THIRD DIVISION

[G.R. No. L-41621. February 18, 1999.]

PASTORA VALMONTE,
JOSE
DE
LEON,
AND
JOAQUIN VALMONTE, petitioners, vs. THE HON. COURT OF
APPEALS,
PHILIPPINE
NATIONAL
BANK,
ARTEMIO
VALENTON, AND AREOPAGITA J. JOSON, respondents.
Taada Vivo & Tan for petitioners.
Artemio E. Valenton in his own behalf and his wife A.J. Joson.
SYLLABUS
1. CIVIL
LAW;
CONTRACTS;
MORTGAGE;
EXTRAJUDICIAL
FORECLOSURE; NOTICE AND PUBLICATION REQUIREMENTS;
AFFIDAVIT OF THE EDITOR OF NEWSPAPER TO THE EFFECT THAT
THE NOTICE OF SALE HAD BEEN PUBLISHED IN SAID NEWSPAPER OF
GENERAL CIRCULATION ONCE A WEEK FOR THREE (3)
CONSECUTIVE WEEKS AND THE TESTIMONY OF WITNESSES
ATTESTING TO SUCH FACT CONSTITUTE ENOUGH EVIDENCE OF
PUBLICATION. It is well-settled that non-compliance with the notice and
publication requirements of an extrajudicial foreclosure sale is a factual
issue. Compliance with the statutory requirements is a proven fact and not a
matter of presumption. A mortgagor who alleges absence of any of such
requisites has the burden of establishing the factum probandum. Following
the ruling in Sadang vs. GSIS, the Court of Appeals upheld the validity of the
publication of the notice of extrajudicial foreclosure, holding that the
customary affidavit of the editor of a newspaper, duly introduced in evidence,
is a prima facie proof of said fact. The party alleging non-compliance with the
requisite publication has the onus probandi. Absent any proof to the contrary,
lack of publication has not been substantiated. What is more, the affidavit of
the editor of Nueva Era, to the effect that the notice of sale had been
published in said newspaper of general circulation once a week for three (3)
consecutive weeks, and what Basilio Castro (letter carrier in the province of
Nueva Ecija) and Eugenio de Guzman (former Justice of the Peace and
Mayor of Jaen) testified and attested to constitute enough evidence of
publication. aDATHC
2. ID.; ID.; ID.; ID.; WHEN THERE IS A RIGHT TO REDEEM, THE
INADEQUACY OF THE PRICE IS OF NO MOMENT FOR THE REASON

THAT THE JUDGMENT DEBTOR HAS ALWAYS THE CHANCE TO

REDEEM AND REACQUIRE THE PROPERTY. On the issue of
unconscionably low price paid by the bank for the mortgaged properties, the
purchase price of P5,524,40 was found by the respondent court to suffice. It
is well settled that when there is a right to redeem, inadequacy of price is of
no moment for the reason that the judgment debtor has always the chance to
redeem and reacquire the property. In fact, the property may be sold for less
than its fair market value precisely because the lesser the price the easier for
the owner to effect a redemption.
3. ID.; ID.; ID.; ID.; VALIDITY OF FORECLOSURE SALE UPHELD
DESPITE EXECUTED ON A HOLIDAY; SECTION 31 OF THE REVISED
ADMINISTRATIVE CODE WHICH PROVIDES THAT WHERE THE ACT
REQUIRED OR PERMITTED BY LAW FALLS ON A HOLIDAY, THE ACT
MAY BE DONE ON THE NEXT SUCCEEDING BUSINESS DAY AND
SINCE THE LAW USED THE WORD "MAY," IT IS MERELY
DISCRETIONARY AND CANNOT BE GIVEN A PROHIBITIVE MEANING.
Petitioners further theorized that the foreclosure sale in question should
be invalidated since it was conducted on a holiday. They rely on Section 31
of the Revised Administrative Code, which provides that where the act
required or permitted by law falls on a holiday, the act may be done on the
next succeeding business day. In the case under scrutiny, the auction sale
was made on August 19, 1954, which was declared a holiday by the late
Pres. Ramon Magsaysay. In upholding the validity of the sale, the Court of
Appeals opined "that since the law used the word 'may,' it is merely
discretionary and cannot be given a prohibitive meaning." The Court is of the
same conclusion on the validity of the sale.
4. ID.; ID.; ID.; EQUITABLE PRINCIPLE OF ESTOPPEL; APPLICABLE IN
CASE AT BAR; A PARTY IN INTEREST WHO ENTERS INTO A LAWFUL
AGREEMENT, STIPULATION, COMPROMISE OR ARRANGEMENT
CALCULATED TO BENEFIT HIM IN CONNECTION WITH A MORTGAGE
FORECLOSURE SALE, INEVITABLY AFFIRMS THEREBY THE VALIDITY,
FORCE AND EFFECT OF THE SALE. Another basis for the Court to
uphold the regularity of the extrajudicial foreclosure under controversy is the
equitable principle of estoppel. Petitioner's admission that as mortgagors,
they had asked for an extension of time to redeem subject properties
estopped them from impugning the regularity of the conduct of the sale. It

bears stressing that on October 10, 1955, appellant Joaquin Valmonte (one
of the herein petitioners) sent a letter-request to the appellee bank for
additional time within which to exercise the right of redemption over the
properties at P35,000.00 (Exh. 33-Bank; 8-Valenton). In view of such request
and of the similar request from Congressman Celestino C. Juan, the Bank,
through its Board of Directors (BOD) Resolution No. 1096, extended the
redemption period until December 31, 1955 for the appellants (the
petitioners here) to purchase in cash their properties in the amount of the
total claim of the bank. Did the aforesaid act of seeking an extension of the
redemption period constitute an act of ratification within legal contemplation,
thus rendering the petitioners in estoppel? The answer to this important and
pertinent question is in the affirmative. If a party in interest enters into a
lawful agreement, stipulation, compromise or arrangement calculated to
benefit him in connection with a mortgage foreclosure sale, he inevitably
affirms thereby the validity, force and effect of the sale. Similarly, a party
cannot later on rely upon the supposed defects of the sale. The act of
plaintiffs in asking for an extension of time to redeem the foreclosed
properties estopped them from questioning the foreclosure sale
thereafter. DTAIaH
5. ID.; ID.; ID.; TITLE VALIDLY TRANSFERRED DESPITE THE
EXISTENCE OF A DULY ANNOTATED UNFORECLOSED MORTGAGE
BETWEEN RESPONDENT BANK AND APPELLANTS; REASONS.
Since the appellants failed to redeem within the redemption period and
during the extension agreed upon, the effect of such failure to redeem was to
vest absolute ownership over subject properties purchased. The annotation
of the unforeclosed mortgage even if appearing on the title of Artemio
Valenton did not in any way affect the sale between the latter and PNB. In
fact, since there was merger on the part of PNB prior to the sale to said
Valenton, any lien which the petitioners were claiming as subsisting was
already extinguished. Granting ex gratia argumenti that there was no merger
and the unforeclosed mortgage subsisted, PNB still had the right to sell
subject properties and the party who purchased the same shall only be
subjected to the said encumbrance. Indubitably, petitioners are not the
proper parties to insist that there be a foreclosure because as earlier stated,
the prerogative to decide whether or not to foreclose is with the mortgagee
and not with the mortgagor.

6. ID.; OBLIGATIONS AND CONTRACTS; EXTINGUISHMENT OF

OBLIGATIONS; MERGER; APPLICABLE IN CASE AT BAR; SAID MERGER
TOOK PLACE WHEN DURING THE AUCTION SALE, RESPONDENT
BANK PURCHASED THE PROPERTIES ON WHICH IT HAD ANOTHER
SUBSISTING MORTGAGED CREDIT. Under ordinary circumstances, if a
person has a mortgage credit over a property which was sold in an auction
sale, the only right left to him was to collect its mortgage credit from the
purchaser thereof during the sale conducted. This is so because a mortgage
directly and immediately subjects the property on which it is constituted,
whoever its possessor may be, to the fulfillment of the obligation for the
security of which it was created. However, these steps need not be taken in
the present case because PNB was the purchaser of subject properties and
it did so with full knowledge that it had a mortgage thereon. Obligations are
extinguished by the merger of the rights of the creditor and debtor. In the
case under consideration, the merger took place in the person of PNB, the
principal creditor in the case. The merger was brought about when during the
auction sale, PNB purchased the properties on which it had another
subsisting mortgage credit. This court is bound by the finding of respondent
court that the two loans referred to are separate and distinct and the mere
allegation by petitioners that said loans constitute a single indivisible
obligation should be stricken off as the said allegation is not supported by
evidence. In effect, the mortgage for the P16,000.00 loan was deemed
extinguished. While it is true that there was still an annotation on the Transfer
Certificate of Title issued to respondent Artemio Valenton, the said
annotation or encumbrance was already discharged by operation of law.
Consequently, petitioners' contention that the said title issued to Valenton
was not valid by reason of the said annotation, is devoid of any legal
basis. DCaSHI
PURISIMA, J p:
".
.
.
On
November
5,
1951,
plaintiff-appellant
Joaquin Valmonte sold to his daughter co-appellant Pastora, three
(3) parcels of land, situated in the Municipality of Jaen, Province of
Nueva Ecija, containing a total area of 70.6 hectares (Exhs. 31Bank, 1-Valenton). A few days later, or on Nov. 12, 1951, plaintiffappellant Pastora obtained a crop loan of P16,000.00 from
defendant-appellee Philippine National Bank and as security for

payment thereof, she executed a Real Estate Mortgage, dated

November 12, 1951, in favor of appellee bank involving the same
parcels of land (Exh. J) as covered by Transfer Certificate of Title
No. NT-10423 in the name of said appellant Pastora (Exh. Q-1).
On September 19, 1952, appellant Pastora, then single, executed a
Special Power of Attorney in favor of one Virginia V. del Castelo for
the purpose of borrowing money in the amount of P5,000.00 from
appellee bank with authority to mortgage the same parcels of land
hereinabove mentioned (Exh. A). As a result thereof, a loan of
P5,000.00 payable on demand was granted by appellee bank and
Virginia Castelo executed a Real Estate Mortgage in its favor (Exhs.
6 and 7-Bank, and B).
On June 14, 1954, appellee bank sent a "Notice of Extra-Judicial
Sale of Mortgaged Properties" to the Provincial Sheriff of Nueva
Ecija for publication (Exh. 39-Bank).
On June 20, 1954, appellant Pastora executed a Deed of Sale in
favor of her father co-appellant Joaquin Valmonte selling unto the
latter the same three (3) parcels of land covered by TCT No. NT10423 with the following condition:
"These lands are at present mortgaged to the Philippine National
Bank, and this obligation shall be the subject of future arrangement
between the vendor and vendee herein on the one hand and the
Philippine National Bank on the other before this deed of Sale shall
be operative." (Exh. 2-Valenton)On July 19, 26 and August 2, 1954,
the notice of extrajudicial sale on August 19, 1954 to be held in the
City Hall of Cabanatuan City, for the satisfaction of appellant
Pastora's debt of P5,000.00 plus interests due thereon, was
published in a newspaper called Nueva Era (Exh. 56-Bank). The
same notice was posted in three (3) public and conspicuous places
in the City of Cabanatuan where the scheduled auction sale will
take place and in three (3) public and conspicuous places in the
Municipality of Jaen, Nueva Ecija where the properties are located
(Exh. 38-Bank).
On August 19, 1954, the auction sale was conducted and appellee
bank was the sole and only bidder for P5,524.40. On the same
date, the Provincial Sheriff Ex-Officio issued the corresponding

Minutes of Auction Sale and Certificate of Sale (Exh. C, 55 and 54Bank).

The period of redemption expired on August 19, 1955 (Exh. 65Bank). Appellee bank received a letter-offer, dated August 31, 1955
from a certain Jose Talens to purchase the properties in question
for P27,000.00, P4,000.00 down and the balance payable in five (5)
yearly amortizations (Exh. 40-Bank). In a letter dated September
28, 1955, appellee Artemio Valenton offered to purchase said
properties for P35,000.00 payable upon execution of the contract in
his favor and deposited P1,000.00 as earnest money therefor (Exh.
41-Bank, 7-Valenton). On October 10, 1955, appellant
JoaquinValmonte sent a letter-request to appellee bank for
additional time within which he may repurchase the properties in
question for P35,000.00 (Exh 33-Bank; 8-Valenton). In view thereof
and by reason of the request of Congressman Celestino C. Juan,
appellants were given up to December 31, 1955 to purchase in
cash the properties concerned in the amount of the bank's total
claim. As of September 7, 1955, the Bank's total claims amounted
to P26,926.38, including the P16,000.00 loan obtained by appellant
Pastora in 1951 (Exhs. 66-Bank and 9-Valenton; J; 43-Bank and 58Valenton).
On December 7, 1955, appellant Pastora designated her father, coappellant Joaquin Valmonte as her attorney-in-fact for the purpose
of repurchasing the land from the appellee bank (Exh. H).
Appellants failed to purchase the properties on or before December
31, 1955. Hence, on January 3, 1956, appellee Valenton deposited
the balance of P34,000.00 which the bank accepted [Exhs 47-B
(Bank) and 62-B (Valenton)]. On Jan. 4, 1956, appellee bank
executed the Deed of Absolute Sale in favor of appellee Valenton
(Exhs. 47-Bank, 11-Valenton and 47-C (Bank) as well as an
Affidavit of Consolidation of Ownership (Exh. D-1).
To enable the registration of the properties in the name of appellee
Valenton, appellee Bank, as attorney-in-fact of the mortgagor under
the Real Estate Mortgagor, dated September 30, 1952 (Exh. B),
had to execute a Deed of Sale in its favor on January 5, 1956 (Exh.
E). On January 6, 1956, a "Deed of Confirmation of Sale" was

executed by appellee bank for the main purpose of asserting that

the existing certificate of title covering the parcels of land in
question at that time was TCT No. - NT 18899 of the land registry of
Nueva Ecija in the name of appellee bank (Exh. F). Appellee
Valenton obtained the cancellation of TCT No. NT 18899 and the
issuance of the Registry of Deeds of Nueva Ecija of TCT No. NT18901 in his name (Exhs. S and S-1).
xxx xxx xxx
. . . The present complaint was filed on August 1, 1958; and, after joining the
issues and trial on the merits, the complaint was dismissed on January 27,
1968." 3
The trial court of origin, as earlier alluded to, dismissed the entire case,
disposing, thus:
"PREMISES CONSIDERED, judgment is hereby
rendered in favor of the defendants against the plaintiffs,
dismissing the complaint with costs against the said
plaintiffs.
The counterclaims of the defendants are hereby
dismissed.
SO ORDERED. " 4
Therefrom,
plaintiffs
Pastora Valmonte,
Jose
de
Leon
and
Joaquin Valmonte appealed to the Court of Appeals, which came out with a
judgment of affirmance promulgated on March 24, 1975.
Undaunted, the said plaintiffs found their way to this court via the present
Petition, theorizing that:
A. THIS IS AS CLEAR A CASE AS ANY WHERE PERSONS
HAVE BEEN DEPRIVED OF THEIR PROPERTY WITHOUT
DUE PROCESS OF LAW.
B. THE RESPONDENT COURT OF APPEALS COMMITTED A
GRAVE ERROR WHEN IT HELD, AS DID THE TRIAL COURT,
THAT THE TWO MORTGAGES (P16,000.00 AND P5,000.00)
WERE SEPARATE AND DISTINCT FROM ONE ANOTHER;
WORSE STILL, THAT ONE WAS "JUNIOR" AND THE OTHER
WAS "SENIOR"; THAT THE "MERGER" CAME ABOUT
AFTER THE FORECLOSURE OF THE P5,000.00 PORTION

C.

