Republic of the Philippines Supreme Court Manila

Municipal Trial Court ;MTC<" Imus" Ca$ite for Violation of the Rule of Proce,ure for Small Claims Cases an, the Co,e of %u,icial Con,uct The antece,ent facts are as follo=s7

THIRD DIVISION ERNESTO Z OR!E" Complainant" Orbe is the plaintiff of a small claims case ,oc>ete, as Ci$il Case No ICSCC 4/#9? entitle, E Z Orbe Ta: (ccountin+ Ser$ices" thru" Ernesto Z Orbe $ ) ' M Sil$er Star Cre,it Corporation" represente, b3 )ibra,o Montano" file, before the MTC of Imus" Ca$ite" presi,e, b3 %u,+e Emil3 ( 'elu@ Durin+ the hearin+ of the case on 2ebruar3 /" 04-4" the parties faile, to reach an amicable settlement On the same ,a3" the case =as assi+ne, to respon,ent %u,+e Manolito * 'umaran+" (ssistin+ %u,+e of the MTC of Imus" Ca$ite" for the continuation of the trial Complainant alle+e, that the case =as sche,ule, for hearin+ on March 5" 04-4" but =as postpone, b3 respon,ent to March --" 04-4 because of po=er interruption On March --" 04-4" a+ain the hearin+ =as reset b3 respon,ent %u,+e 'umaran+ to March 0?" 04-4 as he =as ,ue for me,ical chec>#up On March 0?" 04-4" respon,ent con,ucte, another %u,icial Dispute Resolution ;%DR<" an, a+ain reset the hearin+ to (pril -?" 04-4 =hen the parties faile, to reach an amicable a+reement Complainant ar+ue, that %u,+e 'umaran+ $iolate, the Rule of Proce,ure for Small Claims Cases for failure to ,eci,e the ci$il case =ithin fi$e ;?< ,a3s from receipt of the or,er of reassi+nment On (u+ust 0" 04-4" the Office of the Court (,ministrator ;OC(< ,irecte, %u,+e 'umaran+ to submit his comment on the complaint a+ainst him 106 In his Comment1A6 ,ate, September -A" 04-4" %u,+e 'umaran+ e:plaine, that as (ssistin+ %u,+e in the MTC of !acoor" Ca$ite" he trie, small claims cases onl3 on Thurs,a3s He a,mitte, that he faile, to ,eci,e the case =ithin fi$e ;?< =or>in+ ,a3s from receipt of the or,er" as man,ate, b3 the Rule Ho=e$er" he pointe, out that the Rule nee,e, clarification since" as in his case" the fi$e ;?< =or>in+ ,a3s shoul, be construe, to refer to fi$e ;?< calen,are, trial ,ates fallin+ on Thurs,a3s onl3" consi,erin+ that he allotte, onl3 one ,a3" that is Thurs,a3" to hear an, tr3 small claims cases On Ma3 -4" 04--" the OC(" in its Memoran,um"156 recommen,e, that the instant matter be re,oc>ete, as a re+ular a,ministrati$e complaint It li>e=ise foun, %u,+e 'umaran+ +uilt3 of 'ross I+norance of the )a=" but recommen,e, that he be fine, in the amount of 2i$e Thousan, Pesos ;P?"444 44< onl3 for $iolatin+ the Rule of Proce,ure for Small Claims Cases

# $ersus #

%&D'E M(NO)ITO * '&M(R(N'" Pairin+ %u,+e" Municipal Trial Court" Imus" Ca$ite" Respon,ent ( M No MT%#--#-./0 12ormerl3 OC( I P I No -4#00/5#MT%6 Present7 PER()T(" % " (ctin+ Chairperson" (!(D" PEREZ"8 MENDOZ(" an, PER)(S#!ERN(!E" %% Promul+ate,7 September 09" 04-:#######################################################################################:

DECISION

PER()T(" % 7

!efore us is an a,ministrati$e complaint1-6 file, b3 complainant Ernesto Z Orbe ;Orbe< a+ainst %u,+e Manolito * 'umaran+ ;respon,ent<" Pairin+ %u,+e"

Be a+ree =ith the fin,in+s an, recommen,ation of the OC( In,ee," Section 00 of the Rule of Proce,ure for Small Claims Cases clearl3 pro$i,e, for the perio, =ithin =hich Cu,+ment shoul, be ren,ere," to =it7 Section 00 2ailure of Settlement D If efforts at settlement fail" the hearin+ shall procee, in an informal an, e:pe,itious manner an, be terminate, =ithin one ;-< ,a3 Either part3 ma3 mo$e in =ritin+ to ha$e another Cu,+e hear an, ,eci,e the case The reassi+nment of the case shall be ,one in accor,ance =ith e:istin+ issuances The referral b3 the ori+inal Cu,+e to the E:ecuti$e %u,+e shall be ma,e =ithin the same ,a3 the motion is file, an, +rante," an, b3 the E:ecuti$e %u,+e to the ,esi+nate, Cu,+e =ithin the same ,a3 of the referral The ne= Cu,+e shall hear an, ,eci,e the case =ithin fi$e ;?< ,a3s from the receipt of the or,er of reassi+nment 1?6

The theor3 behin, the small claims s3stem is that or,inar3 liti+ation fails to brin+ practical Custice to the parties =hen the ,ispute, claim is small" because the time an, e:pense reGuire, b3 the or,inar3 liti+ation process is so ,isproportionate to the amount in$ol$e, that it ,iscoura+es a Cust resolution of the ,ispute The small claims process is ,esi+ne, to function Guic>l3 an, informall3 There are no la=3ers" no formal plea,in+s an, no strict le+al rules of e$i,ence 1.6 Thus" the intent of the la= in pro$i,in+ the perio, to hear an, ,eci,e cases fallin+ un,er the Rule of Proce,ure for Small Claims Cases" =hich is =ithin fi$e ;?< ,a3s from the receipt of the or,er of assi+nment" is $er3 clear The e:i+enc3 of prompt ren,ition of Cu,+ment in small claims cases is a matter of public polic3 There is no room for further interpretationH it ,oes not reGuire respon,entIs e:ercise of ,iscretion He is ,ut3#boun, to a,here to the rules an, ,eci,e small claims cases =ithout un,ue ,ela3 The nee, for prompt resolution of small claims cases is further emphasi@e, b3 Section -/ of the Rule" =hich pro$i,es that7

In this case" it is un,ispute, that it too> more than t=o ;0< months for respon,ent to ren,er a ,ecision on the subCect case as he himself a,mitte, the series of postponements =hich occurre, ,urin+ the pen,enc3 of the case His lone ar+ument =as that he hears small claims cases on Thurs,a3s onl3" hence" he claime, that" in his case" the perio, of fi$e ;?< =or>in+ ,a3s bein+ referre, to b3 Section 00 of the Rule shoul, pertain onl3 to Thurs,a3s Be are uncon$ince, %u,+e 'umaran+ must ha$e misse, the $er3 purpose an, essence of the creation of the Rule of Proce,ure for Small Claims Cases" as his interpretation of the Rule is rather misplace, It is" therefore" imperati$e to emphasi@e =hat the Court sou+ht to accomplish in creatin+ the Rule of Proce,ure for Small Claims Cases" to =it7 : : : Thus" pursuant to its rule#ma>in+ po=er" the Court" un,er the present Constitution" can a,opt a special rule of proce,ure to +o$ern small claims cases an, select pilot courts that =oul, empo=er the people to brin+ suits before them pro se to resol$e le+al ,isputes in$ol$in+ simple issues of la= an, proce,ure =ithout the nee, for le+al representation an, e:tensi$e Cu,icial inter$ention This s3stem =ill enhance access to Custice" especiall3 b3 those =ho cannot affor, the hi+h costs of liti+ation e$en in cases of relati$el3 small $alue It is en$isione, that b3 facilitatin+ the traffic of cases throu+h simple an, e:pe,itious rules an, means" our Court can impro$e the perception of Custice in this countr3" thus" +i$in+ citi@ens a rene=e, Esta>eF in preser$in+ peace in the lan, : : :196

SEC -/ Postponement Bhen (llo=e, J ( reGuest for postponement of a hearin+ ma3 be +rante, onl3 upon proof of the ph3sical inabilit3 of the part3 to appear before the court on the sche,ule, ,ate an, time ( part3 ma3 a$ail of onl3 one ;-< postponement

In the instant case" it is note=orth3 to mention that the postponements =ere not attribute, to an3 of the parties to the case The numerous postponements" =hich in some instances =ere upon respon,entIs initiati$e" =ere uncalle, for an, unCustifie," consi,erin+ that it =as alrea,3 establishe, that all efforts for amicable settlement =ere futile Thus" the postponements =ere clear $iolation of the Rule an, ,efeat the $er3 essence of the Rule Time an, a+ain" =e ha$e rule, that =hen the rules of proce,ure are clear an, unambi+uous" lea$in+ no room for interpretation" all that is nee,e, to ,o is to simpl3 appl3 it 2ailure to appl3 elementar3 rules of proce,ure constitutes +ross i+norance of the la= an, proce,ure In the instant case" neither +oo, faith nor lac> of malice =ill e:onerate respon,ent" as the rules $iolate, =ere basic proce,ural rules Be cannot countenance un,ue ,ela3 in the ,isposition of cases or motions" especiall3 no= =hen there is an all#out effort to minimi@e if not totall3 era,icate the problem of con+estion lon+ pla+uin+ our courts The reGuirement that cases be ,eci,e, =ithin the re+lementar3 perio, is ,esi+ne, to pre$ent ,ela3 in the a,ministration of Custice 2or ob$iousl3" Custice ,ela3e, is

Custice ,enie, Dela3 in the ,isposition of cases ero,es the faith an, confi,ence of our people in the Cu,iciar3" lo=ers its stan,ar,s" an, brin+s it into ,isrepute 1K6 Section / ;-<" Rule -54 of the Re$ise, Rules of Court" as amen,e," pro$i,es that un,ue ,ela3 in ren,erin+ a ,ecision or or,er is classifie, as a less serious char+e" =hich is punishable b3 suspension from office" =ithout salar3 an, other benefits for not less than one ;-< or more than three ;A< monthsH or a fine of more than P-4"444 44 but not e:cee,in+ P04"444 44 Consi,erin+ that the Rule on small claims is a ne= rule" an, that this is respon,ent Cu,+eLs first $iolation of the rule" =e ,eem it proper to impose a fine in the amount of P?"444 44 BHERE2ORE" the Court fin,s %u,+e Manolito * 'umaran+" Municipal Trial Court" Imus" Ca$ite" '&I)T* of &n,ue Dela3 in Ren,erin+ a Decision an, Violation of the Rule of Proce,ure for Small Claims Cases" an, is hereb3 ORDERED to pa3 a fine of 2i$e Thousan, Pesos ;P?"444 44< an, B(RNED that a repetition of the same or similar act shall be ,ealt =ith more se$erel3 SO ORDERED

The 2acts an, the Case Plaintiff Estelita P 'arcia ;respon,ent in this case< file, a complaint for ,ama+es a+ainst ,efen,ant Eloisa R Narciso ;petitioner< before the Re+ional Trial Court ;RTC< of San 2ernan,o" Pampan+a Narciso file, a motion to ,ismiss the complaint" alle+in+ that the RTC ha, no Curis,iction o$er the subCect matter of the complaint since it a$erre, facts constituti$e of forcible entr3 Narciso also assaile, the $enue as improperl3 lai, since the acts 'arcia complaine, of =ere committe, in (n+eles Cit3 Plaintiff 'arcia oppose, the motion to ,ismiss an, at the same time sou+ht to ha$e ,efen,ant Narciso ,eclare, in ,efault 'arcia cite, the Supreme Courts a,ministrati$e circular that ,iscoura+e, the filin+ of a motion to ,ismiss in lieu of ans=er Since the time to file an ans=er ha, alrea,3 elapse," sai, 'arcia" she =as entitle, to ha$e Narciso ,eclare, in ,efault The RTC set the t=o motions for hearin+ on No$ember ?" 0445 at =hich hearin+ it ,eeme, the inci,ents submitte, for resolution On No$ember A4" 0445" the RTC ,enie, Narcisos motion to ,ismiss an," as a conseGuence" ,eclare, her in ,efault for failin+ to file an ans=er On December 00" 0445 ,efen,ant Narciso file, a motion for reconsi,eration of the or,ers ,en3in+ her motion to ,ismiss an, ,eclarin+ her in ,efault for failin+ to file an ans=er" =hich motion 'arcia oppose, In her opposition" the latter also sou+ht to present her e$i,ence e: parte Meantime" the presi,in+ Cu,+e" Pe,ro M Sun+a" retire, an, %u,+e Di$ina )u@ (Guino#Simbulan replace, him as actin+ Cu,+e of the concerne, RTC branch %u,+e Simbulan referre, the case for me,iation on %une 0A" 044? Bhen me,iation faile," on (u+ust -" 044? the trial court set the case for Cu,icial ,ispute resolution ;%DR< as component of pre#trial" presi,e, o$er b3 %u,+e Maria (mifaith S 2i,er#Re3es Since the %DR also faile," the case =as re# raffle, for pre#trial proper an, trial to !ranch 55" presi,e, o$er b3 %u,+e Esperan@a Pa+lina=an#Ro@ario On March 09" 044." ha$in+ note, that the court ha, not 3et acte, on Narcisos motion for reconsi,eration of the or,ers ,en3in+ her motion to ,ismiss an, ,eclarin+ her in ,efault" the trial court set the case for hearin+ an, reGuire, the parties to submit their respecti$e =ritten manifestations to the court On (u+ust 05" 044. the trial court ,enie, Narcisos motion for reconsi,eration It rule, that since she ha, alrea,3 been ,eclare, in ,efault as earl3 as No$ember A4" 0445 an, since she ha, not file, an3 motion to lift the or,er of ,efault =ithin the allo=able time" Narciso coul, no lon+er assail such ,efault or,er

THIRD DIVISION G.R. No. 196877 : November 21, 2012 ELOISA R. NARCISO, Petitioner" v. ESTELITA . GARCIA, Respondent DECISION A!AD, J.: This case is about the propriet3 of ,eclarin+ a ,efen,ant in ,efault =hen the time for filin+ the ans=er has not 3et elapse,

On September A" 044. Narciso file, a motion to lift the or,er of ,efault a+ainst her She claime, that the protracte, resolution of her motion for reconsi,eration an, the referral of the case for me,iation pre$ente, her from filin+ an ans=er She also pointe, out that she file, a case for eCectment a+ainst 'arcia an, succee,e, in obtainin+ a ,ecision a+ainst the latter On (pril K" 044K the trial court ,enie, Narcisos motion She file, a motion for reconsi,eration of this or,er but the court also ,enie, the same on October -A" 044K" promptin+ Narciso to file a petition for certiorari before the Court of (ppeals ;C(< On December K" 04-4-MNrOPll the C( ,enie, her petition an, affirme, the RTCs or,er The C( hel, that" =hile a motion to lift or,er of ,efault ma3 be file, at an3 time after notice an, before Cu,+ment" Narciso nee,e, to alle+e facts constitutin+ frau," acci,ent" mista>e" or e:cusable ne+li+ence that pre$ente, her from ans=erin+ the complaint She also nee,e, to sho= a meritorious ,efense or that somethin+ =oul, be +aine, b3 ha$in+ the or,er of ,efault set asi,e 0MNrOPll 2or the C(" petitioner faile, to ,o these thin+s It ,enie, Narcisos motion for reconsi,eration of its ,ecision on (pril --" 04-- AMNrOPll Claimin+ that the C( committe, +ra$e abuse of ,iscretion amountin+ to lac> or e:cess of Curis,iction" Narciso file, the present petition for certiorari =ith pra3er for the issuance of a temporar3 restrainin+ or,er ;TRO< an, inCunction In a Resolution ,ate, %une K" 04-- the Court issue, a TRO in the case" enCoinin+ the RTC from procee,in+ =ith its hearin+ until further or,ers 5MNrOPll The Issue Presente, The sole issue presente, in this case is =hether or not the C( +ra$el3 abuse, its ,iscretion in affirmin+ the or,er of ,efault that the RTC issue, a+ainst petitioner Narciso The Courts Rulin+ Section A" Rule / of the Rules of Court pro$i,es that a ,efen,in+ part3 ma3 be ,eclare, in ,efault upon motion of the claimin+ part3 =ith notice to the ,efen,in+ part3" an, proof of failure to file an ans=er =ithin the time allo=e, for it Thus7chanrobles$irtualla=librar3 SEC A DefaultH ,eclaration of If the ,efen,in+ part3 fails to ans=er =ithin the time allo=e, therefor" the court shall" upon motion of the claimin+ part3 =ith notice to the ,efen,in+ part3" an, proof of such failure" ,eclare the ,efen,in+ part3 in ,efault : : : Here" ho=e$er" ,efen,ant Narciso file, a motion to ,ismiss plaintiff 'arcias complaint a+ainst her before filin+ an ans=er Section -" Rule -9 allo=s her this reme,3 Thus7chanrobles$irtualla=librar3

SEC - 'roun,s Bithin the time for but before filin+ the ans=er to the complaint or plea,in+ assertin+ a claim" a motion to ,ismiss ma3 be ma,e on an3 of the follo=in+ +roun,s7 : : : (s a conseGuence of the motion to ,ismiss that ,efen,ant Narciso file," the runnin+ of the perio, ,urin+ =hich the rules reGuire, her to file her ans=er =as ,eeme, suspen,e, Bhen the trial court ,enie, her motion to ,ismiss" therefore" she ha, the balance of her perio, for filin+ an ans=er un,er Section 5" Rule -9 =ithin =hich to file the same but in no case less than fi$e ,a3s" compute, from her receipt of the notice of ,enial of her motion to ,ismiss Thus7chanrobles$irtualla=librar3 SEC 5 Time to plea, If the motion is ,enie," the mo$ant shall file his ans=er =ithin the balance of the perio, prescribe, b3 Rule -- to =hich he =as entitle, at the time of ser$in+ his motion" but not less than fi$e ;?< ,a3s in an3 e$ent" compute, from his receipt of the notice of the ,enial If the plea,in+ is or,ere, to be amen,e," he shall file his ans=er =ithin the perio, prescribe, b3 Rule -counte, from ser$ice of the amen,e, plea,in+" unless the court pro$i,es a lon+er perio, !ut apart from opposin+ ,efen,ants motion to ,ismiss" plaintiff 'arcia as>e, the trial court to ,eclare Narciso in ,efault for not filin+ an ans=er" alto+ether ,isre+ar,in+ the suspension of the runnin+ of the perio, for filin+ such an ans=er ,urin+ the pen,enc3 of the motion to ,ismiss that she file, in the case ConseGuentl3" =hen the trial court +rante, 'arcias pra3er an, simultaneousl3 ,enie, Narcisos motion to ,ismiss an, ,eclare, her in ,efault" it committe, serious error Narciso =as not 3et in ,efault =hen the trial court ,enie, her motion to ,ismiss She still ha, at least fi$e ,a3s =ithin =hich to file her ans=er to the complaint Bhat is more" Narciso ha, the ri+ht to file a motion for reconsi,eration of the trial courts or,er ,en3in+ her motion to ,ismiss No rule prohibits the filin+ of such a motion for reconsi,eration Onl3 after the trial court shall ha$e ,enie, it ,oes Narciso become boun, to file her ans=er to 'arcias complaint (n, onl3 if she ,i, not ,o so =as 'arcia entitle, to ha$e her ,eclare, in ,efault &nfortunatel3" the C( faile, to see this point MNOQOROSblOTOPOUrMVORllORMWlOUbrORr BHERE2ORE" the Court (NN&)S an, SETS (SIDE the Decision of the Court of (ppeals ,ate, December K" 04-4 an, Resolution ,ate, (pril --" 04-- in C(# ' R SP -4950?" )I2TS the or,er of ,efault that the Re+ional Trial Court of San 2ernan,o" Pampan+a" !ranch 55" entere, a+ainst petitioner Eloisa Narciso" an, DIRECTS that court to allo= her to file her ans=er to the complaint an, procee, to hear the case =ith ,ispatch The court DISSO)VES the temporar3 restrainin+ or,er that it issue, on %une K" 04-- to enable the trial court to resume procee,in+s in the case MNrORlORMWlOUbrORr

SO ORDERED.

Petitioner Xorea Technolo+ies Co " )t, ;XO'IES< is a Xorean corporation =hich is en+a+e, in the suppl3 an, installation of )iGuefie, Petroleum 'as ;)P'< C3lin,er manufacturin+ plants" =hile pri$ate respon,ent Pacific 'eneral Steel Manufacturin+ Corp ;P'SMC< is a ,omestic corporation On March ?" -//." P'SMC an, XO'IES e:ecute, a Contract- =hereb3 XO'IES =oul, set up an )P' C3lin,er Manufacturin+ Plant in Carmona" Ca$ite The contract =as e:ecute, in the Philippines On (pril ." -//." the parties e:ecute," in Xorea" an (men,ment for Contract No X)P#/.4A4- ,ate, March ?" -//.0 amen,in+ the terms of pa3ment The contract an, its amen,ment stipulate, that XO'IES =ill ship the machiner3 an, facilities necessar3 for manufacturin+ )P' c3lin,ers for =hich P'SMC =oul, pa3 &SD -"005"444 XO'IES =oul, install an, initiate the operation of the plant for =hich P'SMC boun, itself to pa3 &SD A49"444 upon the plantLs pro,uction of the --# >+ )P' c3lin,er samples Thus" the total contract price amounte, to &SD -"?A4"444 On October -5" -//." P'SMC entere, into a Contract of )easeA =ith Borth Properties" Inc ;Borth< for use of BorthLs ?"4./#sGuare meter propert3 =ith a 5"4A0#sGuare meter =arehouse buil,in+ to house the )P' manufacturin+ plant The monthl3 rental =as PhP A00"?94 commencin+ on %anuar3 -" -//K =ith a -4Y annual increment clause SubseGuentl3" the machineries" eGuipment" an, facilities for the manufacture of )P' c3lin,ers =ere shippe," ,eli$ere," an, installe, in the Carmona plant P'SMC pai, XO'IES &SD -"005"444 %&'(&r) 7, 2008 Ho=e$er" +leane, from the Certificate5 e:ecute, b3 the parties on %anuar3 00" -//K" after the installation of the plant" the initial operation coul, not be con,ucte, as P'SMC encountere, financial ,ifficulties affectin+ the suppl3 of materials" thus forcin+ the parties to a+ree that XO'IES =oul, be ,eeme, to ha$e completel3 complie, =ith the terms an, con,itions of the March ?" -//. contract 2or the remainin+ balance of &SDA49"444 for the installation an, initial operation of the plant" P'SMC issue, t=o post,ate, chec>s7 ;-< !PI Chec> No 4A-95-0 ,ate, %anuar3 A4" -//K for PhP 5"?44"444H an, ;0< !PI Chec> No 4A-95-A ,ate, March A4" -//K for PhP 5"?44"444 ? Bhen XO'IES ,eposite, the chec>s" these =ere ,ishonore, for the reason ZP(*MENT STOPPED Z Thus" on Ma3 K" -//K" XO'IES sent a ,eman, letter9 to P'SMC threatenin+ criminal action for $iolation of Batas Pambansa Blg. 00 in case of nonpa3ment On the same ,ate" the =ife of P'SMCLs Presi,ent fa:e, a letter ,ate, Ma3 ." -//K to XO'IESL Presi,ent =ho =as then sta3in+ at a Ma>ati Cit3 hotel She complaine, that not onl3 ,i, XO'IES ,eli$er a ,ifferent bran, of h3,raulic press from that a+ree, upon but it ha, not ,eli$ere, se$eral eGuipment parts alrea,3 pai, for

SECOND DIVISION G.R. No. 1"#$81

*OREA TECHNOLOGIES CO., LTD., petitioner" $s HON. AL!ERTO A. LER+A, ,' -,. /&0&/,1) &. re.,2,'3 %(23e o4 !r&'/2$6 o4 Re3,o'&5 Tr,&5 Co(r1 o4 +('1,'5(0& C,1), &'2 ACI6IC GENERAL STEEL +AN76ACT7RING COR ORATION, respon,ents DECISION VELASCO, %R., J.: In our Curis,iction" the polic3 is to fa$or alternati$e metho,s of resol$in+ ,isputes" particularl3 in ci$il an, commercial ,isputes (rbitration alon+ =ith me,iation" conciliation" an, ne+otiation" bein+ ine:pensi$e" spee,3 an, less hostile metho,s ha$e lon+ been fa$ore, b3 this Court The petition before us puts at issue an arbitration clause in a contract mutuall3 a+ree, upon b3 the parties stipulatin+ that the3 =oul, submit themsel$es to arbitration in a forei+n countr3 Re+rettabl3" instea, of hastenin+ the resolution of their ,ispute" the parties =ittin+l3 or un=ittin+l3 prolon+e, the contro$ers3

On Ma3 -5" -//K" P'SMC replie, that the t=o chec>s it issue, XO'IES =ere full3 fun,e, but the pa3ments =ere stoppe, for reasons pre$iousl3 ma,e >no=n to XO'IES . On %une -" -//K" P'SMC informe, XO'IES that P'SMC =as cancelin+ their Contract ,ate, March ?" -//. on the +roun, that XO'IES ha, altere, the Guantit3 an, lo=ere, the Gualit3 of the machineries an, eGuipment it ,eli$ere, to P'SMC" an, that P'SMC =oul, ,ismantle an, transfer the machineries" eGuipment" an, facilities installe, in the Carmona plant 2i$e ,a3s later" P'SMC file, before the Office of the Public Prosecutor an (ffi,a$it#Complaint for Estafa ,oc>ete, as I S No /K#4AK-A a+ainst Mr Dae H3un Xan+" Presi,ent of XO'IES On %une -?" -//K" XO'IES =rote P'SMC informin+ the latter that P'SMC coul, not unilaterall3 rescin, their contract nor ,ismantle an, transfer the machineries an, eGuipment on mere ima+ine, $iolations b3 XO'IES It also insiste, that their ,isputes shoul, be settle, b3 arbitration as a+ree, upon in (rticle -?" the arbitration clause of their contract On %une 0A" -//K" P'SMC a+ain =rote XO'IES reiteratin+ the contents of its %une -" -//K letter threatenin+ that the machineries" eGuipment" an, facilities installe, in the plant =oul, be ,ismantle, an, transferre, on %ul3 5" -//K Thus" on %ul3 -" -//K" XO'IES institute, an (pplication for (rbitration before the Xorean Commercial (rbitration !oar, ;XC(!< in Seoul" Xorea pursuant to (rt -? of the Contract as amen,e, On %ul3 A" -//K" XO'IES file, a Complaint for Specific Performance" ,oc>ete, as Ci$il Case No /K#--.K a+ainst P'SMC before the Muntinlupa Cit3 Re+ional Trial Court ;RTC< The RTC +rante, a temporar3 restrainin+ or,er ;TRO< on %ul3 5" -//K" =hich =as subseGuentl3 e:ten,e, until %ul3 00" -//K In its complaint" XO'IES alle+e, that P'SMC ha, initiall3 a,mitte, that the chec>s that =ere stoppe, =ere not fun,e, but later on claime, that it stoppe, pa3ment of the chec>s for the reason that Ztheir $alue =as not recei$e,Z as the former alle+e,l3 breache, their contract b3 Zalterin+ the Guantit3 an, lo=erin+ the Gualit3 of the machiner3 an, eGuipmentZ installe, in the plant an, faile, to ma>e the plant operational althou+h it earlier certifie, to the contrar3 as sho=n in a %anuar3 00" -//K Certificate )i>e=ise" XO'IES a$erre, that P'SMC $iolate, (rt -? of their Contract" as amen,e," b3 unilaterall3 rescin,in+ the contract =ithout resortin+ to arbitration XO'IES also as>e, that P'SMC be restraine, from ,ismantlin+ an, transferrin+ the machiner3 an, eGuipment installe, in the plant =hich the latter threatene, to ,o on %ul3 5" -//K On %ul3 /" -//K" P'SMC file, an opposition to the TRO ar+uin+ that XO'IES =as not entitle, to the TRO since (rt -?" the arbitration clause" =as null an, $oi, for bein+ a+ainst public polic3 as it ousts the local courts of Curis,iction o$er the instant contro$ers3

On %ul3 -." -//K" P'SMC file, its (ns=er =ith Compulsor3 Counterclaim/ assertin+ that it ha, the full ri+ht to ,ismantle an, transfer the machineries an, eGuipment because it ha, pai, for them in full as stipulate, in the contractH that XO'IES =as not entitle, to the PhP /"444"444 co$ere, b3 the chec>s for failin+ to completel3 install an, ma>e the plant operationalH an, that XO'IES =as liable for ,ama+es amountin+ to PhP 5"?44"444 for alterin+ the Guantit3 an, lo=erin+ the Gualit3 of the machineries an, eGuipment Moreo$er" P'SMC a$erre, that it has alrea,3 pai, PhP 0"0?."/04 in rent ;co$erin+ %anuar3 to %ul3 -//K< to Borth an, it =as not =illin+ to further shoul,er the cost of rentin+ the premises of the plant consi,erin+ that the )P' c3lin,er manufacturin+ plant ne$er became operational (fter the parties submitte, their Memoran,a" on %ul3 0A" -//K" the RTC issue, an Or,er ,en3in+ the application for a =rit of preliminar3 inCunction" reasonin+ that P'SMC ha, pai, XO'IES &SD -"005"444" the $alue of the machineries an, eGuipment as sho=n in the contract such that XO'IES no lon+er ha, proprietar3 ri+hts o$er them (n, finall3" the RTC hel, that (rt -? of the Contract as amen,e, =as in$ali, as it ten,e, to oust the trial court or an3 other court Curis,iction o$er an3 ,ispute that ma3 arise bet=een the parties XO'IESL pra3er for an inCuncti$e =rit =as ,enie, -4 The ,ispositi$e portion of the Or,er state,7 BHERE2ORE" in $ie= of the fore+oin+ consi,eration" this Court belie$es an, so hol,s that no co+ent reason e:ists for this Court to +rant the =rit of preliminar3 inCunction to restrain an, refrain ,efen,ant from ,ismantlin+ the machineries an, facilities at the lot an, buil,in+ of Borth Properties" Incorporate, at Carmona" Ca$ite an, transfer the same to another site7 an, therefore ,enies plaintiffLs application for a =rit of preliminar3 inCunction On %ul3 0/" -//K" XO'IES file, its Repl3 to (ns=er an, (ns=er to Counterclaim -- XO'IES ,enie, it ha, altere, the Guantit3 an, lo=ere, the Gualit3 of the machiner3" eGuipment" an, facilities it ,eli$ere, to the plant It claime, that it ha, performe, all the un,erta>in+s un,er the contract an, ha, alrea,3 pro,uce, certifie, samples of )P' c3lin,ers It a$erre, that =hate$er =as unfinishe, =as P'SMCLs fault since it faile, to procure ra= materials ,ue to lac> of fun,s XO'IES" rel3in+ on Chung Fu Industries (Phils.), Inc. v. Court of ppeals"-0 insiste, that the arbitration clause =as =ithout Guestion $ali, (fter XO'IES file, a Supplemental Memoran,um =ith Motion to Dismiss-A ans=erin+ P'SMCLs memoran,um of %ul3 00" -//K an, see>in+ ,ismissal of P'SMCLs counterclaims" XO'IES" on (u+ust 5" -//K" file, its Motion for Reconsi,eration-5 of the %ul3 0A" -//K Or,er ,en3in+ its application for an inCuncti$e =rit claimin+ that the contract =as not merel3 for machiner3 an, facilities =orth &SD -"005"444 but =as for the sale of an Z)P' manufacturin+ plantZ consistin+ of Zsuppl3 of all the machiner3 an, facilitiesZ an, Ztransfer of technolo+3Z for a total contract price of &SD -"?A4"444 such that the ,ismantlin+

an, transfer of the machiner3 an, facilities =oul, result in the ,ismantlin+ an, transfer of the $er3 plant itself to the +reat preCu,ice of XO'IES as the still unpai, o=ner[seller of the plant Moreo$er" XO'IES points out that the arbitration clause un,er (rt -? of the Contract as amen,e, =as a $ali, arbitration stipulation un,er (rt 0455 of the Ci$il Co,e an, as hel, b3 this Court in Chung Fu Industries (Phils.), Inc -? In the meantime" P'SMC file, a Motion for Inspection of Thin+s -9 to ,etermine =hether there =as in,ee, alteration of the Guantit3 an, lo=erin+ of Gualit3 of the machineries an, eGuipment" an, =hether these =ere properl3 installe, XO'IES oppose, the motion positin+ that the Gueries an, issues raise, in the motion for inspection fell un,er the co$era+e of the arbitration clause in their contract On September 0-" -//K" the trial court issue, an Or,er ;-< +rantin+ P'SMCLs motion for inspectionH ;0< ,en3in+ XO'IESL motion for reconsi,eration of the %ul3 0A" -//K RTC Or,erH an, ;A< ,en3in+ XO'IESL motion to ,ismiss P'SMCLs compulsor3 counterclaims as these counterclaims fell =ithin the reGuisites of compulsor3 counterclaims On October 0" -//K" XO'IES file, an &r+ent Motion for Reconsi,eration -. of the September 0-" -//K RTC Or,er +rantin+ inspection of the plant an, ,en3in+ ,ismissal of P'SMCLs compulsor3 counterclaims Ten ,a3s after" on October -0" -//K" =ithout =aitin+ for the resolution of its October 0" -//K ur+ent motion for reconsi,eration" XO'IES file, before the Court of (ppeals ;C(< a petition for certiorari -K ,oc>ete, as C(#' R SP No 5/05/" see>in+ annulment of the %ul3 0A" -//K an, September 0-" -//K RTC Or,ers an, pra3in+ for the issuance of =rits of prohibition" man,amus" an, preliminar3 inCunction to enCoin the RTC an, P'SMC from inspectin+" ,ismantlin+" an, transferrin+ the machineries an, eGuipment in the Carmona plant" an, to ,irect the RTC to enforce the specific a+reement on arbitration to resol$e the ,ispute In the meantime" on October -/" -//K" the RTC ,enie, XO'IESL ur+ent motion for reconsi,eration an, ,irecte, the !ranch Sheriff to procee, =ith the inspection of the machineries an, eGuipment in the plant on October 0K" -//K -/ Thereafter" XO'IES file, a Supplement to the Petition 04 in C(#' R SP No 5/05/ informin+ the C( about the October -/" -//K RTC Or,er It also reiterate, its pra3er for the issuance of the =rits of prohibition" man,amus an, preliminar3 inCunction =hich =as not acte, upon b3 the C( XO'IES asserte, that the !ranch Sheriff ,i, not ha$e the technical e:pertise to ascertain =hether or not the machineries an, eGuipment conforme, to the specifications in the contract an, =ere properl3 installe,

On No$ember --" -//K" the !ranch Sheriff file, his SheriffLs Report 0- fin,in+ that the enumerate, machineries an, eGuipment =ere not full3 an, properl3 installe, T-e Co(r1 o4 A00e&5. &44,rme2 1-e 1-e &rb,1r&1,o' /5&(.e &3&,'.1 0(b5,/ 0o5,/) 1r,&5 /o(r1 &'2 2e/5&re2

On Ma3 A4" 0444" the C( ren,ere, the assaile, Decision00 affirmin+ the RTC Or,ers an, ,ismissin+ the petition for certiorari file, b3 XO'IES The C( foun, that the RTC ,i, not +ra$el3 abuse its ,iscretion in issuin+ the assaile, %ul3 0A" -//K an, September 0-" -//K Or,ers Moreo$er" the C( reasone, that XO'IESL contention that the total contract price for &SD -"?A4"444 =as for the =hole plant an, ha, not been full3 pai, =as contrar3 to the fin,in+ of the RTC that P'SMC full3 pai, the price of &SD -"005"444" =hich =as for all the machineries an, eGuipment (ccor,in+ to the C(" this ,etermination b3 the RTC =as a factual fin,in+ be3on, the ambit of a petition for certiorari On the issue of the $ali,it3 of the arbitration clause" the C( a+ree, =ith the lo=er court that an arbitration clause =hich pro$i,e, for a final ,etermination of the le+al ri+hts of the parties to the contract b3 arbitration =as a+ainst public polic3 On the issue of nonpa3ment of ,oc>et fees an, non#attachment of a certificate of non#forum shoppin+ b3 P'SMC" the C( hel, that the counterclaims of P'SMC =ere compulsor3 ones an, pa3ment of ,oc>et fees =as not reGuire, since the (ns=er =ith counterclaim =as not an initiator3 plea,in+ 2or the same reason" the C( sai, a certificate of non#forum shoppin+ =as also not reGuire, 2urthermore" the C( hel, that the petition for certiorari ha, been file, prematurel3 since XO'IES ,i, not =ait for the resolution of its ur+ent motion for reconsi,eration of the September 0-" -//K RTC Or,er =hich =as the plain" spee,3" an, a,eGuate reme,3 a$ailable (ccor,in+ to the C(" the RTC must be +i$en the opportunit3 to correct an3 alle+e, error it has committe," an, that since the assaile, or,ers =ere interlocutor3" these cannot be the subCect of a petition for certiorari Hence" =e ha$e this Petition for Re$ie= on Certiorari un,er Rule 5? T-e I..(e. Petitioner posits that the appellate court committe, the follo=in+ errors7 a PRONO&NCIN' THE \&ESTION O2 OBNERSHIP OVER THE M(CHINER* (ND 2(CI)ITIES (S Z( \&ESTION O2 2(CTZ Z!E*OND THE

