[G.R. No. 124642. February 23, 2004.

]
ALFREDO CHING and ENCARNACION
CHING, petitioners, vs. THE HON.
COURT OF APPEALS and ALLIED
BANKING CORPORATION,
respondents.
D E C I S I O N
CALLEJO, SR., J p:
This petition for review, under Rule 45 of the Revised
Rules of Court, assails the Decision 1 of the Court of
Appeals (CA) dated November 27, 1995 in CA-G.R. SP
No. 33585, as well as the Resolution 2 on April 2, 1996
denying the petitioners' motion for reconsideration. The
impugned decision granted the private respondent's
petition for certiorari and set aside the Orders of the trial
court dated December 15, 1993 3 and February 17, 1994
4 nullifying the attachment of 100,000 shares of stocks of
the Citycorp Investment Philippines under the name of
petitioner Alfredo Ching.
The following facts are undisputed:
On September 26, 1978, the Philippine Blooming Mills
Company, Inc. (PBMCI) obtained a loan of P9,000,000.00
from the Allied Banking Corporation (ABC). By virtue of
this loan, the PBMCI, through its Executive Vice-
President Alfredo Ching, executed a promissory note for
the said amount promising to pay on December 22, 1978
at an interest rate of 14%per annum. 5 As added security
for the said loan, on September 28, 1978, Alfredo Ching,
together with Emilio Taedo and Chung Kiat Hua,
executed a continuing guaranty with the ABC binding
themselves to jointly and severally guarantee the
payment of all the PBMCI obligations owing the ABC to
the extent of P38,000,000.00. 6 The loan was
subsequently renewed on various dates, the last renewal
having been made on December 4, 1980. 7
Earlier, on December 28, 1979, the ABC extended
another loan to the PBMCI in the amount of
P13,000,000.00 payable in eighteen months at 16%
interest per annum. As in the previous loan, the PBMCI,
through Alfredo Ching, executed a promissory note to
evidence the loan maturing on June 29, 1981. 8 This was
renewed once for a period of one month. 9
The PBMCI defaulted in the payment of all its loans.
Hence, on August 21, 1981, the ABC filed a complaint for
sum of money with prayer for a writ of preliminary
attachment against the PBMCI to collect the
P12,612,972.88 exclusive of interests, penalties and
other bank charges. Impleaded as co-defendants in the
complaint were Alfredo Ching, Emilio Taedo and Chung
Kiat Hua in their capacity as sureties of the PBMCI.
The case was docketed as Civil Case No. 142729 in the
Regional Trial Court of Manila, Branch XVIII. 10 In its
application for a writ of preliminary attachment, the ABC
averred that the "defendants are guilty of fraud in
incurring the obligations upon which the present action is
brought 11 in that they falsely represented themselves to
be in a financial position to pay their obligation upon
maturity thereof." 12 Its supporting affidavit stated, inter
alia, that the "[d]efendants have removed or disposed of
their properties, or [are] ABOUT to do so, with intent to
defraud their creditors." 13
On August 26, 1981, after an ex-parte hearing, the trial
court issued an Order denying the ABC's application for a
writ of preliminary attachment. The trial court decreed
that the grounds alleged in the application and that of its
supporting affidavit "are all conclusions of fact and of
law" which do not warrant the issuance of the writ
prayed for. 14 On motion for reconsideration, however,
the trial court, in an Order dated September 14, 1981,
reconsidered its previous order and granted the ABC's
application for a writ of preliminary attachment on a
bond of P12,700,000. The order, in relevant part, stated:
With respect to the second ground relied
upon for the grant of the writ of preliminary
attachment ex-parte, which is the alleged
disposal of properties by the defendants with
intent to defraud creditors as provided in Sec.
1(e) of Rule 57 of the Rules of Court, the
affidavits can only barely justify the issuance
of said writ as against the defendant Alfredo
Ching who has allegedly bound himself jointly
and severally to pay plaintiff the defendant
corporation's obligation to the plaintiff as a
surety thereof.
WHEREFORE, let a writ of preliminary
attachment issue as against the defendant
Alfredo Ching requiring the sheriff of this
Court to attach all the properties of said
Alfredo Ching not exceeding P12,612,972.82
in value, which are within the jurisdiction of
this Court and not exempt from execution
upon, the filing by plaintiff of a bond duly
approved by this Court in the sum of Twelve
Million Seven Hundred Thousand Pesos
(P12,700,000.00) executed in favor of the
defendant Alfredo Ching to secure the
payment by plaintiff to him of all the costs
which may be adjudged in his favor and all
damages he may sustain by reason of the
attachment if the court shall finally adjudge
that the plaintiff was not entitled thereto.
SO ORDERED. 15
Upon the ABC's posting of the requisite bond, the trial
court issued a writ of preliminary attachment.
Subsequently, summonses were served on the
defendants, 16 save Chung Kiat Hua who could not be
found.
Meanwhile, on April 1, 1982, the PBMCI and Alfredo
Ching jointly filed a petition for suspension of payments
with the Securities and Exchange Commission (SEC),
docketed as SEC Case No. 2250, at the same time
seeking the PBMCI's rehabilitation. 17
On July 9, 1982, the SEC issued an Order placing the
PBMCI's business, including its assets and liabilities,
under rehabilitation receivership, and ordered that "all
actions for claims listed in Schedule "A" of the petition
pending before any court or tribunal are hereby
suspended in whatever stage the same may be until
further orders from the Commission." 18 The ABC was
among the PBMCI's creditors named in the said schedule.