D.

E.

F.

OF THE MORTGAGE SUCH THAT THE PNB BECAME

CREDITOR AND DEBTOR AT THE SAME TIME.
THE RESPONDENT COURT OF APPEALS COMMITTED A
GRAVE ERROR WHEN IT DID NOT HOLD THAT, FROM THE
VERY EXPRESS PROVISIONS OF THE TWO DOCUMENTS
THE P16,000.00 MORTGAGE, EXH. "J", AND THE
P5,000.00 MORTGAGE, EXH. "B" THE TWO MORTGAGES
MUTUALLY AND IMMEDIATELY MERGED INTO EACH
OTHER AS SECURITY FOR THE SAME TOTALITY OF ALL
OF PETITIONERS' OBLIGATIONS TO RESPONDENT PNB
AT THE MOMENT THE LATER DOCUMENT WAS
EXECUTED ON SEPTEMBER 30, 1952, SO THAT THE
RESULT WAS AN INDIVISIBLE, INSEPARABLE, SINGLE
MORTGAGE
WHICH
CANNOT
BE
FORECLOSED
PARTIALLY; HENCE FORECLOSURE OF THE P5,000.00
MORTGAGE ALONE DID NOT VEST TITLE OVER THE
PROPERTY IN THE PNB.
THE RESPONDENT COURT OF APPEALS COMMITTED A
GRAVE ERROR WHEN IT GAVE ITS IMPRIMATUR TO THE
TRANSFER FROM RESPONDENT PNB TO RESPONDENTS
VALENTON OF PASTORA'S PROPERTY WHICH HAD NOT
BEEN VALIDLY FORECLOSED.
THE RESPONDENT COURT OF APPEALS COMMITTED A
GRAVE ERROR WHEN IT FAILED TO HOLD THAT THE
EXTRA-JUDICIAL FORECLOSURE OF THE P5,000.00
PORTION OF THE MORTGAGE WAS NULL AND VOID
BECAUSE OF FATAL DEFECTS IN THE PUBLICATION OF
THE NOTICE OF FORECLOSURE, THE DAY OF THE
FORECLOSURE, THE PLACE OF THE FORECLOSURE, THE
AUTHORITY
OF
THE
PERSON
CONDUCTING
FORECLOSURE,
AND
THE
REALITY
OF
THE
FORECLOSURE SALE.
THE RESPONDENT COURT OF APPEALS ERRED IN
UPHOLDING THE TRIAL COURT'S DENIAL OF THE
PETITIONERS MOTION FOR LEAVE TO AMEND

COMPLAINT TO CONFORM TO THE EVIDENCE AND FOR

ADMISSION OF THIRD AMENDED COMPLAINT.
The petition is not impressed with merit.
To begin with, succinct and unmistakable is the consistent pronouncement
that the Supreme Court is not a trier of facts. And well entrenched is the
doctrine that pure questions of fact may not be the proper subject of appeal
by certiorari under Rule 45 of the Revised Rules of Court, as this mode of
appeal is generally confined to questions of law. 5
Anent the first error, petitioners theorize: ( 1 ) That there was insufficient
publication of the notice of sale; (2) That the posting of the notice was not in
accordance with law; (3) That the price obtained during the auction sale was
unconscionably low; (4) That the Sheriff who conducted the sale had no
authority to do so; and (5) That the auction sale was void as it was
conducted on a declared holiday.
It is well-settled that non-compliance with the notice and publication
requirements of an extrajudicial foreclosure sale is a factual issue.
Compliance with the statutory requirements is a proven fact and not a matter
of presumption. A mortgagor who alleges absence of any of such requisites
has the burden of establishing the factum probandum. 6
Following the ruling in Sadang vs. GSIS 7 , the Court of Appeals upheld the
validity of the publication of the notice of extrajudicial foreclosure, holding
that the customary affidavit of the editor of a newspaper, duly introduced in
evidence, is aprima facie proof of said fact. The party alleging noncompliance with the requisite publication has the onus probandi. Absent any
proof to the contrary, lack of publication has not been substantiated. What is
more, the affidavit of the editor of Nueva Era, to the effect that the notice of
sale had been published in said newspaper of general circulation once a
week for three (3) consecutive weeks, and what Basilio Castro (letter carrier
in the province of Nueva Ecija) and Eugenio de Guzman (former Justice of
the Peace and Mayor of Jaen) testified and attested to constitute enough
evidence of publication. 8
Petitioners' reliance on the cases of Tan Ten Koc vs. Republic 9 ; Tan Sen
vs. Republic 10 and Tan Khe Shing vs. Republic 11 is misplaced. In the said
cases, in ruling that Nueva Era was not shown to be a newspaper of general
circulation, the Court considered the failure of the applicants to come forward
with positive evidence other than the editor's affidavit. As they were

naturalization cases, the purpose of the publication requirement was to

inform the officers concerned and the public in general of the filing of subject
petitions, to the end that the Solicitor General or the Provincial Fiscal (now
provincial prosecutor) could be furnished whatever derogatory information
and evidence there may be against the applicants or petitioners. There is no
such objective in the publication requirement for extrajudicial foreclosures.
Consequently, the petitioners here cannot rely on the aforecited cases of
different nature to buttress their stance.
The alleged failure to comply with the posting requirement in that: ( 1 ) it was
not posted in three (3) public conspicuous places, and (2) the posting was
not in the municipality where the properties involved or part thereof are
located, was negated by the certificate of posting, dated July 15, 1954, and
the testimony of Deputy Sheriff Jose N. Mendoza. (Exh. 38-Bank; pp. 561563, t.s.n., Feb. 22, 1963) 12
On the issue of unconscionably low price paid by the bank for the mortgaged
properties, the purchase price of P5,524.40 was found by the respondent
court to suffice. It is well settled that when there is a right to redeem,
inadequacy of price is of no moment for the reason that the judgment debtor
has always the chance to redeem and reacquire the property. In fact, the
property may be sold for less than its fair market value precisely because the
lesser the price the easier for the owner to effect a redemption. 13
Petitioners further theorized that the foreclosure sale in question should be
invalidated since it was conducted on a holiday.They rely on Section 31 of
the Revised Administrative Code, which provides that where the act required
or permitted by law falls on a holiday, the act may be done on the next
succeeding business day. In the case under scrutiny, the auction sale was
made on August 19, 1954, which was declared a holiday by the late Pres.
Ramon Magsaysay. In upholding the validity of the sale, the Court of Appeals
opined "that since the law used the word 'may', it is merely discretionary and
cannot be given a prohibitive meaning." 14 The Court is of the same
conclusion on the validity of the sale.
Said the court in the case of Rural Bank of Caloocan, Inc. vs. Court of
Appeals 15 , in holding that Section 31 of the Revised Administrative Code is
not applicable to auction sales:
". . . The pretermission of a holiday applies only where the day or
the last day for doing any act required or permitted by law falls on

a holiday, or when the last day of a given period for doing an act
falls on a holiday. It does not apply to a day fixed by an office or
officer of the government for an act to be done, as distinguished
from a period of time within which an act should be done, which
may be on any day within that specified period. For example, if a
party is required by law to file his answer to a complaint within
fifteen (15) days from receipt of the summons and the last day
falls on a holiday, the last day is deemed moved to the next
succeeding business day. But, if the court fixes the trial of a case
on a certain day but the said date is subsequently declared a
public holiday, the trial thereof is not automatically transferred to
the next succeeding business day. Since April 10, 1961 was not
the day or the last day set by law for the extrajudicial foreclosure
sale, nor the last day of a given period, but a date fixed by the
deputy sheriff, the aforesaid sale cannot legally be made on the
next succeeding business day without the notices of the sale on
that day being posted as prescribed in Sec. 9, Act No. 3135." 16
Conformably, the extrajudicial foreclosure conducted on August 19, 1954
was valid, notwithstanding the fact that the said date was declared a public
holiday. Act 3135 merely requires that sufficient publication and posting of
the notice of sale be caused, as required by law.
The issue concerning the authority of the sheriff to conduct the sale is
factual. This Court is bound by the findings by the trial court, and affirmed by
the respondent court, that the signing by the Provincial Sheriff of the Minutes
of Auction Sale (Exh. 55-Bank) and the Certificate of Sale evinced that the
auction sale was conducted by the Deputy Sheriff under the direction of the
Provincial Sheriff. 17
Another basis for the Court to uphold the regularity of the extrajudicial
foreclosure under controversy is the equitable principle of estoppel.
Petitioners' admission that as mortgagors, they had asked for an extension
of time to redeem subject properties estopped them from impugning the
regularity of the conduct of the sale. It bears stressing that on October 10,
1955, appellant Joaquin Valmonte (one of the herein petitioners) sent a
letter-request to the appellee bank for additional time within which to exercise
the right of redemption over the properties at P35,000.00 (Exh. 33-Bank; 8Valenton). In view of such request and of the similar request from

Congressman Celestino C. Juan, the Bank, through its Board of Directors

(BOD) Resolution No. 1096, extended the redemption period until December
31, 1955 for the appellants (the petitioners here) to purchase in cash their
properties in the amount of the total claim of the bank. 18
Did the aforesaid act of seeking an extension of the redemption period
constitute an act of ratification within legal contemplation, thus rendering the
petitioners in estoppel? The answer to this important and pertinent question
is in the affirmative. If a party in interest enters into a lawful agreement,
stipulation, compromise or arrangement calculated to benefit him in
connection with a mortgage foreclosure sale, he inevitably affirms thereby
the validity, force and effect of the sale. Similarly, a party cannot later on rely
upon the supposed defects of the sale. 19 The act of plaintiffs in asking for
an extension of time to redeem the foreclosed properties estopped them
from questioning the foreclosure sale thereafter. 20
Since the findings by the trial court are supported by the evidence and the
law and the party theorizing upon the alleged irregularities afflicting the
extrajudicial foreclosure sale was unable to prove their imputation;
affirmance of the finding of respondent court is indicated.
Neither is there any sustainable basis for the second assignment of errors
relied upon by petitioners.
Petitioners contend that the respondent court erred in applying the principle
of merger. Mortgagors averred that the two loans should be considered as
one mortgage credit inasmuch as they were constituted between the same
parties and on the same properties. Being a single and indivisible obligation,
the foreclosure sale in connection with the P5,000.00 loan necessarily
included the other loan of P16,000.00. Therefore, there was no outstanding
mortgage credit for the P16,000.00 loan, and PNB being the purchaser at
the auction sale, was not subrogated to answer for any encumbrance on
subject properties.
The Court of Appeals erred not on the application of the principle of merger.
Merger as one of the means of extinguishing an obligation has the following
elements: (1) the merger of the characters of the creditor and debtor must be
in the same person; (2) it must take place in the person of either the principal
creditor or the principal debtor; and (3) it must be complete and definite.
As can be gleaned from the attendant facts and circumstances, there were
two mortgages constituted on subject properties by the appellants. The first

mortgage was for a loan of P16,000.00 and the second one was for a loan of
P5,000.00, by and between petitioners and the PNB. What the Bank did was
to foreclose the second mortgage embodied in a separate mortgage
contract.
Under ordinary circumstances, if a person has a mortgage credit over a
property which was sold in an auction sale, the only right left to him was to
collect its mortgage credit from the purchaser thereof during the sale
conducted. This is so because a mortgage directly and immediately subjects
the property on which it is constituted, whoever its possessor may be, to the
fulfillment of the obligation for the security of which it was
created. 21 However, these steps need not be taken in the present case
because PNB was the purchaser of subject properties and it did so with full
knowledge that it had a mortgage thereon. Obligations are extinguished by
the merger of the rights of the creditor and debtor.
In the case under consideration, the merger took place in the person of PNB,
the principal creditor in the case. The merger was brought about when during
the auction sale, PNB purchased the properties on which it had another
subsisting mortgage credit. This court is bound by the finding of respondent
court that the two loans referred to are separate and distinct and the mere
allegation by petitioners that said loans constitute a single indivisible
obligation should be stricken off as the said allegation is not supported by
evidence. In effect, the mortgage for the P16,000.00 loan was deemed
extinguished. While it is true that there was still an annotation on the Transfer
Certificate of Title issued to respondent Artemio Valenton, the said
annotation or encumbrance was already discharged by operation of law.
Consequently, petitioners' contention that the said title issued to Valenton
was not valid by reason of the said annotation, is devoid of any legal basis.
As aptly held by respondent court:
". . . The purchaser in the extrajudicial sale is appellee bank itself.
As such purchaser, it acquired the right to pay off the claim of the
senior mortgage. However, the senior mortgagee is also appellee
bank. In such a case, Art. 1275 of the New Civil Code as invoked
by defendants-appellees in their respective briefs, to wit:
"ARTICLE 1275. The obligation is extinguished from the time the
characters of creditor and debtor are merged in the same person."

applies. The rights pertaining to the personalities of the debtor

(mortgagor) and of the creditor (mortgagee) are merged and
therefor, in case where the mortgagees of both the senior and junior
mortgages are one and the same (herein appellee bank), and
especially where the mortgagors of said encumbrances are also
one and the same (herein appellant Pastora Valmonte de Leon), the
sale to appellee bank operated to divest the rights of the mortgagor
(appellant Pastora) of her rights and to vest her rights with respect
to the senior mortgage, in the purchaser (appellee bank), subject to
such rights of redemption as may be required by law. Records show
however that appellant mortgagor failed to redeem the property
within the one-year period provided by Act No. 3135, as
amended." 22
With respect to the third assignment of errors, untenable is petitioners'
contention that the failure of PNB to foreclose the first mortgage for the loan
of P16,000.00 was in actuality a pactum commissorium, which is prohibited
by law, and the subsequent transfer by PNB to Valenton of the said property
is a nullity.
Pactum Commissorium takes place when in a mortgage contract, it is
stipulated that the ownership of the property would automatically pass to the
vendee in case no redemption is made within a given period, thus enabling
the mortgagee to acquire ownership of the mortgaged property without need
of foreclosure. 23 It is not so in the present case where there was foreclosure
of the mortgage.
When PNB opted to foreclose only the second mortgage for the loan of
P5,000.00, it was well within its right to do so. The only condition the law
requires in extrajudicial foreclosure is that the loan is already due and
demandable and there was failure on the part of the mortgagor to pay the
mortgage debt. The law does not prohibit a mortgagee from choosing which
of the mortgages in his favor to foreclose. It must be borne in mind that the
power to decide whether to foreclose or not resides in the mortgagee. 24
The next pivotal issue to resolve is whether PNB could transfer a valid title to
respondent Artemio Valenton despite the existence of a duly annotated
unforeclosed mortgage between PNB and the appellants.
The court resolves this issue in the affirmative.