(M!IT O2 ( PETITION 2OR CERTIOR(RIZ INTENDED ON)* 2OR CORRECTION O2 ERRORS O2 %&RISDICTION OR 'R(VE (!&SE O2 DISCRETION (MO&NTIN' TO )(CX O2 ;SIC< E]CESS O2 %&RISDICTION" (ND CONC)&DIN' TH(T THE TRI() CO&RTLS 2INDIN' ON THE S(ME \&ESTION B(S IMPROPER)* R(ISED IN THE PETITION !E)OBH b DEC)(RIN' (S N&)) (ND VOID THE (R!ITR(TION C)(&SE IN (RTIC)E -? O2 THE CONTR(CT !ETBEEN THE P(RTIES 2OR !EIN' ZCONTR(R* TO P&!)IC PO)IC*Z (ND 2OR O&STIN' THE CO&RTS O2 %&RISDICTIONH c DECREEIN' PRIV(TE RESPONDENTLS CO&NTERC)(IMS TO !E ()) COMP&)SOR* NOT NECESSIT(TIN' P(*MENT O2 DOCXET 2EES (ND CERTI2IC(TION O2 NON#2OR&M SHOPPIN'H , R&)IN' TH(T THE PETITION B(S 2I)ED PREM(T&RE)* BITHO&T B(ITIN' 2OR THE RESO)&TION O2 THE MOTION 2OR RECONSIDER(TION O2 THE ORDER D(TED SEPTEM!ER 0-" -//K OR BITHO&T 'IVIN' THE TRI() CO&RT (N OPPORT&NIT* TO CORRECT ITSE)2H e PROC)(IMIN' THE TBO ORDERS D(TED %&)* 0A (ND SEPTEM!ER 0-" -//K NOT TO !E PROPER S&!%ECTS O2 CERTIOR(RI (ND PROHI!ITION 2OR !EIN' ZINTER)OC&TOR* IN N(T&REHZ f NOT 'R(NTIN' THE RE)IE2S (ND REMEDIES PR(*ED 2OR IN HE ;SIC< PETITION (ND" INSTE(D" DISMISSIN' THE S(ME 2OR ())E'ED)* ZBITHO&T MERIT Z0A T-e Co(r18. R(5,'3 The petition is partl3 meritorious !efore =e ,el$e into the substanti$e issues" =e shall first tac>le the proce,ural issues T-e r(5e. o' 1-e 0&)me'1 o4 2o/9e1 4ee. 4or /o('1er/5&,m. &'2 /ro.. /5&,m. :ere &me'2e2 e44e/1,ve A(3(.1 16, 200" XO'IES stron+l3 ar+ues that =hen P'SMC file, the counterclaims" it shoul, ha$e pai, ,oc>et fees an, file, a certificate of non#forum shoppin+" an, that its failure to ,o so =as a fatal ,efect Be ,isa+ree =ith XO'IES

(s aptl3 rule, b3 the C(" the counterclaims of P'SMC =ere incorporate, in its (ns=er =ith Compulsor3 Counterclaim ,ate, %ul3 -." -//K in accor,ance =ith Section K of Rule --" -//. Re$ise, Rules of Ci$il Proce,ure" the rule that =as effecti$e at the time the (ns=er =ith Counterclaim =as file, Sec K on e:istin+ counterclaim or cross#claim states" Z( compulsor3 counterclaim or a cross#claim that a ,efen,in+ part3 has at the time he files his ans=er shall be containe, therein Z On %ul3 -." -//K" at the time P'SMC file, its (ns=er incorporatin+ its counterclaims a+ainst XO'IES" it =as not liable to pa3 filin+ fees for sai, counterclaims bein+ compulsor3 in nature Be stress" ho=e$er" that effecti$e (u+ust -9" 0445 un,er Sec ." Rule -5-" as amen,e, b3 ( M No 45#0#45#SC" ,oc>et fees are no= reGuire, to be pai, in compulsor3 counterclaim or cross# claims (s to the failure to submit a certificate of forum shoppin+" P'SMCLs (ns=er is not an initiator3 plea,in+ =hich reGuires a certification a+ainst forum shoppin+ un,er Sec ?05 of Rule ." -//. Re$ise, Rules of Ci$il Proce,ure It is a responsi$e plea,in+" hence" the courts a !uo ,i, not commit re$ersible error in ,en3in+ XO'IESL motion to ,ismiss P'SMCLs compulsor3 counterclaims I'1er5o/(1or) or2er. 0ro0er .(b;e/1 o4 /er1,or&r, Citin+ "amboa v. Cru#"0? the C( also pronounce, that Zcertiorari an, Prohibition are neither the reme,ies to Guestion the propriet3 of an interlocutor3 or,er of the trial court Z09 The C( erre, on its reliance on "amboa "amboa in$ol$e, the ,enial of a motion to acGuit in a criminal case =hich =as not assailable in an action for certiorari since the ,enial of a motion to Guash reGuire, the accuse, to plea, an, to continue =ith the trial" an, =hate$er obCections the accuse, ha, in his motion to Guash can then be use, as part of his ,efense an, subseGuentl3 can be raise, as errors on his appeal if the Cu,+ment of the trial court is a,$erse to him The +eneral rule is that interlocutor3 or,ers cannot be challen+e, b3 an appeal 0. Thus" in $amao%a v. Pescarich &anufacturing Corporation" =e hel,7 The proper reme,3 in such cases is an or,inar3 appeal from an a,$erse Cu,+ment on the merits" incorporatin+ in sai, appeal the +roun,s for assailin+ the interlocutor3 or,ers (llo=in+ appeals from interlocutor3 or,ers =oul, result in the ^sorr3 spectacleL of a case bein+ subCect of a counterpro,ucti$e ping' pong to an, from the appellate court as often as a trial court is percei$e, to ha$e ma,e an error in an3 of its interlocutor3 rulin+s Ho=e$er" =here the assaile, interlocutor3 or,er =as issue, =ith +ra$e abuse of ,iscretion or patentl3 erroneous an, the reme,3 of appeal =oul, not affor, a,eGuate an, e:pe,itious relief" the Court allo=s certiorari as a mo,e of re,ress 0K

(lso" appeals from interlocutor3 or,ers =oul, open the floo,+ates to en,less occasions for ,ilator3 motions Thus" =here the interlocutor3 or,er =as issue, =ithout or in e:cess of Curis,iction or =ith +ra$e abuse of ,iscretion" the reme,3 is certiorari 0/ The alle+e, +ra$e abuse of ,iscretion of the respon,ent court eGui$alent to lac> of Curis,iction in the issuance of the t=o assaile, or,ers couple, =ith the fact that there is no plain" spee,3" an, a,eGuate reme,3 in the or,inar3 course of la= ampl3 pro$i,es the basis for allo=in+ the resort to a petition for certiorari un,er Rule 9? rem&1(r,1) o4 1-e 0e1,1,o' be4ore 1-e CA Neither ,o =e thin> that XO'IES =as +uilt3 of forum shoppin+ in filin+ the petition for certiorari Note that XO'IESL motion for reconsi,eration of the %ul3 0A" -//K RTC Or,er =hich ,enie, the issuance of the inCuncti$e =rit ha, alrea,3 been ,enie, Thus" XO'IESL onl3 reme,3 =as to assail the RTCLs interlocutor3 or,er $ia a petition for certiorari un,er Rule 9? Bhile the October 0" -//K motion for reconsi,eration of XO'IES of the September 0-" -//K RTC Or,er relatin+ to the inspection of thin+s" an, the allo=ance of the compulsor3 counterclaims has not 3et been resol$e," the circumstances in this case =oul, allo= an e:ception to the rule that before certiorari ma3 be a$aile, of" the petitioner must ha$e file, a motion for reconsi,eration an, sai, motion shoul, ha$e been first resol$e, b3 the court a Guo The reason behin, the rule is Zto enable the lo=er court" in the first instance" to pass upon an, correct its mista>es =ithout the inter$ention of the hi+her court ZA4 The September 0-" -//K RTC Or,er ,irectin+ the branch sheriff to inspect the plant" eGuipment" an, facilities =hen he is not competent an, >no=le,+eable on sai, matters is e$i,entl3 fla=e, an, ,e$oi, of an3 le+al support Moreo$er" there is an ur+ent necessit3 to resol$e the issue on the ,ismantlin+ of the facilities an, an3 further ,ela3 =oul, preCu,ice the interests of XO'IES In,ee," there is real an, imminent threat of irreparable ,estruction or substantial ,ama+e to XO'IESL eGuipment an, machineries Be fin, the resort to certiorari base, on the +ra$el3 abusi$e or,ers of the trial court sans the rulin+ on the October 0" -//K motion for reconsi,eration to be proper T-e Core I..(e: Ar1,/5e 1$ o4 1-e Co'1r&/1 Be no= +o to the core issue of the $ali,it3 of (rt -? of the Contract" the arbitration clause It pro$i,es7

(rticle -? rbitration J(ll ,isputes" contro$ersies" or ,ifferences =hich ma3 arise bet=een the parties" out of or in relation to or in connection =ith this Contract or for the breach thereof" shall finall3 be settle, b3 arbitration in Seoul" Xorea in accor,ance =ith the Commercial (rbitration Rules of the Xorean Commercial (rbitration !oar, T-e &:&r2 re'2ere2 b) 1-e &rb,1r&1,o'<.= .-&55 be 4,'&5 &'2 b,'2,'3 (0o' bo1- 0&r1,e. /o'/er'e2 ;Emphasis supplie, < Petitioner claims the RTC an, the C( erre, in rulin+ that the arbitration clause is null an, $oi, Petitioner is correct Establishe, in this Curis,iction is the rule that the la= of the place =here the contract is ma,e +o$erns (e) loci contractus The contract in this case =as perfecte, here in the Philippines Therefore" our la=s ou+ht to +o$ern Nonetheless" (rt 0455 of the Ci$il Co,e sanctions the $ali,it3 of mutuall3 a+ree, arbitral clause or the finalit3 an, bin,in+ effect of an arbitral a=ar, (rt 0455 pro$i,es" ZA') .1,0(5&1,o' 1-&1 1-e &rb,1r&1or.8 &:&r2 or 2e/,.,o' .-&55 be 4,'&5, ,. v&5,2" =ithout preCu,ice to (rticles 04AK" 04A/ an, 0454 Z ;Emphasis supplie, < (rts 04AK"A- 04A/"A0 an, 0454AA abo$ecite, refer to instances =here a compromise or an arbitral a=ar," as applie, to (rt 0455 pursuant to (rt 045A"A5 ma3 be $oi,e," rescin,e," or annulle," but these =oul, not ,eni+rate the finalit3 of the arbitral a=ar, The arbitration clause =as mutuall3 an, $oluntaril3 a+ree, upon b3 the parties It has not been sho=n to be contrar3 to an3 la=" or a+ainst morals" +oo, customs" public or,er" or public polic3 There has been no sho=in+ that the parties ha$e not ,ealt =ith each other on eGual footin+ Be fin, no reason =h3 the arbitration clause shoul, not be respecte, an, complie, =ith b3 both parties In "on#ales v. Clima) &ining (td "A? =e hel, that submission to arbitration is a contract an, that a clause in a contract pro$i,in+ that all matters in ,ispute bet=een the parties shall be referre, to arbitration is a contract A9 (+ain in *el &onte Corporation'+, v. Court of ppeals " =e li>e=ise rule, that Z1t6he pro$ision to submit to arbitration an3 ,ispute arisin+ therefrom an, the relationship of the parties is part of that contract an, is itself a contract ZA. Arb,1r&1,o' /5&(.e 'o1 /o'1r&r) 1o 0(b5,/ 0o5,/) The arbitration clause =hich stipulates that the arbitration must be ,one in Seoul" Xorea in accor,ance =ith the Commercial (rbitration Rules of the XC(!" an, that the arbitral a=ar, is final an, bin,in+" is not contrar3 to public polic3 This Court has sanctione, the $ali,it3 of arbitration clauses in a catena of cases

In the -/?. case ofEastboard -avigation (td. v. .uan $smael and Co., Inc."AK this Court ha, occasion to rule that an arbitration clause to resol$e ,ifferences an, breaches of mutuall3 a+ree, contractual terms is $ali, In BF Corporation v. Court of ppeals" =e hel, that Z1i6n this Curis,iction" arbitration has been hel, $ali, an, constitutional E$en before the appro$al on %une -/" -/?A of Republic (ct No K.9" this Court has countenance, the settlement of ,isputes throu+h arbitration Republic (ct No K.9 =as a,opte, to supplement the Ne= Ci$il Co,eLs pro$isions on arbitration Z A/ (n, in (& Po/er Engineering Corporation v. Capitol Industrial Construction "roups, Inc " =e ,eclare, that7 !ein+ an ine:pensi$e" spee,3 an, amicable metho, of settlin+ ,isputes" arbitrationDDalon+ =ith me,iation" conciliation an, ne+otiationDDis encoura+e, b3 the Supreme Court (si,e from unclo++in+ Cu,icial ,oc>ets" arbitration also hastens the resolution of ,isputes" especiall3 of the commercial >in, It is thus re+ar,e, as the Z=a$e of the futureZ in international ci$il an, commercial ,isputes !rushin+ asi,e a contractual a+reement callin+ for arbitration bet=een the parties =oul, be a step bac>=ar, Consistent =ith the abo$e#mentione, polic3 of encoura+in+ alternati$e ,ispute resolution metho,s" courts shoul, liberall3 construe arbitration clauses Pro$i,e, such clause is susceptible of an interpretation that co$ers the asserte, ,ispute" an or,er to arbitrate shoul, be +rante, (n3 ,oubt shoul, be resol$e, in fa$or of arbitration 54 Ha$in+ sai, that the instant arbitration clause is not a+ainst public polic3" =e come to the Guestion on =hat +o$erns an arbitration clause specif3in+ that in case of an3 ,ispute arisin+ from the contract" an arbitral panel =ill be constitute, in a forei+n countr3 an, the arbitration rules of the forei+n countr3 =oul, +o$ern an, its a=ar, shall be final an, bin,in+ RA 928$ ,'/or0or&1e2 1o :-,/- :e &re & .,3'&1or) 1-e 7NCITRAL +o2e5 5&:

CH(PTER 5 # INTERN(TION() COMMERCI() (R!ITR(TION SEC -/ doption of the &odel (a/ on International Commercial rbitration DD International commercial arbitration shall be +o$erne, b3 the Mo,el )a= on International Commercial (rbitration ;the ZMo,el )a=Z< a,opte, b3 the &nite, Nations Commission on International Tra,e )a= on %une 0-" -/K? ;&nite, Nations Document ([54[-.< an, recommen,e, for enactment b3 the 'eneral (ssembl3 in Resolution No 54[.0 appro$e, on December --" -/K?" cop3 of =hich is hereto attache, as (ppen,i: Z(Z SEC 04 Interpretation of &odel (a/ DDIn interpretin+ the Mo,el )a=" re+ar, shall be ha, to its international ori+in an, to the nee, for uniformit3 in its interpretation an, resort ma3 be ma,e to the travau) preparatories an, the report of the Secretar3 'eneral of the &nite, Nations Commission on International Tra,e )a= ,ate, March 0?" -/K? entitle," ZInternational Commercial (rbitration7 (nal3tical Commentar3 on Draft Tra,e i,entifie, b3 reference number ([CN /[095 Z Bhile R( /0K? =as passe, onl3 in 0445" it nonetheless applies in the instant case since it is a proce,ural la= =hich has a retroacti$e effect )i>e=ise" XO'IES file, its application for arbitration before the XC(! on %ul3 -" -//K an, it is still pen,in+ because no arbitral a=ar, has 3et been ren,ere, Thus" R( /0K? is applicable to the instant case Bell#settle, is the rule that proce,ural la=s are construe, to be applicable to actions pen,in+ an, un,etermine, at the time of their passa+e" an, are ,eeme, retroacti$e in that sense an, to that e:tent (s a +eneral rule" the retroacti$e application of proce,ural la=s ,oes not $iolate an3 personal ri+hts because no $este, ri+ht has 3et attache, nor arisen from them 50 (mon+ the pertinent features of R( /0K? appl3in+ an, incorporatin+ the &NCITR() Mo,el )a= are the follo=in+7 <1= T-e RTC m(.1 re4er 1o &rb,1r&1,o' ,' 0ro0er /&.e.

2or ,omestic arbitration procee,in+s" =e ha$e particular a+encies to arbitrate ,isputes arisin+ from contractual relations In case a forei+n arbitral bo,3 is chosen b3 the parties" the arbitration rules of our ,omestic arbitration bo,ies =oul, not be applie, (s si+nator3 to the (rbitration Rules of the &NCITR() Mo,el )a= on International Commercial (rbitration 5- of the &nite, Nations Commission on International Tra,e )a= ;&NCITR()< in the Ne= *or> Con$ention on %une 0-" -/K?" the Philippines committe, itself to be boun, b3 the Mo,el )a= Be ha$e e$en incorporate, the Mo,el )a= in Republic (ct No ;R(< /0K?" other=ise >no=n as the (lternati$e Dispute Resolution (ct of 0445 entitle, n ct to Institutionali#e the +se of an lternative *ispute Resolution ,0stem in the Philippines and to Establish the 1ffice for lternative *ispute Resolution, and for 1ther Purposes" promul+ate, on (pril 0" 0445 Secs -/ an, 04 of Chapter 5 of the Mo,el )a= are the pertinent pro$isions7

&n,er Sec 05" the RTC ,oes not ha$e Curis,iction o$er ,isputes that are properl3 the subCect of arbitration pursuant to an arbitration clause" an, man,ates the referral to arbitration in such cases" thus7 SEC 05 Referral to rbitration DD( court before =hich an action is brou+ht in a matter =hich is the subCect matter of an arbitration a+reement shall" if at least one part3 so reGuests not later than the pre#trial conference" or upon the reGuest of both parties thereafter" refer the parties to arbitration unless it fin,s that the arbitration a+reement is null an, $oi," inoperati$e or incapable of bein+ performe,

<2= 6ore,3' &rb,1r&5 &:&r2. m(.1 be /o'4,rme2 b) 1-e RTC 2orei+n arbitral a=ar,s =hile mutuall3 stipulate, b3 the parties in the arbitration clause to be final an, bin,in+ are not imme,iatel3 enforceable or cannot be implemente, imme,iatel3 Sec A?5A of the &NCITR() Mo,el )a= stipulates the reGuirement for the arbitral a=ar, to be reco+ni@e, b3 a competent court for enforcement" =hich court un,er Sec A9 of the &NCITR() Mo,el )a= ma3 refuse reco+nition or enforcement on the +roun,s pro$i,e, for R( /0K? incorporate, these pro$isos to Secs 50" 5A" an, 55 relati$e to Secs 5. an, 5K" thus7 SEC 50 pplication of the -e/ $or% Convention DDThe Ne= *or> Con$ention shall +o$ern the reco+nition an, enforcement of arbitral a=ar,s co$ere, b3 sai, Con$ention The reco+nition an, enforcement of such arbitral a=ar,s shall be file, =ith the Re3,o'&5 Tr,&5 Co(r1 in accor,ance =ith the rules of proce,ure to be promul+ate, b3 the Supreme Court Sai, proce,ural rules shall pro$i,e that the part3 rel3in+ on the a=ar, or appl3in+ for its enforcement shall file =ith the court the ori+inal or authenticate, cop3 of the a=ar, an, the arbitration a+reement If the a=ar, or a+reement is not ma,e in an3 of the official lan+ua+es" the part3 shall suppl3 a ,ul3 certifie, translation thereof into an3 of such lan+ua+es The applicant shall establish that the countr3 in =hich forei+n arbitration a=ar, =as ma,e in part3 to the Ne= *or> Con$ention :::: SEC 5A Recognition and Enforcement of Foreign rbitral /ards -ot Covered b0 the -e/ $or% Convention DDThe reco+nition an, enforcement of forei+n arbitral a=ar,s not co$ere, b3 the Ne= *or> Con$ention shall be ,one in accor,ance =ith proce,ural rules to be promul+ate, b3 the Supreme Court The Court ma3" on +roun,s of comit3 an, reciprocit3" reco+ni@e an, enforce a non# con$ention a=ar, as a con$ention a=ar, SEC 55 Foreign rbitral /ard -ot Foreign .udgment DD( forei+n arbitral a=ar, =hen confirme, b3 a court of a forei+n countr3" shall be reco+ni@e, an, enforce, as a forei+n arbitral a=ar, an, not as a Cu,+ment of a forei+n court ( forei+n arbitral a=ar," =hen confirme, b3 the Re+ional Trial Court" shall be enforce, in the same manner as final an, e:ecutor3 ,ecisions of courts of la= of the Philippines ::::

SEC 5. 2enue and .urisdiction DDProcee,in+s for reco+nition an, enforcement of an arbitration a+reement or for $acations" settin+ asi,e" correction or mo,ification of an arbitral a=ar," an, an3 application =ith a court for arbitration assistance an, super$ision shall be ,eeme, as special procee,in+s an, shall be file, =ith the Re+ional Trial Court ;i< =here arbitration procee,in+s are con,ucte,H ;ii< =here the asset to be attache, or le$ie, upon" or the act to be enCoine, is locate,H ;iii< =here an3 of the parties to the ,ispute resi,es or has his place of businessH or ;i$< in the National %u,icial Capital Re+ion" at the option of the applicant SEC 5K -otice of Proceeding to Parties DDIn a special procee,in+ for reco+nition an, enforcement of an arbitral a=ar," the Court shall sen, notice to the parties at their a,,ress of recor, in the arbitration" or if an3 part cannot be ser$e, notice at such a,,ress" at such part3Ls last >no=n a,,ress The notice shall be sent al least fifteen ;-?< ,a3s before the ,ate set for the initial hearin+ of the application It is no= clear that forei+n arbitral a=ar,s =hen confirme, b3 the RTC are ,eeme, not as a Cu,+ment of a forei+n court but as a forei+n arbitral a=ar," an, =hen confirme," are enforce, as final an, e:ecutor3 ,ecisions of our courts of la= Thus" it can be +leane, that the concept of a final an, bin,in+ arbitral a=ar, is similar to Cu,+ments or a=ar,s +i$en b3 some of our Guasi#Cu,icial bo,ies" li>e the National )abor Relations Commission an, Mines (,Cu,ication !oar," =hose final Cu,+ments are stipulate, to be final an, bin,in+" but not imme,iatel3 e:ecutor3 in the sense that the3 ma3 still be Cu,iciall3 re$ie=e," upon the instance of an3 part3 Therefore" the final forei+n arbitral a=ar,s are similarl3 situate, in that the3 nee, first to be confirme, b3 the RTC <#= T-e RTC -&. ;(r,.2,/1,o' 1o rev,e: 4ore,3' &rb,1r&5 &:&r2. Sec 50 in relation to Sec 5? of R( /0K? ,esi+nate, an, $este, the RTC =ith specific authorit3 an, Curis,iction to set asi,e" reCect" or $acate a forei+n arbitral a=ar, on +roun,s pro$i,e, un,er (rt A5;0< of the &NCITR() Mo,el )a= Secs 50 an, 5? pro$i,e7 SEC 50 pplication of the -e/ $or% Convention DDThe Ne= *or> Con$ention shall +o$ern the reco+nition an, enforcement of arbitral a=ar,s co$ere, b3 sai, Con$ention The reco+nition an, enforcement of such arbitral a=ar,s shall be file, =ith the Re3,o'&5 Tr,&5 Co(r1 in accor,ance =ith the rules of proce,ure to be promul+ate, b3 the Supreme Court Sai, proce,ural rules shall pro$i,e that the part3 rel3in+ on the a=ar, or appl3in+ for its enforcement shall file =ith the court

the ori+inal or authenticate, cop3 of the a=ar, an, the arbitration a+reement If the a=ar, or a+reement is not ma,e in an3 of the official lan+ua+es" the part3 shall suppl3 a ,ul3 certifie, translation thereof into an3 of such lan+ua+es The applicant shall establish that the countr3 in =hich forei+n arbitration a=ar, =as ma,e is part3 to the Ne= *or> Con$ention If the application for reCection or suspension of enforcement of an a=ar, has been ma,e" the Re+ional Trial Court ma3" if it consi,ers it proper" $acate its ,ecision an, ma3 also" on the application of the part3 claimin+ reco+nition or enforcement of the a=ar," or,er the part3 to pro$i,e appropriate securit3 :::: SEC 5? Re3ection of a Foreign rbitral /ard DD( part3 to a forei+n arbitration procee,in+ ma3 oppose an application for reco+nition an, enforcement of the arbitral a=ar, in accor,ance =ith the proce,ures an, rules to be promul+ate, b3 the Supreme Court onl3 on those +roun,s enumerate, un,er (rticle V of the Ne= *or> Con$ention (n3 other +roun, raise, shall be ,isre+ar,e, b3 the Re+ional Trial Court Thus" =hile the RTC ,oes not ha$e Curis,iction o$er ,isputes +o$erne, b3 arbitration mutuall3 a+ree, upon b3 the parties" still the forei+n arbitral a=ar, is subCect to Cu,icial re$ie= b3 the RTC =hich can set asi,e" reCect" or $acate it In this sense" =hat this Court hel, in Chung Fu Industries (Phils.), Inc relie, upon b3 XO'IES is applicable insofar as the forei+n arbitral a=ar,s" =hile final an, bin,in+" ,o not oust courts of Curis,iction since these arbitral a=ar,s are not absolute an, =ithout e:ceptions as the3 are still Cu,iciall3 re$ie=able Chapter . of R( /0K? has ma,e it clear that all arbitral a=ar,s" =hether ,omestic or forei+n" are subCect to Cu,icial re$ie= on specific +roun,s pro$i,e, for <"= Gro('2. 4or ;(2,/,&5 rev,e: 2,44ere'1 ,' 2ome.1,/ &'2 4ore,3' &rb,1r&5 &:&r2. The ,ifferences bet=een a final arbitral a=ar, from an international or forei+n arbitral tribunal an, an a=ar, +i$en b3 a local arbitral tribunal are the specific +roun,s or con,itions that $est Curis,iction o$er our courts to re$ie= the a=ar,s 2or forei+n or international arbitral a=ar,s =hich must first be confirme, b3 the RTC" the +roun,s for settin+ asi,e" reCectin+ or $acatin+ the a=ar, b3 the RTC are pro$i,e, un,er (rt A5;0< of the &NCITR() Mo,el )a= 2or final ,omestic arbitral a=ar,s" =hich also nee, confirmation b3 the RTC pursuant to Sec 0A of R( K.9 55 an, shall be reco+ni@e, as final an, e:ecutor3

,ecisions of the RTC"5? the3 ma3 onl3 be assaile, before the RTC an, $acate, on the +roun,s pro$i,e, un,er Sec 0? of R( K.9 59 <$= RTC 2e/,.,o' o4 &..&,5e2 4ore,3' &rb,1r&5 &:&r2 &00e&5&b5e Sec 59 of R( /0K? pro$i,es for an appeal before the C( as the reme,3 of an a++rie$e, part3 in cases =here the RTC sets asi,e" reCects" $acates" mo,ifies" or corrects an arbitral a=ar," thus7 SEC 59 ppeal from Court *ecision or rbitral /ards J( ,ecision of the Re+ional Trial Court confirmin+" $acatin+" settin+ asi,e" mo,if3in+ or correctin+ an arbitral a=ar, ma3 be appeale, to the Court of (ppeals in accor,ance =ith the rules an, proce,ure to be promul+ate, b3 the Supreme Court The losin+ part3 =ho appeals from the Cu,+ment of the court confirmin+ an arbitral a=ar, shall be reGuire, b3 the appellate court to post a counterbon, e:ecute, in fa$or of the pre$ailin+ part3 eGual to the amount of the a=ar, in accor,ance =ith the rules to be promul+ate, b3 the Supreme Court Thereafter" the C( ,ecision ma3 further be appeale, or re$ie=e, before this Court throu+h a petition for re$ie= un,er Rule 5? of the Rules of Court GS+C -&. reme2,e. 1o 0ro1e/1 ,1. ,'1ere.1. Thus" base, on the fore+oin+ features of R( /0K?" P'SMC must submit to the forei+n arbitration as it boun, itself throu+h the subCect contract Bhile it ma3 ha$e mis+i$in+s on the forei+n arbitration ,one in Xorea b3 the XC(!" it has a$ailable reme,ies un,er R( /0K? Its interests are ,ul3 protecte, b3 the la= =hich reGuires that the arbitral a=ar, that ma3 be ren,ere, b3 XC(! must be confirme, here b3 the RTC before it can be enforce, Bith our ,isGuisition abo$e" petitioner is correct in its contention that an arbitration clause" stipulatin+ that the arbitral a=ar, is final an, bin,in+" ,oes not oust our courts of Curis,iction as the international arbitral a=ar," the a=ar, of =hich is not absolute an, =ithout e:ceptions" is still Cu,iciall3 re$ie=able un,er certain con,itions pro$i,e, for b3 the &NCITR() Mo,el )a= on IC( as applie, an, incorporate, in R( /0K? 2inall3" it must be note, that there is nothin+ in the subCect Contract =hich pro$i,es that the parties ma3 ,ispense =ith the arbitration clause 7',5&1er&5 re./,..,o' ,m0ro0er &'2 ,55e3&5

Ha$in+ rule, that the arbitration clause of the subCect contract is $ali, an, bin,in+ on the parties" an, not contrar3 to public polic3H conseGuentl3" bein+ boun, to the contract of arbitration" a part3 ma3 not unilaterall3 rescin, or terminate the contract for =hate$er cause =ithout first resortin+ to arbitration Bhat this Court hel, in +niversit0 of the Philippines v. *e (os ngeles 5. an, reiterate, in succee,in+ cases"5Kthat the act of treatin+ a contract as rescin,e, on account of infractions b3 the other contractin+ part3 is $ali, albeit pro$isional as it can be Cu,iciall3 assaile," is not applicable to the instant case on account of a $ali, stipulation on arbitration Bhere an arbitration clause in a contract is a$ailin+" neither of the parties can unilaterall3 treat the contract as rescin,e, since =hate$er infractions or breaches b3 a part3 or ,ifferences arisin+ from the contract must be brou+ht first an, resol$e, b3 arbitration" an, not throu+h an e:traCu,icial rescission or Cu,icial action The issues arisin+ from the contract bet=een P'SMC an, XO'IES on =hether the eGuipment an, machineries ,eli$ere, an, installe, =ere properl3 installe, an, operational in the plant in Carmona" Ca$iteH the o=nership of eGuipment an, pa3ment of the contract priceH an, =hether there =as substantial compliance b3 XO'IES in the pro,uction of the samples" +i$en the alle+e, fact that P'SMC coul, not suppl3 the ra= materials reGuire, to pro,uce the sample )P' c3lin,ers" are matters proper for arbitration In,ee," =e note that on %ul3 -" -//K" XO'IES institute, an (pplication for (rbitration before the XC(! in Seoul" Xorea pursuant to (rt -? of the Contract as amen,e, Thus" it is incumbent upon P'SMC to abi,e b3 its commitment to arbitrate Corollaril3" the trial court +ra$el3 abuse, its ,iscretion in +rantin+ P'SMCLs Motion for Inspection of Thin+s on September 0-" -//K" as the subCect matter of the motion is un,er the primar3 Curis,iction of the mutuall3 a+ree, arbitral bo,3" the XC(! in Xorea In a,,ition" =hate$er fin,in+s an, conclusions ma,e b3 the RTC !ranch Sheriff from the inspection ma,e on October 0K" -//K" as or,ere, b3 the trial court on October -/" -//K" is of no =orth as sai, Sheriff is not technicall3 competent to ascertain the actual status of the eGuipment an, machineries as installe, in the plant 2or these reasons" the September 0-" -//K an, October -/" -//K RTC Or,ers pertainin+ to the +rant of the inspection of the eGuipment an, machineries ha$e to be recalle, an, nullifie, I..(e o' o:'er.-,0 o4 05&'1 0ro0er 4or &rb,1r&1,o'

Petitioner assails the C( rulin+ that the issue petitioner raise, on =hether the total contract price of &SD -"?A4"444 =as for the =hole plant an, its installation is be3on, the ambit of a Petition for Certiorari PetitionerLs position is untenable It is settle, that Guestions of fact cannot be raise, in an ori+inal action for certiorari 5/ Bhether or not there =as full pa3ment for the machineries an, eGuipment an, installation is in,ee, a factual issue prohibite, b3 Rule 9? Ho=e$er" =hat appears to constitute a +ra$e abuse of ,iscretion is the or,er of the RTC in resol$in+ the issue on the o=nership of the plant =hen it is the arbitral bo,3 ;XC(!< an, not the RTC =hich has Curis,iction an, authorit3 o$er the sai, issue The RTCLs ,etermination of such factual issue constitutes +ra$e abuse of ,iscretion an, must be re$erse, an, set asi,e RTC -&. ,'1er,m ;(r,.2,/1,o' 1o 0ro1e/1 1-e r,3-1. o4 1-e 0&r1,e. (nent the %ul3 0A" -//K Or,er ,en3in+ the issuance of the inCuncti$e =rit pa$in+ the =a3 for P'SMC to ,ismantle an, transfer the eGuipment an, machineries" =e fin, it to be in or,er consi,erin+ the factual milieu of the instant case 2irstl3" =hile the issue of the proper installation of the eGuipment an, machineries mi+ht =ell be un,er the primar3 Curis,iction of the arbitral bo,3 to ,eci,e" 3et the RTC un,er Sec 0K of R( /0K? has Curis,iction to hear an, +rant interim measures to protect $este, ri+hts of the parties Sec 0K pertinentl3 pro$i,es7 SEC 0K "rant of interim &easure of Protection J;a< I1 ,. 'o1 ,'/om0&1,b5e :,1- &' &rb,1r&1,o' &3reeme'1 4or & 0&r1) 1o re>(e.1, be4ore /o'.1,1(1,o' o4 1-e 1r,b('&5, 4rom & Co(r1 1o 3r&'1 .(/- me&.(re (fter constitution of the arbitral tribunal an, ,urin+ arbitral procee,in+s" a reGuest for an interim measure of protection" or mo,ification thereof" ma3 be ma,e =ith the arbitral or 1o 1-e e?1e'1 1-&1 1-e &rb,1r&5 1r,b('&5 -&. 'o 0o:er 1o &/1 or ,. ('&b5e 1o &/1 e44e/1,v,1), 1-e re>(e.1 m&) be m&2e :,1- 1-e Co(r1 The arbitral tribunal is ,eeme, constitute, =hen the sole arbitrator or the thir, arbitrator" =ho has been nominate," has accepte, the nomination an, =ritten communication of sai, nomination an, acceptance has been recei$e, b3 the part3 ma>in+ the reGuest ;b< The follo=in+ rules on interim or pro$isional relief shall be obser$e,7 (n3 part3 ma3 reGuest that pro$isional relief be +rante, a+ainst the a,$erse part3

Such relief ma3 be +rante,7 ;i< 1o 0reve'1 ,rre0&r&b5e 5o.. or ,';(r)H ;ii< to pro$i,e securit3 for the performance of an3 obli+ationH ;iii< to pro,uce or preser$e an3 e$i,enceH or ;i$< to compel an3 other appropriate act or omission ;c< The or,er +rantin+ pro$isional relief ma3 be con,itione, upon the pro$ision of securit3 or an3 act or omission specifie, in the or,er ;,< Interim or pro$isional relief is reGueste, b3 =ritten application transmitte, b3 reasonable means to the Court or arbitral tribunal as the case ma3 be an, the part3 a+ainst =hom the relief is sou+ht" ,escribin+ in appropriate ,etail the precise relief" the part3 a+ainst =hom the relief is reGueste," the +roun,s for the relief" an, the e$i,ence supportin+ the reGuest ;e< T-e or2er .-&55 be b,'2,'3 (0o' 1-e 0&r1,e. ;f< Either part3 ma3 appl3 =ith the Court for assistance in implementin+ or enforcin+ an interim measure or,ere, b3 an arbitral tribunal ;+< ( part3 =ho ,oes not compl3 =ith the or,er shall be liable for all ,ama+es resultin+ from noncompliance" inclu,in+ all e:penses" an, reasonable attorne3Is fees" pai, in obtainin+ the or,erLs Cu,icial enforcement ;Emphasis ours < (rt -.;0< of the &NCITR() Mo,el )a= on IC( ,efines an Zinterim measureZ of protection as7 rticle 45. Po/er of arbitral tribunal to order interim measures ::: ::: ::: ;0< (n ,'1er,m me&.(re is an3 temporar3 measure" =hether in the form of an a=ar, or in another form" b3 =hich" at an3 time prior to the issuance of the a=ar, b3 =hich the ,ispute is finall3 ,eci,e," the arbitral tribunal or,ers a part3 to7 (a) Maintain or restore the status Guo pen,in+ ,etermination of the ,isputeH

