Republic of the Philippines

SUPREME COURT
SECOND DIVISION
G.R. No. 140954. April 12, 2005
HEIRS OF BERTULDO1 HINOG: Bertuldo Hinog II, Bertuldo Hinog III, Bertuldo Hinog, Jr., Jocelyn
Hinog, Bertoldo Hinog IV, Bertoldo Hinog V, Edgardo Hinog, Milagros H. Pabatao, Lilian H. King,
Victoria H. Engracia, Terisita C. Hinog, Paz H. Besana, Roberto C. Hinog, Vicente C. Hinog, Roel
C. Hinog, Marilyn C. Hinog, Bebot C. Hinog, lordes C. Hinog, Pablo Chiong, Arlene Lanasang (All
respresented by Bertuldo Hinog III), Petitioners,
vs.
HON. ACHILLES MELICOR, in his capacity as Presiding Judge, RTC, Branch 4, 7th Judicial
Region, Tagbiliran City, Bohol, and CUSTODIO BALANE, RUFO BALANE, HONORIO BALANE, and
TOMAS BALANE, Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for certiorari and prohibition under Rule 65 of the Rules of Court which assails the
Orders dated March 22, 1999, August 13, 1999 and October 15, 1999 of the Regional Trial Court, Branch 4,
of Tagbilaran City, Bohol in Civil Case No. 4923.
The factual background of the case is as follows:
On May 21, 1991, private respondents Custodio, Rufo, Tomas and Honorio, all surnamed Balane, filed a
complaint for "Recovery of Ownership and Possession, Removal of Construction and Damages" against
Bertuldo Hinog (Bertuldo for brevity). They alleged that: they own a 1,399- square meter parcel of land
situated in Malayo Norte, Cortes, Bohol, designated as Lot No. 1714; sometime in March 1980, they
allowed Bertuldo to use a portion of the said property for a period of ten years and construct thereon a
small house of light materials at a nominal annual rental of P100.00 only, considering the close relations of
the parties; after the expiration of the ten-year period, they demanded the return of the occupied portion
and removal of the house constructed thereon but Bertuldo refused and instead claimed ownership of the
entire property.
Accordingly, private respondents sought to oust Bertuldo from the premises of the subject property and
restore upon themselves the ownership and possession thereof, as well as the payment of moral and
exemplary damages, attorneys fees and litigation expenses "in amounts justified by the evidence." 2
On July 2, 1991, Bertuldo filed his Answer. He alleged ownership of the disputed property by virtue of a
Deed of Absolute Sale dated July 2, 1980, executed by one Tomas Pahac with the knowledge and
conformity of private respondents.3
After the pre-trial, trial on the merits ensued. On November 18, 1997, private respondents rested their
case. Thereupon, Bertuldo started his direct examination. However, on June 24, 1998, Bertuldo died
without completing his evidence.
On August 4, 1998, Atty. Sulpicio A. Tinampay withdrew as counsel for Bertuldo as his services were
terminated by petitioner Bertuldo Hinog III. Atty. Veronico G. Petalcorin then entered his appearance as
new counsel for Bertuldo.4

On September 22, 1998, Atty. Petalcorin filed a motion to expunge the complaint from the record and
nullify all court proceedings on the ground that private respondents failed to specify in the complaint the
amount of damages claimed so as to pay the correct docket fees; and that under Manchester
Development Corporation vs. Court of Appeals,5 non-payment of the correct docket fee is jurisdictional.6
In an amended motion, filed on October 2, 1998, Atty. Petalcorin further alleged that the private
respondents failed to pay the correct docket fee since the main subject matter of the case cannot be
estimated as it is for recovery of ownership, possession and removal of construction. 7
Private respondents opposed the motion to expunge on the following grounds: (a) said motion was filed
more than seven years from the institution of the case; (b) Atty. Petalcorin has not complied with Section
16, Rule 3 of the Rules of Court which provides that the death of the original defendant requires a
substitution of parties before a lawyer can have legal personality to represent a litigant and the motion to
expunge does not mention of any specific party whom he is representing; (c) collectible fees due the court
can be charged as lien on the judgment; and (d) considering the lapse of time, the motion is merely a
dilatory scheme employed by petitioners.8
In their Rejoinder, petitioners manifested that the lapse of time does not vest the court with jurisdiction
over the case due to failure to pay the correct docket fees. As to the contention that deficiency in payment
of docket fees can be made as a lien on the judgment, petitioners argued that the payment of filing fees
cannot be made dependent on the result of the action taken.9
On January 21, 1999, the trial court, while ordering the complaint to be expunged from the records and the
nullification of all court proceedings taken for failure to pay the correct docket fees, nonetheless, held:
The Court can acquire jurisdiction over this case only upon the payment of the exact prescribed
docket/filing fees for the main cause of action, plus additional docket fee for the amount of damages being
prayed for in the complaint, which amount should be specified so that the same can be considered in
assessing the amount of the filing fees. Upon the complete payment of such fees, the Court may take
appropriate action in the light of the ruling in the case of Manchester Development Corporation vs. Court of
Appeals, supra.10
Accordingly, on January 28, 1999, upon payment of deficiency docket fee, private respondents filed a
manifestation with prayer to reinstate the case.11 Petitioners opposed the reinstatement12 but on March 22,
1999, the trial court issued the first assailed Order reinstating the case. 13
On May 24, 1999, petitioners, upon prior leave of court,14 filed their supplemental pleading, appending
therein a Deed of Sale dated November 15, 1982.15 Following the submission of private respondents
opposition thereto,16the trial court, in its Order dated July 7, 1999, denied the supplemental pleading on
the ground that the Deed of Absolute Sale is a new matter which was never mentioned in the original
answer dated July 2, 1991, prepared by Bertuldos original counsel and which Bertuldo verified; and that
such new document is deemed waived in the light of Section 1, Rule 9 17 of the Rules of Court. The trial
court also noted that no formal substitution of the parties was made because of the failure of defendants
counsel to give the names and addresses of the legal representatives of Bertuldo, so much so that the
supposed heirs of Bertuldo are not specified in any pleading in the case. 18
On July 14, 1999, petitioners manifested that the trial court having expunged the complaint and nullified
all court proceedings, there is no valid case and the complaint should not be admitted for failure to pay the
correct docket fees; that there should be no case to be reinstated and no case to proceed as there is no
complaint filed.19
After the submission of private respondents opposition20 and petitioners rejoinder,21 the trial court issued
the second assailed Order on August 13, 1999, essentially denying petitioners manifestation/rejoinder. The

trial court held that the issues raised in such manifestation/rejoinder are practically the same as those
raised in the amended motion to expunge which had already been passed upon in the Order dated January
21, 1999. Moreover, the trial court observed that the Order dated March 22, 1999 which reinstated the
case was not objected to by petitioners within the reglementary period or even thereafter via a motion for
reconsideration despite receipt thereof on March 26, 1999. 22
On August 25, 1999, petitioners filed a motion for reconsideration 23 but the same was denied by the trial
court in its third assailed Order dated October 15, 1999. The trial court held that the Manchester rule was
relaxed in Sun Insurance Office, Ltd. vs. Asuncion.24 Noting that there has been no substitution of parties
following the death of Bertuldo, the trial court directed Atty. Petalcorin to comply with the provisions of
Section 16, Rule 3 of the Rules of Court. The trial court also reiterated that the Order dated March 22, 1999
reinstating the case was not assailed by petitioners within the reglementary period, despite receipt thereof
on March 26, 1999.25
On November 19, 1999, Atty. Petalcorin complied with the directive of the trial court to submit the names
and addresses of the heirs of Bertuldo.26
On November 24, 1999, petitioners filed before us the present petition for certiorari and prohibition.27 They
allege that the public respondent committed grave abuse of discretion in allowing the case to be reinstated
after private respondents paid the docket fee deficiency since the trial court had earlier expunged the
complaint from the record and nullified all proceedings of the case and such ruling was not contested by
the private respondents. Moreover, they argue that the public respondent committed grave abuse of
discretion in allowing the case to be filed and denying the manifestation with motion to dismiss, despite
the defect in the complaint which prayed for damages without specifying the amounts, in violation of SC
Circular No. 7, dated March 24, 1988.
In their Comment, private respondents aver that no grave abuse of discretion was committed by the trial
court in reinstating the complaint upon the payment of deficiency docket fees because petitioners did not
object thereto within the reglementary period. Besides, Atty. Petalcorin possessed no legal personality to
appear as counsel for the heirs of Bertuldo until he complies with Section 16, Rule 3 of the Rules of Court. 28
At the outset, we note the procedural error committed by petitioners in directly filing the instant petition
before this Court for it violates the established policy of strict observance of the judicial hierarchy of
courts.
Although the Supreme Court, Court of Appeals and the Regional Trial Courts have concurrent jurisdiction to
issue writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such
concurrence does not give the petitioner unrestricted freedom of choice of court forum. 29 As we stated
in People vs. Cuaresma:30
This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared by this Court with
Regional Trial Courts and with the Court of Appeals. This concurrence of jurisdiction is not, however, to be
taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the
court to which application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is
determinative of the venue of appeals, and also serves as a general determinant of the appropriate forum
for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly
indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should
be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct
invocation of the Supreme Courts original jurisdiction to issue these writs should be allowed only when
there are special and important reasons therefor, clearly and specifically set out in the petition. This is [an]
established policy. It is a policy necessary to prevent inordinate demands upon the Courts time and
attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further
over-crowding of the Courts docket.31

The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of this Court;
and (b) it would cause an inevitable and resultant delay, intended or otherwise, in the adjudication of
cases, which in some instances had to be remanded or referred to the lower court as the proper forum
under the rules of procedure, or as better equipped to resolve the issues because this Court is not a trier of
facts.32
Thus, this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the
appropriate courts, and exceptional and compelling circumstances, such as cases of national interest and
of serious implications, justify the availment of the extraordinary remedy of writ of certiorari, calling for the
exercise of its primary jurisdiction. Exceptional and compelling circumstances were held present in the
following cases: (a)Chavez vs. Romulo33 on citizens right to bear arms; (b) Government of the United
States of America vs. Purganan34 on bail in extradition proceedings; (c) Commission on Elections vs.
Quijano-Padilla35 on government contract involving modernization and computerization of voters
registration list; (d) Buklod ng Kawaning EIIB vs. Zamora36 on status and existence of a public office; and
(e) Fortich vs. Corona37 on the so-called "Win-Win Resolution" of the Office of the President which modified
the approval of the conversion to agro-industrial area.
In this case, no special and important reason or exceptional and compelling circumstance analogous to any
of the above cases has been adduced by the petitioners so as to justify direct recourse to this Court. The
present petition should have been initially filed in the Court of Appeals in strict observance of the doctrine
on the hierarchy of courts. Failure to do so is sufficient cause for the dismissal of the petition at bar.
In any event, even if the Court disregards such procedural flaw, the petitioners contentions on the
substantive aspect of the case fail to invite judgment in their favor.
The unavailability of the writ of certiorari and prohibition in this case is borne out of the fact that
petitioners principally assail the Order dated March 22, 1999 which they never sought reconsideration of,
in due time, despite receipt thereof on March 26, 1999. Instead, petitioners went through the motion of
filing a supplemental pleading and only when the latter was denied, or after more than three months have
passed, did they raise the issue that the complaint should not have been reinstated in the first place
because the trial court had no jurisdiction to do so, having already ruled that the complaint shall be
expunged.
After recognizing the jurisdiction of the trial court by seeking affirmative relief in their motion to serve
supplemental pleading upon private respondents, petitioners are effectively barred by estoppel from
challenging the trial courts jurisdiction.38 If a party invokes the jurisdiction of a court, he cannot thereafter
challenge the courts jurisdiction in the same case.39 To rule otherwise would amount to speculating on the
fortune of litigation, which is against the policy of the Court. 40
Nevertheless, there is a need to correct the erroneous impression of the trial court as well as the private
respondents that petitioners are barred from assailing the Order dated March 22, 1999 which reinstated
the case because it was not objected to within the reglementary period or even thereafter via a motion for
reconsideration despite receipt thereof on March 26, 1999.
It must be clarified that the said order is but a resolution on an incidental matter which does not touch on
the merits of the case or put an end to the proceedings. 41 It is an interlocutory order since there leaves
something else to be done by the trial court with respect to the merits of the case. 42 As such, it is not
subject to a reglementary period. Reglementary period refers to the period set by the rules for appeal or
further review of a final judgment or order, i.e., one that ends the litigation in the trial court.
Moreover, the remedy against an interlocutory order is generally not to resort forthwith to certiorari, but to
continue with the case in due course and, when an unfavorable verdict is handed down, to take an appeal
in the manner authorized by law.43 Only when the court issued such order without or in excess of

jurisdiction or with grave abuse of discretion and when the assailed interlocutory order is patently
erroneous and the remedy of appeal would not afford adequate and expeditious relief will certiorari be
considered an appropriate remedy to assail an interlocutory order. 44 Such special circumstances are
absolutely wanting in the present case.
Time and again, the Court has held that the Manchester rule has been modified in Sun Insurance Office,
Ltd. (SIOL) vs. Asuncion45 which defined the following guidelines involving the payment of docket fees:
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of the
action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the
court may allow payment of the fees within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall
not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow
payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or
reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and
payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the
pleading, or if specified the same has been left for determination by the court, the additional filing fee
therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his
duly authorized deputy to enforce said lien and assess and collect the additional fee.
Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its nonpayment at the time of filing does not automatically cause the dismissal of the case, as long as the fee is
paid within the applicable prescriptive or reglementary period, more so when the party involved
demonstrates a willingness to abide by the rules prescribing such payment. 46 Thus, when insufficient filing
fees were initially paid by the plaintiffs and there was no intention to defraud the government,
the Manchester rule does not apply.47
Under the peculiar circumstances of this case, the reinstatement of the complaint was just and proper
considering that the cause of action of private respondents, being a real action, prescribes in thirty
years,48 and private respondents did not really intend to evade the payment of the prescribed docket fee
but simply contend that they could not be faulted for inadequate assessment because the clerk of court
made no notice of demand or reassessment.49 They were in good faith and simply relied on the assessment
of the clerk of court.
Furthermore, the fact that private respondents prayed for payment of damages "in amounts justified by
the evidence" does not call for the dismissal of the complaint for violation of SC Circular No. 7, dated March
24, 1988 which required that all complaints must specify the amount of damages sought not only in the
body of the pleadings but also in the prayer in order to be accepted and admitted for filing. Sun
Insurance effectively modified SC Circular No. 7 by providing that filing fees for damages and awards that
cannot be estimated constitute liens on the awards finally granted by the trial court. 50
Thus, while the docket fees were based only on the real property valuation, the trial court acquired
jurisdiction over the action, and judgment awards which were left for determination by the court or as may
be proven during trial would still be subject to additional filing fees which shall constitute a lien on the
judgment. It would then be the responsibility of the Clerk of Court of the trial court or his duly authorized
deputy to enforce said lien and assess and collect the additional fees. 51

It is worth noting that when Bertuldo filed his Answer on July 2, 1991, he did not raise the issue of lack of
jurisdiction for non-payment of correct docket fees. Instead, he based his defense on a claim of ownership
and participated in the proceedings before the trial court. It was only in September 22, 1998 or more than
seven years after filing the answer, and under the auspices of a new counsel, that the issue of jurisdiction
was raised for the first time in the motion to expunge by Bertuldos heirs.
After Bertuldo vigorously participated in all stages of the case before the trial court and even invoked the
trial courts authority in order to ask for affirmative relief, petitioners, considering that they merely stepped
into the shoes of their predecessor, are effectively barred by estoppel from challenging the trial courts
jurisdiction. Although the issue of jurisdiction may be raised at any stage of the proceedings as the same is
conferred by law, it is nonetheless settled that a party may be barred from raising it on ground of laches or
estoppel.52
Moreover, no formal substitution of the parties was effected within thirty days from date of death of
Bertuldo, as required by Section 16, Rule 353 of the Rules of Court. Needless to stress, the purpose behind
the rule on substitution is the protection of the right of every party to due process. It is to ensure that the
deceased party would continue to be properly represented in the suit through the duly appointed legal
representative of his estate.54 Non-compliance with the rule on substitution would render the proceedings
and judgment of the trial court infirm because the court acquires no jurisdiction over the persons of the
legal representatives or of the heirs on whom the trial and the judgment would be binding. 55 Thus, proper
substitution of heirs must be effected for the trial court to acquire jurisdiction over their persons and to
obviate any future claim by any heir that he was not apprised of the litigation against Bertuldo or that he
did not authorize Atty. Petalcorin to represent him.
The list of names and addresses of the heirs was submitted sixteen months after the death of Bertuldo and
only when the trial court directed Atty. Petalcorin to comply with the provisions of Section 16, Rule 3 of the
Rules of Court. Strictly speaking therefore, before said compliance, Atty. Petalcorin had no standing in the
court a quowhen he filed his pleadings. Be that as it may, the matter has been duly corrected by the Order
of the trial court dated October 15, 1999.
To be sure, certiorari under Rule 6556 is a remedy narrow in scope and inflexible in character. It is not a
general utility tool in the legal workshop.57 It offers only a limited form of review. Its principal function is to
keep an inferior tribunal within its jurisdiction. 58 It can be invoked only for an error of jurisdiction, that is,
one where the act complained of was issued by the court, officer or a quasi-judicial body without or in
excess of jurisdiction, or with grave abuse of discretion which is tantamount to lack or in excess of
jurisdiction,59 not to be used for any other purpose,60 such as to cure errors in proceedings or to correct
erroneous conclusions of law or fact.61 A contrary rule would lead to confusion, and seriously hamper the
administration of justice.
Petitioners utterly failed to show that the trial court gravely abused its discretion in issuing the assailed
resolutions. On the contrary, it acted prudently, in accordance with law and jurisprudence.
WHEREFORE, the instant petition for certiorari is DISMISSED for lack of merit.
No costs.
SO ORDERED.
Puno, (Chairman), Callejo, Sr., Tinga and Chico-Nazario, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 105308 September 25, 1998

HERBERT CANG, petitioner,
vs.
COURT OF APPEALS and Spouses RONALD V. CLAVANO and MARIA CLARA CLAVANO, respondents.

ROMERO, J.:
Can minor children be legally adopted without the written consent of a natural parent on the ground that
the latter has abandoned them? The answer to this interesting query, certainly not one of first impression,
would have to be reached, not solely on the basis of law and jurisprudence, but also the hard reality
presented by the facts of the case.
This is the question posed before this Court in this petition for review on certiorari of the Decision 1 of the
Court of Appeals affirming the decree of adoption issued by the Regional Trial Court of Cebu City, Branch
14, 2 in Special Proceedings No. 1744-CEB, "In the Matter of the Petition for Adoption of the minors Keith,
Charmaine and Joseph Anthony, all surnamed Cang, Spouses Ronald V. Clavano and Maria Clara Diago
Clavano, petitioners."
Petitioner Herbert Cang and Anna Marie Clavano who were married on January 27, 1973, begot three
children, namely: Keith, born on July 3, 1973; Charmaine, born on January 23, 1977, and Joseph Anthony,
born on January 3, 1981.
During the early years of their marriage, the Cang couple's relationship was undisturbed. Not long
thereafter, however, Anna Marie learned of her husband's alleged extramarital affair with Wilma Soco, a
family friend of the Clavanos.
Upon learning of her husband's alleged illicit liaison, Anna Marie filed a petition for legal separation with
alimonypendente lite 3 with the then Juvenile and Domestic Relations Court of Cebu 4 which rendered a
decision 5 approving the joint manifestation of the Cang spouses providing that they agreed to "live
separately and apart or from bed and board." They further agreed:
(c) That the children of the parties shall be entitled to a monthly support of
ONE THOUSAND PESOS (P1,000.00) effective from the date of the filing of the
complaint. This shall constitute a first lien on the net proceeds of the house
and lot jointly owned by the parties situated at Cinco Village, Mandaue City;
(d) That the plaintiff shall be entitled to enter into any contract or agreement
with any person or persons, natural or juridical without the written consent of
the husband; or any undertaking or acts that ordinarily requires husband's
consent as the parties are by this agreement legally separated; 6

Petitioner then left for the United States where he sought a divorce from Anna Marie before the Second
Judicial District Court of the State of Nevada. Said court issued the divorce decree that also granted sole
custody of the three minor children to Anna Marie, reserving "rights of visitation at all reasonable times
and places" to petitioner. 7
Thereafter, petitioner took an American wife and thus became a naturalized American citizen. In 1986, he
divorced his American wife and never remarried.
While in the United States, petitioner worked in Tablante Medical Clinic earning P18,000.00 to P20,000.00 a
month 8 a portion of which was remitted to the Philippines for his children's expenses and another,
deposited in the bank in the name of his children.
Meanwhile, on September 25, 1987, private respondents Ronald V. Clavano and Maria Clara Diago Clavano,
respectively the brother and sister-in-law of Anna Marie, filed Special Proceedings No. 1744-CEB for the
adoption of the three minor Cang children before the Regional Trial Court of Cebu. The petition bears the
signature of then 14-year-old Keith signifying consent to his adoption. Anna Marie likewise filed an affidavit
of consent alleging that her husband had "evaded his legal obligation to support" his children; that her
brothers and sisters including Ronald V. Clavano, had been helping her in taking care of the children; that
because she would be going to the United States to attend to a family business, "leaving the children
would be a problem and would naturally hamper (her) job-seeking venture abroad;" and that her husband
had "long forfeited his parental rights" over the children for the following reasons:
1. The decision in Civil Case No. JD-707 allowed her to enter into any contract without the
written consent of her husband;
2. Her husband had left the Philippines to be an illegal alien in the United States and had
been transferring from one place to another to avoid detection by Immigration authorities,
and
3. Her husband had divorced her.
Upon learning of the petitioner for adoption, petitioner immediately returned to the Philippines and filed an
opposition thereto, alleging that, although private respondents Ronald and Maria Clara Clavano were
financially capable of supporting the children while his finances were "too meager" compared to theirs, he
could not "in conscience, allow anybody to strip him of his parental authority over his beloved children."
Pending resolution of the petition for adoption, petitioner moved to reacquire custody over his children
alleging that Anna Marie had transferred to the United States thereby leaving custody of their children to
private respondents. On January 11, 1988, the Regional Trial Court of Cebu City, Branch 19, issued an order
finding that Anna Marie had, in effect, relinquished custody over the children and, therefore, such custody
should be transferred to the father. The court then directed the Clavanos to deliver custody over the
minors to petitioner.
On March 27, 1990, the Regional Trial Court of Cebu City, Branch 14, issued a decree of adoption with a
dispositive portion reading as follows:
WHEREFORE, premises considered, the petition for adoption of the minors Keith, Charmaine
and Joseph Anthony all surnamed Cang, by the petitioner-spouses Ronald V. Clavano and
Maria Clara Diago Clavano is hereby granted and approved. These children shall henceforth
be known and called as Keith D. Clavano, Charmaine D. Clavano and Joseph Anthony D.
Clavano respectively. Moreover, this Decree of Adoption shall:

(1) Confer upon the adopted children the same rights and duties as though
they were in fact the legitimate children of the petitioners;
(2) Dissolve the authority vested in the parents by nature, of the children;
and,
(3) Vest the same authority in the petitioners.
Furnish the Local Civil Registrar of Cebu City, Philippines with a copy of this Decree of
Adoption for registration purposes.
SO ORDERED.
In so ruling, the lower court was "impelled" by these reasons:
(1) The Cang children had, since birth, developed "close filial ties with the
Clavano family, especially their maternal uncle," petitioner Ronald Clavano.
(2) Ronald and Maria Clara Clavano were childless and, with their printing
press, real estate business, export business and gasoline station and minimart in Rosemead, California, U.S.A., had substantial assets and income.
(3) The natural mother of the children, Anna Marie, nicknamed "Menchu,"
approved of the adoption because of her heart ailment, near-fatal accident in
1981, and the fact that she could not provide them a secure and happy future
as she "travels a lot."
(4) The Clavanos could provide the children moral and spiritual direction as
they would go to church together and had sent the children to Catholic
schools.
(5) The children themselves manifested their desire to be adopted by the
Clavanos Keith had testified and expressed the wish to be adopted by the
Clavanos while the two younger ones were observed by the court to have
"snuggled" close to Ronald even though their natural mother was around.
On the other hand, the lower court considered the opposition of petitioner to rest on "a very shaky
foundation" because of its findings that:
(1) Petitioner was "morally unfit to be the father of his children" on account of
his being "an improvident father of his family" and an "undisguised Lothario."
This conclusion is based on the testimony of his alleged paramour, mother of
his two sons and close friend of Anna Marie, Wilma Soco, who said that she
and petitioner lived as husband and wife in the very house of the Cangs in
Opao, Mandaue City.
(2) The alleged deposits of around $10,000 that were of "comparatively recent
dates" were "attempts at verisimilitude" as these were joint deposits the
authenticity of which could not be verified.
(3) Contrary to petitioner's claim, the possibility of his reconciliation with Anna
Marie was "dim if not nil" because it was petitioner who "devised, engineered
and executed the divorce proceedings at the Nevada Washoe County court."

(4) By his naturalization as a U.S. citizen, petitioner "is now an alien from the
standpoint of Philippine laws" and therefore, how his "new attachments and
loyalties would sit with his (Filipino) children is an open question."
Quoting with approval the evaluation and recommendation of the RTC Social Worker in her Child Study
Report, the lower court concluded as follows:
Simply put, the oppositor Herbert Cang has abandoned his children. And abandonment of a
child by its (sic) parent is commonly specified by statute as a ground for dispensing with his
consent to its (sic) adoption (Re Cozza, 163 Cal. 514 P. 161, Ann. [As. 1914A, 214]). Indeed,
in such case, adoption will be allowed not only without the consent of the parent, but even
against his opposition(Re McKeag, 141 Cal. 403, 74 P. 1039, 99 Am. St. Rep. 80; Re Camp.
131 Gal. 469,63 P. 736, 82 Am. St. Rep. 371; Graham v. Francis, 83 Colo. 346, 265 P. 690,
citing R.C.L.; Seibert, 170 Iowa, 561, 153 N.W. 160, citing R.C.L.; Steams v. Allen, 183 Mass.
404, 67 N.E. 349; 97 Am. St. Rep. 441; Wilson v. Otis, 71 N.H. 483, 53 A. 439, 93 Am. St. Rep.
564; Nugent v. Powell, 4 Wyo, 173, 33 P. 23, 20 L.R.A. 199, 62 Am. St. Rep. 17.) 9
Before the Court of Appeals, petitioner contended that the lower court erred in holding that it would be in
the best interest of the three children if they were adopted by private respondents Ronald and Maria Clara
Clavano. He asserted that the petition for adoption was fatally defective and tailored to divest him of
parental authority because: (a) he did not have a written consent to the adoption; (b) he never abandoned
his children; (c) Keith and Charmaine did not properly give their written consent; and (d) the petitioners for
adoption did not present as witness the representative of the Department of Social Welfare and
Development who made the case study report required by law.
The Court of Appeals affirmed the decree of adoption stating:
Art. 188 of the Family Code requires the written consent of the natural parents of the child to
be adopted. It has been held however that the consent of the parent who has abandoned
the child is not necessary (Dayrit vs. Piccio, 92 Phil. 729; Santos vs. Ananzanso, 16 SCRA
344). The question therefore is whether or not oppositor may be considered as having
abandoned the children. In adoption cases, abandonment connotes any conduct on the part
of the parent to forego parental duties and relinquish parental claims to the child, or the
neglect or refusal to perform the natural and legal obligations which parents owe their
children (Santos vs. Ananzanso, supra), or the withholding of the parent's presence, his care
and the opportunity to display voluntary affection. The issue of abandonment is amply
covered by the discussion of the first error.
Oppositor argues that he has been sending dollar remittances to the children and has in fact
even maintained bank accounts in their names. His duty to provide support comes from two
judicial pronouncements. The first, the decision in JD-707 CEB, supra, obliges him to pay the
children P1,000.00 a month. The second is mandated by the divorce decree of the Nevada,
U.S.A. Federal Court which orders him to pay monthly support of US$50.00 for each child.
Oppositor has not submitted any evidence to show compliance with the decision in JD-101
CEB, but he has submitted 22 cancelled dollar checks (Exhs. 24 to 45) drawn in the
children's names totalling $2,126.98. The last remittance was on October 6, 1987 (Exh. 45).
His obligation to provide support commenced under the divorce decree on May 5, 1982 so
that as of October 6, 1987, oppositor should have made 53 remittances of $150.00, or a
total of $7,950.00. No other remittances were shown to have been made after October 6,
1987, so that as of this date, oppositor was woefully in arrears under the terms of the
divorce decree. And since he was totally in default of the judgment in JD-707 CEB, the
inevitable conclusion is oppositor had not really been performing his duties as a father,
contrary to his protestations.

True, it has been shown that oppositor had opened three accounts in different banks, as
follows
Acct. No. Date Opened Balance Name of Bank

1) 118-606437-4 July 23, 1985 $5,018.50 Great Western Savings,
Oct. 29, 1987 Daly City, Cal., U.S.A.
2) 73-166-8 March 5, 1986 3,129.00 Matewan National Bank
Oct. 26, 1987 of Williamson, West
Virginia, U.S.A.
3) 564-146883 December 31, 1986 2,622.19 Security Pacific National
Oct. 29, 1987 Bank, Daly City, Cal.,
U.S.A.
The first and third accounts were opened however in oppositor's name as trustee for
Charmaine Cang and Joseph Anthony Cang, respectively. In other words, the accounts are
operated and the amounts withdrawable by oppositor himself and it cannot be said that they
belong to the minors. The second is an "or" account, in the names of Herbert Cang or Keith
Cang. Since Keith is a minor and in the Philippines, said account is operable only by
oppositor and the funds withdrawable by him alone.
The bank accounts do not really serve what oppositor claimed in his offer of evidence "the
aim and purpose of providing for a better future and security of his family." 10
Petitioner moved to reconsider the decision of the Court of Appeals. He emphasized that the decree of
legal separation was not based on the merits of the case as it was based on a manifestation amounting to
a compromise agreement between him and Anna Marie. That he and his wife agreed upon the plan for him
to leave for the United States was borne out by the fact that prior to his departure to the United States, the
family lived with petitioner's parents. Moreover, he alone did not instigate the divorce proceedings as he
and his wife initiated the "joint complaint" for divorce.
Petitioner argued that the finding that he was not fit to rear and care for his children was belied by the
award to him of custody over the children in Civil Case No. JD-707. He took exception to the appellate
court's findings that as an American citizen he could no longer lay claim to custody over his children
because his citizenship would not take away the fact that he "is still a father to his children." As regards his
alleged illicit relationship with another woman, he had always denied the same both in Civil Case No. JD707 and the instant adoption case. Neither was it true that Wilma Soco was a neighbor and family friend of
the Clavanos as she was residing in Mandaue City seven (7) kilometers away from the Clavanos who were
residents of Cebu City. Petitioner insisted that the testimony of Wilma Soco should not have been given
weight for it was only during the hearing of the petition for adoption that Jose Clavano, a brother of Ronald,
came to know her and went to her residence in Iligan City to convince her to be a witness for monetary
considerations. Lastly, petitioner averred that it would be hypocritical of the Clavanos to claim that they
could love the children much more than he could. 11

His motion for reconsideration having been denied, petitioner is now before this Court, alleging that the
petition for adoption was fatally defective as it did not have his written consent as a natural father as
required by Article 31 (2) of Presidential Decree No. 603, the Child and Youth Welfare Code, and Article 188
(2) of the Family Code.
Art. 31 of P.D. No. 603 provides
Art. 31. Whose Consent is Necessary. The written consent of the following to the adoption
shall be necessary:
(1) The person to be adopted, if fourteen years of age or, over;
(2) The natural parents of the child or his legal guardian of the Department of
Social Welfare or any duly licensed child placement agency under whose care
the child may be;
(3) The natural children, fourteen years and above, of the adopting parents.
(Emphasis supplied)
On December 17, 1986, then President Corazon C. Aquino issued Executive Order No. 91 amending Articles
27, 28, 29, 31, 33 and 35 of the Child and Youth Welfare Code. As thus amended, Article 31 read:
Art. 31. Whose Consent is Necessary. The written consent of the following to the adoption
shall be necessary:
(1) The person to be adopted, if fourteen years of age or over;
(2) The natural parents of the child or his legal guardian after receiving
counselling and appropriate social services from the Ministry of Social Services
and Development or from a duly licensed child-placement agency;
(3) The Ministry of Social Services and Development or any duly licensed
child-placement agency under whose care and legal custody the child may be;
(4) The natural children, fourteen years and above, of the adopting parents.
(Emphasis supplied)
Jurisdiction being a matter of substantive law, the established rule is that the statute in force at the time of
the commencement of the action determines the jurisdiction of the court. 12 As such, when private
respondents filed the petition for adoption on September 25, 1987, the applicable law was the Child and
Youth Welfare Code, as amended by Executive Order No. 91.
During the pendency of the petition for adoption or on August 3, 1988, the Family Code which amended
the Child and Youth Welfare Code took effect. Article 256 of the Family Code provides for its retroactivity
"insofar as it does not prejudice or impair vested or acquired rights in accordance with the Civil Code or
other laws." As amended by the Family Code, the statutory provision on consent for adoption now reads:
Art. 188. The written consent of the following to the adoption shall be necessary:
(1) The person to be adopted, if ten years of age or over;
(2) The parents by nature of the child, the legal guardian, or the proper
government instrumentality;

(3) The legitimate and adopted children, ten years of age or over, of the
adopting parent or parents;
(4) The illegitimate children, ten years of age or over, of the adopting parents,
if living with said parent and the latter's spouse, if any; and
(5) The spouse, if any, of the person adopting or to be adopted. (Emphasis
supplied)
Based on the foregoing, it is thus evident that notwithstanding the amendments to the law, the written
consent of the natural parent to the adoption has remained a requisite for its validity. Notably, such
requirement is also embodied in Rule 99 of the Rules of Court as follows:
Sec. 3. Consent to adoption. There shall be filed with the petition a written consent to the
adoption signed by the child, if fourteen years of age or over and not incompetent, and by
the child's spouse, if any, and by each of its known living parents who is not insane or
hopelessly intemperate or has not abandoned the child, or if the child is in the custody of an
orphan asylum, children's home, or benevolent society or person, by the proper officer or
officers of such asylum, home, or society, or by such persons; but if the child is illegitimate
and has not been recognized, the consent of its father to the adoption shall not be required.
(Emphasis supplied)
As clearly inferred from the foregoing provisions of law, the written consent of the natural parent is
indispensable for the validity of the decree of adoption. Nevertheless, the requirement of written consent
can be dispensed with if the parent has abandoned the child 13 or that such parent is "insane or hopelessly
intemperate." The court may acquire jurisdiction over the case even, without the written consent of the
parents or one of the parents provided that the petition for adoption alleges facts sufficient to warrant
exemption from compliance therewith. This is in consonance with the liberality with which this Court treats
the procedural aspect of adoption. Thus, the Court declared:
. . . . The technical rules of pleading should not be stringently applied to adoption
proceedings, and it is deemed more important that the petition should contain facts relating
to the child and its parents, which may give information to those interested, than that it
should be formally correct as a pleading. Accordingly, it is generally held that a petition will
confer jurisdiction if it substantially complies with the adoption statute, alleging all facts
necessary to give the court jurisdiction. 14
In the instant case, only the affidavit of consent of the natural mother was attached to the petition for
adoption. Petitioner's consent, as the natural father is lacking. Nonetheless, the petition sufficiently alleged
the fact of abandonment of the minors for adoption by the natural father as follows:
3. That the children's mother, sister of petitioner RONALD V. CLAVANO, has given her
express consent to this adoption, as shown by Affidavit of Consent, Annex "A". Likewise, the
written consent of Keith Cang, now 14 years of age appears on page 2 of this petition;
However, the father of the children, Herbert Cang, had already left his wife and children and
had already divorced the former, as evidenced by the xerox copy of the DECREE OF
DIVORCE issued by the County of Washoe, State of Nevada, U.S.A. (Annex "B") which was
filed at the instance of Mr. Cang, not long after he abandoned his family to live in the United
States as an illegal immigrant. 15
The allegations of abandonment in the petition for adoption, even absent the written consent of petitioner,
sufficiently vested the lower court with jurisdiction since abandonment of the child by his natural parents is

one of the circumstances under which our statutes and jurisprudence

written consent to the adoption of their minor children.

16

dispense with the requirement of

However, in cases where the father opposes the adoption primarily because his consent thereto was not
sought, the matter of whether he had abandoned his child becomes a proper issue for determination. The
issue of abandonment by the oppositor natural parent is a preliminary issue that an adoption court must
first confront. Only upon, failure of the oppositor natural father to prove to the satisfaction of the court that
he did not abandon his child may the petition for adoption be considered on its merits.
As a rule, factual findings of the lower courts are final and binding upon this Court. 17 This Court is not
expected nor required to examine or contrast the oral and documentary evidence submitted by the
parties. 18 However, although this Court is not a trier of facts, it has the authority to review and reverse the
factual findings of the lower courts if it that these do not conform to the evidence on record. 19
In Reyes v. Court of Appeals, 20 this Court has held that the exceptions to the rule that factual findings of
the trial court are final and conclusive and may not be reviewed on appeal are the following: (1) when the
inference made is manifestly mistaken, absurd or impossible; (2) when there is a grave abuse of discretion;
(3) when the finding is grounded entirely on speculations, surmises or conjectures; (4) when the judgment
of the Court of Appeals is based on misapprehension of facts; (5) when the findings of fact are conflicting;
(6) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same is
contrary to the admissions of both appellant and appellee; (7) when the findings of the Court of Appeals
are contrary to those of the trial court; (8) when the findings of fact are conclusions without citation of
specific evidence on which they are based; (9) when the Court of Appeals manifestly overlooked certain
relevant facts not disputed by the parties and which, if properly considered, would justify a different
conclusion and (10) when the findings of fact of the Court of Appeals are premised on the absence of
evidence and are contradicted by the evidence on record.
This Court finds that both the lower court and the Court of Appeals failed to appreciate facts and
circumstances that should have elicited a different conclusion 21 on the issue of whether petitioner has so
abandoned his children, thereby making his consent to the adoption unnecessary.
In its ordinary sense, the word "abandon'' means to forsake entirely, to forsake or renounce utterly. The
dictionaries trace this word to the root idea of "putting under a ban." The emphasis is on the finality and
publicity with which a thing or body is thus put in the control of another, hence, the meaning of giving up
absolutely, with intent never to resume or claim one's rights or interests. 22 In reference to abandonment
of a child by his parent, the act of abandonment imports "any conduct of the parent which evinces a
settled purpose to forego all parental duties and relinquish all parental claims to the child." It means
"neglect or refusal to perform the natural and legal obligations of care and support which parents owe their
children." 23
In the instant case, records disclose that petitioner's conduct did not manifest a settled purpose to forego
all parental duties and relinquish all parental claims over his children as to, constitute abandonment.
Physical estrangement alone, withoutfinancial and moral desertion, is not tantamount to
abandonment. 24 While admittedly, petitioner was physically absent as he was then in the United States,
he was not remiss in his natural and legal obligations of love, care and support for his children. He
maintained regular communication with his wife and children through letters and telephone. He used to
send packages by mail and catered to their whims.
Petitioner's testimony on the matter is supported by documentary evidence consisting of the following
handwritten letters to him of both his wife and children:
1. Exh. 1 a 4-page updated letter of Menchu (Anna Marie) addressed to "Dear Bert" on a
C. Westates Carbon Phil. Corp. stationery. Menchu stated therein that it had been "a long

time since the last time you've heard from me excluding that of the phone conversation
we've had." She discussed petitioner's intention to buy a motorbike for Keith, expressing
apprehension over risks that could be engendered by Keith's use of it. She said that in the
"last phone conversation" she had with petitioner on the birthday of "Ma," she forgot to tell
petitioner that Keith's voice had changed; he had become a "bagito" or a teen-ager with
many "fans" who sent him Valentine's cards. She told him how Charmaine had become quite
a talkative "almost dalaga" who could carry on a conversation with herangkong and how
pretty she was in white dress when she won among the candidates in the Flores de
Mayo after she had prayed so hard for it. She informed him, however, that she was worried
because Charmaine was vain and wont to extravagance as she loved clothes. About Joeton
(Joseph Anthony), she told petitioner that the boy was smart for his age and "quite spoiled"
being the youngest of the children in Lahug. Joeton was mischievous but Keith was his idol
with whom he would sleep anytime. She admitted having said so much about the childrenbecause they might not have informed petitioner of "some happenings and spices of life"
about themselves. She said that it was "just very exciting to know how they've grown up and
very pleasant, too, that each of them have (sic) different characters." She ended the letter
with the hope that petitioner was "at the best of health." After extending her regards "to all,"
she signed her name after the word "Love." This letter was mailed on July 9, 1986 from Cebu
to petitioner whose address was P.O. Box 2445, Williamson, West Virginia 25661 (Exh. 1-D).
2. Exh. 2 letter dated 11/13/84 on a green stationery with golden print of "a note from
Menchu" on the left upper corner. Anna Marie stated that "we" wrote to petitioner on Oct. 2,
1984 and that Keith and Joeton were very excited when petitioner "called up last time." She
told him how Joeton would grab the phone from Keith just so petitioner would know what he
wanted to order. Charmaine, who was asleep, was so disappointed that she missed
petitioner's call because she also wanted something that petitioner should buy. Menchu told
petitioner that Charmaine wanted a pencil sharpener, light-colored T-shirts for her walking
shorts and a (k)nap sack. Anna Marie informed petitioner that the kids were growing up and
so were their needs. She told petitioner to be "very fatherly" about the children's needs
because those were expensive here. For herself, Anna Marie asked for a subscription of
Glamour and Vogue magazines and that whatever expenses he would incur, she would
"replace" these. As a postscript, she told petitioner that Keith wanted a size 6 khaki-colored
"Sperry topsider shoes."
3. Exh. 3 an undated note on a yellow small piece of paper that reads:
Dear Herbert,
Hi, how was Christmas and New Year? Hope you had a wonderful one.
By the way thanks for the shoes, it was a nice one. It's nice to be thought of at X'mas.
Thanks again.
Sincer
ely,
M
e
n
c
h
u