Since the appellants failed to redeem within the redemption period and
during the extension agreed upon, the effect of such failure to redeem was to
vest absolute ownership over subject properties purchased. 25 The
annotation of the unforeclosed mortgage even if appearing on the title of
Artemio Valenton did not in any way affect the sale between the latter and
PNB. In fact, since there was merger on the part of PNB prior to the sale to
said Valenton, any lien which the petitioners were claiming as subsisting was
already extinguished.
Granting ex gratia argumenti that there was no merger and the unforeclosed
mortgage subsisted, PNB still had the right to sell subject properties and the
party who purchased the same shall only be subjected to the said
encumbrance. Indubitably, petitioners are not the proper parties to insist that
there be a foreclosure because as earlier stated, the prerogative to decide
whether or not to foreclose is with the mortgagee and not with the mortgagor.
In light of the foregoing, it is decisively obvious that PNB did not acquire the
mortgaged properties by pactum commissorium, but for failure of the
petitioners to redeem the same. As to the lien which, they claim, should have
hindered the transfer of the certificate of title to the name of Artemio
Valenton, the merger of rights on the part of PNB extinguished whatever
encumbrance there was over the properties deeded out and there is no more
lien to speak of. The transfer of the certificate of title to Artemio Valenton
who was a purchaser for value was valid and the petitioners cannot
effectively defeat the title of Artemio Valenton by claiming otherwise.
WHEREFORE, for lack of merit, the petition is DENIED and the decision of
the Court of Appeals AFFIRMED. No pronouncement as to costs.
SO ORDERED.
Romero, Vitug, Panganiban and Gonzaga-Reyes, JJ., concur.
||| (Valmonte v. Court of Appeals, G.R. No. L-41621, [February 18, 1999],
362 PHIL 616-633)

SECOND DIVISION
[G.R. No. 154745. January 29, 2004.]
COMMISSIONER ANDREA D. DOMINGO, BUREAU OF
IMMIGRATION, petitioner, vs.
HERBERT
MARKUS
EMIL
SCHEER, respondent.
DECISION
CALLEJO, SR., J p:
This is a petition for review under Rule 45 of the Rules of Court, as
amended, of the Decision 1 of the Court of Appeals in CA-G.R. SP No.
71094 granting the respondent's petition for certiorari and prohibition
annulling the order of arrest issued by the petitioner, and permanently
enjoining her from deporting the respondent from the Philippines. Through its
decision, the CA virtually reversed the Summary Deportation Order 2 of the
Board of Commissioners (BOC) and its Omnibus Resolution 3denying the
respondent's Urgent Motion for Reconsideration of said Order, and enjoining
the petitioner from deporting the respondent.
The facts as culled from the records are as follows:
Respondent Herbert Markus Emil Scheer, a native of Ochsenfurt, Germany,
was a frequent visitor of the Philippines. On July 18, 1986, his application for
permanent resident status was granted. 4 The Bureau of Immigration and
Deportation (BID) issued in favor of the respondent Alien Certificate of
Registration No. B-396907 dated September 16, 1987 5 and Immigration
Certificate of Residence No. 256789 dated February 24, 1988. 6 The
Commissioner stated that the granting of the petition would redound to the
benefit of the Filipino people. 7 During his sojourn in the Philippines, the
respondent married widowed Edith delos Reyes 8 with whom he had two
daughters. They had a son, Herbert Scheer, Jr., but he passed away on
November 13, 1995. 9 They resided in Puerto Princesa City, Palawan, where
the respondent established and managed the Bavaria Restaurant. On May
21, 1991, he was appointed Confidential Agent by then NBI Director Alfredo
S. Lim. 10
In a Letter dated June 29, 1995, Vice Consul Jutta Hippelein informed the
Philippine Ambassador to Bonn, Germany, that the respondent had police
records and financial liabilities in Germany. 11
The Department of Foreign Affairs received from the German Embassy in
Manila Note Verbale No. 369/95 dated July 26, 1995, informing it that the

respondent was wanted by the German Federal Police; that a warrant of

arrest had been issued against him; and that the respondent will be served
with an official document requesting him to turn over his German passport to
the Embassy which was invalidated on July 2, 1995. 12 The Embassy
requested the Department of Foreign Affairs to inform the competent
Philippine authorities of the matter. The BOC thereafter issued a Summary
Deportation Order dated September 27, 1997. The penultimate paragraph of
the Order reads:
WHEREFORE,
the
foregoing
considered,
the
Board
Commissioners hereby orders the following:
1. Cancellation of respondent's permanent residence visa;
2. Respondent's summary deportation and permanent exclusion
from the Philippines; and
3. Inclusion of his name on the Bureau's Blacklist.
PROVIDED, however that said summary deportation should be held
in abeyance in case said alien has a pending final and executory
criminal conviction where the imposed penalty is imprisonment, in
which case, he has to serve first such imposed penalty, and/or has
a pending criminal, civil or administrative action and a Hold
Departure Order has been issued or that his presence in said
action is indispensable. In such instances, the alien should remain
in the custody of the Bureau until his turnover to the proper
authorities in case he has to serve imprisonment or in case of
pendency of civil or criminal administrative action, he shall remain
in the custody of the Bureau until such time that his pending cases
shall have been decided, terminated or settled, as the case may be,
unless circumstances demand the immediate implementation of this
summary deportation.
xxx xxx xxx
SO ORDERED. 13
In issuing the said order, the BOC relied on the correspondence from the
German Vice Consul on its speculation that it was unlikely that the German
Embassy will issue a new passport to the respondent; on the warrant of
arrest issued by the District Court of Germany against the respondent for
insurance fraud; and on the alleged illegal activities of the respondent in

Palawan. 14 The BOC concluded that the respondent was not only an
undocumented but an undesirable alien as well.
When the respondent was apprised of the deportation order, he forthwith
aired his side to then BID Commissioner Leandro T. Verceles. The
Commissioner allowed the respondent to remain in the Philippines, giving
the latter time to secure a clearance and a new passport from the German
Embassy. 15 Then Presidential Assistant Teodorico K. Imperial wrote a
Testimonial dated November 24, 1995, in behalf of the respondent
addressed to Commissioner Verceles. Nonetheless, the respondent, through
counsel, filed on December 5, 1995 an Urgent Motion for Reconsideration of
the Summary Deportation Order of the BOC. 16 In his motion, the
respondent alleged, inter alia, that: AcSHCD
1. The elementary rules of due process require notice and
opportunity to be heard before a person can be lawfully deprived of
his right (Ute Paterok vs. Bureau of Customs, 193 SCRA 132). In
the instant case, although it is acknowledged that the Honorable
Office may conduct summary deportation proceedings, respondent
was not given notice and opportunity to be heard before said
Summary Deportation Order was issued. Respondent's right to
procedural due process was therefore violated. Consequently, the
Summary Deportation Order is invalid.
2. In issuing, the Summary Deportation Order, this Honorable Office
relied on Note Verbal No. 369/95 issued by the Embassy of the
Federal Republic of Germany, Manila, notifying the Department of
Foreign Affairs and this Honorable Office about the warrant of arrest
against respondent for alleged illegal insurance fraud and illegal
activities. However, a close scrutiny of said note verbal shows that
nowhere therein does it state that respondent was involved in
insurance fraud or in any kind of illegal activities in Germany or
anywhere else in the world, such as in Palawan. Therefore, the
main basis of the Summary Deportation Order is incompetent as
evidence against respondent who is, like every Filipino, presumed
to be innocent until his guilt is proven beyond reasonable doubt.
3. The power to deport alien is a police power measure necessary
against undesirable alien whose presence in the country is injurious
to the public good and domestic tranquility of the country (Board of

Commissioner Commission on Immigration vs. De la Rosa, 197

SCRA 853). It is respectfully submitted that respondent is not an
undesirable alien. He has stayed in the Philippines for more or less
than (10) years. He has married a Filipina and has three (3) minor
children. He has established his business in Palawan and he has
no police record whatsoever. Respondent has considered the
Philippines his second home and he has nowhere else to go back
to in Germany. Under the circumstances and for humanitarian
considerations, respondent is not an undesirable alien whose
deportation is warranted. Likewise, the mere fact that his passport
was not renewed by the German Embassy does not also
automatically justify the deportation of respondent. 17
However, the BOC did not resolve the respondent's motion. The respondent
was neither arrested nor deported.
Meanwhile, on February 15, 1996, the District Court of Straubing rendered a
Decision dismissing the criminal case against the respondent for physical
injuries. 18 The German Embassy in Manila, thereafter, issued a temporary
passport to the respondent.
In a Letter dated March 1, 1996, the respondent informed Commissioner
Verceles that his passport had been renewed following the dismissal of the
said criminal case. He reiterated his request for the cancellation of the
Summary Deportation Order dated September 27, 1995 and the restoration
of his permanent resident status. 19 Subsequently, on March 12, 1996, the
German Embassy issued to the respondent a regular passport, to expire on
March 11, 2006.
The BOC still failed to resolve the respondent's Urgent Motion for
Reconsideration. Commissioner Verceles did not respond to the
respondent's March 1, 1996 Letter. The respondent remained in the
Philippines and maintained his business in Palawan. On March 20, 1997, the
Department of Labor and Employment approved his application for Alien
Employment Registration Certificate as manager of the Bavaria Restaurant
in Puerto Princesa City.
In the meantime, petitioner Immigration Commissioner Andrea
T. Domingo assumed office. She wrote the German Embassy and inquired if
the respondent was wanted by the German police. On April 12, 2002, the
German Embassy replied that the respondent was not so wanted. 20 At

about midnight on June 6, 2002, Marine operatives and BID agents

apprehended the respondent in his residence on orders of the petitioner. He
was whisked to the BID Manila Office and there held in custody while
awaiting his deportation. Despite entreaties from the respondent's
wife 21 and his employees, the petitioner refused to release the
respondent. 22
Shocked at the sudden turn of events, the respondent promptly
communicated with his lawyer. The latter filed with the BID a motion for bail
to secure the respondent's temporary liberty. On June 11, 2002, the
respondent's counsel filed with the Court of Appeals a petition for certiorari,
prohibition and mandamus with a prayer for temporary restraining order and
writ of preliminary injunction, to enjoin the petitioner from proceeding with the
respondent's
deportation. 23 The
respondent
(petitioner
therein)
alleged, inter alia, that his arrest and detention were premature, unjust,
wrongful, illegal and unconstitutional, effected without sufficient cause and
without jurisdiction or with grave abuse of discretion. He asserted that there
was no speedy remedy open to him in the ordinary course of law 24 and that
his Urgent Motion for Reconsideration of the Summary Deportation Order of
the BOC had not yet been resolved despite the lapse of more than six years.
The respondent averred that he was a fully documented alien, a permanent
resident and a law-abiding citizen. He, thus, prayed as follows:
PRAYER
WHEREFORE, it is most respectfully prayed of this Honorable
Court that:
1. Upon the filing of this Petition, this Honorable Court issue a
Temporary Restraining Order to enjoin respondent Commissioner
from enforcing any order to deport petitioner;
2. After due hearing, a writ of preliminary and mandatory injunction
be correspondingly issued to maintain the status quo pending
resolution of the Petition on the merits.
3. After hearing, judgment be rendered:
a) Directing and mandating respondent Commissioner and the body
she heads to resolve the Motion for Reconsideration filed in 1995,
in his favor, and nullifying or suspending the implementation of any

order, oral or written, she may have issued or issue to deport

petitioner; and
b) Making the injunction in petitioner's favor permanent.
Petitioner likewise prays for such other and further relief as may be
deemed just and equitable in the premises, such as directing
respondent, if Herbert Scheer is deported before the matter is
heard on notice, to authorize his return. 25
The BOC ruled that its September 27, 1995 Order had become final and
executory after the lapse of one year, citing our rulings in Sy vs.
Vivo, 26 and Lou vs. Vivo. 27 The BOC also held that it was not competent
to reverse the September 27, 1995 Order, citing our ruling in Immigration
Commissioner vs. Fernandez. 28 It declared that the respondent may seek
the waiver of his exclusion via deportation proceedings through the
exceptions provided by Commonwealth Act No. 613, 29 Section 29(a)(15),
but that his application for the waiver presupposes his prior removal from the
Philippines.
In a parallel development, the respondent procured a letter from the National
Bureau of Investigation (NBI) in Puerto Princesa City certifying that he had
no pending criminal record. 30 The Puerto Princesa City Philippine National
Police (PNP) also issued a certification that the respondent had no pending
criminal or derogatory records in the said office. 31
Meanwhile, on June 26, 2002, the Court of Appeals issued a status
quo order restraining the petitioner from deporting the respondent on a bond
of P100,000.00. 32 On July 18, 2002, the BOC issued an Omnibus
Resolution dated June 14, 2002,pendente lite denying the respondent's
Urgent Motion for Reconsideration, Motion for Bail/Recognizance, and the
Letter dated June 11, 2002. The decretal portion of the resolution reads:
Wherefore, in view of the foregoing circumstances, we deny the
prayers of the Urgent Motion for Reconsideration of 5 December
1995, the Motion for Bail/Recognizance dated 7 June 2002 and the
Letter of 11 June 2002. Further, we hereby order the following:
1. Subject to the submission of appropriate clearances, the
summary deportation order the respondent Herbert Scheer,
German, under BI Office Memorandum Order No. 34 (series of
1989) and the BOC Summary Deportation Order of 27 September
1995;

2. Permanent exclusion of Herbert Scheer from the Philippines

under C.A. No. 613, Section 40(a)(15).
3. Inclusion of the name of Herbert Scheer in the Immigration Black
List; and
4. Forfeiture of the bail bond, if any, of Herbert Scheer under C.A.
No. 613, Section 40(a)(15).
xxx xxx xxx
IT IS SO ORDERED. 33
During the hearing of the respondent's plea for a writ of preliminary
mandatory injunction before the CA on July 22, 2002, the Office of the
Solicitor General (OSG) manifested that the State had no opposition to the
respondent's re-entry and stay in the Philippines, provided that he leave the
country first and re-apply for admission and residency status with the
assurance that he would be re-admitted. 34 The respondent's counsel
manifested to the appellate court that he had just been informed by the OSG
of the Omnibus Resolution of the BOC dated June 14, 2002.
In her Comment on the Petition, the petitioner (the respondent therein)
alleged, inter alia, the following:
1) that the BOC was an indispensable party to the petition; EaIDAT
2) the petitioner's failure to implead the BOC warranted the denial of
the petition;
3) the allowance by then Immigration Commissioner Leandro
Verceles for the petitioner therein to renew his passport and secure
clearances, even if proved, was not binding on the BOC;
4) the September 27, 1995 Order of the BOC was already
executory when the respondent filed her petition in the CA;
5) the German Embassy's issuance of a new passport did not
legalize the respondent's stay in this country, which became illegal
on July 2, 1995 when his passport expired;
6) the respondent therein did not act with abuse of discretion in
causing the arrest and detention of the respondent based on the
BOC's Summary Deportation Order; and
7) the BOC did not act with grave abuse of discretion in issuing its
Summary Deportation Order and Omnibus Resolution and such
order and resolution were not mooted by the German Embassy's
issuance of a new passport in favor of the respondent.