(b) Ta>e action that =oul, pre$ent" or refrain from ta>in+ action that is li>el3 to cause" current or imminent harm or preCu,ice to the arbitral process itselfH (c) Pro$i,e a means of preser$in+ assets out of =hich a subseGuent a=ar, ma3 be satisfie,H or (d) Preser$e e$i,ence that ma3 be rele$ant an, material to the resolution of the ,ispute (rt -. % of &NCITR() Mo,el )a= on IC( also +rants courts po=er an, Curis,iction to issue interim measures7 rticle 45 .. Court'ordered interim measures ( court shall ha$e the same po=er of issuin+ an interim measure in relation to arbitration procee,in+s" irrespecti$e of =hether their place is in the territor3 of this State" as it has in relation to procee,in+s in courts The court shall e:ercise such po=er in accor,ance =ith its o=n proce,ures in consi,eration of the specific features of international arbitration In the recent 0449 case of 6ransfield Philippines, Inc. v. (u#on 70dro Corporation" =e =ere e:plicit that e$en Zthe pen,enc3 of an arbitral procee,in+ ,oes not foreclose resort to the courts for pro$isional reliefs Z Be e:plicate, this =a37 (s a fun,amental point" the pen,enc3 of arbitral procee,in+s ,oes not foreclose resort to the courts for pro$isional reliefs The Rules of the ICC" =hich +o$erns the partiesL arbitral ,ispute" allo=s the application of a part3 to a Cu,icial authorit3 for interim or conser$ator3 measures )i>e=ise" Section -5 of Republic (ct ;R ( < No K.9 ;The (rbitration )a=< reco+ni@es the ri+hts of an3 part3 to petition the court to ta>e measures to safe+uar, an,[or conser$e an3 matter =hich is the subCect of the ,ispute in arbitration In a,,ition" R ( /0K?" other=ise >no=n as the Z(lternati$e Dispute Resolution (ct of 0445"Z allo=s the filin+ of pro$isional or interim measures =ith the re+ular courts =hene$er the arbitral tribunal has no po=er to act or to act effecti$el3 ?4 It is thus be3on, ca$il that the RTC has authorit3 an, Curis,iction to +rant interim measures of protection Secon,l3" consi,erin+ that the eGuipment an, machineries are in the possession of P'SMC" it has the ri+ht to protect an, preser$e the eGuipment an, machineries in the best =a3 it can Consi,erin+ that the )P' plant =as non# operational" P'SMC has the ri+ht to ,ismantle an, transfer the eGuipment an, machineries either for their protection an, preser$ation or for the better =a3 to

ma>e +oo, use of them =hich is ineluctabl3 =ithin the mana+ement ,iscretion of P'SMC Thir,l3" an, of +reater import is the reason that maintainin+ the eGuipment an, machineries in BorthLs propert3 is not to the best interest of P'SMC ,ue to the prohibiti$e rent =hile the )P' plant as set#up is not operational P'SMC =as losin+ PhPA00"?94 as monthl3 rentals or PhPA K.M for -//K alone =ithout consi,erin+ the -4Y annual rent increment in maintainin+ the plant 2ourthl3" an, corollaril3" =hile the XC(! can rule on motions or petitions relatin+ to the preser$ation or transfer of the eGuipment an, machineries as an interim measure" 3et on hin,si+ht" the %ul3 0A" -//K Or,er of the RTC allo=in+ the transfer of the eGuipment an, machineries +i$en the non#reco+nition b3 the lo=er courts of the arbitral clause" has accor,e, an interim measure of protection to P'SMC =hich =oul, other=ise been irreparabl3 ,ama+e, 2ifth" XO'IES is not unCustl3 preCu,ice, as it has alrea,3 been pai, & substantial amount base, on the contract Moreo$er , XO'IES is ampl3 protecte, b3 the arbitral action it has institute, before the XC(!" the a=ar, of =hich can be enforce, in our Curis,iction throu+h the RTC !esi,es" b3 our ,ecision" P'SMC is compelle, to submit to arbitration pursuant to the $ali, arbitration clause of its contract =ith XO'IES GS+C 1o 0re.erve 1-e .(b;e/1 e>(,0me'1 &'2 m&/-,'er,e. 2inall3" =hile P'SMC ma3 ha$e been +rante, the ri+ht to ,ismantle an, transfer the subCect eGuipment an, machineries" it ,oes not ha$e the ri+ht to con$e3 or ,ispose of the same consi,erin+ the pen,in+ arbitral procee,in+s to settle the ,ifferences of the parties P'SMC therefore must preser$e an, maintain the subCect eGuipment an, machineries =ith the ,ili+ence of a +oo, father of a famil3?- until final resolution of the arbitral procee,in+s an, enforcement of the a=ar," if an3 @HERE6ORE" this petition is ARTLA GRANTED " in that7 ;-< The Ma3 A4" 0444 C( is REVERSED an, SET ASIDEH Decision in C(#' R SP No 5/05/

;5< P'SMC is hereb3 ALLO@ED to ,ismantle an, transfer the eGuipment an, machineries" if it ha, not ,one so" an, ORDERED to preser$e an, maintain them until the finalit3 of =hate$er arbitral a=ar, is +i$en in the arbitration procee,in+s No pronouncement as to costs SO ORDERED Republic of the Philippines S&PREME CO&RT Manila

THIRD DIVISION

LO7RDES DELA CR7B, Petitioner"

G.R. No. 1#9""2

Present7

\&IS&M!IN'" .." Chairperson" # $ersus # C(RPIO" C(RPIO MOR()ES"

;0< The September 0-" -//K an, October -/" -//K RTC Or,ers in Ci$il Case No /K#--. are REVERSED an,SET ASIDEH ;A< The parties are hereb3 ORDERED to submit themsel$es to the arbitration of their ,ispute an, ,ifferences arisin+ from the subCect Contract before the XC(!H an,

TIN'(" an,

VE)(SCO" %R " ...

HON. CO7RT O6 A &'2 +EL!A TAN TE,

EALS

Promul+ate,7

This petition for re$ie= see>s to nullif3 the (pril A4" -/// Decision an, the %ul3 -9" -/// Resolution of the Court of (ppeals in C(#' R SP No 5/4/." =hich re$erse, the Decision of the Manila Re+ional Trial Court ;RTC<" !ranch A?" in Ci$il Case No /K#K/-.5" an, reinstate, the Decision of the Manila Metropolitan Trial Court ;MeTC<" !ranch 04" =hich or,ere, petitioner Dela Cru@ to $acate the subCect lot in fa$or of respon,ent Tan Te 1-6 T-e 6&/1.

Respon,ents

December 9" 0449 The Re3es famil3" represente, b3 Mr )ino Re3es" o=ne, the lot locate, at No -AA0 )acson Street ;formerl3 'o$ 2orbes Street<" Sampaloc" Manila Petitioner )our,es Dela Cru@ =as one of their lessees" an, she reli+iousl3 pai, rent o$er a portion of the lot for =ell o$er 54 3ears Sometime in -/K/" a fire struc> the premises an, ,estro3e," amon+ others" petitionerLs ,=ellin+ (fter the fire" petitioner an, some tenants returne, to the sai, lot an, rebuilt their respecti$e housesH simultaneousl3" the Re3es famil3 ma,e se$eral $erbal ,eman,s on the remainin+ lessees" inclu,in+ petitioner" to $acate the lot but the latter ,i, not compl3 On 2ebruar3 0-" -//5" petitioner =as ser$e, a =ritten ,eman, to $acate sai, lot but refuse, to lea$e Despite the setbac>" the Re3es famil3 ,i, not initiate court procee,in+s a+ainst an3 of the lessees

:#########################################################################################:

DECISION

VELASCO, %R., J.:

For unto ever0 one that hath shall be given, and he shall have abundance8 but from him that hath not shall be ta%en a/a0 even that /hich he hath.

On No$ember 09" -//9" the ,ispute, lot =as sol, b3 the Re3eses to respon,ent Melba Tan Te b3 $irtue of the No$ember 09" -//9 Dee, of (bsolute Sale Respon,ent bou+ht the lot in Guestion for resi,ential purposes Despite the sale" petitioner Dela Cru@ ,i, not +i$e up the lot

JHol3 !ible" Matthe= 0?70/

On %anuar3 -5" -//." petitioner =as sent a =ritten ,eman, to relinGuish the premises =hich she i+nore," promptin+ respon,ent Tan Te to initiate conciliation procee,in+s at the baran+a3 le$el Bhile respon,ent attempte, to settle the ,ispute b3 offerin+ financial assistance" petitioner countere, b3 as>in+ PhP ?44"444 44 for her house Respon,ent reCecte, the counter offer =hich she consi,ere, unconscionable (s a result" a certificate to file action =as issue, to Tan Te

T-e C&.e

On September K" -//." respon,ent Tan Te file, an eCectment complaint =ith ,ama+es before the Manila MeTC" entitle, &elba 6an 6e v. (ourdes *ela

Cru# an, ,oc>ete, as Ci$il Case No -?9.A4#CV The complaint a$erre, that7 ;-< the pre$ious o=ners" the Re3eses =ere in possession an, control of the conteste, lotH ;0< on No$ember 09" -//9" the lot =as sol, to Tan TeH ;A< prior to the sale" Dela Cru@ forcibl3 entere, the propert3 =ith strate+3 an,[or stealthH ;5< the petitioner unla=full3 ,epri$e, the respon,ent of ph3sical possession of the propert3 an, continues to ,o soH an," ;?< the respon,ent sent se$eral =ritten ,eman,s to petitioner to $acate the premises but refuse, to ,o so A Or,erin+ the ,efen,ant to pa3 the plaintiff the amount of P-4"444 44 as attorne3Ls feesH an," the costs of the suit On October 05" -//." petitioner file, her ans=er an, alle+e, that7 ;-< the MeTC ha, no Curis,iction o$er the case because it falls =ithin the Curis,iction of the RTC as more than one 3ear ha, elapse, from petitionerLs forcible entr3H ;0< she =as a rent#pa3in+ tenant protecte, b3 PD 04H106 ;A< her lease constitute, a le+al encumbrance upon the propert3H an, ;5< the lot =as subCect of e:propriation

SO ORDERED 1A6

T-e R(5,'3 o4 1-e +&',5& +eTC

T-e R(5,'3 o4 1-e Re3,o'&5 Tr,&5 Co(r1

On (pril A" -//K" the MeTC ,eci,e, as follo=s7

BHERE2ORE" Cu,+ment is hereb3 ren,ere, in fa$or of the plaintiff as follo=s7

- Or,erin+ the ,efen,ant an, all persons claimin+ ri+ht un,er her to $acate the premises situate, at -AA0 )acson Street ;formerl3 'o$ 2orbes Street<" Sampaloc" Manila an, peacefull3 return possession thereof to plaintiffH

&ncon$ince," petitioner Dela Cru@ appeale, the Decision of the MeTC in the Manila RTC an, the appeal =as ,oc>ete, as Ci$il Case No /K#K/-.5 On September -" -//K" the RTC ren,ere, its Cu,+ment settin+ asi,e the (pril A" -//K Decision of the Manila MeTC an, ,ismisse, respon,ent Tan TeLs Complaint on the +roun, that it =as the RTC an, not the MeTC =hich ha, Curis,iction o$er the subCect matter of the case The RTC belie$e, that since Tan TeLs pre,ecessor#in#interest learne, of petitionerLs intrusion into the lot as earl3 as 2ebruar3 0-" -//5" the eCectment suit shoul, ha$e been file, =ithin the one#3ear prescripti$e perio, =hich e:pire, on 2ebruar3 0-" -//? Since the Re3es ,i, 'o1 file the eCectment suit an, respon,ent Tan Te file, the action onl3 on September K" -//." then the suit ha, become an accion publiciana co+ni@able b3 the RTC

T-e R(5,'3 o4 1-e Co(r1 o4 A00e&5. 0 Or,erin+ the ,efen,ant to pa3 the plaintiff the amount of PA94 44 a month from December -//9 to No$ember -//.H P5A0 44 a month from December -//. to No$ember -//K" plus 04Y for each subseGuent 3ear until the premises shall ha$e been $acate, an, turne, o$er to the plaintiffH

Disappointe, at the turn of e$ents" respon,ent Tan Te appeale, the a,$erse Decision to the Court of (ppeals ;C(< =hich =as ,oc>ete, as C(#' R SP No 5/4/. This time" the C( ren,ere, a Decision in fa$or of respon,ent Tan Te

re$ersin+ the Manila RTC September -" -//K Decision an, reinstate, the Manila MeTC (pril A" -//K Decision

THE DECISION O2 THE 1MeTC6 BHICH IS CONTR(DICTED !* THE EVIDENCE ON RECORD 156

Petitioner trie, to ha$e the C( reconsi,er its Decision but =as rebutte, in its %ul3 -9" -/// Resolution T-e Co(r18. R(5,'3

&n3iel,in+ to the C( Decision an, the ,enial of her reGuest for reconsi,eration" petitioner Dela Cru@ no= see>s le+al reme,3 throu+h the instant Petition for Re$ie= on Certiorari before the Court

D,./(..,o' o' R(5e "$

T-e I..(e.

!efore =e ,=ell on the principal issues" a fe= proce,ural matters must first be resol$e,

Petitioner Dela Cru@ claims t=o ;0< re$ersible errors on the part of the appellate court" to =it7

Petitioner Dela Cru@ as>s the Court to re$ie= the fin,in+s of facts of the C(" a course of action proscribe, b3 Section -" Rule 5? 2irm is the rule that fin,in+s of fact of the C( are final an, conclusi$e an, cannot be re$ie=e, on appeal to this Court pro$i,e, the3 are supporte, b3 e$i,ence on recor, or substantial e$i,ence 2ortunatel3 for petitioner" =e =ill be liberal =ith her petition consi,erin+ that the C(Ls factual fin,in+s contra,ict those of the RTC" an, there =as an asse$eration that the court a !uo =ent be3on, the issues of the case In,ee," these +roun,s =ere consi,ere, e:ceptions to the factual issue bar rule

THE HON CO&RT O2 (PPE()S" BITH D&E RESPECT" BENT !E*OND THE ISS&ES O2 THE C(SE (ND CONTR(R* TO THOSE O2 THE TRI() CO&RT

Secon,l3" the petition unnecessaril3 implea,e, the C( in $iolation of Section 5" Rule 5? Be =ill let this breach pass onl3 because there is a nee, to entertain the petition ,ue to the conflictin+ rulin+s bet=een the lo=er courtsH ho=e$er" a repetition ma3 result to sanctions

THE HON CO&RT O2 (PPE()S" BITH D&E RESPECT" ERRED IN REVERSIN' THE DECISION O2 THE RTC (ND IN E22ECT" REINST(TIN'

The actual threshol, issue is =hich court" the Manila RTC or the Manila MeTC" has Curis,iction o$er the Tan Te eCectment suit Once the Curis,ictional issue is settle," the heart of the ,ispute is =hether or not respon,ent is entitle, to the eCectment of petitioner Dela Cru@ from the premises

Ho=e$er" the petition is bereft of merit

O' 1-e I..(e o4 %(r,.2,/1,o'

entr3 ;detentacion<" =here one is ,epri$e, of ph3sical possession of an3 lan, or buil,in+ b3 means of force" intimi,ation" threat" strate+3" or stealth In actions for forcible entr3" three ;A< reGuisites ha$e to be met for the municipal trial court to acGuire Curis,iction 2irst" the plaintiffs must alle+e their prior ph3sical possession of the propert3 Secon," the3 must also assert that the3 =ere ,epri$e, of possession either b3 force" intimi,ation" threat" strate+3" or stealth Thir," the action must be file, =ithin one ;-< 3ear from the time the o=ners or le+al possessors learne, of their ,epri$ation of ph3sical possession of the lan, or buil,in+

%uris,iction is the po=er or capacit3 +i$en b3 the la= to a court or tribunal to entertain" hear an, ,etermine certain contro$ersies 1?6 %uris,iction o$er the subCect matter is conferre, b3 la=

Section AA of Chapter III ## on Metropolitan Trial Courts" Municipal Trial Courts" an, Municipal Circuit Trial Courts of ! P No -0/196 pro$i,es7

Se/1,o' ##. .urisdiction of &etropolitan 6rial Courts, &unicipal 6rial Courts and &unicipal Circuit 6rial Courts in civil cases JMetropolitan Trial Courts" Municipal Trial Courts" an, Municipal Circuit Trial Courts shall e:ercise7 ::::

The other >in, of eCectment procee,in+ is unla=ful ,etainer ;desahucio<" =here one unla=full3 =ithhol,s possession of the subCect propert3 after the e:piration or termination of the ri+ht to possess Here" the issue of ri+htful possession is the one ,ecisi$eH for in such action" the ,efen,ant is the part3 in actual possession an, the plaintiffLs cause of action is the termination of the ,efen,antLs ri+ht to continue in possession 1.6 The essential reGuisites of unla=ful ,etainer are7 ;-< the fact of lease b3 $irtue of a contract e:press or implie,H ;0< the e:piration or termination of the possessorLs ri+ht to hol, possessionH ;A< =ithhol,in+ b3 the lessee of the possession of the lan, or buil,in+ after e:piration or termination of the ri+ht to possessionH ;5< letter of ,eman, upon lessee to pa3 the rental or compl3 =ith the terms of the lease &'2 $acate the premisesH an, ;?< the action must be file, =ithin one ;-< 3ear from ,ate of last ,eman, recei$e, b3 the ,efen,ant

;0< E:clusi$e ori+inal Curis,iction o$er cases of forcible entr3 an, unla=ful ,etainer7 Pro$i,e," That =hen" in such cases" the ,efen,ant raises the Guestion of o=nership in his plea,in+s an, the Guestion of possession cannot be resol$e, =ithout ,eci,in+ the issue of o=nership" the issue of o=nership shall be resol$e, onl3 to ,etermine the issue of possession

( person =ho =ants to reco$er ph3sical possession of his real propert3 =ill prefer an eCectment suit because it is +o$erne, b3 the Rule on Summar3 Proce,ure =hich allo=s imme,iate e:ecution of the Cu,+ment un,er Section -/" Rule .4 unless the ,efen,ant perfects an appeal in the RTC an, complies =ith the reGuirements to sta3 e:ecutionH all of =hich are ne$ertheless beneficial to the interests of the lot o=ner or the hol,er of the ri+ht of possession

On the other han," Section -/" of Chapter II of ! P No -0/ on Re+ional Trial Courts pro$i,es7

Thus e:clusi$e" ori+inal Curis,iction o$er eCectment procee,in+s ;accion interdictal< is lo,+e, =ith the first le$el courts This is clarifie, in Section -" Rule .4 of the -//. Rules of Ci$il Proce,ure that embraces an action for forcible

Se/1,o' 19. .urisdiction in civil cases JRe+ional Trial Courts shall e:ercise e:clusi$e ori+inal Curis,iction7

::::

entr3" =here tenanc3 is a$erre, b3 =a3 of ,efense an, is pro$e, to be the real issue" the case shoul, be ,ismisse, for lac> of Curis,iction as the case shoul, properl3 be file, =ith the then Court of (+rarian Relations F1/6

;0< In all ci$il actions =hich in$ol$e the title to" or possession of" real propert3" or an3 interest therein" e:cept actions for forcible entr3 into an, unla=ful ,etainer of lan,s or buil,in+s" ori+inal Curis,iction o$er =hich is conferre, upon Metropolitan Trial Courts" Municipal Trial Courts an, Municipal Circuit Trial Courts

The cause of action in a complaint is not =hat the ,esi+nation of the complaint states" but =hat the alle+ations in the bo,3 of the complaint ,efine an, ,escribe The ,esi+nation or caption is not controllin+" more than the alle+ations in the complaint themsel$es are" for it is not e$en an in,ispensable part of the complaint 1-46

)et us refer to the alle+ations of the complaint file, in the Manila MeTC in Ci$il Case No /K#K/-.5" =hich =e Guote $erbatim7 T=o ;0< >in,s of action to reco$er possession of real propert3 =hich fall un,er the Curis,iction of the RTC are7 ;-< the plenar3 action for the reco$er3 of the real ri+ht of possession ;accion publiciana< =hen the ,ispossession has laste, for more than one 3ear or =hen the action =as file, more than one ;-< 3ear from ,ate of the last ,eman, recei$e, b3 the lessee or ,efen,antH an, ;0< an action for the reco$er3 of o=nership ;accion reivindicatoria< =hich inclu,es the reco$er3 of possession

A That plaintiff is the absolute an, re+istere, o=ner of a parcel of lan, locate, at No -AA0" )acson Street" Sampaloc" Manila no= bein+ occupie, b3 ,efen,antH

These actions are +o$erne, b3 the re+ular rules of proce,ure an, a,Cu,ication ta>es a lon+er perio, than the summar3 eCectment suit

5 That plaintiff purchase, the abo$e#sai, parcel of lan, to+ether =ith its impro$ements from the le+al heirs of the late EMER)IND( DIM(*&'( RE*ES on No$ember 09" -//9" un,er an, b3 $irtue of a Dee, of (bsolute Sale : : :H

To ,etermine =hether a complaint for reco$er3 of possession falls un,er the Curis,iction of the MeTC ;first le$el court< or the RTC ;secon, le$el court<" =e are compelle, to +o o$er the alle+ations of the complaint The +eneral rule is that =hat ,etermines the nature of the action an, the court that has Curis,iction o$er the case are the alle+ations in the complaint These cannot be ma,e to ,epen, upon the ,efenses set up in the ans=er or plea,in+s file, b3 the ,efen,ant 1K6

? That pursuant to the sai, ,ee, of sale" the title to the lan, an, all its impro$ements =as transferre, in plaintiffLs name as e$i,ence, b3 Transfer Certificate of Title No 0AA0.A issue, b3 the Re+ister of Dee,s of Manila on (pril 00" -//. : : :H

This +eneral rule ho=e$er a,mits e:ceptions In Ignacio v. CFI of Bulacan" it =as hel, Ethat =hile the alle+ations in the complaint ma>e out a case for forcible

9 That prior to sai, sale" the pre$ious o=ners" represente, b3 Mr )ino Re3es" husban, of the sai, ,ecease, Emerlin,a D Re3es an, the a,ministrator of her estate" =as in possession an, control of the propert3 subCect of this complaintH

. That also prior to sai, sale" ,efen,ant" =ithout the >no=le,+e an, consent of Mr )ino Re3es" surreptitiousl3 an, b3 means of stealth an, strate+3 entere," use, an, occupie, the sai, premises thus ,epri$in+ the former of ri+htful possession thereofH

? 2or more than four ,eca,es no=" ,efen,ant has been an, still is a rent#pa3in+ tenant of the subCect lan, occupie, b3 their resi,ential house" ,atin+ bac> to the ori+inal o=ner#lessor" the Dima3u+a famil3 Her lease =ith no ,efinite ,uration" commence, =ith a rent at P94 44 per month until it =as +ra,uall3 increase, in the ensuin+ 3ears (s of No$ember -//9" it stoo, at PA44 44 a monthH

K That on 2ebruar3 0-" -//5" Mr )ino Re3es" throu+h (tt3 (leCo Se,ico" his la=3er" furnishe, the ,efen,ants a letter formall3 ,eman,in+ that ,efen,ant $acate the premises : : :H

/ That" ho=e$er" ,efen,ant faile, an, refuse, to $acate ,espite Cust an, le+al ,eman, b3 Mr )ino Re3esH

9 In this circumstances 1sic6" ,efen,ant enCo3s the protecti$e mantle of P D 04 an, the subseGuent rental control status a+ainst ,ispossession She cannot be eCecte, other than for causes prescribe, un,er ! P !l+ 0? 2urther" in case of sale of the lan," she has the ri+ht of first refusal un,er the e:press pro$ision of P D -?.-H

-4 That after the sale to plaintiff of sai, premises" plaintiff has se$eral times ,eman,e, of ,efen,ants to $acate the premises" the last ,eman, ha$in+ been ma,e on them personall3 an, in =ritin+ on %anuar3 -5" -//. : : :H

. Throu+hout the 3ears of her tenanc3" ,efen,ant has been up,ate, in her rental pa3ment until the collector of the ori+inal o=ner#lessor no lon+er came aroun, as she has ,one theretoforeH

-That ,efen,ant faile, an, refuse, an, still fails an, refuses to $acate the premises =ithout le+al cause or Custifiable reason =hatsoe$erH1--6

.(s a result" she =as compelle, to file a petition for consi+nation of rent before the Metropolitan Trial Court of ManilaH

K ( bona fi,e tenant =ithin the ambit if 1sic6 P D 04 an, the subseGuent rental control status" inclu,in+ ! P !l+ 0?" un,er its terms" cannot be ouste, on a plea of e:piration of her monthl3 leaseH The ans=er of petitioner a$erre,7 / Her lease constitutes a le+al encumbrance upon the propert3 of the lessor[o=ner an, bin,s the latterLs successor#in#interest =ho is un,er obli+ation to respect itH

5 The Court has no Curis,iction o$er the case" ha$in+ been file, b3 plaintiff more than the re+lementar3 one 3ear perio, to commence forcible entr3 case" =hich is rec>one, from the ,ate of the alle+e, unla=ful entr3 of ,efen,ant b3 the use of stealth an, strate+3 into the premisesH

-4 The lan, at bench is the subCect of a pen,in+ e:propriation procee,in+sH

-Plaintiff bein+ a marrie, =oman cannot sue or be sue, =ithout bein+ Coine, b3 her husban,H1-06

Curis,iction Secon," the eCectment suit =as file, =ith the Manila MeTC on September K" -//. or more than nine ;/< 3ears a+o To ,ismiss the complaint =oul, be a serious blo= to the effecti$e ,ispensation of Custice as the parties =ill start ane= an, incur a,,itional le+al e:penses after ha$in+ liti+ate, for a lon+ time EGuitable Custice ,ictates that alle+ations in the ans=er shoul, be consi,ere, to ai, in arri$in+ at the real nature of the action )astl3" Section 9" Rule - of the Rules of Court clearl3 empo=ers the Court to construe Rule .4 an, other pertinent proce,ural issuances Ein a liberal manner to promote Cust" spee,3" an, ine:pensi$e ,isposition of e$er3 action an, procee,in+ F

&n,eniabl3" the aforeGuote, alle+ations of the complaint are $a+ue an, iff3 in re$ealin+ the nature of the action for eCectment

The alle+ations in the complaint sho= that prior to the sale b3 )ino Re3es" representin+ the estate of his =ife Emerlin,a Re3es" he =as in possession an, control of the subCect lot but =ere ,epri$e, of sai, possession =hen petitioner" b3 means of stealth an, strate+3" entere, an, occupie, the same lot These circumstances impl3 that he ha, prior ph3sical possession of the subCect lot an, can ma>e up a forcible entr3 complaint On the other han," the alle+ation that petitioner Dela Cru@ =as ser$e, se$eral ,eman,s to lea$e the premises but refuse, to ,o so =oul, seem to in,icate an action for unla=ful ,etainer since a =ritten ,eman, is not necessar3 in an action for forcible entr3 It is a fact that the MeTC complaint =as file, on September K" -//. =ithin one ;-< 3ear from the ,ate of the last =ritten ,eman, upon petitioner Dela Cru@ on %anuar3 -5" -//.

!ase, on the complaint an, the ans=er" it is apparent that the Tan Te eCectment complaint is after all a complaint for unla=ful ,etainer It =as a,mitte, that petitioner Dela Cru@ =as a lessee of the Re3eses for aroun, four ;5< ,eca,es Thus" initiall3 petitioner as lessee is the le+al possessor of the subCect lot b3 $irtue of a contract of lease Bhen fire ,estro3e, her house" the Re3eses consi,ere, the lease terminate,H but petitioner Dela Cru@ persiste, in returnin+ to the lot an, occupie, it b3 strate+3 an, stealth =ithout the consent of the o=ners The Re3eses ho=e$er 1o5er&1e2 the continue, occupanc3 of the lot b3 petitioner Thus" =hen the lot =as sol, to respon,ent Tan Te" the ri+hts of the Re3eses" =ith respect to the lot" =ere transferre, to their subro+ee" respon,ent Tan Te" =ho for a time also 1o5er&1e2 the sta3 of petitioner until she ,eci,e, to eCect the latter b3 sen,in+ se$eral ,eman,s" the last bein+ the %anuar3 -5" -//. letter of ,eman, Since the action =as file, =ith the MeTC on September K" -//." the action =as institute, =ell =ithin the one ;-< 3ear perio, rec>one, from %anuar3 -5" -//. Hence" the nature of the complaint is one of unla=ful ,etainer an, the Manila MeTC ha, Curis,iction o$er the complaint

Thus" an eCectment complaint base, on 0o..e..,o' b) 1o5er&'/e of the o=ner" li>e the Tan Te complaint" is a specie of unla=ful ,etainer cases

(s pre$iousl3 ,iscusse," the settle, rule is Curis,iction is base, on the alle+ations in the initiator3 plea,in+ an, the ,efenses in the ans=er are ,eeme, irrele$ant an, immaterial in its ,etermination Ho=e$er" =e rela: the rule an, consi,er the complaint at bar as an e:ception in $ie= of the special an, uniGue circumstances present 2irst" as inIgnacio v. CFI of Bulacan"1-A6 the ,efense of lac> of Curis,iction =as raise, in the ans=er =herein there =as an a,mission that petitioner Dela Cru@ =as a lessee of the former o=ners of the lot" the Re3eses" prior to the sale to respon,ent Tan Te The fact that petitioner =as a tenant of the pre,ecessors#in#interest of respon,ent Tan Te is material to the ,etermination of Curis,iction Since this is a Cu,icial a,mission a+ainst the interest of petitioner" such a,mission can be consi,ere, in ,eterminin+

(s earl3 as -/-A" case la= intro,uce, the concept of possession b3 tolerance in eCectment cases as follo=s7

It is true that the lan,lor, mi+ht" upon the failure of the tenant to pa3 the stipulate, rents" consi,er the contract bro>en an, ,eman, imme,iate possession of the rente, propert3" thus con$ertin+ a le+al possession into ille+al possession &pon the other han," ho=e$er" the lan,lor, mi+ht conclu,e to +i$e

the tenant cre,it for the pa3ment of the rents an, allo= him to continue in,efinitel3 in the possession of the propert3 In other =or,s" the lan,lor, mi+ht choose to +i$e the tenant cre,it from month to month or from 3ear to 3ear for the pa3ment of their rent" rel3in+ upon his honest3 of his financial abilit3 to pa3 the same Durin+ such perio, the tenant =oul, not be in ille+al possession of the propert3 an, the lan,lor, coul, not maintain an action of ,esahucio until after he ha, ta>en steps to con$ert the le+al possession into ille+al possession ( mere failure to pa3 the rent in accor,ance =ith the contract =oul, Custif3 the lan,lor," after the le+al notice" in brin+in+ an action of ,esahucio The lan,lor, mi+ht" ho=e$er" elect to reco+ni@e the contract as still in force an, sue for the sums ,ue un,er it It =oul, seem to be clear that the lan,lor, mi+ht sue for the rents ,ue an, 1unpai," =ithout electin+ to terminate the contract of tenanc3H6 1=6hether he can ,eclare the contract of tenanc3 bro>en an, sue in an action ,esahucio for the possession of the propert3 an, in a separate actions for the rents ,ue an, ,ama+es" etc 1-56

&' ,m05,e2 0rom,.e 1-&1 -e :,55 v&/&1e (0o' 2em&'2 " failin+ =hich a summar3 action for eCectment is the proper reme,3 a+ainst them The status of the ,efen,ant is analo+ous to that of a lessee or tenant =hose term of lease has e:pire, but =hose occupanc3 continue, b3 tolerance of the o=ner In such a case" the unla=ful ,epri$ation or =ithhol,in+ of possession is to be counte, from the ,ate of the ,eman, to $acate 1-96 ;Emphasis supplie, <

2rom the fore+oin+ Curispru,ence" it is uneGui$ocal that petitionerLs possession after she intru,e, into the lot after the fireJ=as b3 tolerance or lenienc3 of the Re3eses an, hence" the action is properl3 an unla=ful ,etainer case fallin+ un,er the Curis,iction of the Manila MeTC

The concept of possession b3 tolerance in unla=ful ,etainer cases =as further refine, an, applie, in pertinent cases submitte, for ,ecision b3 -/99 The rule =as articulate, as follo=s7

Bhere ,espite the lesseeLs failure to pa3 rent after the first ,eman," the lessor ,i, not choose to brin+ an action in court but suffere, the lessee to continue occup3in+ the lan, for nearl3 t=o 3ears" after =hich the lessor ma,e a secon, ,eman," the one#3ear perio, for brin+in+ the ,etainer case in the Custice of the peace court shoul, be counte, not from the ,a3 the lessee refuse, the first ,eman, for pa3ment of rent but from the time the secon, ,eman, for rents an, surren,er of possession =as not complie, =ith 1-?6

E$en if =e conce,e that it is the RTC an, not the MeTC that has Curis,iction o$er the Tan Te complaint" follo=in+ the reasonin+ that neither respon,ent nor her pre,ecessor#in#interest file, an eCectment suit =ithin one ;-< 3ear from 2ebruar3 0-" -//5 =hen the Re3eses >ne= of the unla=ful entr3 of petitioner" an, hence" the complaint is transforme, into an accion publiciana" the Court ,eems it fair an, Cust to suspen, its rules in or,er to ren,er efficient" effecti$e" an, e:pe,itious Custice consi,erin+ the nine ;/< 3ear pen,enc3 of the eCectment suit More importantl3" if there =as uncertaint3 on the issue of Curis,iction that arose from the a$erments of the complaint" the same cannot be attribute, to respon,ent Tan Te but to her counsel =ho coul, ha$e been confuse, as to the actual nature of the eCectment suit The la=3erLs apparent imprecise lan+ua+e use, in the preparation of the complaint =ithout an3 participation on the part of Tan Te is sufficient special or compellin+ reason for the +rant of relief

In Caluba0an v. Pascual" a case usuall3 cite, in subseGuent ,ecisions on eCectment" the concept of possession b3 tolerance =as further eluci,ate, as follo=s7

The case of Barnes v. Padilla1-.6 eluci,ates the rationale behin, the e:ercise b3 this Court of the po=er to rela:" or e$en suspen," the application of the rules of proce,ure7

In allo=in+ se$eral 3ears to pass =ithout reGuirin+ the occupant to $acate the premises nor filin+ an action to eCect him" 05&,'1,44. -&ve &/>(,e./e2 1o 2e4e'2&'18. 0o..e..,o' &'2 (.e o4 1-e 0rem,.e.. I1 -&. bee' -e52 1-&1 & 0er.o' :-o o//(0,e. 1-e 5&'2 o4 &'o1-er &1 1-e 5&11er8. 1o5er&'/e or 0erm,..,o', :,1-o(1 &') /o'1r&/1 be1:ee' 1-em, ,. 'e/e..&r,5) bo('2 b)

)et it be emphasi@e, that the rules of proce,ure shoul, be $ie=e, as mere tools ,esi+ne, to facilitate the attainment of Custice Their strict an, ri+i, application" =hich =oul, result in technicalities that ten, to frustrate rather than promote substantial Custice" must al=a3s be esche=e, E$en the Rules of Court reflect this principle The po=er to suspen, or e$en ,isre+ar, rules can be so

per$asi$e an, compellin+ as to alter e$en that =hich this Court itself has alrea,3 ,eclare, to be final : : :

reco+ni@e, the o=nership of the lot b3 respon,ent" =hich inclu,es the ri+ht of possession

The emer+in+ tren, in the rulin+s of this Court is to affor, e$er3 part3 liti+ant the amplest opportunit3 for the proper an, Cust ,etermination of his cause" free from the constraints of technicalities Time an, a+ain" this Court has consistentl3 hel, that rules must not be applie, ri+i,l3 so as not to o$erri,e substantial Custice 1-K6

0 (fter the fire ra+e, o$er the structures on the subCect lot in late -/K/ the contracts of lease e:pire," as a result of =hich )ino Re3es ,eman,e, that all occupants" inclu,in+ petitioner" $acate the lot but the latter refuse, to aban,on the premises Durin+ the ,uration of the lease" petitionerLs possession =as le+al but it became unla=ful after the fire =hen the lease contracts =ere ,eeme, terminate, an, ,eman,s =ere ma,e for the tenants to return possession of the lot

Moreo$er" Section K" Rule 54 authori@es the RTCJin case of affirmance of an or,er of the municipal trial court ,ismissin+ a case =ithout trial on the merits an, the +roun, of ,ismissal is lac> of Curis,iction o$er the subCect matterJto tr3 the case on the merits as if the case =as ori+inall3 file, =ith it if the RTC has Curis,iction o$er the case In the same $ein" this Court" in the e:ercise of its rule#ma>in+ po=er" can suspen, its rules =ith respect to this particular case ;pro hac vice<" e$en if initiall3" the MeTC ,i, not ha$e Curis,iction o$er the eCectment suit" an, ,eci,e to assume Curis,iction o$er it in or,er to promptl3 resol$e the ,ispute

A PetitionerLs possession is one b3 the Re3esesL tolerance an, +enerosit3 an, later b3 respon,ent Tan TeLs

The issue of Curis,iction settle," =e no= scrutini@e the main issue

Petitioner full3 >no=s that her sta3 in the subCect lot is at the lenienc3 an, ma+nanimit3 of Mr )ino Re3es an, later of respon,ent Tan TeH an, her acGuiescence to such use of the lot carries =ith it an implicit an, assume, commitment that she =oul, lea$e the premises the moment it is nee,e, b3 the o=ner Bhen respon,ent Tan Te ma,e a last" =ritten ,eman, on %anuar3 -5" -//. an, petitioner breache, her promise to lea$e upon ,eman," she lost her ri+ht to the ph3sical possession of the lot Thus" respon,ent Tan Te shoul, no= be allo=e, to occup3 her lot for resi,ential purposes" a ,ream that =ill finall3 be reali@e, after nine ;/< 3ears of liti+ation

(t the heart of e$er3 eCectment suit is the issue of =ho is entitle, to ph3sical possession of the lot or possession de facto

Petitioner raises the ancillar3 issue that on March -?" -//K" the Manila Cit3 Council passe, an, appro$e, Or,inance No ./?-7

Be rule in fa$or of respon,ent Tan Te for the follo=in+ reasons7

Petitioner a,mitte, in her (ns=er that she =as a rent#pa3in+ tenant of the Re3eses" pre,ecessors#in#interest of respon,ent Tan Te (s such" she

1a6uthori@in+ the Manila Cit3 Ma3or to acGuire either b3 ne+otiation or e:propriation certain parcels of lan, co$ere, b3 Transfer Certificates of Title Nos 0AA0.A" -.?-49 an, -545.-" containin+ an area of One Thousan, 2our Hun,re, T=ent3 2i$e ;-"50?< sGuare meters" locate, at Maria Clara an, 'o$ernor 2orbes Streets" Sta Cru@" Manila" for lo= cost housin+ an, a=ar, to actual bonafi,e resi,ents thereat an, further authori@in+ the Cit3 Ma3or to a$ail

for that purpose an3 a$ailable fun,s of the cit3 an, other e:istin+ fun,in+ facilities from other +o$ernment a+encies : : : 1-/6

S&PREME CO&RT Manila

SECOND DIVISION It rea,il3 appears that this issue =as not presente, before the Court of (ppeals in C(#' R SP No 5/4/. ,espite the fact that the respon,entLs petition =as file, on September 0?" -//K" si: months after the or,inance =as passe, Thus" this issue is proscribe, as are all issues raise, for the first time before the Court are proscribe,

!ENG7ET COR ORATION, Petitioner"

G.R. No. 16#101

E$en +rantin+ for the sa>e of ar+ument that =e entertain the issue" =e rule that the inten,e, e:propriation of respon,entLs lot ;TCT No 0AA0.A< b3 the cit3 +o$ernment ofManila =ill not affect the resolution of this petition 2or one thin+" the issue can be raise, b3 petitioner in the appropriate le+al procee,in+ Secon,l3" the inten,e, e:propriation mi+ht not e$en be implemente, since it is clear from the or,inance that the Cit3 Ma3or =ill still locate a$ailable fun,s for proCect" meanin+ the sai, e:pense is not a re+ular item in the bu,+et

Present7

# $ersus #

\&IS&M!IN'" .." Chairperson" C(RPIO" C(RPIO MOR()ES"

@HERE6ORE" this petition is DENIED for lac> of merit The (pril A4" -/// Decision of the Court of (ppeals reinstatin+ the (pril A" -//K MeTC Decision in Ci$il Case No -?9.A4#CV an, the %ul3 -9" -/// Resolution in C(#' R SP No 5/4/. are hereb3 A66IR+ED IN TOTO

TIN'(" an, DE ART+ENT O6 ENVIRON+ENT VE)(SCO" %R " ... AND NAT7RAL RESO7RCES C+INES AD%7DICATION !OARD &'2 %.G. REALTA AND +INING COR ORATION, Respon,ents 2ebruar3 -A" 044K Promul+ate,7

No costs

SO ORDERED.