Subsequently, on January 31, 1983, the PBMCI and
Alfredo Ching jointly filed a Motion to Dismiss and/or
motion to suspend the proceedings in Civil Case No.
142729 invoking the PBMCI's pending application for
suspension of payments (which Ching co-signed) and
over which the SEC had already assumed jurisdiction. 19
On February 4, 1983, the ABC filed its Opposition
thereto. 20
In the meantime, on July 26, 1983, the deputy sheriff of
the trial court levied on attachment the 100,000 common
shares of Citycorp stocks in the name of Alfredo Ching.
21
Thereafter, in an Order dated September 16, 1983, the
trial court partially granted the aforementioned motion
by suspending the proceedings only with respect to the
PBMCI. It denied Ching's motion to dismiss the
complaint/or suspend the proceedings and pointed out
that P.D. No. 1758 only concerns the activities of
corporations, partnerships and associations and was
never intended to regulate and/or control activities of
individuals. Thus, it directed the individual defendants to
file their answers. 22
Instead of filing an answer, Ching filed on January 14,
1984 a Motion to Suspend Proceedings on the same
ground of the pendency of SEC Case No. 2250. This
motion met the opposition from the ABC. 23
On January 20, 1984, Taedo filed his Answer with
counterclaim and cross-claim. 24 Ching eventually filed
his Answer on July 12, 1984. 25
On October 25, 1984, long after submitting their
answers, Ching filed an Omnibus Motion, 26 again praying
for the dismissal of the complaint or suspension of the
proceedings on the ground of the July 9, 1982 Injunctive
Order issued in SEC Case No. 2250. He averred that as a
surety of the PBMCI, he must also necessarily benefit
from the defenses of his principal. The ABC opposed
Ching's omnibus motion.
Emilio Y. Taedo, thereafter, filed his own Omnibus
Motion 27 praying for the dismissal of the complaint,
arguing that the ABC had "abandoned and waived" its
right to proceed against the continuing guaranty by its
act of resorting to preliminary attachment.
On December 17, 1986, the ABC filed a Motion to
Reduce the amount of his preliminary attachment bond
from P12,700,000 to P6,350,000. 28 Alfredo Ching
opposed the motion, 29 but on April 2, 1987, the court
issued an Order setting the incident for further hearing
on May 28, 1987 at 8:30 a.m. for the parties to adduce
evidence on the actual value of the properties of Alfredo
Ching levied on by the sheriff. 30
On March 2, 1988, the trial court issued an Order
granting the motion of the ABC and rendered the
attachment bond of P6,350,000. 31
On November 16, 1993, Encarnacion T. Ching, assisted
by her husband Alfredo Ching, filed a Motion to Set Aside
the levy on attachment. She alleged inter alia that the
100,000 shares of stocks levied on by the sheriff were
acquired by her and her husband during their marriage
out of conjugal funds after the Citycorp Investment
Philippines was established in 1974. Furthermore, the
indebtedness covered by the continuing
guaranty/comprehensive suretyship contract executed by
petitioner Alfredo Ching for the account of PBMCI did not
redound to the benefit of the conjugal partnership. She,
likewise, alleged that being the wife of Alfredo Ching, she
was a third-party claimant entitled to file a motion for the
release of the properties. 32 She attached therewith a
copy of her marriage contract with Alfredo Ching. 33
The ABC filed a comment on the motion to quash
preliminary attachment and/or motion to expunge
records, contending that:
2.1The supposed movant, Encarnacion
T. Ching, is not a party to this present
case; thus, she has no personality to
file any motion before this Honorable
Court;
2.2Said supposed movant did not file
any Motion for Intervention pursuant
to Section 2, Rule 12 of the Rules of
Court;
2.3Said Motion cannot even be
construed to be in the nature of a
Third-Party Claim conformably with
Sec. 14, Rule 57 of the Rules of Court.
3.Furthermore, assuming in gratia argumenti
that the supposed movant has the required
personality, her Motion cannot be acted upon
by this Honorable Court as the above-entitled
case is still in the archives and the
proceedings thereon still remains suspended.
And there is no previous Motion to revive the
same. 34

The ABC also alleged that the motion was barred by
prescription or by laches because the shares of stocks
were in custodia legis.
During the hearing of the motion, Encarnacion T. Ching
adduced in evidence her marriage contract to Alfredo
Ching to prove that they were married on January 8,
1960; 35 the articles of incorporation of Citycorp
Investment Philippines dated May 14, 1979; 36 and, the
General Information Sheet of the corporation showing
that petitioner Alfredo Ching was a member of the Board
of Directors of the said corporation and was one of its
top twenty stockholders.
On December 10, 1993, the Spouses Ching filed their
Reply/Opposition to the motion to expunge records.
Acting on the aforementioned motion, the trial court
issued on December 15, 1993 an Order 37 lifting the writ
of preliminary attachment on the shares of stocks and
ordering the sheriff to return the said stocks to the
petitioners. The dispositive portion reads:
WHEREFORE, the instant Motion to Quash
Preliminary Attachment, dated November 9,
1993, is hereby granted. Let the writ of
preliminary attachment subject matter of said
motion, be quashed and lifted with respect to
the attached 100,000 common shares of
stock of Citycorp Investment Philippines in
the name of the defendant Alfredo Ching, the
said shares of stock to be returned to him
and his movant-spouse by Deputy Sheriff
Apolonio A. Golfo who effected the levy
thereon on July 26, 1983, or by whoever may
be presently in possession thereof.