In view of the Omnibus Resolution of the BOC, the respondent (petitioner

therein) in his Memorandum prayed for the nullification of the BOC's Order,
as well as its Omnibus Resolution denying his Urgent Motion for
Reconsideration considering that with the issuance of a new passport, there
was no more basis for his deportation, thus:
RELIEF
WHEREFORE, it is most respectfully prayed of this Honorable
Court that:
1. Upon the filing of this Memorandum, this Honorable Court
forthwith direct and authorize the immediate release of petitioner,
even on undersigned's recognizance, until further orders from this
Honorable Court;
2. The Summary Deportation Order of September 27, 19[9]5,
affirmed by respondent allegedly on June 14, 2002 and made
known only yesterday, be nullified to the extent that it directs the
deportation of petitioner, who has removed the very basis of said
Order of not having a valid passport, and that the Resolution of
June 14, 2002 be nullified in toto; and,
3. The Temporary Restraining Order of June 26, 2002 be converted
into a permanent injunction or writ of prohibition.
Petitioner likewise prays for such other and further relief as may be
deemed just and equitable in the premises. 35
Surprisingly, the respondent's counsel received on July 24, 2003 a Letter
from the petitioner dated July 16, 2002 stating that, "the BOC was in the
course of reviewing the deportation case against Mr. Scheer, and that its
findings would be given in due time." 36
On August 20, 2002, the Court of Appeals rendered a Decision in favor of
the respondent granting his petition for certiorariand prohibition and
permanently enjoining the petitioner from deporting the respondent. The
decretal portion of the Decision reads:
WHEREFORE, premises considered, the petitions for certiorari and
prohibition are hereby GRANTED. Accordingly, any order, oral or
written, issued by respondent Commissioner Domingo against
petitioner, in relation to his deportation, is hereby ANNULLED, and
respondent
Commissioner Domingo is
hereby
permanently

enjoined/prohibited from deporting petitioner, in so far as this case

is concerned.
It is likewise ordered that petitioner be released from his
confinement/detention in the Bureau of Immigration UNLESS there
is/are fresh new grounds/cases that will warrant his continued
detention.
SO ORDERED. 37
The Court of Appeals ruled that the German Embassy's subsequent
issuance of passport to the respondent before the BOC's issuance of its
Omnibus Resolution had mooted the September 27, 1995 Summary
Deportation Order, as well as the arrest and detention of the respondent.
According to the court, it made no sense to require the respondent to leave
the country and thereafter re-apply for admission with the BOC.
Furthermore, since the grounds cited by the BOC in its Summary
Deportation Order no longer existed, there was no factual and legal basis to
disqualify the respondent from staying in the country.
On the issue of whether the members of the BOC were indispensable
parties, the CA ruled as follows:
a) There are quite a number of cases in relevant jurisprudence
wherein only the Immigration Commissioner was impleaded to
decide whether an alien may stay or be deported, such as in the
case of Vivo vs. Arca (19 SCRA 878) andVivo vs. Cloribel (22
SCRA 159).
b) In the case of Caruncho III vs. COMELEC (315 SCRA 693), it
was pronounced that: "Ordinarily, the nonjoinder of an
indispensable party or the real party interest is not by itself a ground
for the dismissal of the petition. The court before which the petition
is filed must first require the joinder of such party. It is the
noncompliance with said order that would be a ground for the
dismissal of the petition."
thus, c) respondent may be estopped for not raising such issue
earlier. 38
Aggrieved, the respondent therein, now the petitioner, through the Office of
the Solicitor General, appealed to us for relief. The petitioner contends that
the Court of Appeals erred on a question of law in granting the respondent's
petition in CA-G.R. SP No. 71094. 39

In support of his contention, the Solicitor General has submitted the following
arguments:
I. THE WRIT OF MANDAMUS DOES NOT LIE AGAINST THE
COMMISSIONER OF THE BUREAU OF IMMIGRATION TO
RESOLVE
RESPONDENT'S
URGENT
MOTION
FOR
RECONSIDERATION OF THE SUMMARY DEPORTATION
ORDER, CONSIDERING THAT IT IS THE BOARD OF
COMMISSIONERS, AND NOT THE COMMISSIONER ALONE,
WHICH HAS AUTHORITY TO MAKE SAID RESOLUTION.
II. THE WRIT OF CERTIORARI DOES NOT LIE AGAINST THE
COMMISSIONER OF THE BUREAU OF IMMIGRATION,
CONSIDERING THAT IT IS THE BOARD OF COMMISSIONERS,
AND NOT THE COMMISSIONER ALONE, WHICH ISSUED THE
SUMMARY DEPORTATION ORDER AND THE OMNIBUS
RESOLUTION.
III. THE WRIT OF PROHIBITION DOES NOT LIE AGAINST THE
COMMISSIONER OF THE BUREAU OF IMMIGRATION,
PROHIBITING THE IMPLEMENTATION OF THE SUMMARY
DEPORTATION ORDER AND THE OMNIBUS RESOLUTION,
CONSIDERING THAT THE BOARD OF COMMISSIONERS WAS
NOT IMPLEADED AS PARTY-RESPONDENT IN THE PETITION
IN CA-G.R. SP NO. 71094.
IV. ASSUMING BUT WITHOUT ADMITTING THAT THE BOARD
OF COMMISSIONERS WAS PROPERLY IMPLEADED AS PARTYRESPONDENT IN THE PETITION IN CA-G.R. SP NO. 71094,
NEVERTHELESS, THE SUMMARY DEPORTATION ORDER AND
THE OMNIBUS RESOLUTION WERE NOT ISSUED WITHOUT
OR IN EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF (SIC) EXCESS OF
JURISDICTION.
V. FURTHER ASSUMING BUT WITHOUT ADMITTING THAT THE
BOARD OF COMMISSIONERS WAS PROPERLY IMPLEADED AS
PARTY-RESPONDENT IN THE PETITION IN CA-G.R. SP NO.
71094, THE COMMISSIONER OF THE BUREAU OF
IMMIGRATION DID NOT ACT WITHOUT OR IN EXCESS OF
JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN

IMPLEMENTING THE SUMMARY DEPORTATION ORDER AND
THE OMNIBUS RESOLUTION. 40
Elucidating on his first three arguments, the petitioner maintains that the
respondent's petition for certiorari, prohibition andmandamus before the
Court of Appeals should have been dismissed because he failed to implead
the real party-in-interest as mandated by Rule 3, Section 7 of the Rules of
Court, as amended; in this case, the BOC. According to the Solicitor
General, this was a fatal procedural error. The inclusion of the BOC as
respondent in the case was necessary in order that its actions could be
directly attacked and for the court to acquire jurisdiction over it. The fact that
Immigration Commissioner Andrea T.Domingo was impleaded as the sole
respondent was not enough, as she is only one of the four Commissioners.
Furthermore, the assailed Orders were issued by the Board, and not by the
Immigration Commissioner alone.
The respondent counters that the petitioner is already estopped from raising
this issue. He argues that
In quite a number of jurisprudence, only the Immigration
Commissioner is impleaded to decide whether an alien may stay
here or not. The bottom line is petitioner, head of the Bureau of
Immigration, was more than fully heard on its institutional position, a
Bureau which speaks with a single voice in this case. She is in
estoppel for not raising the issue earlier, either in a timely Comment
or during the oral argument . . . 41
In Caruncho III v. Comelec, it was held that
[O]rdinarily, the nonjoinder of an indispensable party or real party in
interest is not by itself a ground for the dismissal of the petition. The
court before which the petition is filed must first require the joinder
of such party. It is the noncompliance with said order that would be
a ground for the dismissal of the petition.
But even as the Court of Appeals did not require respondent of
such joinder of parties, the respondent, in fact, begged leave, ad
cautelam, in its Reply Memorandum dated July 31, 2002 to implead
the Board which speaks with a single voice anyway in this case,
and therefore, no claim can be made that a valid point of view has
not been heard . . . 42

Moreover, according to the respondent, the petitioner is clearly the BID's

chosen instrumentality for the relevant purpose. What the respondent
ultimately questioned are the acts or orders of the petitioner for the arrest
and immediate deportation of the respondent by way of implementing the
BOC's Summary Deportation Order.
By way of reply, the Office of the Solicitor General asserted that the
Summary Deportation Order and Omnibus Resolution were collegial actions
of the BOC and not of the petitioner alone. Although its Chairperson, the
petitioner, is merely a member thereof, her decisions and actions are still
subject to the collective will of the majority. 43
The Ruling of the Court
The BOC is an Indispensable Party
We agree with the petitioner's contention that the BOC was an indispensable
party to the respondent's petition for certiorari, prohibition and mandamus in
the Court of Appeals. The respondent was arrested and detained on the
basis of the Summary Deportation Order of the BOC. The petitioner caused
the arrest of the respondent in obedience to the said Deportation Order. The
respondent, in his Memorandum, prayed that the CA annul not only the
Summary Deportation Order of the BOC but also the latter's Omnibus
Resolution, and, thus, order the respondent's immediate release. The
respondent also prayed that the CA issue a writ of mandamus for the
immediate resolution of his Urgent Motion for Reconsideration. The said
motion had to be resolved by the BOC as the order sought to be resolved
and reconsidered was issued by it and not by the petitioner alone. The
powers and duties of the BOC may not be exercised by the individual
members of the Commission. 44
Section 7, Rule 3 of the Rules of Court, as amended, requires indispensable
parties to be joined as plaintiffs or defendants. The joinder of indispensable
parties is mandatory. Without the presence of indispensable parties to the
suit, the judgment of the court cannot attain real finality. 45 Strangers to a
case are not bound by the judgment rendered by the court. 46 The absence
of an indispensable party renders all subsequent actions of the court null
and void. Lack of authority to act not only of the absent party but also as to
those present. 47 The responsibility of impleading all the indispensable
parties rests on the petitioner/plaintiff. 48

However, the non-joinder of indispensable parties is not a ground for the

dismissal of an action. Parties may be added by order of the court on motion
of the party or on its own initiative at any stage of the action and/or such
times as are just. 49 If the petitioner/plaintiff refuses to implead an
indispensable party despite the order of the court, the latter may dismiss the
complaint/petition for the petitioner/plaintiffs failure to comply therefor. 50 The
remedy is to implead the non-party claimed to be indispensable. 51 In this
case, the CA did not require the respondent (petitioner therein) to implead
the BOC as respondent, but merely relied on the rulings of the Court in Vivo
v. Arca, 52 and Vivo v. Cloribel. 53 The CA's reliance on the said rulings is,
however, misplaced. The acts subject of the petition in the two cases were
those of the Immigration Commissioner and not those of the BOC; hence,
the BOC was not a necessary nor even an indispensable party in the
aforecited cases.
The
Non-joinder
of
an
Indispensable
Party
is not a Ground for the Dismissal of the Petition
The Court may be curing the defect in this case by adding the BOC as partypetitioner. The petition should not be dismissed because the second action
would only be a repetition of the first. 54 In Salvador, et al., v. Court of
Appeals, et al., 55 we held that this Court has full powers, apart from that
power and authority which is inherent, to amend the processes, pleadings,
proceedings and decisions by substituting as party-plaintiff the real party-ininterest. The Court has the power to avoid delay in the disposition of this
case, to order its amendment as to implead the BOC as party-respondent.
Indeed, it may no longer be necessary to do so taking into account the
unique backdrop in this case, involving as it does an issue of public
interest. 56After all, the Office of the Solicitor General has represented the
petitioner in the instant proceedings, as well as in the appellate court, and
maintained the validity of the deportation order and of the BOC's Omnibus
Resolution. It cannot, thus, be claimed by the State that the BOC was not
afforded its day in court, simply because only the petitioner, the Chairperson
of the BOC, 57 was the respondent in the CA, and the petitioner in the
instant recourse. In Alonso v. Villamor, 58 we had the occasion to state:
There is nothing sacred about processes or pleadings, their forms
or contents. Their sole purpose is to facilitate the application of
justice to the rival claims of contending parties. They were created,

not to hinder and delay, but to facilitate and promote, the

administration of justice. They do not constitute the thing itself,
which courts are always striving to secure to litigants. They are
designed as the means best adapted to obtain that thing. In other
words, they are a means to an end. When they lose the character of
the one and become the other, the administration of justice is at
fault and courts are correspondingly remiss in the performance of
their obvious duty.
The
CA
had
Jurisdiction
Over
the
Petition
for Certiorari, Prohibition and Mandamus
We do not agree with the petitioner's contention that the issue before the CA,
as to the power of the President to determine whether an alien may remain
or be deported from the Philippines, is beyond the appellate court's
competence to delve into and resolve. The contention of the petitioner is
based on a wrong premise.
The settled rule is that the authority to exclude or expel aliens by a power
affecting international relation is vested in the political department of the
government, and is to be regulated by treaty or by an act of Congress, and to
be executed by the executive authority according to the regulations so
established, except in so far as the judicial department has been authorized
by treaty or by statute, or is required by the Constitution to intervene. 59 The
judicial department cannot properly express an opinion upon the wisdom or
the justice of the measures executed by Congress in the exercise of the
power conferred on it, 60 by statute or as required by the Constitution.
Congress may, by statute, allow the decision or order of the Immigration
Commissioner or the BOC to be reviewed by the President of the Philippines
or by the courts, on the grounds and in the manner prescribed by law.
Article VIII, Section 1 of the Constitution has vested judicial power in the
Supreme Court and the lower courts such as the Court of Appeals, as
established by law. Although the courts are without power to directly decide
matters over which full discretionary authority has been delegated to the
legislative or executive branch of the government and are not empowered to
execute absolutely their own judgment from that of Congress or of the
President, 61 the Court may look into and resolve questions of whether or
not such judgment has been made with grave abuse of discretion, when the
act of the legislative or executive department violates the law or the

Constitution. In Harvy Bridges v. I.F. Wixon, 62 the United States Federal

Supreme Court reversed an Order of Deportation made by the Attorney
General for insufficiency of evidence and for "improper admission of
evidence." In Nging v. Nagh, 63 the United States Court of Appeals (9th
Circuit Court) held that conclusions of administrative offices on the issues of
facts are invulnerable in courts unless when they are not rendered by fairminded men; hence, are arbitrary. In Toon v. Stump, 64 the Court ruled that
courts may supervise the actions of the administrative offices authorized to
deport aliens and reverse their rulings when there is no evidence to sustain
them. When acts or omissions of a quasi-judicial agency are involved, a
petition for certiorari or prohibition may be filed in the Court of Appeals as
provided by law or by the Rules of Court, as amended. 65
In this case, the respondent alleges that the petitioner acted arbitrarily,
contrary to law and with grave abuse of discretion in causing his arrest and
detention at a time when his Urgent Motion for Reconsideration of the BOC's
Summary Deportation Order had yet to be resolved. There was no factual or
legal basis for his deportation considering that he was a documented alien
and a law-abiding citizen; the respondent, thus, prayed for a writ
of mandamus to compel the petitioner, the Chairperson of the BOC, to
resolve the said motion. The petition before the CA did not involve the act or
power of the President of the Philippines to deport or exclude an alien from
the country. This being so, the petition necessarily did not call for a
substitution of the President's discretion on the matter of the deportation of
the respondent with that of the judgment of the CA.
Irrefragably, the CA had jurisdiction over the petition of the
respondent. DHACES
The BOC Committed a Grave Abuse of Discretion
Amounting to Lack or Excess of Jurisdiction
in Issuing its Summary Deportation Order
and Omnibus Resolution; The Petitioner
Committed a Grave Abuse of Her Discretion
Amounting to Lack or Excess of Jurisdiction
in Causing the Arrest and Detention
of the Private Respondent

On the Solicitor General's fourth and fifth arguments, we are convinced that
the BOC committed a grave abuse of discretion amounting to excess or lack
of jurisdiction in issuing its Summary Deportation Order and Omnibus
Resolution, and that the petitioner committed grave abuse of discretion
amounting to excess or lack of jurisdiction in causing the arrest and
detention of the private respondent.
The settled rule is that the entry or stay of aliens in the Philippines is merely
a privilege and a matter of grace; such privilege is not absolute nor
permanent and may be revoked. However, aliens may be expelled or
deported from the Philippines only on grounds and in the manner provided
for by the Constitution, the Immigration. Act of 1940, as amended, and
administrative issuances pursuant thereto. In Mejoff v. Director of
Prisons, 66 we held, thus:
Moreover, by its Constitution (Art. II, Sec. 3) the Philippines "adopts
the generally accepted principles of international law a part of the
law of Nation." And in a resolution entitled "Universal Declaration of
Human Rights" and approved by the General Assembly of the
United Nations of which the Philippines is a member, at its plenary
meeting on December 10, 1948, the right to life and liberty and all
other fundamental rights as applied to all human beings were
proclaimed. It was there resolved that "All human beings are born
free and equal in degree and rights" (Art. 1); that "Everyone is
entitled to all the rights and freedom set forth in this Declaration,
without distinction of any kind, such as race, color, sex, language,
religion, political or other opinion, nationality or social origin,
property, birth, or other status" (Art. 2); that "Every one has the right
to an effective remedy by the competent national tribunals for acts
violating the fundamental rights granted him by the Constitution or
by law" (Art. 8); that "No one shall be subjected to arbitrary arrest,
detention or exile" (Art. 9); etc.
In this case, the BOC ordered the private respondent's deportation on
September 27, 1995 without even conducting summary deportation
proceedings. The BOC merely relied on the June 29, 1995 Letter of the
German Vice Consul and of the German Embassy's Note Verbale No.
369/95 dated July 26, 1995. It issued the Summary Deportation Order on