Republic of the Philippines

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DECISION

VELASCO, %R., J.:

The instant petition un,er Rule 9? of the Rules of Court see>s the annulment of the December 0" 0440 Decision1-6 an, March -." 0445 Resolution106 of the Department of En$ironment an, Natural Resources#Minin+ (,Cu,ication !oar, ;DENR#M(!< in M(! Case No 4-05#4- ;Mines (,ministrati$e Case No R#M#0444#4-< entitle, Benguet Corporation ;Benguet< v. ..". Realt0 and &ining Corporation ;..". Realt0< The December 0" 0440 Decision uphel, the March -/" 044- Decision1A6 of the M(! Panel of (rbitrators ;PO(< =hich cancele, the Ro3alt3 (+reement =ith Option to Purchase ;R(BOP< ,ate, %une -" -/K.156 bet=een !en+uet an, % ' Realt3" an, e:clu,e, !en+uet from the Coint Mineral Pro,uction Sharin+ (+reement ;MPS(< application o$er four minin+ claims The March -." 0445 Resolution ,enie, !en+uetLs Motion for Reconsi,eration

the3 are =orth ,e$elopin+ =ith reasonable probabilit3 of profitable pro,uction !en+uet un,ertoo> also to furnish % ' Realt3 =ith a report on the e:amination" =ithin a reasonable time after the completion of the e:amination Moreo$er" also =ithin the e:amination perio," !en+uet shall con,uct all necessar3 e:ploration in accor,ance =ith a prepare, e:ploration pro+ram If it chooses to ,o so an, before the e:piration of the e:amination perio," !en+uet ma3 un,erta>e to ,e$elop the minin+ claims upon =ritten notice to % ' Realt3 !en+uet must then place the minin+ claims into commercial pro,ucti$e sta+e =ithin 05 months from the =ritten notice 196 It is also pro$i,e, in the R(BOP that if the minin+ claims =ere place, in commercial pro,uction b3 !en+uet" % ' Realt3 shoul, be entitle, to a ro3alt3 of fi$e percent ;?Y< of net reali@able $alue" an, to ro3alt3 for an3 pro,uction ,one b3 !en+uet =hether ,urin+ the e:amination or ,e$elopment perio,s

Thus" on (u+ust /" -/K/" the E:ecuti$e Vice#Presi,ent of !en+uet" (ntonio N Tachulin+" issue, a letter informin+ % ' Realt3 of its intention to ,e$elop the minin+ claims Ho=e$er" on 2ebruar3 /" -///" % ' Realt3" throu+h its Presi,ent" %ohnn3 ) Tan" then sent a letter to the Presi,ent of !en+uet informin+ the latter that it =as terminatin+ the R(BOP on the follo=in+ +roun,s7

T-e 6&/1.

a The fact that 3our compan3 has faile, to perform the obli+ations set forth in the R(BOP" i e " to un,erta>e ,e$elopment =or>s =ithin 0 3ears from the e:ecution of the (+reementH

On %une -" -/K." !en+uet an, % ' Realt3 entere, into a R(BOP" =herein % ' Realt3 =as ac>no=le,+e, as the o=ner of four minin+ claims respecti$el3 name, as !onito#I" !onito#II" !onito#III" an, !onito#IV" =ith a total area of 0KK K9?9 hectares" situate, in !aran+a3 )u>lu>am" Sitio !a+on+ !a3an" Municipalit3 of %ose Pan+aniban" Camarines Norte The parties also e:ecute, a Supplemental (+reement1?6 ,ate, %une -" -/K. The minin+ claims =ere co$ere, b3 MPS( (pplication No (PS(#V#444/ Cointl3 file, b3 % ' Realt3 as claimo=ner an, !en+uet as operator

Violation of the Contract b3 allo=in+ hi+h +ra,ers to operate on our claim

No stipulation =as pro$i,e, =ith respect to the term limit of the R(BOP

, In the R(BOP" !en+uet obli+ate, itself to perfect the ri+hts to the minin+ claims an,[or other=ise acGuire the minin+ ri+hts to the mineral claims Bithin 05 months from the e:ecution of the R(BOP" !en+uet shoul, also cause the e:amination of the minin+ claims for the purpose of ,eterminin+ =hether or not

Non#pa3ment of the ro3alties thereon as pro$i,e, in the R(BOP 1.6

In response" !en+uetLs Mana+er for )e+al Ser$ices" Re3nal,o P Men,o@a" =rote % ' Realt3 a letter ,ate, March K" -///"1K6 therein alle+in+ that !en+uet complie, =ith its obli+ations un,er the R(BOP b3 in$estin+ PhP 50 5 million to rehabilitate the mines" an, that the commercial operation =as hampere, b3 the non#issuance of a Mines Temporar3 Permit b3 the Mines an, 'eosciences !ureau ;M'!< =hich must be consi,ere, as force ma3eure" entitlin+ !en+uet to an e:tension of time to prosecute such permit !en+uet further claime, that the hi+h +ra,ers mentione, b3 % ' Realt3 =ere alrea,3 operatin+ prior to !en+uetLs ta>in+ o$er of the premises" an, that % ' Realt3 ha, the obli+ation of eCectin+ such small scale miners !en+uet also alle+e, that the nature of the minin+ business ma,e it ,ifficult to specif3 a time limit for the R(BOP !en+uet then ar+ue, that the ro3alties ,ue to % ' Realt3 =ere in fact in its office an, rea,3 to be pic>e, up at an3 time It appeare, that" pre$iousl3" the practice b3 % ' Realt3 =as to pic>#up chec>s from !en+uet representin+ such ro3alties Ho=e$er" startin+ (u+ust -//5" % ' Realt3 alle+e,l3 refuse, to collect such chec>s from !en+uet Thus" !en+uet posite, that there =as no $ali, +roun, for the termination of the R(BOP It also remin,e, % ' Realt3 that it shoul, submit the ,isa+reement to arbitration rather than unilaterall3 terminatin+ the R(BOP

Therefrom" !en+uet file, a Notice of (ppeal1--6 =ith the M(! on (pril 0A" 044-" ,oc>ete, as Mines (,ministrati$e Case No R#M#0444#4- Thereafter" the M(! issue, the assaile, December 0" 0440 Decision !en+uet then file, a Motion for Reconsi,eration of the assaile, Decision =hich =as ,enie, in the March -." 0445 Resolution of the M(! Hence" !en+uet file, the instant petition

T-e I..(e.

On %une ." 0444" % ' Realt3 file, a Petition for Declaration of Nullit3[Cancellation of the R(BOP1/6 =ith the )e+aspi Cit3 PO(" Re+ion V" ,oc>ete, as DENR Case No 0444#4- an, entitle, ..". Realt0 v. Benguet

There =as serious an, palpable error =hen the Honorable !oar, faile, to rule that the contractual obli+ation of the parties to arbitrate un,er the Ro3alt3 (+reement is man,ator3

On March -/" 044-" the PO( issue, a Decision"1-46 ,=ellin+ upon the issues of ;-< =hether the arbitrators ha, Curis,iction o$er the caseH an, ;0< =hether !en+uet $iolate, the R(BOP Custif3in+ the unilateral cancellation of the R(BOP b3 % ' Realt3 The ,ispositi$e portion state,7

0 The Honorable !oar, e:cee,e, its Curis,iction =hen it sustaine, the cancellation of the Ro3alt3 (+reement for alle+e, breach of contract ,espite the absence of e$i,ence

BHERE2ORE" premises consi,ere," the %une 4-" -/K. 1R(BOP6 an, its Supplemental (+reement is hereb3 ,eclare, cancelle, an, =ithout effect !EN'&ET is hereb3 e:clu,e, from the Coint MPS( (pplication o$er the mineral claims ,enominate, as E!ONITO#IF" E!ONITO#IIF" E!ONITO#IIIF an, E!ONITO# IVF

A The \uestione, Decision of the Honorable !oar, in cancellin+ the R(BOP preCu,ice1,6 the substantial ri+hts of !en+uet un,er the contract to the unCust enrichment of %' Realt3 1-06

SO ORDERED

Restate," the issues are7 ;-< Shoul, the contro$ers3 ha$e first been submitte, to arbitration before the PO( too> co+ni@ance of the case_H ;0< Bas the cancellation of the R(BOP supporte, b3 e$i,ence_H an, ;A< Di, the

cancellation of the R(BOP amount to unCust enrichment of % ' Realt3 at the e:pense of !en+uet_

is to be ma,e or ,eci,e, The parties still ha$e a reme,3 an, a competent tribunal to +rant this reme,3

T-e Co(r18. R(5,'3

!efore =e ,=ell on the substanti$e issues" =e fin, that the instant petition can be ,enie, outri+ht as !en+uet resorte, to an improper reme,3

The last para+raph of Section ./ of Republic (ct No ;R(< ./50 or the EPhilippine Minin+ (ct of -//?F states" E( petition for re$ie= b3 certiorari an, Guestion of la= ma3 be file, b3 the a++rie$e, part3 =ith the Supreme Court =ithin thirt3 ;A4< ,a3s from receipt of the or,er or ,ecision of the 1M(!6 F

6hird, the Re$ise, Rules of Ci$il Proce,ure inclu,e, Rule 5A to pro$i,e a uniform rule on appeals from Guasi#Cu,icial a+encies &n,er the rule" appeals from their Cu,+ments an, final or,ers are no= reGuire, to be brou+ht to the C( on a $erifie, petition for re$ie= ( Guasi#Cu,icial a+enc3 or bo,3 has been ,efine, as an or+an of +o$ernment" other than a court or le+islature" =hich affects the ri+hts of pri$ate parties throu+h either a,Cu,ication or rule#ma>in+ M(! falls un,er this ,efinitionH hence" it is no ,ifferent from the other Guasi# Cu,icial bo,ies enumerate, un,er Rule 5A !esi,es" the intro,uctor3 =or,s in Section - of Circular No -#/-DDEamon+ these a+encies areFDDin,icate that the enumeration is not e:clusi$e or conclusi$e an, ac>no=le,+e the e:istence of other Guasi#Cu,icial a+encies =hich" thou+h not e:pressl3 liste," shoul, be ,eeme, inclu,e, therein

Ho=e$er" this Court has alrea,3 in$ali,ate, such pro$ision in Carpio v. ,ulu Resources *evelopment Corp."1-A6 rulin+ that a ,ecision of the M(! must first be appeale, to the Court of (ppeals ;C(< un,er Rule 5A of the Rules of Court" before recourse to this Court ma3 be ha, Be hel," thus7

Fourth, the Court reali@es that un,er !atas Pambansa ;!P< !l+ -0/ as amen,e, b3 R( No ./40" factual contro$ersies are usuall3 in$ol$e, in ,ecisions of Guasi#Cu,icial bo,iesH an, the C(" =hich is li>e=ise tas>e, to resol$e Guestions of fact" has more elbo= room to resol$e them !3 inclu,in+ Guestions of fact amon+ the issues that ma3 be raise, in an appeal from Guasi# Cu,icial a+encies to the C(" Section A of Re$ise, (,ministrati$e Circular No -# /? an, Section A of Rule 5A e:plicitl3 e:pan,e, the list of such issues

To summari@e" there are sufficient le+al footin+s authori@in+ a re$ie= of the M(! Decision un,er Rule 5A of the Rules of Court First, Section A4 of (rticle VI of the -/K. Constitution" man,ates that E1n6o la= shall be passe, increasin+ the appellate Curis,iction of the Supreme Court as pro$i,e, in this Constitution =ithout its a,$ice an, consent F On the other han," Section ./ of R( No ./50 pro$i,es that ,ecisions of the M(! ma3 be re$ie=e, b3 this Court on a Epetition for re$ie= b3 certiorari F This pro$ision is ob$iousl3 an e:pansion of the CourtLs appellate Curis,iction" an e:pansion to =hich this Court has not consente, In,iscriminate enactment of le+islation enlar+in+ the appellate Curis,iction of this Court =oul, unnecessaril3 bur,en it ,econd, =hen the Supreme Court" in the e:ercise of its rule#ma>in+ po=er" transfers to the C( pen,in+ cases in$ol$in+ a re$ie= of a Guasi#Cu,icial bo,3Ls ,ecisions" such transfer relates onl3 to proce,ureH hence" it ,oes not impair the substanti$e an, $este, ri+hts of the parties The a++rie$e, part3Ls ri+ht to appeal is preser$e,H =hat is chan+e, is onl3 the proce,ure b3 =hich the appeal

(ccor,in+ to Section A of Rule 5A" E1a6n appeal un,er this Rule ma3 be ta>en to the Court of (ppeals =ithin the perio, an, in the manner herein pro$i,e, =hether the appeal in$ol$es Guestions of fact" of la=" or mi:e, Guestions of fact an, la= F Hence" appeals from Guasi#Cu,icial a+encies e$en onl3 on Guestions of la= ma3 be brou+ht to the C(

Fifth" the Cu,icial polic3 of obser$in+ the hierarch3 of courts ,ictates that ,irect resort from a,ministrati$e a+encies to this Court =ill not be entertaine," unless the re,ress ,esire, cannot be obtaine, from the appropriate lo=er tribunals" or unless e:ceptional an, compellin+ circumstances Custif3 a$ailment of a reme,3 fallin+ =ithin an, callin+ for the e:ercise of our primar3 Curis,iction 1-56

The abo$e principle =as reiterate, in saphil Construction and *evelopment Corporation v. 6uason, .r ; saphil< 1-?6 Ho=e$er" the Carpio rulin+ =as not applie, to saphil as the petition in the latter case =as file, in -/// or three 3ears before the promul+ation of Carpio in 0440 Here" the petition =as file, on (pril 0K" 0445 =hen the Carpio,ecision =as alrea,3 applicable" thus !en+uet shoul, ha$e file, the appeal =ith the C(

>in, =hatsoe$er in an3 court or a,ministrati$e a+enc3 but shall" upon notice of one part3 to the other" be referre, to a !oar, of (rbitrators consistin+ of three ;A< members" one to be selecte, b3 !EN'&ET" another to be selecte, b3 the OBNER an, the thir, to be selecte, b3 the aforementione, t=o arbitrators so appointe,

::::

-- 40 Court (ction Petitioner ha$in+ faile, to properl3 appeal to the C( un,er Rule 5A" the ,ecision of the M(! has become final an, e:ecutor3 On this +roun, alone" the instant petition must be ,enie, No action shall be institute, in court as to an3 matter in ,ispute as hereinabo$e state," e:cept to enforce the ,ecision of the maCorit3 of the (rbitrators 1-96 E$en if =e entertain the petition althou+h !en+uet s>irte, the appeal to the C( $ia Rule 5A" still" the December 0" 0440 Decision an, March -." 0445 Resolution of the DENR#M(! in M(! Case No 4-05#4- shoul, be maintaine,

6,r.1 I..(e: T-e /&.e .-o(52 -&ve 4,r.1 bee' bro(3-1 1o vo5('1&r) &rb,1r&1,o' be4ore 1-e OA

Thus" !en+uet ar+ues that the PO( shoul, ha$e first referre, the case to $oluntar3 arbitration before ta>in+ co+ni@ance of the case" citin+ Sec 0 of R( K.9 on persons an, matters subCect to arbitration

On the other han," in ,en3in+ such ar+ument" the PO( rule, that7 Secs -- 4- an, -- 40 of the R(BOP pertinentl3 pro$i,e7

-- 4- (rbitration

(n3 ,isputes" ,ifferences or ,isa+reements bet=een !EN'&ET an, the OBNER =ith reference to an3thin+ =hatsoe$er pertainin+ to this (+reement that cannot be amicabl3 settle, b3 them shall not be cause of an3 action of an3

Bhile the parties ma3 establish such stipulations clauses" terms an, con,itions as the3 ma3 ,eem con$enient" the same must not be contrar3 to la= an, public polic3 (t a +lance" there is nothin+ =ron+ =ith the terms an, con,itions of the a+reement !ut to state that an a++rie$e, part3 cannot initiate an action =ithout +oin+ to arbitration =oul, be t3in+ oneLs han, e$en if there is a la= =hich allo=s him to ,o so 1-.6

The M(!" mean=hile" ,enie, !en+uetLs contention on the +roun, of estoppel" statin+7

!esi,es" b3 its o=n act" !en+uet is alrea,3 estoppe, in Guestionin+ the Curis,iction of the Panel of (rbitrators to hear an, ,eci,e the case (s pointe, out in the appeale, Decision" !en+uet initiate, an, file, an (,$erse Claim ,oc>ete, as M(C#R#M#0444#40 o$er the same minin+ claims =ithout un,er+oin+ contractual arbitration In this particular case ;M(C#R#M#0444#40< no= subCect of the appeal" !en+uet is li>e=ise in estoppel from Guestionin+ the competence of the Panel of (rbitrators to hear an, ,eci,e in the summar3 procee,in+s % ' Realt3Ls petition" =hen !en+uet itself ,i, not merel3 mo$e for the ,ismissal of the case but also file, an (ns=er =ith counterclaim see>in+ affirmati$e reliefs from the Panel of (rbitrators 1-K6

Section 0 Persons and matters sub3ect to arbitration.DDT:o or more 0er.o'. or 0&r1,e. m&) .(bm,1 1o 1-e &rb,1r&1,o' o4 o'e or more &rb,1r&1or. &') /o'1rover.) e?,.1,'3 be1:ee' 1-em &1 1-e 1,me o4 1-e .(bm,..,o' &'2 :-,/- m&) be 1-e .(b;e/1 o4 &' &/1,o', or 1-e 0&r1,e. 1o &') /o'1r&/1 m&) ,' .(/- /o'1r&/1 &3ree 1o .e115e b) &rb,1r&1,o' & /o'1rover.) 1-ere&41er &r,.,'3 be1:ee' 1-em. S(/- .(bm,..,o' or /o'1r&/1 .-&55 be v&5,2, e'4or/e&b5e &'2 ,rrevo/&b5e, .&ve (0o' .(/- 3ro('2. &. e?,.1 &1 5&: 4or 1-e revo/&1,o' o4 &') /o'1r&/1.

Such submission or contract ma3 inclu,e Guestion1s6 arisin+ out of $aluations" appraisals or other contro$ersies =hich ma3 be collateral" inci,ental" prece,ent or subseGuent to an3 issue bet=een the parties ;Emphasis supplie, <

Moreo$er" the M(! rule, that the contractual pro$ision on arbitration merel3 pro$i,es for an a,,itional forum or $enue an, ,oes not ,i$est the PO( of the Curis,iction to hear the case 1-/6

In R( /0K? or the E(lternati$e Dispute Resolution (ct of 0445"F the Con+ress reiterate, the efficac3 of arbitration as an alternati$e mo,e of ,ispute resolution b3 statin+ in Sec A0 thereof that ,omestic arbitration shall still be +o$erne, b3 R( K.9 Clearl3" a contractual stipulation that reGuires prior resort to $oluntar3 arbitration before the parties can +o ,irectl3 to court is not ille+al an, is in fact promote, b3 the State Thus" petitioner correctl3 cites se$eral cases =hereb3 arbitration clauses ha$e been uphel, b3 this Court 10-6

In its %ul3 04" 0445 Comment"1046 % ' Realt3 reiterate, the abo$e rulin+s of the PO( an, M(! It ar+ue, that R( ./50 or the EPhilippine Minin+ (ct of -//?F is a special la= =hich shoul, pre$ail o$er the stipulations of the parties an, o$er a +eneral la=" such as R( K.9 It also ar+ue, that the PO( cannot be consi,ere, as a EcourtF un,er the contemplation of R( K.9 an, that Curispru,ence sa3in+ that there must be prior resort to arbitration before filin+ a case =ith the courts is inapplicable to the instant case as the PO( is itself alrea,3 en+a+e, in arbitration

Moreo$er" the contention that R( ./50 pre$ails o$er R( K.9 presupposes a conflict bet=een the t=o la=s Such is not the case here To reiterate" a$ailment of $oluntar3 arbitration before resort is ma,e to the courts or Guasi# Cu,icial a+encies of the +o$ernment is a $ali, contractual stipulation that must be a,here, to b3 the parties (s state, in Secs 9 an, . of R( K.97

On this issue" =e rule for !en+uet Sec 0 of R( K.9 eluci,ates the scope of arbitration7

Section 9 7earing b0 court.DDA 0&r1) &33r,eve2 b) 1-e 4&,5(re, 'e35e/1 or re4(.&5 o4 &'o1-er 1o 0er4orm ('2er &' &3reeme'1 ,' :r,1,'3 0rov,2,'3 4or &rb,1r&1,o' m&) 0e1,1,o' 1-e /o(r1 4or &' or2er 2,re/1,'3 1-&1 .(/&rb,1r&1,o' 0ro/ee2 ,' 1-e m&''er 0rov,2e2 4or ,' .(/- &3reeme'1 2i$e ,a3s notice in =ritin+ of the hearin+ of such application shall be ser$e, either

personall3 or b3 re+istere, mail upon the part3 in ,efault T-e /o(r1 .-&55 -e&r 1-e 0&r1,e., &'2 (0o' be,'3 .&1,.4,e2 1-&1 1-e m&9,'3 o4 1-e &3reeme'1 or .(/- 4&,5(re 1o /om05) 1-ere:,1- ,. 'o1 ,' ,..(e, .-&55 m&9e &' or2er 2,re/1,'3 1-e 0&r1,e. 1o 0ro/ee2 1o &rb,1r&1,o' ,' &//or2&'/e :,1- 1-e 1erm. o4 1-e &3reeme'1. I4 1-e m&9,'3 o4 1-e &3reeme'1 or 2e4&(51 be ,' ,..(e 1-e /o(r1 .-&55 0ro/ee2 1o .(mm&r,5) -e&r .(/- ,..(e. I4 1-e 4,'2,'3 be 1-&1 'o &3reeme'1 ,' :r,1,'3 0rov,2,'3 4or &rb,1r&1,o' :&. m&2e, or 1-&1 1-ere ,. 'o 2e4&(51 ,' 1-e 0ro/ee2,'3 1-ere('2er, 1-e 0ro/ee2,'3 .-&55 be 2,.m,..e2. I4 1-e 4,'2,'3 be 1-&1 & :r,11e' 0rov,.,o' 4or &rb,1r&1,o' :&. m&2e &'2 1-ere ,. & 2e4&(51 ,' 0ro/ee2,'3 1-ere('2er, &' or2er .-&55 be m&2e .(mm&r,5) 2,re/1,'3 1-e 0&r1,e. 1o 0ro/ee2 :,1- 1-e &rb,1r&1,o' ,' &//or2&'/e :,1- 1-e 1erm. 1-ereo4.

arbitration has been pursue, an, complete," then the lo=er court ma3 confirm the a=ar, ma,e b3 the arbitrator 1006

% ' Realt3Ls contention" that prior resort to arbitration is una$ailin+ in the instant case because the PO(Ls man,ate is to arbitrate ,isputes in$ol$in+ mineral a+reements" is misplace, ( ,istinction must be ma,e bet=een $oluntar3 an, compulsor3 arbitration In (udo and (u0m Corporation v. ,aordino" the Court ha, the occasion to ,istin+uish bet=een the t=o t3pes of arbitrations7 Comparati$el3" in Reformist +nion of R.B. (iner, Inc. vs. -(RC" compulsor3 arbitration has been ,efine, both as Ethe process of settlement of labor ,isputes b3 a 3over'me'1 &3e'/) :-,/- -&. 1-e &(1-or,1) 1o ,'ve.1,3&1e &'2 1o m&9e &' &:&r2 =hich is bin,in+ on all the parties" an, as a mo,e of arbitration =here the parties are compelle, to accept the resolution of their ,ispute throu+h arbitration b3 a thir, part3 F Bhile a $oluntar3 arbitrator is 'o1 0&r1 o4 1-e 3over'me'1&5 (',1 or 5&bor 2e0&r1me'18. 0er.o''e5" sai, arbitrator ren,ers arbitration ser$ices pro$i,e, for un,er labor la=s 10A6;Emphasis supplie, <

::::

Section . ,ta0 of civil action.DDIf an3 suit or procee,in+ be brou+ht upon an issue arisin+ out of an a+reement pro$i,in+ for the arbitration thereof" the court in =hich such suit or procee,in+ is pen,in+" upon bein+ satisfie, that the issue in$ol$e, in such suit or procee,in+ is referable to arbitration" shall sta3 the action or procee,in+ until an arbitration has been ha, in accor,ance =ith the terms of the a+reement7 Pro$i,e," That the applicant" for the sta3 is not in ,efault in procee,in+ =ith such arbitration ;Emphasis supplie, <

There is a clear ,istinction bet=een compulsor3 an, $oluntar3 arbitration The arbitration pro$i,e, b3 the PO( is compulsor3" =hile the nature of the arbitration pro$ision in the R(BOP is $oluntar3" not in$ol$in+ an3 +o$ernment a+enc3 Thus" % ' Realt3Ls ar+ument on this matter must fail In other =or,s" in the e$ent a case that shoul, properl3 be the subCect of $oluntar3 arbitration is erroneousl3 file, =ith the courts or Guasi#Cu,icial a+encies" on motion of the ,efen,ant" the court or Guasi#Cu,icial a+enc3 shall ,etermine =hether such contractual pro$ision for arbitration is sufficient an, effecti$e If in affirmati$e" the court or Guasi#Cu,icial a+enc3 shall then or,er the enforcement of sai, pro$ision !esi,es" in BF Corporation v. Court of ppeals" =e alrea,3 rule,7

(s to % ' Realt3Ls contention that the pro$isions of R( K.9 cannot appl3 to the instant case =hich in$ol$es an a,ministrati$e a+enc3" it must be pointe, out that Section -- 4- of the R(BOP states that7

In this connection" it bears stressin+ that the lo=er court has not lost its Curis,iction o$er the case Section . of Republic (ct No K.9 pro$i,es that procee,in+s therein ha$e onl3 been sta3e, (fter the special procee,in+ of

1(n3 contro$ers3 =ith re+ar, to the contract6 shall not be cause of an3 action of an3 >in, =hatsoe$er in an3 court or &2m,',.1r&1,ve &3e'/) but shall" upon notice of one part3 to the other" be referre, to a !oar, of (rbitrators consistin+ of three ;A< members" one to be selecte, b3 !EN'&ET" another to

be selecte, b3 the OBNER an, the thir, to be selecte, b3 the aforementione, t=o arbiters so appointe, 1056 ;Emphasis supplie, <

The cancellation of the R(BOP b3 the PO( =as base, on t=o +roun,s7 ;-< !en+uetLs failure to pa3 % ' Realt3Ls ro3alties for the minin+ claimsH an, ;0< !en+uetLs failure to seriousl3 pursue MPS( (pplication No (PS(#V#444/ o$er the minin+ claims

There can be no Guibblin+ that PO( is a Guasi#Cu,icial bo,3 =hich forms part of the DENR" an a,ministrati$e a+enc3 Hence" the pro$ision on man,ator3 resort to arbitration" freel3 entere, into b3 the parties" must be hel, bin,in+ a+ainst them 10?6

In sum" on the issue of =hether PO( shoul, ha$e referre, the case to $oluntar3 arbitration" =e fin, that" in,ee," PO( has no Curis,iction o$er the ,ispute =hich is +o$erne, b3 R( K.9" the arbitration la=

(s to the ro3alties" !en+uet claims that the chec>s representin+ pa3ments for the ro3alties of % ' Realt3 =ere a$ailable for pic>#up in its office an, it is the latter =hich refuse, to claim them !en+uet then thus conclu,es that it ,i, not $iolate the R(BOP for nonpa3ment of ro3alties 2urther" !en+uet reasons that % ' Realt3 has the bur,en of pro$in+ that the former ,i, not pa3 such ro3alties follo=in+ the principle that the complainants must pro$e their affirmati$e alle+ations

Ho=e$er" =e fin, that !en+uet is alrea,3 estoppe, from Guestionin+ the PO(Ls Curis,iction (s it =ere" =hen % ' Realt3 file, DENR Case No 0444#4-" !en+uet file, its ans=er an, participate, in the procee,in+s before the PO(" Re+ion V Secon,l3" =hen the a,$erse March -/" 044- PO( Decision =as ren,ere," it file, an appeal =ith the M(! in Mines (,ministrati$e Case No R#M# 0444#4- an, a+ain participate, in the M(! procee,in+s Bhen the a,$erse December 0" 0440 M(! Decision =as promul+ate," it file, a motion for reconsi,eration =ith the M(! Bhen the a,$erse March -." 0445 M(! Resolution =as issue," !en+uet file, a petition =ith this Court pursuant to Sec ./ of R( ./50 implie,l3 reco+ni@in+ M(!Ls Curis,iction In this factual milieu" the Court rules that the Curis,iction of PO( an, that of M(! can no lon+er be Guestione, b3 !en+uet at this late hour Bhat !en+uet shoul, ha$e ,one =as to imme,iatel3 challen+e the PO(Ls Curis,iction b3 a special ci$il action for certiorari =hen PO( rule, that it has Curis,iction o$er the ,ispute To re,o the procee,in+s full3 participate, in b3 the parties after the lapse of se$en 3ears from ,ate of institution of the ori+inal action =ith the PO( =oul, be anathema to the spee,3 an, efficient a,ministration of Custice

Bith re+ar, to the failure to pursue the MPS( application" !en+uet claims that the len+th3 time of appro$al of the application is ,ue to the failure of the M'! to appro$e it In other =or,s" !en+uet ar+ues that the appro$al of the application is solel3 in the han,s of the M'!

!en+uetLs ar+uments are bereft of merit

Sec -5 4? of the R(BOP pro$i,es7

-5 4? !an> (ccount

Se/o'2 I..(e: T-e /&'/e55&1,o' o4 1-e RA@O :&. .(00or1e2 b) ev,2e'/e

OBNER shall maintain a ban> account at ``````````` or an3 other ban> from time to time selecte, b3 OBNER =ith notice in =ritin+ to !EN'&ET =here !EN'&ET shall ,eposit to the OBNERLs cre,it an3 an, all a,$ances an, pa3ments =hich ma3 become ,ue the OBNER un,er this (+reement as =ell as the purchase price herein a+ree, upon in the e$ent that !EN'&ET shall e:ercise the option to purchase pro$i,e, for in the (+reement A') &'2 &55 2e0o.,1. .o m&2e b) !ENG7ET .-&55 be & 4(55 &'2 /om05e1e &/>(,11&'/e

&'2 re5e&.e 1o 1sic6 !ENG7ET 4rom &') 4(r1-er 5,&b,5,1) 1o 1-e O@NER o4 1-e &mo('1. re0re.e'1e2 b) .(/- 2e0o.,1.. ;Emphasis supplie, <

In the instant case" the obli+ation of !en+uet to pa3 ro3alties to % ' Realt3 has been a,mitte, an, supporte, b3 the pro$isions of the R(BOP Thus" the bur,en to pro$e such obli+ation rests on !en+uet

E$i,entl3" the R(BOP itself pro$i,es for the mo,e of ro3alt3 pa3ment b3 !en+uet The fact that there =as the pre$ious practice =hereb3 % ' Realt3 pic>e,#up the chec>s from !en+uet is una$ailin+ The mo,e of pa3ment is embo,ie, in a contract bet=een the parties (s such" the contract must be consi,ere, as the la= bet=een the parties an, bin,in+ on both 1096 Thus" after % ' Realt3 informe, !en+uet of the ban> account =here ,eposits of its ro3alties ma3 be ma,e" !en+uet ha, the obli+ation to ,eposit the chec>s % ' Realt3 ha, no obli+ation to furnish !en+uet =ith a !oar, Resolution consi,erin+ that the R(BOP itself pro$i,e, for such pa3ment scheme

It shoul, also be borne in min, that MPS( (pplication No (PS(#V#444/ has been pen,in+ =ith the M'! for a consi,erable len+th of time !en+uet" in the R(BOP" obli+ate, itself to perfect the ri+hts to the minin+ claims an,[or other=ise acGuire the minin+ ri+hts to the mineral claims but faile, to present an3 e$i,ence sho=in+ that it e:erte, efforts to spee, up an, ha$e the application appro$e, In fact" !en+uet ne$er e$en alle+e, that it continuousl3 follo=e,#up the application =ith the M'! an, that it =as in constant communication =ith the +o$ernment a+enc3 for the e:pe,itious resolution of the application Such alle+ations =oul, sho= that" in,ee," !en+uet =as remiss in prosecutin+ the MPS( application an, clearl3 faile, to compl3 =ith its obli+ation in the R(BOP

Notabl3" !en+uetLs claim that % ' Realt3 must pro$e nonpa3ment of its ro3alties is both illo+ical an, unsupporte, b3 la= an, Curispru,ence

T-,r2 I..(e: T-ere ,. 'o (';(.1 e'r,/-me'1 ,' 1-e ,'.1&'1 /&.e

The alle+ation of nonpa3ment is not a positi$e alle+ation as claime, b3 !en+uet Rather" such is a ne+ati$e alle+ation that ,oes not reGuire proof an, in fact transfers the bur,en of proof to !en+uet Thus" this Court rule, in .imene# v -ational (abor Relations Commission7

!ase, on the fore+oin+ ,iscussion" the cancellation of the R(BOP =as base, on $ali, +roun,s an, is" therefore" Custifie, The necessar3 implication of the cancellation is the cessation of !en+uetLs ri+ht to prosecute MPS( (pplication No (PS(#V#444/ an, to further ,e$elop such minin+ claims

(s a +eneral rule" one =ho plea,s pa3ment has the bur,en of pro$in+ it E$en =here the plaintiff must alle+e non#pa3ment" the +eneral rule is that the bur,en rests on the ,efen,ant to pro$e pa3ment" rather than on the plaintiff to pro$e non#pa3ment T-e 2eb1or -&. 1-e b(r2e' o4 .-o:,'3 :,1- 5e3&5 /er1&,'1) 1-&1 1-e ob5,3&1,o' -&. bee' 2,./-&r3e2 b) 0&)me'1. 10.6 ;Emphasis supplie, <

In Car Cool Philippines, Inc. v. +shio Realt0 and *evelopment Corporation" =e ,efine, unCust enrichment" as follo=s7

Be ha$e hel, that E1t6here is unCust enrichment =hen a person (';(.15) retains a benefit to the loss of another" or =hen a person retains mone3 or propert3 of another a+ainst the fun,amental principles of Custice" eGuit3 an, +oo, conscience F (rticle 00 of the Ci$il Co,e pro$i,es that E1e6$er3 person =ho throu+h an act of performance b3 another" or an3 other means" acGuires or comes into possession of somethin+ at the e:pense of the latter =ithout Cust or le+al +roun," shall return the same to him F The principle of unCust enrichment un,er (rticle 00 reGuires t=o con,itions7 ;-< that a person is benefite, =ithout a

$ali, basis or Custification" an, ;0< that such benefit is ,eri$e, at anotherLs e:pense or ,ama+e

%OR'E 'ONZ()ES an, P(NE) O2 (R!ITR(TORS" Petitioners" $s C)IM(] MININ' )TD " C)IM(]#(RIMCO MININ' (&STR()(SI(N PHI)IPPINES MININ' INC " Respon,ents CORP " an,

T-ere ,. 'o (';(.1 e'r,/-me'1 :-e' 1-e 0er.o' :-o :,55 be'e4,1 -&. & v&5,2 /5&,m 1o .(/- be'e4,1.10K6 ;Emphasis supplie, <

:################################################################################# :

Clearl3" there is no unCust enrichment in the instant case as the cancellation of the R(BOP" =hich left !en+uet =ithout an3 le+al ri+ht to participate in further ,e$elopin+ the minin+ claims" =as brou+ht about b3 its $iolation of the R(BOP Hence" !en+uet has no one to blame but itself for its pre,icament

' R No -9.//5

%anuar3 00" 044.