SO ORDERED. 38
The plaintiff Allied Banking Corporation filed a motion for
the reconsideration of the order but denied the same on
February 17, 1994. The petitioner bank forthwith filed a
petition for certiorari with the CA, docketed as CA-G.R.
SP No. 33585, for the nullification of the said order of the
court, contending that:
1.The respondent Judge exceeded his
authority thereby acted without
jurisdiction in taking cognizance of,
and granting a "Motion" filed by a
complete stranger to the case.
2.The respondent Judge committed a grave
abuse of discretion in lifting the writ of
preliminary attachment without any
basis in fact and in law, and contrary
to established jurisprudence on the
matter. 39
On November 27, 1995, the CA rendered judgment
granting the petition and setting aside the assailed
orders of the trial court, thus:
WHEREFORE, premises considered, the
petition is GRANTED, hereby setting aside the
questioned orders (dated December 15, 1993
and February 17, 1994) for being null and
void.
SO ORDERED. 40
The CA sustained the contention of the private
respondent and set aside the assailed orders. According
to the CA, the RTC deprived the private respondent of its
right to file a bond under Section 14, Rule 57 of the
Rules of Court. The petitioner Encarnacion T. Ching was
not a party in the trial court; hence, she had no right of
action to have the levy annulled with a motion for that
purpose. Her remedy in such case was to file a separate
action against the private respondent to nullify the levy
on the 100,000 Citycorp shares of stocks. The court
stated that even assuming that Encarnacion T. Ching had
the right to file the said motion, the same was barred by
laches.
Citing Wong v. Intermediate Appellate Court, 41 the CA
ruled that the presumption in Article 160 of the New Civil
Code shall not apply where, as in this case, the
petitioner-spouses failed to prove the source of the
money used to acquire the shares of stock. It held that
the levied shares of stocks belonged to Alfredo Ching, as
evidenced by the fact that the said shares were
registered in the corporate books of Citycorp solely under
his name. Thus, according to the appellate court, the
RTC committed a grave abuse of its discretion amounting
to excess or lack of jurisdiction in issuing the assailed
orders. The petitioners' motion for reconsideration was
denied by the CA in a Resolution dated April 2, 1996.
The petitioner-spouses filed the instant petition for
review on certiorari, asserting that the RTC did not
commit any grave abuse of discretion amounting to
excess or lack of jurisdiction in issuing the assailed
orders in their favor; hence, the CA erred in reversing
the same. They aver that the source of funds in the
acquisition of the levied shares of stocks is not the
controlling factor when invoking the presumption of the
conjugal nature of stocks under Art. 160, 42 and that
such presumption subsists even if the property is
registered only in the name of one of the spouses, in this
case, petitioner Alfredo Ching. 43 According to the
petitioners, the suretyship obligation was not contracted
in the pursuit of the petitioner-husband's profession or
business. 44 And, contrary to the ruling of the CA, where
conjugal assets are attached in a collection suit on an
obligation contracted by the husband, the wife should
exhaust her motion to quash in the main case and not
file a separate suit. 45 Furthermore, the petitioners
contend that under Art. 125 of the Family Code, the
petitioner-husband's gratuitous suretyship, is null and
void ab initio, 46 and that the share of one of the
spouses in the conjugal partnership remains inchoate
until the dissolution and liquidation of the partnership. 47
In its comment on the petition, the private respondent
asserts that the CA correctly granted its petition for
certiorari nullifying the assailed order. It contends that
the CA correctly relied on the ruling of this Court in
Wong v. Intermediate Appellate Court. Citing Cobb-Perez
v. Lantin and G-Tractors, Inc. v. Court of Appeals, the
private respondent alleges that the continuing guaranty
and suretyship executed by petitioner Alfredo Ching in
pursuit of his profession or business. Furthermore,
according to the private respondent, the right of the
petitioner-wife to a share in the conjugal partnership
property is merely inchoate before the dissolution of the
partnership; as such, she had no right to file the said
motion to quash the levy on attachment of the shares of
stocks. HSTCcD
The issues for resolution are as follows: (a) whether
the petitioner-wife has the right to file the motion
to quash the levy on attachment on the 100,000
shares of stocks in the Citycorp Investment
Philippines; (b) whether or not the RTC committed a
grave abuse of its discretion amounting to excess or lack
of jurisdiction in issuing the assailed orders.
On the first issue, we agree with the petitioners that the
petitioner-wife had the right to file the said motion,
although she was not a party in Civil Case No. 142729.
48
In Ong v. Tating, 49 we held that the sheriff may attach
only those properties of the defendant against whom a
writ of attachment has been issued by the court. When
the sheriff erroneously levies on attachment and seizes
the property of a third person in which the said
defendant holds no right or interest, the superior
authority of the court which has authorized the execution
may be invoked by the aggrieved third person in the
same case. Upon application of the third person, the
court shall order a summary hearing for the purpose of
determining whether the sheriff has acted rightly or
wrongly in the performance of his duties in the execution
of the writ of attachment, more specifically if he has
indeed levied on attachment and taken hold of property
not belonging to the plaintiff. If so, the court may then
order the sheriff to release the property from the
erroneous levy and to return the same to the third
person. In resolving the motion of the third party, the
court does not and cannot pass upon the question of the
title to the property with any character of finality. It can
treat the matter only insofar as may be necessary to
decide if the sheriff has acted correctly or not. If the
claimant's proof does not persuade the court of the
validity of the title, or right of possession thereto, the
claim will be denied by the court. The aggrieved third
party may also avail himself of the remedy of "terceria"
by executing an affidavit of his title or right of possession
over the property levied on attachment and serving the
same to the office making the levy and the adverse
party. Such party may also file an action to nullify the
levy with damages resulting from the unlawful levy and
seizure, which should be a totally separate and distinct
action from the former case. The abovementioned
remedies are cumulative and any one of them may be
resorted to by one third-party claimant without availing
of the other remedies. 50
In this case, the petitioner-wife filed her motion to set
aside the levy on attachment of the 100,000 shares of
stocks in the name of petitioner-husband claiming that
the said shares of stocks were conjugal in nature; hence,
not liable for the account of her husband under his
continuing guaranty and suretyship agreement with the
PBMCI. The petitioner-wife had the right to file the
motion for said relief.