September 27, 1995 allegedly under paragraph 3 of Office Memorandum

Order No. 34 dated August 21, 1989 which reads:
3. If a foreign embassy cancels the passport of the alien or does not
reissue a valid passport to him, the alien loses the privilege to
remain in the country, under the Immigration Act, Sections 10 and
15 (Schonemann vs. Santiago, et al., G.R. No. 81461, 30 May
1989). The automatic loss of the privilege obviates deportation
proceedings. In such instance, the Board of Commissioners may
issue summary judgment of deportation which shall be immediately
executory.
However, as gleaned from the Summary Deportation Order, the respondent
was ordered deported not only because his passport had already expired;
the BOC speculated that the respondent committed insurance fraud and
illegal activities in the Philippines and would not, thus, be issued a new
passport. This, in turn, caused the BOC to conclude that the respondent was
an undesirable alien. Section 37(c) of Commonwealth Act No. 613, as
amended, provides that: No alien shall be deported without being informed of
the specific grounds for deportation or without being given a hearing under
rules of procedure to be prescribed by the Commissioner of Immigration.
Under paragraphs 4 and 5 of Office Memorandum Order No. 34, an alien
cannot be deported unless he is given a chance to be heard in a full
deportation hearing, with the right to adduce evidence in his behalf, thus:
4. All other cases shall be tried in full deportation hearing, with due
observance of the pertinent provisions of Law Instruction No. 39.
5. In all cases, the right of the alien to be informed of the charges
against him, to be notified of the time and place of hearing, when
necessary, to examine the evidence against him, and to present
evidence in his own behalf, where appropriate, shall be observed.
The respondent was not afforded any hearing at all. The BOC simply
concluded that the respondent committed insurance fraud and illegal
activities in Palawan without any evidence. The respondent was not afforded
a chance to refute the charges. He cannot, thus, be arrested and deported
without due process of law as required by the Bill of Rights of the
Constitution. InLao Gi v. Court of Appeals, 67 we held that: Although a
deportation proceeding does not partake of the nature of a criminal action,
however, considering that it is a harsh and extraordinary administrative

proceeding affecting the freedom and liberty of a person, the constitutional

right of such person to due process should not be denied. Thus, the
provisions of the Rules of Court of the Philippines particularly on criminal
procedure are applicable to deportation proceedings.
It must be noted that the respondent was a permanent resident before his
passport expired on July 2, 1995. In Chew v.Colding, 68 the United States
Federal Supreme Court ruled:
It is well established that if an alien is a lawful permanent resident
of the United States and remains physically present there, he is a
person within the protection of the Fifth Amendment. He may not be
deprived of his life, liberty or property without due process of law.
Although it later may be established, as respondents contend, that
petitioner can be expelled and deported, yet before his expulsion,
he is entitled to notice of the nature of the charge and a hearing at
least before an executive or administrative tribunal. Although
Congress may prescribe conditions for his expulsion and
deportation, not even Congress may expel him without allowing him
a fair opportunity to be heard.
As Mr. Justice Murphy said in his concurring opinion in Bridges
v. Wixon: 69The Bill of Rights belongs to them as well as to all citizens. It
protects them as long as they reside within the boundaries of our land. It.
protects them in the exercise of the great individual rights necessary to a
sound political and economic democracy.
According to Vattal, 70 an alien who is a permanent resident in a country is a
member of the new society, at least as a permanent inhabitant, and is a kind
of citizen of inferior order from the native citizens; but is, nevertheless,
limited and subject to the society, without participating in all its advantages.
Sir Robert Philconse called them "de facto," though not de jure citizens of the
country of their domicile. 71
Such permanent resident 72 may be classified as a "denizen," a kind of
middle state between alien and a natural-born subject and partakes of both.
Paraphrasing Justice Brewer in his dissenting opinion in Fong Yue Ting
v. United States, 73 when the right to liberty and residence is involved, some
other protection than the mere discretion of the petitioner or the BOC is
required. We recall the warning of the United States Supreme Court in Boyd
v. United States: 74 Illegitimate and unconstitutional practices get their first

footing in that way, namely, by silent approaches and slight deviations from
legal modes of procedure. This can only be obviated by adhering to the rule
that constitutional provisions for the security of person and property should
be liberally construed. A close and literal construction deprives them of half
their efficacy, and leads to a gradual depreciation of the right, as if it
consisted more in sound than in substance. It is the duty of the courts to be
watchful for the constitutional rights of the citizen, and against any stealthy
encroachments thereon. Their motto should be obsta principiis. EScAID
In sum, the arrest and detention of the respondent and his deportation under
the Summary Deportation Order of the BOC for insurance fraud and illegal
activities in Palawan violated his constitutional and statutory rights to due
process.
The Respondent's Arrest and
Detention was Premature,
Unwarranted and Arbitrary
We agree that the Immigration Commissioner is mandated to implement a
legal and valid Summary Deportation Order within a reasonable time. But in
this case, the arrest of the respondent in his house, at near midnight, and his
subsequent detention was premature, unwarranted and arbitrary. Like a
thunderbolt in the sky, the BID agents and marines arrested the respondent
on June 6, 2002, on orders of the petitioner based on the September 27,
1995 Summary Deportation Order. Under the basic rudiments of fair play
and due process, the petitioner was required to first resolve the respondent's
Urgent Motion for Reconsideration of the said Order, which was filed more
than six years before or on December 5, 1995.
It may be argued that respondent's filing of an Urgent Motion for
Reconsideration did not ipso facto suspend the efficacy of the BOC's
deportation order. However, such an argument cannot be sustained in this
case because of the extant and peculiar factual milieu. It bears stressing that
more than six years had elapsed, from the time the Summary Deportation
Order was issued, until the respondent was finally arrested. Supervening
facts and circumstances rendered the respondent's arrest and detention
unjust, unreasonable, barren of factual and legal basis. The BOC should
have set the respondent's motion for hearing to afford him a chance to be
heard and adduce evidence in support thereon. It was bad enough that the

BOC issued its Summary Deportation Order without a hearing; the BOC
dealt the respondent a more severe blow when it refused to resolve his
motion for reconsideration before causing his arrest on June 6, 2002.
As aforestated, the BOC ordered the deportation of the respondent after a
summary proceeding without prior notice on the following grounds: (a) the
respondent's German passport had expired; (b) there was a pending criminal
case for physical injuries against him in Germany; (c) the respondent
indulged in illegal activities in Palawan; (d) that in all likelihood, the
respondent's passport will not be renewed by the German Embassy as he
was wanted for insurance fraud in Germany; and, (e) he was an undesirable
alien. But then, in response to the written query of no less than the petitioner
herself, the German Embassy declared that the respondent was not wanted
by the German police for any crime, including insurance fraud. This could
only mean that the warrant of arrest issued by the German Federal police
mentioned in Note Verbale No. 369/95 had been lifted, and that the
respondent was not involved in any illegal activities in Germany. The criminal
case against the respondent for physical injuries, which does not involve
moral turpitude, was dismissed by the German District Court. Furthermore,
there was no evidence of insurance fraud against the respondent.
The BOC issued its Summary Deportation Order without affording the
respondent the right to be heard on his motion and adduce evidence
thereon. It merely concluded that the respondent was involved in "illegal
activities in Palawan." What made matters worse was that the BOC indulged
in sheer speculation, that the German Embassy is unlikely to issue a new
passport to the respondent. The deportation of aliens should not be based
on mere speculation or a mere product of procrastinations as in this case. As
it turned out, the German Embassy re-issued the respondent's passport; he
was issued a temporary passport, and, thereafter, a regular passport, yet to
expire on March 12, 2006. The petitioner cannot feign ignorance of this
matter because the respondent himself, six years before he was arrested,
informed then Immigration Commissioner Verceles in a Letter dated March 1,
1996. The respondent's letter forms part of the records of the BOC. There is
no evidence on record that the respondent committed any illegal activities in
Palawan. He was even designated as special agent of the NBI, and was, in
fact, issued clearances by the PNP and the NBI no less. Despite all the

foregoing, the petitioner ordered and caused the arrest and detention of the
respondent.
What is most nettlesome is the apparent antedating of the BOC Omnibus
Resolution. The records show that the petitioner sought to assuage the
respondent's concern on the belated resolution of his pending urgent motion
for reconsideration in a Letter to the latter's counsel dated July 18, 2002 in
which the petitioner assured the respondent that the BOC will provide him of
its action on the said motion:
Dear Atty. Sagisag,
We respond to your letter of 17 June 2002 by informing you that the
case of Mr. Herbert Scheer is being evaluated by the Board of
Commissioners (BOC). The BOC will provide you of the results of
its collegial action in due time.
Very truly
yours,
(Sgd.)
ANDREA
D. DOMING
O
Commission
er 75
However, the Omnibus Resolution of the BOC was dated June 14, 2002,
although on its face it was filed with the Records Division of the BID only on
July 18, 2002.
The foregoing gave reason for the CA to suspect that the Omnibus
Resolution of the BOC was antedated. 76 The petition of the respondent in
the CA must have jolted the petitioner and the BOC from its stupor because
it came out with its Omnibus Resolution on July 18, 2002, which was,
however, dated as early as June 14, 2002. The respondent had to wait in
anxiety for the BOC to quench his quest for justice. The BOC's wanton acts
amounted to an abdication of its duty to act and/or resolve cases/incidents
with reasonable dispatch. To recall our ruling in Board of Commissioners
v. De la Rosa, 77 citing Sheor v.Bengson, 78 thus:This inaction or oversight
on the part of the immigration officials has created an anomalous situation
which, for reasons of equity, should be resolved in favor of the minor herein
involved.

The petitioner and the BOC should have taken to heart the following
pronouncement in Commissioner of Immigration v.Fernandez: 79In the face
of the disclosure that Teban Caoili had been all along working in the Avenue
Electrical Supply Co. (Avesco), located at No. 653 Rizal Avenue, Manila,
until his arrest, and the documentary evidence showing that he had been
issued a Philippine Passport; had regularly paid his Residence Tax
Certificates (A & B), and filed Income Tax Returns, a finding of fact is
necessary whether the Commissioner really had intended to notify Teban
Caoili of the exclusion proceedings the Board had conducted in his absence.
While it may be true that the proceedings is purely administrative in nature,
such a circumstance did not excuse the serving of notice. There are cardinal
primary rights which must be respected even in proceedings of
administrative character, the first of which is the right of the party interested
or affected to present his own case and submit evidence in support
thereof. 80
xxx xxx xxx
Since the proceedings affected Caoili's status and liberty, notice
should have been given. And in the light of the actuations of the
new Board of Commissioners, there is a necessity of determining
whether the findings of the Board of Special Inquiry and the old
Board of Commissioners are correct or not. This calls for
an examination of the evidence, and, the law on the matter. 81
Apparently, the BOC did not bother to review its own records in resolving the
respondent's Urgent Motion for Reconsideration. It anchored its Omnibus
Resolution only on the following: the membership of the BOC had changed
when it issued its September 27, 1995 Summary Deportation Order and
under Commonwealth Act No. 613, Section 27(b); the BOC is precluded
from reversing a previous order issued by it; 82 and, the September 27, 1995
Order of the BOC had become final and could no longer be reviewed and
reversed by it after the lapse of one year. 83 However, the rulings cited by
the petitioner are not applicable in the instant case, as the said cases cited
involve appeals to the BOC from the decisions of the Board of Special
Inquiry (BSI). In Sy v. Vivo 84 and Lou v. Vivo, 85 we ruled that
under Section 27(b) of Commonwealth Act No. 613, as amended, the
Decision of the BOC on appeal from the decision of the BSI becomes final
and executory after one year:

(b) A board of special inquiry shall have authority (1) to determine

whether an alien seeking to enter or land in the Philippines shall be
allowed to enter or land or shall be excluded, and (2) to make its
findings and recommendations in all the cases provided for in
section twenty-nine of this Act wherein the Commissioner of
Immigration may admit an alien who is otherwise inadmissible. For
this purpose, the board or any member thereof, may administer
oaths and take evidence and in case of necessity may
issue subpoena and/or subpoena duces tecum. The hearing of all
cases brought before a board of special inquiry shall be conducted
under rules of procedure to be prescribed by the Commissioner of
Immigration. The decision of any two members of the board shall
prevail and shall be final unless reversed on appeal by the Board of
Commissioners as hereafter stated, or in the absence of an appeal,
unless reversed by the Board of Commissioners after a review by
it, motu propio, of the entire proceedings within one year from the
promulgation of the decision. EDCcaS
In Commissioner of Immigration v. Fernandez, 86 we held that the BOC
composed of new members is precluded from reversing, motu proprio, the
decision of the BOC on appeal from a BSI decision. But not to be ignored
was our ruling that "at any rate, the issue of authority should be made in
accordance with the procedure established by law, with a view to protecting
the rights of individuals." 87
In this case, the Summary Deportation Order was issued by the BOC in the
exercise of its authority under Office Memorandum Order No. 34, and not in
the exercise of its appellate jurisdiction of BSI decisions. There is no law nor
rule which provides that a Summary Deportation Order issued by the BOC in
the exercise of its authority becomes final after one year from its
issuance, 88 or that the aggrieved party is barred from filing a motion for a
reconsideration of any order or decision of the BOC. The Rules of Court may
be applied in a suppletory manner to deportation proceedings 89 and
under Rule 37, a motion for reconsideration of a decision or final order may
be filed by the aggrieved party.
Neither is there any law nor rule providing that the BOC, composed of new
members, cannot revise a Summary Deportation Order previously issued by
a different body of Commissioners. The BOC that issued the Summary

Deportation Order and the BOC which resolved the respondent's Urgent
Motion for Reconsideration are one and the same government entity, with the
same powers and duties regardless of its membership. Similarly, an RTC
judge who replaces another judge who presided over a case may review the
judgment or order of his predecessor as long as the said judgment or order
has not as yet become final or executory, The act subject of review is not the
act of the judge but the act of the court.
The petitioner's contention that it failed to resolve the respondent's motion for
reconsideration because of the change of administration in the BOC was
branded by the CA as flimsy, if not bordering on the absurd:
Firstly, it was issued three days (June 14, 2002) after petitioner filed
this instant petition on June 11, 2002 or almost seven years from
the time the motion for reconsideration was filed;
Secondly, respondent's counsel's excuse that it took such time to
resolve it because it was only later that the motion for
reconsideration was discovered because of change of
administration, is flimsy, if not bordering on the absurd; 90
The Issuance of a New and Regular Passport to the Respondent
Rendered the Summary Deportation Order Moot and Academic, and the
Omnibus Resolution of the BOC Lacking in Legal Basis
We agree with the petitioner that a foreign embassy's cancellation of the
passport it had issued to its citizens, or its refusal to issue a new one in lieu
of a passport that has expired, will result in the loss of the alien's privilege to
stay in this country and his subsequent deportation therefrom. But even the
BOC asserted in its Summary Deportation Order that an embassy's
issuance of a new passport to any of its citizens may bar the latter's
deportation, citing the resolution of this Court inSchonemann
v. Commissioner Santiago. 91
Irrefragably, Commissioner Verceles was mandated to cause the arrest of
the respondent preparatory to his deportation from the Philippines. However,
there was no fixed period in the Order within which to comply with the same.
The Commissioner is not mandated to deport an alien immediately upon
receipt of the BOC's deportation order. It is enough that the Commissioner
complies with the Order within a "reasonable time," which, in Mejoff
v. Director of Prisons, 92 we held to connote as follows:

The meaning of "reasonable time" depends upon the

circumstances, specially the difficulties of obtaining a
passport, the availability of transportation, the diplomatic
arrangements with the governments concerned and the
efforts displayed to send the deportee away; but the
Court warned that "under established precedents, too
long a detention may justify the issuance of a writ
of habeas corpus.
In this case, the BOC had yet to act on the respondent's Urgent Motion for
Reconsideration. The respondent was also given a chance to secure a
clearance and a new passport with the German Embassy. After all, the
possibility that the German Embassy would renew the respondent's passport
could not be ruled out. This was exactly what happened: the German
Embassy issued a new passport to the respondent on March 12, 1996 after
the German District Court dismissed the case for physical injuries. Thus, the
respondent was no longer an undocumented alien; nor was he an
undesirable one for that matter.
The petitioner even admits that there is no longer a legal or factual basis to
disqualify the respondent from remaining in the country as a permanent
resident. Yet, the OSG insists that he has to be deported first so that the
BOC's Summary Deportation Order could be implemented. This contention
was rejected by the CA, thus:
During the hearing of petitioner's prayer for issuance of
a writ of preliminary injunction before Us, respondent's
counsel from the Office of the Solicitor General had the
occasion to manifest in open court that the State has no
opposition to petitioner's stay in the country provided he
first leave and re-enter and re-apply for residency if only
to comply with the Summary Deportation Order of 1995.
That, to Our mind, seems preposterous, if not ridiculous.
An individual's human rights and rights to freedom,
liberty and self-determination recognize no boundaries
in the democratic, free and civilized world. Such rights
follow him wherever he may be. If presently, there is no
factual or legal impediment to disqualify petitioner in his
stay in the country, other than allegedly those relied

upon in the Summary Deportation Order of 1995 (as

hereinbefore discussed, had ceased to exist), requiring
petitioner to leave the country and re-enter and re-apply
for residency makes little sense or no sense at all, more
so, in the case of petitioner who, for many years past,
had lived herein and nurtured a family that is Filipino.
Thus, opined, We, therefore, believe and hereby rule,
that there is presently every reason to enjoin/prohibit the
Bureau
of
Immigration,
respondent
Commissioner Domingo in particular, from presently
deporting petitioner. 93
We agree with the Court of Appeals. The Summary Deportation Order had
been rendered moot and academic upon the German Embassy's issuance of
a new passport to the respondent. The respondent had been in the
Philippines as a permanent resident since July 18, 1986, and had married a
Filipino citizen, with whom he has two children. He is not a burden to the
country nor to the people of Palawan. He put up, and has been managing,
the Bavaria Restaurant with about 30 employees. He has no pending
criminal case; nor does he have any derogatory record. The respondent was
allowed by then Immigration Commissioner Verceles to renew his passport
and was given time to secure a clearance from the German Embassy. The
respondent was able to do so. The case against him for physical injuries was
dismissed by the German District Court. Thus, the inceptual basis for the
respondent's deportation had ceased to exist.
The power to deport is a police matter against undesirable aliens, whose
presence in the country is found to be injurious to the public good. We
believe that the deportation of the respondent late in the day did not achieve
the said purpose. The petitioner admitted that there is no longer a factual
and legal basis to disqualify the respondent from staying in the country. He is
not an undesirable alien; nor is his presence in the country injurious to public
good. He is even an entrepreneur and a productive member of society.
Arrest, detention and deportation orders of aliens should not be enforced
blindly and indiscriminately, without regard to facts and circumstances that
will render the same unjust, unfair or illegal. 94 To direct the respondent to
leave the country first before allowing him re-entry is downright
iniquitous. 95 If the respondent does leave the country, he would thereby be

accepting the force and effect of the BOC's Summary Deportation Order with
its attendant infirmities. He will thereby lose his permanent resident status
and admit the efficacy of the cancellation of his permanent resident visa.
Moreover, his entry into the country will be subject to such conditions as the
petitioner may impose.
The deportation of an alien is not intended as a punishment or penalty. But in
a real sense, it is. In Bridges v. Wixon, 96 Mr. Justice Murphy declared that
the impact of deportation upon the life of an alien is often as great if not
greater than the imposition of a criminal sentence. In dealing with
deportation, there is no justifiable reason for disregarding the democratic and
human tenets of our legal system and descending to the practices of
despotism. As Justice Brewer opined in Fong Yue Ting v. United
States, 97 deportation is a punishment because it requires first, an arrest, a
deprivation of liberty and second, a removal from home, from family, from
business, from property. To be forcibly taken away from home, family,
business and property and sent across the ocean to a distant land is
punishment; and that oftentimes is most severe and cruel. It would be putting
salt on the respondent's woes occasioned by the BOC's ineptitude.
Considering the peculiar backdrop and the equities in this case, the
respondent's deportation and the cancellation of his permanent resident visa
as a precondition to his re-entry into this country is severe and cruel; it is a
form of punishment. aCSEcA
Our ruling in Vivo v. Cloribel, 98 has no application in this case, precisely
because the factual milieu here is entirely different. In that case, the
Commissioner of Immigration required the respondents to leave the country
on or before September 12, 1962, because their stay in the country as
approved by the Secretary of Justice had been cancelled. Our ruling in Bing
v.Commission on Immigration, 99 even buttresses the case for the
respondent since we ruled therein that an alien entitled to a permanent stay
cannot be deported without being accorded due notice and hearing.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The Decision
of the Court of Appeals is AFFIRMED.
SO ORDERED.
Puno, Quisumbing, Austria-Martinez and Tinga, JJ., concur.
||| (Domingo v. Scheer, G.R. No. 154745, [January 29, 2004], 466 PHIL 235284)

SECOND DIVISION
[G.R. No. L-31061. August 17, 1976.]
SULO NG BAYAN,
INC., plaintiff-appellant, vs. GREGORIO
ARANETA, INC., PARADISE FARMS, INC., NATIONAL
WATERWORKS & SEWERAGE AUTHORITY, HACIENDA
CARETAS,
INC.
and
REGISTER
OF
DEEDS
OF
BULACAN,defendants-appellees.
Hill & Associates Law Offices for appellant.
Araneta, Mendoza & Papa for appellee Gregorio Araneta, Inc.
Carlos, Madarang, Carballo & Valdez for Paradise Farms, Inc.
Leopoldo M. Abellera, Arsenio J. Magpale & Raul G. Bernardo, Office of
the Government Corporate Counsel for appellee National Waterworks &
Sewerage Authority.
Candido G. del Rosario for appellee Hacienda Caretas, Inc.
ANTONIO, J p:
The issue posed in this appeal is whether or not plaintiff corporation (nonstock) may institute an action in behalf of its individual members for the
recovery of certain parcels of land allegedly owned by said members; for the
nullification of the transfer certificates of title issued in favor of defendantsappellees covering the aforesaid parcels of land; for a declaration of
"plaintiff's members as absolute owners of the property" and the issuance of
the corresponding certificate of title; and for damages.
On April 26, 1966, plaintiff-appellant Sulo ng Bayan, Inc. filed an accion de
reivindicacion with the Court of First Instance of Bulacan, Fifth Judicial
District, Valenzuela, Bulacan, against defendants-appellees to recover the
ownership and possession of a large tract of land in San Jose del Monte,
Bulacan, containing an area of 27,982,250 square meters, more or less,
registered under the Torrens System in the name of defendants-appellees'
predecessors-in-interest. 1 The complaint, as amended on June 13, 1966,
specifically alleged that plaintiff is a corporation organized and existing under
the laws of the Philippines, with its principal office and place of business at
San Jose del Monte, Bulacan; that its membership is composed of natural
persons residing at San Jose del Monte, Bulacan; that the members of the
plaintiff corporation, through themselves and their predecessors-in-interest,
had pioneered in the clearing of the afore-mentioned tract of land, cultivated
the same since the Spanish regime and continuously possessed the said

property openly and publicly under concept of ownership adverse against the
whole world; that defendant-appellee Gregorio Araneta, Inc., sometime in the
year 1958, through force and intimidation, ejected the members of the
plaintiff corporation from their possession of the aforementioned vast tract of
land; that upon investigation conducted by the members and officers of
plaintiff corporation, they found out for the first time in the year 1961 that the
land in question "had been either fraudulently or erroneously included, by
direct or constructive fraud, in Original Certificate of Title No. 466 of the Land
Records of the province of Bulacan", issued on May 11, 1916, which title is
fictitious, non-existent and devoid of legal efficacy due to the fact that "no
original survey nor plan whatsoever" appears to have been submitted as a
basis thereof and that the Court of First Instance of Bulacan which issued
the decree of registration did not acquire jurisdiction over the land
registration case because no notice of such proceedings was given to the
members of the plaintiff corporation who were then in actual possession of
said properties; that as a consequence of the nullity of the original title, all
subsequent titles derived therefrom, such as Transfer Certificate of Title No.
4903 issued in favor of Gregorio Araneta and Carmen Zaragoza, which was
subsequently cancelled by Transfer Certificate of Title No. 7573 in the name
of Gregorio Araneta, Inc., Transfer Certificate of Title No. 4988 issued in the
name of, the National Waterworks & Sewerage Authority (NWSA), Transfer
Certificate of Title No. 4986 issued in the name of Hacienda Caretas, Inc.,
and another transfer certificate of title in the name of Paradise Farms, Inc.,
are therefore void. Plaintiff-appellant consequently prayed (1) that Original
Certificate of Title No. 466, as well as all transfer certificates of title issued
and derived therefrom, be nullified; (2) that "plaintiff's members" be declared
as absolute owners in common of said property and that the corresponding
certificate of title be issued to plaintiff; and (3) that defendant-appellee
Gregorio Araneta, Inc. be ordered to pay to plaintiff the damages therein
specified.
On September 2, 1966, defendant-appellee Gregorio Araneta, Inc. filed a
motion to dismiss the amended complaint on the grounds that (1) the
complaint states no cause of action; and (2) the cause of action, if any, is
barred by prescription and laches. Paradise Farms, Inc. and Hacienda
Caretas, Inc. filed motions to dismiss based on the same grounds. Appellee
National Waterworks & Sewerage Authority did not file any motion to

dismiss. However, it pleaded in its answer as special and affirmative

defenses lack of cause of action by the plaintiff-appellant and the barring of
such action by prescription and laches.
During the pendency of the motion to dismiss, plaintiff-appellant filed a
motion, dated October 7, 1966, praying that the case be transferred to
another branch of the Court of First Instance sitting at Malolos, Bulacan.
According to defendants-appellees, they were not furnished a copy of said
motion, hence, on October 14, 1966, the lower court issued an Order
requiring plaintiff-appellant to furnish the appellees copy of said motion. On
November 11, 1966, defendant-appellee Gregorio Araneta, Inc. filed a
motion informing the lower court that it did not receive a copy of the plaintiffappellant's motion dated October 7, 1966 and, consequently, prayed that the
said motion be denied for lack of notice and for failure of the plaintiffappellant to comply with the Order of October 14, 1966. Similarly, defendantappellee Paradise Farms, Inc. filed, on December 2, 1966, a manifestation
informing the court that it also did not receive a copy of the afore-mentioned
motion of appellant. On January 24, 1967, the trial court issued an Order
dismissing the amended complaint on the ground of lack of cause of action
and prescription. On the same date, the lower court denied appellant's
motion to transfer the case to Malolos for being moot and academic, the
court having dismissed the amended complaint.
On February 14, 1967, appellant filed a motion to reconsider the Order of
dismissal on the grounds that the court had no jurisdiction to issue the Order
of dismissal, because its request for the transfer of the case from the
Valenzuela Branch of the Court of First Instance to the Malolos Branch of the
said court has been approved by the Department of Justice; that the
complaint states a sufficient cause of action because the subject matter of
the controversy is one of common interest to the members of the corporation
who are so numerous that the present complaint should be treated as a
class suit; and that the action is not barred by the statute of limitations
because (a) an action for the reconveyance of property registered through
fraud does not prescribe, and (b) an action to impugn a void judgment may
be brought any time. This motion was denied by the trial court in its Order
dated February 22, 1967. From the afore-mentioned Order of dismissal and
the Order denying its motion for reconsideration, plaintiff-appellant appealed
to the Court of Appeals.

On September 3, 1969, the Court of Appeals, upon finding that no question

of fact was involved in the appeal but only questions of law and jurisdiction,
certified this case to this Court for resolution of the legal issues involved in
the controversy.
I
Appellant contends, as a first assignment of error, that the trial court acted
without authority and jurisdiction in dismissing the amended complaint when
the Secretary of Justice had already approved the transfer of the case to any
one of the two branches of the Court of First Instance of Malolos, Bulacan.
Appellant confuses the jurisdiction of a court and the venue of cases with the
assignment of cases in the different branches of the same Court of First
Instance. Jurisdiction implies the power of the court to decide a case, while
venue the place of action. There is no question that respondent court has
jurisdiction over the case. The venue of actions in the Court of First Instance
is prescribed in Section 2, Rule 4 of the Revised Rules of Court. The laying
of venue is not left to the caprice of plaintiff, but must be in accordance with
the aforesaid provision of the rules. 2 The mere fact that a request for the
transfer of a case to another branch of the same court has been approved by
the Secretary of Justice does not divest the court originally taking
cognizance thereof of its jurisdiction, much less does it change the venue of
the action. As correctly observed by the trial court, the indorsement of the
Undersecretary of Justice did not order the transfer of the case to the
Malolos Branch of the Bulacan Court of First Instance, but only "authorized"
it for the reason given by plaintiff's counsel that the transfer would be
convenient for the parties. The trial court is not without power to either grant
or deny the motion, especially in the light of a strong opposition thereto filed
by the defendant. We hold that the court a quo acted within its authority in
denying the motion for the transfer of the case to Malolos notwithstanding the
"authorization" of the same by the Secretary of Justice.
II
Let us now consider the substantive aspect of the Order of dismissal.
In dismissing the amended complaint, the court a quo said:
"The issue of lack of cause of action raised in the motions to
dismiss refer to the lack of personality of plaintiff to file the instant
action. Essentially, the term 'cause of action' is composed of two
elements: (1) the right of the plaintiff and (2) the violation of such