4. Exh. 4 a two-page undated letter of Keith on stationery of Jose Clavano, Inc. addressed
to "Dear Dad." Keith told his father that they tried to tell their mother "to stay for a little
while, just a few weeks after classes start(s)" on June 16. He informed petitioner that Joeton
would be in Kinder I and that, about the motorbike, he had told his mother to write petitioner
about it and "we'll see what you're (sic) decision will be." He asked for chocolates, nuts,
basketball shirt and shorts, rubber shoes, socks, headband, some clothes for outing and
perfume. He told petitioner that they had been going to Labug with their mother picking
them up after Angkong or Ama had prepared lunch or dinner. From her aerobics, his mother
would go for them in Lahug at about 9:30 or 10:00 o'clock in the evening. He wished his
father "luck and the best of health" and that they prayed for him and their other relatives.
The letter was ended with "Love Keith."
5. Exh. 5 another undated long letter of Keith. He thanked his father for the Christmas
card "with $40.00, $30.00 and $30.00" and the "card of Joeton with $5.00 inside." He told
petitioner the amounts following his father's instructions and promise to send money
through the mail. He asked his father to address his letter directly to him because he wanted
to open his own letters. He informed petitioner of activities during the Christmas season
that they enjoyed eating, playing and giving surprises to their mother. He apprised him of
his daily schedule and that their mother had been closely supervising them, instructing
them to fold their blankets and pile up their pillows. He informed petitioner that Joeton had
become very smart while Charmaine, who was also smart, was very demanding of their
mother. Because their mother was leaving for the United States on February 5, they would
be missing her like they were missing petitioner. He asked for his "things" and $200.00. He
told petitioner more anecdotes about Joeton like he would make the sign of the cross even
when they would pass by the Iglesia ni Cristo church and his insistence that Aquino was not
dead because he had seen him on the betamax machine. For Keith, Charmaine had become
"very maldita" who was not always satisfied with her dolls and things but Joeton was full of
surprises. He ended the letter with "Love your son, Keith." The letter was mailed on February
6, 1985 (Exh. 5-D).
6. Exh. 6 an undated letter Charmaine. She thanked petitioner for the bathing suit, key
chain, pencil box, socks, half shirt, pencil sharpener and $50.00. She reminded him of her
birthday on January 23 when she would turn 9 years old. She informed him that she wore
size 10 and the size of her feet was IM. They had fun at Christmas in Lahug but classes
would start on January 9 although Keith's classes had started on January 6. They would feel
sad again because Mommy would be leaving soon. She hoped petitioner would keep writing
them. She signed, "Love, Charmaine."
7. Exh . 7 an undated letter of Keith. He explained to petitioner that they had not been
remiss in writing letters to him. He informed him of their trip to Manila they went to
Malacaang, Tito Doy Laurel's house, the Ministry of Foreign Affairs, the executive house,
Tagaytay for three days and Baguio for one week. He informed him that he got "honors,"
Charmaine was 7th in her class and Joeton had excellent grades. Joeton would be enrolled in
Sacred Heart soon and he was glad they would be together in that school. He asked for his
"reward" from petitioner and so with Charmaine and Joeton. He asked for a motorbike and
dollars that he could save. He told petitioner that he was saving the money he had been
sending them. He said he missed petitioner and wished him the best. He added that
petitioner should call them on Sundays.
8. Exh. 8 a letter from Joeton and Charmaine but apparently written by the latter. She
asked for money from petitioner to buy something for the school and "something else." She,
promised not to spend so much and to save some. She said she loved petitioner and missed

him. Joeton said "hi!" to petitioner. After ending the letter with "Love, Joeton and
Charmaine," she asked for her prize for her grades as she got seventh place.
9. Exh. 9 undated letter of Keith. He assured petitioner that he had been writing him; that
he would like to have some money but he would save them; that he learned that petitioner
had called them up but he was not around; that he would be going to Manila but would be
back home May 3; that his Mommy had just arrived Thursday afternoon, and that he would
be the "official altar boy." He asked petitioner to write them soon.
10. Exh. 10 Keith thanked petitioner for the money he sent. He told petitioner that he was
saving some in the bank and he was proud because he was the only one in his group who
saved in the bank. He told him that Joeton had become naughty and would claim as his own
the shirts sent to Keith by petitioner. He advised petitioner to send pants and shirts to
Joeton, too, and asked for a pair of topsider shoes and candies. He informed petitioner that
he was a member of the basketball team and that his mom would drive for his group. He
asked him to call them often like the father of Ana Christie and to write them when he would
call so that they could wait for it. He informed petitioner that they had all grown bigger and
heavier. He hoped petitioner would be happy with the letter that had taken him so long to
write because he did not want to commit any mistakes. He asked petitioner to buy him
perfume (Drakkar) and, after thanking petitioner, added that the latter should buy
something for Mommy.
11. Exh. 11 a Christmas card "For My Wonderful Father" dated October 8, 1984 from Keith,
Charmaine and Joeton.
12. Exh. 12 another Christmas card, "Our Wish For You" with the year '83 written on the
upper right hand corner of the inside page, from Keith, Charmaine and Joeton.
13. Exh. 13 a letter of Keith telling petitioner that he had written him even when their
Mom "was there" where she bought them clothes and shoes. Keith asked petitioner for
$300.00. Because his mother would not agree to buy him a motorbike, he wanted a Karaoke
unit that would cost P12,000.00. He informed petitioner that he would go to an afternoon
disco with friends but their grades were all good with Joeton receiving "stars" for excellence.
Keith wanted a bow and arrow Rambo toys and G.I. Joe. He expressed his desire that
petitioner would come and visit them someday.
14. Exh. 14 a letter of Keith with one of the four pages bearing the date January 1986.
Keith told his father that they had received the package that the latter sent them. The
clothes he sent, however, fitted only Keith but not Charmaine and Joeton who had both
grown bigger. Keith asked for grocery items, toys and more clothes. He asked, in behalf of
his mother, for low-heeled shoes and a dress to match, jogging pants, tights and leotards
that would make her look sexy. He intimated to petitioner that he had grown taller and that
he was already ashamed to be asking for things to buy in the grocery even though his
mother had told him not to be shy about it.
Aside from these letters, petitioner also presented certifications of banks in the U.S.A. showing that even
prior to the filing of the petition for adoption, he had deposited amounts for the benefit of his
children. 25 Exhibits 24 to 45 are copies of checks sent by petitioner to the children from 1985 to 1989.
These pieces of evidence are all on record. It is, therefore, quite surprising why the courts below simply
glossed over these, ignoring not only evidence on financial support but also the emotional exchange of
sentiments between petitioner and his family. Instead, the courts below emphasized the meagerness of the
amounts he sent to his children and the fact that, as regards the bank deposits, these were "withdrawable

by him alone." Simply put, the courts below attached a high premium to the prospective adopters' financial
status but totally brushed aside the possible repercussion of the adoption on the emotional and
psychological well-being of the children.
True, Keith had expressed his desire to be adopted by his uncle and aunt. However, his seeming
steadfastness on the matter as shown by his testimony is contradicted by his feelings towards his father as
revealed in his letters to him. It is not at all farfetched to conclude that Keith's testimony was actually the
effect of the filing of the petition for adoption that would certainly have engendered confusion in his young
mind as to the capability of his father to sustain the lifestyle he had been used to.
The courts below emphasized respondents' emotional attachment to the children. This is hardly surprising
for, from the very start of their young lives, the children were used to their presence. Such attachment had
persisted and certainly, the young ones' act of snuggling close to private respondent Ronald Clavano was
not indicative of their emotional detachment from their father. Private respondents, being the uncle and
aunt of the children, could not but come to their succor when they needed help as when Keith got sick and
private respondent Ronald spent for his hospital bills.
In a number of cases, this Court has held that parental authority cannot be entrusted to a person simply
because he could give the child a larger measure of material comfort than his natural parent. Thus,
in David v. Court of Appeals, 26 the Court awarded custody of a minor illegitimate child to his mother who
was a mere secretary and market vendor instead of to his affluent father who was a married man, not
solely because the child opted to go with his mother. The Court said:
Daisie and her children may not be enjoying a life of affluence that private respondent
promises if the child lives with him. It is enough, however, that petitioner is earning a decent
living and is able to support her children according to her means.
In Celis v. Cafuir 27 where the Court was confronted with the issue of whether to award custody of a child to
the natural mother or to a foster mother, this Court said:
This court should avert the tragedy in the years to come of having deprived mother and son
of the beautiful associations and tender, imperishable memories engendered by the
relationship of parent and child. We should not take away from a mother the opportunity of
bringing up her own child even at the cost of extreme sacrifice due to poverty and lack of
means; so that afterwards, she may be able to look back with pride and a sense of
satisfaction at her sacrifices and her efforts, however humble, to make her dreams of her
little boy come true. We should not forget that the relationship between a foster mother and
a child is not natural but artificial. If the child turns out to be a failure or forgetful of what its
foster parents had done for him, said parents might yet count and appraise (sic) all that they
have done and spent for him and with regret consider all of it as a dead loss, and even rue
the day they committed the blunder of taking the child into their hearts and their home. Not
so with a real natural mother who never counts the cost and her sacrifices, ever treasuring
memories of her associations with her child, however unpleasant and disappointing. Flesh
and blood count. . . . .
In Espiritu v. Court of Appeals, 28 the Court stated that "(I)n ascertaining the welfare and best interests of
the child, courts are mandated by the Family Code to take into account all relevant considerations." Thus,
in awarding custody of the child to the father, the Court said:
A scrutiny of the pleadings in this case indicates that Teresita, or at least, her counsel are
more intent on emphasizing the "torture and agony" of a mother separated from her
children and the humiliation she suffered as a, result of her character being made a key
issue in court rather than the feelings and future, the best interests and welfare of her

children. While the bonds between a mother and her small child are special in nature, either
parent, whether father or mother, is bound to suffer agony and pain if deprived of custody.
One cannot say that his or her suffering is greater than that of the other parent. It is not so
much the suffering, pride, and other feelings of either parent but the welfare of the child
which is the paramount consideration. (Emphasis supplied) 29
Indeed, it would be against the spirit of the law if financial consideration were to be the paramount
consideration in deciding whether to deprive a person of parental authority over his children. There should
be a holistic approach to the matter, taking into account the physical, emotional, psychological, mental,
social and spiritual needs of the child. 30 The conclusion of the courts below that petitioner abandoned his
family needs more evidentiary support other than his inability to provide them the material comfort that
his admittedly affluent in-laws could provide. There should be proof that he had so emotionally
abandoned them that his children would not miss his guidance and counsel if they were given to adopting
parents. The letters he received from his children prove that petitioner maintained the more important
emotional tie between him and his children. The children needed him not only because he could cater to
their whims but also because he was a person they could share with their daily activities, problems and
triumphs.
The Court is thus dismayed that the courts below did not look beyond petitioner's "meager" financial
support to ferret out other indications on whether petitioner had in fact abandoned his family. The omission
of said courts has led us to examine why the children were subjected to the process of adoption,
notwithstanding the proven ties that bound them to their father. To our consternation, the record of the
case bears out the fact that the welfare of the children was not exactly the "paramount consideration" that
impelled Anna Marie to consent to their adoption.
In her affidavit of consent, Anna Marie expressly said that leaving the children in the country, as she was
wont to travel abroad often, was a problem that would naturally hamper her job-seeking abroad. In other
words, the adoption appears to be a matter of convenience for her because Anna Marie herself is
financially capable of supporting her children. 31 In his testimony, private respondent Ronald swore that
Anna Marie had been out of the country for two years and came home twice or three times, 32 thereby
manifesting the fact that it was she who actually left her children to the care of her relatives. It was bad
enough that their father left their children when he went abroad, but when their mother followed suit for
her own reasons, the situation worsened. The Clavano family must have realized this. Hence, when the
family first discussed the adoption of the children, they decided that the prospective adopter should be
Anna Marie's brother Jose. However, because he had children of his own, the family decided to devolve the
task upon private respondents. 33
This couple, however, could not always be in Cebu to care for the children. A businessman, private
respondent Ronald Clavano commutes between Cebu and Manila while his wife, private respondent Maria
Clara, is an international flight stewardess. 34 Moreover, private respondent Ronald claimed that he could
"take care of the children while their parents are away," 35 thereby indicating the evanescence of his
intention. He wanted to have the children's surname changed to Clavano for the reason that he wanted to
take them to the United States as it would be difficult for them to get a visa if their surname were different
from his. 36 To be sure, he also testified that he wanted to spare the children the stigma of being products
of a broken home.
Nevertheless, a close analysis of the testimonies of private respondent Ronald, his sister Anna Marie and
their brother Jose points to the inescapable conclusion that they just wanted to keep the children away
from their father. One of the overriding considerations for the adoption was allegedly the state of Anna
Marie's health she was a victim of an almost fatal accident and suffers from a heart ailment. However,
she herself admitted that her health condition was not that serious as she could still take care of the
children. 37 An eloquent evidence of her ability to physically care for them was her employment at the
Philippine Consulate in Los Angeles 38 she could not have been employed if her health were endangered.

It is thus clear that the Clavanos' attempt at depriving petitioner of parental authority apparently stemmed
from their notion that he was an inveterate womanizer. Anna Marie in fact expressed fear that her children
would "never be at ease with the wife of their father." 39
Petitioner, who described himself as single in status, denied being a womanizer and father to the sons of
Wilma Soco. 40As to whether he was telling the truth is beside the point. Philippine society, being
comparatively conservative and traditional, aside from being Catholic in orientation, it does not
countenance womanizing on the part of a family man, considering the baneful effects such irresponsible
act visits on his family. Neither may the Court place a premium on the inability of a man to distinguish
between siring children and parenting them. Nonetheless, the actuality that petitioner carried on an affair
with a paramour cannot be taken as sufficient basis for the conclusion that petitioner was necessarily an
unfit father. 41 Conventional wisdom and common human experience show that a "bad" husband does not
necessarily make a "bad" father. That a husband is not exactly an upright man is not, strictly speaking, a
sufficient ground to deprive him as a father of his inherent right to parental authority over the
children. 42 Petitioner has demonstrated his love and concern for his children when he took the trouble of
sending a telegram 43 to the lower court expressing his intention to oppose the adoption immediately after
learning about it. He traveled back to this country to attend to the case and to testify about his love for his
children and his desire to unite his family once more in the United States. 44
Private respondents themselves explained why petitioner failed to abide by the agreement with his wife on
the support of the children. Petitioner was an illegal alien in the United States. As such, he could not have
procured gainful employment. Private respondents failed to refute petitioner's testimony that he did not
receive his share from the sale of the conjugal home, 45 pursuant to their manifestation/compromise
agreement in the legal separation case. Hence, it can be reasonably presumed that the proceeds of the
sale redounded to the benefit of his family, particularly his children. The proceeds may not have lasted
long but there is ample evidence to show that thereafter, petitioner tried to abide by his agreement with
his wife and sent his family money, no matter how "meager."
The liberality with which this Court treats matters leading to adoption insofar as it carries out the
beneficent purposes of the law to ensure the rights and privileges of the adopted child arising therefrom,
ever mindful that the paramount consideration is the overall benefit and interest of the adopted child,
should be understood in its proper context and perspective. The Court's position, should not be
misconstrued or misinterpreted as to extend to inferences beyond the contemplation of law and
jurisprudence. 46 The discretion to approve adoption proceedings is not to be anchored solely on best
interests of the child but likewise, with due regard to the natural rights of the parents over the child. 47
In this regard, this Court notes private respondents' reliance on the manifestation/compromise agreement
between petitioner and Anna Marie which became the basis of the decree of legal separation. According to
private respondents' counsel, 48 the authority given to Anna Marie by that decree to enter into contracts as
a result of the legal separation was "all embracing"49 and, therefore, included giving her sole consent to
the adoption. This conclusion is however, anchored on the wrong premise that the authority given to the
innocent spouse to enter into contracts that obviously refer to their conjugal properties, shall include
entering into agreements leading to the adoption of the children. Such conclusion is as devoid of a legal
basis as private respondents' apparent reliance on the decree of legal separation for doing away with
petitioner's consent to the adoption.
The transfer of custody over the children to Anna Marie by virtue of the decree of legal separation did not,
of necessity; deprive petitioner of parental authority for the purpose of placing the children up for
adoption. Article 213 of the Family Code states: ". . . in case of legal separation of parents, parental
authority shall be exercised by the parent designated by the court." In awarding custody, the court shall
take into account "all relevant considerations, especially the choice of the child over seven years of age,
unless the parent chosen is unfit."

If should be noted, however, that the law only confers on the innocent spouse the "exercise" of parental
authority. Having custody of the child, the innocent spouse shall implement the sum of parental rights with
respect to his rearing and care. The innocent spouse shall have the right to the child's services and
earnings, and the right to direct his activities and make decisions regarding his care and control,
education, health and religion. 50
In a number of cases, this Court has considered parental authority, the joint exercise of which is vested by
the law upon the parents, 51 as
. . . a mass of rights and obligations which the law grants to parents for the purpose of the
children's physical preservation and development, as well as the cultivation of their intellect
and the education of their hearts and senses. As regards parental authority, "there is no
power, but a task; no complex of rights, but a sum of duties; no sovereignty but a sacred
trust for the welfare of the minor."
Parental authority and responsibility are inalienable and may not be transferred or
renounced except in cases authorized by law. The right attached to parental authority, being
purely personal, the law allows a waiver of parental authority only in cases of adoption,
guardianship and surrender to a children's home or an orphan institution. When a parent
entrusts the custody of a minor to another, such as a friend or godfather, even in a
document, what is given is merely temporary custody and it does not constitute a
renunciation of parental authority. Even if a definite renunciation is manifest, the law still
disallows the same.
The father and mother, being the natural guardians of unemancipated children, are dutybound and entitled to keep them in their custody and company. 52 (Emphasis supplied)
As such, in instant case, petitioner may not be deemed as having been completely deprived of parental
authority, notwithstanding the award of custody to Anna Marie in the legal separation case. To reiterate,
that award was arrived at by the lower court on the basis of the agreement of the spouses.
While parental authority may be waived, as in law it may be subject to a compromise, 53 there was no
factual finding in the legal separation case that petitioner was such an irresponsible person that he should
be deprived of custody of his children or that there are grounds under the law that could deprive him of
parental authority. In fact, in the legal separation case, the court thereafter ordered the transfer of custody
over the children from Anna Marie back to petitioner. The order was not implemented because of Anna
Marie's motion for reconsideration thereon. The Clavano family also vehemently objected to the transfer of
custody to the petitioner, such that the latter was forced to file a contempt charge against them. 54
The law is clear that either parent may lose parental authority over the child only for a valid reason. No
such reason was established in the legal separation case. In the instant case for adoption, the issue is
whether or not petitioner had abandoned his children as to warrant dispensation of his consent to their
adoption. Deprivation of parental authority is one of the effects of a decree of adoption. 55 But there cannot
be a valid decree of adoption in this case precisely because, as this Court has demonstrated earlier, the
finding of the courts below on the issue of petitioner's abandonment of his family was based on a
misappreciation that was tantamount to non-appreciation, of facts on record.
As regards the divorce obtained in the United States, this Court has ruled in Tenchavez v. Escao 56 that a
divorce obtained by Filipino citizens after the effectivity of the Civil Code is not recognized in this
jurisdiction as it is contrary to State policy. While petitioner is now an American citizen, as regards Anna
Marie who has apparently remained a Filipino citizen, the divorce has no legal effect.

Parental authority is a constitutionally protected State policy borne out of established customs and
tradition of our people. Thus, in Silva v. Court of Appeals, 57 a case involving the visitorial rights of an
illegitimate parent over his child, the Court expressed the opinion that:
Parents have the natural right, as well as the moral and legal duty, to care for their children,
see to their upbringing and safeguard their best interest and welfare. This authority and
responsibility may not be unduly denied the parents; neither may it be renounced by them.
Even when the parents are estranged and their affection for each other is lost, the
attachment and feeling for their offsprings invariably remain unchanged. Neither the law not
the courts allow this affinity to suffer absent, of course, any real, grave and imminent threat
to the well being of the child.
Since the incorporation of the law concerning adoption in the Civil Code, there has been a pronounced
trend to place emphasis in adoption proceedings, not so much on the need of childless couples for a child,
as on the paramount interest, of a child who needs the love and care of parents. After the passage of the
Child and Youth Welfare Code and the Family Code, the discernible trend has impelled the enactment of
Republic Act No. 8043 on Intercountry,
Adoption 58 and Republic Act No. 8552 establishing the rules on the domestic adoption of Filipino
children. 59
The case at bar applies the relevant provisions of these recent laws, such as the following policies in the
"Domestic Adoption Act of 1998":
(a) To ensure that every child remains under the care and custody of his/her
parent(s) and be provided with love, care, understanding and security towards
the full and harmonious development of his/her personality. 60
(b) In all matters relating to the care, custody and adoption of a child, his/her
interest shall be the paramount consideration in accordance with the tenets
set forth in the United Nations (UN) Convention on the Rights of the Child. 61
(c) To prevent the child from unnecessary separation from his/her biological
parent(s).62
Inasmuch as the Philippines is a signatory to the United Nations Convention on the Rights of the Child, the
government and its officials are duty bound to comply with its mandates. Of particular relevance to instant
case are the following provisions:
States Parties shall respect the responsibilities, rights and duties of parents . . . to provide, in
a manner consistent with the evolving capacities of the child, appropriate direction and
guidance in the exercise by the child of the rights recognized in the present Convention. 63
States Parties shall respect the right of the child who is separated from one or both parents
to maintain personal relations and direct contact with both parents on a regular basis,
except if it is contrary to the child's best interests. 64
A child whose parents reside in different States shall have the right to maintain on a regular
basis, save in exceptional circumstances personal relations and direct contacts with both
parents . . . 65
States Parties shall respect the rights and duties of the parents . . . to provide direction to
the child in the exercise of his or her right in a manner consistent with the evolving
capacities of the child. 66

Underlying the policies and precepts in international conventions and the domestic statutes with respect to
children is the overriding principle that all actuations should be in the best interests of the child. This is
not, however, to be implemented in derogation of the primary right of the parent or parents to exercise
parental authority over him. The rights of parents vis--visthat of their children are not antithetical to each
other, as in fact, they must be respected and harmonized to the fullest extent possible.
Keith, Charmaine and Joseph Anthony have all grown up. Keith and Charmaine are now of legal age while
Joseph Anthony is approaching eighteen, the age of majority. For sure, they shall be endowed with the
discretion to lead lives independent of their parents. This is not to state that this case has been rendered
moot and academic, for their welfare and best interests regarding their adoption, must be determined as
of the time that the petition for adoption was filed. 67 Said petition must be denied as it was filed without
the required consent of their father who, by law and under the facts of the case at bar, has not abandoned
them.
WHEREFORE, the instant petition for review on certiorari is hereby GRANTED. The questioned Decision and
Resolution of the Court of Appeals, as well as the decision of the Regional Trial Court of Cebu, are SET
ASIDE thereby denying the petition for adoption of Keith, Charmaine and Joseph Anthony, all surnamed
Cang, by the spouse respondents Ronald and Maria Clara Clavano. This Decision is immediately executory.
SO ORDERED. Narvasa, C.J., Kapunan and Purisima, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 97381 November 5, 1992

BENIGNO V. MAGPALE, JR., petitioner,
vs.
CIVIL SERVICE COMMISSION and ROGELIO A. DAYAN, in his capacity as the General Manager of
the Philippine Ports Authority, respondents.

MELO, J.:
Before Us is a petition for review on certiorari assailing Resolution No. 90-962 dated October 19, 1990 of
respondent Civil Service Commission (CSC). Said CSC resolution set aside and modified the decision dated
February 5, 1990 of the Merit System Protection Board in MSPB Case No. 449, which ordered the
immediate reinstatement in the service of herein petitioner Benigno V. Magpale, Jr., without loss of
seniority rights and with payment of back salaries and other emoluments to which he is entitled under the
law.
The record shows that petitioner started his career in government as an employee in the Presidential
Assistance on Community Development in 1960. Fifteen years later, or in 1975, he transferred to the
Philippine Ports Authority (PPA) as Arrastre Superintendent. He was promoted to the position of Port
Manager in 1977 of the Port Management Unit (PMU), General Santos City. Then he was reassigned, in the
same year to PPA-PMU, Tacloban City where he likewise discharged the functions of Port Manager. On
December 1, 1982, the PPA General Manager designated Atty. William A. Enriquez as officer-in-charge of
PPA-PMU, Tacloban City effective December 6, 1982. On January 6, 1983, petitioner was ordered to
immediately report to the Assistant General Manager (AGM) for Operation, PPA, Manila, Petitioner reported
at PPA Manila on the same date and performed the duties and functions assigned to him.
In an Internal Control Department Report dated March 5, 1984, the PMU-Tacloban Inventory Committee and
the Commission on Audit (COA) stated that petitioner failed to account for equipment of PPA value at
P65,542.25 and to liquidate cash advances amounting to P130,069.61. He was found also to have incurred
unauthorized absences from May 25, 1984 to July 23, 1984.
On July 23, 1984, or nineteen months after he began reporting in Manila, a formal charge for Dishonesty,
Pursuit of Private Business without permission as required by Civil Service Rules and Regulations, Frequent
and Unauthorized Absences and Neglect of Duty was filed against petitioner. Based on said charges he was
ordered preventively suspended and has been out of service since then.
For almost four years the case remained unacted upon. The formal investigation and hearing resumed on
September 18, 1987.
On January 18, 1989 a Decision was rendered by the Secretary of the Department of Transportation and
Communication (DOTC), through its Administrative Action Board, finding petitioner guilty of Gross
Negligence on two counts: (a) for his failure to account for the forty-four (44) assorted units of equipment,
among them a Sony Betamax and a TV Camera, and (b) for failing to render the required liquidation of his

cash advances amounting to P44,877.00 for a period of four years. Petitioner was also found guilty of
frequent and unauthorized absences. Accordingly, he was meted the penalty of dismissal from the service
with the corresponding accessory penalties.
When petitioner's motion for reconsideration of the aforesaid Decision was denied in the DOTC's Order of
February 20, 1989, he appealed to the Merit System and Protection Board (MSPB) of respondent Civil
Service Commission.
On February 5, 1990, the MSPB rendered a Decision reversing the Decision of the DOTC. The pertinent
portion of the MSPB's Decision reads:
After a careful review of the record of the case, this Board found the appeal meritorious.
Respondent cannot be held liable for Gross Negligence for his alleged failure to account for
several properties and for failure to liquidate the cash advances he received as there was no
showing that he has been specifically required to do so either by law or regulation. The mere
detail of respondent to PPA-Manila, in the absence of an order requiring him to turn over and
account for the funds and property received for his office at PMU-Tacloban will not
necessarily obligate him to make accounting for the same.
Moreover, Section 105, Chapter 5 of Presidential Decree 1445, otherwise known as "The
Government Auditing Code of the Philippines" measured the liability of an officer
accountable for government property only to the money value of said property. Though
respondent is the person primarily liable for these funds and property, he holds this liability
jointly with the person who has the actual possession thereof and who has the immediate
responsibility for the safekeeping.
As to the charge relative to respondent's frequent unauthorized absences had been
sufficiently and convincingly explained, due to which the Board found him not at all guilty of
the offense charged (sic).
IN VIEW THEREOF, the decision appealed from is hereby reversed. Respondent-Appellant
Magpale should immediately by reinstated in the service without loss of seniority rights and
with payment of back salaries and other emoluments to which he is entitled under the law.
(pp. 31-32, Rollo.)
On March 1, 1990, PPA, through its General Manager, herein respondent Rogelio A Dayan, filed an appeal
with the Civil Service Field Office-PPA, and the latter office indorsed the appeal to respondent CSC in a
letter dated March 5, 1990.
On March 5, 1990, petitioner requested the Secretary of the DOTC to direct the PPA to implement the MSPB
decision as it has become final and executory. Said request was reiterated in another letter also dated
March 5, 1990 by petitioner to OIC Wilfredo M. Trinidad of the Office of the Assistant Secretary for
Administration and Legal Affairs, DOTC.
On March 13, 1990, petitioner filed with the MSPB a Motion for Implementation of the MSPB decision. This
was opposed by the PPA through its General Manager.
On April 27, 1990 petitioner filed with respondent CSC his comment to the appeal of the PPA contending
that he is not an accountable officer and is under no obligation to account for the property and equipment;
that said property and equipment were not received by him as custodian and he should not be held liable
for the loss of the same; that the said property and equipment were place in PPA-PMU Tacloban City which
the herein petitioner left on October 8, 1982 and since then had lost control over them. Moreover,
petitioner averred that as to the unliquidated cash advances of P44,877.00, the same had long been

liquidated. Finally, petitioner claimed that his failure to secure the clearance for any possible property or
financial obligation in PMU-Tacloban was due to the urgency of his transfer to PPA-Manila and the absence
of any order or demand to secure the clearance.
On May 29, 1990, the MSPB issued an Order for the immediate implementation of its February 5, 1990
Decision ruling that:
Records further show that a copy of this Board's decision was received by the Office of the
Honorable Secretary, that Department, thru Mr. Frankie Tampus on February 6, 1990.
Records finally show that as of March 5, 1990, no motion for reconsideration of this Board's
aforementioned decision has ever been filed as evidenced by the certification of even date
issued and signed by Director Adelaida C. Montero of the Office for Central Personnel
Records, this Commission. Hence, said decision has long become final and executory. (p.
34, Rollo.)
On June 28, 1990, petitioner filed a Motion to Dismiss the appeal of PPA claiming that:
1. Appeal of PPA was filed out of time and that the CSC has no jurisdiction over it;
2. The PPA has not exhausted administrative remedies before appealing to the higher body,
the CSC;
3. The MSPB decision has become final and therefore cannot be disturbed anymore.
(p. 22, Rollo.)
On October 19, 1990, respondent CSC rendered its now assailed Resolution No. 90-962, the pertinent
portion of which reads as follows:
The Commission thus holds respondent Magpale guilty of Gross Neglect of Duty on two (2)
counts for the forty-four (44) equipments (sic) under his charge and to render an accounting
for cash advances amounting to P44,877.90. Accordingly, considering two mitigating
circumstances of length of service and first offense in favor of respondent, the commission
hereby imposes a penalty of suspension for a period of one (1) year against him. As he has
been out of the service since 1984, the penalty is deemed served and he should now be
reinstated to his former position. This is, however, without prejudice to any criminal or civil
proceedings that the agency concerned or the COA may institute as proper under the
premises.
Finally, the decision of the MSPB exonerating the respondent Magpale for Gross Negligence
is hereby reversed. Corollarily, the order of payment of back salaries is hereby set aside.
MSPB is likewise reminded to be more circumspect on matters of this nature, especially as
the instant case involves accountability of public funds and property.
WHEREFORE, foregoing premises considered, the Commission finds respondent Benigno V.
Magpale, Jr., guilty of Gross Neglect of Duty on two (2) counts for failure to account for the
forty-four (44) equipments (sic) under his charge and to render an accounting for cash
advance amounting to P44,877.90. In view of the attendant mitigating circumstances of
length of service and first offense in favor of respondents and the Neglect of Duty to account
for cash advance in the amount of P44,877.90 (second count) be appreciated as an
aggravating circumstances, the penalty of suspension for one (1) year shall be imposed
against respondent. This shall be without prejudice to any criminal or civil proceeding that
PPA or COA may institute against respondent. Accordingly, the Decision and Order of MSBP

dated February 5, 1990 and May 29, 1990, respectively, are hereby set aside. (pp. 2728, Rollo.)
Hence, the present recourse.
The petition alleges that respondent CSC, in issuing its Resolution No. 90-962, gravely abused its discretion
because:
1. The law did not authorize an appeal by the government from an adverse decision of the
Merit Systems Protection Board (MSBP);
2. Respondent PPA General Manager did not have the right or legal personality to appeal
from the MSPB decision;
3. Assuming that the appeal was available to respondent DAYAN, the same was filed out
time after the MSPB decision had long become final and executory. (pp. 6-7, Petition; pp. 78, Rollo.)
In support of this first contention, petitioner invokes Paragraph 2(a). Section 16, Chapter 3, Subtitle A, Title
I, Book V of Executive Order No. 292, otherwise known as the Administrative Code of 1987 which provides:
Sec. 16. Offices in the Commission. The Commission shall have the following offices:
xxx xxx xxx
(2) The Merit Systems Protection Board composed of a Chairman and two (2)
members shall have the following functions:
(a) Hear and decide on appeal administrative cases involving
officials and employees of the Civil Service. Its decision shall be
final except those involving dismissal or separation from the
service which may be appealed to the Commission. (Emphasis
supplied.)
claiming that since the MSBP decision was for dismissal or separation from the service, but reinstatement
without loss of seniority rights and with payment of back salaries, the said MSBP decision should be
deemed final, immediately executory and unappealable.
Petitioner next contends that assuming, for the sake of argument, that the decision of the MSBP was
appealable, respondent Dayan, even in his capacity as General Manager of the PPA, did not have the legal
personality not the right to appeal the decision of the MSBP, citing Paragraph 1, Section 49, Chapter 7,
Subtitle A, Title I, Book V, of Executive Order No. 292 and the case of Paredes vs. CSC, G.R. No. 88177,
December 4, 1990, 192 SCRA 84.
Assuming further that the MSBP decision was appealable and that respondent Dayan had the legal
personality to appeal the MSBP decision, petitioner still contends that the appeal should not have been
given due course by the respondent CSC because the appeal was not filed with the proper disciplining
office in accordance with same Section 49 of Executive Order No. 292, which in this case, should be the
DOTC, not with the CSC Field Office at the PPA.
On the merit of the petition, petitioner claims that assuming even further that an appeal lies from the
MSBP decision, that respondent Dayan had the legal personality or standing to institute the appeal that it
was filed with the proper office, still CSC Resolution 90-962 was rendered with grave abuse of discretion

because petitioner cannot be suspended for alleged failure to account for pieces of equipment and cash
advances since this is not the neglect of duty contemplated by Section 36 of Presidential Degree No. 807
or Section 46 of chapter in the Civil Service in Executive Order 292. At most, petitioner can be held liable
for the money value of the equipment and advances as mandated by Section 105 of Presidential Decree
No. 1445, the Government Auditing Code of the Philippines.
For its part, respondent CSC maintains
First, that the finality of the MSPB decision in the disciplinary cases as stated in Section 16, Paragraph 2(a),
Book V of Executive Order No. 292, relied upon by petitioner, is modified by section 12, Paragraph 11, Book
V, of the same Executive Order No. 292, which reads:
Sec. 12. Powers and Functions. The Commission shall have the following powers and
functions:
xxx xxx xxx
(11) Hear and decide administrative case instituted by or bought directly or on appeal,
including contested appointments, and review decisions and actions of its offices and of the
agencies attached to it.
Furthermore, relevant provisions of Executive Order No 135 dated February 25, 1987 amending Section
19(b) of Presidential Decree No. 807 and Section 8 of Presidential Decree No. 1409 state, thus:
WHEREAS, in the interest of justice, there is a need to confer upon the Civil Service
Commission jurisdiction over appeal in contested or provisional appointments and to make
its decision thereon, as well as in administrative disciplinary cases final and reviewable by
the Supreme Court.
xxx xxx xxx
Relationship with the Civil Service Commission. The Commission shall hear and decide
appeals from other decisions of the Board provided that the decisions of the Commission
shall be subject to review on certiorari upon receipt of the copy thereof by the aggrieved
part.
Thus, respondent CSC argues that it is deemed not to have lost its appellate jurisdiction over the decisions
of the MSPB in administrative disciplinary case.
Second, the case of Paredes vs. CSC is not applicable. Respondent Dayan appealed the MSPB decision not
in his personal capacity nor in pursuit in his private interest, but as head of PPA, being the general
manager thereof.
Third, the appeal was filed with the proper disciplining office because the decision appealed from was that
of the MSPB, one of the offices in respondent CSC. Thus, respondent CSC was justified in giving due course
to PPA's notice of appeal filed with its (CSC) Field Office at the PPA.
Finally, petitioner's claim that he is liable only for the money value of the property and cash advances and
cannot be administratively charged for such infraction is untenable and a mockery of the civil service law.
For his failure to account for the property under his charge and to liquidate his cash advances, petitioner is
guilty of Gross Neglect of Duty and should have been dismissed from the service if no mitigating
circumstances were considered in his favor.

We gave due course to the petition and required the parties to file their respective memoranda. After
considering the same and the pertinent laws and jurisprudence, We find that the petition must be granted.
After Mendez vs. Civil Service Commission, (204 SCRA 965 [1991]), the extent of the authority of
respondent CSC to review the decisions of the MSPB is now a settled matter.
The Court, in said case held:
It is axiomatic that the right to appeal is merely a statutory privilege and may
be exercised only in the manner and in accordance with the provisions of law.
(Victorias Milling Co., Inc. vs. Office of the Presidential Assistant for Legal
Affairs, 153 SCRA 318).
A cursory reading of P.D. 807, otherwise known as "The Philippines Civil
Service Law" shows that said law does not contemplate a review of decisions
exonerating officers or employees from administrative charges.
Section 37 paragraph (a) thereof, provides:
The Commission shall decide upon appeal all administrative disciplinary cases
involving the imposition of the penalty of suspension for more than thirty
days, or fine in an amount exceeding thirty day's salary, demotion in rank or
salary or transfer, removal or dismissal from office. . . . (Emphasis supplied)
(p. 7. Rollo)
Said provisions must be read together with Section 39 paragraph (a) of P.D. 805 which
contemplates:
Appeals, where allowable, shall be made by the party adversely affected by
the decision . . . (Emphasis supplied) (p. 104, Rollo)
The phrase "party adversely affective by the decision" refers to the government employees
against whom the administrative case is filed for the purpose of disciplinary action which
may take the form of suspension, demotion in rank or salary, transfer, removal or dismissal
from office. In the instant case, Coloyan who filed the appeal cannot be considered an
aggrieved party because he is not the respondent of the administrative case below.
Finally, pursuant to Section 37 paragraph (b) of P.D. 807, the city mayor, as head of the city
government, is empowered to enforce judgment with finality on lesser penalties like
suspension from work for one month and forfeiture of salary equivalent to one month
against erring employees.
By inference or implication, the remedy of appeal may be availed of only in a case where the
respondent is found guilty of the charges filed against him. But the respondent is exonerated
of said charges, as in this case, there is no occasion on appeal. (pp. 967-968)
The above ruling is a reiteration of the earlier pronouncement in Paredes vs. Civil Service Commission,
(192 SCRA 84 [1990]) cited by petitioner, where We said:
Based on the above provisions of law, appeal to the Civil Service Commission in an
administrative case is extended to the party adversely affected by the decision, that is, the
person or the respondent employee who has been meted out the penalty of suspension for
more than thirty days; or fine in an amount exceeding thirty days salary demotion in rank or

salary or transfer, removal or dismissal from office. The decision of the disciplining authority
is even final and not appealable to the Civil Service Commission in cases where the penalty
imposed is suspension for not more than thirty days or fine in an amount not exceeding
thirty days salary. Appeal in cases allowed by law must be filed within fifteen days from
receipt of the decision.
Here the MSPB after hearing and the submission of memoranda exonerated private
respondent Amor of all charges except for habitual tardiness. The penalty was only a
reprimand so that even private respondent Amor, the party adversely affected by the
decision, cannot even interpose an appeal to the Civil Service Commission.
As correctly ruled by respondent, petitioner Paredes the complainant is not the part
adversely affected by the decision so that she has no legal personality to interpose an
appeal to the Civil Service Commission. In an administrative case, the complainant is a mere
witness (Gonzalo vs. D. Roda, 64 SCRA 120). Even if she is the Head of the Administrative
Services Department of the HSRC as a complaint she is merely a witness for the government
in an administrative case. No private interest is involved in an administrative case as the
offense is committed against the government. (pp. 98-99)
While it is true, as contended by respondent Civil Service Commission that under Section 12 (par. 11),
Chapter 3, Subtitle A, Book V of Executive Order 292, the CSC does have the power to
Hear and decide administrative cases instituted by or brought before it directly or on appeal,
including contested appointments, and review decisions and actions of its offices and of the
agencies attached to it. . . .
the exercise of the power is qualified by and should be read together with the other sections of the same
sub-title and book of Executive Order 292, particularly Section 49 which prescribes the following requisites
for the exercise of the power of appeal, to wit:
(a) the decision must be appealable;
(b) the appeal must be made by the party adversely affected by the decision;
(c) the appeal must be made within fifteen days from receipt of the decision, unless a
petition for the reconsideration is seasonably filed; and
(d) the notice of appeal must be filed with the disciplining office, which shall forward the
records of the case, together with the notice of appeal to the appellate authority within
fifteen days from filing of the notice of appeal, with its comments, if any.
Under Section 47 of the same Code, the CSC shall decide on appeal all administrative disciplinary cases
involving the imposition of:
(a) a penalty of suspension for more than thirty days; or
(b) fine in an amount exceeding thirty days salary; or
c) demotion in rank or salary or transfer; or
(d) removal or dismissal from office.

The February 5, 1990 decision of the MSPB did not involve dismissal or separation from office, rather, the
decision exonerated petitioner and ordered him reinstated to his former position. Consequently, in the light
of our pronouncements in the aforecited cases of Mendez v. Civil Service Commission and Paredes vs. Civil
Service Commission, the MSPB decision was not a proper subject of appeal to the CSC.
Settled is the rule that a tribunal, board, or officer exercising judicial functions acts without jurisdiction if no
authority has been conferred by law to hear and decide the case. (Acena v. Civil Service Commission, 193
SCRA 623 [1991]).
WHEREFORE, the decision of the Civil Service Commission is hereby ANNULLED and SET ASIDE and the
decision of the Merit Systems Protection Board dated February 5, 1990 is hereby REINSTATED.
SO ORDERED.
Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr., Romero, Nocon, Bellosillo
and Campos, Jr., JJ., concur.
Narvasa, C.J., and Medialdea, J., are on leave.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 154877

March 27, 2007

JIN-JIN DELOS SANTOS, Petitioner,

vs.
SPOUSES REYNATO D. SARMIENTO and LENI C. SARMIENTO and IA-JAN SARMIENTO REALTY,
INC.,Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the August
20, 2002 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 69902.2
The facts are of record.lawphi1.net
In a Contract to Buy and Sell3 dated March 17, 1995 (contract to sell), Reynato Sarmiento and Leni
Sarmiento (Spouses Sarmiento),4 agreed to sell to Jin Jin Delos Santos (Santos) an 82-square meter
residential lot identified as Lot 18, Block 2, located at IA-JAN Homes and registered under TCT. No. 95442.
The purchase price was set at P824,000.00, P300,000.00 of which was paid by Santos to Spouses
Sarmiento at the time of the execution of the contract, with the remaining balance to be paid within 5
years at a monthly amortization rate of P15,074.43.
Before the purchase price could be paid in full, Santos and Spouses Sarmiento entered into a Cancellation
of Contract to Buy and Sell5 (cancellation of contract) dated April 19, 1997, by virtue of which Spouses
Sarmiento agreed to refund Santos P584,355.10 while the latter agreed to surrender possession of the
residential lot to the former.
On July 14, 1999, Santos wrote Spouses Sarmiento, demanding refund of P760,000.00 with
interest.6 Spouses Sarmiento wrote back that they intend to refund the amount within 90 days. 7
When Spouses Sarmiento failed to refund Santos, the latter filed with the Housing and Land Use Regulatory
BoardExpanded National Capital Region Field Office (HLURB) a Complaint, 8 docketed as HLURB Case No.
REM-102299-10723,9 to enforce the cancellation of contract and demand payment of the refund plus
interest and damages. The case was assigned to Arbiter Atty. Dunstan T. San Vicente (Arbiter San Vicente)
who issued an Order10 dated June 7, 2000, declaring respondents therein in default for failure to file an
answer despite notice. It is noted, however, that the respondent named in the June 7, 2000 Order is IA-JAN
Sarmiento Realty, Inc. (IJSRI), not Spouses Sarmiento.
IJSRI is actually the complainant in a case for specific performance filed against Santos before HLURB and
docketed as REM-102299-10732.11 In said case, IJSRI alleged in its Complaint12 that it was the vendor in the
contract to sell with Santos; that it received only 13 payments from Santos (or the total amount
of P195,727.12) for which it issued corresponding IJSRI official receipts; 13 and that Santos defaulted,
leaving an unpaid balance ofP2,414,964.58.14 The case was assigned to Arbiter Atty. Joselito Melchor
(Arbiter Melchor).

In her Answer to the Complaint in REM-102299-10732,15 Santos admitted that she entered into the
contract to sell with IJSRI and that she made payments to the latter for which she received IJSRI official
receipts.16 However, Santos insists that, in addition to the 13 payments itemized in the Complaint, she
made 7 additional payments, all covered by official
receipts,17 bringing her total payments to P866,602.35. Moreover, Santos argued that her obligations under
the contract to sell had been extinguished by the execution of the cancellation of contract. 18
It appears that Santos filed a motion19 for consolidation of REM-102299-10723 and REM-102299-10732. IAJAN opposed20 the consolidation as improper for the two cases involve different sets of parties, specifically:
while in REM-102299-10723 the complainant is Santos and the respondents are Spouses Sarmiento, in
REM-102299-10732, the complainant is IA-JAN and the respondent is Santos. 21
In an undated Order, 22 Arbiter San Vicente granted Santoss motion and directed that REM-102299-10723
and REM-102299-10732 be resolved in a consolidated judgment. However, Arbiter San Vicente later
reversed himself in an Order23 dated June 7, 2000 and directed that REM-102299-10732 be heard
separately from REM-102299-10723.
Yet, in a Decision dated February 26, 2001, Arbiter Melchor treated REM-102299-10723 and REM-10229910732 as still consolidated24 and held:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the respondent and ordering
the complainant to pay to respondent as follows:
a) The amount of FIVE HUNDRED EIGHTY FOUR THOUSAND THREE HUNDRED FIFTY FIVE PESOS &
10/100 (P584,255.10) with eighteen percent (18%) per annum to be computed from the
complainants delay of payment dated October 15, 1997 until fully paid, and
b) The amount of FIFTY THOUSAND PESOS (P50,000.00) as damages and attorneys fees plus the
costs of litigation.
SO ORDERED.