%OR'E 'ONZ()ES" Petitioner" @HERE6ORE" =e DIS+ISS the petition" an, A66IR+ the December 0" 0440 Decision an, March -." 0445 Resolution of the DENR#M(! in M(! Case No 4-05#4- uphol,in+ the cancellation of the %une -" -/K. R(BOP No costs $s HON OSC(R ! PIMENTE)" in his capacit3 as PRESIDIN' %&D'E of !R -5K of the RE'ION() TRI() CO&RT of M(X(TI CIT*" an, C)IM(]#(RIMCO MININ' CORPOR(TION" Respon,ents

SO ORDERED. RESO)&TION

TIN'(" % 7 SPECI() SECOND DIVISION This is a consoli,ation of t=o petitions roote, in the same ,ispute, (,,en,um Contract entere, into b3 the parties In ' R No -9-/?." the Court in its Decision of 0K 2ebruar3 044?- ,enie, the Rule 5? petition of petitioner %or+e 'on@ales ;'on@ales< It hel, that the DENR Panel of (rbitrators ha, no Curis,iction o$er the complaint for the annulment of the (,,en,um Contract on +roun,s of frau, an, $iolation of the Constitution an, that the action shoul, ha$e been brou+ht before the re+ular courts as it in$ol$e, Cu,icial issues !oth

' R No -9-/?.

%anuar3 00" 044.

parties file, separate motions for reconsi,eration 'on@ales a$ers in his Motion for Reconsi,eration0 that the Court erre, in hol,in+ that the DENR Panel of (rbitrators =as bereft of Curis,iction" reiteratin+ its ar+ument that the case in$ol$es a minin+ ,ispute that properl3 falls =ithin the ambit of the PanelLs authorit3 'on@ales a,,s that the Court faile, to rule on other issues he raise, relatin+ to the sufficienc3 of his complaint before the DENR Panel of (rbitrators an, the timeliness of its filin+

On ? %une 0449" the t=o cases" ' R Nos -9-/?. an, -9.//5" =ere consoli,ate, upon the recommen,ation of the (ssistant Di$ision Cler> of Court since the cases are roote, in the same (,,en,um Contract

Respon,ents Clima: Minin+ )t, " et al " ;respon,ents< file, their Motion for Partial Reconsi,eration an,[or ClarificationA see>in+ reconsi,eration of that part of the Decision hol,in+ that the case shoul, not be brou+ht for arbitration un,er Republic (ct ;R ( < No K.9" also >no=n as the (rbitration )a= 5 Respon,ents" citin+ (merican Curispru,ence? an, the &NCITR() Mo,el )a="9 ar+ue that the arbitration clause in the (,,en,um Contract shoul, be treate, as an a+reement in,epen,ent of the other terms of the contract" an, that a claime, rescission of the main contract ,oes not a$oi, the ,ut3 to arbitrate Respon,ents a,, that 'on@alesLs ar+ument relatin+ to the alle+e, in$ali,it3 of the (,,en,um Contract still has to be pro$en an, a,Cu,icate, on in a proper procee,in+H that is" an action separate from the motion to compel arbitration Pen,in+ Cu,+ment in such separate action" the (,,en,um Contract remains $ali, an, bin,in+ an, so ,oes the arbitration clause therein Respon,ents a,, that the hol,in+ in the Decision that Zthe case shoul, not be brou+ht un,er the ambit of the (rbitration )a=Z appears to be premise, on 'on@alesLs ha$in+ Zimpu+n1e,6 the e:istence or $ali,it3Z of the a,,en,um contract If so" it suppose,l3 con$e3s the i,ea that 'on@alesLs unilateral repu,iation of the contract or mere alle+ation of its in$ali,it3 is all it ta>es to a$oi, arbitration Hence" respon,ents submit that the courtLs hol,in+ that Zthe case shoul, not be brou+ht un,er the ambit of the (rbitration )a=Z be un,erstoo, or clarifie, as operati$e onl3 =here the challen+e to the arbitration a+reement has been sustaine, b3 final Cu,+ment

Be first tac>le the more recent case =hich is ' R No -9.//5 It stemme, from the petition to compel arbitration file, b3 respon,ent Clima:#(rimco before the RTC of Ma>ati Cit3 on A- March 0444 =hile the complaint for the nullification of the (,,en,um Contract =as pen,in+ before the DENR Panel of (rbitrators On 0A March 0444" Clima:#(rimco ha, sent 'on@ales a Deman, for (rbitration pursuant to Clause -/ --- of the (,,en,um Contract an, also in accor,ance =ith Sec ? of R ( No K.9 The petition for arbitration =as subseGuentl3 file, an, Clima:#(rimco sou+ht an or,er to compel the parties to arbitrate pursuant to the sai, arbitration clause The case" ,oc>ete, as Ci$il Case No 44#555" =as initiall3 raffle, to !r -A0 of the RTC of Ma>ati Cit3" =ith %u,+e Herminio I !enito as Presi,in+ %u,+e Respon,ent Clima:#(rimco file, on ? (pril 0444 a motion to set the application to compel arbitration for hearin+

On -5 (pril 0444" 'on@ales file, a motion to ,ismiss =hich he ho=e$er faile, to set for hearin+ On -? Ma3 0444" he file, an (ns=er =ith Counterclaim"-0 Guestionin+ the $ali,it3 of the (,,en,um Contract containin+ the arbitration clause 'on@ales alle+e, that the (,,en,um Contract containin+ the arbitration clause is $oi, in $ie= of Clima:#(rimcoLs acts of frau," oppression an, $iolation of the Constitution Thus" the arbitration clause" Clause -/ -" containe, in the (,,en,um Contract is also null an, $oi, ab initio an, le+all3 ine:istent -a=phi- net

!oth parties =ere reGuire, to file their respecti$e comments to the other part3Ls motion for reconsi,eration[clarification . Respon,ents file, their Comment on -. (u+ust 044?"K =hile 'on@ales file, his onl3 on 0? %ul3 0449 /

On -K Ma3 0444" the RTC issue, an or,er ,eclarin+ 'on@alesLs motion to ,ismiss moot an, aca,emic in $ie= of the filin+ of his (ns=er =ith Counterclaim -A

On the other han," ' R No -9.//5 is a Rule 9? petition file, on 9 Ma3 044?" or =hile the motions for reconsi,eration in ' R No -9-/?.-4 =ere pen,in+" =herein 'on@ales challen+e, the or,ers of the Re+ional Trial Court ;RTC< reGuirin+ him to procee, =ith the arbitration procee,in+s as sou+ht b3 Clima:# (rimco Minin+ Corporation ;Clima:#(rimco<

On A- Ma3 0444" 'on@ales as>e, the RTC to set the case for pre#trial -5 This the RTC ,enie, on -9 %une 0444" hol,in+ that the petition for arbitration is a special procee,in+ that is summar3 in nature -? Ho=e$er" on . %ul3 0444" the RTC +rante, 'on@alesLs motion for reconsi,eration of the -9 %une 0444 Or,er

an, set the case for pre#trial on -4 (u+ust 0444" it bein+ of the $ie= that 'on@ales ha, raise, in his ans=er the issue of the ma>in+ of the arbitration a+reement -9

pre#trial conference an, the necessar3 hearin+s on the ,etermination of the nullit3 of the (,,en,um Contract

In support of his ar+ument" 'on@ales in$o>es Sec 9 of R ( No K.97 Clima:#(rimco then file, a motion to resol$e its pen,in+ motion to compel arbitration The RTC ,enie, the same in its 05 %ul3 0444 or,er Sec 9 Hearin+ b3 court J( part3 a++rie$e, b3 the failure" ne+lect or refusal of another to perform un,er an a+reement in =ritin+ pro$i,in+ for arbitration ma3 petition the court for an or,er ,irectin+ that such arbitration procee, in the manner pro$i,e, for in such a+reement 2i$e ,a3s notice in =ritin+ of the hearin+ of such application shall be ser$e, either personall3 or b3 re+istere, mail upon the part3 in ,efault The court shall hear the parties" an, upon bein+ satisfie, that the ma>in+ of the a+reement or such failure to compl3 there=ith is not in issue" shall ma>e an or,er ,irectin+ the parties to procee, to arbitration in accor,ance =ith the terms of the a+reement If the ma>in+ of the a+reement or ,efault be in issue the court shall procee, to summaril3 hear such issue If the fin,in+ be that no a+reement in =ritin+ pro$i,in+ for arbitration =as ma,e" or that there is no ,efault in the procee,in+ thereun,er" the procee,in+ shall be ,ismisse, If the fin,in+ be that a =ritten pro$ision for arbitration =as ma,e an, there is a ,efault in procee,in+ thereun,er" an or,er shall be ma,e summaril3 ,irectin+ the parties to procee, =ith the arbitration in accor,ance =ith the terms thereof

On 0K %ul3 0444" Clima:#(rimco file, a Motion to Inhibit %u,+e Herminio I !enito for Znot possessin+ the col, neutralit3 of an impartial Cu,+e Z-. On ? (u+ust 0444" %u,+e !enito issue, an Or,er +rantin+ the Motion to Inhibit an, or,ere, the re#rafflin+ of the petition for arbitration -K The case =as raffle, to the sala of public respon,ent %u,+e Oscar ! Pimentel of !ranch -5K

On 0A (u+ust 0444" Clima:#(rimco file, a motion for reconsi,eration of the 05 %ul3 0444 Or,er -/ Clima:#(rimco ar+ue, that R ( No K.9 ,oes not authori@e a pre#trial or trial for a motion to compel arbitration but ,irects the court to hear the motion summaril3 an, resol$e it =ithin ten ,a3s from hearin+ %u,+e Pimentel +rante, the motion an, ,irecte, the parties to arbitration On -A 2ebruar3 044-" %u,+e Pimentel issue, the first assaile, or,er reGuirin+ 'on@ales to procee, =ith arbitration procee,in+s an, appointin+ retire, C( %ustice %or+e CoGuia as sole arbitrator 04

'on@ales mo$e, for reconsi,eration on 04 March 044- but this =as ,enie, in the Or,er ,ate, . March 044? 0-

The court shall ,eci,e all motions" petitions or applications file, un,er the pro$isions of this (ct" =ithin ten ;-4< ,a3s after such motions" petitions" or applications ha$e been hear, b3 it

'on@ales thus file, the Rule 9? petition assailin+ the Or,ers ,ate, -A 2ebruar3 044- an, . March 044? of %u,+e Pimentel 'on@ales conten,s that public respon,ent %u,+e Pimentel acte, =ith +ra$e abuse of ,iscretion in imme,iatel3 or,erin+ the parties to procee, =ith arbitration ,espite the proper" $ali," an, timel3 raise, ar+ument in his (ns=er =ith Counterclaim that the (,,en,um Contract" containin+ the arbitration clause" is null an, $oi, 'on@ales has also sou+ht a temporar3 restrainin+ or,er to pre$ent the enforcement of the assaile, or,ers ,irectin+ the parties to arbitrate" an, to ,irect %u,+e Pimentel to hol, a

'on@ales also cites Sec 05 of R ( No /0K? or the Z(lternati$e Dispute Resolution (ct of 04457Z

Sec 05 Referral to (rbitration J( court before =hich an action is brou+ht in a matter =hich is the subCect matter of an arbitration a+reement shall" if at least one part3 so reGuests not later than the pre#trial conference" or upon the reGuest of both parties thereafter" refer the parties to arbitration unless it fin,s that the

arbitration a+reement is null an, $oi," inoperati$e or incapable of bein+ performe,

petition for certiorari He cannot use the special ci$il action of certiorari as a reme,3 for a lost appeal

(ccor,in+ to 'on@ales" the abo$e#Guote, pro$isions of la= outline the proce,ure to be follo=e, in petitions to compel arbitration" =hich the RTC ,i, not follo= Thus" referral of the parties to arbitration b3 %u,+e Pimentel ,espite the timel3 an, properl3 raise, issue of nullit3 of the (,,en,um Contract =as misplace, an, =ithout le+al basis !oth R ( No K.9 an, R ( No /0K? man,ate that an3 issue as to the nullit3" inoperati$eness" or incapabilit3 of performance of the arbitration clause[a+reement raise, b3 one of the parties to the alle+e, arbitration a+reement must be ,etermine, b3 the court prior to referrin+ them to arbitration The3 reGuire that the trial court first ,etermine or resol$e the issue of nullit3" an, there is no other $enue for this ,etermination other than a pre#trial an, hearin+ on the issue b3 the trial court =hich has Curis,iction o$er the case 'on@ales a,,s that the assaile, -A 2ebruar3 044Or,er also $iolate, his ri+ht to proce,ural ,ue process =hen the trial court erroneousl3 rule, on the e:istence of the arbitration a+reement ,espite the absence of a hearin+ for the presentation of e$i,ence on the nullit3 of the (,,en,um Contract

Clima:#(rimco a,,s that an application to compel arbitration un,er Sec 9 of R ( No K.9 confers on the trial court onl3 a limite, an, special Curis,iction" i e " a Curis,iction solel3 to ,etermine ;a< =hether or not the parties ha$e a =ritten contract to arbitrate" an, ;b< if the ,efen,ant has faile, to compl3 =ith that contract Respon,ent cites )a Na$al Dru+ Corporation $ Court of (ppeals"00 =hich hol,s that in a procee,in+ to compel arbitration" Z1t6he arbitration la= e:plicitl3 confines the courtLs authorit3 onl3 to pass upon the issue of =hether there is or there is no a+reement in =ritin+ pro$i,in+ for arbitration"Z an, Z1i6n the affirmati$e" the statute or,ains that the court shall issue an or,er ^summaril3 ,irectin+ the parties to procee, =ith the arbitration in accor,ance =ith the terms thereof LZ0A Clima:#(rimco ar+ues that R ( No K.9 +i$es no room for an3 other issue to be ,ealt =ith in such a procee,in+" an, that the court presente, =ith an application to compel arbitration ma3 or,er arbitration or ,ismiss the same" ,epen,in+ solel3 on its fin,in+ as to those t=o limite, issues If either of these matters is ,ispute," the court is reGuire, to con,uct a summar3 hearin+ on it 'on@alesLs proposition contra,icts both the trial courtLs limite, Curis,iction an, the summar3 nature of the procee,in+ itself

Respon,ent Clima:#(rimco" on the other han," assails the mo,e of re$ie= a$aile, of b3 'on@ales Clima:#(rimco cites Sec 0/ of R ( No K.97

Sec 0/ (ppeals J(n appeal ma3 be ta>en from an or,er ma,e in a procee,in+ un,er this (ct" or from a Cu,+ment entere, upon an a=ar, throu+h certiorari procee,in+s" but such appeals shall be limite, to Guestions of la= The procee,in+s upon such an appeal" inclu,in+ the Cu,+ment thereon shall be +o$erne, b3 the Rules of Court in so far as the3 are applicable

Clima:#(rimco further notes that 'on@alesLs attac> on or repu,iation of the (,,en,um Contract also is not a +roun, to ,en3 effect to the arbitration clause in the Contract The arbitration a+reement is separate an, se$erable from the contract e$i,encin+ the partiesL commercial or economic transaction" it stresses Hence" the alle+e, ,efect or failure of the main contract is not a +roun, to ,en3 enforcement of the partiesL arbitration a+reement E$en the part3 =ho has repu,iate, the main contract is not pre$ente, from enforcin+ its arbitration pro$ision R ( No K.9 itself treats the arbitration clause or a+reement as a contract separate from the commercial" economic or other transaction to be arbitrate, The statute" in particular para+raph - of Sec 0 thereof" consi,ers the arbitration stipulation an in,epen,ent contract in its o=n ri+ht =hose enforcement ma3 be pre$ente, onl3 on +roun,s =hich le+all3 ma>e the arbitration a+reement itself re$ocable" thus7

Clima:#(rimco mentions that the special ci$il action for certiorari emplo3e, b3 'on@ales is a$ailable onl3 =here there is no appeal or an3 plain" spee,3" an, a,eGuate reme,3 in the or,inar3 course of la= a+ainst the challen+e, or,ers or acts Clima:#(rimco then points out that R ( No K.9 pro$i,es for an appeal from such or,ers" =hich" un,er the Rules of Court" must be file, =ithin -? ,a3s from notice of the final or,er or resolution appeale, from or of the ,enial of the motion for reconsi,eration file, in ,ue time 'on@ales has not ,enie, that the rele$ant -?#,a3 perio, for an appeal ha, elapse, lon+ before he file, this

Sec 0 Persons an, matters subCect to arbitration JT=o or more persons or parties ma3 submit to the arbitration of one or more arbitrators an3 contro$ers3 e:istin+" bet=een them at the time of the submission an, =hich ma3 be the subCect of an action" or the parties to an3 contract ma3 in such contract a+ree to

settle b3 arbitration a contro$ers3 thereafter arisin+ bet=een them Such submission or contract shall be $ali," enforceable an, irre$ocable" sa$e upon such +roun,s as e:ist at la= for the re$ocation of an3 contract

'on@alesLs Petition for Certiorari in ' R No -9.//5 essentiall3 turns on =hether the Guestion of $ali,it3 of the (,,en,um Contract bears upon the applicabilit3 or enforceabilit3 of the arbitration clause containe, therein The t=o pen,in+ matters shall thus be Cointl3 resol$e,

:::: Be a,,ress the Rule 9? petition in ' R No -9.//5 first from the reme,ial la= perspecti$e It ,eser$es to be ,ismisse, on proce,ural +roun,s" as it =as file, in lieu of appeal =hich is the prescribe, reme,3 an, at that far be3on, the re+lementar3 perio, It is elementar3 in reme,ial la= that the use of an erroneous mo,e of appeal is cause for ,ismissal of the petition for certiorari an, it has been repeate,l3 stresse, that a petition for certiorari is not a substitute for a lost appeal (s its nature" a petition for certiorari lies onl3 =here there is Zno appeal"Z an, Zno plain" spee,3 an, a,eGuate reme,3 in the or,inar3 course of la= Z0? The (rbitration )a= specificall3 pro$i,es for an appeal b3 certiorari" i e " a petition for re$ie= un,er certiorari un,er Rule 5? of the Rules of Court that raises pure Guestions of la= 09 There is no merit to 'on@alesLs ar+ument that the use of the permissi$e term Zma3Z in Sec 0/" R ( No K.9 in the filin+ of appeals ,oes not prohibit nor ,iscount the filin+ of a petition for certiorari un,er Rule 9? 0. Proper interpretation of the aforesai, pro$ision of la= sho=s that the term Zma3Z refers onl3 to the filin+ of an appeal" not to the mo,e of re$ie= to be emplo3e, In,ee," the use of Zma3Z merel3 reiterates the principle that the ri+ht to appeal is not part of ,ue process of la= but is a mere statutor3 pri$ile+e to be e:ercise, onl3 in the manner an, in accor,ance =ith la=

The +roun,s 'on@ales in$o>es for the re$ocation of the (,,en,um ContractJ frau, an, oppression in the e:ecution thereofJare also not +roun,s for the re$ocation of the arbitration clause in the Contract" Clima:#(rimco notes Such +roun,s ma3 onl3 be raise, b3 =a3 of ,efense in the arbitration itself an, cannot be use, to frustrate or ,ela3 the con,uct of arbitration procee,in+s Instea," these shoul, be raise, in a separate action for rescission" it continues

Clima:#(rimco emphasi@es that the summar3 procee,in+ to compel arbitration un,er Sec 9 of R ( No K.9 shoul, not be confuse, =ith the proce,ure in Sec 05 of R ( No /0K? Sec 9 of R ( No K.9 refers to an application to compel arbitration =here the courtLs authorit3 is limite, to resol$in+ the issue of =hether there is or there is no a+reement in =ritin+ pro$i,in+ for arbitration" =hile Sec 05 of R ( No /0K? refers to an or,inar3 action =hich co$ers a matter that appears to be arbitrable or subCect to arbitration un,er the arbitration a+reement In the latter case" the statute is clear that the court" instea, of tr3in+ the case" ma3" on reGuest of either or both parties" refer the parties to arbitration" unless it fin,s that the arbitration a+reement is null an, $oi," inoperati$e or incapable of bein+ performe, (rbitration ma3 e$en be or,ere, in the same suit brou+ht upon a matter co$ere, b3 an arbitration a+reement e$en =ithout =aitin+ for the outcome of the issue of the $ali,it3 of the arbitration a+reement (rt K of the &NCITR() Mo,el )a=05 states that =here a court before =hich an action is brou+ht in a matter =hich is subCect of an arbitration a+reement refers the parties to arbitration" the arbitral procee,in+s ma3 procee, e$en =hile the action is pen,in+

Thus" the main issue raise, in the Petition for Certiorari is =hether it =as proper for the RTC" in the procee,in+ to compel arbitration un,er R ( No K.9" to or,er the parties to arbitrate e$en thou+h the ,efen,ant therein has raise, the t=in issues of $ali,it3 an, nullit3 of the (,,en,um Contract an," conseGuentl3" of the arbitration clause therein as =ell The resolution of both Clima:#(rimcoLs Motion for Partial Reconsi,eration an,[or Clarification in ' R No -9-/?. an,

Neither can !2 Corporation $ Court of (ppeals0K cite, b3 'on@ales support his theor3 'on@ales ar+ues that sai, case reco+ni@e, an, allo=e, a petition for certiorari un,er Rule 9? Zappealin+ the or,er of the Re+ional Trial Court ,isre+ar,in+ the arbitration a+reement as an acceptable reme,3 Z0/ The !2 Corporation case ha, its ori+ins in a complaint for collection of sum of mone3 file, b3 therein petitioner !2 Corporation a+ainst Shan+ri#la Properties" Inc ;SPI< SPI mo$e, to suspen, the procee,in+s alle+in+ that the construction a+reement or the (rticles of (+reement bet=een the parties containe, a clause reGuirin+ prior resort to arbitration before Cu,icial inter$ention The trial court foun, that an arbitration clause =as incorporate, in the Con,itions of Contract appen,e, to an, ,eeme, an inte+ral part of the (rticles of (+reement Still" the trial court ,enie, the motion to suspen, procee,in+s upon a fin,in+ that the Con,itions of Contract =ere not ,ul3 e:ecute, an, si+ne, b3 the parties The trial court also foun, that SPI ha, faile, to file an3 =ritten notice of ,eman, for arbitration =ithin the perio, specifie, in the arbitration clause The trial court ,enie, SPIIs motion for reconsi,eration an, or,ere, it to file its responsi$e plea,in+ Instea, of filin+ an ans=er" SPI file, a petition for certiorari un,er Rule 9?" =hich the Court of (ppeals" fa$orabl3 acte, upon In a petition for re$ie=

before this Court" !2 Corporation alle+e," amon+ others" that the Court of (ppeals shoul, ha$e ,ismisse, the petition for certiorari since the or,er of the trial court ,en3in+ the motion to suspen, procee,in+s Zis a resolution of an inci,ent on the meritsZ an, upon the continuation of the procee,in+s" the trial court =oul, e$entuall3 ren,er a ,ecision on the merits" =hich ,ecision coul, then be ele$ate, to a hi+her court Zin an or,inar3 appeal ZA4

,isputes 2orei+n arbitration" as a s3stem of settlin+ commercial ,isputes of an international character" =as li>e=ise reco+ni@e, =hen the Philippines a,here, to the &nite, Nations ZCon$ention on the Reco+nition an, the Enforcement of 2orei+n (rbitral (=ar,s of -/?K"Z un,er the -4 Ma3 -/9? Resolution No .- of the Philippine Senate" +i$in+ reciprocal reco+nition an, allo=in+ enforcement of international arbitration a+reements bet=een parties of ,ifferent nationalities =ithin a contractin+ state A5 The enactment of R ( No /0K? on 0 (pril 0445 further institutionali@e, the use of alternati$e ,ispute resolution s3stems" inclu,in+ arbitration" in the settlement of ,isputes

The Court ,i, not uphol, !2 CorporationLs ar+ument The issue raise, before the Court =as =hether SPI ha, ta>en the proper mo,e of appeal before the Court of (ppeals The Guestion before the Court of (ppeals =as =hether the trial court ha, prematurel3 assume, Curis,iction o$er the contro$ers3 The Guestion of Curis,iction in turn ,epen,e, on the Guestion of e:istence of the arbitration clause =hich is one of fact Bhile on its face the Guestion of e:istence of the arbitration clause is a Guestion of fact that is not proper in a petition for certiorari" 3et since the ,etermination of the Guestion obli+e, the Court of (ppeals as it ,i, to interpret the contract ,ocuments in accor,ance =ith R ( No K.9 an, e:istin+ Curispru,ence" the Guestion is li>e=ise a Guestion of la= =hich ma3 be properl3 ta>en co+ni@ance of in a petition for certiorari un,er Rule 9?" so the Court hel, A-

Disputes ,o not +o to arbitration unless an, until the parties ha$e a+ree, to abi,e b3 the arbitratorLs ,ecision Necessaril3" a contract is reGuire, for arbitration to ta>e place an, to be bin,in+ R ( No K.9 reco+ni@es the contractual nature of the arbitration a+reement" thus7

The situation in ! 2 Corporation is not a$ailin+ in the present petition The ,isGuisition in ! 2 Corporation le, to the conclusion that in or,er that the Guestion of Curis,iction ma3 be resol$e," the appellate court ha, to ,eal first =ith a Guestion of la= =hich coul, be a,,resse, in a certiorari procee,in+ In the present case" 'on@alesLs petition raises a Guestion of la=" but not a Guestion of Curis,iction %u,+e Pimentel acte, in accor,ance =ith the proce,ure prescribe, in R ( No K.9 =hen he or,ere, 'on@ales to procee, =ith arbitration an, appointe, a sole arbitrator after ma>in+ the ,etermination that there =as in,ee, an arbitration a+reement It has been hel, that as lon+ as a court acts =ithin its Curis,iction an, ,oes not +ra$el3 abuse its ,iscretion in the e:ercise thereof" an3 suppose, error committe, b3 it =ill amount to nothin+ more than an error of Cu,+ment re$ie=able b3 a timel3 appeal an, not assailable b3 a special ci$il action of certiorari A0 E$en if =e o$erloo> the emplo3ment of the =ron+ reme,3 in the broa,er interests of Custice" the petition =oul, ne$ertheless be ,ismisse, for failure of 'on@ale@ to sho= +ra$e abuse of ,iscretion

Sec 0 Persons an, matters subCect to arbitration JT=o or more persons or parties ma3 submit to the arbitration of one or more arbitrators an3 contro$ers3 e:istin+" bet=een them at the time of the submission an, =hich ma3 be the subCect of an action" or the parties to an3 contract ma3 in such contract a+ree to settle b3 arbitration a contro$ers3 thereafter arisin+ bet=een them Such submission or contract shall be $ali," enforceable an, irre$ocable" sa$e upon such +roun,s as e:ist at la= for the re$ocation of an3 contract

Such submission or contract ma3 inclu,e Guestion arisin+ out of $aluations" appraisals or other contro$ersies =hich ma3 be collateral" inci,ental" prece,ent or subseGuent to an3 issue bet=een the parties

( contro$ers3 cannot be arbitrate, =here one of the parties to the contro$ers3 is an infant" or a person Cu,iciall3 ,eclare, to be incompetent" unless the appropriate court ha$in+ Curis,iction appro$e a petition for permission to submit such contro$ers3 to arbitration ma,e b3 the +eneral +uar,ian or +uar,ian a, litem of the infant or of the incompetent 1Emphasis a,,e, 6

(rbitration" as an alternati$e mo,e of settlin+ ,isputes" has lon+ been reco+ni@e, an, accepte, in our Curis,iction The Ci$il Co,e is e:plicit on the matter AA R ( No K.9 also e:pressl3 authori@es arbitration of ,omestic

Thus" =e hel, in Manila Electric Co $ Pasa3 Transportation Co A? that a submission to arbitration is a contract ( clause in a contract pro$i,in+ that all matters in ,ispute bet=een the parties shall be referre, to arbitration is a contract"A9 an, in Del Monte Corporation#&S( $ Court of (ppealsA. that Z1t6he pro$ision to submit to arbitration an3 ,ispute arisin+ therefrom an, the relationship of the parties is part of that contract an, is itself a contract (s a rule" contracts are respecte, as the la= bet=een the contractin+ parties an, pro,uce effect as bet=een them" their assi+ns an, heirs ZAK

No K.9 e:plicitl3 confines the courtIs authorit3 onl3 to the ,etermination of =hether or not there is an a+reement in =ritin+ pro$i,in+ for arbitration In the affirmati$e" the statute or,ains that the court shall issue an or,er Zsummaril3 ,irectin+ the parties to procee, =ith the arbitration in accor,ance =ith the terms thereof Z If the court" upon the other han," fin,s that no such a+reement e:ists" Zthe procee,in+ shall be ,ismisse, Z54 The cite, case also stresse, that the procee,in+s are summar3 in nature 5- The same thrust =as ma,e in the earlier case of Min,anao Portlan, Cement Corp $ McDonou+h Construction Co of 2lori,a50 =hich hel," thus7

The special procee,in+ un,er Sec 9 of R ( No K.9 reco+ni@es the contractual nature of arbitration clauses or a+reements It pro$i,es7

Sec 9 Hearin+ b3 court J( part3 a++rie$e, b3 the failure" ne+lect or refusal of another to perform un,er an a+reement in =ritin+ pro$i,in+ for arbitration ma3 petition the court for an or,er ,irectin+ that such arbitration procee, in the manner pro$i,e, for in such a+reement 2i$e ,a3s notice in =ritin+ of the hearin+ of such application shall be ser$e, either personall3 or b3 re+istere, mail upon the part3 in ,efault The court shall hear the parties" an, upon bein+ satisfie, that the ma>in+ of the a+reement or such failure to compl3 there=ith is not in issue" shall ma>e an or,er ,irectin+ the parties to procee, to arbitration in accor,ance =ith the terms of the a+reement If the ma>in+ of the a+reement or ,efault be in issue the court shall procee, to summaril3 hear such issue If the fin,in+ be that no a+reement in =ritin+ pro$i,in+ for arbitration =as ma,e" or that there is no ,efault in the procee,in+ thereun,er" the procee,in+ shall be ,ismisse, If the fin,in+ be that a =ritten pro$ision for arbitration =as ma,e an, there is a ,efault in procee,in+ thereun,er" an or,er shall be ma,e summaril3 ,irectin+ the parties to procee, =ith the arbitration in accor,ance =ith the terms thereof

Since there obtains herein a =ritten pro$ision for arbitration as =ell as failure on respon,entIs part to compl3 there=ith" the court a Guo ri+htl3 or,ere, the parties to procee, to arbitration in accor,ance =ith the terms of their a+reement ;Sec 9" Republic (ct K.9< Respon,entIs ar+uments touchin+ upon the merits of the ,ispute are improperl3 raise, herein The3 shoul, be a,,resse, to the arbitrators This procee,in+ is merel3 a summar3 reme,3 to enforce the a+reement to arbitrate The ,ut3 of the court in this case is not to resol$e the merits of the partiesI claims but onl3 to ,etermine if the3 shoul, procee, to arbitration or not : : : :5A

Implicit in the summar3 nature of the Cu,icial procee,in+s is the separable or in,epen,ent character of the arbitration clause or a+reement This =as hi+hli+hte, in the cases of Manila Electric Co $ Pasa3 Trans Co 55 an, Del Monte Corporation#&S( $ Court of (ppeals 5?

The court shall ,eci,e all motions" petitions or applications file, un,er the pro$isions of this (ct" =ithin ten ,a3s after such motions" petitions" or applications ha$e been hear, b3 it 1Emphasis a,,e, 6

The ,octrine of separabilit3" or se$erabilit3 as other =riters call it" enunciates that an arbitration a+reement is in,epen,ent of the main contract The arbitration a+reement is to be treate, as a separate a+reement an, the arbitration a+reement ,oes not automaticall3 terminate =hen the contract of =hich it is part comes to an en, 59

This special procee,in+ is the proce,ural mechanism for the enforcement of the contract to arbitrate The Curis,iction of the courts in relation to Sec 9 of R ( No K.9 as =ell as the nature of the procee,in+s therein =as e:poun,e, upon in )a Na$al Dru+ Corporation $ Court of (ppeals A/ There it =as hel, that R (

The separabilit3 of the arbitration a+reement is especiall3 si+nificant to the ,etermination of =hether the in$ali,it3 of the main contract also nullifies the arbitration clause In,ee," the ,octrine ,enotes that the in$ali,it3 of the main contract" also referre, to as the ZcontainerZ contract" ,oes not affect the $ali,it3 of the arbitration a+reement Irrespecti$e of the fact that the main contract is in$ali," the arbitration clause[a+reement still remains $ali, an, enforceable 5.

