Title No. V-12296 of the Valenzuela registry. The judgment debt adjudicated in public respondents impugned October 17, 2000 judgment is, likewise, ordered RECOMPUTED at the rate of 12% per annum from March 2, 1991. No costs.

SO ORDERED.28 (Emphases in the original.) Petitioner sought reconsideration, which was denied by the CA in its June 26, 2006 Resolution.29 Issues Hence, this Petition anchored on the following grounds: I. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR OF LAW WHEN IT GRANTED RESPONDENTS PETITION FOR ANNULMENT OF JUDGMENT AS A SUBSTITUTE OR ALTERNATIVE REMEDY OF A LOST APPEAL. II. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR AND MISAPPREHENSION OF LAW AND THE FACTS WHEN IT GRANTED RESPONDENTS PETITION FOR ANNULMENT OF JUDGMENT OF THE DECISION OF THE REGIONAL TRIAL COURT OF VALENZUELA, BRANCH 75 DATED OCTOBER 17, 2000 IN CIVIL CASE NO. 241-V-99, DESPITE THE FACT THAT SAID DECISION HAS BECOME FINAL AND ALREADY EXECUTED CONTRARY TO THE DOCTRINE OF IMMUTABILITY OF JUDGMENT.30 Petitioners Arguments Petitioner claims that the CA erred in partially annulling the RTCs October 17, 2000 Decision. She contends that a Petition for Annulment of Judgment may be availed of only when the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no longer available through no fault of the claimant. In the present case, however, respondents had all the opportunity to question the October 17, 2000 Decision of the RTC, but because of their own inaction or negligence they failed to avail of the remedies sanctioned by the rules. Instead, they contented themselves with the filing of a Motion to Set Aside Judgment and then a Motion to Correct/Amend Judgment and to Set Aside Execution Sale. Petitioner likewise argues that for a Rule 47 petition to prosper, the same must either be based on extrinsic fraud or lack of jurisdiction. However, the allegations in respondents Rule 47 petition do not constitute extrinsic fraud because they simply pass the blame to the negligence of their former counsel. In addition, it is too late for respondents to pass the buck to their erstwhile counsel considering that when they filed their Motion to Correct/Amend Judgment and To Set Aside Execution Sale they were already assisted by their new lawyer, Atty. Reynaldo A. Ruiz, who did not also avail of the remedies of new trial, appeal, etc. As to the ground of lack of jurisdiction, petitioner posits that there is no reason to doubt that the RTC had jurisdiction over the subject matter of the case and over the persons of the respondents. While conceding that the RTC patently made a mistake in awarding 5% monthly interest, petitioner nonetheless invokes the doctrine of immutability of final judgment and contends that the RTC Decision can no longer be corrected or modified since it had long become final and executory. She likewise points out that respondents received a copy of said Decision on

November 13, 2000 but did nothing to correct the same. They did not even question the award of 5% monthly interest when they filed their Motion to Set Aside Judgment which they anchored on the sole ground of the RTCs lack of jurisdiction over the persons of some of the respondents. Respondents Arguments Respondents do not contest the existence of their obligation and the principal amount thereof. They only seek quittance from the 5% monthly interest or 60% per annum imposed by the RTC. Respondents contend that Section (3)d of Rule 9 of the Rules of Court is clear that when the defendant is declared in default, the court cannot grant a relief more than what is being prayed for in the Complaint. A judgment which transgresses said rule, according to the respondents, is void for having been issued without jurisdiction and for being violative of due process of law. Respondents maintain that it was through no fault of their own, but through the gross negligence of their former counsel, Atty. Coroza, that the remedies of new trial, appeal or petition for relief from judgment were lost. They allege that after filing a Motion to Extend Period to Answer, Atty. Coroza did not file any pleading resulting to their being declared in default. While the said lawyer filed on their behalf a Motion to Set Aside Judgment dated January 26, 2001, he however took no steps to appeal from the Decision of the RTC, thereby allowing said judgment to lapse into finality. Citing Legarda v. Court of Appeals,31 respondents aver that clients are not always bound by the actions of their counsel, as in the present case where the clients are to lose their property due to the gross negligence of their counsel. With regard to petitioners invocation of immutability of judgment, respondents argue that said doctrine applies only to valid and not to void judgments. Our Ruling The petition must fail. We agree with respondents that the award of 5% monthly interest violated their right to due process and, hence, the same may be set aside in a Petition for Annulment of Judgment filed under Rule 47 of the Rules of Court. Annulment of judgment under Rule 47; an exception to the final judgment rule; grounds therefor. A Petition for Annulment of Judgment under Rule 47 of the Rules of Court is a remedy granted only under exceptional circumstances where a party, without fault on his part, has failed to avail of the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies. Said rule explicitly provides that it is not available as a substitute for a remedy which was lost due to the partys own neglect in promptly availing of the same. "The underlying reason is traceable to the notion that annulling final judgments goes against the grain of finality of judgment. Litigation must end and terminate sometime and somewhere, and it is essential to an effective administration of justice that once a judgment has become final, the issue or cause involved therein should be laid to rest."32