25

HLURB Regional Director Octavio DG. Canta (Director Canta) approved the foregoing Decision. 26
IJSRI filed a Petition for Review27 with the HLURB Board of Commissioners (HLURB Board) but Arbiter
Melchor, in an Order28 dated February 26, 2002, dismissed the Petition for failure of IJSRI to attach an
appeal bond. Director Canta approved the Order.
Upon a Petition for Certiorari and Mandamus29 filed by IJSRI, the CA rendered the August 20, 2002 Decision
assailed herein, the dispositive portion of which reads:
WHEREFORE, finding grave abuse of discretion on the part of public respondents Arbiter Melchor and
Regional Director Obligacion of the HLURB, the assailed Decision dated February 26, 2001 and Order dated
February 26, 2002 are hereby VACATED and SET ASIDE. Accordingly, public respondents are hereby
DIRECTED to dispose the cases REM 102999-10732 entitled "IA-JAN SARMIENTO REALTY, INCORPORATED,
Complainant versus JIN-JIN DELOS SANTOS, Respondent" separately and independently, in keeping with
the Order dated June 7, 2000 of Arbiter Dunstan San Vicente.
Without filing a motion for reconsideration from the CA Decision, petitioner Santos took the present
recourse on three grounds:

1. The Court of Appeals erred when it made a legal conclusion given the undisputed facts, that
there was grave abuse of discretion when Arbiter Melchor rendered a consolidated decision on the
two cases of Jin-Jin Delos Santos vs. Sps. Reynato D. Sarmiento/Leni C. Sarmiento and IA-JAN
Sarmiento Realty vs. Jin-Jin Delos Santos, even when the cases involved the same parties, same
matters (contract to buy and sell, cancellation of contract, townhouse/lot and official receipts) and
intimately related issues.
2. The Court of Appeals erred when, in ruling to remand the consolidated cases for a separate and
independent resolution, it made the legal conclusion, in clear disregard of the principle of "piercing
the veil of corporate fiction". That the Spouses Sarmiento and their Sarmiento Realty Inc. have
separate and distinct personalities, even when the undisputed fact is that the two respondents
never considered themselves as indpendent and separate entitities in their dealings with
petitioner-"purchaser".
3. The Court of Appeals erred when it made a legal conclusion given the admitted facts, that there
was grave abuse of discretion when Arbiter Melchor dismissed the Petition for Review of respondent
IA-JAN Sarmiento Realty, Inc. even when there was failure to attach the required appeal bond and
which failure is a ground for such dismissal.30
Before we even begin to consider the foregoing issues, the Court takes cognizance of a pivotal question of
lack of jurisdiction over the subject matter, a deficiency patent on the face of the records. We resolve this
issue motuproprio, even if it was not raised by the parties nor threshed out in their pleadings, 31 for to let it
pass would result in the conferment of jurisdiction to the HLURB by the mere oversight of the parties, the
agency concerned and the CA.32
The scope and limitation of the jurisdiction of the HLURB is well-defined. Its precursor, the National Housing
Authority (NHA), was vested under Presidential Decree (P.D.) No. 95733 with exclusive jurisdiction to
regulate the real estate trade and business,34 specifically the registration of subdivision or condominium
projects35 and dealers, brokers and salesmen of subdivision lots or condominium units; 36 issuance37 and
suspension38 of license to sell; and revocation of registration certificate 39 and license to sell.40 Its
jurisdiction was later expanded under Presidential Decree (P.D.) No. 1344 41 of April 2, 1978, to include
adjudication of the following cases:
Sec. 1. In the exercise of its function to regulate the real estate trade and business and in addition to its
powers provided for in Presidential Decree No. 957, the National Housing Authority shall have exclusive
jurisdiction to hear and decide cases of the following nature:
A. Unsound real estate business practices;
B. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer
against the project owner, developer, dealer, broker or salesman; and
C. Cases involving specific performance of contractual and statutory obligations filed by buyers of
subdivision lot or condominium unit against the owner, developer, broker or salesman. (Emphasis
ours.)
By virtue of Executive Order No. 648,42 the Human Settlements Regulatory Commission (HSRC) was
created to regulate zoning and land use and development43 and to assume the regulatory and adjudicatory
functions of NHA.44 HSRC was later renamed HLURB under Executive Order No. 90.45
At present, therefore, it is clear that the jurisdiction of the HLURB to hear and decide cases is determined
by the nature of the cause of action, the subject matter or property involved and the parties.

The cases over which HLURB has jurisdiction are those arising from either unsound real estate business
practices, or claims for refund or other claims filed by subdivision lot or condominium unit buyers against
the project owner, developer, dealer, broker or salesman, or demands for specific performance of
contractual and statutory obligations filed by buyers of subdivision lots or condominium units against the
owner, developer,
broker or salesman.46
In addition, these cases must involve a subdivision project, subdivision lot, condominium project or
condominium unit. A subdivision project or subdivision lot is defined under Sec. 2 of P.D. No. 957, thus:
Section 2 x x x
d) Subdivision project "Subdivision project" shall mean a tract or a parcel of land registered under Act No.
496 which is partitioned primarily for residential purposes into individual lots with or without improvements
thereon, and offered to the public for sale, in cash or in installment terms. It shall include all residential,
commercial, industrial and recreational areas as well as open spaces and other community and public
areas in the project.
e) Subdivision lot. "Subdivision lot" shall mean any of the lots, whether residential, commercial,
industrial, or recreational, in a subdivision project.
In quite a number of cases, we declared the HLURB without jurisdiction where the complaint filed did not
allege that the property involved is a subdivision or condominium project or a subdivision lot or
condominium unit.47 In fact, in Javellana v. Presiding Judge,48 we were not satisfied with a mere reference in
the contract to sell to the property as a "regular subdivision project." We observed:
A reading of the complaint does not show that the subject lot was a subdivision lot which would fall under
the jurisdiction of the HLURB. The complaint clearly described the subject lot as Lot No. 44, Plan 15 with an
area of 139.4 sq. meters situated in the District of Sampaloc covered by Transfer Certificate of Title No.
131305 of the Registry of Deeds of Manila. We note that such description was used when referring to the
subject lot. What appears from the complaint was the fact that the subject lot was sold to petitioners in an
ordinary sale of a lot on installment basis; that petitioners allegedly defaulted in the payment of their
monthly installments for which reason respondent seeks to recover possession thereof. Thus, the trial court
has jurisdiction over the case.
Going back to the jurisdictional requirements, it is also important that, with reference to cases arising from
a claim for refund or specific performance, said cases must be filed by the subdivision lot or condominium
unit buyer or owner against the subdivision or condominium project owner, developer, broker or salesman.
Cases filed by buyers or owners of property which is not alleged to be a subdivision or condominium
property do not fall within the jurisdiction of the HLURB for the complainants in said cases are treated as
ordinary real estate buyers or owners, not subdivision or condomium buyers or owners. 49
What about cases filed by subdivision or condominium project owners or developers against their buyers?
The rules on this matter differ.
The general rule is stated in Pilar Development Corporation v. Villar 50 and Suntay v. Gocolay51 where we
held that the HLURB has no jurisdiction over cases filed by subdivision or condominium owners or
developers against subdivision lot or condominium unit buyers or owners. The rationale behind this can be
found in the wordings of Sec. 1, P.D. No. 1344, which expressly qualifies that the cases cognizable by the
HLURB are those instituted by subdivision or condomium buyers or owners against the project developer or
owner. This rationale is also expressed in the preambles of P.D. No. 957 and P.D. No. 1344 which state that
the policy of the law is to curb unscrupulous practices in real estate trade and business. 52

The only instance that HLURB may take cognizance of a case filed by the developer is when said case is
instituted as a compulsory counterclaim to a pending case filed against it by the buyer or owner of a
subdivision lot or condominium unit. We allowed this in Francel Realty Corporation v. Sycip in order to
forestall splitting of causes of action.
To summarize, not every case involving buyers and sellers of real estate may be filed with the HLURB. Its
jurisdiction is limited to those cases filed by the buyer or owner of a subdivision or condominium and
based on any of the causes of action enumerated under Section 1 of P.D. No. 1344, and which jurisdictional
facts must be clearly alleged in the complaint.
Set against the foregoing requirements, it is plain that the HLURB has no jurisdiction over REM-10229910723 and REM-102299-10732.
Mere reference to the contract to sell, which forms part of the Complaints in REM-102299-10723 and REM102299-10732, reveals that the property subject matter of the case is not a subdivision lot in the
contemplation of P.D. No. 957. While the contract describes the residential lot as found in IA-JAN Homes,
there is nothing that would indicate that said area has been partitioned or developed as a subdivision or
that it was registered with the HLURB as a subdivision project. It is absolutely silent on whether the
vendors Spouses Sarmiento are subdivision owners or that IJSRI is a subdivision developer or that the
vendee Santos is the buyer or owner of a subdivision lot. The parties are ordinary sellers and buyer of a
common real property.
It may be that REM-102299-10723 arose from Santoss claim for refund under the contract of cancellation,
which is a cause of action ordinarily cognizable by the HLURB under Sec. 1 (b), P.D. No. 1344. But then, the
same provision expressly qualifies that the claim for refund, to be cognizable by the HLURB, must involve a
subdivision or condominium property and that it be filed by a "subdivision lot or condominium unit buyer
against the project owner, developer, dealer, broker or salesman." In Lacson Hermanas, Inc. v. Heirs of
Cenon Ignacio,53 we held that the regular courts, not the HLURB, have jurisdiction over actions to enforce a
contract to sell involving real property which is not alleged nor established to be a subdivision or
condominium property. Also, in Kakilala v. Faraon,54 the buyer of a real property sued the seller before the
HLURB for "Specific Performance for Non-development and Damages." While non-development falls under
Sec. 1 (c) of P.D. No. 1344, we held that the HLURB has no jurisdiction to hear and decide the case because
it was never alleged that the property involved is a subvision or condominium and that the parties are
subdivision or condominium buyer and developer/owner.
As to its Complaint in REM-102299-10732, IJSRI does not claim to be registered and licensed with the
HLURB to engage in the development and sale of subdivision lots. It merely attached to its Complaint a
copy of its Articles of Incorporation with the Securities and Exchange Commission which states that its
purpose is to acquire, own, use, improve, develop, subdivide, sell, mortgage, exchange, lease and hold for
investment or otherwise real estate of all kinds. There is no hint that it is a subdivision developer or owner.
Moreover, except for a bare description of the residential lot being located at IA-JAN Homes, there is no
allegation that said property is a subdivision lot or "part of a tract of land partitioned primarily for
residential purposes into individual lots and offered to the public for sale x x x [and which] includes
recreational areas and open spaces."55
Worse, REM-102299-10732 is a case instituted by IJSRI, purportedly as a subdivision owner. As we said,
HLURB is not a collection agency that real estate businesses can employ to exact payment from their
clients. Its mandate is to police real estate trade and business to protect the buying public. It cannot
entertain cases instituted by developers against their buyers,56 unless the case is filed as a compulsory
counterclaim as contemplated in Francel Realty Corp. v. Sycip. Assuming IJSRI to be a subdivision owner,
its case (REM-102299-10732), which was filed separately from REM-102299-10723, should not have been
entertained by the HLURB.

In sum, the HLURB erred in taking cognizance of both REM-102299-10723 and REM-102299-10732, and in
rendering the February 26, 2001 Decision and February 26, 2002 Order. Although the CA acted correctly in
setting aside said decision and order, the proper disposition of the cases is not their remand to the HLURB
for separate hearing but their outright dismissal for lack of jurisdiction.
With the foregoing disquisition, the issues raised in the present Petition need no longer be resolved.
WHEREFORE, the petitition is GRANTED. The August 20, 2002 Decision of the Court of Appeals
is SET ASIDEwhile the February 26, 2001 Decision and February 26, 2002 Order of the Housing and Land
Use Regulatory Board are also SET ASIDE. REM-102299-10723 and REM-102299-10732
are DISMISSED without prejudice to the filing of the cases in the proper court.
No costs.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 155713

May 5, 2006

MILAGROS G. LUMBUAN,* Petitioner,

vs.
ALFREDO A. RONQUILLO, Respondent.
DECISION
QUISUMBING, J.:
This petition for review on certiorari seeks to reverse and set aside the Decision1 dated April 12, 2002, of
the Court of Appeals in CA-G.R. SP No. 52436 and its Resolution 2 dated October 14, 2002, denying the
petitioners motion for reconsideration.
The salient facts, as found by the Court of Appeals,3 are as follows:
Petitioner Milagros G. Lumbuan is the registered owner of Lot 19-A, Block 2844 with Transfer Certificate of
Title No. 193264, located in Gagalangin, Tondo, Manila. On February 20, 1995, she leased it to respondent
Alfredo A. Ronquillo for a period of three years with a monthly rental of P5,000. The parties also agreed
that there will be a 10% annual increase in rent for the succeeding two years, i.e., 1996 and 1997, 4 and the
leased premises will be used exclusively for the respondents fastfood business, unless any other use is
given, with the petitioners prior written consent.5
While the respondent at the start operated a fastfood business, he later used the premises as residence
without the petitioners prior written consent. He also failed to pay the 10% annual increase in rent
of P500/month starting 1996 and P1,000/month in 1997 to the present. Despite repeated verbal and
written demands, the respondent refused to pay the arrears and vacate the leased premises.
On November 15, 1997, the petitioner referred the matter to the Barangay Chairmans office but the
parties failed to arrive at a settlement. The Barangay Chairman then issued a Certificate to File Action. 6
On December 8, 1997, the petitioner filed against the respondent an action for Unlawful Detainer,
docketed as Civil Case No. 157922-CV. It was raffled to the Metropolitan Trial Court (MeTC) of Manila,
Branch 6. On December 15, 1997, the respondent received the summons and copy of the complaint. On
December 24, 1997, he filed his Answer by mail. Before the MeTC could receive the respondents Answer,
the petitioner filed a Motion for Summary Judgment dated January 7, 1998. 7 Acting upon this motion, the
MeTC rendered a decision8 on January 15, 1998, ordering the respondent to vacate and surrender
possession of the leased premises; to pay the petitioner the amount of P46,000 as unpaid rentals with
legal interest until fully paid; and to pay the petitionerP5,000 as attorneys fees plus cost of the suit.
The respondent then filed a Manifestation calling the attention of the MeTC to the fact that his Answer was
filed on time and praying that the decision be set aside. The MeTC denied the prayer, ruling that the
Manifestation was in the nature of a motion for reconsideration which is a prohibited pleading under the
Rules on Summary Procedure.
Upon appeal, the case was raffled to the Regional Trial Court (RTC) of Manila, Branch 38, and docketed as
Civil Case No. 98-87311. On July 8, 1998, the RTC rendered its decision 9 setting aside the MeTC decision.

The RTC directed the parties to go back to the Lupon Chairman or Punong Barangay for further proceedings
and to comply strictly with the condition that should the parties fail to reach an amicable settlement, the
entire records of the case will be remanded to MeTC of Manila, Branch 6, for it to decide the case anew.
The respondent sought reconsideration but the RTC denied the motion in an Order dated March 15, 1999.
Thus, he sought relief from the Court of Appeals through a petition for review. 10 On April 12, 2002, the
appellate court promulgated a decision, reversing the decision of the RTC and ordering the dismissal of the
ejectment case. The appellate court ruled that when a complaint is prematurely instituted, as when the
mandatory mediation and conciliation in the barangay level had not been complied with, the court should
dismiss the case and not just remand the records to the court of origin so that the parties may go through
the prerequisite proceedings.
The petitioner filed a motion for reconsideration, which was denied by the appellate court. Hence, this
present petition.
In the meantime, while this petition was pending before this Court, the parties went through barangay
conciliation proceedings as directed by the RTC of Manila, Branch 38. Again, they failed to arrive at an
amicable settlement prompting the RTC to issue an Order11 remanding the case to the MeTC of Manila,
Branch 6, where the proceedings took place anew. On April 25, 2000, the MeTC rendered a second
decision, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment on the merits is hereby rendered for the plaintiff as follows:
1. Ordering defendant and all persons claiming right of possession under him to voluntarily vacate
the property located at Lot 19-A Block 2844, Gagalangin, Tondo, Manila and surrender possession
thereof to the plaintiff;
2. Ordering defendant to pay to plaintiff the amount of P387,512.00 as actual damages in the form
of unpaid rentals and its agreed increase up to January 2000 and to pay the amount of P6,500.00 a
month thereafter until the same is actually vacated;
3. Ordering the defendant to pay to plaintiff the sum of P10,000.00 as and for attorneys fees plus
cost of the suit.
SO ORDERED.12
The respondent appealed the foregoing decision.1avvphil.net The case was raffled to RTC of Manila, Branch
22, and docketed as Civil Case No. 00-98173. The RTC ruled in favor of the petitioner and dismissed the
appeal. The respondent elevated the case to the Court of Appeals, where it is now pending.
The sole issue for our resolution is:
[WHETHER] THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE COMPLAINT FOR THE ALLEGED
FAILURE OF THE PARTIES TO COMPLY WITH THE MANDATORY MEDIATION AND CONCILIATION PROCEEDINGS
IN THE BARANGAY LEVEL.13
With the parties subsequent meeting with the Lupon Chairman or Punong Barangay for further conciliation
proceedings, the procedural defect was cured. Nevertheless, if only to clear any lingering doubt why the
Court of Appeals erred in dismissing the complaint, we shall delve on the issue.
The petitioner alleges that the parties have gone through barangay conciliation proceedings to settle their
dispute as shown by the Certificate to File Action issued by the Lupon/Pangkat Secretary and attested by
the Lupon/Pangkat Chairman. The respondent, on the other hand, contends that whether there was

defective compliance or no compliance at all with the required conciliation, the case should have been
dismissed.
The primordial objective of the Katarungang Pambarangay Rules,14 is to reduce the number of court
litigations and prevent the deterioration of the quality of justice which has been brought about by the
indiscriminate filing of cases in the courts. To attain this objective, Section 412(a) of Republic Act No.
716015 requires the parties to undergo a conciliation process before the Lupon Chairman or the Pangkat as
a precondition to filing a complaint in court,16 thus:
SECTION 412. Conciliation. (a) Pre-condition to Filing of Complaint in Court. No complaint, petition,
action, or proceeding involving any matter within the authority of the lupon shall be filed or instituted
directly in court or any other government office for adjudication, unless there has been a confrontation
between the parties before the lupon chairman or the pangkat, and that no conciliation or settlement has
been reached as certified by the lupon secretary or pangkat secretary as attested to by the lupon or
pangkat chairman.
Here, the Lupon/Pangkat Chairman and Lupon/Pangkat Secretary signed the Certificate to File Action
stating that no settlement was reached by the parties. While admittedly no pangkat was constituted, it was
not denied that the parties met at the office of the Barangay Chairman for possible settlement. The efforts
of the Barangay Chairman, however, proved futile as no agreement was reached. Although no pangkat was
formed, in our mind, there was substantial compliance with the law. It is noteworthy that under the
aforequoted provision, the confrontation before the Lupon Chairman or the pangkat is sufficient
compliance with the precondition for filing the case in court. 17 This is true notwithstanding the mandate of
Section 410(b) of the same law that the Barangay Chairman shall constitute a pangkat if he fails in his
mediation efforts. Section 410(b) should be construed together with Section 412, as well as the
circumstances obtaining in and peculiar to the case. On this score, it is significant that the Barangay
Chairman or Punong Barangay is herself the Chairman of the Lupon under the Local Government Code. 18
Finally, this Court is aware that the resolution of the substantial issues in this case is pending with the
Court of Appeals. While ordinarily, we would have determined the validity of the parties substantial claims
since to await the appellate courts decision will only frustrate speedy justice and, in any event, would be a
futile exercise, as in all probability the case would end up with this Court, we find that we cannot do so in
the instant case.
It must be underscored that supervening events have taken place before the lower courts where the
parties have been adequately heard, and all the issues have been ventilated. Since the records of those
proceedings are with the Court of Appeals, it is in a better position to fully adjudicate the rights of the
parties. To rely on the records before this Court would prevent us from rendering a sound judgment in this
case. Thus, we are left with no alternative but to leave the matter of ruling on the merits to the appellate
court.
WHEREFORE, the petition is GRANTED. The decision and resolution of the Court of Appeals in CA-G.R. SP
No. 52436 are REVERSED and SET ASIDE, and the decision of the Regional Trial Court of Manila, Branch
38, in Civil Case No. 98-87311 is AFFIRMED.
The Court of Appeals is ordered to proceed with the appeal in CA G.R. No. 73453 and decide the case
with dispatch.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. Nos. 79937-38 February 13, 1989
SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J. WARBY, petitioners,
vs.
HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional Trial Court, Quezon City
and MANUEL CHUA UY PO TIONG, respondents.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices for petitioners. Tanjuatco, Oreta,
Tanjuatco, Berenguer & Sanvicente Law Offices for private respondent.

GANCAYCO, J.:
Again the Court is asked to resolve the issue of whether or not a court acquires jurisdiction over a case
when the correct and proper docket fee has not been paid.
On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a complaint with the
Regional Trial Court of Makati, Metro Manila for the consignation of a premium refund on a fire insurance
policy with a prayer for the judicial declaration of its nullity against private respondent Manuel Uy Po Tiong.
Private respondent as declared in default for failure to file the required answer within the reglementary
period.
On the other hand, on March 28, 1984, private respondent filed a complaint in the Regional Trial Court of
Quezon City for the refund of premiums and the issuance of a writ of preliminary attachment which was
docketed as Civil Case No. Q-41177, initially against petitioner SIOL, and thereafter including E.B. Philipps
and D.J. Warby as additional defendants. The complaint sought, among others, the payment of actual,
compensatory, moral, exemplary and liquidated damages, attorney's fees, expenses of litigation and costs
of the suit. Although the prayer in the complaint did not quantify the amount of damages sought said
amount may be inferred from the body of the complaint to be about Fifty Million Pesos (P50,000,000.00).
Only the amount of P210.00 was paid by private respondent as docket fee which prompted petitioners'
counsel to raise his objection. Said objection was disregarded by respondent Judge Jose P. Castro who was
then presiding over said case. Upon the order of this Court, the records of said case together with twentytwo other cases assigned to different branches of the Regional Trial Court of Quezon City which were under
investigation for under-assessment of docket fees were transmitted to this Court. The Court thereafter
returned the said records to the trial court with the directive that they be re-raffled to the other judges in
Quezon City, to the exclusion of Judge Castro. Civil Case No. Q-41177 was re-raffled to Branch 104, a sala
which was then vacant.
On October 15, 1985, the Court en banc issued a Resolution in Administrative Case No. 85-10-8752-RTC
directing the judges in said cases to reassess the docket fees and that in case of deficiency, to order its
payment. The Resolution also requires all clerks of court to issue certificates of re-assessment of docket
fees. All litigants were likewise required to specify in their pleadings the amount sought to be recovered in
their complaints.

On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177 was temporarily
assigned, issuedan order to the Clerk of Court instructing him to issue a certificate of assessment of the
docket fee paid by private respondent and, in case of deficiency, to include the same in said certificate.
On January 7, 1984, to forestall a default, a cautionary answer was filed by petitioners. On August 30,1984,
an amended complaint was filed by private respondent including the two additional defendants
aforestated.
Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter assigned, after his
assumption into office on January 16, 1986, issued a Supplemental Order requiring the parties in the case
to comment on the Clerk of Court's letter-report signifying her difficulty in complying with the Resolution of
this Court of October 15, 1985 since the pleadings filed by private respondent did not indicate the exact
amount sought to be recovered. On January 23, 1986, private respondent filed a "Compliance" and a "ReAmended Complaint" stating therein a claim of "not less than Pl0,000,000. 00 as actual compensatory
damages" in the prayer. In the body of the said second amended complaint however, private respondent
alleges actual and compensatory damages and attorney's fees in the total amount of about
P44,601,623.70.
On January 24, 1986, Judge Asuncion issued another Order admitting the second amended complaint and
stating therein that the same constituted proper compliance with the Resolution of this Court and that a
copy thereof should be furnished the Clerk of Court for the reassessment of the docket fees. The
reassessment by the Clerk of Court based on private respondent's claim of "not less than P10,000,000.00
as actual and compensatory damages" amounted to P39,786.00 as docket fee. This was subsequently paid
by private respondent.
Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of Judie
Asuncion dated January 24, 1986.
On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of
P20,000,000.00 as d.qmages so the total claim amounts to about P64,601,623.70. On October 16, 1986, or
some seven months after filing the supplemental complaint, the private respondent paid the additional
docket fee of P80,396.00. 1
On August 13, 1987, the Court of Appeals rendered a decision ruling, among others, as follows:
WHEREFORE, judgment is hereby rendered:
1. Denying due course to the petition in CA-G.R. SP No. 1, 09715 insofar as it seeks
annulment of the order
(a) denying petitioners' motion to dismiss the complaint, as amended, and
(b) granting the writ of preliminary attachment, but giving due course to the portion thereof
questioning the reassessment of the docketing fee, and requiring the Honorable respondent
Court to reassess the docketing fee to be paid by private respondent on the basis of the
amount of P25,401,707.00. 2
Hence, the instant petition.
During the pendency of this petition and in conformity with the said judgment of respondent court, private
respondent paid the additional docket fee of P62,432.90 on April 28, 1988. 3

The main thrust of the petition is that the Court of Appeals erred in not finding that the lower court did not
acquire jurisdiction over Civil Case No. Q-41177 on the ground of nonpayment of the correct and proper
docket fee. Petitioners allege that while it may be true that private respondent had paid the amount of
P182,824.90 as docket fee as herein-above related, and considering that the total amount sought to be
recovered in the amended and supplemental complaint is P64,601,623.70 the docket fee that should be
paid by private respondent is P257,810.49, more or less. Not having paid the same, petitioners contend
that the complaint should be dismissed and all incidents arising therefrom should be annulled. In support
of their theory, petitioners cite the latest ruling of the Court in Manchester Development Corporation vs.
CA, 4 as follows:
The Court acquires jurisdiction over any case only upon the payment of the prescribed
docket fee. An amendment of the complaint or similar pleading will not thereby vest
jurisdiction in the Court, much less the payment of the docket fee based on the amounts
sought in the amended pleading. The ruling in the Magaspi Case in so far as it is inconsistent
with this pronouncement is overturned and reversed.
On the other hand, private respondent claims that the ruling in Manchester cannot apply retroactively to
Civil Case No. Q41177 for at the time said civil case was filed in court there was no such Manchester ruling
as yet. Further, private respondent avers that what is applicable is the ruling of this Court in Magaspi v.
Ramolete, 5wherein this Court held that the trial court acquired jurisdiction over the case even if the docket
fee paid was insufficient.
The contention that Manchester cannot apply retroactively to this case is untenable. Statutes regulating
the procedure of the courts will be construed as applicable to actions pending and undetermined at the
time of their passage. Procedural laws are retrospective in that sense and to that extent. 6
In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of the full amount of the docket fee
is an indispensable step for the perfection of an appeal. In a forcible entry and detainer case before the
justice of the peace court of Manaoag, Pangasinan, after notice of a judgment dismissing the case, the
plaintiff filed a notice of appeal with said court but he deposited only P8.00 for the docket fee, instead of
P16.00 as required, within the reglementary period of appeal of five (5) days after receiving notice of
judgment. Plaintiff deposited the additional P8.00 to complete the amount of the docket fee only fourteen
(14) days later. On the basis of these facts, this court held that the Court of First Instance did notacquire
jurisdiction to hear and determine the appeal as the appeal was not thereby perfected.
In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention to become a Filipino citizen by
sending it through registered mail to the Office of the Solicitor General in 1953 but the required filing fee
was paid only in 1956, barely 5V2 months prior to the filing of the petition for citizenship. This Court ruled
that the declaration was not filed in accordance with the legal requirement that such declaration should be
filed at least one year before the filing of the petition for citizenship. Citing Lazaro, this Court concluded
that the filing of petitioner's declaration of intention on October 23, 1953 produced no legal effect until the
required filing fee was paid on May 23, 1956.
In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and Lee were applied. It was an original
petition for quo warranto contesting the right to office of proclaimed candidates which was mailed,
addressed to the clerk of the Court of First Instance, within the one-week period after the proclamation as
provided therefor by law. 10 However, the required docket fees were paid only after the expiration of said
period. Consequently, this Court held that the date of such payment must be deemed to be the real date
of filing of aforesaid petition and not the date when it was mailed.
Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the docket fee must be paid before a
court will act on a petition or complaint. However, we also held that said rule is not applicable when
petitioner seeks the probate of several wills of the same decedent as he is not required to file a separate

action for each will but instead he may have other wills probated in the same special proceeding then
pending before the same court.
Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that a case is deemed filed only upon
payment of the docket fee regardless of the actual date of its filing in court. Said case involved a complaint
for recovery of ownership and possession of a parcel of land with damages filed in the Court of First
Instance of Cebu. Upon the payment of P60.00 for the docket fee and P10.00 for the sheriffs fee, the
complaint was docketed as Civil Case No. R-11882. The prayer of the complaint sought that the Transfer
Certificate of Title issued in the name of the defendant be declared as null and void. It was also prayed
that plaintiff be declared as owner thereof to whom the proper title should be issued, and that defendant
be made to pay monthly rentals of P3,500.00 from June 2, 1948 up to the time the property is delivered to
plaintiff, P500,000.00 as moral damages, attorney's fees in the amount of P250,000.00, the costs of the
action and exemplary damages in the amount of P500,000.00.
The defendant then filed a motion to compel the plaintiff to pay the correct amount of the docket fee to
which an opposition was filed by the plaintiff alleging that the action was for the recovery of a parcel of
land so the docket fee must be based on its assessed value and that the amount of P60.00 was the correct
docketing fee. The trial court ordered the plaintiff to pay P3,104.00 as filing fee.
The plaintiff then filed a motion to admit the amended complaint to include the Republic as the defendant.
In the prayer of the amended complaint the exemplary damages earlier sought was eliminated. The
amended prayer merely sought moral damages as the court may determine, attorney's fees of
P100,000.00 and the costs of the action. The defendant filed an opposition to the amended complaint. The
opposition notwithstanding, the amended complaint was admitted by the trial court. The trial court
reiterated its order for the payment of the additional docket fee which plaintiff assailed and then
challenged before this Court. Plaintiff alleged that he paid the total docket fee in the amount of P60.00 and
that if he has to pay the additional fee it must be based on the amended complaint.
The question posed, therefore, was whether or not the plaintiff may be considered to have filed the case
even if the docketing fee paid was not sufficient. In Magaspi, We reiterated the rule that the case was
deemed filed only upon the payment of the correct amount for the docket fee regardless of the actual date
of the filing of the complaint; that there was an honest difference of opinion as to the correct amount to be
paid as docket fee in that as the action appears to be one for the recovery of property the docket fee of
P60.00 was correct; and that as the action is also one, for damages, We upheld the assessment of the
additional docket fee based on the damages alleged in the amended complaint as against the assessment
of the trial court which was based on the damages alleged in the original complaint.
However, as aforecited, this Court overturned Magaspi in Manchester. Manchester involves an action for
torts and damages and specific performance with a prayer for the issuance of a temporary restraining
order, etc. The prayer in said case is for the issuance of a writ of preliminary prohibitory injunction during
the pendency of the action against the defendants' announced forfeiture of the sum of P3 Million paid by
the plaintiffs for the property in question, the attachment of such property of defendants that may be
sufficient to satisfy any judgment that may be rendered, and, after hearing, the issuance of an order
requiring defendants to execute a contract of purchase and sale of the subject property and annul
defendants' illegal forfeiture of the money of plaintiff. It was also prayed that the defendants be made to
pay the plaintiff jointly and severally, actual, compensatory and exemplary damages as well as 25% of said
amounts as may be proved during the trial for attorney's fees. The plaintiff also asked the trial court to
declare the tender of payment of the purchase price of plaintiff valid and sufficient for purposes of
payment, and to make the injunction permanent. The amount of damages sought is not specified in the
prayer although the body of the complaint alleges the total amount of over P78 Millon allegedly suffered by
plaintiff.

Upon the filing of the complaint, the plaintiff paid the amount of only P410.00 for the docket fee based on
the nature of the action for specific performance where the amount involved is not capable of pecuniary
estimation. However, it was obvious from the allegations of the complaint as well as its designation that
the action was one for damages and specific performance. Thus, this court held the plaintiff must be
assessed the correct docket fee computed against the amount of damages of about P78 Million, although
the same was not spelled out in the prayer of the complaint.
Meanwhile, plaintiff through another counsel, with leave of court, filed an amended complaint on
September 12, 1985 by the inclusion of another co-plaintiff and eliminating any mention of the amount of
damages in the body of the complaint. The prayer in the original complaint was maintained.
On October 15, 1985, this Court ordered the re-assessment of the docket fee in the said case and other
cases that were investigated. On November 12, 1985, the trial court directed the plaintiff to rectify the
amended complaint by stating the amounts which they were asking for. This plaintiff did as instructed. In
the body of the complaint the amount of damages alleged was reduced to P10,000,000.00 but still no
amount of damages was specified in the prayer. Said amended complaint was admitted.
Applying the principle in Magaspi that "the case is deemed filed only upon payment of the docket fee
regardless of the actual date of filing in court," this Court held that the trial court did not acquire
jurisdiction over the case by payment of only P410.00 for the docket fee. Neither can the amendment of
the complaint thereby vest jurisdiction upon the Court. For all legal purposes there was no such original
complaint duly filed which could be amended. Consequently, the order admitting the amended complaint
and all subsequent proceedings and actions taken by the trial court were declared null and void. 13
The present case, as above discussed, is among the several cases of under-assessment of docket fee
which were investigated by this Court together with Manchester. The facts and circumstances of this case
are similar toManchester. In the body of the original complaint, the total amount of damages sought
amounted to about P50 Million. In the prayer, the amount of damages asked for was not stated. The action
was for the refund of the premium and the issuance of the writ of preliminary attachment with damages.
The amount of only P210.00 was paid for the docket fee. On January 23, 1986, private respondent filed an
amended complaint wherein in the prayer it is asked that he be awarded no less than P10,000,000.00 as
actual and exemplary damages but in the body of the complaint the amount of his pecuniary claim is
approximately P44,601,623.70. Said amended complaint was admitted and the private respondent was
reassessed the additional docket fee of P39,786.00 based on his prayer of not less than P10,000,000.00 in
damages, which he paid.
On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of
P20,000,000.00 in damages so that his total claim is approximately P64,601,620.70. On October 16, 1986,
private respondent paid an additional docket fee of P80,396.00. After the promulgation of the decision of
the respondent court on August 31, 1987 wherein private respondent was ordered to be reassessed for
additional docket fee, and during the pendency of this petition, and after the promulgation of Manchester,
on April 28, 1988, private respondent paid an additional docket fee of P62,132.92. Although private
respondent appears to have paid a total amount of P182,824.90 for the docket fee considering the total
amount of his claim in the amended and supplemental complaint amounting to about P64,601,620.70,
petitioner insists that private respondent must pay a docket fee of P257,810.49.
The principle in Manchester could very well be applied in the present case. The pattern and the intent to
defraud the government of the docket fee due it is obvious not only in the filing of the original complaint
but also in the filing of the second amended complaint.
However, in Manchester, petitioner did not pay any additional docket fee until] the case was decided by
this Court on May 7, 1987. Thus, in Manchester, due to the fraud committed on the government, this Court

held that the court a quo did not acquire jurisdiction over the case and that the amended complaint could
not have been admitted inasmuch as the original complaint was null and void.
In the present case, a more liberal interpretation of the rules is called for considering that, unlike
Manchester, private respondent demonstrated his willingness to abide by the rules by paying the
additional docket fees as required. The promulgation of the decision in Manchester must have had that
sobering influence on private respondent who thus paid the additional docket fee as ordered by the
respondent court. It triggered his change of stance by manifesting his willingness to pay such additional
docket fee as may be ordered.
Nevertheless, petitioners contend that the docket fee that was paid is still insufficient considering the total
amount of the claim. This is a matter which the clerk of court of the lower court and/or his duly authorized
docket clerk or clerk in-charge should determine and, thereafter, if any amount is found due, he must
require the private respondent to pay the same.
Thus, the Court rules as follows:
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the
action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the
court may allow payment of the fee within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third party claims and similar pleadings, which shall
not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow
payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or
reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and
payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the
pleading, or if specified the same has been left for determination by the court, the additional filing fee
therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his
duly authorized deputy to enforce said lien and assess and collect the additional fee.
WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of Court of the court a quo is hereby
instructed to reassess and determine the additional filing fee that should be paid by private respondent
considering the total amount of the claim sought in the original complaint and the supplemental complaint
as may be gleaned from the allegations and the prayer thereof and to require private respondent to pay
the deficiency, if any, without pronouncement as to costs.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 170750

April 7, 2009

HEIRS OF TOMAS DOLLETON, HERACLIO ORCULLO, REMEDIOS SAN PEDRO, HEIRS OF

BERNARDO MILLAMA, HEIRS OF AGAPITO VILLANUEVA, HEIRS OF HILARION GARCIA, SERAFINA
SP ARGANA, and HEIRS OF MARIANO VILLANUEVA, Petitioners,
vs.
FIL-ESTATE MANAGEMENT INC., ET AL. AND THE REGISTER OF DEEDS OF LAS PIAS
CITY,Respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing (1) the
Decision1 dated 16 September 2005, rendered by the Court of Appeals in CA-G.R. CV No. 80927, which
affirmed the Resolutions2dated 8 September 2000 and 30 June 2003, of the Regional Trial Court (RTC),
Branch 253, of Las Pias City, dismissing the Complaints in Civil Cases No. LP-97-0228, No. LP-97-0229, No.
LP-97-0230, No. LP-97-0231, No. LP-97-0236, No. LP-97-0237, No. LP-97-0238, and No. LP-97-0239; and (2)
the Resolution dated 9 December 2005 of the same court denying petitioners Motion for Reconsideration.
In October 1997, petitioners Heirs of Tomas Dolleton, 3 Heraclio Orcullo, Remedios San Pedro, et al.,4 Heirs
of Bernardo Millama, et al.,5 Heirs of Agapito Villanueva, et al.,6 Heirs of Hilarion Garcia, et al.,7 Serafina SP
Argana, et al.,8 and Heirs of Mariano Villanueva, et al.9 filed before the RTC separate Complaints for
Quieting of Title and/or Recovery of Ownership and Possession with Preliminary Injunction/Restraining
Order and Damages against respondents Fil-Estate Management Inc., Spouses Arturo E. Dy and Susan Dy,
Megatop Realty Development, Inc.,10 and the Register of Deeds of Las Pias. The Complaints, which were
later consolidated, were docketed as follows:
1. Civil Case No. L-97-0228, which was filed by the Heirs of Tomas Dolleton covering a parcel of land
with an area of 17,681 square meters, located in Magasawang Mangga, Barrio Pugad Lawin, Las
Pias, Rizal under Psu-235279 approved by the Director of the Bureau of Lands on 20 February
1959;
2. Civil Case No. L-97-0229, which was filed by Heraclio Orcullo covering two (2) parcels of land with
the total areas of 14,429 square meters and 2,105 square meters, respectively, located in
Magasawang Mangga, Barrio Pugad Lawin, Las Pias, Rizal under Lots 1 and 2, Psu-169404
approved by the Director of the Bureau of Lands on 4 December 1959;
3. Civil Case No. L-97-0230, which was filed by Remedios San Pedro, et al., covering a parcel of land
with an area of 17,159 square meters, located in Barrio Pugad Lawin, Las Pias, Rizal under Psu96901 approved by the Director of the Bureau of Lands on 21 July 1933;
4. Civil Case No. L-97-0231, which was filed by the Heirs of Bernardo Millama, et al., covering a
parcel of land with an area of 23,359 square meters, located in Magasawang Mangga, Barrio Pugad
Lawin, Las Pias, Rizal under Psu-96905 approved by the Director of the Bureau of Lands on 16
January 1933;

5. Civil Case No. L-97-0236, which was filed by the Heirs of Agapito Villanueva covering a parcel of
land with an area of 10,572 square meters, located in Magasawang Mangga, Barrio Pugad Lawin,
Las Pias, Rizal;
6. Civil Case No. L-97-0237, which was filed by the Heirs of Hilarion Garcia, et al., covering a parcel
of land with an area of 15,372 square meters, located in Magasawang Mangga, Barrio Pugad Lawin,
Las Pias, Rizal under Psu-96920 approved by the Director of the Bureau of Lands on 16 January
1933;
7. Civil Case No. L-97-0238, which was filed by Serafina SP Argana, et al., covering a parcel of land
with an area of 29,391 square meters, located in Magasawang Mangga, Barrio Pugad Lawin, Las
Pias, Rizal under Psu-96909 approved by the Director of the Bureau of Lands on 18 January 1933;
and
8. Civil Case No. L-97-0239, which was filed by the Heirs of Mariano Villanueva, et al., covering a
parcel of land with an area of 7,454 square meters, located in Magasawang Mangga, Barrio Pugad
Lawin, Las Pias, Rizal under Psu-96910 approved by the Director of the Bureau of Lands on 16
January 1933.
The eight Complaints11 were similarly worded and contained substantially identical allegations. Petitioners
claimed in their Complaints that they had been in continuous, open, and exclusive possession of the aforedescribed parcels of land (subject properties) for more than 90 years until they were forcibly ousted by
armed men hired by respondents in 1991. They had cultivated the subject properties and religiously paid
the real estate taxes for the same. Respondents cannot rely on Transfer Certificates of Title (TCTs) No.
9176, No. 9177, No. 9178, No. 9179, No. 9180, No. 9181 and No. 9182, 12 issued by the Registry of Deeds of
Las Pias in their names, to support their claim over the subject properties since, petitioners averred, the
subject properties were not covered by said certificates. Petitioners also alleged that said TCTs, purportedly
derived from Original Certificate of Title (OCT) No. 6122, issued in favor of Jose Velasquez, were spurious.
To support their narration of facts, petitioners cited Vda. de Cailles v. Mayuga 13 and Orosa v.
Migrino,14 which both involved the parcel of land referred to as Lot 9, Psu-11411, Amd-2. In these cases,
the Court adjudicated said piece of land to Dominador Mayuga, who later transferred it to Marciano
Villanueva, who sold it to Nicolas Orosa. Pending a controversy between the Heirs of Nicolas Orosa and
Jose Velasquez, Delta Motors Corporation somehow acquired the rights over their conflicting claims to the
land and managed to obtain certificates of title over the same. Delta Motors Corporation sold the land to
Goldenrod, Inc., which finally transferred it to a consortium composed of respondents, Peaksun Enterprises
and Export Corporation, and Elena Jao.
Petitioners stressed, however, that in Vda. de Cailles and Orosa, the land that was transferred was Lot 9,
Psu-11411, Amd-2, measuring 53 hectares, which was only a portion of the entire Lot 9, Psu-11411, with a
total area of 119.8 hectares. And respondents TCTs, derived from OCT No. 6122 in the name of Jose
Velasquez, covered only 26.44 hectares or roughly half of Lot 9, Psu-11411, Amd-2. Petitioners averred that
the subject properties were not included in the 53 hectares of Lot 9, Psu-11411, adjudicated to Dominador
Mayuga.
Petitioners thus sought from the RTC that an order be issued enjoining respondents from making any
developments on the subject properties, and that after hearing, judgment be rendered as follows:
A. [Herein respondents] be ordered to recognize the rights of [herein petitioners]; to vacate the
subject lot and peacefully surrender possession thereof to [petitioners]; and that Transfer Certificate
of Title Numbers 9176, 9177, 9178, 9179, 9180 and 9182 be cancelled by the Register of Deeds for
Las Pinas, Metro Manila, insofar as they are or may be utilized to deprive [petitioners] of the
possession and ownership of said lot.