On the second issue, we find and so hold that the CA
erred in setting aside and reversing the orders of the
RTC. The private respondent, the petitioner in the CA,
was burdened to prove that the RTC committed a grave
abuse of its discretion amounting to excess or lack of
jurisdiction. The tribunal acts without jurisdiction if it
does not have the legal purpose to determine the case;
there is excess of jurisdiction where the tribunal, being
clothed with the power to determine the case, oversteps
its authority as determined by law, There is grave abuse
of discretion where the tribunal acts in a capricious,
whimsical, arbitrary or despotic manner in the exercise of
its judgment and is equivalent to lack of jurisdiction. 51
It was incumbent upon the private respondent to adduce
a sufficiently strong demonstration that the RTC acted
whimsically in total disregard of evidence material to,
and even decide of, the controversy before certiorari will
lie. A special civil action for certiorari is a remedy
designed for the correction of errors of jurisdiction and
not errors of judgment. When a court exercises its
jurisdiction, an error committed while so engaged does
not deprive it of its jurisdiction being exercised when the
error is committed. 52

After a comprehensive review of the records of the RTC
and of the CA, we find and so hold that the RTC did not
commit any grave abuse of its discretion amounting to
excess or lack of jurisdiction in issuing the assailed
orders.
Article 160 of the New Civil Code provides that all the
properties acquired during the marriage are presumed to
belong to the conjugal partnership, unless it be proved
that it pertains exclusively to the husband, or to the wife.
In Tan v. Court of Appeals, 53 we held that it is not even
necessary to prove that the properties were acquired
with funds of the partnership. As long as the properties
were acquired by the parties during the marriage, they
are presumed to be conjugal in nature. In fact, even
when the manner in which the properties were acquired
does not appear, the presumption will still apply, and the
properties will still be considered conjugal. The
presumption of the conjugal nature of the properties
acquired during the marriage subsists in the absence of
clear, satisfactory and convincing evidence to overcome
the same. 54
In this case, the evidence adduced by the petitioners in
the RTC is that the 100,000 shares of stocks in the
Citycorp Investment Philippines were issued to and
registered in its corporate books in the name of the
petitioner-husband when the said corporation was
incorporated on May 14, 1979. This was done during the
subsistence of the marriage of the petitioner-spouses.
The shares of stocks are, thus, presumed to be the
conjugal partnership property of the petitioners. The
private respondent failed to adduce evidence that the
petitioner-husband acquired the stocks with his exclusive
money. 55 The barefaced fact that the shares of stocks
were registered in the corporate books of Citycorp
Investment Philippines solely in the name of the
petitioner-husband does not constitute proof that the
petitioner-husband, not the conjugal partnership, owned
the same. 56 The private respondent's reliance on the
rulings of this Court in Maramba v. Lozano 57 and
Associated Insurance & Surety Co., Inc. v. Banzon, 58 is
misplaced. In the Maramba case, we held that where
there is no showing as to when the property was
acquired, the fact that the title is in the wife's name
alone is determinative of the ownership of the property.
The principle was reiterated in the Associated Insurance
case where the uncontroverted evidence showed that the
shares of stocks were acquired during the marriage of
the petitioners.
Instead of fortifying the contention of the respondents,
the ruling of this Court in Wong v. Intermediate
Appellate Court 59 buttresses the case for the petitioners.
In that case, we ruled that he who claims that property
acquired by the spouses during their marriage is not
conjugal partnership property but belongs to one of
them as his personal property is burdened to prove the
source of the money utilized to purchase the same. In
this case, the private respondent claimed that the
petitioner-husband acquired the shares of stocks from
the Citycorp Investment Philippines in his own name as
the owner thereof. It was, thus, the burden of the
private respondent to prove that the source of the
money utilized in the acquisition of the shares of stocks
was that of the petitioner-husband alone. As held by the
trial court, the private respondent failed to adduce
evidence to prove this assertion.
The CA, likewise, erred in holding that by executing a
continuing guaranty and suretyship agreement with the
private respondent for the payment of the PBMCI loans,
the petitioner-husband was in the exercise of his
profession, pursuing a legitimate business. The appellate
court erred in concluding that the conjugal partnership is
liable for the said account of PBMCI under Article 161(1)
of the New Civil Code.
Article 161(1) of the New Civil Code (now Article 121[2
and 3] 60 of the Family Code of the Philippines) provides:
Art. 161.The conjugal partnership shall be
liable for:
(1)All debts and obligations contracted
by the husband for the benefit
of the conjugal partnership, and
those contracted by the wife,
also for the same purpose, in
the cases where she may
legally bind the partnership.