While under Section 2, Rule 4733 of the Rules of Court a Petition for Annulment of Judgment may be based only on the grounds of extrinsic fraud and lack of jurisdiction, jurisprudence recognizes lack of due process as additional ground to annul a judgment. 34 In Arcelona v. Court of Appeals,35 this Court declared that a final and executory judgment may still be set aside if, upon mere inspection thereof, its patent nullity can be shown for having been issued without jurisdiction or for lack of due process of law. Grant of 5% monthly interest is way beyond the 12% per annum interest sought in the Complaint and smacks of violation of due process. It is settled that courts cannot grant a relief not prayed for in the pleadings or in excess of what is being sought by the party. They cannot also grant a relief without first ascertaining the evidence presented in support thereof. Due process considerations require that judgments must conform to and be supported by the pleadings and evidence presented in court. In Development Bank of the Philippines v. Teston,36 this Court expounded that: Due process considerations justify this requirement. It is improper to enter an order which exceeds the scope of relief sought by the pleadings, absent notice which affords the opposing party an opportunity to be heard with respect to the proposed relief. The fundamental purpose of the requirement that allegations of a complaint must provide the measure of recovery is to prevent surprise to the defendant. Notably, the Rules is even more strict in safeguarding the right to due process of a defendant who was declared in default than of a defendant who participated in trial. For instance, amendment to conform to the evidence presented during trial is allowed the parties under the Rules.37 But the same is not feasible when the defendant is declared in default because Section 3(d), Rule 9 of the Rules of Court comes into play and limits the relief that may be granted by the courts to what has been prayed for in the Complaint. It provides: (d) Extent of relief to be awarded. A judgment rendered against a party in default shall not exceed the amount or be different in kind from that prayed for nor award unliquidated damages. The raison dtre in limiting the extent of relief that may be granted is that it cannot be presumed that the defendant would not file an Answer and allow himself to be declared in default had he known that the plaintiff will be accorded a relief greater than or different in kind from that sought in the Complaint.38 No doubt, the reason behind Section 3(d), Rule 9 of the Rules of Court is to safeguard defendants right to due process against unforeseen and arbitrarily issued judgment. This, to the mind of this Court, is akin to the very essence of due process. It embodies "the sporting idea of fair play" 39 and forbids the grant of relief on matters where the defendant was not given the opportunity to be heard thereon. In the case at bench, the award of 5% monthly interest rate is not supported both by the allegations in the pleadings and the evidence on record. The Real Estate Mortgage40 executed by the parties does not include any provision on interest. When petitioner filed her Complaint before the RTC, she alleged that respondents borrowed from her "the sum of FORTY-FIVE THOUSAND PESOS (P45,000.00), with interest thereon at the rate of 12% per annum" 41 and

sought payment thereof. She did not allege or pray for the disputed 5% monthly interest. Neither did she present evidence nor testified thereon. Clearly, the RTCs award of 5% monthly interest or 60% per annum lacks basis and disregards due process. It violated the due process requirement because respondents were not informed of the possibility that the RTC may award 5% monthly interest. They were deprived of reasonable opportunity to refute and present controverting evidence as they were made to believe that the complainant petitioner was seeking for what she merely stated in her Complaint. NOTE: Neither can the grant of the 5% monthly interest be considered subsumed by petitioners general prayer for "other reliefs and remedies just and equitable under the premises x x x." 42 To repeat, the courts grant of relief is limited only to what has been prayed for in the Complaint or related thereto, supported by evidence, and covered by the partys cause of action. 43 Besides, even assuming that the awarded 5% monthly or 60% per annum interest was properly alleged and proven during trial, the same remains unconscionably excessive and ought to be equitably reduced in accordance with applicable jurisprudence. In Bulos, Jr. v. Yasuma,44 this Court held: In the case of Ruiz v. Court of Appeals, citing the cases of Medel v. Court of Appeals, Garcia v. Court of Appeals, Spouses Bautista v. Pilar Development Corporation and the recent case of Spouses Solangon v. Salazar, this Court considered the 3% interest per month or 36% interest per annum as excessive and unconscionable. Thereby, the Court, in the said case, equitably reduced the rate of interest to 1% interest per month or 12% interest per annum. (Citations omitted) It is understandable for the respondents not to contest the default order for, as alleged in their Comment, "it is not their intention to impugn or run away from their just and valid obligation." 45 Nonetheless, their waiver to present evidence should never be construed as waiver to contest patently erroneous award which already transgresses their right to due process, as well as applicable jurisprudence. Respondents former counsel was grossly negligent in handling the case of his clients; respondents did not lose ordinary remedies of new trial, petition for relief, etc. through their own fault. Ordinarily, the mistake, negligence or lack of competence of counsel binds the client. 1wphi1 This is based on the rule that any act performed by a counsel within the scope of his general or implied authority is regarded as an act of his client. A recognized exception to the rule is when the lawyers were grossly negligent in their duty to maintain their clients cause and such amounted to a deprivation of their clients property without due process of law.46 In which case, the courts must step in and accord relief to a client who suffered thereby.47 The manifest indifference of respondents former counsel in handling the cause of his client was already present even from the beginning. It should be recalled that after filing in behalf of his clients a Motion to Extend Period to Answer, said counsel allowed the requested extension to pass without filing an Answer, which resulted to respondents being declared in default. His