B. Making the preliminary injunctions permanent.

C. An order be issued directing [respondents] to pay [petitioners] the sums of:
a. P500,000.00 as moral damages;
b. P150,000.00 as exemplary damages;
c. P100,000.00 as attorneys fees; and,
d. Cost of suit.
[Petitioners] further pray for such other affirmative reliefs as are deemed just and equitable in the
premises.15
Respondents filed before the RTC a Motion to Dismiss and Opposition to Application for a Temporary
Restraining Order/Writ of Preliminary Injunction.16 They moved for the dismissal of the eight Complaints on
the grounds of (1) prescription; (2) laches; (3) lack of cause of action; and (4) res judicata. 17
Respondents argued that the Complaints sought the annulment of the certificates of title that were issued
in their names. Section 32 of Presidential Decree No. 1529, otherwise known as the Property Registration
Decree,18provides that the decree of registration and the certificate of title issued pursuant thereto can
only be nullified on the ground of fraud within one year after the entry of such decree of registration.
Respondents TCTs could be traced back to the decree/s of registration entered in 1966/1967, which
resulted in the issuance of OCT No. 6122 in the name of Jose Velasquez, respondents predecessor-ininterest. Hence, the filing of the Complaints only in October 1997 was made beyond the prescription period
for assailing a decree of registration and/or the certificate of title issued pursuant thereto. Additionally,
petitioners Complaints were actions for reconveyance of the subject properties based on implied trust, the
filing of which prescribes after 10 years from the time said properties were first registered under the
Torrens system, in accordance with Articles 1144 and 1456 of the Civil Code. 19 Since the subject properties
were first registered in 1966/1967, then the actions for their reconveyance, instituted only in 1997 or 30
years later, should be dismissed on the ground of prescription. 20
Respondents also contended that petitioners were guilty of laches. Despite their alleged possession of the
subject properties for 90 years, petitioners failed to take any steps to oppose the land registration cases
involving the same properties or to seek the nullification of the decrees of registration and certificates of
title which were entered and issued as early as 1966 and 1967. 21
Moreover, respondents maintained that the Complaints should be dismissed for failure to state a cause of
action. Even assuming that petitioners were able to prove their allegations of longtime possession and
payment of realty taxes on the subject properties, and to submit a sketch plan of the same, these cannot
defeat a claim of ownership over the parcels of land, which were already registered under the Torrens
system in the name of respondents and the other consortium members.22
Lastly, respondents insisted that the Complaints should be dismissed on the ground of res judicata. 23 By
virtue of the decided cases Vda. de Cailles and Orosa, which petitioners themselves cited in their
Complaints, any claims to all portions of Lot 9, Psu 11411, Amd-2 are barred by res judicata. In said cases,
respondents predecessors-in-interest were declared owners of Lot 9, Psu 11411, Amd-2. Respondents also
referred to a Decision24 dated 17 December 1991 rendered by the Metropolitan Trial Court (MTC) of Las
Pias, Branch 79, in Civil Case No. 3271, entitled Heirs of Benito Navarro v. Fil-Estate Management Inc. 25 In
its Decision, the MTC declared that therein plaintiffs were not in possession of the land, which it found to
belong to respondent Fil-Estate Management Inc.

On 11 June 1998, the Heirs of Jose Velasquez (intervenors) filed a Motion for Intervention with Leave of
Court and a Complaint-in-Intervention, alleging that the subject properties, covered by TCTs No. 9176, No.
9177, No. 9178, No. 9179, No. 9180, and No. 9181, were once owned by the Spouses Jose Velasquez and
Loreto Tiongkiao. Without settling the conjugal partnership after the death of his wife Loreto Tiongkiao, and
without obtaining the intervenors consent, Jose Velasquez, together with J.V. Development Corporation,
Delta Motors Corporation, and Nicolas Orosa, transferred all their rights to the subject properties to
Goldenrod, Inc., from which respondents acquired the same. The intervenors sought the cancellation and
nullification of respondents certificates of title insofar as their mothers share in the subject properties was
concerned.26
On 8 September 2000, the RTC issued a Resolution27 in Civil Case No. LP-97-0228 granting respondents
Motion to Dismiss. The trial court determined that the subject properties were already registered in the
names of respondents, and that petitioners were unable to prove by clear and convincing evidence their
title to the said properties. The dispositive part of the RTC Resolution reads:
On the basis of the foregoing reasons alone, the instant complaint should immediately be DISMISSED.
Accordingly, the prayer for a temporary restraining order and preliminary injunction is DENIED. This,
however, is without prejudice to the complaint-in-intervention filed by intervenors over the disputed
properties, their undivided interests being intertwined and attached to the disputed properties wherever it
goes and whoever is in possession of the same, their right to bring action to pursue the same being
imprescriptible.28
On 12 August 2002, respondents filed a Motion for Clarification 29 asking the RTC whether the order of
dismissal of Civil Case No. LP-97-0228, included Civil Cases No. LP-97-0229, No. LP-97-0230, No. LP-970231, No. LP-97-0236, No. LP-97-0237, No. LP-97-0238, and No. LP-97-0239. In a Resolution 30 dated 30 June
2003, the RTC reiterated its Resolution dated 8 September 2000 dismissing the Complaint of petitioners
Heirs of Tomas Dolleton in Civil Case No. LP-97-0228; and declared that the other cases Civil Cases No.
LP-97-0229, No. LP-97-0230, No. LP-97-0231, No. LP-97-0236, No. LP-97-0237, No. LP-97-0238, and No. LP97-0239 were similarly dismissed since they involved the same causes of action as Civil Case No. LP-970228.
On 9 July 2003, petitioners filed a consolidated Notice of Appeal questioning the 30 June 2003 Resolution of
the RTC.31 They accordingly filed an appeal of the said Resolution of the trial court with the Court of
Appeals, docketed as CA-G.R. CV No. 80927.
In its Decision dated 16 September 2005 in CA-G.R. CV No. 80927, the Court of Appeals denied petitioners
appeal and affirmed the RTC Resolutions dated 8 September 2000 and 30 June 2003. The appellate court
found that respondents titles to the subject properties were indefeasible because they were registered
under the Torrens system. Thus, petitioners could not say that any claim on the subject properties casts a
cloud on their title when they failed to demonstrate a legal or an equitable title to the same. The Court of
Appeals also ruled that petitioners actions had already prescribed. Section 32 of Presidential Decree No.
1529 requires that an action assailing a certificate of title should be filed within one year after its issuance.
Moreover, actions assailing fraudulent titles should be filed within 10 years after the said titles were
issued. The appellate court further decreed that the cases for quieting of title should be dismissed based
on the allegation of petitioners themselves that the parcels of land covered by respondents certificates of
title were not the subject properties which petitioners claimed as their own. 32
Petitioners filed a Motion for Reconsideration of the afore-mentioned Decision, 33 which the Court of Appeals
denied in a Resolution dated 9 December 2005.34
Hence, the present Petition, where petitioners made the following assignment of errors:
I

THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT AFFIRMED THE RESOLUTION OF THE
COURT A QUO, DATED SEPTEMBER 8, 2000 AND THE RESOLUTION DATED JUNE 30, 2003, BASED PURELY
ON THE TECHNICALITY OF THE LAW RATHER THAN THE LAW THAT PROTECT[S] THE PROPERTY RIGHTS OF
THE PETITIONERS WHO WERE FORCIBLY EVICTED FROM THEIR RESPECTIVE LANDHOLDINGS BY THE USED
(sic) OF BRUTE FORCE OF ARMED MEN ON THE BASIS OF THE TITLES OF THE PRIVATE RESPONDENTS, IN
VIOLATION OF THEIR PROPERTY RIGHTS AND OF DUE PROCESS.
II
THAT THE COURT OF APPEALS GRAVELY ERRED WHEN IT AFFIRMED THE RESOLUTION OF THE COURT A
QUO, DESPITE THE FACT THAT A FULL BLOWN HEARING ON THE MERIT[S] IS NECESSARY TO DETERMINE
THE ACTUAL LOCATION ON THE ACTUAL GROUND [OF] THE LOTS COVERED BY THE PRIVATE RESPONDENT
(sic) TITLES, LOTS COVERED BY ITS TITLES ARE MORE THAN THREE HUNDRED (300 m) METERS AWAY TO
THE WEST-NORTHWEST FROM THE CONSOLIDATED LOTS OF THE HEREIN PETITIONERS AND THEREFORE
PRIVATE RESPONDENTS BRUTAL ACTION IN FORCIBLY EVICTING THE PETITIONERS FROM THEIR RESPECTIVE
LANDHOLDINGS BY THE USED (sic) OF BRUTE FORCE OF ARMED MEN, ARE PURELY CASES OF
LANDGRABBING.35
This Petition is meritorious.
The main issue in this case is whether the RTC properly granted respondents motion to dismiss. This Court
finds that the trial court erred in dismissing petitioners Complaints.
Complaints sufficiently stated a cause of action.
Respondents seek the dismissal of petitioners Complaints for failure to state a cause of action. Even
assuming as true that the subject properties have been in the possession of petitioners and their
predecessors-in-interest for 90 years; that petitioners have been paying the realty taxes thereon; and that
petitioners are able to submit a sketch plan of the subject properties, respondents maintain that their
ownership of the subject properties, evidenced by certificates of title registered in their names, cannot be
defeated. This contention is untenable.
Respondents mistakenly construe the allegations in petitioners Complaints. What petitioners alleged in
their Complaints was that while the subject properties were not covered by respondents certificates of
title, nevertheless, respondents forcibly evicted petitioners therefrom. Hence, it is not simply a question of
whether petitioners possession can defeat respondents title to registered land. Instead, an initial
determination has to be made on whether the subject properties were in fact covered by respondents
certificates of title.
Section 2, Rule 2 of the Rules of Civil Procedure defines a cause of action as the act or omission by which a
party violates the right of another. Its essential elements are as follows: (1) a right in favor of the plaintiff
by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the
named defendant to respect or not to violate such right; and (3) an act or omission on the part of such
defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the defendant
to the plaintiff, for which the latter may maintain an action for recovery of damages or other appropriate
relief. 36
The elementary test for failure to state a cause of action is whether the complaint alleges facts which if
true would justify the relief demanded. The inquiry is into the sufficiency, not the veracity, of the material
allegations. If the allegations in the complaint furnish sufficient basis on which it can be maintained, it
should not be dismissed regardless of the defense that may be presented by the defendant. 37

This Court is convinced that each of the Complaints filed by petitioners sufficiently stated a cause of
action. The Complaints alleged that petitioners are the owners of the subject properties by acquisitive
prescription. As owners thereof, they have the right to remain in peaceful possession of the said properties
and, if deprived thereof, they may recover the same. Section 428 of the Civil Code provides that:
Article 428. The owner has the right to enjoy and dispose of a thing without other limitations than those
established by law.
The owner has also a right of action against the holder and possessor of the thing in order to recover it.
Petitioners averred that respondents had violated their rights as owner of the subject properties by
evicting the former therefrom by means of force and intimidation. Respondents allegedly retained
possession of the subject properties by invoking certificates of title covering other parcels of land.
Resultantly, petitioners filed the cases before the RTC in order to recover possession of the subject
properties, to prevent respondents from using their TCTs to defeat petitioners rights of ownership and
possession over said subject properties, and to claim damages and other reliefs that the court may deem
just and equitable.
The Court notes that petitioners prayer for the cancellation of respondents certificates of title are
inconsistent with their allegations. Petitioners prayed for in their Complaints that, among other reliefs,
judgment be rendered so that "Transfer Certificate of Title Numbers 9176, 9177, 9178, 9179, 9180, 9181,
and 9182 be cancelled by the Register of Deeds for Las Pias, Metro Manila, insofar as they are or may be
utilized to deprive plaintiffs of possession and ownership of said lot." Yet, petitioners also made it plain that
the subject properties, of which respondents unlawfully deprived them, were not covered by respondents
certificates of title. It is apparent that the main concern of petitioners is to prevent respondents from using
or invoking their certificates of title to deprive petitioners of their ownership and possession over the
subject properties; and not to assert a superior right to the land covered by respondents certificates of
title. Admittedly, while petitioners can seek the recovery of the subject properties, they cannot ask for the
cancellation of respondents TCTs since petitioners failed to allege any interest in the land covered thereby.
Still, the other reliefs sought by petitioners, i.e., recovery of the possession of the subject properties and
compensation for the damages resulting from respondents forcible taking of their property, are still proper.
Petitioners Complaints should not have been dismissed despite the seeming error made by petitioners in
their prayer. To sustain a motion to dismiss for lack of cause of action, the complaint must show that the
claim for relief does not exist, rather than that a claim has been defectively stated, or is ambiguous,
indefinite or uncertain.38
Complaints are not barred by prescription and laches.
In their Motion to Dismiss, respondents argued that petitioners cases were barred by prescription, in
accordance with Section 32 of the Property Registration Decree and Articles 1144(2) and 1456 of the Civil
Code. Respondents relied on the premise that the actions instituted by petitioners before the RTC were for
the reopening and review of the decree of registration and reconveyance of the subject properties.
Section 32 of the Property Registration Decree provides that a decree of registration may be reopened
when a person is deprived of land or an interest therein by such adjudication or confirmation obtained by
actual fraud. On the other hand, an action for reconveyance respects the decree of registration as
incontrovertible but seeks the transfer of property, which has been wrongfully or erroneously registered in
other persons names, to its rightful and legal owners, or to those who claim to have a better right. 39 In
both instances, the land of which a person was deprived should be the same land which was fraudulently
or erroneously registered in another persons name, which is not the case herein, if the Court considers the
allegations in petitioners Complaints.

As previously established, petitioners main contention is that the subject properties from which they were
forcibly evicted were not covered by respondents certificates of title. Stated differently, the subject
properties and the land registered in respondents names are not identical. Consequently, petitioners do
not have any interest in challenging the registration of the land in respondents names, even if the same
was procured by fraud.
While petitioners improperly prayed for the cancellation of respondents TCTs in their Complaints, there is
nothing else in the said Complaints that would support the conclusion that they are either petitions for
reopening and review of the decree of registration under Section 32 of the Property Registration Decree or
actions for reconveyance based on implied trust under Article 1456 of the Civil Code. Instead, petitioners
Complaints may be said to be in the nature of an accion reivindicatoria, an action for recovery of
ownership and possession of the subject properties, from which they were evicted sometime between
1991 and 1994 by respondents. An accion reivindicatoria may be availed of within 10 years from
dispossession.40 There is no showing that prescription had already set in when petitioners filed their
Complaints in 1997.
Furthermore, the affirmative defense of prescription does not automatically warrant the dismissal of a
complaint under Rule 16 of the Rules of Civil Procedure. An allegation of prescription can effectively be
used in a motion to dismiss only when the Complaint on its face shows that indeed the action has already
prescribed. 41 If the issue of prescription is one involving evidentiary matters requiring a full-blown trial on
the merits, it cannot be determined in a motion to dismiss. 42 In the case at bar, respondents must first be
able to establish by evidence that the subject properties are indeed covered by their certificates of title
before they can argue that any remedy assailing the registration of said properties or the issuance of the
certificates of title over the same in the names of respondents or their predecessors-in-interest has
prescribed.
Neither can the Court sustain respondents assertion that petitioners Complaints were barred by laches.
Laches has been defined as the failure of or neglect, for an unreasonable and unexplained length of time,
to do that which by exercising due diligence, could or should have been done earlier; or to assert a right
within reasonable time, warranting a presumption that the party entitled thereto has either abandoned it
or declined to assert it. Thus, the doctrine of laches presumes that the party guilty of negligence had the
opportunity to do what should have been done, but failed to do so. Conversely, if the said party did not
have the occasion to assert the right, then, he cannot be adjudged guilty of laches. Laches is not
concerned with the mere lapse of time; rather, the party must have been afforded an opportunity to
pursue his claim in order that the delay may sufficiently constitute laches. 43
Again, going back to petitioners chief claim that the subject properties are distinct from the land covered
by respondents certificates of title, then, petitioners would have no standing to oppose the registration of
the latter property in the names of respondents or their predecessors-in-interest, or to seek the
nullification of the certificates of title issued over the same.
It also appears from the records that the RTC did not conduct a hearing to receive evidence proving that
petitioners were guilty of laches. Well-settled is the rule that the elements of laches must be proven
positively. Laches is evidentiary in nature, a fact that cannot be established by mere allegations in the
pleadings and cannot be resolved in a motion to dismiss. At this stage, therefore, the dismissal of
petitioners Complaints on the ground of laches is premature. Those issues must be resolved at the trial of
the case on the merits, wherein both parties will be given ample opportunity to prove their respective
claims and defenses.44
Complaints are not barred by res judicata.

Lastly, respondents argued in their Motion to Dismiss that petitioners Complaints are barred by res
judicata, citing Vda. de Cailles and Orosa. Likewise, petitioners are barred from instituting any case for
recovery of possession by the MTC Decision in Civil Case No. 3271.
Res judicata refers to the rule that a final judgment or decree on the merits by a court of competent
jurisdiction is conclusive of the rights of the parties or their privies in all later suits on all points and
matters determined in the former suit. Res judicata has two concepts: (1) "bar by prior judgment" as
enunciated in Rule 39, Section 47 (b) of the Rules of Civil Procedure; and (2) "conclusiveness of judgment"
in Rule 39, Section 47 (c).
There is "bar by prior judgment" when, as between the first case where the judgment was rendered, and
the second case that is sought to be barred, there is identity of parties, subject matter, and causes of
action. But where there is identity of parties and subject matter in the first and second cases, but no
identity of causes of action, the first judgment is conclusive only as to those matters actually and directly
controverted and determined and not as to matters merely involved therein. There is "conclusiveness of
judgment." Under the doctrine of conclusiveness of judgment, facts and issues actually and directly
resolved in a former suit cannot again be raised in any future case between the same parties, even if the
latter suit may involve a different claim or cause of action. The identity of causes of action is not required
but merely identity of issues.45
Vda. de Cailles and Orosa cannot bar the filing of petitioners Complaints before the RTC under the doctrine
of conclusiveness of judgment, since they involve entirely different subject matters. In both cases, the
subject matter was a parcel of land referred to as Lot 9 Psu-11411 Amd-2, while subject matter of the
petitioners Complaints are lots which are not included in the said land.
It follows that the more stringent requirements of res judicata as "bar by prior judgment" will not apply to
petitioners Complaints. In Vda. de Cailles, the Court confirmed the ownership of Dominador Mayuga over a
53-hectare parcel of land located in Las Pias, Rizal, more particularly referred to as Lot 9, Psu-11411,
Amd-2. The Court also recognized that Nicolas Orosa was Dominador Mayugas successor-in-interest.
However, the judgment in said case was not executed because the records of the Land Registration
Authority revealed that the property had previously been decreed in favor of Jose T. Velasquez, to whom
OCT No. 6122 was issued. During the execution proceedings, Goldenrod Inc. filed a motion to intervene,
the granting of which by the trial court was challenged in Orosa. The Court held in Orosa that Goldenrod,
Inc., despite having acquired the opposing rights of Nicolas Orosa and Jose T. Velasquez to the property
sometime in 1987, no longer had any interest in the same as would enable it to intervene in the execution
proceedings, since it had already sold its interest in February 1989 to the consortium composed of
respondents, Peaksun Enterprises and Export Corporation, and Elena Jao.1avvphi1.zw+
The adjudication of the land to respondents predecessors-in-interest in Vda. de Cailles and Orosa is not
even relevant to petitioners Complaints. According to petitioners allegations in their Complaints, although
the subject properties were derived from the 119.8-hectare parcel of land referred to as Lot 9, Psu-11411,
they are not included in the 53-hectare portion thereof, specifically identified as Lot 9, Psu-11411, Amd-2,
subject of Vda. de Cailles and Orosa. This was the reason why petitioners had to cite Vda. de Cailles and
Orosa: to distinguish the subject properties from the land acquired by respondents and the other members
of the consortium. There clearly being no identity of subject matter and of parties, then, the rulings of this
Court in Vda. de Cailles and Orosa do not bar by prior judgment Civil Cases No. LP-97-0228, No. LP-970229, No. LP-97-0230, No. LP-97-0231, No. LP-97-0236, No. LP-97-0237, No. LP-97-0238, and No. LP-970239 instituted by petitioners in the RTC.
The Court is aware that petitioners erroneously averred in their Complaints that the subject properties
"originated from Psu-11411, Lot 9, Amd-2," instead of stating that the said properties originated from Psu11411, Lot 9. However, this mistake was clarified in later allegations in the same Complaints, where
petitioners stated that "Psu-114, Lot 9 consists of 1, 198,017 square meters," or 119.8 hectares when

converted, while Psu-11411, Lot 9, Amd-2 referred to a 53-hectare parcel. Petitioners pointed out that in
Vda. de Cailles and Orosa, the Court acknowledged "the ownership [of respondents predecessor-ininterest] only over a fifty-three (53) hectare parcel, more particularly referred to as Lot 9 Psu-11411, Amd2." Thus, petitioners argued that the rights which respondents acquired from Mayuga and Orosa "cover[ed]
only 531, 449 square meters or 53 hectares of Psu-11411, Lot 9. They do not extend to the latters other
portion of 1,198, 017 square meters part of which [petitioners] had been occupying until they were forcibly
evicted by [respondents]." Accordingly, the single statement in the Complaints that the subject properties
originated from Lot 9, Psu-11411, Amd-2, is an evident mistake which cannot prevail over the rest of the
allegations in the same Complaints.
Similarly, the Decision dated 17 December 1991 of the MTC in Civil Case No. 3271 cannot bar the filing of
petitioners Complaints before the RTC because they have different subject matters. The subject matter in
Civil Case No. 3271 decided by the MTC was the parcel of land covered by TCTs No. 9176, No. 9177, No.
9178, No. 9179, No. 9180, and No. 9181, in the name of respondents and the other consortium members;
while, according to petitioners allegations in their Complaints, the subject matters in Civil Cases No. LP-970228, No. LP-97-0229, No. LP-97-0230, No. LP-97-0231, No. LP-97-0236, No. LP-97-0237, No. LP-97-0238,
and No. LP-97-0239, before the RTC, are the subject properties which are not covered by respondents
certificates of title.
The MTC, in its 17 December 1991 Decision in Civil Case No. 3271 found that:
The subject parcels of land are covered by (TCT) Nos. 9176, 9177, 9178, 9179, [9180], [9181] and 9182
(Exhs. "1" to "7", Defendants) all issued in the name of defendant Fil-Estate Management, Inc. It appears
from the evidence presented that defendant Fil-Estate purchased the said property from Goldenrod, Inc. It
also appears from the evidence that the subject property at the time of the purchase was then occupied by
squatters/intruders. By reason thereof, the Municipality of Las Pias conducted in 1989 a census of all
structures/shanties on subject property. Those listed in the census were relocated by defendant, which
relocation program started in 1990 up to the present. Interestingly, however, all of the plaintiffs herein
except the Almas, were not listed as among those in possession of defendants land as of November 1989.
xxxx
In fine, plaintiffs have not clearly established their right of possession over the property in question. They
claim ownership, but no evidence was ever presented to prove such fact. They claim possession from time
immemorial. But the Census prepared by Las Pias negated this posture. 46 (Emphasis provided.)
The determination by the MTC that petitioners were not occupants of the parcels of land covered by TCTs
No. 9176, No. 9177, No. 9178, No. 9179, No. 9180, and No. 9181 cannot bar their claims over another
parcel of land not covered by the said TCTs. It should also be noted that petitioners Heirs of Agapito
Villanueva do not appear to be plaintiffs in Civil Case No. 3271 and, therefore, cannot be bound by the MTC
Decision therein.
In all, this Court pronounces that respondents failed to raise a proper ground for the dismissal of
petitioners Complaints. Petitioners claims and respondents opposition and defenses thereto are best
ventilated in a trial on the merits of the cases.
IN VIEW OF THE FOREGOING, the instant Petition is GRANTED. The Decision dated 16 September 2005 and
Resolution dated 9 December 2005 of the Court of Appeals in CA-G.R. CV No. 80927 are REVERSED and
SET ASIDE. Let the records of the case be remanded for further proceedings to the Regional Trial Court,
Branch 253, of Las Pias City, which is hereby ordered to try and decide the case with deliberate speed.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 169889

September 29, 2009

SPOUSES SIMON YAP AND MILAGROS GUEVARRA, Petitioners,

vs.
FIRST e-BANK CORPORATION (previously known as PDCP DEVELOPMENT BANK,
INC.), Respondent.
DECISION
CORONA, J.:
On August 30, 1990, Sammy Yap obtained a P2 million loan from PDCP Development Bank, Inc.1 (PDCP). As
security, Sammys parents, petitioners Simon Yap and Milagros Guevarra, executed a third-party mortgage
on their land2 and warehouse standing on it. The mortgage agreement provided that PDCP may
extrajudicially foreclose the property in case Sammy failed to pay the loan.
On November 7, 1990, Sammy issued a promissory note and six postdated checks 3 in favor of PDCP as
additional securities for the loan.
When Sammy defaulted on the payment of his loan, PDCP presented the six checks to the drawee bank
but the said checks were dishonored. 4 This prompted PDCP to file a complaint against Sammy for six
counts of violation of BP 22 (Bouncing Checks Law) on February 8, 1993.
On May 3, 1993, PDCP filed an application for extrajudicial foreclosure of mortgage on the property of
petitioners which served as principal security for Sammys loan.
On December 16, 1993, on motion of Sammy and without objection from the public prosecutor and PDCP,
the BP 22 cases were provisionally dismissed.
On October 26, 1994, pursuant to the petition of PDCP for extrajudicial foreclosure, the extrajudicial sale
was set on December 28, 1994. Copies of the notice of extrajudicial sale were sent by registered mail to
Sammy, petitioners, the Registrar of Deeds of San Carlos City, Pangasinan, the Sangguniang
Panglungsod of San Carlos City and the office of the barangay secretary of Taloy District, San Carlos City,
Pangasinan.
The notice was also published in the Sunday Punch, a newspaper of general circulation in Pangasinan on
November 27, December 4 and 11, 1994.
On December 20, 1994, petitioners filed in the Regional Trial Court (RTC) of San Carlos City, Pangasinan a
complaint for injunction (with prayer for the issuance of a temporary restraining order/preliminary
injunction), damages and accounting of payments against PDCP. The complaint sought to stop the
foreclosure sale on the ground that PDCP waived its right to foreclose the mortgage on their property when
it filed the BP 22 cases against Sammy.
On April 2, 1997, the RTC5 ruled in favor of petitioners. It held that PDCP had three options when Sammy
defaulted in the payment of his loan: enforcement of the promissory note in a collection case, enforcement
of the checks under the Negotiable Instruments Law and/or BP 22, or foreclosure of mortgage. The

remedies were alternative and the choice of one excluded the others. Thus, PDCP was deemed to have
waived its right to foreclose on the property of petitioners when it elected to sue Sammy for violation of BP
22.6
PDCP appealed to the Court of Appeals (CA). On February 8, 2005, the CA7 reversed the RTC. It opined that
PDCP was not barred from exercising its right to foreclose on the property of petitioners despite suing
Sammy for violation of BP 22. The purpose of BP 22 was to punish the act of issuing a worthless check, not
to force a debtor to pay his debt.8
Hence, this appeal9 where petitioners argue that, when Sammy was sued for six counts of violation of BP
22, PDCP should have been deemed to have simultaneously filed for collection of the amount represented
by the checks. The civil aspect of the case was naturally an action for collection of Sammys obligation to
PDCP. PDCP clearly elected a remedy. PDCP should not be allowed to pursue another, like foreclosure of
mortgage.
The argument is not convincing.
First, petitioners anchor their position on Supreme Court Circular 57-97, which provides for the rules and
guidelines in the filing and prosecution of criminal cases under BP 22. Pertinent portions of Circular 57-97
provide:
1. The criminal action for violation of [BP] 22 shall be deemed to necessarily include the
corresponding civil action, and no reservation to file such civil action separately shall be
allowed or recognized.
2. Upon the filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full
the filing fees based upon the amount of the check involved, which shall be considered as the
actual damages claimed, in accordance with the filing fees in Section 7 (a) and Section 8 (a), Rule
141 of the Rules of Court, and last amended by Administrative Circular No. 11-94 effective August
1, 1994. Where the offended party seeks to enforce against the accused civil liability by way of
liquidated, moral, nominal, temperate or exemplary damages, he shall pay the corresponding filing
fees therefore based on the amounts thereof as alleged either in his complaint or in the
information. If not so alleged but any of these damages are awarded by the court, the amount of
such fees shall constitute a first lien on the judgment.
3. Where the civil action has heretofore been filed separately and trial thereof has not yet
commenced, it may be consolidated with the criminal action upon application with the court trying
the latter case. If the application is granted, the trial of both actions shall proceed in accordance
with the pertinent procedure outlined in Section 2 (a) of Rule 111 governing the proceedings in the
actions as thus consolidated. (emphasis supplied)
Circular 57-97 has been institutionalized as Section 1(b), Rule 111 of the Rules of Court: 10
Section 1. Institution of criminal and civil actions.xxx
(b) The criminal action for violation of [BP] 22 shall be deemed to include the corresponding
civil action. No reservation to file such civil action separately shall be allowed.
Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full the filing fees
based on the amount of the check involved, which shall be considered as the actual damages claimed.
Where the complaint or information also seeks to recover liquidated, moral, nominal, temperate or
exemplary damages, the offended party shall pay additional filing fees based on the amounts alleged

therein. If the amounts are not so alleged but any of these damages are subsequently awarded by the
court, the filing fee based on the amount awarded shall constitute a first lien on the judgment.
Where the civil action has been filed separately and trial thereof has not yet commenced, it may be
consolidated with the criminal action upon application with the court trying the latter case. If the
application is granted, the trial of both actions shall proceed in accordance with section 2 of this Rule
governing consolidation of the civil and criminal actions. (emphasis supplied)
Sad to say, Circular 57-97 (and, it goes without saying, Section 1(b), Rule 111 of the Rules of Court) was
not yet in force11 when PDCP sued Sammy for violation of BP 22 and when it filed a petition for extrajudicial
foreclosure on the mortgaged property of petitioners on February 8, 1993 and May 3, 1993, respectively.
In Lo Bun Tiong v. Balboa,12 Circular 57-97 was not applied because the collection suit and the criminal
complaints for violation of BP 22 were filed prior to the adoption of Circular 57-97. The same principle
applies here.
Thus, prior to the effectivity of Circular 57-97, the alternative remedies of foreclosure of mortgage and
collection suit were not barred even if a suit for BP 22 had been filed earlier, unless a judgment of
conviction had already been rendered in the BP 22 case finding the accused debtor criminally liable and
ordering him to pay the amount of the check(s).13
In this case, no judgment of conviction (which could have declared the criminal and civil liability of Sammy)
was rendered because Sammy moved for the provisional dismissal of the case. Hence, PDCP could have
still foreclosed on the mortgage or filed a collection suit.
Nonetheless, records show that, during the pendency of the BP 22 case, Sammy had already paid PDCP the
total amount of P1,783,582.14 Thus, to prevent unjust enrichment on the part of the creditor, any
foreclosure by PDCP should only be for the unpaid balance.
Second, it is undisputed that the BP 22 cases were provisionally dismissed at Sammys instance. In other
words, PDCP was prevented from recovering the whole amount by Sammy himself. To bar PDCP from
foreclosing on petitioners property for the balance of the indebtedness would be to penalize PDCP for the
act of Sammy. That would not only be illogical and absurd but would also violate elementary rules of justice
and fair play. In sum, PDCP has not yet effectively availed of and fully exhausted its remedy.
While it can be argued that PDCP may revive the BP 22 cases anytime as their dismissal was only
provisional, suffice it to state that the law gives the right of choice to PDCP, not to Sammy or to
petitioners.1avvph!1
Third, petitioners should be mindful that, by being third party mortgagors, they agreed that their property
would stand as collateral to the loan of Sammy until the last centavo is paid to PDCP. That is a risk they
willingly assumed. To release the mortgage just because they find it inconvenient would be the height of
injustice against PDCP.
All told, PDCP should not be left without recourse for the unsettled loan of Sammy. Otherwise, an iniquitous
situation will arise where Sammy and petitioners are unjustly enriched at the expense of PDCP. That we
cannot sanction.
So as not to create any misunderstanding, however, the point should be underscored that the creditors
obvious purpose when it forecloses on mortgaged property is to obtain payment for a loan which the
debtor is unable or unjustifiably refuses to pay. The rationale is the same if the creditor opts to sue the
debtor for collection. Thus, it is but logical that a creditor who obtains a personal judgment against the
debtor on a loan waives his right to foreclose on the mortgage securing the loan. Otherwise, the creditor
becomes guilty of splitting a single cause of action 15 for the debtors inability (or unjustified refusal) to pay

his debt.16 Nemo debet bis vexare pro una et eadem causa. No man shall be twice vexed for one and the
same cause.
In the light of Circular 57-97 and Section 1(b), Rule 111 of the Rules of Court, the same rule applies when
the creditor sues the debtor for BP 22 and thereafter forecloses on the mortgaged property. It is true that
BP 22 is a criminal remedy while foreclosure of mortgage is a civil remedy. It is also true that BP 22 was not
enacted to force, much more penalize a person for his inability (or refusal to pay) his debt. 17 What BP 22
prohibits and penalizes is the issuance of bum checks because of its pernicious effects on public interest.
Congress, in the exercise of police power, enacted BP 22 in order to maintain public confidence in
commercial transactions.18
At the other end of the spectrum, however, is the fact that a creditors principal purpose in suing the
debtor for BP 22 is to be able to collect his debt. (Circular 57-97 and Section 1(b), Rule 111 of the Rules of
Court have been drawn up to address this reality.) It is not so much that the debtor should be imprisoned
for issuing a bad check; this is so specially because a conviction for BP 22 does not necessarily result in
imprisonment.19
Thus, we state the rule at present. If the debtor fails (or unjustly refuses) to pay his debt when it falls due
and the debt is secured by a mortgage and by a check, the creditor has three options against the debtor
and the exercise of one will bar the exercise of the others. He may pursue either of the three but not all or
a combination of them.
First, the creditor may file a collection suit against the debtor. This will open up all the properties of the
debtor to attachment and execution, even the mortgaged property itself. Second, the creditor may opt to
foreclose on the mortgaged property. In case the debt is not fully satisfied, he may sue the debtor for
deficiency judgment (not a collection case for the whole indebtedness), in which case, all the properties of
the debtor, other than the mortgaged property, are again opened up for the satisfaction of the
deficiency.20 Lastly, the creditor may opt to sue the debtor for violation of BP 22 if the checks securing the
obligation bounce. Circular 57-97 and Section 1(b), Rule 111 of the Rules of Court both provide that the
criminal action for violation of BP 22 shall be deemed to necessarily include the corresponding civil
action, i.e., a collection suit. No reservation to file such civil action separately shall be allowed or
recognized.
Petitioners would have been correct had it not been for the reasons stated earlier.
WHEREFORE, the petition is hereby DENIED.
Costs against petitioners.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 150134

October 31, 2007

ERNESTO C. DEL ROSARIO and DAVAO TIMBER CORPORATION, petitioners,

vs.
FAR EAST BANK & TRUST COMPANY1 and PRIVATE DEVELOPMENT CORPORATION OF THE
PHILIPPINES, respondents.
DECISION
CARPIO MORALES, J.:
The Regional Trial Court (RTC) of Makati City, Branch "65" (sic) 2 having, by Decision3 of July 10, 2001,
dismissed petitioners' complaint in Civil Case No. 00-540 on the ground of res judicata and splitting of a
cause of action, and by Order of September 24, 20014 denied their motion for reconsideration thereof,
petitioners filed the present petition for review on certiorari.
From the rather lengthy history of the present controversy, a recital of the following material facts culled
from the records is in order.
On May 21, 1974, petitioner Davao Timber Corporation (DATICOR) and respondent Private Development
Corporation of the Philippines (PDCP) entered into a loan agreement under which PDCP extended to
DATICOR a foreign currency loan of US $265,000 and a peso loan of P2.5 million or a total amount of
approximately P4.4 million, computed at the then prevailing rate of exchange of the dollar with the peso.
The loan agreement provided, among other things, that DATICOR shall pay: (1) a service fee of one percent
(1%) per annum (later increased to six percent [6%] per annum) on the outstanding balance of the peso
loan; (2) 12 percent (12%) per annum interest on the peso loan; and (3) penalty charges of two percent
(2%) per month in case of default.
The loans were secured by real estate mortgages over six parcels of land one situated in Manila (the Otis
property) which was registered in the name of petitioner Ernesto C. Del Rosario, and five in Mati, Davao
Oriental and chattel mortgages over pieces of machinery and equipment.
Petitioners paid a total of P3 million to PDCP, which the latter applied to interest, service fees and penalty
charges. This left petitioners, by PDCP's computation, with an outstanding balance on the principal of more
thanP10 million as of May 15, 1983.
By March 31, 1982, petitioners had filed a complaint against PDCP before the then Court of First Instance
(CFI) of Manila for violation of the Usury Law, annulment of contract and damages. The case, docketed as
Civil Case No. 82-8088, was dismissed by the CFI.
On appeal, the then Intermediate Appellate Court (IAC) set aside the CFI's dismissal of the complaint and
declared void and of no effect the stipulation of interest in the loan agreement between DATICOR and
PDCP.
PDCP appealed the IAC's decision to this Court where it was docketed as G.R. No. 73198.

In the interim, PDCP assigned a portion of its receivables from petitioners (the receivables) to its corespondent Far East Bank and Trust Company (FEBTC) under a Deed of Assignment dated April 10,
19875 for a consideration of P5,435,000. The Deed of Assignment was later amended by two
Supplements.6
FEBTC, as assignee of the receivables, and petitioners later executed a Memorandum of Agreement (MOA)
dated December 8, 1988 whereby petitioners agreed to, as they did pay FEBTC 7 the amount of P6.4
million as full settlement of the receivables.
On September 2, 1992, this Court promulgated its Decision in G.R. No. 73198 8 affirming in toto the decision
of the IAC. It determined that after deducting the P3 million earlier paid by petitioners to PDCP, their
remaining balance on the principal loan was only P1.4 million.
Petitioners thus filed on April 25, 1994 a Complaint 9 for sum of money against PDCP and FEBTC before the
RTC of Makati, mainly to recover the excess payment which they computed to be P5.3 million10 P4.335
million from PDCP, and P965,000 from FEBTC. The case, Civil Case No. 94-1610, was raffled to Branch 132
of the Makati RTC.
On May 31, 1995, Branch 132 of the Makati RTC rendered a decision 11 in Civil Case No. 94-1610 ordering
PDCP to pay petitioners the sum of P4.035 million,12 to bear interest at 12% per annum from April 25, 1994
until fully paid; to execute a release or cancellation of the mortgages on the five parcels of land in Mati,
Davao Oriental and on the pieces of machinery and equipment and to return the corresponding titles to
petitioners; and to pay the costs of the suit.
As for the complaint of petitioners against respondent FEBTC, the trial court dismissed it for lack of cause
of action, ratiocinating that the MOA between petitioners and FEBTC was not subject to this Court's
Decision in G.R. No. 73198, FEBTC not being a party thereto.
From the trial court's decision, petitioners and respondent PDCP appealed to the Court of Appeals (CA). The
appeal was docketed as CA-G.R. CV No. 50591.
On May 22, 1998, the CA rendered a decision 13 in CA-G.R. CV No. 50591, holding that petitioners'
outstanding obligation, which this Court had determined in G.R. No. 73198 to be P1.4 million, could not be
increased or decreased by any act of the creditor PDCP.
The CA held that when PDCP assigned its receivables, the amount payable to it by DATICOR was the same
amount payable to assignee FEBTC, irrespective of any stipulation that PDCP and FEBTC might have
provided in the Deed of Assignment, DATICOR not having been a party thereto, hence, not bound by its
terms.
Citing Articles 215414 and 216315 of the Civil Code which embody the principle of solutio indebiti, the CA
held that the party bound to refund the excess payment of P5 million16 was FEBTC as it received the
overpayment; and that FEBTC could recover from PDCP the amount of P4.035 million representing its
overpayment for the assigned receivables based on the terms of the Deed of Assignment or on the general
principle of equity.
Noting, however, that DATICOR claimed in its complaint only the amount of P965,000 from FEBTC, the CA
held that it could not grant a relief different from or in excess of that prayed for.
Finally, the CA held that the claim of PDCP against DATICOR for the payment of P1.4 million had no basis,
DATICOR's obligation having already been paid in full, overpaid in fact, when it paid assignee FEBTC the
amount of P6.4 million.