The petitioner-husband signed the continuing guaranty
and suretyship agreement as security for the payment of
the loan obtained by the PBMCI from the private
respondent in the amount of P38,000,000. In Ayala
Investment and Development Corp. v. Court of Appeals,
61 this Court ruled "that the signing as surety is certainly
not an exercise of an industry or profession. It is not
embarking in a business. No matter how often an
executive acted on or was persuaded to act as surety for
his own employer, this should not be taken to mean that
he thereby embarked in the business of suretyship or
guaranty."
For the conjugal partnership to be liable for a liability
that should appertain to the husband alone, there must
be a showing that some advantages accrued to the
spouses. Certainly, to make a conjugal partnership
responsible for a liability that should appertain alone to
one of the spouses is to frustrate the objective of the
New Civil Code to show the utmost concern for the
solidarity and well being of the family as a unit. The
husband, therefore, is denied the power to assume
unnecessary and unwarranted risks to the financial
stability of the conjugal partnership. 62
In this case, the private respondent failed to prove that
the conjugal partnership of the petitioners was benefited
by the petitioner-husband's act of executing a continuing
guaranty and suretyship agreement with the private
respondent for and in behalf of PBMCI. The contract of
loan was between the private respondent and the
PBMCI, solely for the benefit of the latter. No
presumption can be inferred from the fact that when the
petitioner-husband entered into an accommodation
agreement or a contract of surety, the conjugal
partnership would thereby be benefited. The private
respondent was burdened to establish that such benefit
redounded to the conjugal partnership. 63
It could be argued that the petitioner-husband was a
member of the Board of Directors of PBMCI and was one
of its top twenty stockholders, and that the shares of
stocks of the petitioner-husband and his family would
appreciate if the PBMCI could be rehabilitated through
the loans obtained; that the petitioner-husband's career
would be enhanced should PBMCI survive because of the
infusion of fresh capital. However, these are not the
benefits contemplated by Article 161 of the New Civil
Code. The benefits must be those directly resulting from
the loan. They cannot merely be a by-product or a spin-
off of the loan itself. 64
This is different from the situation where the husband
borrows money or receives services to be used for his
own business or profession. In the Ayala case, we ruled
that it is such a contract that is one within the term
"obligation for the benefit of the conjugal partnership."
Thus:
(A)If the husband himself is the principal
obligor in the contract, i.e., he directly
received the money and services to be used
in or for his own business or his own
profession, that contract falls within the term
". . . obligations for the benefit of the
conjugal partnership." Here, no actual benefit
may be proved. It is enough that the benefit
to the family is apparent at the time of the
signing of the contract. From the very nature
of the contract of loan or services, the family
stands to benefit from the loan facility or
services to be rendered to the business or
profession of the husband. It is immaterial, if
in the end, his business or profession fails or
does not succeed. Simply stated, where the
husband contracts obligations on behalf of
the family business, the law presumes, and
rightly so, that such obligation will redound
to the benefit of the conjugal partnership. 65
The Court held in the same case that the rulings of the
Court in Cobb-Perez and G-Tractors, Inc. are not
controlling because the husband, in those cases,
contracted the obligation for his own business. In this
case, the petitioner-husband acted merely as a surety for
the loan contracted by the PBMCI from the private
respondent.
IN LIGHT OF ALL THE FOREGOING, the petition is
GRANTED. The Decision and Resolution of the Court of
Appeals are SET ASIDE AND REVERSED. The assailed
orders of the RTC are AFFIRMED.
SO ORDERED.
[G.R. No. 156067. August 11, 2004.]
MADRIGAL TRANSPORT, INC.,
petitioner, vs. LAPANDAY HOLDINGS
CORPORATION; MACONDRAY AND
COMPANY, INC., and LUIS P.
LORENZO JR., respondents.
D E C I S I O N
PANGANIBAN, J p:
The special civil action for certiorari and appeal are two
different remedies that are mutually exclusive; they are
not alternative or successive. Where appeal is available,
certiorari will not prosper, even if the ground therefor is
grave abuse of discretion. Basic is the rule that certiorari
is not a substitute for the lapsed remedy of appeal.
The Case
Before us is a Petition for Review 1 under Rule 45 of the
Rules of Court, assailing the February 28, 2002 Decision
2 and the November 5, 2002 Resolution 3 of the Court of
Appeals (CA) in CA-GR SP No. 54861. The challenged
Decision disposed as follows:
"WHEREFORE, in consideration of the
foregoing premises, private respondents
Lapanday and Lorenzo, Jr.'s Motion for
Reconsideration dated 10 February 2000 is
GRANTED. Accordingly, the Resolution dated
10 January 2000 is RECONSIDERED and SET
ASIDE, thereby dismissing the Petition for
Certiorari dated 10 September 1999." 4
The assailed Resolution denied reconsideration.
The Facts
The pertinent facts are undisputed. On February 9, 1998,
Petitioner Madrigal Transport, Inc. ("Madrigal") filed a
Petition for Voluntary Insolvency before the Regional
Trial Court (RTC) of Manila, Branch 49. 5 Subsequently,
on February 21, 1998, petitioner filed a Complaint for
damages against Respondents Lapanday Holdings
Corporation ("Lapanday"), Macondray and Company, Inc.