The separabilit3 of the arbitration clause is confirme, in (rt -9;-< of the &NCITR() Mo,el )a= an, (rt 0-;0< of the &NCITR() (rbitration Rules 5K

The separabilit3 ,octrine =as ,=elt upon at len+th in the & S case of Prima Paint Corp $ 2loo, a Con>lin Manufacturin+ Co 5/ In that case" Prima Paint an, 2loo, an, Con>lin ;2 a C< entere, into a consultin+ a+reement =hereb3 2 a C un,ertoo> to act as consultant to Prima Paint for si: 3ears" sol, to Prima Paint a list of its customers an, promise, not to sell paint to these customers ,urin+ the same perio, The consultin+ a+reement containe, an arbitration clause Prima Paint ,i, not ma>e pa3ments as pro$i,e, in the consultin+ a+reement" conten,in+ that 2 a C ha, frau,ulentl3 misrepresente, that it =as sol$ent an, able for perform its contract =hen in fact it =as not an, ha, e$en inten,e, to file for ban>ruptc3 after e:ecutin+ the consultanc3 a+reement Thus" 2 a C ser$e, Prima Paint =ith a notice of intention to arbitrate Prima Paint sue, in court for rescission of the consultin+ a+reement on the +roun, of frau,ulent misrepresentation an, as>e, for the issuance of an or,er enCoinin+ 2 a C from procee,in+ =ith arbitration 2 a C mo$e, to sta3 the suit pen,in+ arbitration The trial court +rante, 2 a CLs motion" an, the & S Supreme Court affirme,

There is reason" therefore" to rule a+ainst 'on@ales =hen he alle+es that %u,+e Pimentel acte, =ith +ra$e abuse of ,iscretion in or,erin+ the parties to procee, =ith arbitration 'on@alesLs ar+ument that the (,,en,um Contract is null an, $oi, an," therefore the arbitration clause therein is $oi, as =ell" is not tenable 2irst" the procee,in+ in a petition for arbitration un,er R ( No K.9 is limite, onl3 to the resolution of the Guestion of =hether the arbitration a+reement e:ists Secon," the separabilit3 of the arbitration clause from the (,,en,um Contract means that $ali,it3 or in$ali,it3 of the (,,en,um Contract =ill not affect the enforceabilit3 of the a+reement to arbitrate Thus" 'on@alesLs petition for certiorari shoul, be ,ismisse,

The & S Supreme Court ,i, not a,,ress Prima PaintLs ar+ument that it ha, been frau,ulentl3 in,uce, b3 2 a C to si+n the consultin+ a+reement an, hel, that no court shoul, a,,ress this ar+ument Rel3in+ on Sec 5 of the 2e,eral (rbitration (ctJ=hich pro$i,es that Zif a part3 1claims to be6 a++rie$e, b3 the alle+e, failure : : : of another to arbitrate : : :" 1t6he court shall hear the parties" an, upon bein+ satisfie, that the ma>in+ of the a+reement for arbitration or the failure to compl3 there=ith is not in issue" the court shall ma>e an or,er ,irectin+ the parties to procee, to arbitration : : : If the ma>in+ of the arbitration a+reement or the failure" ne+lect" or refusal to perform the same be in issue" the court shall procee, summaril3 to the trial thereofZJthe & S Hi+h Court hel, that the court shoul, not or,er the parties to arbitrate if the ma>in+ of the arbitration a+reement is in issue The parties shoul, be or,ere, to arbitration if" an, onl3 if" the3 ha$e contracte, to submit to arbitration Prima Paint =as not entitle, to trial on the Guestion of =hether an arbitration a+reement =as ma,e because its alle+ations of frau,ulent in,ucement =ere not ,irecte, to the arbitration clause itself" but onl3 to the consultin+ a+reement =hich containe, the arbitration a+reement ?4 Prima Paint hel, that Zarbitration clauses are ^separableL from the contracts in =hich the3 are embe,,e," an, that =here no claim is ma,e that frau, =as ,irecte, to the arbitration clause itself" a broa, arbitration clause =ill be hel, to encompass arbitration of the claim that the contract itself =as in,uce, b3 frau, Z?-

This brin+s us bac> to ' R No -9-/?. The a,Cu,ication of the petition in ' R No -9.//5 effecti$el3 mo,ifies part of the Decision ,ate, 0K 2ebruar3 044? in ' R No -9-/?. Hence" =e no= hol, that the $ali,it3 of the contract containin+ the a+reement to submit to arbitration ,oes not affect the applicabilit3 of the arbitration clause itself ( contrar3 rulin+ =oul, su++est that a part3Ls mere repu,iation of the main contract is sufficient to a$oi, arbitration That is e:actl3 the situation that the separabilit3 ,octrine" as =ell as Curispru,ence appl3in+ it" see>s to a$oi, Be a,, that =hen it =as ,eclare, in ' R No -9-/?. that the case shoul, not be brou+ht for arbitration" it shoul, be clarifie, that the case referre, to is the case actuall3 file, b3 'on@ales before the DENR Panel of (rbitrators" =hich =as for the nullification of the main contract on the +roun, of frau," as it ha, alrea,3 been ,etermine, that the case shoul, ha$e been brou+ht before the re+ular courts in$ol$in+ as it ,i, Cu,icial issues

The Motion for Reconsi,eration of 'on@ales in ' R No -9-/?. shoul, also be ,enie, In the motion" 'on@ales raises the same Guestion of Curis,iction" more particularl3 that the complaint for nullification of the (,,en,um Contract pertaine, to the DENR Panel of (rbitrators" not the re+ular courts He insists that the subCect of his complaint is a minin+ ,ispute since it in$ol$es a ,ispute concernin+ ri+hts to minin+ areas" the 2inancial an, Technical (ssistance (+reement ;2T((< bet=een the parties" an, it also in$ol$es claimo=ners He a,,s that the Court faile, to rule on other issues he raise," such as =hether he ha, ce,e, his claims o$er the mineral ,eposits locate, =ithin the (,,en,um (rea of InfluenceH =hether the complaint file, before the DENR Panel of (rbitrators alle+e, ultimate facts of frau,H an, =hether the action to ,eclare the nullit3 of the (,,en,um Contract on the +roun, of frau, has prescribe, -a$$phi- net

These are the same issues that 'on@ales raise, in his Rule 5? petition in ' R No -9-/?. =hich =ere resol$e, a+ainst him in the Decision of 0K 2ebruar3 044? 'on@ales ,oes not raise an3 ne= ar+ument that =oul, s=a3 the Court e$en a bit to alter its hol,in+ that the complaint file, before the DENR Panel of (rbitrators in$ol$es Cu,icial issues =hich shoul, properl3 be resol$e, b3 the re+ular courts He alle+e, frau, or misrepresentation in the e:ecution of the (,,en,um Contract =hich is a +roun, for the annulment of a $oi,able contract Clearl3" such alle+ations entail le+al Guestions =hich are =ithin the Curis,iction of the courts

,one Incorporate, in the bo,3 of the complaint are $erbatim repro,uctions of the contracts" correspon,ence an, +o$ernment issuances that reporte,l3 e:plain the alle+ations of frau, an, misrepresentation" but these are" at best" e$i,entiar3 matters that shoul, not be inclu,e, in the plea,in+

The Guestion of =hether 'on@ales ha, ce,e, his claims o$er the mineral ,eposits in the (,,en,um (rea of Influence is a factual Guestion =hich is not proper for ,etermination before this Court (t all e$ents" moreo$er" the Guestion is irrele$ant to the issue of Curis,iction of the DENR Panel of (rbitrators It shoul, be pointe, out that the DENR Panel of (rbitrators ma,e a factual fin,in+ in its Or,er ,ate, -K October 044-" =hich it reiterate, in its Or,er ,ate, 0? %une 0440" that 'on@ales ha," Zthrou+h the $arious a+reements" assi+ne, his interest o$er the mineral claims all in fa$or of 1Clima:#(rimco6Z as =ell as that =ithout the complainant 1'on@ales6 assi+nin+ his interest o$er the mineral claims in fa$or of 1Clima:#(rimco6" there =oul, be no 2T(( to spea> of Z?0 This fin,in+ =as affirme, b3 the Court of (ppeals in its Decision ,ate, A4 %ul3 044A resol$in+ the petition for certiorari file, b3 Clima:#(rimco in re+ar, to the -K October 044- Or,er of the DENR Panel ?A

(s to the issue of prescription" 'on@alesLs claims of frau, an, misrepresentation atten,in+ the e:ecution of the (,,en,um Contract are +roun,s for the annulment of a $oi,able contract un,er the Ci$il Co,e ?? &n,er (rt -A/- of the Co,e" an action for annulment shall be brou+ht =ithin four 3ears" in the case of frau," be+innin+ from the time of the ,isco$er3 of the same Ho=e$er" the time of the ,isco$er3 of the alle+e, frau, is not clear from the alle+ations of 'on@alesLs complaint That bein+ the situation couple, =ith the fact that this Court is not a trier of facts" an3 rulin+ on the issue of prescription =oul, be uncalle, for or e$en unnecessar3

BHERE2ORE" the Petition for Certiorari in ' R No -9.//5 is DISMISSED Such ,ismissal effecti$el3 ren,ers superfluous formal action on the Motion for Partial Reconsi,eration an,[or Clarification file, b3 Clima: Minin+ )t, " et al in ' R No -9-/?.

The Motion for Reconsi,eration file, b3 %or+e 'on@ales in ' R No -9-/?. is DENIED BITH 2IN()IT* The Court of (ppeals li>e=ise foun, that 'on@alesLs complaint alle+e, frau, but ,i, not pro$i,e an3 particulars to substantiate it The complaint repeate,l3 mentione, frau," oppression" $iolation of the Constitution an, similar conclusions but no=here ,i, it +i$e an3 ultimate facts or particulars relati$e to the alle+ations ?5

SO ORDERED

SECOND DIVISION Sec ?" Rule K of the Rules of Court specificall3 pro$i,es that in all a$erments of frau," the circumstances constitutin+ frau, must be state, =ith particularit3 This is to enable the opposin+ part3 to contro$ert the particular facts alle+e,l3 constitutin+ the same Perusal of the complaint in,ee, sho=s that it faile, to state =ith particularit3 the ultimate facts an, circumstances constitutin+ the alle+e, frau, It ,oes not state =hat particulars about Clima:#(rimcoLs financial or technical capabilit3 =ere misrepresente," or ho= the misrepresentation =as

T&N( PROCESSIN'" INC "

Petitioner"

Chairperson" !RION" PEREZ" SERENO" an, RE*ES" %%

#$ersus# Promul+ate,7

2ebruar3 0/" 04-0

PHI)IPPINE XIN'2ORD" INC " Respon,ent

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DECISION ' R No -K??K0 PEREZ" % 7

Present7

Can a forei+n corporation not license, to ,o business in the Philippines" but =hich collects ro3alties from entities in the Philippines" sue here to enforce a forei+n arbitral a=ar,_

C(RPIO" % "

In this Petition for Re$ie= on Certiorari un,er Rule 5?"1-6 petitioner Tuna Processin+" Inc ;TPI<" a forei+n corporation not license, to ,o business in the Philippines" pra3s that the Resolution106 ,ate, 0- No$ember 044K of the Re+ional Trial Court ;RTC< of Ma>ati Cit3 be ,eclare, $oi, an, the case be reman,e, to the RTC for further procee,in+s In the assaile, Resolution" the RTC ,ismisse, petitionerLs Petition for Confirmation" Reco+nition" an, Enforcement of 2orei+n (rbitral (=ar,1A6 a+ainst respon,ent Philippine Xin+for," Inc ;Xin+for,<" a corporation ,ul3 or+ani@e, an, e:istin+ un,er the la=s of the Philippines"156 on the +roun, that petitioner lac>e, le+al capacit3 to sue 1?6

5 Establishment of Tuna Processors" Inc The parties hereto a+ree to the establishment of Tuna Processors" Inc ;ETPIF<" a corporation establishe, in the State of California" in or,er to implement the obCecti$es of this (+reement

? !an> account TPI shall open an, maintain ban> accounts in the &nite, States" =hich =ill be use, e:clusi$el3 to ,eposit fun,s that it =ill collect an, to ,isburse cash it =ill be obli+ate, to spen, in connection =ith the implementation of this (+reement

The (ntece,ents 9 O=nership of TPI TPI shall be o=ne, b3 the Sponsors an, )icensor )icensor shall be assi+ne, one share of TPI for the purpose of bein+ electe, as member of the boar, of ,irectors The remainin+ shares of TPI shall be hel, b3 the Sponsors accor,in+ to their respecti$e eGuit3 shares 1/6

On -5 %anuar3 044A" Xanemitsu *amao>a ;hereinafter referre, to as the ElicensorF<" co#patentee of & S Patent No ?"5K5"9-/" Philippine )etters Patent No A--AK" an, In,onesian Patent No ID444A/-- ;collecti$el3 referre, to as the E*amao>a PatentF<"196 an, fi$e ;?< Philippine tuna processors" namel3" (n+el Seafoo, Corporation" East (sia 2ish Co " Inc " Momm3 'ina Tuna Resources" Santa Cru@ Seafoo,s" Inc " an, respon,ent Xin+for, ;collecti$el3 referre, to as the EsponsorsF[ElicenseesF<1.6 entere, into a Memoran,um of (+reement ;MO(<" 1K6 pertinent pro$isions of =hich rea,7

:::

!ac>+roun, an, obCecti$es The )icensor" co#o=ner of & S Patent No ?"5K5"9-/" Philippine Patent No A--AK" an, In,onesian Patent No ID444A/-::: =ishes to form an alliance =ith Sponsors for purposes of enforcin+ his three aforementione, patents" +rantin+ licenses un,er those patents" an, collectin+ ro3alties

The parties li>e=ise e:ecute, a Supplemental Memoran,um of (+reement1-46 ,ate, -? %anuar3 044A an, an (+reement to (men, Memoran,um of (+reement1--6 ,ate, -5 %ul3 044A

The Sponsors =ish to be license, un,er the aforementione, patents in or,er to practice the processes claime, in those patents in the &nite, States" the Philippines" an, In,onesia" enforce those patents an, collect ro3alties in conCunction =ith )icensor

Due to a series of e$ents not mentione, in the petition" the licensees" inclu,in+ respon,ent Xin+for," =ith,re= from petitioner TPI an, correspon,in+l3 rene+e, on their obli+ations 1-06 Petitioner submitte, the ,ispute for arbitration before the International Centre for Dispute Resolution in the State of California" &nite, States an, =on the case a+ainst respon,ent 1-A6 Pertinent portions of the a=ar, rea,7

:::

-A - Bithin thirt3 ;A4< ,a3s from the ,ate of transmittal of this (=ar, to the Parties" pursuant to the terms of this a=ar," the total sum to be pai, b3

RESPONDENT XIN'2ORD to C)(IM(NT TPI" is the sum of ONE MI))ION SEVEN H&NDRED 2I2T* THO&S(ND EI'HT H&NDRED 2ORT* SI] DO))(RS (ND TEN CENTS ;b-".?4"K59 -4< ;(< 2or breach of the MO( b3 not pa3in+ past ,ue assessments" RESPONDENT XIN'2ORD shall pa3 C)(IM(NT the total sum of TBO H&NDRED TBENT* NINE THO&S(ND THREE H&NDRED (ND 2I2T* 2IVE DO))(RS (ND NINET* CENTS ;b00/"A?? /4< =hich is 04Y of MO( assessments since September -" 044?1H6

respon,entLs Motion for Reconsi,eration an, ,ismisse, the petition on the +roun, that the petitioner lac>e, le+al capacit3 to sue in the Philippines 1046

Petitioner TPI no= see>s to nullif3" in this instant Petition for Re$ie= on Certiorari un,er Rule 5?" the or,er of the trial court ,ismissin+ its Petition for Confirmation" Reco+nition" an, Enforcement of 2orei+n (rbitral (=ar,

;!< 2or breach of the MO( in failin+ to cooperate =ith C)(IM(NT TPI in fulfillin+ the obCecti$es of the MO(" RESPONDENT XIN'2ORD shall pa3 C)(IM(NT the total sum of TBO H&NDRED SEVENT* ONE THO&S(ND 2O&R H&NDRED NINET* DO))(RS (ND TBENT* CENTS ;b0.-"5/4 04<1H6 1-56 an,

Issue

The core issue in this case is =hether or not the court a Guo =as correct in so ,ismissin+ the petition on the +roun, of petitionerLs lac> of le+al capacit3 to sue

;C< 2or $iolation of THE )(NH(M (CT an, infrin+ement of the *(M(OX( 9-/ P(TENT" RESPONDENT XIN'2ORD shall pa3 C)(IM(NT the total sum of ONE MI))ION TBO H&NDRED 2I2T* THO&S(ND DO))(RS (ND NO CENTS ;b-"0?4"444 44< :::

Our Rulin+

The petition is impresse, =ith merit :::1-?6 The Corporation Co,e of the Philippines e:pressl3 pro$i,es7 To enforce the a=ar," petitioner TPI file, on -4 October 044. a Petition for Confirmation" Reco+nition" an, Enforcement of 2orei+n (rbitral (=ar, before the RTC of Ma>ati Cit3 The petition =as raffle, to !ranch -?4 presi,e, b3 %u,+e Elmo M (lame,a

(t !ranch -?4" respon,ent Xin+for, file, a Motion to Dismiss 1-96 (fter the court ,enie, the motion for lac> of merit"1-.6 respon,ent sou+ht for the inhibition of %u,+e (lame,a an, mo$e, for the reconsi,eration of the or,er ,en3in+ the motion 1-K6 %u,+e (lame,a inhibite, himself not=ithstan,in+ E1t6he unfoun,e, alle+ations an, unsubstantiate, assertions in the motion F1-/6 %u,+e Ce,ric> O Rui@ of !ranch 9-" to =hich the case =as re#raffle," in turn" +rante,

Sec -AA Doin+ business =ithout a license # No forei+n corporation transactin+ business in the Philippines =ithout a license" or its successors or assi+ns" shall be permitte, to maintain or inter$ene in an3 action" suit or procee,in+ in an3 court or a,ministrati$e a+enc3 of the PhilippinesH but such corporation ma3 be sue, or procee,e, a+ainst before Philippine courts or a,ministrati$e tribunals on an3 $ali, cause of action reco+ni@e, un,er Philippine la=s

It is pursuant to the aforeGuote, pro$ision that the court a Guo ,ismisse, the petition Thus7 Herein plaintiff TPILs EPetition" etc F ac>no=le,+es that it Eis a forei+n corporation establishe, in the State of CaliforniaF an, E=as +i$en the e:clusi$e ri+ht to license or sublicense the *amao>a PatentF an, E=as assi+ne, the e:clusi$e ri+ht to enforce the sai, patent an, collect correspon,in+ ro3altiesF in the Philippines TPI li>e=ise a,mits that it ,oes not ha$e a license to ,o business in the Philippines

Simpl3 put" ho= ,o =e reconcile the pro$isions of the Corporation Co,e of the Philippines on one han," an, the (lternati$e Dispute Resolution (ct of 0445" the Ne= *or> Con$ention an, the Mo,el )a= on the other_

In se$eral cases" this Court ha, the occasion to ,iscuss the nature an, applicabilit3 of the Corporation Co,e of the Philippines" a +eneral la=" $i@#a#$i@ other special la=s Thus" in Xoru+a $ (rcenas" %r "10?6 this Court reCecte, the application of the Corporation Co,e an, applie, the Ne= Central !an> (ct It ratiocinate,7

There is no ,oubt" therefore" in the min, of this Court that TPI has been ,oin+ business in the Philippines" but sans a license to ,o so issue, b3 the concerne, +o$ernment a+enc3 of the Republic of the Philippines" =hen it collecte, ro3alties from Efi$e ;?< Philippine tuna processors1"6 namel31"6 (n+el Seafoo, Corporation" East (sia 2ish Co " Inc " Momm3 'ina Tuna Resources" Santa Cru@ Seafoo,s" Inc an, respon,ent Philippine Xin+for," Inc F This bein+ the real situation" TPI cannot be permitte, to maintain or inter$ene in an3 action" suit or procee,in+s in an3 court or a,ministrati$e a+enc3 of the Philippines F ( priori" the EPetition" etc F e:tant of the plaintiff TPI shoul, be ,ismisse, for it ,oes not ha$e the le+al personalit3 to sue in the Philippines 10-6

Xoru+aLs in$ocation of the pro$isions of the Corporation Co,e is misplace, In an earlier case =ith similar antece,ents" =e rule, that7 EThe Corporation Co,e" ho=e$er" is a +eneral la= appl3in+ to all t3pes of corporations" =hile the Ne= Central !an> (ct re+ulates specificall3 ban>s an, other financial institutions" inclu,in+ the ,issolution an, liGui,ation thereof (s bet=een a +eneral an, special la=" the latter shall pre$ail D +eneralia specialibus non ,ero+ant F ;Emphasis supplie,<1096

The petitioner counters" ho=e$er" that it is entitle, to see> for the reco+nition an, enforcement of the subCect forei+n arbitral a=ar, in accor,ance =ith Republic (ct No /0K? ;(lternati$e Dispute Resolution (ct of 0445<"1006 the Con$ention on the Reco+nition an, Enforcement of 2orei+n (rbitral (=ar,s ,rafte, ,urin+ the &nite, Nations Conference on International Commercial (rbitration in -/?K ;Ne= *or> Con$ention<" an, the &NCITR() Mo,el )a= on International Commercial (rbitration ;Mo,el )a=<"10A6 as none of these specificall3 reGuires that the part3 see>in+ for the enforcement shoul, ha$e le+al capacit3 to sue It anchors its ar+ument on the follo=in+7

2urther" in the recent case of Hacien,a )uisita" Incorporate, $ Presi,ential (+rarian Reform Council"10.6 this Court hel,7

Bithout ,oubt" the Corporation Co,e is the +eneral la= pro$i,in+ for the formation" or+ani@ation an, re+ulation of pri$ate corporations On the other han," R( 99?. is the special la= on a+rarian reform (s bet=een a +eneral an, special la=" the latter shall pre$ailJ+eneralia specialibus non ,ero+ant 10K6

In the present case" enforcement has been effecti$el3 refuse, on a +roun, not foun, in the 1(lternati$e Dispute Resolution (ct of 04456" Ne= *or> Con$ention" or Mo,el )a= It is for this reason that TPI has brou+ht this matter before this most Honorable Court" as it 1i6s imperati$e to clarif3 =hether the PhilippinesL international obli+ations an, State polic3 to stren+then arbitration as a means of ,ispute resolution ma3 be ,efeate, b3 misplace, technical consi,erations not foun, in the rele$ant la=s 1056

2ollo=in+ the same principle" the (lternati$e Dispute Resolution (ct of 0445 shall appl3 in this case as the (ct" as its title # (n (ct to Institutionali@e the &se of an (lternati$e Dispute Resolution S3stem in the Philippines an, to Establish the Office for (lternati$e Dispute Resolution" an, for Other Purposes # =oul,

su++est" is a la= especiall3 enacte, Eto acti$el3 promote part3 autonom3 in the resolution of ,isputes or the free,om of the part3 to ma>e their o=n arran+ements to resol$e their ,isputes F10/6 It specificall3 pro$i,es e:clusi$e +roun,s a$ailable to the part3 opposin+ an application for reco+nition an, enforcement of the arbitral a=ar, 1A46

Sec -/ (,option of the Mo,el )a= on International Commercial (rbitration International commercial arbitration shall be +o$erne, b3 the Mo,el )a= on International Commercial (rbitration ;the EMo,el )a=F< a,opte, b3 the &nite, Nations Commission on International Tra,e )a= on %une 0-" -/K? ::: F

Inasmuch as the (lternati$e Dispute Resolution (ct of 0445" a municipal la=" applies in the instant petition" =e ,o not see the nee, to ,iscuss compliance =ith international obli+ations un,er the Ne= *or> Con$ention an, the Mo,el )a= (fter all" both alrea,3 form part of the la=

No=" ,oes a forei+n corporation not license, to ,o business in the Philippines ha$e le+al capacit3 to sue un,er the pro$isions of the (lternati$e Dispute Resolution (ct of 0445_ Be ans=er in the affirmati$e

In particular" the (lternati$e Dispute Resolution (ct of 0445 incorporate, the Ne= *or> Con$ention in the (ct b3 specificall3 pro$i,in+7

Sec 5? of the (lternati$e Dispute Resolution (ct of 0445 pro$i,es that the opposin+ part3 in an application for reco+nition an, enforcement of the arbitral a=ar, ma3 raise onl3 those +roun,s that =ere enumerate, un,er (rticle V of the Ne= *or> Con$ention" to =it7

SEC 50 (pplication of the Ne= *or> Con$ention # The Ne= *or> Con$ention shall +o$ern the reco+nition an, enforcement of arbitral a=ar,s co$ere, b3 the sai, Con$ention

(rticle V

:::

- Reco+nition an, enforcement of the a=ar, ma3 be refuse," at the reGuest of the part3 a+ainst =hom it is in$o>e," onl3 if that part3 furnishes to the competent authorit3 =here the reco+nition an, enforcement is sou+ht" proof that7 ;a< The parties to the a+reement referre, to in article II =ere" un,er the la= applicable to them" un,er some incapacit3" or the sai, a+reement is not $ali, un,er the la= to =hich the parties ha$e subCecte, it or" failin+ an3 in,ication thereon" un,er the la= of the countr3 =here the a=ar, =as ma,eH or ;b< The part3 a+ainst =hom the a=ar, is in$o>e, =as not +i$en proper notice of the appointment of the arbitrator or of the arbitration procee,in+s or =as other=ise unable to present his caseH or ;c< The a=ar, ,eals =ith a ,ifference not contemplate, b3 or not fallin+ =ithin the terms of the submission to arbitration" or it contains ,ecisions on matters be3on, the scope of the submission to arbitration" pro$i,e, that" if the ,ecisions on matters submitte, to arbitration can be separate, from those not so submitte," that part of the a=ar, =hich contains ,ecisions on matters submitte, to arbitration ma3 be reco+ni@e, an, enforce,H or

SEC 5? ReCection of a 2orei+n (rbitral (=ar, # ( part3 to a forei+n arbitration procee,in+ ma3 oppose an application for reco+nition an, enforcement of the arbitral a=ar, in accor,ance =ith the proce,ural rules to be promul+ate, b3 the Supreme Court onl3 on those +roun,s enumerate, un,er (rticle V of the Ne= *or> Con$ention (n3 other +roun, raise, shall be ,isre+ar,e, b3 the re+ional trial court

It also e:pressl3 a,opte, the Mo,el )a=" to =it7

;,< The composition of the arbitral authorit3 or the arbitral proce,ure =as not in accor,ance =ith the a+reement of the parties" or" failin+ such a+reement" =as not in accor,ance =ith the la= of the countr3 =here the arbitration too> placeH or ;e< The a=ar, has not 3et become bin,in+ on the parties" or has been set asi,e or suspen,e, b3 a competent authorit3 of the countr3 in =hich" or un,er the la= of =hich" that a=ar, =as ma,e 0 Reco+nition an, enforcement of an arbitral a=ar, ma3 also be refuse, if the competent authorit3 in the countr3 =here reco+nition an, enforcement is sou+ht fin,s that7 ;a< The subCect matter of the ,ifference is not capable of settlement b3 arbitration un,er the la= of that countr3H or ;b< The reco+nition or enforcement of the a=ar, =oul, be contrar3 to the public polic3 of that countr3

In,ee," it is in the best interest of Custice that in the enforecement of a forei+n arbitral a=ar," =e ,en3 a$ailment b3 the losin+ part3 of the rule that bars forei+n corporations not license, to ,o business in the Philippines from maintainin+ a suit in our courts Bhen a part3 enters into a contract containin+ a forei+n arbitration clause an," as in this case" in fact submits itself to arbitration" it becomes boun, b3 the contract" b3 the arbitration an, b3 the result of arbitration" conce,in+ thereb3 the capacit3 of the other part3 to enter into the contract" participate in the arbitration an, cause the implementation of the result (lthou+h not on all fours =ith the instant case" also =orth3 to consi,er is the =is,om of then (ssociate %ustice 2leri,a Ruth P Romero in her Dissentin+ Opinion in (sset Pri$ati@ation Trust $ Court of (ppeals"1A.6 to =it7

Clearl3" not one of these e:clusi$e +roun,s touche, on the capacit3 to sue of the part3 see>in+ the reco+nition an, enforcement of the a=ar,

::: (rbitration" as an alternati$e mo,e of settlement" is +ainin+ a,herents in le+al an, Cu,icial circles here an, abroa, If its teste, mechanism can simpl3 be i+nore, b3 an a++rie$e, part3" one =ho" it must be stresse," $oluntaril3 an, acti$el3 participate, in the arbitration procee,in+s from the $er3 be+innin+" it =ill ,estro3 the $er3 essence of mutualit3 inherent in consensual contracts 1AK6

Pertinent pro$isions of the Special Rules of Court on (lternati$e Dispute Resolution"1A-6 =hich =as promul+ate, b3 the Supreme Court" li>e=ise support this position

Clearl3" on the matter of capacit3 to sue" a forei+n arbitral a=ar, shoul, be respecte, not because it is fa$ore, o$er ,omestic la=s an, proce,ures" but because Republic (ct No /0K? has certainl3 erase, an3 conflict of la= Guestion

Rule -A - of the Special Rules pro$i,es that E1a6n3 part3 to a forei+n arbitration ma3 petition the court to reco+ni@e an, enforce a forei+n arbitral a=ar, F The contents of such petition are enumerate, in Rule -A ? 1A06 Capacit3 to sue is not inclu,e, Oppositel3" in the Rule on local arbitral a=ar,s or arbitrations in instances =here Ethe place of arbitration is in the Philippines"F1AA6 it is specificall3 reGuire, that a petition Eto ,etermine an3 Guestion concernin+ the e:istence" $ali,it3 an, enforceabilit3 of such arbitration a+reementF1A56 a$ailable to the parties before the commencement of arbitration an,[or a petition for ECu,icial relief from the rulin+ of the arbitral tribunal on a preliminar3 Guestion uphol,in+ or ,eclinin+ its Curis,ictionF1A?6 after arbitration has alrea,3 commence, shoul, state E1t6he facts sho=in+ that the persons name, as petitioner or respon,ent ha$e le+al capacit3 to sue or be sue, F1A96

2inall3" e$en assumin+" onl3 for the sa>e of ar+ument" that the court a Guo correctl3 obser$e, that the Mo,el )a=" not the Ne= *or> Con$ention" +o$erns the subCect arbitral a=ar,"1A/6 petitioner ma3 still see> reco+nition an, enforcement of the a=ar, in Philippine court" since the Mo,el )a= prescribes substantiall3 i,entical e:clusi$e +roun,s for refusin+ reco+nition or enforcement 1546 Premises consi,ere," petitioner TPI" althou+h not license, to ,o business in the Philippines" ma3 see> reco+nition an, enforcement of the forei+n arbitral a=ar, in accor,ance =ith the pro$isions of the (lternati$e Dispute Resolution (ct of 0445

II

The remainin+ ar+uments of respon,ent Xin+for, are li>e=ise unmeritorious

Moreo$er" the no$elt3 an, the paramount importance of the issue herein raise, shoul, be seriousl3 consi,ere, 1596 Surel3" there is a nee, to ta>e co+ni@ance of the case not onl3 to +ui,e the bench an, the bar" but if onl3 to stren+then arbitration as a means of ,ispute resolution" an, uphol, the polic3 of the State embo,ie, in the (lternati$e Dispute Resolution (ct of 0445" to =it7

2irst There is no nee, to consi,er respon,entLs contention that petitioner TPI improperl3 raise, a Guestion of fact =hen it posite, that its act of enterin+ into a MO( shoul, not be consi,ere, E,oin+ businessF in the Philippines for the purpose of ,eterminin+ capacit3 to sue Be reiterate that the forei+n corporationLs capacit3 to sue in the Philippines is not material insofar as the reco+nition an, enforcement of a forei+n arbitral a=ar, is concerne,

Sec 0 Declaration of Polic3 # It is hereb3 ,eclare, the polic3 of the State to acti$el3 promote part3 autonom3 in the resolution of ,isputes or the free,om of the part3 to ma>e their o=n arran+ements to resol$e their ,isputes To=ar,s this en," the State shall encoura+e an, acti$el3 promote the use of (lternati$e Dispute Resolution ;(DR< as an important means to achie$e spee,3 an, impartial Custice an, ,eclo+ court ,oc>ets :::

Secon, Respon,ent cannot fault petitioner for not filin+ a motion for reconsi,eration of the assaile, Resolution ,ate, 0- No$ember 044K ,ismissin+ the case Be ha$e" time an, a+ain" rule, that the prior filin+ of a motion for reconsi,eration is not reGuire, in certiorari un,er Rule 5? 15-6

2ourth (s re+ar,s the issue on the $ali,it3 an, enforceabilit3 of the forei+n arbitral a=ar," =e lea$e its ,etermination to the court a Guo =here its reco+nition an, enforcement is bein+ sou+ht

Thir, Bhile =e a+ree that petitioner faile, to obser$e the principle of hierarch3 of courts" =hich" un,er or,inar3 circumstances" =arrants the outri+ht ,ismissal of the case"1506 =e opt to rela: the rules follo=in+ the pronouncement in Chua $ (n+"15A6 to =it7

2ifth Respon,ent claims that petitioner faile, to furnish the court of ori+in a cop3 of the motion for time to file petition for re$ie= on certiorari before the petition =as file, =ith this Court 15.6 Be" ho=e$er" fin, petitionerLs repl3 in or,er Thus7

1I6t must be remembere, that 1the principle of hierarch3 of courts6 +enerall3 applies to cases in$ol$in+ conflictin+ factual alle+ations Cases =hich ,epen, on ,ispute, facts for ,ecision cannot be brou+ht imme,iatel3 before us as =e are not triers of facts 1556 ( strict application of this rule ma3 be e:cuse, =hen the reason behin, the rule is not present in a case" as in the present case" =here the issues are not factual but purel3 le+al In these t3pes of Guestions" this Court has the ultimate sa3 so that =e merel3 abbre$iate the re$ie= process if =e" because of the uniGue circumstances of a case" choose to hear an, ,eci,e the le+al issues outri+ht 15?6

09 (,mitte,l3" reference to E!ranch 9.F in petitioner TPILs EMotion for Time to 2ile a Petition for Re$ie= on Certiorari un,er Rule 5?F is a t3po+raphical error (s correctl3 pointe, out b3 respon,ent Xin+for," the or,er sou+ht to be assaile, ori+inate, from Re+ional Trial Court" Ma>ati Cit3" !ranch 9-

0. ::: &pon confirmation =ith the Re+ional Trial Court" Ma>ati Cit3" !ranch 9-" a cop3 of petitioner TPILs motion =as recei$e, b3 the Metropolitan Trial Court" Ma>ati Cit3" !ranch 9. On K %anuar3 044/" the motion =as for=ar,e, to the Re+ional Trial Court" Ma>ati Cit3" !ranch 9- 15K6

(ll consi,ere," petitioner TPI" althou+h a forei+n corporation not license, to ,o business in the Philippines" is not" for that reason alone" preclu,e, from filin+ the Petition for Confirmation" Reco+nition" an, Enforcement of 2orei+n (rbitral (=ar, before a Philippine court %OSEPH EN(RIO" BHERE2ORE" the Resolution ,ate, 0- No$ember 044K of the Re+ional Trial Court" !ranch 9-" Ma>ati Cit3 in Special Procee,in+s No M#9?AA is hereb3 REVERSED an, SET (SIDE The case is REM(NDED to !ranch 9- for further procee,in+s Respon,ent ' R No -K04.?