Accordingly, the CA ordered PDCP to execute a release or cancellation of the mortgages it was holding over
the Mati real properties and the machinery and equipment, and to return the corresponding certificates of
title to petitioners. And it ordered FEBTC to pay petitioners the amount of P965,000 with legal interest from
the date of the promulgation of its judgment.
FEBTC's motion for reconsideration of the CA Decision was denied, and so was its subsequent appeal to
this Court.
On April 25, 2000, petitioners filed before the RTC of Makati a Complaint 17 against FEBTC to recover the
balance of the excess payment of P4.335 million.18 The case was docketed as Civil Case No. 00-540, the
precursor of the present case and raffled to Branch 143 of the RTC.
In its Answer,19 FEBTC denied responsibility, it submitting that nowhere in the dispositive portion of the CA
Decision in CA-G.R. CV No. 50591 was it held liable to return the whole amount of P5.435 million
representing the consideration for the assignment to it of the receivables, and since petitioners failed to
claim the said whole amount in their original complaint in Civil Case No. 94-1610 as they were merely
claiming the amount of P965,000 from it, they were barred from claiming it.
FEBTC later filed a Third Party Complaint20 against PDCP praying that the latter be made to pay
the P965,000 and the interests adjudged by the CA in favor of petitioners, as well as the P4.335 million and
interests that petitioners were claiming from it. It posited that PDCP should be held liable because it
received a consideration ofP5.435 million when it assigned the receivables.
Answering21 the Third Party Complaint, PDCP contended that since petitioners were not seeking the
recovery of the amount of P965,000, the same cannot be recovered via the third party complaint.
PDCP went on to contend that since the final and executory decision in CA-G.R. CV No. 50591 had held that
DATICOR has no cause of action against it for the refund of any part of the excess payment, FEBTC can no
longer re-litigate the same issue.
Moreover, PDCP contended that it was not privy to the MOA which explicitly excluded the receivables from
the effect of the Supreme Court decision, and that the amount of P6.4 million paid by petitioners to FEBTC
was clearly intended as consideration for the release and cancellation of the lien on the Otis property.
Replying,22 FEBTC pointed out that PDCP cannot deny that it benefited from the assignment of its rights
over the receivables from petitioners. It added that the third party claim being founded on a valid and
justified cause, PDCP's counterclaims lacked factual and legal basis.
Petitioners thereafter filed a Motion for Summary Judgment23 to which FEBTC filed its opposition.24
By Order of March 5, 2001, the trial court denied the motion for summary judgment for lack of merit. 25
On July 10, 2001, the trial court issued the assailed Decision dismissing petitioners' complaint on the
ground ofres judicata and splitting of cause of action. It recalled that petitioners had filed Civil Case No. 941610 to recover the alleged overpayment both from PDCP and FEBTC and to secure the cancellation and
release of their mortgages on real properties, machinery and equipment; that when said case was
appealed, the CA, in its Decision, ordered PDCP to release and cancel the mortgages and FEBTC to
pay P965,000 with interest, which Decision became final and executory on November 23, 1999; and that a
Notice of Satisfaction of Judgment between petitioners and FEBTC was in fact submitted on August 8,
2000, hence, the issue between them was finally settled under the doctrine of res judicata.
The trial court moreover noted that the MOA between petitioners and FEBTC clearly stated that the
"pending litigation before the Supreme Court of the Philippines with respect to the Loan exclusive of the

Receivablesassigned to FEBTC shall prevail up to the extent not covered by this Agreement." That
statement in the MOA, the trial court ruled, categorically made only the loan subject to this Court's
Decision in G.R. No. 73198, hence, it was with the parties' full knowledge and consent that petitioners
agreed to pay P6.4 million to FEBTC as consideration for the settlement. The parties cannot thus be
allowed to welsh on their contractual obligations, the trial court concluded.
Respecting the third party claim of FEBTC, the trial court held that FEBTC's payment of the amount
ofP1,224,906.67 (P965,000 plus interest) to petitioners was in compliance with the final judgment of the
CA, hence, it could not entertain such claim because the Complaint filed by petitioners merely sought to
recover from FEBTC the alleged overpayment of P4.335 million and attorney's fees of P200,000.
Petitioners' motion for reconsideration26 of the July 10, 2001 decision of the trial court was denied by Order
of September 24, 2001.
Hence, the present petition.
In their Memorandum,27 petitioners proffer that, aside from the issue of whether their complaint is
dismissible on the ground of res judicata and splitting of cause of action, the issues of 1) whether FEBTC
can be held liable for the balance of the overpayment of P4.335 million plus interest which petitioners
previously claimed against PDCP in Civil Case No. 94-1610, and 2) whether PDCP can interpose as defense
the provision in the Deed of Assignment and the MOA that the assignment of the receivables shall not be
affected by this Court's Decision in G.R. No. 73198, be considered.
Stripped of the verbiage, the only issue for this Court's consideration is the propriety of the dismissal of
Civil Case No. 00-540 upon the grounds stated by the trial court. This should be so because a Rule 45
petition, like the one at bar, can raise only questions of law (and that justifies petitioners' elevation of the
case from the trial court directly to this Court) which must be distinctly set forth. 28
The petition is bereft of merit.
Section 47 of Rule 39 of the Rules of Court, on the doctrine of res judicata, reads:
Sec. 47. Effect of judgments or final orders. The effect of a judgment or final order rendered by a
court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as
follows:
xxxx
(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as
to any other matter that could have been raised in relation thereto, conclusive between the parties
and their successors in interest by title subsequent to the commencement of the action or special
proceeding, litigating for the same thing and under the same title and in the same capacity; and
(c) In any other litigation between the same parties or their successors in interest, that only
is deemed to have been adjudged in a former judgment or final order which appears upon its face
to have been so adjudged, or which was actually and necessarily included therein or necessary
thereto. (Underscoring supplied)
The above-quoted provision lays down two main rules. Section 49(b) enunciates the first rule of res
judicataknown as "bar by prior judgment" or "estoppel by judgment," which states that the judgment or
decree of a court of competent jurisdiction on the merits concludes the parties and their privies to the
litigation and constitutes a bar to a new action or suit involving the same cause of action either before the
same or any other tribunal.29

Stated otherwise, "bar by former judgment" makes the judgment rendered in the first case an absolute bar
to the subsequent action since that judgment is conclusive not only as to the matters offered and received
to sustain it but also as to any other matter which might have been offered for that purpose and which
could have been adjudged therein. 30 It is in this concept that the term res judicata is more commonly and
generally used as a ground for a motion to dismiss in civil cases. 31
The second rule of res judicata embodied in Section 47(c), Rule 39 is "conclusiveness of judgment." This
rule provides that any right, fact, or matter in issue directly adjudicated or necessarily involved in the
determination of an action before a competent court in which a judgment or decree is rendered on the
merits is conclusively settled by the judgment therein and cannot again be litigated between the parties
and their privies whether or not the claim or demand, purpose, or subject matter of the two suits is the
same.32 It refers to a situation where the judgment in the prior action operates as an estoppel only as to
the matters actually determined or which were necessarily included therein. 33
The case at bar satisfies the four essential requisites of "bar by prior judgment," viz:
(a) finality of the former judgment;
(b) the court which rendered it had jurisdiction over the subject matter and the parties;
(c) it must be a judgment on the merits; and
(d) there must be, between the first and second actions, identity of parties, subject matter and
causes of action.34
There is no doubt that the judgment on appeal relative to Civil Case No. 94-1610 (that rendered in CA-G.R.
CV No. 50591) was a final judgment. Not only did it dispose of the case on the merits; it also became
executory as a consequence of the denial of FEBTC's motion for reconsideration and appeal. 35
Neither is there room to doubt that the judgment in Civil Case No. 94-1610 was on the merits for it
determined the rights and liabilities of the parties.36 To recall, it was ruled that: (1) DATICOR overpaid
by P5.3 million; (2) FEBTC was bound to refund the excess payment but because DATICOR's claim against
FEBTC was only P965,000, the court could only grant so much as the relief prayed for; and (3) PDCP has no
further claim against DATICOR because its obligation had already been paid in full.
Right or wrong, that judgment bars another case based upon the same cause of action. 37
As to the requisite of identity of parties, subject matter and causes of action, it cannot be gainsaid that the
first case, Civil Case No. 94-1610, was brought by petitioners to recover an alleged overpayment of P5.3
million P965,000 from FEBTC and P4.335 million from PDCP.
On the other hand, Civil Case No. 00-540, filed by the same petitioners, was for the recovery of P4.335
million which is admittedly part of the P5.3 million earlier sought to be recovered in Civil Case No. 94-1610.
This time, the action was brought solely against FEBTC which in turn impleaded PDCP as a third party
defendant.
In determining whether causes of action are identical to warrant the application of the rule of res judicata,
the test is to ascertain whether the same evidence which is necessary to sustain the second action would
suffice to authorize a recovery in the first even in cases in which the forms or nature of the two actions are
different.38Simply stated, if the same facts or evidence would sustain both, the two actions are considered
the same within the rule that the judgment in the former is a bar to the subsequent action.

It bears remembering that a cause of action is the delict or the wrongful act or omission committed by the
defendant in violation of the primary rights of the plaintiff.39
In the two cases, petitioners imputed to FEBTC the same alleged wrongful act of mistakenly receiving and
refusing to return an amount in excess of what was due it in violation of their right to a refund. The same
facts and evidence presented in the first case, Civil Case No. 94-1610, were the very same facts and
evidence that petitioners presented in Civil Case No. 00-540.
Thus, the same Deed of Assignment between PDCP and FEBTC, the first and second supplements to the
Deed, the MOA between petitioners and FEBTC, and this Court's Decision in G.R. No. 73198 were submitted
in Civil Case No. 00-540.
Notably, the same facts were also pleaded by the parties in support of their allegations for, and defenses
against, the recovery of the P4.335 million. Petitioners, of course, plead the CA Decision as basis for their
subsequent claim for the remainder of their overpayment. It is well established, however, that a party
cannot, by varying the form of action or adopting a different method of presenting his case, or by pleading
justifiable circumstances as herein petitioners are doing, escape the operation of the principle that one and
the same cause of action shall not be twice litigated.40
In fact, authorities tend to widen rather than restrict the doctrine of res judicata on the ground that public
as well as private interest demands the ending of suits by requiring the parties to sue once and for all in
the same case all the special proceedings and remedies to which they are entitled. 41
This Court finds well-taken then the pronouncement of the court a quo that to allow the re-litigation of an
issue that was finally settled as between petitioners and FEBTC in the prior case is to allow the splitting of
a cause of action, a ground for dismissal under Section 4 of Rule 2 of the Rules of Court reading:
SEC. 4. Splitting of a single cause of action; effect of. If two or more suits are instituted on the
basis of the same cause of action, the filing of one or a judgment upon the merits in any one is
available as a ground for the dismissal of the others. (Emphasis and underscoring supplied)
This rule proscribes a party from dividing a single or indivisible cause of action into several parts or claims
and instituting two or more actions based on it.42 Because the plaintiff cannot divide the grounds for
recovery, he is mandated to set forth in his first action every ground for relief which he claims to exist and
upon which he relies; he cannot be permitted to rely upon them by piecemeal in successive actions to
recover for the same wrong or injury.43
Clearly then, the judgment in Civil Case No. 94-1610 operated as a bar to Civil Case No. 00-540, following
the above-quoted Section 4, Rule 2 of the Rules of Court.
A final word. Petitioners are sternly reminded that both the rules on res judicata and splitting of causes of
action are based on the salutary public policy against unnecessary multiplicity of suits interest
reipublicae ut sit finis litium.44 Re-litigation of matters already settled by a court's final judgment merely
burdens the courts and the taxpayers, creates uneasiness and confusion, and wastes valuable time and
energy that could be devoted to worthier cases.45
WHEREFORE, the Petition is DENIED. The assailed Decision of the RTC, Branch 143, Makati dismissing
petitioners' complaint in Civil Case No. 00-540 is AFFIRMED.
Costs against petitioners.
SO ORDERED.

Quisumbing, Carpio, Tinga, Velasco, Jr., JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 170916

April 27, 2007

CGR CORPORATION herein represented by its President ALBERTO RAMOS, III, HERMAN M.
BENEDICTO and ALBERTO R. BENEDICTO, Petitioners,
vs.
ERNESTO L. TREYES, JR., Respondent
DECISION
CARPIO MORALES, J.:
Assailed via petition for review are issuances of the Regional Trial Court (RTC), Branch 43, Bacolod City, in
Civil Case No. 04-12284, to wit: Order1 dated August 26, 2005 which dismissed petitioners complaint for
damages on the ground of prematurity, and Order2 dated January 2, 2006 which denied petitioners motion
for reconsideration.
In issue is one of law whether a complainant in a forcible entry case can file an independent action for
damages arising after the act of dispossession had occurred.
CGR Corporation, Herman M. Benedicto and Alberto R. Benedicto (petitioners) claimed to have occupied
37.3033 hectares of public land in Barangay Bulanon, Sagay City, Negros Occidental even before the
notarized separate Fishpond Lease Agreement Nos. 5674,3 56944 and 56955 in their respective favor were
approved in October 2000 by the Secretary of Agriculture for a period of twenty-five (25) years or until
December 31, 2024.
On November 18, 2000, Ernesto L. Treyes, Jr. (respondent) allegedly forcibly and unlawfully entered the
leased properties and once inside barricaded the entrance to the fishponds, set up a barbed wire fence
along the road going to petitioners fishponds, and harvested several tons of milkfish, fry and
fingerlings owned by petitioners.
On November 22, 2000, petitioners promptly filed with the Municipal Trial Court (MTC) in Sagay
City separate complaints for Forcible Entry With Temporary Restraining Order And/Or Preliminary Injunction
And Damages, docketed as Civil Case Nos. 1331,6 13327 and 1333,8 against Ernesto M. Treyes, Sr. and
respondent.
In a separate move, petitioners filed in March 2004 with the Bacolod RTC a complaint for damages against
respondent, docketed as Civil Case No, 04-12284, alleging, inter alia,
xxxx
V
That prior to the issuance of the fishpond lease agreement in favor of the plaintiffs, they had
already been in open and continuous possession of the same parcel of land;
VI

As lessee and in possession of the above[-]described fishpond, plaintiffs have continuously

occupied, cultivated and developed the said fishpond and since then, had been regularly harvesting
milkfish, shrimps, mud crabs and other produce of the fishponds;1a\^/phi1.net
VII
That the yearly income of the fishpond of the plaintiff corporation is at least P300,000.00 more or
less, while the yearly income of the fishpond of plaintiff Herman Benedicto, Sr. is at
least P100,000.00 more or less, and the yearly income of the fishpond of plaintiff Alberto Benedicto
is at least P100,000.00 more or less;
VIII
That sometime last November 18, 2000 or thereabout, defendant Ernesto L. Treyes, Jr. and his
armed men and with the help of the blue guards from the Negros Veterans Security Agency forcibly
and unlawfully entered the fishponds of the plaintiffs and once inside barricaded the entrance of the
fishpond and set up barb wire fence along the road going to plaintiffs fishpond and harvested the
milkfish and carted away several tons of milkfish owned by the plaintiffs;
IX
That on succeeding days, defendants men continued their forage on the fishponds of the plaintiffs
bycarting and taking away the remaining full grown milkfish, fry and fingerlings and other marine
products in the fishponds. NOT ONLY THAT, even the chapel built by plaintiff CGR Corporation was
ransacked and destroyed and the materials taken away by defendants men. Religious icons were
also stolen and as an extreme act of sacrilege, even decapitated the heads of some of these icons;
xxxx
XIII
That the unlawful, forcible and illegal intrusion/destruction of defendant Ernesto Treyes, Jr. and his
men on the fishpond leased and possessed by the plaintiffs is without any authority of law and in
violation of Article 539 of the New Civil Code which states:
"Art. 539. Every possessor has a right to be respected in his possession; and should he be disturbed
therein he shall be protected in or restored to said possession by the means established by the laws and
rules of the Court."9 (Underscoring supplied) and praying for the following reliefs:
1) Ordering the defendant to pay plaintiff CGR Corporation the sum of at least P900,000.00 and to
plaintiffs Herman and Alberto Benedicto, the sum of at least P300,000.00 each by way
of actual damages and such other amounts as proved during the trial;
2) Ordering the defendant to pay the plaintiffs the sum of P100,000.00 each as moral damages;
3) Ordering the defendant to pay the plaintiffs the sum of P100,000.00 each
as exemplary damages;
4) Ordering the defendant to pay the plaintiffs the sum of P200,000.00 as attorneys fees, and to
reimburse plaintiffs with all such sums paid to their counsel by way of appearance
fees.10 (Underscoring supplied)

Respondent filed a Motion to Dismiss11 petitioners complaint for damages on three grounds litis
pendentia, res judicata and forum shopping.
By the assailed Order12 of August 26, 2005, Branch 43 of the Bacolod RTC dismissed petitioners complaint
on the ground of prematurity, it holding that a complaint for damages may only be maintained "after a
final determination on the forcible entry cases has been made."
Hence, the present petition for review.
The only issue is whether, during the pendency of their separate complaints for forcible entry, petitioners
can independently institute and maintain an action for damages which they claim arose from incidents
occurring afterthe dispossession by respondent of the premises.
Petitioners meet the issue in the affirmative. Respondents assert otherwise.
The petition is impressed with merit.
Section 17, Rule 70 of the Rules of Court provides:
SEC. 17. Judgment. If after trial the court finds that the allegations of the complaint are true, it shall
render judgment in favor of the plaintiff for the restitution of the premises, the sum justly due as arrears of
rent or as reasonable compensation for the use and occupation of the premises, attorneys fees and costs.
If it finds that said allegations are not true, it shall render judgment for the defendant to recover his costs.
If a counterclaim is established, the court shall render judgment for the sum found in arrears from either
party and award costs as justice requires. (Emphasis supplied)
The recoverable damages in forcible entry and detainer cases thus refer to "rents" or "the reasonable
compensation for the use and occupation of the premises" or "fair rental value of the property" and
attorneys fees and costs.13
The 2006 case of Dumo v. Espinas14 reiterates the long-established rule that the only form of damages that
may be recovered in an action for forcible entry is the fair rental value or the reasonable compensation for
the use and occupation of the property:
Lastly, we agree with the CA and the RTC that there is no basis for the MTC to award actual, moral, and
exemplary damages in view of the settled rule that in ejectment cases, the only damage that can be
recovered is the fair rental value or the reasonable compensation for the use and occupation of the
property. Considering that the only issue raised in ejectment is that of rightful possession, damages which
could be recovered are thosewhich the plaintiff could have sustained as a mere possessor, or those caused
by the loss of the use and occupation of the property, and not the damages which he may have suffered
but which have no direct relation to his loss of material possession. x x x15 (Emphasis, underscoring and
italics supplied; citations omitted)
Other damages must thus be claimed in an ordinary action.16
In asserting the negative of the issue, respondent cites the 1999 case of Progressive Development
Corporation, Inc. v. Court of Appeals.17 In this case, Progressive Development Corporation, Inc.
(Progressive), as lessor, repossessed the leased premises from the lessee allegedly pursuant to their
contract of lease whereby it was authorized to do so if the lessee failed to pay monthly rentals. The lessee
filed a case for forcible entry with damages against Progressive before the Metropolitan Trial Court (MeTC)
of Quezon City. During the pendency of the case, the lessee filed an action for damages before the RTC,
drawing Progressive to file a motion to dismiss based on litis pendentia. The RTC denied the motion.

On appeal by Progressive, the Court of Appeals sustained the RTC order denying the motion to dismiss.
Progressive brought the case to this Court. Citing Section 1, Rule 70 of the Rules of Court, this Court
reversed the lower courts ruling, it holding that "all cases for forcible entry or unlawful detainer shall be
filed before the Municipal Trial Court which shall include not only the plea for restoration of possession but
also all claims for damages and costs therefrom." In other words, this Court held that "no claim for
damages arising out of forcible entry or unlawful detainer may be filed separately and independently of
the claim for restoration of possession."18(Underscoring supplied)
In thus ruling, this Court in Progressive made a comparative study of the therein two complaints, thus:
A comparative study of the two (2) complaints filed by private respondent against petitioner before the two
(2) trial courts shows that not only are the elements of res adjudicata present, at least insofar as the claim
for actual and compensatory damages is concerned, but also that the claim for damagesmoral and
exemplary in addition to actual and compensatoryconstitutes splitting a single cause of action. Since this
runs counter to the rule against multiplicity of suits, the dismissal of the second action becomes
imperative.
The complaint for forcible entry contains the following pertinent allegations
2.01 On 02 January 1989, plaintiff entered into a contract of lease with defendant PDC over a property
designated as Ground Floor, Seafood Market (hereinafter "Subject Premises") situated at the corner of
EDSA corner MacArthur Street, Araneta Center, Cubao, Quezon City, for a period of ten (10) years from 02
January 1989 to 30 April 1998.
2.02 Immediately after having acquired actual physical possession of the Subject Premises, plaintiff
established and now operates thereon the now famous Seafood Market Restaurant. Since then, plaintiff
had been in actual, continuous, and peaceful physical possession of the Subject Premises until 31 October
1992.
xxxx
3.02 Plaintiff, being the lessee of the Subject Premises, is entitled to the peaceful occupation and
enjoyment of the Subject Premises to the exclusion of all others, including defendants herein.
3.03 Defendants resort to strong arms tactics to forcibly wrest possession of the Subject Premises from
plaintiff and maintain possession thereof through the use of force, threat, strategy and intimidation by the
use of superior number of men and arms amounts to the taking of the law into their own hands.
3.04 Thus, defendants act of unlawfully evicting out plaintiff from the Subject Premises it is leasing from
defendant PDC and depriving it of possession thereof through the use of force, threat, strategy and
intimidation should be condemned and declared illegal for being contrary to public order and policy.
3.05 Consequently, defendants should be enjoined from continuing with their illegal acts and be ordered to
vacate the Subject Premises and restore possession thereof, together with its contents to plaintiff.
xxxx
4.07 Considering that defendants act of forcibly grabbing possession of the Subject Premises from plaintiff
is illegal and null and void, defendant should be adjudged liable to plaintiff for all the aforedescribed
damages which plaintiff incurred as a result thereof.

The amended complaint for damages filed by private respondent alleges basically the same factual
circumstances and issues as bases for the relief prayed for, to wit:
4. On May 28, 1991, plaintiff and defendant PDC entered into a Contract of Lease for a period of ten years
or from January 2, 1989 up to April 30, 1998 over a property designated as Ground Floor, Seafood Market
(hereinafter referred to as Subject Premises) situated at the corner of EDSA corner McArthur Street,
Araneta Center, Cubao, Quezon City. A copy of the lease contract is attached hereto as Annex "A."
5. Immediately thereafter, plaintiff took over actual physical possession of Subject Premises, and
established thereon the now famous "Seafood Market Restaurant."
xxxx
7. On October 31, 1992 at around 8:30 p.m., defendant PDC, without the benefit of any writ of possession
or any lawful court order and with the aid of approximately forty (40) armed security guards and policemen
under the supervision of defendant Tejam, forcibly entered the subject premises through force,
intimidation, threats and stealth and relying on brute force and in a thunderboltish manner and against
plaintiffs will, unceremoniously drew away all of plaintiffs men out of the subject premises, thereby
depriving herein plaintiff of its actual, physical and natural possession of the subject premises. The illegal
high-handed manner of gestapo like take-over by defendants of subject premises is more particularly
described as follows: x x x x
8. To date, defendants continue to illegally possess and hold the Subject Premises, including all the multimillion improvements, fixtures and equipment therein owned by plaintiff, all to the damage and prejudice
of plaintiff. The actuations of defendants constitute an unlawful appropriation, seizure and taking of
property against the will and consent of plaintiff. Worse, defendants are threatening to sell at public
auction and without the consent, of plaintiff and without lawful authority, the multi-million fixtures and
equipment of plaintiff and at prices way below the market value thereof. Plaintiff hereby attaches as Annex
"B" the letter from defendants dated August 6, 1993 addressed to plaintiff, informing the latter that the
former intends to sell at an auction on August 19, 1993 at 2:00 p.m. properties of the plaintiff presently in
defendants possession.
xxxx
12. Defendants unlawful takeover of the premises constitutes a violation of its obligation under Art. 1654
of the New Civil Code requiring the lessor to maintain the lessee in peaceful and adequate enjoyment of
the lease for the entire duration of the contract. Hence, plaintiff has filed the present suit for the recovery
of damages under Art. 1659 of the New Civil Code x x x x19 (Emphasis in the original; underscoring
supplied)
Analyzing the two complaints, this Court, still in Progressive, observed:
Restated in its bare essentials, the forcible entry case has one cause of action, namely, the alleged
unlawful entry by petitioner into the leased premises out of which three (3) reliefs (denominated by private
respondent as its causes of action) arose: (a) the restoration by the lessor (petitioner herein) of the
possession of the leased premises to the lessee, (b) the claim for actual damages due to the losses
suffered by private respondent such as the deterioration of perishable foodstuffs stored inside the
premises and the deprivation of the use of the premises causing loss of expected profits; and, (c) the claim
for attorneys fees and costs of suit.
On the other hand, the complaint for damages prays for a monetary award consisting of (a) moral
damages of P500,000.00 and exemplary damages of another P500,000.00; (b) actual damages of
P20,000.00 and compensatory damages of P1,000,000.00 representing unrealized profits; and, (c)

P200,000.00 for attorneys fees and costs, all based on the alleged forcible takeover of the leased
premises by petitioner. Since actual and compensatory damages were already prayed for in the forcible
entry case before the MeTC, it is obvious that this cannot be relitigated in the damage suit before the RTC
by reason of res adjudicata.
The other claims for moral and exemplary damages cannot also succeed considering that these sprung
from the main incident being heard before the MeTC. x x x20 (Italics in the original; Emphasis and
underscoring supplied)
It bears noting, however, that as reflected in the earlier-quoted allegations in the complaint for damages of
herein petitioners, their claim for damages have no direct relation to their loss of possession of the
premises. It had to do with respondents alleged harvesting and carting away several tons of milkfish and
other marine products in their fishponds, ransacking and destroying of a chapel built by petitioner CGR
Corporation, and stealing religious iconsand even decapitating the heads of some of them, after the act of
dispossession had occurred.
Surely, one of the elements of litis pendentia - that the identity between the pending actions, with respect
to the parties, rights asserted and reliefs prayed for, is such that any judgment rendered on one action will,
regardless of which is successful, amount to res judicata in the action under consideration - is not present,
hence, it may not be invoked to dismiss petitioners complaint for damages. 21
Res judicata may not apply because the court in a forcible entry case has no jurisdiction over claims for
damagesother than the use and occupation of the premises and attorneys fees.22
Neither may forum-shopping justify a dismissal of the complaint for damages, the elements of litis
pendentia not being present, or where a final judgment in the forcible entry case will not amount to res
judicata in the former.23
Petitioners filing of an independent action for damages other than those sustained as a result of their
dispossession or those caused by the loss of their use and occupation of their properties could not thus be
considered as splitting of a cause of action.
WHEREFORE, the Orders dated August 26, 2005 and January 2, 2006 issued by the Regional Trial Court,
Branch 43, Bacolod City, in Civil Case No. 04-12284 are REVERSED and SET ASIDE.
The Regional Trial Court, Branch 43, Bacolod City, is directed to REINSTATE Civil Case No. 04-12284 to its
docket and to conduct proceedings thereon with dispatch.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-41423 February 23, 1989
LUIS JOSEPH, petitioner
vs.
HON. CRISPIN V. BAUTISTA, PATROCINIO PEREZ, ANTONIO SIOSON, JACINTO PAGARIGAN,
ALBERTO CARDENO and LAZARO VILLANUEVA, respondents.
Jose M. Castillo for petitioner.
Arturo Z. Sioson for private respondent, Patrocinio Perez.
Cipriano B. Farrales for private respondents except P. Perez.

REGALAD0, J.:
Petitioner prays in this appeal by certiorari for the annulment and setting aside of the order, dated July 8,
1975, dismissing petitioner's complaint, as well as the order, dated August 22, 1975, denying his motion
for reconsideration of said dismissal, both issued by respondent Judge Crispin V. Bautista of the former
Court of First Instance of Bulacan, Branch III.
Petitioner herein is the plaintiff in Civil Case No. 50-V-73 entitled "Luis Joseph vs. Patrocinio Perez, Domingo
Villa y de Jesus, Rosario Vargas, Antonio Sioson, Lazaro Villanueva and Jacinto Pagarigan", filed before the
Court of First Instance of Bulacan, Branch III, and presided over by respondent Judge Crispin V. Bautista;
while private respondents Patrocinio Perez, Antonio Sioson, Jacinto Pagarigan and Lazaro Villanueva are
four of the defendants in said case. Defendant Domingo Villa y de Jesus did not answer either the original
or the amended complaint, while defendant Rosario Vargas could not be served with summons; and
respondent Alberto Cardeno is included herein as he was impleaded by defendant Patrocinio Perez, one of
respondents herein, in her cross-claim.
The generative facts of this case, as culled from the written submission of the parties, are as follows:
Respondent Patrocinio Perez is the owner of a cargo truck with Plate No. 25-2 YT Phil. '73 for conveying
cargoes and passengers for a consideration from Dagupan City to Manila. On January 12, 1973, said cargo
truck driven by defendant Domingo Villa was on its way to Valenzuela, Bulacan from Pangasinan.
Petitioner, with a cargo of livestock, boarded the cargo truck at Dagupan City after paying the sum of P
9.00 as one way fare to Valenzuela, Bulacan. While said cargo truck was negotiating the National Highway
proceeding towards Manila, defendant Domingo Villa tried to overtake a tricycle likewise proceeding in the
same direction. At about the same time, a pick-up truck with Plate No. 45-95 B, supposedly owned by
respondents Antonio Sioson and Jacinto Pagarigan, then driven by respondent Lazaro Villanueva, tried to
overtake the cargo truck which was then in the process of overtaking the tricycle, thereby forcing the
cargo truck to veer towards the shoulder of the road and to ram a mango tree. As a result, petitioner
sustained a bone fracture in one of his legs. 1
The following proceedings thereafter took place:

Petitioner filed a complaint for damages against respondent Patrocinio Perez, as owner of the cargo truck,
based on a breach of contract of carriage and against respondents Antonio Sioson and Lazaro Villanueva,
as owner and driver, respectively, of the pick-up truck, based on quasi-delict.
Respondent Sioson filed his answer alleging that he is not and never was an owner of the pick-up truck and
neither would he acquire ownership thereof in the future.
On September 24, 1973, petitioner, with prior leave of court, filed his amended complaint impleading
respondents Jacinto Pagarigan and a certain Rosario Vargas as additional alternative defendants. Petitioner
apparently could not ascertain who the real owner of said cargo truck was, whether respondents Patrocinio
Perez or Rosario Vargas, and who was the real owner of said pick-up truck, whether respondents Antonio
Sioson or Jacinto Pagarigan.
Respondent Perez filed her amended answer with crossclaim against her co-defendants for indemnity and
subrogation in the event she is ordered to pay petitioner's claim, and therein impleaded cross-defendant
Alberto Cardeno as additional alternative defendant.
On September 27, 1974, respondents Lazaro Villanueva, Alberto Cardeno, Antonio Sioson and Jacinto
Pagarigan, thru their insurer, Insurance Corporation of the Philippines, paid petitioner's claim for injuries
sustained in the amount of P 1,300.00. By reason thereof, petitioner executed a release of claim releasing
from liability the following parties, viz: Insurance Corporation of the Philippines, Alberto Cardeno, Lazaro
Villanueva, Antonio Sioson and Jacinto Pagarigan.
On December 2, 1974, respondents Lazaro Villanueva, Alberto Cardeno and their insurer, the Insurance
Corporation of the Philippines, paid respondent Patrocinio Perez' claim for damages to her cargo truck in
the amount of P 7,420.61.
Consequently, respondents Sioson, Pagarigan, Cardeno and Villanueva filed a "Motion to Exonerate and
Exclude Defs/ Cross defs. Alberto Cardeno, Lazaro Villanueva, Antonio Sioson and Jacinto Pagarigan on the
Instant Case", alleging that respondents Cardeno and Villanueva already paid P 7,420.61 by way of
damages to respondent Perez, and alleging further that respondents Cardeno, Villanueva, Sioson and
Pagarigan paid P 1,300.00 to petitioner by way of amicable settlement.
Thereafter, respondent Perez filed her "Opposition to Cross-defs.' motion dated Dec. 2, 1974 and Counter
Motion" to dismiss. The so-called counter motion to dismiss was premised on the fact that the release of
claim executed by petitioner in favor of the other respondents inured to the benefit of respondent Perez,
considering that all the respondents are solidarity liable to herein petitioner.
On July 8, 1975, respondent judge issued the questioned order dismissing the case, and a motion for the
reconsideration thereof was denied. Hence, this appeal, petitioner contending that respondent judge erred
in declaring that the release of claim executed by petitioner in favor of respondents Sioson, Villanueva and
Pagarigan inured to the benefit of respondent Perez; ergo, it likewise erred in dismissing the case.
We find the present recourse devoid of merit.
The argument that there are two causes of action embodied in petitioner's complaint, hence the judgment
on the compromise agreement under the cause of action based on quasi-delict is not a bar to the cause of
action for breach of contract of carriage, is untenable.
A cause of action is understood to be the delict or wrongful act or omission committed by the defendant in
violation of the primary rights of the plaintiff. 3 It is true that a single act or omission can be violative of
various rights at the same time, as when the act constitutes juridically a violation of several separate and

distinct legal obligations. However where there is only one delict or wrong, there is but a single cause of
action regardless of the number of rights that may have been violated belonging to one person. 4
The singleness of a cause of action lies in the singleness of the- delict or wrong violating the rights of one
person. Nevertheless, if only one injury resulted from several wrongful acts, only one cause of action
arises. 5 In the case at bar, there is no question that the petitioner sustained a single injury on his person.
That vested in him a single cause of action, albeit with the correlative rights of action against the different
respondents through the appropriate remedies allowed by law.
The trial court was, therefore, correct in holding that there was only one cause of action involved although
the bases of recovery invoked by petitioner against the defendants therein were not necessarily Identical
since the respondents were not identically circumstanced. However, a recovery by the petitioner under one
remedy necessarily bars recovery under the other. This, in essence, is the rationale for the proscription in
our law against double recovery for the same act or omission which, obviously, stems from the
fundamental rule against unjust enrichment.
There is no question that the respondents herein are solidarily liable to petitioner. On the evidence
presented in the court below, the trial court found them to be so liable. It is undisputed that petitioner, in
his amended complaint, prayed that the trial court hold respondents jointly and severally liable.
Furthermore, the allegations in the amended complaint clearly impleaded respondents as solidary debtors.
We cannot accept the vacuous contention of petitioner that said allegations are intended to apply only in
the event that execution be issued in his favor. There is nothing in law or jurisprudence which would
countenance such a procedure.
The respondents having been found to be solidarity liable to petitioner, the full payment made by some of
the solidary debtors and their subsequent release from any and all liability to petitioner inevitably resulted
in the extinguishment and release from liability of the other solidary debtors, including herein respondent
Patrocinio Perez.
The claim that there was an agreement entered into between the parties during the pre-trial conference
that, after such payment made by the other respondents, the case shall proceed as against respondent
Perez is both incredible and unsubstantiated. There is nothing in the records to show, either by way of a
pre-trial order, minutes or a transcript of the notes of the alleged pre-trial hearing, that there was indeed
such as agreement.
WHEREFORE, the challenged orders of the respondent judge are hereby AFFIRMED.
SO ORDERED.
Melencio-Herrera, (Chairperson), Paras, Padilla, and Sarmiento, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 123555 January 22, 1999

PROGRESSIVE DEVELOPMENT CORPORATION, INC., petitioner,
vs.
COURT OF APPEALS and WESTIN SEAFOOD MARKET, INC. respondents.

BELLOSILLO, J.:
May the lessee which instituted before the Metropolitan Trial Court an action for forcible entry with
damages against its lessor file a separate suit with the Regional Trial Court against the same lessor for
moral and exemplary damages plus actual and compensatory damages based on the same forcible entry?
On grounds of litis pendencia and forum-shopping petitioner invokes established jurisprudence that a party
cannot by varying the form of action or adopting a different method of presenting his case evade the
principle that the same cause of action shall not be litigated twice between the same parties or their
privies. 1 Petitioner therefore prays for reversal of the decision of the Court of Appeals dated 27 May 1995,
as well as its Resolution dated 17 January 1996 denying reconsideration, which upheld the denial by the
Regional Trial Court of petitioner's motion to dismiss private respondent's damage suit.
The antecedents: On 27 May 1991 petitioner leased to private, respondent Westin Seafood Market, Inc., a
parcel of land with a commercial building thereon located at Aranet Center, Cubao, Quezon City, for a
period of nine (9) years and three (3) months, i.e., from 2 January 1989 to 30 April 1998, with a monhtly
rental of approximately P600,000.00. The contract contained, among others, the following pertinent terms
and conditions:
EFFECT OF VIOLATIONS
25. LESSEE hereby agrees that all the provisions contained in this Contract shall be deemed
as conditions, as-well as covenants, and that this Contract shall be automatically terminated
and cancelled without resorting to court action should LESSEE violate any or all said
conditions, including the payment of Rent, CUSA and other charges indicated in the FLP
when due within the time herein stipulated and in any such cases, LESSEE hereby
irrevocably appoints LESSOR, its authorized agents, employees and/or representatives as his
duly authorized attorney-in-fact, even after the termination, expiration or cancellation of this
Contract, with full power and authority to open, enter, repossess, secure, enclose, fence and
otherwise take full and complete physical possession and control of the leased premises and
its contents without resorting to court action and/or to summarily disconnect electrical
and/or water services thereof, and that LESSEE hereby irrevocably empowers LESSOR, his
authorized agents, employees and/or representatives to take inventory and possession of
whatever equipment, furniture, articles, merchandise, appliances, etc., found therein
belonging to LESSEE, consignors and/or to any other persons and to place the same in
LESSOR's warehouse or any other place at LESSOR's discretion for safekeeping; charging
LESSEE the corresponding storage fees therefor; that in case LESSEE fails to claim-said

equipment, furniture, articles, merchandise, appliances, etc. from storage and

simultaneously liquidate any liability with LESSOR within seven (7) days from date of said
transfer to LESSOR's warehouse, LESSOR is likewise hereby expressly authorized and
empowered by LESSEE to dispose of said property/properties in a public sale through a
Notary Public of LESSOR's choice and to apply the proceeds thereof to whatever liability
and/or indebtedness LESSEE may have to LESSOR plus reasonable expenses for the same,
including storage fees, and the balance, if any, shall be turned over to LESSEE; that LESSEE
hereby expressly agrees that any or all acts performed by LESSOR, his authorized agents,
employees and/or representatives under the provisions of this Section may not be the
subject of any petition for a Writ of Preliminary Injunction or Mandatory Injunction in court,
and that LESSOR and/or his authorized agents, employees, and/or representatives shall be
free from any civil and/or criminal liability or responsibility whatsoever therefor.
TERMINATION OF LEASE
26. Upon-the automatic termination of this lease contract, as the case may be, LESSEE shall
immediately vacate and redeliver physical possession of the leased premises, including the
keys appertaining thereto, to LESSOR in good, clean and sanitary condition, reasonable wear
and tear excepted, devoid of all occupants,. equipment, furnitures articles, merchandise,
etc., belonging to LESSEE or to any other person except those belonging to LESSOR; that
should LESSEE fail to comply with this provision, LESSOR is hereby given the same rights
and power to proceed against LESSEE as expressly granted in the immediately; preceding
section.
Private respondent failed to pay rentals despite several demands by petitioner. As of 19 October 1992 the
arrearages amounted to P8,608,284.66. Admittedly, non-payment of rentals constituted breach of their
contract; thus, pursuant to the express authority granted petitioner under the above-quoted Secs. 25 and
26 of the lease agreement, petitioner on 31 October 1992 repossessed the leased premises, inventoried
the movable properties found within and owned by private respondent and scheduled public auction for
the sale of the movables on 19 August 1993 with notice to private respondent.
On 26 November 1992 private respondent filed with the Metropolitan Trial Court of Quezon City a
complaint against petitioner for forcible entry with damages and a prayer for a temporary restraining order
and/or writ of preliminary injunction. 2 The case was raffled to Branch 40 presided over by Judge Guillermo
L. Loja Jr. who issued a temporary restraining order enjoining petitioner from selling private respondent's
properties at a public auction.
On 9 December 1992 Judge Loja inhibited himself from trying the case and directed its transfer to Branch
34 presided over by Judge Joselito SD Generoso. Soon after, petitioner filed an urgent motion for the
inhibition of Judge Generoso and the immediate reraffle of the case arguing that the summary transfer of
the case to Judge Generoso was irregular as it was not done by raffle.
The motion was granted and the case went to Branch 36 presided over by Judge Francisco D. Villanueva.
Thereafter, on 22 December 1992, at the continuation of the hearing on the issuance of a writ preliminary
mandatory injunction, the parties agreed, among others, on the following: (a) private respondent would
deposit with the Philippine Commercial and Industrial Bank in the name of the Metropolitan Trial Court,
Branch 36, the amount of P8,000,000.00 to guarantee the payment of its back rentals; (b) petitioner would
defer the sale of the personal properties of the Westin Seafood Market, Inc., until a final settlement of the
case had been arrived, at; (c) petitioner shall allow private respondent to retrieve all the perishable goods
from inside the leased premises like frozen meat, vegetables and fish, all properly receipted for; (d)
petitioner shall allow three (3) maintenance personnel of private respondent to enter the premises at
reasonable working hours to maintain the restaurant equipment; and (e) the parties shall negotiate for the
restoration of the premises to private respondent, and if no settlement be arrived at on or before January

8, 1993, the hearing on the merits of the case shall proceed and the disposition of the amount deposited
representing the rental arrearages shall be left to the. discretion of the court.
This agreement was incorporated in the order of the court dated 22 December 1992 3 which in effect
terminated for all intents and purposes the incident on the issuance of a preliminary writ of injunction.
Private respondent did not comply with its undertaking to deposit with the designated bank the amount
representing its back rentals. Instead, with the forcible entry case still pending with the MeTC, private
respondent instituted on 9 June 1993 another action for damages against petitioner with the Regional Trial
Court of Quezon City. The case was raffled to Branch 101 presided over by Judge Pedro T. Santiago. 4
Petitioner filed a motion, to dismiss the damage suit on the ground of litis pendencia and forum
shopping. On 2 July 1993, instead of ruling on the motion, Judge Santiago issued an order archiving the
case pending the outcome of the forcible entry case being heard at the MeTC for the reason that "the
damages is (sic) principally anchored on whether or not the defendants (petitioner herein) have committed
forcible entry." 5 On 2 August 1993 petitioner moved for reconsideration of the order and reiterated its
motion to dismiss the suit for damages.
Before petitioner's motion to dismiss could be resolved, private respondent filed with the RTC on 18 August
1993 an amended complaint for damages. On 14 September 1993 it also filed an Urgent Ex-Parte Motion
for the Issuance of a Temporary Restraining Order and Motion for the Grant of a Preliminary Prohibitory
and Preliminary Mandatory Injunction. On the very same day, Judge Santiago issued an order (a) denying
petitioner's motion to dismiss, (b) admitting private respondent's amended complaint, and (c) granting
private respondent's application for a temporary restraining order against petitioner.
Thus, petitioner filed with the Court of Appeals a special civil action for certiorari and prohibition on the
ground that Judge Santjago acted in excess of his jurisdiction and/or committed grave abuse of discretion
amounting to lack of jurisdiction in admitting, the amended complaint of private respondent and issuing a
restraining order against petitioner; in allowing private respondent to engage in forum shopping; and,
taking cognizance of the action; for damages despite lack of jurisdiction. 6
But the Court of Appeals dismissed the petition due to the failure of petitioner to file a motion for
reconsideration of Judge Santiago's order of 14 September 1993 which, it explained, was a prerequisite to
the institution of a petition for certiorari and prohibition. It also found that the elements of litis
pendencia were lacking to justify the dismissal of the action for damages with the RTC because despite the
pendency of the forcible entry case with the MeTC the only damages recoverable thereat were those
caused by the loss of the use and occupation of the property and not the kind of damages being claimed
before the RTC which had no direct relation to loss of material possession. It clarified that since the
damages prayed for in the amended complaint with the RTC were those caused by the alleged highhanded manner with which petitioner reacquired possession of the leased premises and the sale of private
respondent's movables found therein, the RTC and not the MeTC had jurisdiction over the action of
damages. 7
Petitioner, aggrieved by the decision of the appellate court, filed the instant petition for review
on certiorari under Rule 45 of the Rules of Court alleging that it erred in (a) finding that petitioner failed to
avail of its plain, speedy and adequate remedy of a prior motion for reconsideration with the RTC; (b) ruling
that, the trial judge did not act with grave abuse of discretion in taking cognizance of the action for
damages and injunction despite the pendency of the forcible entry case with the MeTC; and, (c) ruling that
private respondent did not commit forum shopping since the causes of action before the RTC and MeTC
were not identical with each other.
There is merit in the petition. While generally a motion for reconsideration must first be filed before
resorting tocertiorari in order to give the lower court an opportunity to correct the errors imputed to it

this

rule admits of exceptions and is not intended to be applied without considering the circumstances of the
case. 9 The filing of the motion for reconsideration before availing of the remedy of certiorari is not sine
qua non when the issue raised is one purely of law,10 or where the error is patent or the disputed order is
void, 11 or the questions raised on certiorari are the same as those already squarely presented to and
passed upon by the lower court
In its motion for dismissal of the action for damages with the RTC petitioner raised the ground that another
action for forcible entry was pending at the MeTC between the same parties involving the same matter and
cause of action. Outrightly rejected by the RTC, the same issue was elevated by petitioner
on certiorari before the Court of Appeals. Clearly, under the prevailing circumstance, any motion for
reconsideration of the trial court would have been a pointless exercise. 12
We now turn to the issue of whether an action for damages filed with the Regional Trial Court by the lessee
against the lessor should be dismissed on the ground of pendency of another action for forcible entry and
damages earlier filed by the same lessee against the same lessor before the Metropolitan Trial Court.
Sec. 1 of Rule 70 of the Rules of Court provides that any person deprived of the possession of any land or
building by force, indimidation, threat, strategy or stealth, or against whom thepossession of any land or
building is unlawfully withheld, may bring an action in the proper Municipal Trial Court against the person
or persons unlawfully withholding or depriving of possession, together with damages and costs. The
mandate under this rule is categorical: that all cases for forcible entry or unlawful detainer shall be filed
before the Municipal Trial Court which shall include not only the plea for restoration of possession but also
all claims for damages and costs arising therefrom. Otherwise expressed, no claim for damages arising out
of forcible entry or unlawful detainer may be filed separately and independently of the claim for restoration
of possession.
This is consistent with the principle laid down in Sec. 1, par. (e), of Rule 16 of the Rules of Court which
states that the pendency of another action between the same parties for the same cause is a ground for
dismissal of an action. Res adjudicata requires that there must be between the action sought to be
dismissed and the other action the following elements: (a) identity of parties or at least such as
representing the same interest in both actions; (b) identity of rights asserted and relief prayed for, the
relief being founded on the same facts; and, (c) the identity in the two (2) preceding particulars should be
such that any judgment which may be rendered on the other action will, regardless of which party is
successful, amount to res adjudicata in the action under
consideration. 13
It is likewise basic under Sec. 3 of Rule 2 of the Revised Rules of Court, as amended, that a party may not
institute more than one suit for a single cause of action. Under Sec. 4 of the same Rule, if two or more suits
are instituted on the basis of the same cause of action, the filing of one or a judgment upon the merits in
any one is available as a ground for the dismissal of the other or others. "Cause of action" is defined by
Sec. 2 of Rule 2 as the act of omission by which a party violates a right of another. 14 These premises
obtaining, there is no question at all that private respondent's cause of action in the forcible entry
case and in the suit for damages is the alleged illegal retaking of possession of the leased premises by the
lessor, petitioner herein, from which all legal reliefs arise. Simply stated, the restoration of possession and
demand for actual damages in the case before the MeTC and the demand for damages with the RTC both
arise from the same cause of action, i.e., the forcible entry by petitioner into the least premises.
A comparative study of the two (2) complaints filed by private respondent against petitioner before the two
(2) trial courts shows that not only are the elements of res adjudicata present, at least insofar as the claim
for actual and compensatory damages is concerned, but also that the claim for damages moral and
exemplary in addition to actual and compensatory constitutes splitting a single cause of action. Since
this runs counter to the rule against multiplicity of suits, the dismissal of the second action becomes
imperative.