("Macondray"), and Luis P. Lorenzo Jr. before the RTC of
Manila, Branch 36. 6
In the latter action, Madrigal alleged (1) that it had
entered into a joint venture agreement with Lapanday
for the primary purpose of operating vessels to service
the shipping requirements of Del Monte Philippines, Inc.;
7 (2) that it had done so on the strength of the
representations of Lorenzo, in his capacity either as
chairman of the board or as president of Del Monte,
Lapanday and Macondray; (3) that Macondray had
thereafter been appointed allegedly upon the
insistence of Lapanday as broker, for the purpose of
securing charter hire contracts from Del Monte; (4) that
pursuant to the joint venture agreement, Madrigal had
purchased a vessel by obtaining a P10,000,000 bank
loan; and (5) that contrary to their representations and
guarantees and despite demands, Lapanday and Lorenzo
had allegedly been unable to deliver those Del Monte
charter hire contracts. 8
On February 23, 1998, the insolvency court (RTC Branch
49) declared petitioner insolvent. 9 On March 30, 1998
and April 6, 1998, Respondents Lapanday, Lorenzo and
Macondray filed their respective Motions to Dismiss the
case pending before the RTC Branch 36. 10
On December 16, 1998, Branch 36 granted the Motion,
for failure of the Complaint to state a cause of action.
Applying Sections 32 and 33 of the Insolvency Law, 11
the trial court opined that upon the filing by Madrigal of
a Petition for Voluntary Insolvency, the latter lost the
right to institute the Complaint for Damages. The RTC
ruled that the exclusive right to prosecute the actions
belonged to the court-appointed assignee. 12
On January 26, 1999, petitioner filed a Motion for
Reconsideration, 13 which was later denied on July 26,
1999. 14 Subsequently, petitioner filed a Petition for
Certiorari with the Court of Appeals, seeking to set aside
the December 16, 1998 and the July 26, 1999 Orders of
the trial court. 15 On September 29, 1999, the CA issued
a Resolution requiring petitioner to explain why its
Petition should not be dismissed outright, on the ground
that the questioned Orders should have been elevated by
ordinary appeal. 16
On January 10, 2000, the appellate court ruled that since
the main issue in the instant case was purely legal, the
Petition could be treated as one for review as an
exception to the general rule that certiorari was not
proper when appeal was available. 17 Respondents
Lapanday and Lorenzo challenged this ruling through a
Motion for Reconsideration dated February 10, 2000. 18
The CA heard the Motion for Reconsideration in oral
arguments on April 7, 2000. 19
Ruling of the Court of Appeals
On February 28, 2002, the appellate court issued the
assailed Decision granting Respondents Lapanday and
Lorenzo's Motion for Reconsideration and dismissing
Madrigal's Petition for Certiorari. The CA opined that an
order granting a motion to dismiss was final and thus the
proper subject of an appeal, not certiorari. 20
Furthermore, even if the Petition could be treated as an
appeal, it would still have to be dismissed for lack of
jurisdiction, according to the CA. 21 The appellate court
held that the issues raised by petitioner involved pure
questions of law that should be brought to the Supreme
Court, pursuant to Section 2 of Rule 50 and Section 2(c)
of Rule 41 of the Rules of Court. 22
Hence, this Petition. 23
The Issues
In its Statement of Issues, petitioner contends:
"I
The Honorable Court of Appeals
committed egregious error by ruling
that the order of the lower court which
granted private respondents' Motions to
Dismiss are not proper subjects of a
Petition for Certiorari under Rule 65. DaIACS
'A.Section 5, Rule 16 does not apply in
the present case since the grounds for
dismissal [were] petitioner's purported
lack of capacity to sue and its failure
to state a cause of action against
private respondents, and not any of
the three (3) grounds provided under
said provision, namely, res judicata,
extinction of the claim, and Statute of
Frauds.
'B.Section 1 of Rule 41, which is the
applicable provision in petitioner's
case, expressly proscribes the taking
of an appeal from an order denying a
motion for reconsideration or one
which dismisses an action without
prejudice, instead, the proper remedy
is a special civil action under Rule 65.
'C.A petition for certiorari under Rule
65 was correctly resorted to by
petitioner from the dismissal order of
the lower court, which had clearly
acted with grave abuse of discretion
amounting to lack of jurisdiction.
"II
The Honorable Court of Appeals
committed serious error in ruling that it
had no jurisdiction to entertain the
Petition for Certiorari filed by petitioner
before it.
'A.Section 2, Rule 50 nor Section 2(c)
and Section 2(c), Rule 41 find no
application in the present case, since
said rule contemplates of a case where
an appeal is the proper remedy, and
not where the appropriate remedy is a
petition for certiorari where questions
of facts and laws may be reviewed by
the court a quo.
"B.The court a quo erroneously
concluded that it has no jurisdiction
over the subject matter of the petition
based on the wrong premise that an
appeal from the lower court's dismissal
order is the proper remedy by
applying Section 2, Rule 50 and
Section 2(c), Rule 41 of the Rules of
Court." 24
The Court's Ruling
The Petition is unmeritorious.
First Issue:
Remedy Against Dismissal of Complaint
The resolution of this case hinges on the proper remedy:
an appeal or a petition for certiorari. Petitioner claims
that it correctly questioned the trial court's Order through
its Petition for Certiorari. Respondents insist that an
ordinary appeal was the proper remedy. We agree with
respondents.
Appeal
Under Rule 41, Rules of Court, an appeal may be taken
from a judgment or final order that completely disposes
of the case, or of a particular matter therein when
declared by the Rules of Court to be appealable. 25 The
manner of appealing an RTC judgment or final order is
also provided in Rule 41 as follows:
Section 2.Modes of appeal.