Present7 SO ORDERED

CORON(" C % " 2IRST DIVISION Chairperson" C(RPIO#MOR()ES"8 VE)(SCO" %R " THE PHI)IPPINE (MERIC(N )I2E a 'ENER() INS&R(NCE COMP(N*" DE) C(STI))O" an, Petitioner" PEREZ" %%

Promul+ate,7 September -?" 04-4 # $ersus #

: # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # #:

A? The (+ent shall imme,iatel3 at an3 time upon ,eman, or =ithout necessit3 of ,eman, upon termination of this Contract" return to the Compan3 an, all ,ocuments" a+enc3 materials" paraphernalia" an, such other properties =hich he ma3 ha$e recei$e, therefrom to effecti$el3 ,ischar+e an, perform his ,uties an, obli+ations 1/6

DECISION Philamlife sent three ;A< successi$e ,eman, letters to respon,ent for the settlement of his outstan,in+ ,ebit account 1-46 On A- October 0444" respon,ent reGueste, that he be +i$en time to re$ie= an, settle his accountabilities as he =as still tr3in+ to reconcile his recor,s 1--6

PEREZ" % 7

The conseGuences of the failure of ,efen,ant to atten, the pre#trial is the central issue in this case

Bhen the parties faile, to reach an a+reement re+ar,in+ the settlement of the outstan,in+ ,ebit balance" Philamlife file, a complaint for collection of a sum of mone3 a+ainst respon,ent before the Re+ional Trial Court ;RTC< of Manila on 00 %une 044-

(ssaile, in this petition is the Decision1-6 ,ate, 0K September 044." as =ell as the Resolution106 ,ate, 9 March 044K of the Court of (ppeals in C(#' R CV No K0A?A" $acatin+ an, settin+ asi,e the or,ers ,ate, A %une 044A1A6 ;%une Or,er< an, 05 No$ember 044A156" an, the ,ecision ,ate, 05 2ebruar3 04451?6 of the Re+ional Trial Court of Manila196 ,eclarin+ respon,ent %oseph Enario in ,efault an, or,erin+ him to pa3 Philamlife P-"-00".K- 99

In his (ns=er" respon,ent ,enie, the alle+ations that he ha, an outstan,in+ ,ebit balance of P-"0A."AA9 04 consi,erin+ that he an, Philamlife ha, 3et to reconcile the recor,s of remittances =ith his compensation" as =ell as o$erri,in+ commissions Respon,ent pra3e, for the ,ismissal of the complaint an, counterclaime, for ,ama+es 1-06

Respon,ent =as appointe, as a+ent of Philamlife on -0 No$ember -//- 1.6 (si,e from bein+ an acti$e a+ent of Philamlife" respon,ent =as appointe, unit mana+er =here he also re+ularl3 recei$e, his o$erri,e commissions He =as affor,e, the pri$ile+e of recei$in+ cash a,$ances from Philamlife" =hich the latter char+es or ,ebits a+ainst future commissions ,ue respon,ent" an, the arran+ement continue, until his resi+nation in 2ebruar3 0444 1K6

On A4 October 0440" the RTC set the pre#trial conference on A an, -. December 0440 The parties =ere ,irecte, to file their respecti$e pre#trial briefs before the ,ate of the pre#trial conference 1-A6 Respon,ent mo$e, for the postponement of the pre#trial to -5 %anuar3 044A ,ue to conflict of sche,ule"1-56 =hich motion the RTC recei$e, on 0 December 0440 1-?6

(t the time of respon,entLs resi+nation" Philamlife alle+e,l3 ,isco$ere, that respon,ent ha, an outstan,in+ ,ebit balance of P-"0A."AA9 04" =hich he =as obli+ate, to settle an, liGui,ate pursuant to the Re$ise, (+enc3 Contract he si+ne, at the time of his emplo3ment" the pertinent portion of =hich pro$i,es7

On -5 %anuar3 044A" the opposin+ counsels a+ree, to amicabl3 settle the case" promptin+ the RTC to reset the pre#trial to K Ma3" A %une an, - %ul3 044A 1-96

On . Ma3 044A" respon,ent sent a tele+ram reGuestin+ for another postponement of the pre#trial sche,ule, on the follo=in+ ,a3 ,ue to me,ical reasons

The - %ul3 044A hearin+ =as reset to 0K (u+ust 044A an, Philamlife =as or,ere, to present its e$i,ence e: parte 1046

Respon,ent file, a motion for reconsi,eration of the %une Or,er On A %une 044A" respon,ent faile, to appear ConseGuentl3" Philamlife manifeste, that respon,ent be ,eclare, in ,efault for failure to appear at the pre#trial The RTC +rante, the manifestation an, allo=e, Philamlife to present its e$i,ence on - %ul3 044A 1-.6 The %une Or,er rea,s7

(ppearance b3 (tt3 Mari$el ( !autista Deo,ores" for the plaintiff appearance b3 (tt3 Casiano C Vailoces" for the ,efen,ant

No

Despite notice" respon,ent still faile, to appear on the 0K (u+ust 044A pre#trial Philamlife =as then allo=e, to present its e$i,ence e: parte" =hich it ,i, on that same hearin+ Mean=hile" Philamlife =as also or,ere, to comment on the motion for reconsi,eration of the or,er of ,efault file, b3 respon,ent 10-6 Respon,ent ,enie, recei$in+ a notice of hearin+ for 0K (u+ust 044A 1006

(tt3 !autista#Deo,ores manifeste, that ,efen,ant be ,eclare, in ,efault for failure to appear four ;5< times an, that she be +i$en -? ,a3s from to,a3 to file a memoran,um

In its 2ormal Offer of E$i,ence" Philamlife submitte, statements of account to pro$e that respon,ent has an outstan,in+ ,ebit account balance amountin+ to P-"0A."A/4 09H an, a summar3 of sale un,er=riter $ouchers ;S&V< as e$i,ence of cash a,$ances" amon+ others 10A6

(ll manifestations" 'R(NTED Plaintiff is allo=e, to present their e$i,ence on %ul3 -" 044A at K7A4 in the mornin+ as pre$iousl3 sche,ule,

On 05 No$ember 044A" the trial court issue, an Or,er ,en3in+ the motion for reconsi,eration of the or,er of ,efault an, a,mitte, PhilamlifeLs 2ormal Offer of E$i,ence 1056

SO ORDERED 1-K6 On 05 2ebruar3 0445" the trial court ren,ere, Cu,+ment or,erin+ respon,ent to pa3 the follo=in+ amount to Philamlife7

It =as onl3 on the follo=in+ ,a3" 5 %une" that the RTC recei$e, respon,entLs motion for postponement of the A %une 044A hearin+" =hich =as maile, on A4 Ma3 044A 1-/6

Ei+ht3#

One Million One Hun,re, T=ent3#t=o Thousan, Se$en Hun,re, One an, 99[-44 ;P-"-00".K- 99<H

P-4"444 as attorne3Ls feesH

Costs of Suit 10?6

Respon,ent ele$ate, the case to the Court of (ppeals $ia petition for certiorari un,er Rule 9? of the Rules of Court On 0K September 044." the Court of (ppeals re$erse, the trial courtLs ,ecision an, rule," thus7

allo= the e: parte presentation of plaintiffLs e$i,ence an, the ren,ition of Cu,+ment on the basis thereof )i>e=ise from %ustice Re+ala,o" Philamlife ar+ues that the reference to the =or, E,efaultF =hich ha, been ,elete, in the present rules solel3 for semantical propriet3 an, terminolo+ical accurac3" is not an error as the stan,in+ proce,ure =as follo=e, b3 the trial court in allo=in+ the e: parte presentation of PhilamlifeLs e$i,ence Philamlife insists that since pre# trial is man,ator3 in an3 action" =hen a part3 fails to appear therein" he ma3 be non#suite, or ,eclare, in ,efault 10/6

BHERE2ORE" the or,ers ,ate, %une A" 044A an, No$ember 05" 044A an, the ,ecision ,ate, 2ebruar3 05" 0445 of the Re+ional Trial Court of Manila ;!ranch K< are V(C(TED an, SET (SIDE an, the case REM(NDED to that court for pre#trial an, other procee,in+s

On the other han," respon,ent maintains that the RTC committe, an e+re+ious error =hen it issue, an or,er of ,efault a+ainst him for failure to appear for pre# trial on A %une 044A

SO ORDERED 1096

The fun,amental issue is =hether or not the RTC erre, in ,eclarin+ respon,ent in ,efault an, allo=in+ Philamlife to present its e$i,ence e: parte

The appellate court foun, that Erespon,entLs failure to appear for pre#trial on A %une 044A ,oes not constitute obstinate refusal to compl3 =ith the lo=er courtLs or,er F10.6 2urther" the appellate court hel, that the trial court erre, in issuin+ an Or,er of Default since Section ?" Rule -K of the Rules of Court e:plicitl3 pro$i,es that failure to appear for pre#trial on the part of the ,efen,ant shall be cause to allo= the plaintiff to present e$i,ence e: parte an, the court to ren,er Cu,+ment on the basis thereof 10K6

The resolution of this issue hin+es on the interpretation an, application of Section ?" Rule -K of the Rules of Court" =hich states7

Philamlife file, a motion for reconsi,eration" =hich =as ,enie, b3 the Court of (ppeals in its Resolution ,ate, 9 March 044K

Section ? Effect of failure to appear J The failure of the plaintiff to appear =hen so reGuire, pursuant to the ne:t prece,in+ section shall be cause for ,ismissal of the action The ,ismissal shall be =ith preCu,ice" unless other=ise or,ere, b3 the court ( similar failure on the part of the ,efen,ant shall be cause to allo= the plaintiff to present his e$i,ence e: parte an, the court to ren,er Cu,+ment on the basis thereof

Hence" this petition for certiorari =as file, b3 Philamlife =hich attributes error on the part of the Court of (ppeals in $acatin+ an, settin+ asi,e the RTCLs ,efault or,er as a conseGuence of respon,entLs failure to appear ,urin+ pre#trial Philamlife conce,es that the Court of (ppeals correctl3 relie, on %ustice 2loren@ Re+ala,oLs annotation in his boo>" REMEDI() )(B COMPENDI&M" that instea, of ,efen,ant bein+ ,eclare, in ,efault b3 reason of his non#appearance" Section ? Rule -K of the Rules of Court spells out that the proce,ure =ill be to

The Ene:t prece,in+F section man,ates that7 Section 5 (ppearance of parties D It shall be the ,ut3 of the parties an, their counsel to appear at the pre#trial The non#appearance of a part3 ma3 be e:cuse, onl3 if a $ali, cause is sho=n therefor or if a representati$e shall appear in his behalf full3 authori@e, in =ritin+ to enter into an amicable settlement" to submit to alternati$e mo,es of ,ispute resolution" an, to enter into stipulations or a,missions of facts an, of ,ocuments

Note that no=here in the first aforementione, pro$ision =as the =or, E,efaultF mentione, Prior to the -//. Re$ise, Rules of Ci$il Proce,ure" the phrase Eas in ,efaultF =as initiall3 inclu,e, in Rule 04 of the ol, rules" an, =hich rea, as follo=s7

(s the rule no= stan,s" if the ,efen,ant fails to appear for pre#trial" a ,efault or,er is no lon+er issue, Instea," the trial court ma3 allo= the plaintiff to procee, =ith his e$i,ence e: parte an, the court can ,eci,e the case base, on the e$i,ence presente, b3 plaintiff

Sec 0 ( part3 =ho fails to appear at a pre#trial conference ma3 be non#suite, or consi,ere, as in ,efault

It =as ho=e$er amen,e, in the -//. Re$ise, Rules of Ci$il Proce,ure %ustice Re+ala,o" in his boo> REMEDI() )(B COMPENDI&M" e:plaine, the rationale for the ,eletion of the phrase Eas in ,efaultF in the amen,e, pro$ision" to =it7

The position of Philamlife is in accor, =ith the Rule In,ee," the amen,ment ,i, not chan+e the essence of the ori+inal pro$ision The le+al ramification of ,efen,antLs failure to appear for pre#trial is still ,etrimental to him =hile beneficial to the plaintiff The plaintiff is +i$en the pri$ile+e to present his e$i,ence =ithout obCection from the ,efen,ant" the li>elihoo, bein+ that the court =ill ,eci,e in fa$or of the plaintiff" the ,efen,ant ha$in+ forfeite, the opportunit3 to rebut or present its o=n e$i,ence

This is a substantial repro,uction of Section 0 of the former Rule 04 =ith the chan+e that" instea, of ,efen,ant bein+ ,eclare, Eas in ,efaultF b3 reason of his non#appearance" this section no= spells out that the proce,ure =ill be to allo= the e: parte presentation of plaintiffLs e$i,ence an, the ren,ition of Cu,+ment on the basis thereof Bhile actuall3 the proce,ure remains the same" the purpose is one of semantical propriet3 or terminolo+ical accurac3 as there =ere criticisms on the use of the =or, E,efaultF in the former pro$ision since that term is i,entifie, =ith the failure to file a reGuire, ans=er" not appearance in court 1A46

Therefore" the %une Or,er cannot be completel3 $acate, because semantics asi,e" the or,er substantiall3 complie, =ith Section ? in relation to Section 5" Rule -K of the Rules of Court

The importance of pre#trial in ci$il actions cannot be o$eremphasi@e, In !alatico $ Ro,ri+ue@1A06" the Court" citin+ Tiu $ Mi,,leton1AA6" ,el$e, on the si+nificance of pre#trial" thus7 Pre#trial is an ans=er to the clarion call for the spee,3 ,isposition of cases (lthou+h it =as ,iscretionar3 un,er the -/54 Rules of Court" it =as ma,e man,ator3 un,er the -/95 Rules an, the subseGuent amen,ments in -//. Haile, as Zthe most important proce,ural inno$ation in (n+lo#Sa:on Custice in the nineteenth centur3"F pre#trial see>s to achie$e the follo=in+7 ;a< The possibilit3 of an amicable settlement to alternati$e mo,es of ,ispute resolutionH or of a submission

Still" in the same boo>" %ustice Re+ala,o clarifie, that =hile the or,er of ,efault no lon+er obtains" its effects =ere retaine," thus7

2ailure to file a responsi$e plea,in+ =ithin the re+lementar3 perio," an, not failure to appear at the hearin+" is the sole +roun, for an or,er of ,efault" e:cept the failure to appear at a pre#trial conference =herein the effects of a ,efault on the part of the ,efen,ant are follo=e," that is" the plaintiff shall be allo=e, to present e$i,ence e: parte an, a Cu,+ment base, thereon ma3 be ren,ere, a+ainst ,efen,ant 1A-6

;b< The simplification of the issuesH ;c< The necessit3 or ,esirabilit3 of amen,ments to the plea,in+sH

;,< The possibilit3 of obtainin+ stipulations an, of ,ocuments to a$oi, unnecessar3 proofH ;e< The limitation of the number of =itnessesH ;f< The a,$isabilit3 commissionerH of a preliminar3

or

a,missions

of

facts

reference

of

issues

to

;+< The propriet3 of ren,erin+ Cu,+ment on the summar3 Cu,+ment" or of ,ismissin+ the action shoul, a $ali, therefor be foun, to e:istH ;h< The an, a,$isabilit3 or necessit3 of suspen,in+ the

plea,in+s" or +roun,

Philamlife claims that respon,ent =as absent the four ;5< times that the case =as calle, for pre#trial on A an, -. December 0440" K Ma3 044A an, A %une 044A Philamlife un,erlines the belate, filin+ of respon,ent of his motions for postponement The motion for the postponement of the A an, -. December 0440 pre#trial =as recei$e, b3 the trial court on A December 0440 =hile that for K Ma3 an, A %une 044A pre#trial =as recei$e, on 5 %une 044A or the ,a3 after the pre#trial" =here an, =hen respon,ent =as ,eclare, in ,efault Philamlife consi,ers the manner b3 =hich respon,ent mo$e, for postponements" as =ell as his claim that he =as not notifie, of the 0K (u+ust 044A =hen recor,s sho= that he =as in fact notifie," as clear ,emonstration of ne+li+ence" irresponsibilit3 an, contumac3

procee,in+sH Respon,ent counters that he mo$e, for the postponement of the A an, -. December 0440 pre#trial ,ue to a conflict of sche,ule =hile the -5 %anuar3 044A pre#trial =as reset on account of the partiesL a+reement to settle the case amicabl3 The K Ma3 044A pre#trial =as also postpone, ,ue to me,ical reasons Bhile he ,i, not appear on the pre#trial of A %une 044A" he file, on A4 Ma3 044A a motion for postponement" althou+h recei$e, b3 the trial court onl3 on 5 %une 044A Respon,ent a,,e, that on A %une an, - %ul3 044A pre#trial ,a3s" petitioner =as not e$en rea,3 to present its e$i,ence It =as onl3 on 0K (u+ust 044A that Philamlife presente, its e$i,ence e: parte" ,espite the unresol$e, motion for reconsi,eration of the A %une 044A or,er

;i< Such other matters as ma3 ai, in the prompt ,isposition of the action 1A56

Therefore" Epre#trial cannot be ta>en for +rante, It is not a mere technicalit3 in court procee,in+s for it ser$es a $ital obCecti$e7 the simplification" abbre$iation an, e:pe,ition of the trial" if not in,ee, its ,ispensation F1A?6 This consi,ere," it is reGuire, in Section 5 of Rule 04 of the Rules of Court that7

Section 5 (ppearance of parties D It shall be the ,ut3 of the parties an, their counsel to appear at the pre#trial The non#appearance of a part3 ma3 be e:cuse, onl3 if a $ali, cause is sho=n therefor or if a representati$e shall appear in his behalf full3 authori@e, in =ritin+ to enter into an amicable settlement" to submit to alternati$e mo,es of ,ispute resolution" an, to enter into stipulations or a,missions of facts an, of ,ocuments 1Emphasis supplie,6

The Court of (ppeals ,ismisse, PhilamlifeLs contention an, ,eclare, that Erespon,entLs failure to appear for pre#trial on A %une 044A ,oes not constitute obstinate refusal to compl3 =ith the lo=er courtLs or,er an, that onl3 on that ,ate =as respon,ent absent =hen the case =as actuall3 calle, for pre#trial F1A96

Definitel3" non#appearance of a part3 ma3 onl3 be e:cuse, for a $ali, cause Be see none in this case e$en if the positions of the parties are +i$en a secon, consi,eration

Respon,ent un,eniabl3 sou+ht for postponement of the pre#trial at least three ;A< times 2irst" he cite, conflict in sche,ule as reason to see> postponement of the A an, -. December 0440 pre#trial Secon," the K Ma3 044A pre#trial =as reset upon motion of respon,ent throu+h a tele+ram ,ue to me,ical reasons Thir," respon,ent also file, a motion to postpone the pre#trial for A %une 044A an, he e:plaine, that E,efen,ant an, plaintiffLs Cebu Office are still ne+otiatin+ the =a3s for the proCecte, settlement on possible monthl3 basis =ith propert3 as +uarantee to be embo,ie, in their Compromise (+reement" an, since plaintiffLs Cebu Officer coul, not al=a3s be a$ailable the3 ha$e not 3et =in,#up to brin+ matters to plaintiffLs Manila Office throu+h their counsel F1A.6

044A pre#trial has not recei$e, an3 =or, from the respon,ent =oul, lo+icall3" as it ,i," procee, =ith the hearin+ The first t=o ;0< motions for postponement =ere +rante, b3 the trial court Onl3 the A %une 044A pre#trial procee,e, in the absence of respon,ent ,urin+ =hich the trial court issue, the ,efault or,er The trial courtLs ,enial of the motion for reconsi,eration of the %une Or,er amounte, to a ,enial of his motion for postponement of the A %une 044A pre#trial ,ate Respon,ent tries in $ain to reason out that b3 allo=in+ Philamlife to present its e$i,ence e: parte" his ri+ht to ,ue process =as ,enie,

( motion for postponement is a pri$ile+e an, not a ri+ht ( mo$ant for postponement shoul, not assume beforehan, that his motion =ill be +rante, The +rant or ,enial of a motion for postponement is a matter that is a,,resse, to the soun, ,iscretion of the trial court In,ee," an or,er ,eclarin+ a part3 to ha$e =ai$e, the ri+ht to present e$i,ence for performin+ ,ilator3 actions uphol,s the trial courtIs ,ut3 to ensure that trial procee,s ,espite the ,eliberate ,ela3 an, refusal to procee, on the part of one part3 1AK6

ZThe essence of ,ue process is to be foun, in the reasonable opportunit3 to be hear, an, submit an3 e$i,ence one ma3 ha$e in support of oneLs ,efense Bhere the opportunit3 to be hear," either throu+h $erbal ar+uments or plea,in+s" is accor,e," an, the part3 can present its si,e or ,efen, its interest in ,ue course" there is no ,enial of proce,ural ,ue process Z1546

Respon,ent ha, been +i$en more than enou+h time to present his e$i,ence The pre#trial ,ate =as reset four ;5< times for a total perio, of 9 months before the trial court allo=e, Philamlife to present its e$i,ence e: parte =hen respon,ent faile, to appear on the sche,ule, ,ate

In ,eci,in+ =hether to +rant or ,en3 a motion for postponement of pre#trial" the court must ta>e into account the follo=in+ factors7 ;a< the reason for the postponement" an, ;b< the merits of the case of mo$ant 1A/6 Bith respect to the trial courtLs or,er for respon,ent to pa3 P-"-00".K- 99 representin+ the amount of his outstan,in+ ,ebit balance" =e affirm its fin,in+s =hich =ere base, on recor,s presente, b3 Philamlife (s a conseGuence of respon,entLs non#appearance" he =as ,eeme, to ha$e =ai$e, his ri+ht to present his o=n e$i,ence" if there =as an3

The trial court correctl3 sa= the reason proffere, b3 respon,ent as insufficient to e:cuse his non#appearance In,ee," =hen the -5 %anuar3 044A pre#trial =as postpone, to K Ma3 044A" the parties =ere in fact +i$en the opportunit3 to settle the case amicabl3" as there =as ample time for both parties to reconcile their recor,s an, a+ree on compromise fi+ures Be cannot see ho=" inspite of the len+th of time +i$en to him" respon,ent can still use as reason a possible settlement" about =hich Philamlife e$en ,enies ha$in+ an3 >no=le,+e

Be o$erturn the rulin+ of the Court of (ppeals on the fore+oin+ basis

Notabl3" the trial court coul, not ha$e acte, timel3 in his fa$or because the trial court recei$e, the motion one ,a3 after the pre#trial sche,ule (bout this" =e note further the practice of respon,ent in filin+ his motions for postponement close to the sche,ule, pre#trial ,ate In his motion to reset the K Ma3 044A pre# trial" his motion =as maile, on . Ma3 044A )i>e=ise" his motion for postponement for the A %une 044A pre#trial =as maile, on A4 Ma3 044A In those occasions" the trial court either recei$e, his motions on the ,a3 of pre#trial or a ,a3 after the pre#trial ,ate The trial court" =hich at the ,a3 of the A %une

BHERE2ORE" the Decision ,ate, 0K September 044." as =ell as the Resolution ,ate, 9 March 044K of the Court of (ppeals in C(#' R CV No K0A?A are REVERSED an, SET (SIDE The Or,ers ,ate, A %une 044A an, 05 No$ember 044A an, the Decision ,ate, 05 2ebruar3 0445 of the Re+ional Trial Court of Manila or,erin+ respon,ent %oseph Enario to pa3 Philamlife P-"-00".K- 99 are REINST(TED

SO ORDERED 2IRST DIVISION !efore us is a Petition for Re$ie=- un,er Rule 5? of the Rules of Court" see>in+ to re$erse the %une A4" 044A Decision0 of the Court of (ppeals ;C(< in C(#'R CV No 9?5/K The assaile, Decision ,ispose, as follo=s7 Ma3 A" 0449 ZBHERE2ORE" premises consi,ere," the appeale, ,ecision ,ate, October -K" -/// ,ismissin+ the complaint file, b3 1petitioner6 issue, b3 the Re+ional Trial Court of Ta+um Cit3" !ranch -" is hereb3 (22IRMED ZA

' R No -?/4K/

IS)(NDERS C(RP#2(RMERS COOPER(TIVE" INC " Petitioner" $s )(P(ND(* Respon,ent ('RIC&)T&R()

!ENE2ICI(RIES

M&)TI#P&RPOSE

The 2acts (ND DEVE)OPMENT CORPOR(TION" The facts of the case are narrate, b3 the C( in this =ise7

DECISION ZOn March K" -//A" a certain Ramon CaCe+as entere, into a %oint Pro,uction (+reement for Islan,ers Carp#2armer !eneficiaries Multi#Purpose Cooperati$e" Inc 1petitioner6 =ith )apan,a3 (+ricultural an, De$elopment Corporation 1respon,ent6

P(N'(NI!(N" C%7

The Department of (+rarian Reform (,Cu,ication !oar, ;D(R(!< has Curis,iction to ,etermine an, a,Cu,icate all a+rarian ,isputes in$ol$in+ the implementation of the Comprehensi$e (+rarian Reform )a= ;C(R)< Inclu,e, in the ,efinition of a+rarian ,isputes are those arisin+ from other tenurial arran+ements be3on, the tra,itional lan,o=ner#tenant or lessor#lessee relationship E:pressl3" these arran+ements are reco+ni@e, b3 Republic (ct 99?. as essential parts of a+rarian reform Thus" the D(R(! has Curis,iction o$er ,isputes arisin+ from the instant %oint Pro,uction (+reement entere, into b3 the present parties

Z(lmost three 3ears after" on (pril 0" -//9" 1petitioner6" represente, b3 its alle+e, chairman" Manuel X (sta" file, a complaint 1=ith the RTC6 for Declaration of Nullit3" Man,amus" Dama+es" =ith pra3er for Preliminar3 InCunction a+ainst 1respon,ent6" the alle+e, : : : officers 1of petitioner6 =ho entere, into the a+reement" an, the Pro$incial (+rarian Reform Office of Da$ao ;hereinafter P(RO<" represente, b3 Saturnino D Sibbaluca 1Petitioner6 subseGuentl3 file, an amen,e, complaint =ith lea$e of court alle+in+ that the persons" =ho e:ecute, the contract =ere not authori@e, b3 it

The Case

Z1Respon,ent6 then file, a Motion to Dismiss on (pril -K" -//9 : : :" statin+ that the Department of (+rarian Reform (,Cu,ication !oar, ;hereinafter D(R(!< has primar3" e:clusi$e" an, ori+inal Curis,ictionH that 1petitioner6 faile, to compl3

=ith the compulsor3 me,iation an, conciliation procee,in+s at the baran+a3 le$elH an, for the unauthori@e, institution of the complaint in behalf of 1petitioner6 1Respon,ent6 also a$erre, that 1petitioner6 =as en+a+e, in forum shoppin+ because 1it6 also file, a petition before the Department of (+rarian Reform pra3in+ for the ,isappro$al of the %oint Pro,uction (+reement : : : P(RO also file, a motion to ,ismiss on Ma3 -9" -//9

Rulin+ of the Court of (ppeals

ZOn (u+ust 0-" -//9" 1respon,ent6 then file, a case at the D(R(! for !reach of Contract" Specific Performance" InCunction =ith Restrainin+ Or,er" Dama+es an, (ttorne3Ls 2ees On 2ebruar3 0?" -//." the D(R(! ,eci,e, the case in fa$or of 1respon,ent6 ,eclarin+ the %oint Pro,uction (+reement as $ali, an, bin,in+ an, or,erin+ 1petitioner6 to account for the procee,s of the pro,uce an, to compl3 =ith the terms of the contract

2in,in+ the relationship bet=een the parties to be an a+ricultural leasehol," the C( hel, that the issue fell sGuarel3 =ithin the Curis,iction of the D(R(! Hence" the appellate court rule, that the RTC ha, correctl3 ,ismisse, the Complaint file, b3 petitioner

Moreo$er" bein+ in the nature of an a+ricultural leasehol, an, not a share, tenanc3" the %oint Pro,uction (+reement entere, into b3 the parties =as ,eeme, $ali, b3 the C( The a+reement coul, not be consi,ere, contrar3 to public polic3" simpl3 because one of the parties =as a corporation

ZThe 1RTC6 then issue, 1its6 ,ecision on October -K" -/// Hence" this Petition ? Z1Petitioner6" before 1the C(6" rais1e,6 the follo=in+ errors on appeal7 Issues ^I Petitioner raises the follo=in+ issues for the CourtLs consi,eration7 ^THE 1RTC6 'R(VE)* ERRED IN DISMISSIN' THE C(SE (T !(R ON THE 'RO&ND O2 )(CX O2 %&RISDICTION ZI ^II ZBhether or not : : : the : : : Court of (ppeals +ra$el3 erre, in affirmin+ the ,ismissal of the case at bench b3 RTC of Ta+um Cit3 on the +roun, that it has no Curis,iction o$er the subCect matter an, nature of the suit

^THE 1RTC6 'R(VE)* ERRED IN NOT DEC)(RIN' THE PROD&CTION ('REEMENT (S N&)) (ND VOID (! INITIOLZ5

%OINT

ZII Sole Issue7 ZBhether or not : : : the : : : Court of (ppeals +ra$el3 erre, in fin,in+ that the ^%oint Pro,uction (+reementL is $ali, instea, of ,eclarin+ it as null an, $oi, ab initio" its pro$isions" terms an, con,ition" cause an, purposes bein+ $iolati$e of 1t6he e:press man,ator3 pro$ision of R ( 99?.

%uris,iction

ZIII

ZBhether or not : : : the : : : Court of (ppeals +ra$el3 erre, in hol,in+ that the ^%oint Pro,uction (+reementL is a leasehol, contract an, therefore $ali,

Section ?4 of Republic (ct 99?.. an, Section -. of E:ecuti$e Or,er 00/K $ests in the Department of (+rarian Reform ;D(R< the primar3 an, e:clusi$e Curis,iction" both ori+inal an, appellate" to ,etermine an, a,Cu,icate all matters in$ol$in+ the implementation of a+rarian reform / Throu+h E:ecuti$e Or,er -0/# ("-4 the Presi,ent of the Philippines create, the D(R(! an, authori@e, it to assume the po=ers an, functions of the D(R pertainin+ to the a,Cu,ication of a+rarian reform cases --

ZIV

Moreo$er" Rule II of the Re$ise, Rules of the D(R(! pro$i,es as follo=s7

ZBhether or not : : : the : : : Court of (ppeals +ra$el3 erre, in interpretin+ an, appl3in+ the pre$ailin+ ,octrines an, Curispru,ence ,elineatin+ the Curis,iction bet=een the re+ular court an, D(R(! on the matter of a+ricultural lan, an, tenanc3 relationship Z9

ZSection - Primar3 an, E:clusi$e Ori+inal an, (ppellate %uris,iction ## The !oar, shall ha$e primar3 an, e:clusi$e Curis,iction" both ori+inal an, appellate" to ,etermine an, a,Cu,icate all a+rarian ,isputes in$ol$in+ the implementation of the Comprehensi$e (+rarian Reform Pro+ram ;C(RP< un,er Republic (ct No 99?." E:ecuti$e Or,er Nos 00K an, -0/#(" Republic (ct No AK55 as amen,e, b3 Republic (ct No 9AK/" Presi,ential Decree No 0. an, other a+rarian la=s an, their implementin+ rules an, re+ulations Specificall3" such Curis,iction shall inclu,e but not be limite, to cases in$ol$in+ the follo=in+7

Simpl3 put" the Guestion to be resol$e, b3 the Court is this7 =hich of the $arious +o$ernment a+encies has Curis,iction o$er the contro$ers3_ a< The ri+hts an, obli+ations of persons" =hether natural or Curi,ical" en+a+e, in the mana+ement" culti$ation an, use of all a+ricultural lan,s co$ere, b3 the C(RP an, other a+rarian la=s1 6Z-0

The CourtLs Rulin+

The Petition has no merit -a$$phil net

The subCect matter of the present contro$ers3 falls sGuarel3 =ithin the Curis,iction of the D(R(! In Guestion are the ri+hts an, obli+ations of t=o

Curi,ical persons en+a+e, in the mana+ement" culti$ation an, use of a+ricultural lan, acGuire, throu+h the Comprehensi$e (+rarian Reform Pro+ram ;C(RP< of the +o$ernment

It is clear that the abo$e ,efinition is broa, enou+h to inclu,e ,isputes arisin+ from an3 tenurial arran+ement be3on, that in the tra,itional lan,o=ner#tenant or lessor#lessee relationship

Petitioner conten,s that" there bein+ no tenanc3 or leasehol, relationship bet=een the parties" this case ,oes not constitute an a+rarian ,ispute that falls =ithin the D(R(!Ls Curis,iction -A

Tenurial (rran+ements Reco+ni@e, b3 )a=

Be clarif3 To pro$e tenanc3 or an a+ricultural leasehol, a+reement" it is normall3 necessar3 to establish the follo=in+ elements7 -< the parties are the lan,o=ner an, the tenant or a+ricultural lesseeH 0< the subCect matter of the relationship is a piece of a+ricultural lan,H A< there is consent bet=een the parties to the relationshipH 5< the purpose of the relationship is to brin+ about a+ricultural pro,uctionH ?< there is personal culti$ation on the part of the tenant or a+ricultural lesseeH an, 9< the har$est is share, bet=een the lan,o=ner an, the tenant or a+ricultural lessee -5

The assaile, %oint Pro,uction (+reement-9 is a t3pe of Coint economic enterprise %oint economic enterprises are partnerships or arran+ements entere, into b3 Comprehensi$e (+rarian Reform Pro+ram ;C(RP< lan, beneficiaries an, in$estors to implement a+ribusiness enterprises in a+rarian reform areas -.

Reco+ni@in+ that a+rarian reform e:ten,s be3on, the mere acGuisition an, re,istribution of lan," the la= ac>no=le,+es other mo,es of tenurial arran+ements to effect the implementation of C(RP -K

In the present case" the fifth element of personal culti$ation is clearl3 absent Petitioner is thus correct in claimin+ that the relationship bet=een the parties is not one of tenanc3 or a+ricultural leasehol, Ne$ertheless" =e belie$e that the present contro$ers3 still falls =ithin the sphere of a+rarian ,isputes

In line =ith its po=er to issue rules an, re+ulations to carr3 out the obCecti$es of Republic (ct 99?."-/ the D(R issue, (,ministrati$e Or,er No 0" Series of -///" =hich issue, ZRules an, Re+ulations 'o$ernin+ %oint Economic Enterprises in (+rarian Reform (reas Z These rules an, re+ulations =ere to pro$i,e C(RP beneficiaries =ith alternati$es to sustain operations of ,istribute, farms an, to increase their pro,ucti$it3 04

(n a+rarian ,ispute Zrefers to an3 contro$ers3 relatin+ to tenurial arran+ements ## =hether leasehol," tenanc3" ste=ar,ship or other=ise ## o$er lan,s ,e$ote, to a+riculture Such ,isputes inclu,e those concernin+ farm =or>ersL associations or representations of persons in ne+otiatin+" fi:in+" maintainin+" chan+in+ or see>in+ to arran+e terms or con,itions of such tenurial arran+ements (lso inclu,e, is an3 contro$ers3 relatin+ to the terms an, con,itions of transfer of o=nership from lan,o=ners to farm =or>ers" tenants an, other a+rarian reform beneficiaries ## =hether the ,isputants stan, in the pro:imate relation of farm operator an, beneficiar3" lan,o=ner an, tenant" or lessor an, lessee Z-?

Section -4 of this a,ministrati$e or,er states as follo=s7

ZSEC -4 Resolution of DisputesD (s a rule" $oluntar3 metho,s" such as me,iation or conciliation an, arbitration" shall be preferre, in resol$in+ ,isputes in$ol$in+ Coint economic enterprises The specific mo,es of resol$in+ ,isputes shall be stipulate, in the contract" an, shoul, the parties fail to ,o so" the proce,ure herein shall appl3

ZThe a++rie$e, part3 shall first reGuest the other part3 to submit the matter to me,iation or conciliation b3 traine, me,iators or conciliators from D(R" non# +o$ernmental or+ani@ations ;N'Os<" or the pri$ate sector chosen b3 them

(s alrea,3 ,iscusse, abo$e" Curis,iction o$er the present contro$ers3 lies =ith the D(R(! (s the RTC ha, correctl3 ,ismisse, the case on the +roun, of lac> of Curis,iction" it =as superfluous for the trial court ## an, the C( for that matter ## to ha$e rule, further on the issue of the $ali,it3 of the a+reement

:::::::::

The ,octrine of primar3 Curis,iction preclu,es the courts from resol$in+ a contro$ers3 o$er =hich Curis,iction has initiall3 been lo,+e, =ith an a,ministrati$e bo,3 of special competence 00

ZShoul, the ,ispute remain unresol$e," it ma3 be brou+ht to either of the follo=in+ for resolution ,epen,in+ on the principal cause of action7

^;a< D(R (,Cu,ication !oar, ;D(R(!< if it in$ol$es interpretation an, enforcement of an a+ribusiness a+reement or an a+rarian ,ispute as ,efine, in Sec A;,< of R( 99?.1 6LZ

Since the D(R(! ha, alrea,3 rule, in a separate case on the $ali,it3 of the %oint Venture (+reement"0A the proper reme,3 for petitioner =as to Guestion the !oar,Ls Cu,+ment throu+h a timel3 appeal =ith the C( 05 !ecause of the manifest lac> of Curis,iction on the part of the RTC" =e must ,efer an3 opinion on the other issues raise, b3 petitioner until an appropriate re$ie= of a similar case reaches this Court 0?

BHERE2ORE" the Petition is DENIED Costs a+ainst petitioner The present contro$ers3 in$ol$es the interpretation an, enforcement of the terms of the %oint Pro,uction (+reement Thus" the case clearl3 falls =ithin the Curis,iction of the D(R(! This Court in fact reco+ni@e, the authorit3 of the D(R an, the D(R(! =hen it rule, thus7

SO ORDERED 2IRST DIVISION

Z(ll contro$ersies on the implementation of the Comprehensi$e (+rarian Reform Pro+ram ;C(RP< fall un,er the Curis,iction of the Department of (+rarian Reform ;D(R<" e$en thou+h the3 raise Guestions that are also le+al or constitutional in nature (ll ,oubts shoul, be resol$e, in fa$or of the D(R" since the la= has +rante, it special an, ori+inal authorit3 to hear an, a,Cu,icate a+rarian matters Z0-

PHI)IPPINE COMMERCI() INTERN(TION() !(NX"

' R No -.--A.