The complaint for forcible entry contains the following pertinent allegations
2.01 On 02 January 1989, plaintiff entered, into a contract of lease with defendant PDC over
a property designated as Ground Floor, Seafood Market (hereinafter "Subject Premises")
situated at the corner of EDSA, corner MacArthur Street, Araneta Center, Cubao, Quezon
City, for a period of ten (10) years from 02 January 1989 to 30 April 1998.
2.02 Immediately after having acquired actual physical possession of the Subject Premises,
plaintiff established and now operates thereon the now famous Seafood Market Restaurant.
Since then, plaintiff had been in actual, continuous, and peaceful physical possession of the
Subject Premises until 31 October 1992.
xxx xxx xxx
3.02 Plaintiff, being the lessee of the Subject Premises, is entitled to the peaceful occupation
and enjoyment of the Subject Premises to the exclusion of all others, including defendants
herein.
3.03 Defendants' resort to strong arms tactics to forcibly wrest possession of the Subject
Premises from plaintiff and maintain possession thereof through the use of force, threat,
strategy and intimidation by the use of superior number of men and arms amounts to the
taking of the law into their own hands.
3.04 Thus, defendants' act of unlawfully evicting out plaintiff from the Subject Premises it is
leasing from defendant PDC and depriving it of possession thereof through the use of force,
threat, strategy and intimidation should be condemned and declared illegal for being
contrary; to public order and policy.
3.05 Consequently, defendants should be enjoined from continuing with their illegal acts and
be ordered to vacate the Subject Premises and restore possession thereof, together with its
contents, to plaintiff.
xxx xxx xxx
4.07 Considering that defendants' act of forcibly grabbing possession of the Subject
Premises from plaintiff is illegal and null and void, defendant should be adjudged liable to
plaintiff for all the aforedescribed damages which plaintiff incurred as a result thereof.
The amended complaint for damages filed by private respondent alleges basically the same factual
circumstances and issues as bases for the relief prayed for, to wit:
4. On May 28, 1991, plaintiff and defendant PDC entered into a Contract of Lease for a
period of ten years or from January 2, 1989 up to April 30, 1998 over a property designated
as Ground Floor, Seafood Market (hereinafter referred to as Subject Premises) situated at the
corner of EDSA corner McArthur Street, Araneta Center, Cubao, Quezon City. A copy of the
lease contract is attached hereto as Annex "A".
5. Immediately thereafter, plaintiff took over actual physical possession of Subject Premises,
and established thereon the now famous "Seafood Market Restaurant."
xxx xxx xxx

7 On October 31, 1992 at around 8:30 p.m., defendant PDC, without the benefit of any writ
of possession or any lawful court order and with the aid of approximately forty (40) armed
security guards and policemen under the supervision of defendant Tejam, forcibly entered
the subject premises through force, intimidation, threats and stealth and relying on brute
force and in a thunderboltish manner and against plaintiff's will, unceremoniously drew away
all of plaintiff's men out of the subject premises, thereby depriving herein plaintiff of its
actual, physical and natural possession of the subject premises. The illegal, high-handed
manner and gestapo like take-over by defendants of subject premises is more particularly
described as follows: . . .
8. To date, defendants continue to illegally possess and hold the Subject Premises, including
all the multi-million improvements, fixtures and equipment therein owned by plaintiff, all to
the damage and prejudice of plaintiff. The actuations of defendants constitute an unlawful
appropriation, seizure and taking of property against the will and consent of plaintiff. Worse,
defendants are threatening to sell at public auction and without the consent of plaintiff and
without lawful authority, the multi-million fixtures and equipment of plaintiff and at prices
way below the market value thereof. Plaintiff hereby attaches as Annex "B" the letter from
defendants dated August 6, 1993 addressed to plaintiff, informing the latter that the former
intends to sell at an auction on August 19, 1993 at 2:00 p.m. properties of the plaintiff
presently in defendants' possession.
xxx xxx xxx
12. Defendants' unlawful takeover of the premises constitutes a violation of its obligation
under Art. 1654 of the New Civil Code requiring the lessor to maintain the lessee in peaceful
and adequate enjoyment of the lease for the entire duration of the contract. Hence, plaintiff
has filed the present suit for the recovery of damages under Art. 1659 of the New Civil Code.
...
Restated in its bare essentials, the forcible entry case has one cause of action, namely, the alleged
unlawful entry by petitioner into the leased premises out of which three (3) reliefs (denominated by private
respondent as is causes of action) arose: (a) the restoration by the lessor (petitioner herein) of the
possession of the leased premises to the lessee; (b) the claim for actual damages due to the losses
suffered by private respondent such as the deterioration of perishable foodstuff stored inside the premises
and the deprivation of the use of the premises causing loss of expected profits; and, (c) the claim for
attoney's fees and cost of suit.
On the other hand, the complaint for damages prays for a monetary award consisting of (a) moral
damages of P500,000.00 and exemplary damages of another P500,000.00; (b) actual damages of
P20,000,000.00 and compensatory damages of P1,000,000.00 representing unrealized profits; and, (c)
P200,000.00 for attorney's fees and costs, all based on the alleged forcible takeover of the leased premises
by petitioner. Since actual and compensatory damages were already prayed for in the forcible entry case
before the MeTC, it is obvious that this cannot be relitigated in the damage suit before the RTC by reason
of res adjudicata.
The other claims for moral and exemplary damages cannot also succeed considering that these sprung
from the main incident being heard before the MeTC. Jurisprudence is unequivocal that when a single delict
or wrong is committed like the unlawful taking or detention of the property of the another there is but
one single cause of action regardless of the number of rights that may have been violated, and all such
rights should be alleged in a single complaint as constituting one single cause of action. 15 In a forcible
entry case, the real issue is the physical possession of the real property. The question of damages is
merely secondary or incidental, so much so that the amount thereof does not affect the jurisdiction of the
court. In other words, the unlawful act of a deforciant in taking possession of a piece of land by means of

force and intimidation against the rights of the party actually in possession thereof is a delict or wrong, or
a cause of action that gives rise to two (2) remedies, namely, the recovery of possession and recovery of
damages arising from the loss of possession, but only to one action. For obvious reasons, both remedies
cannot be the subject of two (2) separate and independent actions, one for recovery of posssession only,
and the other, for the recovery of damages. That would inevitably lead to what is termed in law as splitting
up a cause of action. 16 In David v. de la Cruz 17we observed
Herein tenants have but one cause of action against their landlord, their illegal ejectment or
removal from their landholdings, which cause of action however entitles them to two (2)
claims or remedies for reinstatement of damages. As both claims arise from the same
cause of action, they should be alleged in a single complaint.
A claim cannot be divided in such a way that a part of the amount of damages may be recovered in one
case and the rest, in another. 18 In Bacharach v. Icarangal 19 we explained that the rule was aimed at
preventing repeated litigations betweent the same parties in regard to the same subject of the controversy
and to protect the defendant from unnecessary vexation. Nemo debet bis vexari pro una et eadem causa.
What then is the effect of the dismissal of the other action? Since the rule is that all such rights should be
alleged in a single complaint, it goes without saying that those not therein included cannot be the subject
of subsequent complaints for they are barred forever. 20 If a suit is brought for a part of a claim, a judgment
obtained in that action precludes the plaintiff from bringing a second action for the residue of the claim,
notwithstanding that the second form of action is not identical with the first or different grounds for relief
are set for the second suit. This principle not only embraces what was actually determined, but also
extends to every matter which the parties might have litigated in the case. 21 This is why the legal basis
upon which private respondent anchored its second claim for damages, i.e., Art. 1659 in relation to Art.
1654 of the Civil Code, 22 not otherwise raised and cited by private respondent in the forcible entry case,
cannot be used as justification for the second suit for damages. We note, not without some degree of
displeasure, that by filing a second suit for damages, private respondent was not only able to press a claim
for moral and exemplary damages which by its failure to allege the same in its suit before the MeTC
foreclosed its right to sue on it, but it was also able to obtain from the RTC, by way of another temporary
restraining order, a second reprieve from an impending public auction sale of its movables which could not
anymore secure from the MeTC before which the matter of the issuance of a preliminary writ of injunction
was already closed.
The foregoing discussions provide sufficient basis to petitioner's charge that private respondent and its
counsel in the trial courts committed forum shopping. In Crisostomo v. Securities and Exchange
Commission 23 we ruled
There is forum-shopping whenever, as a result of an adverse opinion in one forum, party
seeks a favorable opinion (other than by appeal or certiorari) in another. The principle
applies . . . with respect to suits filed in the courts . . . in connection with litigations
commenced in the court . . . in anticipation of an unfavorable . . . ruling and a favorable case
where the court in which the second suit was brought, has no jurisdiction.
This Court likewise elucidated in New Pangasinan Review, Inc. v. National Labor Relations
Commission 24 that there is forum-shopping when the actions involve the same transactions, the same
essential facts and circumstances. The reason behind the proscription of forum shopping is obvious. This
unnecessarily burdens our courts with heavy caseloads, unduly taxes the manpower and financial
resources of the judiciary and trifles with and mocks our judicial processes, thereby adversely affecting the
efficient administration of justice. This condemnable conduct has prompted the Court to issue
circulars 25 ordering among others that a violation thereof shall be cause for the dismissal of the case or
cases without prejudice to the taking of appropriate action against the counsel or party concerned.

The records ineluctably show that the complaint lodged, by private respondent with the Regional Trial
Court of Quezon City contained no certification of non-forum shopping. When petitioner filed a motion to
dismiss the case raising among others the ground of forum shopping it pointed out the absence of the
required certification. The amended complaint, as well as the second and third amended complaints,
attempted to rectify the error by invariably stating that there was no other action pending between the
parties involving the same causes of action although there was actually a forcible entry case pending
before the MTC of Quezon City. By its admission of a pending forcible entry case, it is obvious that private
respondent was indulging in forum shopping. While private respondent conveniently failed to inform the
RTC that it had likewise sought damages in the MTC on the basis of the same forcible entry, the fact
remains that it precisely did so, which stratagem was being duplicated in the second case. This is a
compelling reason to dismiss the second case.
WHEREFORE, the Petition is GRANTED. The questioned Decision of the Court of Appeals dated 27
September 1995 and the Order of the Regional Trial Court of Quezon City dated 24 September 1993 are
REVERSED and SET ASIDE. The Regional Trial Court of Quezon City is directed to dismiss Civil Case No. Q93-16409, "Westin Seafood Market, Inc. v. Progressive Development Corporation, et al.," and the
Metropolitan Trial Court of Quezon City to proceed with the proper disposition of Civil Case No. 6589,
"Westin Seafood Market, Inc. v. Progressive Development Corporation, et al.," with dispacth considering the
summary nature of the case. Treble costs against private respondent.1wphi1.nt
SO ORDERED.
Puno, Mendoza, Quisumbing and Buena, JJ., concur.

Republic of the Philippines

SUPREME COURT
G.R. No. 147417 July 8, 2005
SPS. VICTOR & MILAGROS PEREZ and CRISTINA AGRAVIADOR AVISO, Petitioners,
vs.
ANTONIO HERMANO, Respondent.
DECISION
CHICO-NAZARIO, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the Resolution1 of the
Court of Appeals dismissing petitioners original action for certiorari under Rule 65 for being filed out of
time. Assailed as well is the Resolution2 dismissing petitioners motion for reconsideration.
The pertinent facts of the case are as follows:
On 27 April 1998, petitioners Cristina Agraviador Aviso and spouses Victor and Milagros Perez filed a civil
case for Enforcement of Contract and Damages with Prayer for the Issuance of a Temporary Restraining
Order (TRO) and/or Preliminary Injunction against Zescon Land, Inc. and/or its President Zenie SalesContreras, Atty. Perlita Vitan-Ele and against respondent herein Antonio Hermano before the Regional Trial
Court (RTC) of Quezon City, Branch 224.3 On 15 May 1998, respondent (then defendant) Hermano filed his
Answer with Compulsory Counterclaim. On 17 January 2000, respondent Hermano filed a "Motion with
Leave to Dismiss the Complaint or Ordered Severed for Separate Trial" which was granted by the trial court
in an Order dated 28 February 2000.
This Order was received by petitioners on 21 March 2000. On 23 March 2000, petitioners moved for
reconsideration which was denied by the trial court on 25 May 2000 and received by petitioners on 18 June
2000. On 17 August 2000, petitioners filed an original action for certiorari before the Court of
Appeals imputing grave abuse of discretion on the part of the trial court in dismissing the complaint
against respondent Hermano.
On 19 October 2000, the Court of Appeals rendered the first assailed Resolution dismissing the petition
forcertiorari "for having been filed beyond the reglementary period pursuant to Section 4, Rule 65 of the
1997 Rules on Civil Procedure, as amended." On 02 March 2001, the second assailed Resolution was
promulgated dismissing petitioners motion for reconsideration, the Court of Appeals holding that:
From the time petitioners received the assailed Order on March 21, 2000 and filed their motion for
reconsideration, four (4) days had elapsed. On June 18, 2000, petitioners received the denial of their
motion for reconsideration. When the instant petition was filed on August 17, 2000, a total of 63 days had
elapsed.
A.M. No. 00-2-03-50 further amending Section 4, Rule 65 of the New Rules on Civil Procedure states that
the petition shall be filed not later than sixty (60) days from notice of the judgment, Order or Resolution
and in case a motion for reconsideration or new trial is timely filed, whether such motion is required or not,
the 60-day period shall be counted from notice of the denial of said motion.
Viewed from its light, the assailed Orders had already attained finality, and are now beyond the power of
this Court to review.4
Aggrieved by the foregoing ruling, petitioners are now before us assigning the following

MANIFEST AND/OR SERIOUS ERROR COMMITTED BY THE HONORABLE COURT OF APPEALS IN THE
COMPUTATION OF THE PERIOD WITHIN WHICH THE PETITIONERS FILED THEIR PETITION FOR CERTIORARI
BEFORE IT AND CONSEQUENTLY COMMITTED GRAVE ABUSE OF DISCRETION IN THE APPRECIATION OF
FACTS AND/OR MISAPPREHENSION OF FACTS, WITH ITS FINDING OF FACT NOT BEING BORNE BY THE
RECORD OR EVIDENCE, AND THUS ITS CONCLUSION IS ENTIRELY BASELESS. 5
According to petitioners, following the amendment introduced by A.M. No. 00-2-03-SC to Section 4, Rule 65
of the 1997 Rules on Civil Procedure, their petition was filed on the 60th day, thus, within the reglementary
period. Respondent insists, on the other hand, that the petition was filed on the 61st day while the Court of
Appeals had declared that the petition was filed on the 63rd day.
We agree in the position taken by petitioners.
Admittedly, at the time petitioners filed their petition for certiorari on 17 August 2000, the rule then
prevailing was Section 4, Rule 65 of the 1997 Rules on Civil Procedure, as amended by Circular No. 39-98
effective 01 September 1998, which provides:
Sec. 4. Where petition filed. The petition shall be filed not later than sixty (60) days from notice of the
judgment, order or resolution sought to be assailed in the Supreme Court, or if it relates to the acts or
omissions of a lower court or of a corporation, board, officer or person in the Regional Trial Court exercising
jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed in the Court of
Appeals whether or not the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid
of its jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, and unless otherwise
provided by law or these Rules, the petition shall be filed in and cognizable only by the Court of Appeals.
If the petitioner had filed a motion for new trial or reconsideration in due time after notice of said
judgment, order, or resolution, the period herein fixed shall be interrupted. If the motion is denied, the
aggrieved party may file the petition within the remaining period, but which shall not be less
than five (5) days in any event, reckoned from notice of such denial. No extension of time to file
the petition shall be granted except for the most compelling reason and in no case to exceed fifteen (15)
days. (Emphasis supplied)
However, on 01 September 2000, during the pendency of the case before the Court of Appeals, Section 4
was amended anew by A.M. No. 00-2-03-SC6 which now provides:
Sec. 4. When and where petition filed. The petition shall be filed not later than sixty (60) days from notice
of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely
filed, whether such motion is required or not, the sixty (60) day period shall be counted from
notice of the denial of said motion.
The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court or
of a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the
territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not
the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate
jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, unless otherwise provided by law
or these rules, the petition shall be filed in and cognizable only by the Court of Appeals.
No extension of time to file the petition shall be granted except for compelling reason and in no case
exceeding fifteen (15) days. (Emphasis supplied)
Under this amendment, the 60-day period within which to file the petition starts to run from receipt of
notice of the denial of the motion for reconsideration, if one is filed. 7

In Narzoles v. National Labor Relations Commission,8 we described this latest amendment as curative in
nature as it remedied the confusion brought about by Circular No. 39-98 because, "historically, i.e., even
before the 1997 revision to the Rules of Civil Procedure, a party had a fresh period from receipt of the order
denying the motion for reconsideration to file a petition for certiorari." Curative statutes, which are
enacted to cure defects in a prior law or to validate legal proceedings which would otherwise be void for
want of conformity with certain legal requirements, by their very essence, are retroactive. 9 And, being a
procedural rule, we held in Sps. Ma. Carmen and Victor Javellana v. Hon. Presiding Judge Benito
Legarda10 that "procedural laws are construed to be applicable to actions pending and undetermined at the
time of their passage, and are deemed retroactive in that sense and to that extent."
Consequently, petitioners had a fresh period of 60 days from the time they received the Order of the trial
court denying their motion for reconsideration on 18 June 2000. When they filed their petition with the
Court of Appeals on 17 August 2000, exactly 60 days had elapsed following the rule that in computing a
period, the first day shall be excluded and the last day included. 11 Hence, there can be no doubt that the
petition was filed within the reglementary period for doing so and it was reversible error on the part of the
Court of Appeals in not giving said petition due course. However, instead of remanding the case to the
Court of Appeals which would only unduly prolong the disposition of the substantive issue raised, we shall
resolve the petition originally filed therein.
Petitioners brought to the Court of Appeals on petition for certiorari under Rule 65 the lone issue of:
WHETHER OR NOT THE PUBLIC RESPONDENT [Hon. Emilio L. Leachon, Jr., Presiding Judge, RTC, Branch 224,
Quezon City] HAD PLAINLY AND MANIFESTLY ACTED WITH GRAVE ABUSE OF DISCRETION, IN EXCESS OF
JURISDICTION, TANTAMOUNT TO LACK OF JURISDICTION, IN DISMISSING THE COMPLAINT AS AGAINST
RESPONDENT ANTONIO HERMANO IN CIVIL CASE NO. Q-98-34211. 12
Petitioners assert that respondent Hermano should not have been dismissed from the complaint because:
(1) He did not file a motion to dismiss under Rule 16 of the Rules of Court and, in fact, his "Motion with
Leave to Dismiss the Complaint or Ordered Severed for Separate Trial" was filed almost two years after he
filed his Answer to the complaint; (2) There was no misjoinder of causes of action in this case; and (3)
There was no misjoinder of parties.
The case filed by petitioners against respondent Hermano and the other defendants, namely Zescon Land,
Inc. and/or its President Zenie Sales-Contreras and Atty. Perlita Vitan-Ele, was one for "Enforcement of
Contract and Damages with Prayer for the Issuance of a Temporary Restraining Order (TRO) and/or
Preliminary Injunction" docketed as Civil Case No. Q-98-34211 and raffled to Branch 224.
Petitioners presented three causes of action in their complaint, the first for enforcement of contract to sell
entered into between petitioners and Zescon Land, Inc., the second for annulment or rescission of two
contracts of mortgage entered into between petitioners and respondent Hermano and the third for
damages against all defendants.
For the first cause of action, petitioners allege that sometime in November 1997, they entered into a
Contract to Sell with Zescon Land, Inc., through Zenie Sales-Contreras, for the purchase of five (5) parcels
of land in the total amount of Nineteen Million One Hundred Four Thousand Pesos (P19,104,000.00). As
part of their agreement, a portion of the purchase price would be paid to them as down payment, another
portion to be given to them as cash advance upon the execution of the contract and another portion to be
used by the buyer, Zescon Land, Inc., to pay for loans earlier contracted by petitioners which loans were
secured by mortgages.
Re-pleading the foregoing in their second cause of action, petitioners contend that "in a tricky machination
and simultaneous with the execution of the aforesaid Contract to Sell," they were made to sign other
documents, two of which were Mortgage deeds over the same five properties in favor of respondent

Hermano, whom they had never met. It was allegedly explained to them by Sales-Contreras that the
mortgage contracts would merely serve to facilitate the payment of the price as agreed upon in their
Contract to Sell. Petitioners claim that it was never their intention to mortgage their property to
respondent Hermano and that they have never received a single centavo from mortgaging their property
to him. Petitioners acknowledge, however, that respondent Hermano was responsible for discharging their
obligations under the first mortgage and for having the titles over the subject lands released, albeit not to
them but to respondent Hermano. They seek a TRO against respondent Hermano who had informed them
that he would be foreclosing the subject properties.
In their third cause of action, petitioners pray for damages against all the defendants alleging that:
Due to the failure and refusal, without any valid justification and reason, by defendants Zescon and
Contreras to comply with their obligations under the Contract to Sell, including their failure and refusal to
pay the sums stipulated therein, and in misleading and misrepresenting the plaintiffs into mortgaging their
properties to defendant Antonio Hermano, who in turn had not paid the plaintiffs the proceeds thereof,
putting them in imminent danger of losing the same, plaintiffs had suffered, and continue to suffer,
sleepless nights .
By reason of defendants Zescon and Contrerass failure and refusal to pay the sums stipulated in the
Contract to Sell, and of defendant Antonio Hermanos not having paid plaintiffs the proceeds of the
mortgage agreements, plaintiffs had been deprived of the beneficial use of the proceeds and stood to lose,
as they continue to lose, by way of unearned profits at least P1,000,000.00. 13
In his Answer with (Compulsory) Counterclaim dated 15 May 1998, respondent Hermano denied
petitioners allegations.14 Then, on 19 February 1999, respondent Hermano filed a civil case entitled
"Judicial Foreclosure of Real Estate Mortgage" against petitioner Aviso docketed as Civil Case No. Q-9936914 and raffled to Branch 216 of the RTC of Quezon City. On 17 January 2000, respondent Hermano filed
a "Motion With Leave To Dismiss The Complaint Against Defendant Antonio Hermano, Or Ordered Severed
For Separate Trial" before Branch 224. In said motion, respondent Hermano argued that there was a misjoinder of causes of action under Rule 2, Section 6 of the Rules of Court. To quote respondent Hermano:
3. In the instant case, the plaintiffs action for the Enforcement of Contract and Damages with Prayer for
The Issuance of a Temporary Restraining Order And/Or Preliminary Injunction against Zescon Land, Inc.,
and/or its President Zenie Sales Contreras, may not, under Rule 2, Section 6 of the 1997 Rules of Civil
Procedure, join defendant Hermano as party defendant to annul and/or rescind the Real Estate Mortgages
of subject properties. There is a misjoinder of parties defendants under a different transaction or cause of
action; that under the said Rule 2, Section 6, upon motion of defendant Hermano in the instant case, the
complaint against defendant Hermano can be severed and tried separately; . . . . 15
Over petitioners opposition to said motion, the same was granted by the trial court in its Order dated 28
February 2000 on the justification that:
. . . [D]efendant having filed a special civil action for judicial foreclosure of mortgage and now pending
before RTC Branch 216, he should be dropped as one of the defendants in this case and whatever claims
plaintiffs may have against defendant Hermano, they can set it up by way of an answer to said judicial
foreclosure.16
And, in an Order dated 25 May 2000, the trial court resolved petitioners motion for reconsideration by
dismissing the same, to wit:
After going over the arguments of the parties, the Court believes that defendant Hermano has nothing to
do with the transaction which the plaintiffs entered into with defendant Zescon Land, Inc. Besides, the said
motion raised matters and defenses previously considered and passed upon by the Court. 17

It is these two Orders that were brought up by petitioners to the Court of Appeals on petition
for Certiorari under Rule 65. The pivotal issue to be resolved, therefore, is whether or not respondent trial
court committed grave abuse of discretion in dismissing the complaint against respondent Hermano in Civil
Case No. Q-98-34211.
As far as we can glean from the Orders of the trial court, respondent Hermano was dropped from the
complaint on the ground of misjoinder of causes of action. Petitioners, on the other hand, insist that there
was no misjoinder in this case.
To better understand the present controversy, it is vital to revisit the rules on joinder of causes of action as
exhaustively discussed in Republic v. Hernandez,18 thus:
By a joinder of actions, or more properly, a joinder of causes of action, is meant the uniting of two or more
demands or rights of action in one action; the statement of more than one cause of action in a declaration.
It is the union of two or more civil causes of action, each of which could be made the basis of a separate
suit, in the same complaint, declaration or petition. A plaintiff may under certain circumstances join
several distinct demands, controversies or rights of action in one declaration, complaint or petition.
As can easily be inferred from the above definitions, a party is generally not required to join in one suit
several distinct causes of action. The joinder of separate causes of action, where allowable, is permissive
and not mandatory in the absence of a contrary statutory provision, even though the causes of action
arose from the same factual setting and might under applicable joinder rules be joined. Modern statutes
and rules governing joinders are intended to avoid a multiplicity of suits and to promote the efficient
administration of justice wherever this may be done without prejudice to the rights of the litigants. To
achieve these ends, they are liberally construed.
While joinder of causes of action is largely left to the option of a party litigant, Section 5, Rule 2 of our
present Rules allows causes of action to be joined in one complaint conditioned upon the following
requisites: (a) it will not violate the rules on jurisdiction, venue and joinder of parties; and (b) the causes of
action arise out of the same contract, transaction or relation between the parties, or are for demands for
money or are of the same nature and character.
The objectives of the rule or provision are to avoid a multiplicity of suits where the same parties and
subject matter are to be dealt with by effecting in one action a complete determination of all matters in
controversy and litigation between the parties involving one subject matter, and to expedite the
disposition of litigation at minimum cost. The provision should be construed so as to avoid such
multiplicity, where possible, without prejudice to the rights of the litigants. Being of a remedial nature, the
provision should be liberally construed, to the end that related controversies between the same parties
may be adjudicated at one time; and it should be made effectual as far as practicable, with the end in view
of promoting the efficient administration of justice.
The statutory intent behind the provisions on joinder of causes of action is to encourage joinder of actions
which could reasonably be said to involve kindred rights and wrongs, although the courts have not
succeeded in giving a standard definition of the terms used or in developing a rule of universal application.
The dominant idea is to permit joinder of causes of action, legal or equitable, where there is some
substantial unity between them. While the rule allows a plaintiff to join as many separate claims as he may
have, there should nevertheless be some unity in the problem presented and a common question of law
and fact involved, subject always to the restriction thereon regarding jurisdiction, venue and joinder of
parties. Unlimited joinder is not authorized.
Our rule on permissive joinder of causes of action, with the proviso subjecting it to the correlative rules on
jurisdiction, venue and joinder of parties and requiring a conceptual unity in the problems presented,
effectively disallows unlimited joinder.

Section 6, Rule 2 on misjoinder of causes of action provides:

Sec. 6. Misjoinder of causes of action. - Misjoinder of causes of action is not a ground for dismissal of an
action. A misjoined cause of action may, on motion of a party or on the initiative of the court, be severed
and proceeded with separately.
There is misjoinder of causes of action when the conditions for joinder under Section 5, Rule 2 are not met.
Section 5 provides:
Sec. 5. Joinder of causes of action. - A party may in one pleading assert, in the alternative or otherwise, as
many causes of action as he may have against an opposing party, subject to the following conditions:
(a) The party joining the causes of action shall comply with the rules on joinder of parties;
(b) The joinder shall not include special civil actions or actions governed by special rules;
(c) Where the causes of action are between the same parties but pertain to different venues or
jurisdictions, the joinder may be allowed in the Regional Trial Court provided one of the causes of action
falls within the jurisdiction of said court and the venue lies therein; and
(d) Where the claims in all the causes of action are principally for recovery of money, the aggregate
amount claimed shall be the test of jurisdiction.
As far as can be gathered from the assailed Orders, it is the first condition - on joinder of parties - that the
trial court deemed to be lacking. It is well to remember that the joinder of causes of action may involve the
same parties or different parties. If the joinder involves different parties, as in this case, there must be a
question of fact or of law common to both parties joined, arising out of the same transaction or series of
transaction.19
In herein case, petitioners have adequately alleged in their complaint that after they had already agreed to
enter into a contract to sell with Zescon Land, Inc., through Sales-Contreras, the latter also gave them
other documents to sign, to wit: A Deed of Absolute Sale over the same properties but for a lower
consideration, two mortgage deeds over the same properties in favor of respondent Hermano with
accompanying notes and acknowledgment receipts for Ten Million pesos (P10,000,000) each. Petitioners
claim that Zescon Land, Inc., through Sales-Contreras, misled them to mortgage their properties which
they had already agreed to sell to the latter.
From the above averments in the complaint, it becomes reasonably apparent that there are questions of
fact and law common to both Zescon Land, Inc., and respondent Hermano arising from a series of
transaction over the same properties. There is the question of fact, for example, of whether or not Zescon
Land, Inc., indeed misled petitioners to sign the mortgage deeds in favor of respondent Hermano. There is
also the question of which of the four contracts were validly entered into by the parties. Note that under
Article 2085 of the Civil Code, for a mortgage to be valid, it is imperative that the mortgagor be the
absolute owner of the thing mortgaged. Thus, respondent Hermano will definitely be affected if it is
subsequently declared that what was entered into by petitioners and Zescon Land, Inc., was a Contract of
Sale (as evidenced by the Deed of Absolute Sale signed by them) because this would mean that the
contracts of mortgage were void as petitioners were no longer the absolute owners of the properties
mortgaged. Finally, there is also the question of whether or not Zescon Land, Inc., as represented by SalesContreras, and respondent Hermano committed fraud against petitioners as to make them liable for
damages.
Prescinding from the foregoing, and bearing in mind that the joinder of causes of action should be liberally
construed as to effect in one action a complete determination of all matters in controversy involving one

subject matter, we hold that the trial court committed grave abuse of discretion in severing from the
complaint petitioners cause of action against respondent Hermano.
WHEREFORE, premises considered, the Resolution of the Court of Appeals dated 19 October 2000
dismissing petitioners petition for certiorari and its Resolution dated 02 March 2001 denying petitioners
motion for reconsideration are REVERSED and SET ASIDE. The petition for certiorari is hereby GRANTED.
The Orders of the Regional Trial Court of Quezon City, Branch 224, dated 28 February 2000 and 25 May
2000 are ANNULLED and SET ASIDE. The RTC is further ordered to reinstate respondent Antonio Hermano
as one of the defendants in Civil Case No. Q-98-34211. No costs. SO ORDERED.

Republic of the Philippines

SUPREME COURT
SECOND DIVISION
G.R. No. 155736. March 31, 2005
SPOUSES DANILO and CRISTINA DECENA, Petitioners,
vs.
SPOUSES PEDRO and VALERIA PIQUERO, Respondents.
RESOLUTION
CALLEJO, SR., J.:
The petitioners, Spouses Danilo and Cristina Decena were the owners of a parcel of land, with a house
constructed thereon, located in Paraaque, Metro Manila (now Paraaque City) covered by Transfer
Certificate of Title (TCT) No. 134391 issued on February 24, 1998. 1
On September 7, 1997, the petitioners and the respondents, the Spouses Pedro and Valeria Piquero,
executed a Memorandum of Agreement (MOA)2 in which the former sold the property to the latter for the
price ofP940,250.00 payable in six (6) installments via postdated checks. The vendees forthwith took
possession of the property.
It appears in the MOA that the petitioners obliged themselves to transfer the property to the respondents
upon the execution of the MOA with the condition that if two of the postdated checks would be dishonored
by the drawee bank, the latter would be obliged to reconvey the property to the petitioners.
On May 17, 1999, the petitioners, then residents of Malolos, Bulacan, filed a Complaint 3 against the
respondents with the Regional Trial Court (RTC) of Malolos, Bulacan, for the annulment of the sale/MOA,
recovery of possession and damages. The petitioners alleged therein that, they did not transfer the
property to and in the names of the respondents as vendees because the first two checks drawn and
issued by them in payment for the purchase price of the property were dishonored by the drawee bank,
and were not replaced with cash despite demands therefor.
The petitioners prayed that, after due proceedings, judgment be rendered in their favor, thus:
a. The sale/Memorandum of Agreement (Annex "A," supra) be declared null and void, rescinded and with
no further force and effect;
b. Defendants, and all persons claiming right under them, be ordered to immediately vacate the subject
property and turnover its possession to the plaintiffs;
c. Defendants, jointly and severally, be ordered to pay the plaintiffs:
i. P10,000.00 monthly, starting 01 October 1997 until complete turnover of the subject property to the
plaintiffs, as reasonable compensation for its continued unlawful use and occupation by the defendants;
ii. P200,000.00 moral damages;
iii. P200,000.00 exemplary damages;
iv. P250,000.00 attorneys fees and litigation related expenses; and

v. the costs of suit.

Other reliefs just and equitable are, likewise, prayed for. 4
The petitioners declared in their complaint that the property subject of the complaint was valued
atP6,900,000.00. They appended copies of the MOA and TCT No. 134391 to their complaint. The case was
eventually raffled to Branch 13 of the RTC of Malolos, Bulacan.
The respondents filed a motion to dismiss the complaint on the ground, inter alia, of improper venue and
lack of jurisdiction over the property subject matter of the action.
On the first ground, the respondents averred that the principal action of the petitioners for the rescission of
the MOA, and the recovery of the possession of the property is a real action and not a personal one; hence,
it should have been brought in the RTC of Paraaque City, where the property subject matter of the action
was located, and not in the RTC of Malolos, Bulacan, where the petitioners resided. The respondents
posited that the said court had no jurisdiction over the property subject matter of the action because it
was located in Paraaque City.5
In opposition, the petitioners insisted that their action for damages and attorneys fees is a personal action
and not a real action; hence, it may be filed in the RTC of Bulacan where they reside. They averred that
while their second cause of action for the recovery of the possession of the property is a real action, the
same may, nevertheless, be joined with the rest of their causes of action for damages, conformably with
Section 5(c), Rule 2 of the Rules of Court. 6
By way of reply, the respondents averred that Section 5(c), Rule 2 of the Rules of Court applies only when
one or more of multiple causes of action falls within the exclusive jurisdiction of the first level courts, and
the other or others are within the exclusive jurisdiction of the RTC, and the venue lies therein.
On February 9, 2000, the trial court issued an Order7 denying the motion for lack of merit. It found merit in
the petitioners contention that Section 5(c), Rule 2 was applicable.
Meanwhile, the case was re-raffled to Branch 10 of the RTC of Malolos, Bulacan. In a Motion 8 dated
December 20, 2000, the respondents prayed for the reconsideration of the trial courts February 9, 2000
Order. On October 16, 2001, the court issued an Order9 granting the motion and ordered the dismissal of
the complaint. It ruled that the principal action of the petitioners was a real action and should have been
filed in the RTC of Paraaque City where the property subject matter of the complaint was located.
However, since the case was filed in the RTC of Bulacan where the petitioners reside, which court had no
jurisdiction over the subject matter of the action, it must be dismissed.
Hence, the present recourse.
The petition has no merit.
The sole issue is whether or not venue was properly laid by the petitioners in the RTC of Malolos, Bulacan.
The resolution of this issue is, in turn, anchored on whether Section 5, Rule 2 of the Rules of Court invoked
by the petitioners is applicable in this case.
Under the said Rule, a party may, in one pleading, assert, in the alternative or otherwise, as many causes
of action as he may have against an opposing party subject to the conditions therein enumerated, one of
which is Section 5(c) which reads:
Sec. 5. Joinder of causes of action. --


(c) Where the causes of action are between the same parties but pertain to different venues or jurisdiction,
the joinder may be allowed in the Regional Trial Court provided one of the causes of action falls within the
jurisdiction of said court and the venue lies therein;
Explaining the aforequoted condition, Justice Jose Y. Feria declared:
(c) Under the third condition, if one cause of action falls within the jurisdiction of the Regional Trial Court
and the other falls within the jurisdiction of a Municipal Trial Court, the action should be filed in the
Regional Trial Court. If the causes of action have different venues, they may be joined in any of the courts
of proper venue. Hence, a real action and a personal action may be joined either in the Regional Trial Court
of the place where the real property is located or where the parties reside. 10
A cause of action is an act or omission of one party in violation of the legal right of the other which causes
the latter injury. The essential elements of a cause of action are the following: (1) the existence of a legal
right of the plaintiff; (2) a correlative legal duty of the defendant to respect ones right; and (3) an act or
omission of the defendant in violation of the plaintiffs right. 11 A cause of action should not be confused
with the remedies or reliefs prayed for. A cause of action is to be found in the facts alleged in the complaint
and not in the prayer for relief. It is the substance and not the form that is controlling. 12 A party may have
two or more causes of action against another party.
A joinder of causes of action is the uniting of two or more demands or right of action in a complaint. The
question of the joinder of causes of action involves in particular cases a preliminary inquiry as to whether
two or more causes of action are alleged.13 In declaring whether more than one cause of action is alleged,
the main thrust is whether more than one primary right or subject of controversy is present. Other tests
are whether recovery on one ground would bar recovery on the other, whether the same evidence would
support the other different counts and whether separate actions could be maintained for separate
relief;14 or whether more than one distinct primary right or subject of controversy is alleged for
enforcement or adjudication.15
A cause of action may be single although the plaintiff seeks a variety of remedies. The mere fact that the
plaintiff prays for multiple reliefs does not indicate that he has stated more than one cause of action. The
prayer may be an aid in interpreting the petition and in determining whether or not more than one cause
of action is pleaded.16 If the allegations of the complaint show one primary right and one wrong, only one
cause of action is alleged even though other matters are incidentally involved, and although different acts,
methods, elements of injury, items of claims or theories of recovery are set forth. 17 Where two or more
primary rights and wrongs appear, there is a joinder of causes of action.
After due consideration of the foregoing, we find and so rule that Section 5(c), Rule 2 of the Rules of Court
does not apply. This is so because the petitioners, as plaintiffs in the court a quo, had only one cause of
action against the respondents, namely, the breach of the MOA upon the latters refusal to pay the first
two installments in payment of the property as agreed upon, and turn over to the petitioners the
possession of the real property, as well as the house constructed thereon occupied by the respondents.
The claim for damages for reasonable compensation for the respondents use and occupation of the
property, in the interim, as well as moral and exemplary damages suffered by the petitioners on account of
the aforestated breach of contract of the respondents are merely incidental to the main cause of action,
and are not independent or separate causes of action.18
The action of the petitioners for the rescission of the MOA on account of the respondents breach thereof
and the latters failure to return the premises subject of the complaint to the petitioners, and the
respondents eviction therefrom is a real action.19 As such, the action should have been filed in the proper

court where the property is located, namely, in Paraaque City, conformably with Section 1, Rule 4 of the
Rules of Court which reads:
SECTION 1. Venue of real actions. Actions affecting title to or possession of real property, or interest
therein, shall be commenced and tried in the proper court which has jurisdiction over the area wherein the
real property involved, or a portion thereof, is situated.
Since the petitioners, who were residents of Malolos, Bulacan, filed their complaint in the said RTC, venue
was improperly laid; hence, the trial court acted conformably with Section 1(c), Rule 16 of the Rules of
Court when it ordered the dismissal of the complaint.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. Costs against the
petitioners.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-66620 September 24, 1986
REMEDIO V. FLORES, petitioner,
vs.
HON. JUDGE HEILIA S. MALLARE-PHILLIPPS, IGNACIO BINONGCAL & FERNANDO
CALION, respondents.
Lucio A. Dixon for respondent F. Calion.