(a)Ordinary appeal. The appeal to the
Court of Appeals in cases decided by the
Regional Trial Court in the exercise of its
original jurisdiction shall be taken by filing a
notice of appeal with the court which
rendered the judgment or final order
appealed from and serving a copy thereof
upon the adverse party. No record on appeal
shall be required except in special
proceedings and other cases of multiple or
separate appeals where the law or these
Rules so require. In such cases, the record
on appeal shall be filed and served in like
manner.
(b)Petition for review. The appeal to the
Court of Appeals in cases decided by the
Regional Trial Court in the exercise of its
appellate jurisdiction shall be by petition for
review in accordance with Rule 42.
(c)Appeal by certiorari. In all cases where
only questions of law are raised or involved,
the appeal shall be to the Supreme Court by
petition for review on certiorari in accordance
with Rule 45. 26
An order or a judgment is deemed final when it finally
disposes of a pending action, so that nothing more can
be done with it in the trial court. In other words, the
order or judgment ends the litigation in the lower court.
Au contraire, an interlocutory order does not dispose of
the case completely, but leaves something to be done as
regards the merits of the latter. 27
Petition for Certiorari
A petition for certiorari is governed by Rule 65, which
reads:
Section 1.Petition for certiorari. When any
tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or
in excess of its or his jurisdiction, or with
grave abuse of discretion amounting to lack
or excess of its or his jurisdiction, and there
is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of
law, a person aggrieved thereby may file a
verified petition in the proper court, alleging
the facts with certainty and praying that
judgment be rendered annulling or modifying
the proceedings of such tribunal, board or
officer, and granting such incidental reliefs as
law and justice may require. cCSHET
The petition shall be accompanied by a
certified true copy of the judgment, order or
resolution subject thereof, copies of all
pleadings and documents relevant and
pertinent thereto, and a sworn certification of
non-forum shopping as provided in the third
paragraph of Section 3, Rule 46. 28

A writ of certiorarimay be issued only for the correction
of errors of jurisdiction or grave abuse of discretion
amounting to lack or excess of jurisdiction. The writ
cannot be used for any other purpose, as its function is
limited to keeping the inferior court within the bounds of
its jurisdiction. 29
For certiorari to prosper, the following requisites must
concur: (1) the writ is directed against a tribunal, a
board or any officer exercising judicial or quasi-judicial
functions; (2) such tribunal, board or officer has acted
without or in excess of jurisdiction, or with grave abuse
of discretion amounting to lack or excess of jurisdiction;
and (3) there is no appeal or any plain, speedy and
adequate remedy in the ordinary course of law. 30
"Without jurisdiction" means that the court acted with
absolute lack of authority. 31 There is "excess of
jurisdiction" when the court transcends its power or acts
without any statutory authority. 32 "Grave abuse of
discretion" implies such capricious and whimsical
exercise of judgment as to be equivalent to lack or
excess of jurisdiction; in other words, power is exercised
in an arbitrary or despotic manner by reason of passion,
prejudice, or personal hostility; and such exercise is so
patent or so gross as to amount to an evasion of a
positive duty or to a virtual refusal either to perform the
duty enjoined or to act at all in contemplation of law. 33
Appeal and Certiorari Distinguished
Between an appeal and a petition for certiorari, there are
substantial distinctions which shall be explained below.
As to the Purpose. Certiorari is a remedy designed for
the correction of errors of jurisdiction, not errors of
judgment. 34 In Pure Foods Corporation v. NLRC, we
explained the simple reason for the rule in this light:
"When a court exercises its jurisdiction, an
error committed while so engaged does not
deprive it of the jurisdiction being exercised
when the error is committed. If it did, every
error committed by a court would deprive it
of its jurisdiction and every erroneous
judgment would be a void judgment. This
cannot be allowed. The administration of
justice would not survive such a rule.
Consequently, an error of judgment that the
court may commit in the exercise of its
jurisdiction is not correct[a]ble through the
original civil action of certiorari." 35
The supervisory jurisdiction of a court over the
issuance of a writ of certiorari cannot be
exercised for the purpose of reviewing the
intrinsic correctness of a judgment of the lower
court on the basis either of the law or the facts
of the case, or of the wisdom or legal soundness
of the decision. 36 Even if the findings of the court
are incorrect, as long as it has jurisdiction over
the case, such correction is normally beyond the
province of certiorari. 37 Where the error is not
one of jurisdiction, but of an error of law or fact
a mistake of judgment appeal is the remedy. 38
As to the Manner of Filing. Over an appeal, the CA
exercises its appellate jurisdiction and power of review.
Over a certiorari, the higher court uses its original
jurisdiction in accordance with its power of control and
supervision over the proceedings of lower courts. 39 An
appeal is thus a continuation of the original suit, while a
petition for certiorari is an original and independent
action that was not part of the trial that had resulted in
the rendition of the judgment or order complained of. 40
The parties to an appeal are the original parties to the
action. In contrast, the parties to a petition for certiorari
are the aggrieved party (who thereby becomes the
petitioner) against the lower court or quasi-judicial
agency, and the prevailing parties (the public and the
private respondents, respectively). 41
As to the Subject Matter. Only judgments or final orders
and those that the Rules of Court so declare are
appealable. 42 Since the issue is jurisdiction, an original
action for certiorari may be directed against an
interlocutory order of the lower court prior to an appeal
from the judgment; or where there is no appeal or any
plain, speedy or adequate remedy. 43
As to the Period of Filing. Ordinary appeals should be
filed within fifteen days from the notice of judgment or
final order appealed from. 44 Where a record on appeal is
required, the appellant must file a notice of appeal and a
record on appeal within thirty days from the said notice
of judgment or final order. 45 A petition for review should
be filed and served within fifteen days from the notice of
denial of the decision, or of the petitioner's timely filed
motion for new trial or motion for reconsideration. 46 In
an appeal by certiorari, the petition should be filed also
within fifteen days from the notice of judgment or final
order, or of the denial of the petitioner's motion for new
trial or motion for reconsideration. 47
DAaIEc

On the other hand, a petition for certiorari should be
filed not later than sixty days from the notice of
judgment, order, or resolution. 48 If a motion for new
trial or motion for reconsideration was timely filed, the
period shall be counted from the denial of the motion. 49
As to the Need for a Motion for Reconsideration. A
motion for reconsideration is generally required prior to
the filing of a petition for certiorari, in order to afford the
tribunal an opportunity to correct the alleged errors.