right by the defendant. (Moran, Vol. I, p. 111). For these reasons,

the roles require that every action must he prosecuted and
defended in the name of the real party in interest and that all
persons having an interest in the subject of the action and in
obtaining the relief demanded shall be joined as plaintiffs (Sec. 2,
Rule 3). In the amended complaint, the people whose rights were
alleged to have been violated by being deprived and dispossessed
of their land are the members of the corporation and not the
corporation itself. The corporation has a separate, and distinct
personality from its members, and this is not a mere technicality but
a matter of substantive law. There is no allegation that the members
have assigned their rights to the corporation or any showing that the
corporation has in any way or manner succeeded to such right. The
corporation evidently did not have any rights violated by the
defendants for which it could seek redress. Even if the Court should
find against the defendants, therefore, the plaintiff corporation
would not be entitled to the reliefs prayed for, which are recovery of
ownership and possession of the land, issuance of the
corresponding title in its name, and payment of damages. Neither
can such reliefs he awarded to the members allegedly deprived of
their land, since they are not parties to the suit. It appearing clearly
that the action has not been filed in the names of the real parties in
interest, the complaint must be dismissed on the ground of lack of
cause of action." 3
Viewed in the light of existing law and jurisprudence, We find that
the trial court correctly dismissed the amended complaint.
It is a doctrine well-established and obtains both at law and in equity that a
corporation is a distinct legal entity to be considered as separate and apart
from the individual stockholders or members who compose it, and is not
affected by the personal rights, obligations and transactions of its
stockholders or members. 4 The property of the corporation is its property
and not that of the stockholders, as owners, although they have equities in it.
Properties registered in the name of the corporation are owned by it as an
entity separate and distinct from its members. 5 Conversely, a corporation
ordinarily has no interest in the individual property of its stockholders unless
transferred to the corporation, "even in the case of a one-man

corporation". 6 The mere fact that one is president of a corporation does not
render the property which he owns or possesses the property of the
corporation, since the president, as individual, and the corporation are
separate entities. 7 Similarly, stockholders in a corporation engaged in
buying and dealing in real estate whose certificates of stock entitled the
holder thereof to an allotment in the distribution of the land of the corporation
upon surrender of their stock certificates were considered not to have such
legal or equitable title or interest in the land, as would support a suit for title,
especially against parties other than the corporation. 8
It must be noted, however, that the juridical personality of the corporation, as
separate and distinct from the persons composing it, is but a legal fiction
introduced for the purpose of convenience and to subserve the ends of
justice. 9 This separate personality of the corporation may be disregarded, or
the veil of corporate fiction pierced, in cases where it is used as a cloak or
cover for fraud or illegality, or to work an injustice, or where necessary to
achieve equity. 10
Thus, when "the notion of legal entity is used to defeat public convenience,
justify wrong, protect fraud, or defend crime, . . . the law will regard the
corporation as an association of persons, or in the case of two corporations,
merge them into one, the one being merely regarded as part or
instrumentality of the other." 11 The same is true where a corporation is a
dummy and serves no business purpose and is intended only as a blind, or
an alter ego or business conduit for the sole benefit of the
stockholders. 12 This doctrine of disregarding the distinct personality of the
corporation has been applied by the courts in those cases when the
corporate entity is used for the evasion of taxes, 13 or when the veil of
corporate fiction is used to confuse legitimate issue of employer-employee
relationship, 14 or when necessary for the protection of creditors, in which
case the veil of corporate fiction may be pierced and the funds of the
corporation may be garnished to satisfy the debts of a principal
stockholder. 15 The aforecited principle is resorted to by the courts as a
measure protection for third parties to prevent fraud, illegality or injustice. 16
It has not been claimed that the members have assigned or transferred
whatever rights they may have on the land in question to the plaintiff
corporation. Absent any showing of interest, therefore, a corporation, like
plaintiff-appellant herein, has no personality to bring an action for and in

behalf of its stockholders or members for the purpose of recovering property

which belongs to said stockholders or members in their personal capacities.
It is fundamental that there cannot be a cause of action without an
antecedent primary legal right conferred by law upon a person. 17 Evidently,
there can be no wrong without a corresponding right, and no breach of duty
by one person without a corresponding right belonging to some other
person. 18 Thus, the essential elements of a cause of action are legal right
of the plaintiff, correlative obligation of the defendant, an act or omission of
the defendant in violation of the aforesaid legal right. 19Clearly, no right of
action exists in favor of plaintiff corporation, for as shown heretofore it does
not have any interest in the subject matter of the case which is material and
direct so as to entitle it to file the suit as a real party in interest.
III
Appellant maintains, however, that the amended complaint may be treated
as a class suit, pursuant to Section 12 of Rule 3 of the Revised Rules of
Court.
In order that a class suit may prosper, the following requisites must be
present: (1) that the subject matter of the controversy is one of common or
general interest to many persons; and (2) that the parties are so numerous
that it is impracticable to bring them all before the court. 20
Under the first requisite, the person who sues must have an interest in the
controversy, common with those for whom he sues, and there must be that
unity of interest between him and all such other persons which would entitle
them to maintain the action if suit was brought by them jointly. 21
As to what constitutes common interest in the subject matter of the
controversy, it has been explained in Scott v. Donald, 22thus:
"The interest that will allow parties to join in a bill of
complaint, or that will enable the court to dispense with
the presence of all the parties, when numerous, except
a determinate number, is not only an interest in the
question, but one in common in the subject matter of the
suit; . . . a community of interest growing out of the
nature and condition of the right in dispute; for, although
there may not be any privity between the numerous
parties, there is a common title out of which the question
arises, and which lies at the foundation of the

proceedings . . . [here] the only matter in common

among the plaintiffs, or between them and the
defendants, is an interest in the question involved, which
alone cannot lay a foundation for the joinder of parties.
There is scarcely a suit at law, or in equity, which settles
a principle or applies a principle to a given state of facts,
or in which a general statute is interpreted, that does not
involved a question in which other parties are interested.
. . ." (Emphasis supplied)
Here, there is only one party plaintiff, and the plaintiff corporation does not
even have an interest in the subject matter of the controversy, and cannot,
therefore, represent its members or stockholders who claim to own in their
individual capacities ownership of the said property. Moreover, as correctly
stated by the appellees, a class suit does not lie in actions for the recovery of
property where several persons claim ownership of their respective portions
of the property, as each one could allege and prove his respective right in a
different way for each portion of the land, so that they cannot all be held to
have identical title through acquisitive prescription. 23
Having shown that no cause of action in favor of the plaintiff exist and that
the action in the lower court cannot be considered as a class suit, it would be
unnecessary and an idle exercise for this Court to resolve the remaining
issue of whether or not the plaintiff's action for reconveyance of real property
based upon constructive or implied trust had already prescribed.
ACCORDINGLY, the instant appeal is hereby DISMISSED with costs against
the plaintiff-appellant.
Fernando (Acting C.J.), Barredo (Acting Chairman), Aquino and Concepcion,
Jr., JJ., concur.
||| (Sulo ng Bayan, Inc. v. Gregorio Araneta, Inc., G.R. No. L-31061, [August
17, 1976])

SECOND DIVISION
[G.R. No. 161237. January 14, 2009.]
PERFECTO MACABABBAD, Jr., * DECEASED, SUBSTITUTED
BY
HIS
HEIRS
SOPHIA MACABABBAD,
GLENN
M.MACABABBAD, PERFECTO VENER M. MACABABBAD III AND
MARY GRACE MACABABBAD, AND SPS. CHUA SENG LIN AND
SAY UN AY, petitioners, vs. FERNANDO G. MASIRAG, FAUSTINA
G. MASIRAG, CORAZON G. MASIRAG, LEONOR G. MASIRAG,
and LEONCIO M. GOYAGOY, respondents.
FRANCISCA MASIRAG BACCAY, PURA MASIRAG FERRERMELAD, and SANTIAGO MASIRAG, intervenors- respondents.
BRION, J p:
Before us is the Petition for Review on Certiorari filed by
Perfecto Macababbad, Jr. 1 (Macababbad) and the spouses Chua Seng
Lin (Chua) and Say Un Ay (Say) (collectively called the petitioners), praying
that we nullify the Decision 2 of the Court of Appeals (CA) and the
Resolution 3 denying the motion for reconsideration that followed. The
assailed decision reversed the dismissal Order 4 of the Regional Trial
Court (RTC), Branch 4, Tuguegarao City, Cagayan, remanding the case for
further trial.cHATSI
BACKGROUND
On April 28, 1999, respondents Fernando Masirag (Fernando), Faustina
Masirag (Faustina),
Corazon
Masirag (Corazon),
Leonor
Masirag (Leonor) and Leoncio Masirag Goyagoy (Leoncio) (collectively
called
the respondents),
filed
with
the
RTC
a
complaint 5 against Macababbad, Chua and Say. 6 On May 10, 1999, they
amended their complaint to allege new matters. 7The respondents alleged
that their complaint is an action for:
quieting of title, nullity of titles, reconveyance, damages and
attorney's fees 8 against the defendants [petitioners here] . . . who
cabal themselves in mala fides of badges of fraud dishonesty,
deceit, misrepresentations, bad faith, under the guise of purported
instrument, nomenclature "EXTRA-JUDICIAL SETTLEMENT WITH
SIMULTANEOUS SALE OF PORTION OF REGISTERED LAND
(Lot 4144)", dated December 3, 1967, a falsification defined and
penalized under Art. 172 in relation to Art. 171, Revised Penal

Code, by "causing it to appear that persons (the plaintiffs herein [the

respondents in this case])have participated in any act or proceeding
when they (the plaintiffs herein [the respondents in this case]) did
not in fact so participate" in the "EXTRA-JUDICIAL SETTLEMENT
WITH SIMULTANEOUS SALE OF PORTION OF REGISTERED
LAND (Lot 4144" covered by Original Certificate of Title No.
1946) [sic]. 9
The amended complaint essentially alleged the following: 10
The deceased spouses Pedro Masirag (Pedro) and Pantaleona
Tulauan (Pantaleona) were the original registered owners of Lot No. 4144 of
the Cadastral Survey of Tuguegarao (Lot No. 4144), as evidenced by
Original Certificate of Title (OCT) No. 1946. 11 Lot No. 4144 contained an
area of 6,423 square meters.
Pedro and Pantaleona had eight (8) children, namely, Valeriano, Domingo,
Pablo, Victoria, Vicenta, Inicio, Maxima and Maria. Respondents Fernando,
Faustina, Corazon and Leonor Masirag are the children of Valeriano and
Alfora Goyagoy, while Leoncio is the son of Vicenta and Braulio Goyagoy.
The respondents allegedly did not know of the demise of their respective
parents; they only learned of the inheritance due from their parents in the
first week of March 1999 when their relative, Pilar Quinto, informed
respondent Fernando and his wife Barbara Balisi about it. They immediately
hired a lawyer to investigate the matter.
The investigation disclosed that the petitioners falsified a document entitled
"Extra-judicial Settlement with Simultaneous Sale of Portion of Registered
Land (Lot 4144) dated December 3, 1967" 12 (hereinafter referred to as
the extrajudicial settlement of estate and sale) so that the respondents were
deprived of their shares in Lot No. 4144. The document purportedly bore the
respondents' signatures, making them appear to have participated in the
execution of the document when they did not; they did not even know the
petitioners. The document ostensibly conveyed the subject property
to Macababbad for the sum of P1,800.00. 13 Subsequently, OCT No. 1946
was cancelled and Lot No. 4144 was registered in the names of its new
owners under Transfer Certificate of Title (TCT) No. 13408, 14 presumably
after the death of Pedro and Pantaleona. However, despite the supposed
sale to Macababbad, his name did not appear on the face of TCT No.
13408. 15 Despite his exclusion from TCT No. 13408, his "Petition for

another owner's duplicate copy of TCT No. 13408", filed in the Court of First
Instance of Cagayan, was granted on July 27, 1982. 16 CaAIES
Subsequently, Macababbad registered portions of Lot No. 4144 in his name
and sold other portions to third parties. 17
On May 18, 1972, Chua filed a petition for the cancellation of TCT No. T13408 and the issuance of a title evidencing his ownership over a subdivided
portion of Lot No. 4144 covering 803.50 square meters. On May 23, 1972,
TCT No. T-18403 was issued in his name. 18
Based on these allegations, the respondents asked: (1) that the extrajudicial
settlement of estate and sale be declared null and void ab initio and without
force and effect, and that Chua be ordered and directed to execute the
necessary deed of reconveyance of the land; if they refuse, that the Clerk of
Court be required to do so; (2) the issuance of a new TCT in respondents'
name and the cancellation of Macababbad's and Chua's certificates of title;
and (3) that the petitioners be ordered to pay damages and attorney's fees.
Macababbad filed a motion to dismiss the amended complaint on July 14,
1999, while Chua and Say filed an "Appearance with Motion to Dismiss" on
September 28, 1999.
On December 14, 1999, the RTC granted the motion of Francisca Masirag
Baccay, Pura Masirag Ferrer-Melad, and Santiago Masirag for leave to
intervene and to admit their complaint-in-intervention. The motion alleged
that they have common inheritance rights with the respondents over the
disputed property.
THE RTC RULING
The RTC, after initially denying the motion to dismiss, reconsidered its ruling
and dismissed the complaint in its Order 19dated May 29, 2000 on the
grounds that: 1) the action, which was filed 32 years after the property
was partitioned and after a portion was sold to Macababbad, had
already prescribed; and 2) there was failure to implead indispensable
parties, namely, the other heirs of Pedro and Pantaleona and the
persons who have already acquired title to portions of the subject
property in good faith. 20
The respondents appealed the RTC's order dated May 29, 2000 to the CA on
the following grounds:
I.

THE COURT A QUO ERRED IN DISMISSING THE

CASE
II.
THE COURT A QUO ERRED IN INTERPRETING THE
NATURE OF APPELLANTS' CAUSE OF ACTION AS
THAT DESIGNATED IN THE COMPLAINT'S TITLE
AND NOT IN (SIC) THE ALLEGATIONS IN THE
COMPLAINT 21 TaDAHE
The petitioners moved to dismiss the appeal primarily on the ground that the
errors the respondents raised involved pure questions of law that should be
brought before the Supreme Court via a petition for review
on certiorari under Rule 45 of the Rules of Court. The respondents insisted
that their appeal involved mixed questions of fact and law and thus fell within
the purview of the CA's appellate jurisdiction.
THE CA DECISION 22
The CA ignored 23 the jurisdictional issue raised by the petitioners in their
motion to dismiss, took cognizance of the appeal, and focused on the
following issues: 1) whether the complaint stated a cause of action; and
2) whether the cause of action had been waived, abandoned or
extinguished.
The appellate court reversed and set aside the RTC's dismissal of the
complaint. On the first issue, it ruled that the complaint "carve(d) out a
sufficient and adequate cause of action . . . . One can read through the
verbosity of the initiatory pleading to discern that a fraud was committed by
the defendants on certain heirs of the original owners of the property and
that, as a result, the plaintiffs were deprived of interests that should have
gone to them as successors-in-interest of these parties. A positive deception
has been alleged to violate legal rights. This is the ultimate essential fact that
remains after all the clutter is removed from the pleading. Directed against
the defendants, there is enough to support a definitive adjudication." 24
On the second issue, the CA applied the Civil Code provision on implied
trust, i.e., that a person who acquires a piece of property through fraud is
considered a trustee of an implied trust for the benefit of the person from
whom the property came. Reconciling this legal provision with Article 1409
(which defines void contracts) and Article 1410 (which provides that an
action to declare a contract null and void is imprescriptible), the CA ruled that

the respondents' cause of action had not prescribed, because "in assailing
the extrajudicial partition as void, the [respondents] have the right to bring
the action unfettered by a prescriptive period." 25
THE PETITION FOR REVIEW ON CERTIORARI
The Third Division of this Court initially denied 26 the petition for review
on certiorari for the petitioners' failure to show any reversible error committed
by the CA. However, it subsequently reinstated the petition. In their motion
for reconsideration, the petitioners clarified the grounds for their petition, as
follows:
A. THE HONORABLE COURT OF APPEALS DID NOT
HAVE JURISDICTION TO PASS UPON AND RULE ON
THE APPEAL TAKEN BY THE RESPONDENTS IN CAGR CV NO. 68541. 27 aTcIAS
In the alternative, ex abundanti cautela, the petitioners alleged other
reversible errors summarized as follows: 28
The RTC dismissal on the ground that indispensable
parties were not impleaded has already become final
and executory because the CA did not pass upon this
ground; 29
The respondents' argument that there was no failure to
implead indispensable parties since the other heirs of
Pedro and Pantaleona who were not impleaded were
not indispensable parties in light of the respondents'
admission that the extra-judicial settlement is valid with
respect to the other heirs who sold their shares to
Perfecto Macababbad is erroneous because innocent
purchasers for value of portions of Lot 4144 who are
also indispensable parties were not impleaded; 30
The CA erred in reconciling Civil Code provisions
Article 1456 and Article 1410, in relation to Article
1409; 31
The CA erred in saying that the Extra-judicial Partition
was an inexistent and void contract because it could not
be said that none of the heirs intended to be bound by
the contract. 32
The respondents argued in their Comment that: 33