FERIA, J.:
The Court rules that the application of the totality rule under Section 33(l) of Batas Pambansa Blg. 129 and
Section 11 of the Interim Rules is subject to the requirements for the permissive joinder of parties under
Section 6 of Rule 3 which provides as follows:
Permissive joinder of parties.-All persons in whom or against whom any right to relief in
respect to or arising out of the same transaction or series of transactions is alleged to exist,
whether jointly, severally, or in the alternative, may, except as otherwise provided in these
rules, join as plaintiffs or be joined as defendants in one complaint, where any question of
law or fact common to all such plaintiffs or to all such defendants may arise in the action;
but the court may make such orders as may be just to prevent any plaintiff or defendant
from being embarrassed or put to expense in connection with any proceedings in which he
may have no interest.
Petitioner has appealed by certiorari from the order of Judge Heilia S. Mallare-Phillipps of the Regional Trial
Court of Baguio City and Benguet Province which dismissed his complaint for lack of jurisdiction. Petitioner
did not attach to his petition a copy of his complaint in the erroneous belief that the entire original record
of the case shall be transmitted to this Court pursuant to the second paragraph of Section 39 of BP129.
This provision applies only to ordinary appeals from the regional trial court to the Court of Appeals (Section
20 of the Interim Rules). Appeals to this Court by petition for review on certiorari are governed by Rule 45
of the Rules of Court (Section 25 of the Interim Rules).
However, the order appealed from states that the first cause of action alleged in the complaint was against
respondent Ignacio Binongcal for refusing to pay the amount of P11,643.00 representing cost of truck tires
which he purchased on credit from petitioner on various occasions from August to October, 1981; and the
second cause of action was against respondent Fernando Calion for allegedly refusing to pay the amount of
P10,212.00 representing cost of truck tires which he purchased on credit from petitioner on several
occasions from March, 1981 to January, 1982.
On December 15, 1983, counsel for respondent Binongcal filed a Motion to Dismiss on the ground of lack of
jurisdiction since the amount of the demand against said respondent was only P11,643.00, and under
Section 19(8) of BP129 the regional trial court shall exercise exclusive original jurisdiction if the amount of
the demand is more than twenty thousand pesos (P20,000.00). It was further averred in said motion that
although another person, Fernando Calion, was allegedly indebted to petitioner in the amount of
P10,212.00, his obligation was separate and distinct from that of the other respondent. At the hearing of

said Motion to Dismiss, counsel for respondent Calion joined in moving for the dismissal of the complaint
on the ground of lack of jurisdiction. Counsel for petitioner opposed the Motion to Dismiss. As above
stated, the trial court dismissed the complaint for lack of jurisdiction.
Petitioner maintains that the lower court has jurisdiction over the case following the "novel" totality rule
introduced in Section 33(l) of BP129 and Section 11 of the Interim Rules.
The pertinent portion of Section 33(l) of BP129 reads as follows:
... Provided,That where there are several claims or causes of action between the same or
different parties, embodied in the same complaint, the amount of the demand shall be the
totality of the claims in all the causes of action, irrespective of whether the causes of action
arose out of the same or different transactions. ...
Section 11 of the Interim Rules provides thus:
Application of the totality rule.-In actions where the jurisdiction of the court is dependent on
the amount involved, the test of jurisdiction shall be the aggregate sum of all the money
demands, exclusive only of interest and costs, irrespective of whether or not the separate
claims are owned by or due to different parties. If any demand is for damages in a civil
action, the amount thereof must be specifically alleged.
Petitioner compares the above-quoted provisions with the pertinent portion of the former rule under
Section 88 of the Judiciary Act of 1948 as amended which reads as follows:
... Where there are several claims or causes of action between the same parties embodied in
the same complaint, the amount of the demand shall be the totality of the demand in all the
causes of action, irrespective of whether the causes of action arose out of the same or
different transactions; but where the claims or causes of action joined in a single complaint
are separately owned by or due to different parties, each separate claim shall furnish the
jurisdictional test. ...
and argues that with the deletion of the proviso in the former rule, the totality rule was reduced to clarity
and brevity and the jurisdictional test is the totality of the claims in all, not in each, of the causes of action,
irrespective of whether the causes of action arose out of the same or different transactions.
This argument is partly correct. There is no difference between the former and present rules in cases
where a plaintiff sues a defendant on two or more separate causes of action. In such cases, the amount of
the demand shall be the totality of the claims in all the causes of action irrespective of whether the causes
of action arose out of the same or different transactions. If the total demand exceeds twenty thousand
pesos, then the regional trial court has jurisdiction. Needless to state, if the causes of action are separate
and independent, their joinder in one complaint is permissive and not mandatory, and any cause of action
where the amount of the demand is twenty thousand pesos or less may be the subject of a separate
complaint filed with a metropolitan or municipal trial court.
On the other hand, there is a difference between the former and present rules in cases where two or more
plaintiffs having separate causes of action against a defendant join in a single complaint. Under the former
rule, "where the claims or causes of action joined in a single complaint are separately owned by or due to
different parties, each separate claim shall furnish the jurisdictional test" (Section 88 of the Judiciary Act of
1948 as amended, supra). This was based on the ruling in the case of Vda. de Rosario vs. Justice of the
Peace, 99 Phil. 693. As worded, the former rule applied only to cases of permissive joinder of parties
plaintiff. However, it was also applicable to cases of permissive joinder of parties defendant, as may be
deduced from the ruling in the case of Brillo vs. Buklatan, thus:

Furthermore, the first cause of action is composed of separate claims against several
defendants of different amounts each of which is not more than P2,000 and falls under the
jurisdiction of the justice of the peace court under section 88 of Republic Act No, 296. The
several claims do not seem to arise from the same transaction or series of transactions and
there seem to be no questions of law or of fact common to all the defendants as may
warrant their joinder under Rule 3, section 6. Therefore, if new complaints are to be filed in
the name of the real party in interest they should be filed in the justice of the peace court.
(87 Phil. 519, 520, reiterated in Gacula vs. Martinez, 88 Phil. 142, 146)
Under the present law, the totality rule is applied also to cases where two or more plaintiffs having
separate causes of action against a defendant join in a single complaint, as well as to cases where a
plaintiff has separate causes of action against two or more defendants joined in a single complaint.
However, the causes of action in favor of the two or more plaintiffs or against the two or more defendants
should arise out of the same transaction or series of transactions and there should be a common question
of law or fact, as provided in Section 6 of Rule 3.
The difference between the former and present rules in cases of permissive joinder of parties may be
illustrated by the two cases which were cited in the case of Vda. de Rosario vs. Justice of the Peace
(supra) as exceptions to the totality rule. In the case of Soriano y Cia vs. Jose (86 Phil. 523), where twentynine dismissed employees joined in a complaint against the defendant to collect their respective claims,
each of which was within the jurisdiction of the municipal court although the total exceeded the
jurisdictional amount, this Court held that under the law then the municipal court had jurisdiction. In said
case, although the plaintiffs' demands were separate, distinct and independent of one another, their joint
suit was authorized under Section 6 of Rule 3 and each separate claim furnished the jurisdictional test. In
the case of International Colleges, Inc. vs. Argonza (90 Phil. 470), where twenty-five dismissed teachers
jointly sued the defendant for unpaid salaries, this Court also held that the municipal court had jurisdiction
because the amount of each claim was within, although the total exceeded, its jurisdiction and it was a
case of permissive joinder of parties plaintiff under Section 6 of Rule 3.
Under the present law, the two cases above cited (assuming they do not fall under the Labor Code) would
be under the jurisdiction of the regional trial court. Similarly, in the abovecited cases of Brillo vs. Buklatan
and Gacula vs. Martinez (supra), if the separate claims against the several defendants arose out of the
same transaction or series of transactions and there is a common question of law or fact, they would now
be under the jurisdiction of the regional trial court.
In other words, in cases of permissive joinder of parties, whether as plaintiffs or as defendants, under
Section 6 of Rule 3, the total of all the claims shall now furnish the jurisdictional test. Needless to state
also, if instead of joining or being joined in one complaint separate actions are filed by or against the
parties, the amount demanded in each complaint shall furnish the jurisdictional test.
In the case at bar, the lower court correctly held that the jurisdictional test is subject to the rules on joinder
of parties pursuant to Section 5 of Rule 2 and Section 6 of Rule 3 of the Rules of Court and that, after a
careful scrutiny of the complaint, it appears that there is a misjoinder of parties for the reason that the
claims against respondents Binongcal and Calion are separate and distinct and neither of which falls within
its jurisdiction.
WHEREFORE, the order appealed from is affirmed, without pronouncement as to costs.
SO ORDERED.
Fernan, Alampay, Gutierrez, Jr., and Paras, JJ., concur.

[G.R. No. 157447. April 29, 2005]

NEMENCIO C. EVANGELISTA, PASCUAL G. QUINTO, LUIS B. BUENA, EUSEBIA V. TABLADA,
CANUTO G. TISBE, DAVID R. CARULLO, SOFONIAS E. COLEGADO, FELIX B. BUENA,
TORIBIO C. EVANGELISTA, LEBRADA A. NICOLAS, ALECIA J. RAMOS, MILA G. DE LOS
REYES, SALVADOR I. DE LA TORRE, MOISES CRUZ, RUFINO INFANTE, ALICIA ASTROLOGO,
TRINIDAD LUMIQUED, LUZMINIDA QUINIQUINI, & TEODORA C. TEMERAS, petitioners,
vs. CARMELINO M. SANTIAGO, respondent.
DECISION
CHICO-NAZARIO, J.:
In this Petition for Review under Rule 45 of the Rules of Court, petitioners pray for the reversal of the
Decision of the Court of Appeals in CA-G.R. CV No. 64957, [1] affirming the Order of the Regional Trial Court
(RTC) of San Mateo, Rizal, Branch 77, in Civil Case No. 1220, [2]dismissing petitioners Complaint for
declaration of nullity of Original Certificate of Title (OCT) No. 670 and all other titles emanating therefrom.
In their Complaint, petitioners alleged that they occupied and possessed parcels of land, located in
Sitio Panayawan, Barangay San Rafael, Montalban (now Rodriquez), Province of Rizal (Subject Property), by
virtue of several Deeds of Assignment, dated 15 April 1994 and 02 June 1994, executed by a certain Ismael
Favila y Rodriguez.[3]
According to the Deeds of Assignment, the Subject Property was part of a vast tract of land called
Hacienda Quibiga, which extended to Paraaque, Las Pias, Muntinlupa, Cavite, Batangas, Pasay, Taguig,
Makati, Pasig, Mandaluyong, Quezon City, Caloocan, Bulacan, and Rizal; awarded to Don Hermogenes
Rodriguez by the Queen of Spain and evidenced by a Spanish title. Ismael Favila claimed to be one of the
heirs and successors-in-interest of Don Hermogenes Rodriguez. Acting as Attorney-in-Fact pursuant to a
Special Power of Attorney executed by his mga kapatid on 25 February 1965, Ismael Favila signed the
aforementioned Deeds of Assignment, assigning portions of the Subject Property to the petitioners, each
portion measuring around 500 to 1,000 square meters, in exchange for the labor and work done on the
Subject Property by the petitioners and their predecessors.[4]
Petitioners came by information that respondent was planning to evict them from the Subject Property.
Two of the petitioners had actually received notices to vacate. Their investigations revealed that the
Subject Property was included in Transfer Certificates of Titles (TCTs) No. 53028, No. 281660, No. N-39258
and No. 205270, all originating from OCT No. 670, and now in the name of respondent. [5]
OCT No. 670 was issued in the name of respondents mother, Isabel Manahan y Francisco, and three
other individuals, pursuant to Decree No. 10248, dated 13 February 1913, in Case No. 8502 of the Court of
Land Registration of the Philippine Islands. The whole property covered by OCT No. 670 was subsequently
adjudicated in favor of Isabel Manahan Santiago (formerly Isabel Manahan y Francisco). Consequently, OCT
No. 670 was cancelled and TCT No. T-53028 was issued exclusively in the name of Isabel Manahan
Santiago. On 28 December 1968, Isabel Manahan Santiago executed a Deed of Donation transferring the
property to her son, respondent herein, who subsequently secured TCTs No. 281660, No. N-39258 and No.
205270 in his own name.[6]
Petitioners filed with the trial court, on 29 April 1996, an action for declaration of nullity of respondents
certificates of title on the basis that OCT No. 670 was fake and spurious. Among the defects of OCT No. 670
pointed out by petitioners were that: (1) OCT No. 670 was not signed by a duly authorized officer; (2)
Material data therein were merely handwritten and in different penmanships; (3) OCT No. 670 was not
printed on the Official Form used in 1913, the year it was issued; (4) It failed to indicate the Survey Plan

which was the basis of the Technical Description of the property covered by the title; (5) Decree No. 10248
referred to in OCT No. 670 was issued only on 11 April 1913, while OCT No. 670 was issued earlier, on 13
February 1913; and (6) Decree No. 10248 was issued over a property other than the one described in OCT
No. 670, although also located in the Province of Rizal.[7]
Respondent filed his Answer with Prayer for Preliminary Hearing on the Affirmative Defenses on 03 July
1996. According to respondent, [t]he allegations in the Complaint would readily and patently show that the
same are flimsy, fabricated, malicious, without basis in law and in fact [8]
As an affirmative defense, respondent claimed that the petitioners had no legal capacity to file the
Complaint, and thus, the Complaint stated no cause of action. Since OCT No. 670 was genuine and
authentic on its face, then OCT No. 670 and all of respondents land titles derived therefrom, are
incontrovertible, indefeasible and conclusive against the petitioners and the whole world. [9]
Citing the consolidated cases of Director of Forestry, et al. v. Hon. Emmanuel M. Muoz, et al. and
Pinagcamaligan Indo-Agro Development Corporation v. Hon. Macario Peralta, Jr., et al., [10] respondent
argued that the Spanish title, on which petitioners based their claim, was neither indefeasible nor
imprescriptible. Moreover, Presidential Decree (P.D.) No. 892, which took effect on 16 February 1976,
required all holders of Spanish titles or grants to apply for registration of their lands under Republic Act No.
496, otherwise known as the Land Registration Act, [11] within six months from effectivity of the decree.
After the given period, Spanish titles could no longer be used as evidence of land ownership in any
registration proceedings under the Torrens System. [12]
Respondent also raised the affirmative defense of prescription. He pointed out that any action against
his certificates of title already prescribed, especially with regard to OCT No. 670, which was issued in 1913
or more than 83 years prior to the filing of the Complaint by the petitioners. At the very least, respondent
contended, it must be presumed that the questioned land titles were issued by the public officials
concerned in the performance of their regular duties and functions pursuant to the law. [13]
Even assuming arguendo that the petitioners entered and occupied the Subject Property, they did so
as mere intruders, squatters and illegal occupants, bereft of any right or interest, since the Subject
Property was already covered by Torrens certificates of title in the name of respondent and his
predecessors-in-interest.[14]
Lastly, respondent denied knowing the petitioners, much less, threatening to evict them. In fact,
petitioners were not included as defendants in Civil Case No. 783 entitled, Carmelino M. Santiago v.
Remigio San Pascual, et al., which respondent instituted before the same trial court against squatters
occupying the Subject Property. In its decision, dated 01 July 1992, the trial court held that there is no
doubt that the plaintiff (respondent herein) is the owner of the land involved in this case on which the
defendants have built their houses and shanties Although the decision in Civil Case No. 783 was appealed
to the Court of Appeals, it had become final and executory for failure of the defendants-appellants therein
to file their appellants brief.[15]
In the instant case, the trial court held a preliminary hearing on the affirmative defenses as prayed for
by the respondent. During said hearing, petitioners presented their lone witness, Engineer Placido Naval, a
supposed expert on land registration laws. In response to questions from Honorable Judge Francisco C.
Rodriguez of the trial court, Engineer Naval answered that a parcel of land titled illegally would revert to
the State if the Torrens title was cancelled, and that it was the State, through the Office of the Solicitor
General, that should file for the annulment or cancellation of the title. Respondent, on the other hand, did
not present any evidence but relied on all the pleadings and documents he had so far submitted to the trial
court.[16]

After the preliminary hearing, the trial court issued the questioned Order, dated 05 February 1999,
dismissing petitioners Complaint. Pertinent portions of the Order of the trial court read:
After considering the testimonial and documentary evidence presented, this Court is inclined not to grant
plaintiffs (sic) prayer. Finding credence and giving weight to plaintiffs (sic) lone but expert witness, it is
crystal clear that, to quote:
1. a parcel of land titled illegally will revert to the State
2. it is the State who must file the corresponding case of annulment of title through the Office
of the Solicitor General, and
3. a land illegally titled in the name of private individual, the State through the Office of the
Solicitor General should file the corresponding case for cancellation of title. (TSN August
26, 1997).
The above quoted testimony is straight from horse (sic) mouth so to speak as this was the testimony of the
plaintiffs (sic) expert witness. And judging from the said testimony alone aforecited, plaintiffs (sic) cause
[of action] is bound to fail. Plaintiffs (sic) own testimony wrote finis to their case. From the record, this case
was initiated and filed by private individuals, Nemencio Evangelista, et. al., contradicting their witness (sic)
testimony. To reiterate, this Court finds credence to the testimony of the plaintiffs (sic) witness, i.e., is (sic)
the State through the Office of the Solicitor General who must initiate and file a case of this nature when
title to a land is being claimed to be obtained through fraud and allegedly spurious.
The opinion of this Court anent the testimony of the witness is not without basis. Explicit is the
pronouncement of the Supreme Court in the recent case of Heirs of Marciano Nagano v. Court of Appeals,
to wit:
An action for reversion has to be instituted by the Solicitor General pursuant to Section 101,
Commonwealth Act No. 141. (282 SCRA 43).
As to the documentary evidence, having gone through with the Deed of Assignment/s purportedly
executed by and between a certain Ismael Favila y Rodriguez and the plaintiffs, which is the principal if not
the only basis of plaintiffs claim ownership and possession of the subject parcel of land, the same does not
hold water in a manner of speaking, for being self-serving. Assignor Ismael Favila y Rodriguez claimed in
said Deed that he is the Attorney-in-Fact by virtue of an alleged Special Power of Attorney executed in his
favor by his mga kapatid on February 23, 1965, but said Special Power of Attorney was not presented
before this Court, thus there arises a doubt as to its existence and execution not to mention doubt on the
existence of his mga kapatid who as alleged executed said Special Power Attorney (sic) in his favor.
Even if this Court granting arguendo would admit the authenticity of said Deeds of Assignment/s, that will
not alter the outcome of the pending incident/s before this Court. Why? Because the said Deed of
Assignment/s which were based on Spanish title have lost their evidentiary value pursuant to the
Presidential Decree No. 892 i.e. DISCONTINUANCE OF THE SPANISH MORTGAGE SYSTEM OF REGISTRATION
AND OF THE USE OF SPANISH TITLES AS EVIDENCE IN LAND REGISTRATION PROCEEDINGS.
There is no need to elaborate on the above-cited provisions of PD 892 as they are self-explanatory. Suffice
it to say that there is no showing, that plaintiffs complied with the said law i.e. to apply for registration of
their lands under Act No. 496, otherwise known as the Land Registration Act, within six (6) months from
the effectivity of this decree (February 16, 1976). Thereafter, Spanish titles cannot be used as evidence of
land ownership in any registration proceedings under the Torrens System.

This being the case and likewise being clear that plaintiffs were not the lawful owners of the land subject of
this case, for they did not comply with PD 892, the said plaintiffs do not have the legal standing to bring
before this Court the instant complaint
Moreover, the principal issue in this case is for the declaration of nullity of defendants title, which has
nothing to do with plaintiffs (sic) claim of ownership and possession even if we set aside, albeit
momentarily, the truth that plaintiffs (sic) claim were based on barred Spanish Title/s, and thus plaintiffs
were never the owners of the parcel of land subject of this case.
Further, defendants (sic) title especially so with the mother title OCT 670 was entered and issued in 1913
or more than Eighty Three (83) years ago, the same not having been questioned by any party. Only now
that it is being questioned, but sad to say, plaintiffs who are on the offensive and relying on their lone
expert witness, instead of bolstering their case, unwittingly sealed their fate [17]

[18]

After the trial court denied petitioners Motion for Reconsideration in its Order, dated 20 July 1999,
petitioners appealed both Orders of the trial court to the Court of Appeals.

The Court of Appeals, in its Decision, dated 29 July 2002, [19] affirmed the Order of the trial court, dated
05 February 1999, dismissing petitioners Complaint. The Court of Appeals denied petitioners Motion for
Reconsideration in its Resolution, dated 14 February 2003.[20]
Thus, petitioners filed this Petition for Review [21] under Rule 45 of the Rules of Court, raising the
following issues and praying for the reversal of the aforementioned Decision of the Court of Appeals
affirming the Order of dismissal of the trial court:
I. Whether the lower courts dismissal of the petitioners complaint should be proscribed by the rules of
evidence it being based inter alia on Engr. Navals testimony, which was indisputably not based on
facts but conclusion of law.
II. Whether the lower courts dismissal of petitioners complaint should be proscribed by the rules of
evidence it being done sans ample evidence except bare allegations of respondent.
III. Whether the provision of P.D. 892, i.e., Spanish titles cannot be used as evidence of land
ownership in any registration proceedings under the Torrens system, holds of an exception.
IV. Whether an action for quieting of title, specifically where petitioners are in possession of subject
land, can be subject of prescription.
In his Comment,[22] the respondent, for the most part, reiterated the findings of the trial court and the
Court of Appeals.
The Court believes that the trial court rightfully dismissed petitioners Complaint, but for reasons
different from those relied upon by the trial court and the Court of Appeals.
According to the respondent, petitioners had no legal capacity to file the Complaint, and thus, the
Complaint filed before the trial court stated no cause of action.
Before anything else, it should be clarified that the plaintiff has no legal capacity to sue [23] and the
pleading asserting the claim states no cause of action[24] are two different grounds for a motion to dismiss
or are two different affirmative defenses. Failure to distinguish between the lack of legal capacity to sue
from the lack of personality to sue is a fairly common mistake. The difference between the two is explained
by this Court in Columbia Pictures, Inc. v. Court of Appeals:[25]

Among the grounds for a motion to dismiss under the Rules of Court are lack of legal capacity to sue and
that the complaint states no cause of action. Lack of legal capacity to sue means that the plaintiff is not in
the exercise of his civil rights, or does not have the necessary qualification to appear in the case, or does
not have the character or representation he claims. On the other hand, a case is dismissible for lack of
personality to sue upon proof that the plaintiff is not the real party-in-interest, hence grounded on failure to
state a cause of action. The term "lack of capacity to sue" should not be confused with the term "lack of
personality to sue." While the former refers to a plaintiffs general disability to sue, such as on account of
minority, insanity, incompetence, lack of juridical personality or any other general disqualifications of a
party, the latter refers to the fact that the plaintiff is not the real party- in-interest. Correspondingly, the
first can be a ground for a motion to dismiss based on the ground of lack of legal capacity to sue; whereas
the second can be used as a ground for a motion to dismiss based on the fact that the complaint, on the
face thereof, evidently states no cause of action.
In the present case, this Court may assume that the respondent is raising the affirmative defense that
the Complaint filed by the petitioners before the trial court stated no cause of action because the
petitioners lacked the personality to sue, not being the real party-in-interest. It is the respondents
contention that only the State can file an action for annulment of his certificates of title, since such an
action will result in the reversion of the ownership of the Subject Property to the State.
The affirmative defense that the Complaint stated no cause of action, similar to a motion to dismiss
based on the same ground, requires a hypothetical admission of the facts alleged in the Complaint. In
the case of Garcon v. Redemptorist Fathers,[26] this Court laid down the rules as far as this ground for
dismissal of an action or affirmative defense is concerned:
It is already well-settled by now that, in a motion to dismiss a complaint based on lack of cause of action,
the question submitted to the court for determination is the sufficiency of the allegations of fact made in
the complaint to constitute a cause of action, and not on whether these allegations of fact are true, for said
motion must hypothetically admit the truth of the facts alleged in the complaint; that the test of the
sufficiency of the facts alleged in the complaint is whether or not, admitting the facts alleged, the court
could render a valid judgment upon the same in accordance with the prayer of said complaint. Stated
otherwise, the insufficiency of the cause of action must appear in the face of the complaint in order to
sustain a dismissal on this ground, for in the determination of whether or not a complaint states a cause of
action, only the facts alleged therein and no other matter may be considered, and the court may not
inquire into the truth of the allegations, and find them to be false before a hearing is had on the merits of
the case; and it is improper to inject in the allegations of the complaint facts not alleged or proved, and
use these as basis for said motion.
In resolving whether or not the Complaint in the present case stated a cause of action, the trial court
should have limited itself to examining the sufficiency of the allegations in the Complaint. It was proscribed
from inquiring into the truth of the allegations in the Complaint or the authenticity of any of the documents
referred or attached to the Complaint, since these are deemed hypothetically admitted by the respondent.
The trial court evidently erred in making findings as to the authenticity of the Deeds of Assignment
executed by Ismael Favila in favor of petitioners on 15 April 1994 and 02 June 1994; and questioning the
existence and execution of the Special Power of Attorney in favor of said Ismael Favila by his siblings on 25
February 1965. These matters may only be resolved after a proper trial on the merits.
Petitioners alleged in their Complaint, and respondent hypothetically admitted that: (1) Petitioners
predecessors-in-interest, in the concept of owners, had been in actual, physical, open, continuous and
adverse possession of the Subject Property against the whole world since time immemorial; (2) The
Subject Property was part of the vast tract of land called Hacienda Quibiga awarded to Don Hermogenes
Rodriguez by the Queen of Spain by virtue of a Spanish title; (3) Ismael Favila, an heir and successor-ininterest of Don Hermogenes Rodriguez, acting as Attorney-in-Fact pursuant to a Special Power of Attorney
executed by his mga kapatid on 25 February 1965, executed Deeds of Assignment covering the Subject

Property in favor of petitioners; (4) Petitioners still occupied and possessed the Subject Property, on which
their houses were erected, when they discovered that the Subject Property was already covered by Torrens
certificates of title in the name of respondent; and (5) That petitioners filed the Complaint to prevent their
eviction by the respondent. To determine whether these allegations are sufficient to constitute a cause of
action, it is important for this Court to establish first the nature of petitioners action.
Indeed, petitioners Complaint filed before the trial court was captioned as an action for declaration of
nullity of respondents certificates of title. However, the caption of the pleading should not be the
governing factor, but rather the allegations therein should determine the nature of the action, because
even without the prayer for a specific remedy, the courts may nevertheless grant the proper relief as may
be warranted by the facts alleged in the Complaint and the evidence introduced. [27]
The trial court believed that petitioners action was ultimately one for reversion of the Subject Property
to the public domain. Based on the testimony of Engineer Naval and the case of Nagao v. Court of Appeals,
[28]
it declared that the State, represented by the Office of the Solicitor General, is the party-in-interest in an
action for cancellation of a certificate of title illegally issued in the name of a private individual, because
the eventual effect of such cancellation is the reversion of the property to the State.
The Court disagrees in this pronouncement of the trial court, and calls for a far closer review of its
decision in Nagao v. Court of Appeals,[29] wherein the Court held that
It is then clear from the allegations in the complaint that private respondents claim ownership of the 2,250
square meter portion for having possessed it in the concept of an owner, openly, peacefully, publicly,
continuously and adversely since 1920. This claim is an assertion that the lot is private land, or that even
assuming it was part of the public domain, private respondents had already acquired imperfect title
thereto under Section 48(b) of C.A. No. 141, otherwise known as the Public Land Act, as amended by R.A.
No. 1942
Under Section 48, a subject lot is, for all legal intents and purposes, segregated from the public domain,
because the beneficiary is conclusively presumed to have performed all the conditions essential to a
Government grant and shall be entitled to a certificate of title under the provisions of this chapter.
Consequently, merely on the basis of the allegations in the complaint, the lot in question is apparently
beyond the jurisdiction of the Director of the Bureau of Lands and could not be the subject of a Free Patent.
Hence, dismissal of private respondents complaint was premature and trial on the merits should have been
conducted to thresh out evidentiary matters.
It would have been entirely different if the action were clearly for reversion, in which case, it would have to
be instituted by the Solicitor General pursuant to Section 101 of C.A. No. 141, which provides:
Sec. 101. All actions for the reversion to the Government of lands of the public domain or improvements
thereon shall be instituted by the Solicitor General or the officer acting in his stead, in the proper courts, in
the name of the [Republic] of the Philippines.
In the more recent case of Heirs of Ambrocio Kionisala v. Heirs of Honorio Dacut,[30] the difference
between an action for declaration of nullity of land titles from an action for reversion was more thoroughly
discussed as follows:
An ordinary civil action for declaration of nullity of free patents and certificates of title is not the same as
an action for reversion. The difference between them lies in the allegations as to the character of
ownership of the realty whose title is sought to be nullified. In an action for reversion, the pertinent
allegations in the complaint would admit State ownership of the disputed land. Hence, in Gabila vs.
Barriga [41 SCRA 131], where the plaintiff in his complaint admits that he has no right to demand the

cancellation or amendment of the defendants title because even if the title were canceled or amended the
ownership of the land embraced therein or of the portion affected by the amendment would revert to the
public domain, we ruled that the action was for reversion and that the only person or entity entitled to
relief would be the Director of Lands.
On the other hand, a cause of action for declaration of nullity of free patent and certificate of title would
require allegations of the plaintiffs ownership of the contested lot prior to the issuance of such free patent
and certificate of title as well as the defendants fraud or mistake, as the case may be, in successfully
obtaining these documents of title over the parcel of land claimed by plaintiff. In such a case, the nullity
arises strictly not from the fraud or deceit but from the fact that the land is beyond the jurisdiction of the
Bureau of Lands to bestow and whatever patent or certificate of title obtained therefore is consequently
void ab initio. The real party-in-interest is not the State but the plaintiff who alleges a pre-existing right of
ownership over the parcel of land in question even before the grant of title to the defendant
In their Complaint, petitioners never alleged that the Subject Property was part of the public domain.
On the contrary, petitioners asserted title over the Subject Property by virtue of their actual, physical,
open, continuous and adverse possession thereof, in the concept of owners, by themselves and through
their predecessors-in-interest, since time immemorial. The Deeds of Assignment executed in their favor
and attached to their Complaint referred to a Spanish title granted by the Queen of Spain to their
predecessor-in-interest, Don Hermogenes Rodriguez. Clearly, petitioners are asserting private title over the
Subject Property, and consequently, their action could not be one for reversion.
In their instant Petition, petitioners further averred that rather than an action for nullity of respondents
certificates of title, theirs was more appropriately an action to remove a cloud on or to quiet their title over
the Subject Property.
Article 476 of the Civil Code, on removal of a cloud on or quieting of title, provides that:
Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any
instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth
and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action
may be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon title to real property or any interest
therein.
Respondents certificates of title over the Subject Property appeared valid or effective; but according to
the petitioners, they were fake, spurious and/or fraudulent, and a cloud on their title to the same property
that needed to be removed. A cloud on title has been defined as follows:
Cloud on Title. A cloud on title is an outstanding instrument, record, claim, encumbrance or proceeding
which is actually invalid or inoperative, but which may nevertheless impair or affect injuriously the title to
property. The matter complained of must have a prima facie appearance of validity or legal efficacy. The
cloud on title is a semblance of title which appears in some legal form but which is in fact unfounded. The
invalidity or inoperativeness of the instrument is not apparent on the face of such instrument, and it has to
be proved by extrinsic evidence[31]
Even as this Court agrees with the petitioners that their action was one for removal of a cloud on or
quieting of title, it does arrive at the same conclusion as the trial court and the Court of Appeals that
petitioners had no personality to file the said action, not being the parties-in-interest, and their Complaint
should be dismissed for not stating a cause of action.

According to Article 477 of the Civil Code, the plaintiff, in an action to remove a cloud on or to quiet
title, must have legal or equitable title to, or interest in, the real property which is the subject matter of the
action.[32] Petitioners failed to establish in their Complaint that they had any legal or equitable title to, or
legitimate interest in, the Subject Property so as to justify their right to file an action to remove a cloud on
or to quiet title.
Title to real property refers to that upon which ownership is based. It is the evidence of the right of the
owner or the extent of his interest, by which means he can maintain control and, as a rule, assert right to
exclusive possession and enjoyment of the property.[33]
In their Complaint, petitioners claimed title to the Subject Property by virtue of their actual and
continuous possession of the same since time immemorial, by themselves and through their predecessorsin-interest. Yet, the Deeds of Assignment executed by Ismael Favila in their favor, attached to and an
integral part of their Complaint, revealed that petitioners predecessors-in-interest based their right to the
Subject Property on the Spanish title awarded to Don Hermogenes Rodriguez.
There existed a contradiction when petitioners based their claim of title to the Subject Property on
their possession thereof since time immemorial, and at the same time, on the Spanish title granted to Don
Hermogenes Rodriguez. Possession since time immemorial carried the presumption that the land
had never been part of the public domain or that it had been private property even before the
Spanish conquest.[34] If the Subject Property was already private property before the Spanish conquest,
then it would have been beyond the power of the Queen of Spain to award or grant to anyone.
The title to and possession of the Subject Property by petitioners predecessors-in-interest could be
traced only as far back as the Spanish title of Don Hermogenes Rodriguez. Petitioners, having acquired
portions of the Subject Property by assignment, could acquire no better title to the said portions than their
predecessors-in-interest, and hence, their title can only be based on the same Spanish title.
Respondent maintained that P.D. No. 892 prevents petitioners from invoking the Spanish title as basis
of their ownership of the Subject Property. P.D. No. 892 strengthens the Torrens system by discontinuing
the system of registration under the Spanish Mortgage Law, and by categorically declaring all lands
recorded under the latter system, not yet covered by Torrens title, unregistered lands. It further provides
that within six months from its effectivity, all holders of Spanish titles or grants should apply for
registration of their land under what is now P.D. No. 1529, otherwise known as the Land Registration
Decree. Thereafter, Spanish titles can no longer be used as evidence of land ownership in any registration
proceedings under the Torrens system. [35] Indubitably, P.D. No. 892 divests the Spanish titles of any legal
force and effect in establishing ownership over real property.
P.D. No. 892 became effective on 16 February 1976. The successors of Don Hermogenes Rodriguez
had only until 14 August 1976 to apply for a Torrens title in their name covering the Subject Property. In the
absence of an allegation in petitioners Complaint that petitioners predecessors-in-interest complied with
P.D. No. 892, then it could be assumed that they failed to do so. Since they failed to comply with P.D. No.
892, then the successors of Don Hermogenes Rodriguez were already enjoined from presenting the
Spanish title as proof of their ownership of the Subject Property in registration proceedings.
Registration proceedings under the Torrens system do not create or vest title, but only confirm and
record title already created and vested. [36] By virtue of P.D. No. 892, the courts, in registration proceedings
under the Torrens system, are precluded from accepting, confirming and recording a Spanish title. Reason
therefore dictates that courts, likewise, are prevented from accepting and indirectly confirming such
Spanish title in some other form of action brought before them (i.e., removal of cloud on or quieting of
title), only short of ordering its recording or registration. To rule otherwise would open the doors to the
circumvention of P.D. No. 892, and give rise to the existence of land titles, recognized and affirmed by the
courts, but would never be recorded under the Torrens system of registration. This would definitely

undermine the Torrens system and cause confusion and instability in property ownership that P.D. No. 892
intended to eliminate.
Petitioners argued that the Spanish title may still be presented as proof of ownership on the basis of
the exception provided in the fourth whereas clause of P.D. No. 892, which reads:
WHEREAS, Spanish titles to lands which have not yet been brought under the operation of the Torrens
system, being subject to prescription, are now ineffective to prove ownership unless accompanied by proof
of actual possession; . . .
Since Petitioners alleged that they were in actual possession of the Subject Property, then they could still
present the Spanish title as evidence of their ownership of the Subject Property. [37]
This Court cannot sustain petitioners argument. Actual proof of possession only becomes necessary
because, as the same whereas clause points out, Spanish titles are subject to prescription. A holder of a
Spanish title may still lose his ownership of the real property to the occupant who actually possesses the
same for the required prescriptive period. [38] Because of this inherent weakness of a Spanish title, the
applicant for registration of his Spanish title under the Torrens system must also submit proof that he is in
actual possession of the real property, so as to discount the possibility that someone else has acquired a
better title to the same property by virtue of prescription.
Moreover, legislative intent must be ascertained from a consideration of the statute as a whole, and
not just a particular provision alone. A word or phrase taken in the abstract may easily convey a meaning
quite different from the one actually intended and evident when the word or phrase is considered with
those with which it is associated. An apparently general provision may have a limited application if read
together with other provisions of the statute.[39]
The fourth whereas clause of P.D. No. 892 should be interpreted and harmonized with the other
provisions of the whole statute.[40] Note that the tenor of the whole presidential decree is to discontinue the
use of Spanish titles and to strip them of any probative value as evidence of ownership. It had clearly set a
deadline for the filing of applications for registration of all Spanish titles under the Torrens system (i.e., six
months from its effectivity or on 14 August 1976), after which, the Spanish titles may no longer be
presented to prove ownership.
All holders of Spanish titles should have filed applications for registration of their title on or before 14
August 1976. In a land registration proceeding, the applicant should present to the court his Spanish title
plus proof of actual possession of the real property. However, if such land registration proceeding was filed
and initiated after 14 August 1976, the applicant could no longer present his Spanish title to the court to
evidence his ownership of the real property, regardless of whether the real property was in his actual
possession.
Therefore, the fact that petitioners were in actual possession of the Subject Property when they filed
the Complaint with the trial court on 29 April 1996 does not exclude them from the application of P.D. No.
892, and their Spanish title remain inadmissible as evidence of their ownership of the Subject Property,
whether in a land registration proceeding or in an action to remove a cloud on or to quiet title.
The preceding discussion does not bar holders of Spanish titles from claiming ownership of the real
property on some other basis, such as those provided in either the Land Registration Decree [41] or the
Public Land Act.[42] Petitioners though failed to allege any other basis for their titles in their Complaint aside
from possession of the Subject Property from time immemorial, which this Court has already controverted;
and the Spanish title, which is already ineffective to prove ownership over the Subject Property.

Therefore, without legal or equitable title to the Subject Property, the petitioners lacked the
personality to file an action for removal of a cloud on, or quieting of, title and their Complaint was properly
dismissed for failing to state a cause of action. In view of the dismissal of the case on this ground, it is
already unnecessary for this Court to address the issue of prescription of the action.
Wherefore, this Court DENIES the instant petition and AFFIRMS the Decision of the Court of Appeals,
dated 29 July 2002, and the Order of the Regional Trial Court of San Mateo, Rizal, Branch 77, dated 05
February 1999, dismissing petitioners Complaint for failure to state a cause of action.
SO ORDERED.

G.R. No. 175048

February 10, 2009

EXCELLENT QUALITY APPAREL, INC., Petitioner,

vs.
WIN MULTI RICH BUILDERS, INC., represented by its President, WILSON G. CHUA, Respondent.
DECISION
TINGA, J.:
Before us is a Rule 45 petition1 seeking the reversal of the Decision2 and Resolution3 of the Court of
Appeals in CA-G.R. SP No. 84640. The Court of Appeals had annulled two orders 4 of the Regional Trial Court
(RTC), Branch 32, of Manila in Civil Case No. 04-108940. This case involves a claim for a sum of money
which arose from a construction dispute.
On 26 March 1996, petitioner Excellent Quality Apparel, Inc. (petitioner) then represented by Max L.F. Ying,
Vice-President for Productions, and Alfiero R. Orden, Treasurer, entered into a contract 5 with Multi-Rich
Builders (Multi-Rich) represented by Wilson G. Chua (Chua), its President and General Manager, for the
construction of a garment factory within the Cavite Philippine Economic Zone Authority (CPEZ). 6 The
duration of the project was for a maximum period of five (5) months or 150 consecutive calendar days.
Included in the contract is an arbitration clause which is as follows:
Article XIX : ARBITRATION CLAUSE
Should there be any dispute, controversy or difference between the parties arising out of this Contract that
may not be resolved by them to their mutual satisfaction, the matter shall be submitted to an Arbitration
Committee of three (3) members; one (1) chosen by the OWNER; one (1) chosen by the CONTRACTOR; and
the Chairman thereof to be chosen by two (2) members. The decision of the Arbitration Committee shall be
final and binding on both the parties hereto. The Arbitration shall be governed by the Arbitration Law (R.A.
[No.] 876). The cost of arbitration shall be borned [sic] jointly by both CONTRACTOR and OWNER on 50-50
basis.7
The construction of the factory building was completed on 27 November 1996.
Respondent Win Multi-Rich Builders, Inc. (Win) was incorporated with the Securities and Exchange
Commission (SEC) on 20 February 19978 with Chua as its President and General Manager. On 26 January
2004, Win filed a complaint for a sum of money9 against petitioner and Mr. Ying amounting
to P8,634,448.20. It also prayed for the issuance of a writ of attachment claiming that Mr. Ying was about
to abscond and that petitioner was about to close. Win obtained a surety bond10 issued by Visayan Surety
& Insurance Corporation. On 10 February 2004, the RTC issued the Writ of Attachment 11 against the
properties of petitioner.
On 16 February 2004, Sheriff Salvador D. Dacumos of the RTC of Manila, Branch 32, went to the office of
petitioner in CPEZ to serve the Writ of Attachment, Summons12 and the Complaint. Petitioner issued
Equitable PCIBank (PEZA Branch) Check No. 160149, dated 16 February 2004, in the amount
of P8,634,448.20, to prevent the Sheriff from taking possession of its properties. 13 The check was made
payable to the Office of the Clerk of Court of the RTC of Manila as a guarantee for whatever liability there
may be against petitioner.
Petitioner filed an Omnibus Motion14 claiming that it was neither about to close. It also denied owing
anything to Win, as it had already paid all its obligations to it. Lastly, it questioned the jurisdiction of the
trial court from taking cognizance of the case. Petitioner pointed to the presence of the Arbitration Clause

and it asserted that the case should be referred to the Construction Industry Arbitration Commission (CIAC)
pursuant to Executive Order (E.O.) No. 1008.
In the hearing held on 10 February 2004, the counsel of Win moved that its name in the case be changed
from "Win Multi-Rich Builders, Inc." to "Multi-Rich Builders, Inc." It was only then that petitioner apparently
became aware of the variance in the name of the plaintiff. In the Reply 15 filed by petitioner, it moved to
dismiss the case since Win was not the contractor and neither a party to the contract, thus it cannot
institute the case. Petitioner obtained a Certificate of Non-Registration of Corporation/Partnership 16 from
the SEC which certified that the latter did not have any records of a "Multi-Rich Builders, Inc." Moreover,
Win in its Rejoinder17 did not
oppose the allegations in the Reply. Win admitted that it was only incorporated on 20 February 1997 while
the construction contract was executed on 26 March 1996. Likewise, it admitted that at the time of
execution of the contract, Multi-Rich was a registered sole proprietorship and was issued a business
permit18 by the Office of the Mayor of Manila.
In an Order19 dated 12 April 2004, the RTC denied the motion and stated that the issues can be answered
in a full-blown trial. Upon its denial, petitioner filed its Answer and prayed for the dismissal of the
case.20 Win filed a Motion21 to deposit the garnished amount to the court to protect its legal rights. In a
Manifestation,22 petitioner vehemently opposed the deposit of the garnished amount. The RTC issued an
Order23 dated 20 April 2004, which granted the motion to deposit the garnished amount. On the same
date, Win filed a motion24 to release the garnished amount to it. Petitioner filed its opposition25 to the
motion claiming that the release of the money does not have legal and factual basis.
On 18 June 2004, petitioner filed a petition for review on certiorari 26 under Rule 65 before the Court of
Appeals, which questioned the jurisdiction of the RTC and challenged the orders issued by the lower court
with a prayer for the issuance of a temporary retraining order and a writ of preliminary injunction.
Subsequently, petitioner filed a Supplemental Manifestation and Motion 27 and alleged that the money
deposited with the RTC was turned over to Win. Win admitted that the garnished amount had already been
released to it. On 14 March 2006, the Court of Appeals rendered its Decision 28 annulling the 12 April and 20
April 2004 orders of the RTC.1avvphi1 It also ruled that the RTC had jurisdiction over the case since it is a
suit for collection of sum of money. Petitioner filed a Motion for Reconsideration 29 which was subsequently
denied in a resolution.30
Hence this petition.
Petitioner raised the following issues to wit: (1) does Win have a legal personality to institute the present
case; (2) does the RTC have jurisdiction over the case notwithstanding the presence of the arbitration
clause; and (3) was the issuance of the writ of attachment and the subsequent garnishment proper.
A suit may only be instituted by the real party in interest. Section 2, Rule 3 of the Rules of Court defines
"parties in interest" in this manner:
A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the
party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every action
must be prosecuted or defended in the name of the real party in interest.
Is Win a real party in interest? We answer in the negative.
Win admitted that the contract was executed between Multi-Rich and petitioner. It further admitted that
Multi-Rich was a sole proprietorship with a business permit issued by the Office of the Mayor of Manila. A
sole proprietorship is the oldest, simplest, and most prevalent form of business enterprise. 31 It is an

unorganized business owned by one person. The sole proprietor is personally liable for all the debts and
obligations of the business.32 In the case of Mangila v. Court of Appeals,33 we held that:
x x x In fact, there is no law authorizing sole proprietorships to file a suit in court.
A sole proprietorship does not possess a juridical personality separate and distinct from the personality of
the owner of the enterprise. The law merely recognizes the existence of a sole proprietorship as a form of
business organization conducted for profit by a single individual and requires its proprietor or owner to
secure licenses and permits, register its business name, and pay taxes to the national government. The
law does not vest a separate legal personality on the sole proprietorship or empower it to file or defend an
action in court.
The original petition was instituted by Win, which is a SEC-registered corporation. It filed a collection of
sum of money suit which involved a construction contract entered into by petitioner and Multi-Rich, a sole
proprietorship. The counsel of Win wanted to change the name of the plaintiff in the suit to Multi-Rich. The
change cannot be countenanced. The plaintiff in the collection suit is a corporation. The name cannot be
changed to that of a sole proprietorship. Again, a sole proprietorship is not vested with juridical personality
to file or defend an action.34
Petitioner had continuously contested the legal personality of Win to institute the case. Win was given
ample opportunity to adduce evidence to show that it had legal personality. It failed to do so. Corpus Juris
Secundum, notes:
x x x where an individual or sole trader organizes a corporation to take over his business and all his assets,
and it becomes in effect merely an alter ego of the incorporator, the corporation, either on the grounds of
implied assumption of the debts or on the grounds that the business is the same and is merely being
conducted under a new guise, is liable for the incorporator's preexisting debts and liabilities. Clearly, where
the corporation assumes or accepts the debt of its predecessor in business it is liable and if the transfer of
assets is in fraud of creditors it will be liable to the extent of the assets transferred. The corporation is not
liable on an implied assumption of debts from the receipt of assets where the incorporator retains
sufficient assets to pay the indebtedness, or where none of his assets are transferred to the corporation, or
where, although all the assets of the incorporator have been transferred, there is a change in the persons
carrying on the business and the corporation is not merely an alter ego of the person to whose business it
succeeded.35
In order for a corporation to be able to file suit and claim the receivables of its predecessor in business, in
this case a sole proprietorship, it must show proof that the corporation had acquired the assets and
liabilities of the sole proprietorship. Win could have easily presented or attached any document e.g., deed
of assignment which will show whether the assets, liabilities and receivables of Multi-Rich were acquired by
Win. Having been given the opportunity to rebut the allegations made by petitioner, Win failed to use that
opportunity. Thus, we cannot presume that Multi-Rich is the predecessor-in-business of Win and hold that
the latter has standing to institute the collection suit.
Assuming arguendo that Win has legal personality, the petition will still be granted.
Section 4 of E.O. No. 100836 provides for the jurisdiction of the Construction Industry Arbitration
Commission, to wit:
Section 4. Jurisdiction.The CIAC shall have original and exclusive jurisdiction over disputes arising from,
or connected with, contracts entered into by parties involved in construction in the Philippines, whether
the disputes arises before or after the completion of the contract, or after the abandonment or breach
thereof. These disputes may involve government or private contracts. For the Board to acquire jurisdiction,
the parties to a dispute must agree to submit the same to voluntary arbitration.