Note also that this motion is a plain and adequate
remedy expressly available under the law. 50 Such
motion is not required before appealing a judgment or
final order. 51
Certiorari Not the Proper Remedy if Appeal Is
Available
Where appeal is available to the aggrieved party, the
action for certiorari will not be entertained. Remedies of
appeal (including petitions for review) and certiorari are
mutually exclusive, not alternative or successive. 52
Hence, certiorari is not and cannot be a substitute for an
appeal, especially if one's own negligence or error in
one's choice of remedy occasioned such loss or lapse. 53
One of the requisites of certiorari is that there be no
available appeal or any plain, speedy and adequate
remedy. 54 Where an appeal is available, certiorari will
not prosper, even if the ground therefor is grave abuse
of discretion.
Second Issue:
CA Jurisdiction
Petitioner was ascribing errors of judgment, not
jurisdiction, in its Petition for Certiorari filed with the
Court of Appeals. The issue raised there was the trial
court's alleged error in dismissing the Complaint for lack
of cause of action. Petitioner argues that it could still
institute the Complaint, even if it had filed a Petition for
Insolvency earlier. 55 As petitioner was challenging the
trial court's interpretation of the law posing a question
of law the issue involved an error of judgment, not of
jurisdiction. An error of judgment committed by a
court in the exercise of its legitimate jurisdiction
is not necessarily equivalent to "grave abuse of
discretion." 56
The instant case falls squarely with Barangay Blue Ridge
"A" of QC v. Court of Appeals. 57 In that case, the trial
court granted the Motion to Dismiss on the ground of
failure to state a cause of action. After the Motion for
Reconsideration was denied, petitioner filed a Petition for
Certiorari with the CA. The appellate court denied the
Petition on the ground that the proper remedy was
appeal. Holding that an error of judgment should be
reviewed through an ordinary appeal, this Court upheld
the CA.
The Dismissal a Final Order
An order of dismissal, whether correct or not, is a final
order. 58 It is not interlocutory because the proceedings
are terminated; it leaves nothing more to be done by the
lower court. Therefore the remedy of the plaintiff is to
appeal the order. 59
Petitioner avers that Section 5 of Rule 16 60 bars the
filing of an appeal when the dismissal is based on lack of
cause of action. It adds that Section 5 limits the remedy
of appeal only to dismissals grounded on prior judgments
or on the statute of limitations, or to claims that have
been extinguished or are unenforceable. We find this
interpretation absurd.
The provision is clear. Dismissals on the aforesaid
grounds constitute res judicata. However, such
dismissals are still subject to a timely appeal. For those
based on other grounds, the complaint can be refiled.
Section 5, therefore, confirms that an appeal is the
remedy for the dismissal of an action.
Citing Sections 1(a) and 1(h), Rule 41, 61 petitioner
further claims that it was prohibited from filing an
appeal. Section 1(a) of the said Rule prohibits the filing
of an appeal from an order denying a motion for
reconsideration, because the remedy is to appeal the
main decision as petitioner could have done. In fact,
under Section 9, Rule 37, the remedy against an order
denying a motion for reconsideration is to appeal the
judgment or final order. Section 1(h) does not apply,
because the trial court's Order did not dismiss the action
without prejudice. 62
Exception to the RuleNot Established by
Petitioner
We are not unaware of instances when this Court has
granted certiorari despite the availability of appeal. 63
Where the exigencies of the case are such that the
ordinary methods of appeal may not prove adequate
either in point of promptness or completeness, so that a
partial if not a total failure of justice could result a writ
of certiorari may still be issued. 64 Petitioner cites some
of these exceptions to justify the remedy it has
undertaken with the appellate court, 65 but these are not
applicable to the present factual milieu.
Even assuming that the Order of the RTC was erroneous,
its error did not constitute grave abuse of discretion.
Petitioner asserts that the trial court should not have
dismissed the Complaint or should have at least allowed
the substitution of the assignee in petitioner's stead. 66
These alleged errors of judgment, however, do not
constitute a despotic, capricious, or whimsical exercise of
power. On the contrary, petitioner availed of certiorari
because the 15-day period within which to file an appeal
had already lapsed. Basic is the rule that certiorari is not
a substitute for the lapsed remedy of appeal. DASEac

As previously stressed, appeal not certiorari was
the correct remedy to elevate the RTC's Order granting
the Motion to Dismiss. The appeal, which would have
involved a pure question of law, should have been filed
with the Supreme Court pursuant to Section 2(c) of Rule
41 and Section 2 of Rule 50, 67 Rules of Court.
WHEREFORE, this Petition is DENIED, and the challenged
Decision and Resolution AFFIRMED.
Costs against petitioner.
SO ORDERED.