The appeal was brought on mixed questions of fact

and law involving prescription, laches and indispensable
parties;
The non-inclusion of indispensable parties is not a
ground to dismiss the claim;
The respondents' action is not for reconveyance.
Rather, it is an action to declare the sale of their
respective shares null and void;
An action for the nullity of an instrument prescribes in
four (4) years from discovery of the fraud. Discovery was
made in 1999, while the complaint was also lodged in
1999. Hence, the action had not yet been barred by
prescription;
Laches had not set in because the action was
immediately filed after discovery of the fraud. EIcSDC
OUR RULING
We find the petition devoid of merit.
Questions of Fact v. Questions of Law
A question of law arises when there is doubt as to what the law is on a
certain state of facts while there is a question of fact when the doubt arises
as to the truth or falsity of the alleged facts. 34 A question of law may be
resolved by the court without reviewing or evaluating the evidence. 35 No
examination of the probative value of the evidence would be necessary to
resolve a question of law. 36 The opposite is true with respect to questions of
fact, which necessitate a calibration of the evidence. 37
The nature of the issues to be raised on appeal can be gleaned from the
appellant's notice of appeal filed in the trial court and in his or her brief as
appellant in the appellate court. 38 In their Notice of Appeal, the respondents
manifested their intention to appeal the assailed RTC order on legal grounds
and "on the basis of the environmental facts". 39 Further, in their Brief, the
petitioners argued that the RTC erred in ruling that their cause of action had
prescribed and that they had "slept on their rights". 40 All these indicate that
questions of facts were involved, or were at least raised, in the respondents'
appeal with the CA.
In Crisostomo v. Garcia, 41 this Court ruled that prescription may either be a
question of law or fact; it is a question of fact when the doubt or difference

arises as to the truth or falsity of an allegation of fact; it is a question of law

when there is doubt or controversy as to what the law is on a given state of
facts. The test of whether a question is one of law or fact is not the
appellation given to the question by the party raising the issue; the test is
whether the appellate court can determine the issue raised without reviewing
or evaluating the evidence. Prescription, evidently, is a question of fact where
there is a need to determine the veracity of factual matters such as the date
when the period to bring the action commenced to run. 42
Ingjug-Tiro v. Casals 43 instructively tells us too that a summary or outright
dismissal of an action is not proper where there are factual matters in dispute
which require presentation and appreciation of evidence. In this cited case
whose fact situation is similar to the present case, albeit with a very slight
and minor variation, we considered the improvident dismissal of a complaint
based on prescription and laches to be improper because the following must
still be proven by the complaining parties:
first, that they were the co-heirs and co-owners of the inherited
property; second, that their co-heirs-co-owners sold their hereditary
rights thereto without their knowledge and consent; third, that
forgery, fraud and deceit were committed in the execution of
the Deed of Extrajudicial Settlement and Confirmation of Sale since
Francisco Ingjug who allegedly executed the deed in 1967 actually
died in 1963, hence, the thumbprint found in the document could
not be his; fourth,that Eufemio Ingjug who signed the deed of sale
is not the son of Mamerto Ingjug, and, therefore, not an heir entitled
to participate in the disposition of the inheritance; fifth, that
respondents have not paid the taxes since the execution of the sale
in 1965 until the present date and the land in question is still
declared for taxation purposes in the name of Mamerto Ingjug, the
original registered owner, as of 1998; sixth, that respondents had
not taken possession of the land subject of the complaint nor
introduced
any
improvement
thereon;
and seventh, that
respondents are not innocent purchasers for value. TAaIDH
As in Ingjug-Tiro, the present case involves factual issues that require trial on
the merits. This situation rules out a summary dismissal of the complaint.
Proper Mode of Appeal

Since the appeal raised mixed questions of fact and law, no error can be
imputed on the respondents for invoking the appellate jurisdiction of the CA
through an ordinary appeal. Rule 41, Sec. 2 of the Rules of Court provides:
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.
In Murillo v. Consul, 44 this Court had the occasion to clarify the three (3)
modes of appeal from decisions of the RTC, namely: (1) ordinary appeal or
appeal by writ of error, where judgment was rendered in a civil or criminal
action by the RTC in the exercise of original jurisdiction, covered by Rule 41;
(2) petition for review, where judgment was rendered by the RTC in the
exercise of appellate jurisdiction, covered by Rule 42; and (3) petition for
review to the Supreme Court under Rule 45 of the Rules of Court. The first
mode of appeal is taken to the CA on questions of fact or mixed questions of
fact and law. The second mode of appeal is brought to the CA on questions
of fact, of law, or mixed questions of fact and law. The third mode of appeal
is elevated to the Supreme Court only on questions of law.
Prescription
A ruling on prescription necessarily requires an analysis of the plaintiff's
cause of action based on the allegations of the complaint and the documents
attached as its integral parts. A motion to dismiss based on prescription
hypothetically admits the allegations relevant and material to the resolution of
this issue, but not the other facts of the case. 45
Unfortunately, both the respondents' complaint and amended complaint are
poorly worded, verbose, and prone to misunderstanding. In addition,
therefore, to the complaint, we deem it appropriate to consider the
clarifications made in their appeal brief by the petitioners relating to the intent
of their complaint. We deem this step appropriate since there were no
matters raised for the first time on appeal and their restatement was aptly
supported by the allegations of the RTC complaint. The respondents argue
in their Appellant's Brief that:
. . . Although reconveyance was mentioned in the title,
reconveyance of which connotes that there was a

mistake in titling the land in question in the name of the

registered owner indicated therein, but in the allegations
in the body of the allegations in the body of the instant
complaint, it clearly appears that the nature of the cause
of action of appellants, [sic]they wanted to get back their
respective shares in the subject inheritance because
they did not sell said shares to appellee
Perfecto Macababbad as the signatures purported to be
theirs which appeared in the Extrajudicial Settlement
with Simultaneo[u]s Sale of Portion of Registered Land
(Lot 4144) were forged. DHaECI
As appellants represented 2 of the 8 children of the
deceased original owners of the land in question who
were Pedro Masirag and Pantaleona Talauan, the sale is
perfectly valid with respect to the other 6 children, and
void ab initio with respect to the appellants. 46
The respondents likewise argue that their action is one for the
annulment of the extrajudicial settlement of estate and salebearing their
forged signatures. They contend that their action had not yet prescribed
because an action to declare an instrument null and void is
imprescriptible. In their Comment to the petition for review, however, the
respondents modified their position and argued that the sale to the
petitioners pursuant to the extrajudicial settlement of estate and
sale was void because it was carried out through fraud; thus, the
appropriate prescription period is four (4) years from the discovery of
fraud. Under this argument, respondents posit that their cause of action
had not yet prescribed because they only learned of the extrajudicial
settlement of estate and sale in March 1999; they filed their complaint
the following month.
The petitioners, on the other hand, argue that the relevant prescriptive period
here is ten (10) years from the date of the registration of title, this being an
action for reconveyance based on an implied or constructive trust.
We believe and so hold that the respondents' amended complaint sufficiently
pleaded a cause to declare the nullity of the extrajudicial settlement of
estate and sale, as they claimed in their amended complaint. Without
prejudging the issue of the merits of the respondents' claim and on the

assumption that the petitioners already hypothetically admitted the

allegations of the complaint when they filed a motion to dismiss based on
prescription, the transfer may be null and void if indeed it is established that
respondents had not given their consent and that the deed is a forgery or is
absolutely fictitious. As the nullity of the extrajudicial settlement of estate and
sale has been raised and is the primary issue, the action to secure this result
will not prescribe pursuant to Article 1410 of the Civil Code.
Based on this conclusion, the necessary question that next arises is: What
then is the effect of the issuance of TCTs in the name of petitioners? In other
words, does the issuance of the certificates of titles convert the action to one
of reconveyance of titled land which, under settled jurisprudence, prescribes
in ten (10) years?
Precedents say it does not; the action remains imprescriptible, the issuance
of the certificates of titles notwithstanding.Ingjug-Tiro is again instructive on
this point: IDCcEa
Article 1458 of the New Civil Code provides: "By the contract of sale
one of the contracting parties obligates himself oftransfer the
ownership of and to deliver a determinate thing, and the other to
pay therefor a price certain in money or its equivalent." It is
essential that the vendors be the owners of the property sold
otherwise they cannot dispose that which does not belong to them.
As the Romans put it: "Nemo dat quod non habet". No one can
give more than what he has. The sale of the realty to
respondents is null and void insofar as it prejudiced
petitioners' interests and participation therein. At best, only
the ownership of the shares of Luisa, Maria and Guillerma in
the disputed property could have been transferred to
respondents.
Consequently, respondents could not have acquired ownership over
the land to the extent of the shares of petitioners.The issuance of a
certificate of title in their favor could not vest upon them
ownership of the entire property; neither could it validate the
purchase thereof which is null and void. Registration does not
vest title; it is merely the evidence of such title. Our land
registration laws do not give the holder any better title than

what he actually has. Being null and void, the sale to

respondents of the petitioners' shares produced no legal
effects whatsoever.
Similarly, the claim that Francisco Ingjug died in 1963 but appeared
to be a party to the Extrajudicial Settlement and Confirmation of
Sale executed in 1967 would be fatal to the validity of the contract, if
proved by clear and convincing evidence. Contracting parties must
be juristic entities at the time of the consummation of the contract.
Stated otherwise, to form a valid and legal agreement it is
necessary that there be a party capable of contracting and party
capable of being contracted with. Hence, if any one party to a
supposed contract was already dead at the time of its execution,
such contract is undoubtedly simulated and false and therefore null
and void by reason of its having been made after the death of the
party who appears as one of the contracting parties therein. The
death of a person terminates contractual capacity.
In actions for reconveyance of the property predicated on the
fact that the conveyance complained of was null and void ab
initio, a claim of prescription of action would be unavailing.
"The action or defense for the declaration of the inexistence of
a contract does not prescribe." Neither could laches be invoked
in the case at bar.Laches is a doctrine in equity and our courts are
basically courts of law and not courts of equity. Equity, which has
been aptly described as "justice outside legality", should be applied
only in the absence of, and never against, statutory law.Aequetas
nunguam contravenit legis. The positive mandate of Art. 1410 of the
New Civil; Code conferring imprescriptibility to actions for
declaration of the inexistence of a contract should preempt and
prevail over all abstract arguments based only on equity.
Certainly, laches cannot be set up to resist the enforcement of an
imprescriptible legal right, and petitioners can validly vindicate their
inheritance despite the lapse of time. 47 AEIcTD
We have a similar ruling in Heirs of Rosa Dumaliang v. Serban. 48
The respondents' action is therefore imprescriptible and the CA committed
no reversible error in so ruling.
Laches

Dismissal based on laches cannot also apply in this case, as it has never
reached the presentation of evidence stage and what the RTC had for its
consideration were merely the parties' pleadings. Laches is evidentiary in
nature and cannot be established by mere allegations in the
pleadings. 49 Without solid evidentiary basis, laches cannot be a valid
ground to dismiss the respondents' complaint.
Non-joinder
of
Indispensable
parties
is
not
a
Ground for a Motion to Dismiss
The RTC dismissed the respondents' amended complaint because
indispensable parties were not impleaded. The respondents argue that since
the extrajudicial settlement of estate and sale was valid with respect to the
other heirs who executed it, those heirs are not indispensable parties in this
case. Innocent purchasers for value to whom title has passed
from Macababbad and the spouses Chua and Say are likewise not
indispensable parties since the titles sought to be recovered here are still
under the name of the petitioners.
We also find the RTC dismissal Order on this ground erroneous.
Rule 3, Section 11 of the Rules of Court provides that neither misjoinder nor
nonjoinder of parties is a ground for the dismissal of an action, thus:
Sec. 11. Misjoinder and non-joinder of parties.
Neither misjoinder nor non-joinder of parties is ground
for dismissal of an action. Parties may be dropped or
added by order of the court on motion of any party or on
its own initiative at any stage of the action and on such
terms as are just. Any claim against a misjoined party
may be severed and proceeded with separately.
In Domingo v. Scheer, 50 this Court held that the proper remedy when a
party is left out is to implead the indispensable party at any stage of the
action. The court, either motu proprio or upon the motion of a party, may
order the inclusion of the indispensable party or give the plaintiff opportunity
to amend his complaint in order to include indispensable parties. If the
plaintiff to whom the order to include the indispensable party is directed
refuses to comply with the order of the court, the complaint may be
dismissed upon motion of the defendant or upon the court's own
motion. 51 Only upon unjustified failure or refusal to obey the order to
include or to amend is the action dismissed. 52 STcEIC

Rule 3, Sec. 7 of the Rules of Court defines indispensable parties as those

who are parties in interest without whom no final determination can be had of
an action. 53 They are those parties who possess such an interest in the
controversy that a final decree would necessarily affect their rights so that
the courts cannot proceed without their presence. 54 A party is
indispensable if his interest in the subject matter of the suit and in the relief
sought is inextricably intertwined with the other parties' interest. 55
In an action for reconveyance, all the owners of the property sought to be
recovered are indispensable parties. Thus, if reconveyance were the only
relief prayed for, impleading petitioners Macababbad and the spouses Chua
and Say would suffice. On the other hand, under the claim that the action is
for the declaration of the nullity of extrajudicial settlement of estate and sale,
all of the parties who executed the same should be impleaded for a complete
resolution of the case. This case, however, is not without its twist on the
issue of impleading indispensable parties as the RTC never issued an order
directing their inclusion. Under this legal situation, particularly in light of Rule
3, Section 11 of the Rules of Court, there can be no basis for the immediate
dismissal of the action.

In relation with this conclusion, we see no merit too in the petitioners'

argument that the RTC ruling dismissing the complaint on respondents'
failure to implead indispensable parties had become final and executory for
the CA's failure to rule on the issue. This argument lacks legal basis as
nothing in the Rules of Court states that the failure of an appellate court to
rule on an issue raised in an appeal renders the appealed order or judgment
final and executory with respect to the undiscussed issue. A court need not
rule on each and every issue raised, 56 particularly if the issue will not vary
the tenor of the Court's ultimate ruling. In the present case, the CA ruling that
overshadows all the issues raised is what is stated in the dispositive portion
of its decision, i.e., "the order of the lower court dismissing the case is SET
ASIDE and the case is remanded for further proceeding."
In sum, the CA correctly reversed the RTC dismissal of the respondents'
complaint.
WHEREFORE, premises considered, we DENY the petition for review for
lack of merit.
SO ORDERED.
Quisumbing, Carpio-Morales, Tinga and Velasco, Jr., JJ., concur.
||| (Macababbad, Jr. v. Masirag, G.R. No. 161237, [January 14, 2009], 596
PHIL 76-98)