Vali,it3 of the %oint Pro,uction (+reement Present7

Petitioner"

Resolution106 ,ate, %anuar3 -4" 0449" ,en3in+ petitionerLs motion for reconsi,eration P&NO" C % " Chairperson" # $ersus # C(RPIO" CORON(" )EON(RDO#DE C(STRO" an, !ERS(MIN" %% Spouses Damian an, Tessie (ma,eo are in,ebte, to petitioner Philippine Commercial International !an>" a ,omestic uni#ban>in+ corporation" as sureties for Streamline Cotton De$elopment Corporation The promissor3 notes became ,ue an, ,eman,able" but the (ma,eo spouses faile, to pa3 their outstan,in+ obli+ations ,espite repeate, ,eman,s (s of 2ebruar3 -?" -//5" these obli+ations stoo, at Ten Million" Si: Hun,re, Se$ent3#One Thousan," Se$en Hun,re, T=ent3#Si: Pesos an, Si:t3#One Centa$os ;P-4"9.-".09 9-<

SPO&SES BI)SON D* HON' PI an, )O)IT( D* an, SPO&SES PRIMO CH&*(CO" %R an, )I)I( CH&*(CO" Respon,ents %une ?" 044/ Promul+ate,7

Petitioner subseGuentl3 ,isco$ere, that rou+hl3 a month before the ,ue ,ate of the promissor3 notes" the (ma,eo spouses ;i< sol, three ;A< or nearl3 all of their real properties to respon,ents" Spouses Bilson an, )olita D3 an, Spouses Primo an, )ilia Chu3aco" an, ;ii< imme,iatel3 cause, the transfer of the titles co$erin+ the parcels of lan, in fa$or of the latter The consi,eration for these sales =as further alle+e, to ha$e been +rossl3 insufficient or ina,eGuate

!elie$in+ that the transfers =ere ,one in frau, of cre,itors" petitioner institute, an action for rescission an, ,ama+es on (pril 00" -//5 In its Complaint1A6 in Ci$il Case No /5#-?K? a+ainst Spouses (ma,eo" D3 an, Chu3aco" petitioner as>e, the Re+ional Trial Court of Ma>ati Cit3 for the follo=in+ reliefs7 - (nnullin+ the Dee,s of (bsolute Sale both ,ate, September -9" -//A an, thereafter" ,irect the Re+istries of Dee,s of Sultan Xu,arat an, Da$ao Cit3 to cancel the Transfer Certificates of Title Nos ;sic< T#0.90K" T#040K9K" an, T# 040K9/ issue, in the name of Bilson D3 Hon+ Pi an, )olita ' D3 (ND Primo Chu3aco" %r an, )ilia O Chu3aco" respecti$el3" an, in lieu thereof" issue ne= ones un,er the name of Damian an, Tessie (ma,eo

:##################################################:

DECISION

P&NO" C % 7 0 Or,erin+ the ,efen,ants to pa3 the plaintiff moral ,ama+es in the sum of P044"444 44H e:emplar3 ,ama+es in the sum of P044"444 44H an, P-44"444 44 as1"6 an, for1"6 attorne3Ls fees 156 !efore the Court is a petition for re$ie= on certiorari assailin+ the Decision1-6 ,ate, %ul3 -K" 044? of the Court of (ppeals in C(D' R SP No K?0K0" an, its

The case =as then raffle, to !ranch -AA" presi,e, o$er b3 %u,+e Napoleon E Inoturan

(ccor,in+l3" on March 5" -//9" petitioner file, an (men,e, Complaint1-56 to inclu,e alle+ations in support of" an, a pra3er for" a =rit of preliminar3 attachment Petitioner then presente, e$i,ence in relation thereto" an, on 2ebruar3 0?" -//." the trial court issue, an Or,er1-?6 for the issuance of the =rit &pon petitionerLs e:#parte motion" the trial court li>e=ise ,irecte, the Cler> of Court of the Re+ional Trial Court of Da$ao Cit3 to ,esi+nate a Special Sheriff to implement the =rit of preliminar3 attachment 1-96

&pon ser$ice of summons on the (ma,eo spouses" the latter file, a Motion to Dismiss1?6 on the +roun, that the Complaint $iolate, the e:plicit terms of Supreme Court Circular No 45#/5" as the Verification =as e:ecute, b3 petitionerLs le+al counsel 196 Petitioner file, its Opposition to the Motion to Dismiss"1.6 =here it ar+ue, that ;i< the rule cite, b3 the (ma,eo spouses shoul, not be applie, literall3" an, ;ii< at an3 rate" petitionerLs le+al counsel =as authori@e, b3 petitioner to institute the Complaint 1K6 On 2ebruar3 5" -//?" the trial court issue, an Or,er1/6 ,en3in+ the Motion to Dismiss

In Or,ers1-.6 ,ate, %anuar3 -0" -//K an, 2ebruar3 04" -//K" respecti$el3" petitioner =as ,irecte, to inform the court =hether it still inten,e, to pursue the case This appears to ha$e been moti$ate, b3 the fact that no propert3 of the ,efen,ants ha, been attache, as of 3et Petitioner ,i, not compl3 =ith the sai, Or,ersH conseGuentl3" the case =as ,ismisse, =ithout preCu,ice on %une 09" -//K for failure to prosecute 1-K6 !3 this time" petitioner ha, alrea,3 cause, the annotation of a notice of lis pen,ens at the bac> of the titles of the properties subCect of this case ;i e " TCT Nos T#0.90K" T#040K9K" an, T#040K9/<

The (ma,eo spouses subseGuentl3 file, an (ns=er1-46 =here the3 alle+e, that petitioner faile, to release the loans to Streamline Cotton De$elopment Corporation on the a+ree, ,ate" thereb3 constrainin+ them to incur loans from thir, parties at hi+h interest rates to >eep the compan3 afloat These loans =ere co$ere, b3 post,ate, chec>s =hich ha, to be fun,e, once the obli+ations fell ,ue" lest the (ma,eo spouses face criminal prosecution In or,er to pa3 the sai, loans" the3 thus ha, to sell the properties subCect of this case The (ma,eo spouses further claime, that the purchase price for the three ;A< parcels of lan, =as the fair mar>et $alue" an, that the3 ha, other personal an, real properties =hich ma3 be a$aile, of to ans=er for their obli+ations In their Counterclaim" the3 pra3e, for moral ,ama+es of P044"444 44" attorne3Ls fees an, e:penses of liti+ation

On (u+ust A" -//K" petitioner file, a Motion for Reconsi,eration of the %une 09" -//K Or,er" alle+in+ that its failure to notif3 the trial court of its intention to pursue the case =as prompte, solel3 b3 the ,ifficult3 of locatin+ properties a+ainst =hich the =rit of attachment coul, be enforce, In the interest of Custice" the trial court +rante, the motion 1-/6

Petitioner file, its Repl3 an, (ns=er to Counterclaim1--6 on March K" -//?

Defen,ant Spouses (ma,eo" D3 an, Chu3aco then file, an EOmnibus Motion to Dismiss an, to (nnul (ll the Procee,in+s Ta>en (+ainst the Defen,antsF1046 on December --" -//K" in =hich motion the3 Guestione, the Curis,iction of the trial court o$er their persons Petitioner file, its Opposition10-6 thereto on 2ebruar3 -?" -/// Defen,ants file, their Repl31006 on March -4" -///" =hile petitioner file, its ReCoin,er10A6 on %une /" -/// Sai, motion" ho=e$er" =as merel3 note, =ithout action in an (u+ust 0" 044- Or,er1056 since its notice of hearin+ =as a,,resse, onl3 to the Cler> of Court" $i@ 7 It appears from the Motion that its Notice of Hearin+ is not a,,resse, to an3 of the parties concerne, as other=ise reGuire, b3 Rule -?1"6 Section ? of the -//. Rules of Ci$il Proce,ure Such bein+ the case" the Motion is ,eeme, a mere scrap of paper as hel, in Pro$i,ent International Resources Corporation $s Court of (ppeals" 0?/ SCR( ?-4

On September -A" -//?" petitioner file, an E: Parte Motion for )ea$e to Ser$e Summons b3 Publication1-06 on Spouses D3 an, Chu3aco Ho=e$er" this =as ,enie, in an Or,er1-A6 ,ate, September -5" -//? on the +roun, that summons b3 publication cannot be a$aile, of in an action in personam

In an3 e$ent" the recor, sho=s that ,efen,ants Sps (ma,eo ha$e been ,ul3 ser$e, =ith summons as earl3 as No$ember --" -//5 per SheriffLs Return of Ser$ice ,ate, No$ember -5" -//5" an, the3 are therefore =ithin the Curis,iction of the Court Ho=e$er" ,efen,ants Spouses D3 an, Chu3aco ha$e not been ser$e, =ith summons as e$i,ence, b3 OfficerLs Return ,ate, Ma3 05" -//5 an, Return of Ser$ice ,ate, %une -4" -//5" respecti$el3" an, so the Court has not 3et acGuire, Curis,iction o$er them Since aforesai, Motion is ,eeme, a scrap of paper" it cannot be construe, to manifest a ;sic< $oluntar3 appearance on their part

Court that a Motion of the same nature =as alrea,3 file, on September -A" -//? an, =as DENIED on September -5" -//? :::H

A That therefore" the or,er ,ate, (u+ust 0-" 044- of this Honorable Court =hich a,$ise, the complainant to a$ail of Rule -5 Section -5 of the Rules is contrar3 to its or,er ,ate, September -5" -//?H

Bherefore" the Omnibus Motion is note, =ithout action )et alias summons be issue, to ,efen,ants#spouses D3 an, Chu3aco 2or plaintiffLs +ui,ance" it ma3 a$ail itself of Rule -51"6 Section -5 on summons b3 publication if it so ,esires" upon proper motion

5 That up to this ,ate" the complainant has not lifte, a fin+er to pursue this case a+ainst mo$ants#,efen,ants" hence" this Motion to Dismiss

SO ORDERED ;un,erscorin+ in the ori+inal<

BHERE2ORE" premises consi,ere," it is most respectfull3 pra3e, that this case be ,ismisse, a+ainst the mo$ants#,efen,ants an, to or,er the ,eletion of the Notice of )is Pen,ens at the bac> of the subCect title ;sic<

Spouses D3 an, Chu3aco subseGuentl3 file, a EMotion to Dismiss ;for )ac> of %uris,iction<F10?6 on 2ebruar3 -K" 0440" in =hich motion the3 essentiall3 accuse, petitioner of not causin+ summons to be ser$e, upon them an, losin+ interest in the case Petitioner file, its Opposition1096 thereto" an, in an (pril 0A" 0440 Or,er"10.6 the trial court ,enie, the Motion to Dismiss on account of ;i< petitionerLs Compliance an, Manifestation10K6 that it ha, not lost interest in pursuin+ the case" an, ;ii< the Motion for )ea$e of Court to Ser$e Summons b3 Publication that petitioner file, simultaneousl3 =ith its Opposition On (pril 05" 0440" the Motion for )ea$e of Court to Ser$e Summons b3 Publication =as submitte, for resolution 10/6

This =as oppose, b3 petitioner" ar+uin+ that it ha, alrea,3 file, a motion for the ser$ice of summons b3 publication" but the trial court ha, 3et to act on it 1A-6 On %ul3 0?" 044A" this Motion =as submitte, for resolution 1A06

On No$ember 5" 044A" Spouses D3 an, Chu3aco personall3" an, not throu+h their counsel" file, a EMotion for Inhibition =ithout submittin+ themsel$es to the Curis,iction of this Honorable Court"F1AA6 the rele$ant portions of =hich state7 - That since -//K" the ,efen,ants#mo$ants ha$e been mo$in+ for the ,ismissal of this case as far as the mo$ants are concerne, an, to nullif3 the procee,in+s ta>en a+ainst them since the Honorable Court has not 3et acGuire, Curis,iction o$er their persons =hen the plaintiff presente, its e$i,ence a+ainst ,efen,ants ;sic< Sps Damian an, Tessie (ma,eo an, e$en thereafterH

Respon,ent Spouses D3 an, Chu3aco ne:t file, a EMotion to Dismiss for 2ailure to ProsecuteF1A46 on %une -." 044A The si+nificant portions of the motion state7 0 That base, on the or,er of this Honorable Court ,ate, (pril 0A" 044A ;sic<" the Motion for )ea$e of Court to Ser$e Summons b3 Publication =as submitte, for resolution" but the mo$ants#,efen,ants =oul, li>e to remin, the Honorable

0 That" ho=e$er onl3 on ;sic< (u+ust 0" 044- or after more than three ;A< 3ears" that this Honorable Court ,enie, the sai, Motion to Dismiss ,ue to

technicalit3 ;sic< an, merel3 reGuire ;sic< the plaintiff to ser$e the summons either personall3 or thru publicationH

(ctin+ on the Motion for Inhibition" the Court hereb3 ,enies the same for lac> of le+al basis

A That" ho=e$er in the or,er of this Honorable Court ,ate, September -5" -//?" it alrea,3 ,enie, the E:#Parte Motion for )ea$e to Ser$e Summons b3 Publication Econsi,erin+ that the action herein is in personamF" hence" this or,er is contrar3 to its latest or,er ,ate, (u+ust 0" 044-H

In an3 e$ent" the fact that ,efen,ants Bilson D3 an, Primo Chu3aco" %r si+ne, sai, Motion themsel$es an, in behalf of their respecti$e spouses un,oubte,l3 in,icates their $oluntar3 appearance in this case an, their submission to the Curis,iction of this Court The phrase E=ithout submittin+ themsel$es to the Curis,iction of this Honorable CourtF in the hea,in+ of sai, Motion can not Gualif3 the clear import of Rule -5 section 04 =hich states7

5 That another Motion to Dismiss =as file, last %une --" 044A1A56 on the +roun, of lac> of interest to pursue the case but up to this ,ate" the Honorable Court has ,one nothin+ that ,ela3s ;sic< the procee,in+s to the preCu,ice of the ,efen,ants#mo$antsH

Voluntar3 appearance J The ,efen,antIs $oluntar3 appearance in the action shall be eGui$alent to ser$ice of summons The inclusion in a motion to ,ismiss of other +roun,s asi,e from lac> of Curis,iction o$er the person of the ,efen,ant shall not be ,eeme, a $oluntar3 appearance ;0Aa<

? That this continuous ,ela3 in the procee,in+s sho=s that the Honorable Court ma3 not be competent enou+h to further hear this case It ma3 be note, that subCect Motion for Inhibition is not a Motion to Dismiss

BHERE2ORE" premises consi,ere," it is most respectfull3 pra3e, for the inhibition of this Honorable Court ;sic< from further hearin+ this case

Bherefore" ,efen,ants#spouses D3 an, Chu3aco are +i$en fifteen ;-?< ,a3s from receipt hereof =ithin =hich to file their respecti$e ans=ers

This =as submitte, for resolution on No$ember -A" 044A (ll pen,in+ inci,ents are ,eeme, resol$e, 1A.6

The motion for inhibition =as a,opte, b3 their counsel on recor," Clarissa Castro" throu+h a EMotion to (,opt Motion for Inhibition an, Manifestation"F =hich =as file, on 2ebruar3 --" 04451A?6 an, note, b3 the trial court in a 2ebruar3 04" 0445 Or,er 1A96 On %une 0A" 0445" ho=e$er" the trial court ;i< ,enie, the motion for inhibition for lac> of merit" ;ii< rule, that Spouses D3 an, Chu3aco ha$e $oluntaril3 submitte, themsel$es to the Curis,iction of the trial court" an, ;iii< +a$e them fifteen ;-?< ,a3s from receipt of the Or,er =ithin =hich to file their respecti$e ans=ers" as follo=s7

&nsatisfie, =ith the Or,er" respon,ent Spouses D3 an, Chu3aco file, a Petition for Certiorari un,er Rule 9?1AK6 before the C(" alle+in+ that Ethe public respon,ent committe, +ra$e abuse of ,iscretion =hen he consi,ere, the Motion to Inhibit ;=ithout submittin+ to the Curis,iction of the Honorable Court< =hich the3 ha, file, to Guestion his impartialit3 an, competence ,ue to the ,ela3 in resol$in+ the Motion to Dismiss base, on lac> of Curis,iction" as $oluntar3 appearance" an, =herein he reGuire, the respon,ents to file their (ns=er =ithin the reGuire, perio, F The C( +rante, the petition in this =ise7

The ol, pro$ision un,er Section 0A" Rule -5 of the Re$ise, Rules of Court pro$i,e, that7 Thus" in this case at bar" the Et=o motions to ,ismissF an, the Emotion to inhibitF ma3 be treate, as Especial appearanceF since the3 all inclu,e, the issue of lac> of Curis,iction ,ue to non#ser$ice of summons The3 ,i, not constitute as submittin+ the mo$ant to the Curis,iction of the court

Section 0A Bhat is eGui$alent to ser$ice The ,efen,antLs $oluntar3 appearance in the action shall be eGui$alent to ser$ice

::: &n,er Section 04" Rule -5 of the -//. Rules of Ci$il Proce,ure" the pro$ision no= rea,s as follo=s7

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Sec 04 Voluntar3 (ppearance J The ,efen,antIs $oluntar3 appearance in the action shall be eGui$alent to ser$ice of summons The inclusion in a motion to ,ismiss of other +roun,s asi,e from lac> of Curis,iction o$er the person of the ,efen,ant shall not be ,eeme, a $oluntar3 appearance

There bein+ no proper ser$ice of summons on petitioners an, there bein+ no $oluntar3 appearance b3 petitioners" the trial court ,i, not acGuire Curis,iction o$er the persons of the ,efen,ants" the herein petitioners (n3 procee,in+ un,erta>en b3 the trial court a+ainst them =oul, conseGuentl3 be null an, $oi,

Bhat remains the same" carr3 ;sic< o$er from the ol, ,octrine" is that the issue of Curis,iction must be raise, seasonabl3

BHERE2ORE" premises consi,ere," the assaile, %une 0A" 0445 Or,er of the Re+ional Trial Court of Ma>ati Cit3" !ranch -AA" is hereb3 DEC)(RED N&)) (ND VOID as a+ainst herein petitioners The (pril 00" -//5 complaint file, b3 Philippine Commercial International !an> is hereb3 DISMISSED as a+ainst herein petitioners D* an, CH&*(CO onl3" no Curis,iction o$er their persons ha$in+ been acGuire,

!ut e$er3thin+ else chan+e, SO ORDERED 1A/6 Bhat chan+e, is that7 if a motion is file," =hate$er >in, it is" it nee, no lon+er be for the sole an, separate purpose of obCectin+ to the Curis,iction of the court because the motion ma3 raise m3ria, issues in that one motion of special appearance as lon+ as the obCection to the Curis,iction of the court is inclu,e, :::

PetitionerLs motion for reconsi,eration =as ,enie, b3 the appellate court 1546

Hence this appeal" =here petitioner ar+ues that7 Bhat necessaril3 chan+e, also is that the me,ium of Especial appearanceF is no lon+er restricte, to a motion to ,ismiss because one coul, no= file an3 t3pe of motion pro$i,e, 3ou inclu,e, the issue of lac> of Curis,iction ,ue to ,efecti$e ser$ice of summons I

THE CO&RT O2 (PPE()S ERRED IN DEC)(RIN' THE %&NE 0A" 0445 ORDER O2 THE TRI() CO&RT N&)) (ND VOID (ND IN DISMISSIN' THE COMP)(INT (S ('(INST RESPONDENTS D* (ND CH&*(CO (ND RENDERIN' THE \&ESTIONED DECISION (ND RESO)&TION IN ( B(* TH(T IS NOT IN (CCORD BITH THE 2(CTS (ND (PP)IC(!)E )(BS (ND %&RISPR&DENCE" BHICH HO)D TH(T !* THEIR S&CCESSIVE 2I)IN' O2 MOTIONS BITH THE CONVENIENT C(VE(T TH(T THE* (RE NOT S&!MITTIN' TO THE %&RISDICTION O2 THE CO&RT ( \&O" THE* H(VE VO)&NT(RI)* S&!MITTED TO THE TRI() CO&RTLS %&RISDICTION

(N* P)(IN" SPEED* (ND (DE\&(TE REMED* IN THE ORDIN(R* CO&RSE O2 )(B (V(I)(!)E TO THEM 15-6

Simpl3 state," the issues are7 ;-< Bas the petition for certiorari prematurel3 file,_ ;0< Has there been $oluntar3 appearance on the part of respon,ent Spouses D3 an, Chu3aco as to confer the trial court =ith Curis,iction o$er their persons_ an, ;A< Di, the trial court correctl3 ,en3 the motion for inhibition_

( THE HONOR(!)E CO&RT O2 (PPE()S ERRED BHEN IT DISMISSED THE C(SE (S ('(INST D* (ND CH&*(CO

Be shall ,iscuss these issues in seriatim

! THE SPO&SES D* (ND CH&*(CO H(VE )OST THEIR RI'HT TO \&ESTION THE TRI() CO&RTLS %&RISDICTION OVER THEM BHEN THE* DID NOT R(ISE THE DENI() O2 THEIR (PRI) 00" 0440 MOTION TO DISMISS TO THE CO&RT O2 (PPE()S

2irst Issue7 Propriet3 of Certiorari

C THE SPO&SES D* (ND CH&*(CO H(VE MISER(!)* 2(I)ED TO SHOB !(SIS IN SEEXIN' THE TRI() CO&RTLS %&RISDICTION

Petitioner conten,s that respon,ents sub$erte, the settle, rule that a Petition for Certiorari un,er Rule 9? is a$ailable onl3 =hen there is no appeal" or an3 plain" spee,3" an, a,eGuate reme,3 in the or,inar3 course of la= 1506 It asserts that respon,entsL failure to mo$e for reconsi,eration of the %une 0A" 0445 Or,er of the trial court" ,en3in+ the latterLs motion for inhibition" pro$i,es sufficient cause for the outri+ht ,ismissal of the instant petition

D THE SPO&SES D* (ND CH&*(CO H(VE VO)&NT(RI)* S&!MITTED THEMSE)VES TO THE TRI() CO&RTLS %&RISDICTION

Be ,isa+ree

II

THE CO&RT O2 (PPE()S ERRED IN ( B(* TH(T IS NOT IN (CCORD BITH (PP)IC(!)E )(BS (ND %&RISPR&DENCE IN NOT DISMISSIN' THE PETITION 2OR CERTIOR(RI NOTBITHST(NDIN' TH(T THE D* (ND CH&*(CO SPO&SES 2(I)ED TO SHOB TH(T THERE IS NO (PPE()" OR

Petitioner is correct that a motion for reconsi,eration" as a +eneral rule" must ha$e first been file, before the tribunal" boar," or officer a+ainst =hom the =rit of certiorari is sou+ht 15A6 This is inten,e, to affor, the latter an opportunit3 to correct an3 actual or fancie, error attribute, to it 1556 Ho=e$er" there are se$eral e:ceptions =here the special ci$il action for certiorari =ill lie e$en =ithout the filin+ of a motion for reconsi,eration" namel37

a =here the or,er is a patent nullit3" as =here the court a Guo has no Curis,ictionH Secon, Issue7 Voluntar3 (ppearance b =here the Guestions raise, in the certiorari procee,in+ ha$e been ,ul3 raise, an, passe, upon b3 the lo=er court" or are the same as those raise, an, passe, upon in the lo=er courtH c =here there is an ur+ent necessit3 for the resolution of the Guestion an, an3 further ,ela3 =oul, preCu,ice the interests of the +o$ernment or the petitioner" or the subCect matter of the action is perishableH , =here" un,er the circumstances" a motion for reconsi,eration =oul, be uselessH e =here petitioner =as ,epri$e, of ,ue process an, there is e:treme ur+enc3 for reliefH f =here" in a criminal case" relief from an or,er of arrest is ur+ent an, the +rantin+ of such relief b3 the trial court is improbableH + processH =here the procee,in+s in the lo=er court are a nullit3 for lac> of ,ue Prescin,in+ from the fore+oin+" it is thus clear that7 Preliminaril3" Curis,iction o$er the ,efen,ant in a ci$il case is acGuire, either b3 the coerci$e po=er of le+al processes e:erte, o$er his person" or his $oluntar3 appearance in court 15.6 (s a +eneral proposition" one =ho see>s an affirmati$e relief is ,eeme, to ha$e submitte, to the Curis,iction of the court 15K6 It is b3 reason of this rule that =e ha$e ha, occasion to ,eclare that the filin+ of motions to a,mit ans=er" for a,,itional time to file ans=er" for reconsi,eration of a ,efault Cu,+ment" an, to lift or,er of ,efault =ith motion for reconsi,eration" is consi,ere, $oluntar3 submission to the courtLs Curis,iction 15/6 This" ho=e$er" is tempere, b3 the concept of con,itional appearance" such that a part3 =ho ma>es a special appearance to challen+e" amon+ others" the courtLs Curis,iction o$er his person cannot be consi,ere, to ha$e submitte, to its authorit3 1?46

h =here the procee,in+s =ere e: parte or in =hich the petitioner ha, no opportunit3 to obCectH an, i =here the issue raise, is one purel3 of la= or =here public interest is in$ol$e, 15?6

;-< Special appearance operates as an e:ception to the +eneral rule on $oluntar3 appearanceH ;0< (ccor,in+l3" obCections to the Curis,iction of the court o$er the person of the ,efen,ant must be e:plicitl3 ma,e" i e " set forth in an uneGui$ocal mannerH an, ;A< 2ailure to ,o so constitutes $oluntar3 submission to the Curis,iction of the court" especiall3 in instances =here a plea,in+ or motion see>in+ affirmati$e relief is file, an, submitte, to the court for resolution

Other=ise state," a motion for reconsi,eration ma3 be ,ispense, =ith onl3 if there are concrete" compellin+" an, $ali, reasons for ,oin+ so 1596

Be fin, that respon,entsL non#filin+ of a motion for reconsi,eration is Custifiable un,er the circumstances of this case It is not ,ispute, that the trial court" ri+htl3 or =ron+l3" consi,ere, them to ha$e $oluntaril3 submitte, to its Curis,iction b3 $irtue of their motion for inhibition Thus" respon,entsL apprehension that the motion for reconsi,eration mi+ht be construe, as further manifestin+ their $oluntar3 appearance is certainl3 =ell#+roun,e, The3 ma3 not" therefore" be faulte, for ha$in+ resorte, imme,iatel3 to a special ci$il action for certiorari

Measure, a+ainst these stan,ar,s" it is rea,il3 apparent that respon,ents ha$e acGuiesce, to the Curis,iction of the trial court as earl3 as %une -." 044A" =hen the3 file, their Motion to Dismiss for 2ailure to Prosecute Si+nificantl3" the motion ,i, not cate+oricall3 an, e:pressl3 raise the Curis,iction of the court o$er their persons as an issue It merel3 ;i< Eremin,e,F the court of its purporte,l3 conflictin+ Or,ers in respect of summons b3 publication" ;ii< alle+e, that because petitioner Ehas not lifte, a fin+er to pursue this case a+ainst mo$ants# ,efen,ants"F the case ma3 be ,ismisse, for failure to prosecute" an, ;iii< pra3e,

a,,itionall3 for the ,eletion of the Notice of )is Pen,ens in,icate, at the bac> of the transfer certificates of title co$erin+ the subCect properties Be note" furthermore" that the motion faile, to Gualif3 the capacit3 in =hich respon,ents =ere appearin+ an, see>in+ recourse 1?-6 It is in this li+ht that the CourtLs pronouncement in !usue+o $ Court of (ppeals1?06 fin,s co+ent application7 ( $oluntar3 appearance is a =ai$er of the necessit3 of a formal notice (n appearance in =hate$er form" =ithout e:plicitl3 obCectin+ to the Curis,iction of the court o$er the person" is a submission to the Curis,iction of the court o$er the person Bhile the formal metho, of enterin+ an appearance in a cause pen,in+ in the courts is to ,eli$er to the cler> a =ritten ,irection or,erin+ him to enter the appearance of the person =ho subscribes it" an appearance ma3 be ma,e b3 simpl3 filin+ a formal motion" or plea or ans=er This formal metho, of appearance is not necessar3 He ma3 appear =ithout such formal appearance an, thus submit himself to the Curis,iction of the court He ma3 appear b3 presentin+ a motion" for e:ample" an, unless b3 such appearance he specificall3 obCects to the Curis,iction of the court" he thereb3 +i$es his assent to the Curis,iction of the court o$er his person 1?A6 ;emphasis supplie,<

Respon,ents ar+ue that the trial courtLs so#calle, Econtinuous ,ela3 in the procee,in+sF is in,icati$e of the fact that it is incompetent to continue hearin+ the case Respon,ents therefore assert that the trial court acte, =ith +ra$e abuse of ,iscretion amountin+ to lac> or e:cess of Curis,iction =hen it ,enie, their motion to inhibit an, reGuire, them to file their (ns=er

Be are not con$ince,

&n,er the first para+raph of Section -" Rule -A. of the Rules of Court" a Cu,+e or Cu,icial officer shall be man,atoril3 ,isGualifie, to sit in an3 case in =hich7

!esi,es" an3 lin+erin+ ,oubts on the issue of $oluntar3 appearance ,issipate =hen the respon,entsL motion for inhibition is consi,ere, This motion see>s a sole relief7 inhibition of %u,+e Napoleon Inoturan from further hearin+ the case E$i,entl3" b3 see>in+ affirmati$e relief other than ,ismissal of the case" respon,ents manifeste, their $oluntar3 submission to the courtLs Curis,iction It is =ell#settle, that the acti$e participation of a part3 in the procee,in+s is tantamount to an in$ocation of the courtLs Curis,iction an, a =illin+ness to abi,e b3 the resolution of the case" an, =ill bar sai, part3 from later on impu+nin+ the courtLs Curis,iction 1?56

;a< he" or his =ife or chil," is pecuniaril3 intereste, as heir" le+atee" cre,itor or other=iseH or ;b< he is relate, to either part3 =ithin the si:th ,e+ree of consan+uinit3 or affinit3" or to counsel =ithin the fourth ,e+ree" compute, accor,in+ to the rules of ci$il la=H or ;c< he has been e:ecutor" a,ministrator" +uar,ian" trustee or counselH or

To be sure" the con$enient ca$eat in the title of the motion for inhibition ;i e " E=ithout submittin+ themsel$es to the Curis,iction of this Honorable CourtF< ,oes not ,etract from this conclusion It =oul, suffice to sa3 that the alle+ations in a plea,in+ or motion are ,eterminati$e of its natureH the ,esi+nation or caption thereof is not controllin+ 1??6 2urthermore" no amount of ca$eat can chan+e the fact that respon,ents tellin+l3 si+ne, the motion to inhibit in their o=n behalf an, not throu+h counsel" let alone throu+h a counsel ma>in+ a special appearance

;,< he has presi,e, in an3 inferior court =hen his rulin+ or ,ecision is the subCect of re$ie=" =ithout the =ritten consent of all parties in interest" si+ne, b3 them an, entere, upon the recor, 1?96

Para+raph t=o of the same pro$ision mean=hile pro$i,es for the rule on $oluntar3 inhibition an, states7 E1a6 Cu,+e ma3" in the e:ercise of his soun, ,iscretion" ,isGualif3 himself from sittin+ in a case" for Cust or $ali, reasons other than those mentione, abo$e F That ,iscretion is a matter of conscience an, is a,,resse, primaril3 to the Cu,+eLs sense of fairness an, Custice 1?.6 Be ha$e eluci,ate, on this point in Pimentel $ Salan+a"1?K6 as follo=s7

Thir, Issue7 Inhibition

( Cu,+e ma3 not be le+all3 prohibite, from sittin+ in a liti+ation !ut =hen su++estion is ma,e of recor, that he mi+ht be in,uce, to act in fa$or of one part3 or =ith bias or preCu,ice a+ainst a liti+ant arisin+ out of circumstances reasonabl3 capable of incitin+ such a state of min," he shoul, con,uct a careful self#e:amination He shoul, e:ercise his ,iscretion in a =a3 that the peopleIs faith in the courts of Custice is not impaire, ( salutar3 norm is that he reflect on the probabilit3 that a losin+ part3 mi+ht nurture at the bac> of his min, the thou+ht that the Cu,+e ha, unmeritoriousl3 tilte, the scales of Custice a+ainst him That passion on the part of a Cu,+e ma3 be +enerate, because of serious char+es of miscon,uct a+ainst him b3 a suitor or his counsel" is not alto+ether remote He is a man" subCect to the frailties of other men He shoul," therefore" e:ercise +reat care an, caution before ma>in+ up his min, to act in or =ith,ra= from a suit =here that part3 or counsel is in$ol$e, He coul, in +oo, +race inhibit himself =here that case coul, be hear, b3 another Cu,+e an, =here no appreciable preCu,ice =oul, be occasione, to others in$ol$e, therein On the result of his ,ecision to sit or not to sit ma3 ,epen, to a +reat e:tent the all# important confi,ence in the impartialit3 of the Cu,iciar3 If after reflection he shoul, resol$e to $oluntaril3 ,esist from sittin+ in a case =here his moti$es or fairness mi+ht be seriousl3 impu+ne," his action is to be interprete, as +i$in+ meanin+ an, substances to the secon, para+raph of Section -" Rule -A. He ser$es the cause of the la= =ho forestalls miscarria+e of Custice

them =ith the sti+ma of bias or partialit3 19A6 Moreo$er" e:trinsic e$i,ence is reGuire, to establish bias" ba, faith" malice or corrupt purpose" in a,,ition to palpable error =hich ma3 be inferre, from the ,ecision or or,er itself 1956 The onl3 e:ception to the rule is =hen the error is so +ross an, patent as to pro,uce an ineluctable inference of ba, faith or malice 19?6

Be ,o not fin, an3 abuse of ,iscretion b3 the trial court in ,en3in+ respon,entsL motion to inhibit Our pronouncement in Bebb" et al $ People of the Philippines" et al 1996 is apropos7 ( perusal of the recor,s =ill re$eal that petitioners faile, to a,,uce an3 e:trinsic e$i,ence to pro$e that respon,ent Cu,+e =as moti$ate, b3 malice or ba, faith in issuin+ the assaile, rulin+s Petitioners simpl3 lean on the alle+e, series of a,$erse rulin+s of the respon,ent Cu,+e =hich the3 characteri@e, as palpable errors This is not enou+h Be note that respon,ent Cu,+eIs rulin+s resol$in+ the $arious motions file, b3 petitioners =ere all ma,e after consi,erin+ the ar+uments raise, b3 all the parties :::

The present case not bein+ co$ere, b3 the rule on man,ator3 inhibition" the issue thus turns on =hether %u,+e Napoleon Inoturan shoul, ha$e $oluntaril3 inhibite, himself

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(t the outset" =e un,erscore that =hile a part3 has the ri+ht to see> the inhibition or ,isGualification of a Cu,+e =ho ,oes not appear to be =holl3 free" ,isintereste," impartial an, in,epen,ent in han,lin+ the case" this ri+ht must be =ei+he, =ith the ,ut3 of a Cu,+e to ,eci,e cases =ithout fear of repression 1?/6 Respon,ents conseGuentl3 ha$e no $este, ri+ht to the issuance of an Or,er +rantin+ the motion to inhibit" +i$en its ,iscretionar3 nature 1946

Be hasten to stress that a part3 a++rie$e, b3 erroneous interlocutor3 rulin+s in the course of a trial is not =ithout reme,3 The ran+e of reme,3 is pro$i,e, in our Rules of Court an, =e nee, not ma>e an elon+ate, ,iscourse on the subCect !ut certainl3" the reme,3 for erroneous rulin+s" absent an3 e:trinsic e$i,ence of malice or ba, faith" is not the outri+ht ,isGualification of the Cu,+e 2or there is 3et to come a Cu,+e =ith the omniscience to issue rulin+s that are al=a3s infallible The courts =ill close shop if =e ,isGualif3 Cu,+es =ho err for =e all err ;emphasis supplie,<

Ho=e$er" the secon, para+raph of Rule -A." Section - ,oes not +i$e Cu,+es unfettere, ,iscretion to ,eci,e =hether to ,esist from hearin+ a case 19-6 The inhibition must be for Cust an, $ali, causes" an, in this re+ar," =e ha$e note, that the mere imputation of bias or partialit3 is not enou+h +roun, for inhibition" especiall3 =hen the char+e is =ithout basis 1906 This Court has to be sho=n acts or con,uct clearl3 in,icati$e of arbitrariness or preCu,ice before it can bran,

Truth be tol," respon,ents are not entirel3 blameless for an3 percei$e, ,ela3 in the resolution of the $arious inci,ents of the case 2or instance" the3 ma>e much of the fact that close to three 3ears passe, before their EOmnibus Motion to Dismiss an, to (nnul (ll the Procee,in+s Ta>en (+ainst the Defen,ants"F file, on December --" -//K" =as note, b3 the trial court !ut the fact remains that the sai, Emotion"F not ha$in+ a notice of hearin+ a,,resse, to the a,$erse part3" is le+all3 a mere scrap of paper 19.6 It presents no Guestion

=hich merits the attention an, consi,eration of the court" an, is not entitle, to Cu,icial co+ni@ance 19K6

Consi,erin+ the fore+oin+" =e rule that respon,entsL accusations of ,ela3" incompetence" an, bias on the part of the trial court are unfoun,e, Hence" the3 are not entitle, to the inhibition of %u,+e Inoturan as a relief

IN VIEB BHEREO2" the Petition is hereb3 'R(NTED The Decision ,ate, %ul3 -K" 044? of the Court of (ppeals an, its Resolution ,ate, %anuar3 -4" 0449 are hereb3 REVERSED an, SET (SIDE" an, another in their stea, is hereb3 ren,ere, ORDERIN' respon,ent Spouses D3 an, Chu3aco to ans=er the Complaint in Ci$il Case No /5#-?K? =ithin fifteen ;-?< ,a3s from receipt of this Decision

The trial court is ,irecte, to procee, hearin+ the case" an, to resol$e the same =ith ,ispatch

No costs

SO ORDERED