negligence was aggravated by the fact that he did not question the awarded 5% monthly interest despite receipt of the RTC Decision on November 13, 2000.48 A simple reading of the dispositive portion of the RTC Decision readily reveals that it awarded exorbitant and unconscionable rate of interest. Its difference from what is being prayed for by the petitioner in her Complaint is so blatant and very patent. It also defies elementary jurisprudence on legal rate of interests. Had the counsel carefully read the judgment it would have caught his attention and compelled him to take the necessary steps to protect the interest of his client. But he did not. Instead, he filed in behalf of his clients a Motion to Set Aside Judgment49 dated January 26, 2001 based on the sole ground of lack of jurisdiction, oblivious to the fact that the erroneous award of 5% monthly interest would result to his clients deprivation of property without due process of law. Worse, he even allowed the RTC Decision to become final by not perfecting an appeal. Neither did he file a petition for relief therefrom. It was only a year later that the patently erroneous award of 5% monthly interest was brought to the attention of the RTC when respondents, thru their new counsel, filed a Motion to Correct/Amend Judgment and To Set Aside Execution Sale. Even the RTC candidly admitted that it "made a glaring mistake in directing the defendants to pay interest on the principal loan at 5% per month which is very different from what was prayed for by the plaintiff."50 "A lawyer owes entire devotion to the interest of his client, warmth and zeal in the maintenance and defense of his rights and the exertion of his utmost learning and ability, to the end that nothing can be taken or withheld from his client except in accordance with the law." 51 Judging from how respondents former counsel handled the cause of his clients, there is no doubt that he was grossly negligent in protecting their rights, to the extent that they were deprived of their property without due process of law. In fine, respondents did not lose the remedies of new trial, appeal, petition for relief and other remedies through their own fault. It can only be attributed to the gross negligence of their erstwhile counsel which prevented them from pursuing such remedies. We cannot also blame respondents for relying too much on their former counsel. Clients have reasonable expectations that their lawyer would amply protect their interest during the trial of the case.52 Here, "respondents are plain and ordinary people x x x who are totally ignorant of the intricacies and technicalities of law and legal procedures. Being so, they completely relied upon and trusted their former counsel to appropriately act as their interest may lawfully warrant and require."53 As a final word, it is worth noting that respondents principal obligation was only P45,000.00. Due to their former counsels gross negligence in handling their cause, coupled with the RTCs erroneous, baseless, and illegal award of 5% monthly interest, they now stand to lose their property and still owe petitioner a large amount of money. As aptly observed by the CA: x x x If the impugned judgment is not, therefore, rightfully nullified, petitioners will not only end up losing their property but will additionally owe private respondent the sum of P232,000.00 plus the legal interest said balance had, in the meantime, earned. As a court of justice and equity, we cannot, in good conscience, allow this unconscionable situation to prevail.54

Indeed, this Court is appalled by petitioners invocation of the doctrine of immutability of judgment. Petitioner does not contest as she even admits that the RTC made a glaring mistake in awarding 5% monthly interest.55 Amazingly, she wants to benefit from such erroneous award. This Court cannot allow this injustice to happen. WHEREFORE, the instant Petition is hereby DENIED and the assailed November 24, 2005 and June 26, 2006 Resolution of the Court of Appeals in CA-G.R. SP No. 85541 are AFFIRMED. SO ORDERED.