The jurisdiction of the CIAC may include but is not limited to violation of specifications for materials and
workmanship; violation of the terms of agreement; interpretation and/or application of contractual time
and delays; amount of damages and penalties; commencement time and delays; maintenance and
defects; payment, default of employer or contractor and changes in contract cost.
Excluded from the coverage of this law are disputes from employer-employee relationships which shall
continue to be covered by the Labor Code of the Philippines.
There is nothing in the law which limits the exercise of jurisdiction to complex or difficult cases. E.O. No.
1008 does not distinguish between claims involving payment of money or not. 37 The CIAC acquires
jurisdiction over a construction contract by the mere fact that the parties agreed to submit to voluntary
arbitration.38 The law does not preclude parties from stipulating a preferred forum or arbitral body but they
may not divest the CIAC of jurisdiction as provided by law.39 Arbitration is an alternative method of dispute
resolution which is highly encouraged.40 The arbitration clause is a commitment on the part of the parties
to submit to arbitration the disputes covered since that clause is binding, and they are expected to
abide by it in good faith.41 Clearly, the RTC should not have taken cognizance of the collection suit. The
presence of the arbitration clause vested jurisdiction to the CIAC over all construction disputes between
Petitioner and Multi-Rich. The RTC does not have jurisdiction. 42
Based on the foregoing, there is no need to discuss the propriety of the issuance of the writ of attachment.
However, we cannot allow Win to retain the garnished amount which was turned over by the RTC. The RTC
did not have jurisdiction to issue the questioned writ of attachment and to order the release of the
garnished funds.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals is hereby MODIFIED. Civil Case
No. 04-108940 is DISMISSED. Win Multi-Rich Builders, Inc. is ORDERED to return the garnished amount of
EIGHT MILLION SIX HUNDRED THIRTY-FOUR THOUSAND FOUR HUNDRED
FORTY-EIGHT PESOS AND FORTY CENTAVOS (P8,634,448.40),
which was turned over by the Regional Trial Court, to petitioner with legal interest of 12 percent (12%) per
annum upon finality of this Decision until payment.
SO ORDERED.

G.R. No. 161065. April 15, 2005

EUFEMIO C. DOMINGO, CELSO D. GANGAN, PACASIO S. BANARIA, SOFRONIO B. URSAL,
ALBERTO P. CRUZ, MARIA L. MATIB, RACHEL U. PACPACO, ANGELO G. SANCHEZ, and SHERWIN
A. SIP-AN,Petitioners,
vs.
HON. GUILLERMO N. CARAGUE, in his capacity as Chairman, Commission on Audit, HON.
EMMANUEL M. DALMAN and HON. RAUL C. FLORES, in their capacities as Commissioners,
Commission on Audit,Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Judicial power is the power to hear and decide cases pending between parties who have the right to sue in
courts of law and equity.1 Corollary to this dictum is the principle of locus standi of a litigant. He who is
directly affected and whose interest is immediate and substantial has the standing to sue. Thus, a party
must show a personal stake in the outcome of the case or an injury to himself that can be redressed by a
favorable decision in order to warrant an invocation of the courts jurisdiction and justify the exercise of
judicial power on his behalf.
Assailed in this petition for certiorari is the legality of Resolution No. 2002-05 of the Commission on Audit
(COA) providing for Organizational Restructuring Plan. The above-named petitioners basically alleged
therein that this Plan is intrinsically void for want of an enabling law authorizing COA to undertake the
same and providing for the necessary standards, conditions, restrictions, limitations, guidelines, and
parameters. Petitioners further alleged that in initiating such Organizational Restructuring Plan without
legal authority, COA committed grave abuse of discretion amounting to lack or excess of jurisdiction.
At this point, it is pertinent to state that the COA is a quasi-judicial body and that its decision, order or
ruling may be brought to the Supreme Court on certiorari by the aggrieved party.2
Petitioners Eufemio C. Domingo, Celso C. Gangan, Pascasio S. Banaria are retired Chairmen, while Sofronio
B. Ursal, and Alberto P. Cruz are retired Commissioners of COA. All claim "to maintain a deep-seated
abiding interest in the affairs of COA,"3 especially in its Organizational Restructuring Plan, as concerned
taxpayers.
The other petitioners are incumbent officers or employees of COA. Maria L. Matib and Angelo G. Sanchez
are State Auditor III and State Auditor II, respectively, assigned to the Cordillera Administrative Region
(CAR). Prior to the implementation of the questioned COA Organizational Restructuring Plan, they were
Resident Auditors and later Audit Team Leaders. Petitioner Rachel U. Pacpaco is a State Auditor III assigned
to CAR and a Team Supervisor, while petitioner Sherwin A. Sipi-an is a State Auditor I also assigned at the
CAR. These petitioners claim that they were unceremoniously divested of their designations/ranks as Unit
Head, Team Supervisor, and Team Leader upon implementation of the COA Organizational Restructuring
Plan without just cause and without due process, in violation of Civil Service Law. Moreover, they were
deprived of their respective Representation and Transportation Allowances (RATA), thus causing them
undue financial prejudice.
Petitioners now invoke this Courts judicial power to strike down the COA Organizational Restructuring Plan
for being unconstitutional or illegal.
Initially, for our resolution is the issue of whether petitioners have the legal standing to institute the instant
petition.

Petitioners invoke our ruling in Chavez v. Public Estates Authority,4 Agan, Jr. v. Philippine International Air
Terminals Co., Inc.,5 and Information Technology Foundation of the Philippines v. Commission on
Elections6 that where the subject matter of a case is a matter of public concern and imbued with public
interest, then this fact alone gives them legal standing to institute the instant petition. Petitioners contend
that the COA Organizational Restructuring Plan is not just a mere reorganization but a revamp or overhaul
of the COA, with a "spillover effect" upon its audit performance. This will have an impact upon the rest of
the government bodies subject to its audit supervision, thus, should be treated as a matter of
transcendental importance. Consequently, petitioners legal standing should be recognized and upheld.
Respondents, through the Office of the Solicitor General (OSG), counter that petitioners have no legal
standing to file the present petition since following our ruling in Kilusang Mayo Uno Labor Center v. Garcia,
Jr.,7 they have not shown "a personal stake in the outcome of the case" or an actual or potential injury that
can be redressed by our favorable decision. Petitioners themselves admitted that "they do not seek any
affirmative relief nor impute any improper or improvident act against the said respondents" and "are not
motivated by any desire to seek affirmative relief from COA or from respondents that would redound to
their personal benefit or gain." It is clear then that petitioners failed to show any "present substantial
interest" in the outcome of this case, citing Kilosbayan v. Morato.8 Nor may petitioners claim that as
taxpayers, they have legal standing since nowhere in their petition do they claim that public funds are
being spent in violation of law or that there is a misapplication of the taxpayers money, as we ruled
in Dumlao v. Comelec.9
Petitioners reliance upon our rulings in Chavez,10 Agan, Jr.,11 and Information Technology Foundation12 is
flawed.
In Chavez, we ruled that the petitioner has legal standing since he is a taxpayer and his purpose in filing
the petition is to compel the Public Estate Authority (PEA) to perform its constitutional duties with respect
to: (a) the right of the citizens to information on matters of public concern; and (b) the application of a
constitutional provision intended to insure the equitable distribution of alienable lands of the public domain
among Filipino citizens. The thrust of the first is to compel PEA to disclose publicly information on the sale
of Government lands worth billions of pesos, as mandated by the Constitution and statutory law. The thrust
of the second is to prevent PEA from alienating hundreds of hectares of alienable lands of the public
domain, thereby compelling it to comply with a constitutional duty to the nation. We held that these
matters are of transcendental public importance.13
In Agan, Jr., we held that petitioners have legal standing as they have a direct and substantial interest to
protect. By the implementation of the PIATCO contracts, they stand to lose their source of livelihood, a
property right zealously protected by the Constitution. Such financial prejudice on their part is sufficient to
confer upon them the requisite locus standi.14
In Information Technology Foundation, there were two reasons why petitioners standing was recognized.
First, the nations political and economic future virtually hangs in the balance, pending the outcome of the
2004 elections. Accordingly, the award for the automation of the electoral process was a matter of public
concern, imbued with public interest. Second, the individual petitioners, as taxpayers, asserted a material
interest in seeing to it that public funds are properly used.
Here, petitioners have not shown any direct and personal interest in the COA Organizational
Restructuring Plan. There is no indication that they have sustained or are in imminent danger of sustaining
some direct injury as a result of its implementation. In fact, they admitted that "they do not seek any
affirmative relief nor impute any improper or improvident act against the respondents" and "are not
motivated by any desire to seek affirmative relief from COA or from respondents that would redound to
their personal benefit or gain." Clearly, they do not have any legal standing to file the instant suit.

We are well aware of the averments of petitioners Matib, Pacpaco, Sanchez, and Sipi-An that they were
demoted and unceremoniously divested of their previous designations as Unit Head, Team Supervisor, or
Team Leader; that they were deprived of their RATA; that they were relegated to being mere Team
Members, entitled to only a reimbursable transportation allowance; and that they were denied due
process.
Such averments lack merit. Actually, they were not demoted. Under Section 11, Rule VII of the Omnibus
Rules Implementing Book V of the Administrative Code of 1987, a demotion is the movement from one
position to another involving the issuance of an appointment with diminution in duties,
responsibilities, status, or rank which may or may not involve reduction in salary. 15 A demotion by
assigning an employee to a lower position in the same service which has a lower rate of compensation is
tantamount to removal, if no cause is shown for it.16
Here, there have been no new appointments issued to Matib, Pacpaco, Sanchez, and Sipi-An under the COA
Organizational Restructuring Plan. Thus, their contention that they have been demoted is baseless.
Moreover, the change in their status from COA auditors (receiving monthly RATA) to COA auditors
(receiving only reimbursable RATA) cannot be attributed to the COA Organizational Restructuring Plan but
to the implementation of the Audit Team Approach (ATAP), pursuant to COA Resolution No. 96-305 dated
April 16, 1996.
Under the ATAP, an audit team, not a resident auditor, is deployed to conduct an audit. An audit team may
be composed of two (2) or more members under an Audit Team Leader. Whenever practicable, an Audit
Team Supervisor supervises at least three (3) audit teams. The composition of an audit team is not
permanent. Hence, an Audit Team Member may be designated or assigned as an Audit Team Leader for
one assignment and subsequently as a Team Member in another engagement. The designation depends
upon the position or rank of the one who is designated as an Audit Team Leader. Thus, a State Auditor III
who may have been assigned as an Audit Team Leader in one engagement may find himself relegated to
being an Audit Team Member in another engagement, if a State Auditor IV or State Auditor V is designated
as the Audit Team Leader.
Pursuant to the COA Organizational Restructuring Plan, the COA issued Memorandum No. 200203417 providing for the guidelines regarding the payment of RATA, thus:
1. All holders of State Auditor IV position shall be entitled to fixed commutable RATA wherever they are
assigned.
2. Henceforth, only State Auditors IV shall be assigned as new Unit Heads or Team Leaders.
3. State Auditors below State Auditor IV assigned as Unit Heads or Team Leaders who have been receiving
fixed RATA shall continue to be designated as such and to receive the RATA until relieved of the designation
for incompetence, inefficiency, or misconduct.
All others who collect RATA on reimbursable basis, including those paid on a daily basis under COA
Resolution No. 99-007 dated June 7, 1999, are likewise entitled thereto.
Matib, Pacpaco, Sanchez, and Sipi-An are not qualified to be Audit Team Leaders or to receive fixed
monthly RATA since none of them holds the rank or position of State Auditor IV. But this does not mean
that they are not entitled to receive reimbursable RATA if they are designated as Audit Team Leaders. It is
clear from the text of the said COA Memorandum that the principle of non-diminution of benefits has been
upheld.

Thus, in the implementation of the COA Organizational Restructuring Plan, we fail to see how petitioners
could have sustained personal injury as they have not shown to have a personal stake therein. Accordingly,
they are wanting in legal standing to institute the instant petition. Corollarily, we find no reason to delve
into the constitutionality or legality of the COA Organizational Restructuring Plan.
WHEREFORE, the petition is DISMISSED. No pronouncement as to costs.
SO ORDERED.

SKIPPING OPOSA VS FACTORAN CASE IN THIS COMPILATION but here are some digests found on the
internet re: REMREV topic
Oposa v. Factoran
Different Compilation of Digests
------------------------------------------------FACTS:
A taxpayers class suit was initiated by the Philippine Ecological Network Incorporated (PENI) together with
the minors Oposa and their parents. All were duly represented. They claimed that as taxpayers they have
the right to the full benefit, use and enjoyment of the natural resources of the countrys rainforests. They
prayed that a judgment be rendered ordering Honorable Factoran Jr, his agents, representatives and other
persons acting in his behalf to cancel all existing timber license agreements in the country and cease and
desist from receiving, accepting, processing, renewing or approving new timber license agreements.
ISSUE: Whether or not petitioners have a cause of action?
HELD: Yes, petitioners have a cause of action. The case at bar is of common interest to all Filipinos. The
right to a balanced and healthy ecology carries with it the correlative duty to refrain from impairing the
environment. The said right implies the judicious management of the countrys forests. This right is also
the mandate of the government through DENR. A denial or violation of that right by the other who has the
correlative duty or obligation to respect or protect the same gives rise to a cause of action. All licenses
may thus be revoked or rescinded by executive action.
-------------------------------------------------FACTS:
The petitioners, all minors duly represented and joined by their respective parents, filed a petition to
cancel all existing timber license agreements (TLAs) in the country and to cease and desist from receiving,
accepting, processing, renewing or approving new timber license agreements. This case is filed not only on
the appellants right as taxpayers, but they are also suing in behalf of succeeding generations based on
the concept of intergenerational responsibility in so far as the right to a balanced and healthful ecology
is concerned.
Together with the Philippine Ecological Network, Inc. (PENI), the petitioners presented scientific evidence
that deforestation have resulted in a host of environmental tragedies. One of these is the reduction of the
earths capacity to process carbon dioxide, otherwise known as the greenhouse effect.
Continued issuance by the defendant of TLAs to cut and deforest the remaining forest stands will work
great damage and irreparable injury to the plaintiffs. Appellants have exhausted all administrative
remedies with the defendants office regarding the plea to cancel the said TLAs. The defendant, however,
fails and refuses to cancel existing TLAs.
ISSUES:
Whether or not the petitioners have legal standing on the said case
Admitting that all facts presented are true, whether or not the court can render a valid judgement in
accordance to the prayer of the complaints

Whether or not the TLAs may be revoked despite the respondents standing that these cancellation of these
TLAs are against the non-impairment clause of the Constitution
HELD:
The petitioners have locus standi (legal standing) on the case as a taxpayers (class) suit. The subject
matter of complaint is of common and general interest to all the citizens of the Philippines. The court found
difficulty in ruling that the appellants can, for themselves, and for others file a class suit.
The right of the petitioners to a balanced and healthful ecology has been clearly stated. A denial or
violation of that right by the other who has the correlative duty or obligation to respect or protect the same
gives rise to a cause of action. The granting of the TLAs, as the petitioners claim to be done with grave
abuse of discretion, violated their right to a balanced and healthful ecology hence, the full protection
thereof requires that no TLAs should be renewed or granted. The appellants have also submitted a
document with the sub-header CAUSE OF ACTION which is adequate enough to show, prima facie, the
violation of their rights. On this basis, these actions must therefore be granted, wholly or partially.
Despite the Constitutions non-impairment clause, TLAs are not contracts, rather licenses; thus, the said
clause cannot be invoked. Even if these are protected by the said clause, these can be revoked if the
public interest so required as stated in Section 20 of the Forestry Reform Code (P.D. No. 705). Furthermore,
Section 16 of Article II of the 1987 Constitution explicitly provides that: The State shall protect the right of
the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature. The
right to a balanced and healthful ecology carries with it the correlative duty to refrain from impairing the
government. The said right is also clear as the DENRs duty under its mandate and by virtue of its powers
and functions under Executive Order No. 192 and the Administrative Code of 1987 to protect and advance
the said right.Needless to say, all licenses may thus be revoked or rescinded. It is not a contract, property
or property right protected by the due process clause of the Constitution.
-----------------------------------------Facts:
Principal petitioners, are all minors duly represented and joined by their respective parents. Impleaded as
an additional plaintiff is the Philippine Ecological Network, Inc. (PENI), a domestic, non-stock and non-profit
corporation organized for the purpose of, inter alia, engaging in concerted action geared for the protection
of our environment and natural resources. The original defendant was the Honorable Fulgencio S. Factoran,
Jr., then Secretary of the Department of Environment and Natural Resources (DENR). His substitution in this
petition by the new Secretary, the Honorable Angel C. Alcala, was subsequently ordered upon proper
motion by the petitioners. The complaint was instituted as a taxpayers' classsuit and alleges that the
plaintiffs "are all citizens of the Republic of the Philippines, taxpayers, and entitled to the full benefit, use
and enjoyment of the natural resource treasure that is the country's virgin tropical forests." The same was
filed for themselves and others who are equally concerned about the preservation of said resource but are
"so numerous that it is impracticable to bring them all before the Court."
On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the complaint
based on two grounds, namely: the plaintiffs have no cause of action against him and, the issue raised by
the plaintiffs is a political question which properly pertains to the legislative or executive branches of
Government. In their 12 July 1990 Opposition to the Motion, the petitioners maintain that, the complaint
shows a clear and unmistakable cause of action, the motion is dilatory and the action presents a justiciable
question as it involves the defendant's abuse of discretion.
On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to dismiss. In the
said order, not only was thedefendant's claim that the complaint states no cause of action against him and

that it raises a political question sustained, the respondent Judge further ruled that the granting of the
relief prayed for would result in the impairment of contracts which is prohibited by the fundamental law of
the land.
Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised Rules of Court
and ask this Court to rescind and set aside the dismissal order on the ground that the respondent Judge
gravely abused his discretion in dismissing the action. Again, the parents of the plaintiffs-minors not only
represent their children, but have also joined the latter in this case.
Petitioners contend that the complaint clearly and unmistakably states a cause of action as it contains
sufficient allegations concerning their right to a sound environment based on Articles 19, 20 and 21 of the
Civil Code (Human Relations), Section 4 of Executive Order (E.O.) No. 192 creating the DENR, Section 3 of
Presidential Decree (P.D.) No. 1151 (Philippine Environmental Policy), Section 16, Article II of the 1987
Constitution recognizing the right of the people to a balanced and healthful ecology, the concept of
generational genocide in Criminal Law and the concept of man's inalienable right to self-preservation and
self-perpetuation embodied in natural law. Petitioners likewise rely on the respondent's correlative
obligation per Section 4 of E.O. No. 192, to safeguard the people's right to a healthful environment.
It is further claimed that the issue of the respondent Secretary's alleged grave abuse of discretion in
granting Timber License Agreements (TLAs) to cover more areas for logging than what is available involves
a judicial question.
Anent the invocation by the respondent Judge of the Constitution's non-impairment clause, petitioners
maintain that the same does not apply in this case because TLAs are not contracts. They likewise submit
that even if TLAs may be considered protected by the said clause, it is well settled that they may still be
revoked by the State when the public interest so requires.
Issues:
(1) Whether or not the petitioners have locus standi.
(2) Whether or not the petiton is in a form of a class suit.
(3) Whether or not the TLAs can be out rightly cancelled.
(4) Whether or not the petition should be dismissed.
Held: As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be done
by the State without due process of law. Once issued, a TLA remains effective for a certain period of time
usually for twenty-five (25) years. During its effectivity, the same can neither be revised nor cancelled
unless the holder has been found, after due notice and hearing, to have violated the terms of the
agreement or other forestry laws and regulations. Petitioners' proposition to have all the TLAs
indiscriminately cancelled without the requisite hearing would be violative of the requirements of due
process.
The subject matter of the complaint is of common and general interest not just to several, but to all
citizens of the Philippines. Consequently, since the parties are so numerous, it, becomes impracticable, if
not totally impossible, to bring all of them before the court. The plaintiffs therein are numerous and
representative enough to ensure the full protection of all concerned interests. Hence, all the requisites for
the filing of a valid class suit under Section 12, Rule 3 of the Revised Rules of Court are present both in the
said civil case and in the instant petition, the latter being but an incident to the former.

Petitioners minors assert that they represent their generation as well as generations yet unborn. Their
personality to sue in behalf of the succeeding generations can only be based on the concept of
intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned.
Nature means the created world in its entirety. Every generation has a responsibility to the next to
preserve that rhythm and harmony for the full enjoyment of a balanced and healthful ecology. The minors'
assertion of their right to a sound environment constitutes, at the same time, the performance of their
obligation to ensure the protection of that right for the generations to come.
The complaint focuses on one specific fundamental legal right the right to a balanced and healthful
ecology which, for the first time in our nation's constitutional history, is solemnly incorporated in the
fundamental law. Section 16, Article II of the 1987 Constitution.
While the right to a balanced and healthful ecology is to be found under the Declaration of Principles and
State Policies and not under the Bill of Rights, it does not follow that it is less important than any of the
civil and political rights enumerated in the latter. Such a right belongs to a different category of rights
altogether for it concerns nothing less than self-preservation and self-perpetuation aptly and fittingly
stressed by the petitioners the advancement of which may even be said to predate all governments and
constitutions. As a matter of fact, these basic rights need not even be written in the Constitution for they
are assumed to exist from the inception of humankind. If they are now explicitly mentioned in the
fundamental charter, it is because of the well-founded fear of its framers that unless the rights to a
balanced and healthful ecology and to health are mandated as state policies by the Constitution itself,
thereby highlighting their continuing importance and imposing upon the state a solemn obligation to
preserve the first and protect and advance the second, the day would not be too far when all else would be
lost not only for the present generation, but also for those to come generations which stand to inherit
nothing but parched earth incapable of sustaining life.
Conformably with the enunciated right to a balanced and healthful ecology and the right to health, as well
as the other related provisions of the Constitution concerning the conservation, development and
utilization of the country's natural resources, then President Corazon C. Aquino promulgated on 10 June
1987 E.O. No. 192, Section 4 of which expressly mandates that the Department of Environment and
Natural Resources "shall be the primary government agency responsible for the conservation,
management, development and proper use of the country's environment and natural resources,
specifically forest and grazing lands, mineral, resources, including those in reservation and watershed
areas, and lands of the public domain, as well as the licensing and regulation of all natural resources as
may be provided for by law in order to ensure equitable sharing of the benefits derived therefrom for the
welfare of the present and future generations of Filipinos." Section 3 thereof makes the following statement
of policy:
The above provision stresses "the necessity of maintaining a sound ecological balance and protecting and
enhancing the quality of the environment." Section 2 of the same Title, on the other hand, specifically
speaks of the mandate of the DENR; however, it makes particular reference to the fact of the agency's
being subject to law and higher authority.
It may, however, be recalled that even before the ratification of the 1987 Constitution, specific statutes
already paid special attention to the "environmental right" of the present and future generations. On 6
June 1977, P.D. No. 1151 and P.D. No. 1152 were issued. Thus, the right of the petitioners to a balanced
and healthful ecology is as clear as the DENR's duty under its mandate and by virtue of its powers and
functions under E.O. No. 192 and the Administrative Code of 1987 to protect and advance the said right.
A denial or violation of that right by the other who has the correlative duty or obligation to respect or
protect the same gives rise to a cause of action. Petitioners maintain that the granting of the TLAs, which
they claim was done with grave abuse of discretion, violated their right to a balanced and healthful
ecology; hence, the full protection thereof requires that no further TLAs should be renewed or granted.

It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint fails to
state a cause of action; the question submitted to the court for resolution involves the sufficiency of the
facts alleged in the complaint itself. No other matter should be considered; furthermore, the truth of falsity
of the said allegations is beside the point for the truth thereof is deemed hypothetically admitted. Policy
formulation or determination by the executive or legislative branches of Government is not squarely put in
issue. What is principally involved is the enforcement of a right vis-a-vis policies already formulated and
expressed in legislation. It must, nonetheless, be emphasized that the political question doctrine is no
longer, the insurmountable obstacle to the exercise of judicial power or the impenetrable shield that
protects executive and legislative actions from judicial inquiry or review.
In the second place, even if it is to be assumed that the same are contracts, the instant case does not
involve a law or even an executive issuance declaring the cancellation or modification of existing timber
licenses. Hence, the non-impairment clause cannot as yet be invoked. Nevertheless, granting further that a
law has actually been passed mandating cancellations or modifications, the same cannot still be
stigmatized as a violation of the non-impairment clause. This is because by its very nature and purpose,
such as law could have only been passed in the exercise of the police power of the state for the purpose of
advancing the right of the people to a balanced and healthful ecology, promoting their health and
enhancing the general welfare.
Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply with
respect to the prayer to enjoin the respondent Secretary from receiving, accepting, processing, renewing
or approving new timber licenses for, save in cases of renewal, no contract would have as of yet existed in
the other instances. Moreover, with respect to renewal, the holder is not entitled to it as a matter of right.
Petition is hereby GRANTED, and the challenged Order of respondent Judge of 18 July 1991 dismissing Civil
Case No. 90-777 is hereby set aside. The petitioners may therefore amend their complaint to implead as
defendants the holders or grantees of the questioned timber license agreements.

SPECIAL THIRD DIVISION

In the Matter of the Heirship
(Intestate
Estates)
of
the
Late
Hermogenes
Rodriguez,
Antonio
Rodriguez, Macario J. Rodriguez,
Delfin Rodriguez, and Consuelo M.
Rodriguez and Settlement of their
Estates,

G.R. No. 182645

Present:
CORONA, C.J., Chairperson,
VELASCO, JR.,
NACHURA,
PERALTA, and
MENDOZA, JJ.

RENE B. PASCUAL,
Petitioner,
- versus -

Promulgated:
JAIME M. ROBLES,
Respondent.
December 15, 2010
x--------------------------------------------------x
RESOLUTION
PERALTA, J.:
Before the Court is the Very Urgent Motion for Reconsideration of Jaime M. Robles (Robles) seeking to set
aside this Court's Decision dated December 4, 2009 which nullified the April 16, 2002 Decision of the Court
of Appeals (CA) in CA-G.R. SP No. 57417 and the February 27, 2007 Order of the Regional Trial Court (RTC)
of Iriga City, Branch 34 in SP No. IR-1110 and reinstated the August 13, 1999 Amended Decision of the
same RTC in the same case.
Robles' Motion is based on the following arguments:
A.) THE HEREIN MOVANT JAIME M. ROBLES, BEING A REAL PARTY-IN-INTEREST WAS NEVER
IMPLEADED AS RESPONDENT IN THE PETITION FOR CERTIORARI (WITH PRAYER TO CLARIFY
JUDGMENT) DATED MAY 10, 2008 WHICH WAS FILED BEFORE THIS HONORABLE SUPREME
COURT ON MAY 13, 2008 - - - BY PETITIONER-RENE B. PASCUAL;
B.) THE DECISION DATED DECEMBER 04, 2009 ISSUED BY THIS HONORABLE SUPREME
COURT IN G.R. NO. 182645 WAS RENDERED BASED ON A PETITION FOR CERTIORARI AND
MEMORANDUM DATED APRIL 7, 2009, WHOSE COPIES THEREOF WERE NEVER SERVED UPON
THE HEREIN MOVANT;
C.) THE NAME OF HEREIN MOVANT-JAIME M. ROBLES APPEARS AS RESPONDENT IN THE TITLE
OF THIS CASE AS CAPTIONED IN THE HONORABLE SUPREME COURT'S ASSAILED DECISION
DATED DECEMBER 04, 2009. HOWEVER, HE WAS NOT REQUIRED TO FILE COMMENT NOR
ANSWER TO THE PETITION, A CLEAR VIOLATION TO (sic) THE RULES OF COURT AND TO (sic)
THE CONSTITUTION.
D.) THE PUBLIC RESPONDENT COURT OF APPEALS PRESENTED THE SALIENT
CIRCUMSTANCES THAT WOULD JUSTIFY THE RELAXATION OF THE RULES ON THE
PERFECTION OF AN APPEAL AND THE RULE THAT CERTIORARI IS NOT A SUBSTITUTE FOR A
LOST APPEAL. THE DECISION ISSUED BY THE PUBLIC RESPONDENT HONORABLE COURT OF
APPEALS DATED APRIL 16, 2002 HAS ALREADY ATTAINED FINALITY BY WAY OF AN ENTRY OF
JUDGMENT ISSUED BY THIS HONORABLE COURT ON NOVEMBER 10, 2005, IN G.R. NO.
168648 ENTITLED JAIME M. ROBLES PETITIONER, VS. HENRY F. RODRIGUEZ, ET. AL., AS
RESPONDENTS.[1]
Robles prays for the reversal of the presently assailed Decision and the entry of a new judgment requiring
him to file his comment and memorandum to the petition. Robles also seeks the reinstatement of

the December 15, 1994 Order of the RTC declaring him as the only forced heir and next of kin of
Hermogenes Rodriguez.
For a clearer discussion and resolution of the instant Motion, it bears to restate the relevant antecedent
facts as stated in the assailed Decision of this Court, to wit:
On 14 September 1989, a petition for Declaration of Heirship and Appointment of
Administrator and Settlement of the Estates of the Late Hermogenes Rodriguez
(Hermogenes) and Antonio Rodriguez (Antonio) was filed before the RTC [of Iriga City]. The
petition, docketed as Special Proceeding No. IR-1110, was filed by Henry F. Rodriguez
(Henry), Certeza F. Rodriguez (Certeza), and Rosalina R. Pellosis (Rosalina). Henry, Certeza
and Rosalina sought that they be declared the sole and surviving heirs of the late Antonio
Rodriguez and Hermogenes Rodriguez. They alleged they are the great grandchildren of
Antonio based on the following genealogy: that Henry and Certeza are the surviving children
of Delfin M. Rodriguez (Delfin) who died on 8 February 1981, while Rosalina is the surviving
heir of Consuelo M. Rodriguez (Consuelo); that Delfin and Consuelo were the heirs of Macario
J. Rodriguez (Macario) who died in 1976; that Macario and Flora Rodriguez were the heirs of
Antonio; that Flora died without an issue in 1960 leaving Macario as her sole heir.
Henry, Certeza and Rosalina's claim to the intestate estate of the late Hermogenes
Rodriguez, a former gobernadorcillo, is based on the following lineage: that Antonio and
Hermogenes were brothers and the latter died in 1910 without issue, leaving Antonio as his
sole heir.
At the initial hearing of the petition on 14 November 1989, nobody opposed the petition.
Having no oppositors to the petition, the RTC entered a general default against the whole
world, except the Republic of the Philippines. After presentation of proof of compliance with
jurisdictional requirements, the RTC allowed Henry, Certeza and Rosalina to submit evidence
before a commissioner in support of the petition. After evaluating the evidence presented,
the commissioner found that Henry, Certeza and Rosalina are the grandchildren in the direct
line of Antonio and required them to present additional evidence to establish the alleged
fraternal relationship between Antonio and Hermogenes.
Taking its cue from the report of the commissioner, the RTC rendered a Partial Judgment
dated 31 May 1990 declaring Henry, Certeza and Rosalina as heirs in the direct descending
line of the late Antonio, Macario and Delfin and appointing Henry as regular administrator of
the estate of the decedents Delfin, Macario and Antonio, and as special administrator to the
estate of Hermogenes.
Henry filed the bond and took his oath of office as administrator of the subject estates.
Subsequently, six groups of oppositors entered their appearances either as a group or
individually, namely:
(1)
(2)
(3)
(4)
(5)
(6)

The group of Judith Rodriguez;

The group of Carola Favila-Santos;
Jaime Robles;
Florencia Rodriguez;
Victoria Rodriguez; and
Bienvenido Rodriguez

Only the group of Judith Rodriguez had an opposing claim to the estate of Antonio, while the
rest filed opposing claims to the estate of Hermogenes.
In his opposition, Jamie Robles likewise prayed that he be appointed regular administrator to
the estates of Antonio and Hermogenes and be allowed to sell a certain portion of land
included in the estate of Hermogenes covered by OCT No. 12022 located at Barrio
Manggahan,Pasig, Rizal.
After hearing on Jamie Robles' application for appointment as regular administrator, the RTC
issued an Order dated 15 December 1994declaring him to be an heir and next of kin of

decedent Hermogenes and thus qualified to be the administrator. Accordingly, the said order
appointed Jaime Robles as regular administrator of the entire estate of Hermogenes and
allowed him to sell the property covered by OCT No. 12022 located at Barrio Manggahan,
Pasig Rizal.
On 27 April 1999, the RTC rendered a decision declaring Carola Favila-Santos and her coheirs as heirs in the direct descending line of Hermogenes and reiterated its ruling in the
partial judgment declaring Henry, Certeza and Rosalina as heirs of Antonio. The decision
dismissed the oppositions of Jamie Robles, Victoria Rodriguez, Bienvenido Rodriguez, and
Florencia Rodriguez, for their failure to substantiate their respective claims of heirship to the
late Hermogenes.
On 13 August 1999, the RTC issued an Amended Decision reversing its earlier finding as to
Carola Favila-Santos. This time, the RTC found Carola Favila-Santos and company not related
to the decedent Hermogenes. The RTC further decreed that Henry, Certeza and Rosalina are
the heirs of Hermogenes. The RTC also re-affirmed its earlier verdict dismissing the
oppositions of Jaime Robles, Victoria Rodriguez, Bienvenido Rodriguez, and Florencia
Rodriguez.[2]
Robles then appealed the August 13, 1999 Decision of the RTC by filing a Notice of Appeal, but the same
was denied by the trial court in its Order dated November 22, 1999 for Robles' failure to file a record on
appeal.
Robles questioned the denial of his appeal by filing a petition for review on certiorari with this Court.
In a Resolution dated February 14, 2000, this Court referred the petition to the CA for consideration and
adjudication on the merits on the ground that the said court has jurisdiction concurrent with this Court and
that no special and important reason was cited for this Court to take cognizance of the said case in the first
instance.
On April 16, 2002, the CA rendered judgment annulling the August 13, 1999 Amended Decision of the RTC.
Henry Rodriguez (Rodriguez) and his group moved for the reconsideration of the CA decision, but the same
was denied in a Resolution dated January 21, 2004. Rodriguez and his co-respondents did not appeal the
Decision and Resolution of the CA.
On the other hand, Robles filed an appeal with this Court assailing a portion of the CA Decision. On August
1, 2005, this Court issued a Resolution denying the petition of Robles and, on November 10, 2005, the said
Resolution became final and executory.
On May 13, 2008, the instant petition was filed.
On December 4, 2009, this Court rendered the presently assailed Decision which held as follows:
In special proceedings, such as the instant proceeding for settlement of estate, the period of
appeal from any decision or final order rendered therein is 30 days, a notice of appeal and a
record on appeal being required. x x x
xxxx
The appeal period may only be interrupted by the filing of a motion for new trial or
reconsideration. Once the appeal period expires without an appeal being perfected, the
decision or order becomes final, x x x
xxxx
In the case under consideration, it was on 13 August 1999 that the RTC issued an Amended
Decision. On 12 October 1999, Jaime Robles erroneously filed a notice of appeal instead of
filing a record on appeal. The RTC, in an order dated 22 November 1999, denied this for his
failure to file a record on appeal as required by the Rules of Court. Petitioner failed to comply

with the requirements of the rule; hence, the13 August 1999 Amended Decision of the RTC
lapsed into finality. It was, therefore, an error for the Court of Appeals to entertain the case
knowing that Jaime Robles' appeal was not perfected and had lapsed into finality.
This Court has invariably ruled that perfection of an appeal in the manner and within the
period laid down by law is not only mandatory but also jurisdictional. The failure to perfect
an appeal as required by the rules has the effect of defeating the right to appeal of a party
and precluding the appellate court from acquiring jurisdiction over the case. The right to
appeal is not a natural right nor a part of due process; it is merely a statutory privilege, and
may be exercised only in the manner and in accordance with the provisions of law. x x x
Failure to meet the requirements of an appeal deprives the appellate court of jurisdiction to
entertain any appeal. There are exceptions to this rule, unfortunately respondents did not
present any circumstances that would justify the relaxation of said rule. [3]
The basic contention of Robles in the instant Motion is that he is a party-in-interest who stands to be
adversely affected or injured or benefited by the judgment in the instant case. He also argues that the
failure of service upon him of a copy of the instant petition as well as petitioner's memorandum, and the
fact that he was not required or given the opportunity to file his comment or answer to the said petition
nor served with any order, resolution or any other process issued by this Court in the instant petition, is a
clear denial of his right to due process.
In his Comment and Opposition, petitioner contends that Robles has no legal standing to participate in the
instant petition. Petitioner argues that in an original action for certiorari, the parties are the aggrieved
party against the lower court and the prevailing party. Petitioner claims, however, that Robles was never
impleaded, because he was not the prevailing party in the assailed Decision of the CA as well as the
questioned Order of the RTC. Petitioner further avers that the inclusion of Robles' name as respondent in
the caption of the instant petition was a result of a clerical error which was probably brought about by
numerous cases filed with this Court involving Robles and the subject estate.
The Court finds partial merit in the instant motion.
Petitioner admitted in his Comment and Opposition to Robles' Motion that in the instant petition he filed,
only the CA and the RTC were impleaded as respondents.
Section 5, Rule 65 of the Rules of Court provides:
Section 5. Respondents and costs in certain cases. When the petition filed relates to the acts
or omissions of a judge, court, quasi-judicial agency, tribunal, corporation, board, officer or
person, the petitioner shall join as private respondent or respondents with such
public respondent or respondents, the person or persons interested in sustaining
the proceedings in the court; and it shall be the duty of such private respondents
to appear and defend, both in his or their own behalf and in behalf of the public
respondent or respondents affected by the proceedings, and the costs awarded in
such proceedings in favor of the petitioner shall be against the private respondents only, and
not against the judge, court, quasi-judicial agency, tribunal, corporation, board, officer or
person impleaded as public respondent or respondents.
Unless otherwise specifically directed by the court where the petition is pending, the public
respondents shall not appear in or file an answer or comment to the petition or any pleading
therein. If the case is elevated to a higher court by either party, the public respondents shall
be included therein as nominal parties. However, unless otherwise specifically directed by
the court, they shall not appear or participate in the proceedings therein. [4]
In Lotte Phil. Co., Inc. v. Dela Cruz,[5] this Court ruled as follows:
An indispensable party is a party-in-interest without whom no final determination can be had
of an action, and who shall be joined either as plaintiffs or defendants. The joinder of
indispensable parties is mandatory. The presence of indispensable parties is necessary to
vest the court with jurisdiction, which is the authority to hear and determine a cause, the
right to act in a case. Thus, without the presence of indispensable parties to a suit or
proceeding, judgment of a court cannot attain real finality. The absence of an indispensable

party renders all subsequent actions of the court null and void for want of authority to act,
not only as to the absent parties but even as to those present. [6]
In the case at bar, Robles is an indispensable party. He stands to be injured or benefited by the outcome of
the petition. He has an interest in the controversy that a final decree would necessarily affect his rights,
such that the courts cannot proceed without his presence. [7] Moreover, as provided for under the
aforequoted Section 5, Rule 65 of the Rules of Court, Robles is interested in sustaining the assailed CA
Decision, considering that he would benefit from such judgment. As such, his non-inclusion would render
the petition for certiorari defective.[8]
Petitioner, thus, committed a mistake in failing to implead Robles as respondent.
The rule is settled that the non-joinder of indispensable parties is not a ground for the dismissal of an
action.[9] The remedy is to implead the non-party claimed to be indispensable. [10] 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 at such
times as are just.[11] If petitioner refuses to implead an indispensable party despite the order of the court,
the latter may dismiss the complaint/petition for the plaintiffs/petitioner's failure to comply therewith. [12]
Based on the foregoing, and in the interest of fair play, the Court finds it proper to set aside its decision
and allow Robles to file his comment on the petition.
WHEREFORE, the Motion for Reconsideration is PARTLY GRANTED. The Decision dated December 4,
2009 is SET ASIDE. Petitioner is ORDERED to furnish Robles a copy of his petition for certiorari within a
period of five (5) days from receipt of this Resolution. Thereafter, Robles is DIRECTED to file his comment
on the petition within a period of ten (10) days from notice.
SO ORDERED.

G.R. No. 186979

August 11, 2010

SOCORRO LIMOS, ROSA DELOS REYES and SPOUSES ROLANDO DELOS REYES and EUGENE
DELOS REYES Petitioners,
vs.
SPOUSES FRANCISCO P. ODONES and ARWENIA R. ODONES, Respondents.
DECISION
NACHURA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the August 14, 2008
Decision1 of the Court of Appeals (CA) in C.A. GR. SP No. 97668 and its Resolution 2 dated March 9, 2009
denying petitioners motion for reconsideration.
The impugned Decision affirmed the resolution dated November 16, 2006 3 and Order dated January 5,
20074 of the trial court, which respectively denied petitioners Motion to Set for Preliminary Hearing the
Special and Affirmative Defenses5 and motion for reconsideration.6
The antecedents:
On June 17, 2005, private respondents-spouses Francisco Odones and Arwenia Odones, filed a complaint
for Annulment of Deed, Title and Damages against petitioners Socorro Limos, Rosa Delos Reyes and
Spouses Rolando Delos Reyes and Eugene Delos Reyes, docketed as Civil Case No. 05-33 before the
Regional Trial Court (RTC) of Camiling, Tarlac, Branch 68.
The complaint alleged that spouses Odones are the owners of a 940- square meter parcel of land located
at Pao 1st, Camiling, Tarlac by virtue of an Extrajudicial Succession of Estate and Sale dated, January 29,
2004, executed by the surviving grandchildren and heirs of Donata Lardizabal in whom the original title to
the land was registered. These heirs were Soledad Razalan Lagasca, Ceferina Razalan Cativo, Rogelio
Lagasca Razalan and Dominador Razalan.
It took a while before respondents decided to register the document of conveyance; and when they did,
they found out that the lands Original Certificate of Title (OCT) was cancelled on April 27, 2005 and
replaced by Transfer Certificate of Title (TCT) No. 329427 in the name of herein petitioners.
Petitioners were able to secure TCT No. 329427 by virtue of a Deed of Absolute Sale allegedly executed by
Donata Lardizabal and her husband Francisco Razalan on April 18, 1972.
Petitioners then subdivided the lot among themselves and had TCT No. 329427 cancelled. In lieu thereof,
three new TCTs were issued: TCT No. 392428 in the names of Socorro Limos and spouses Rolando Delos
Reyes and Eugene Delos Reyes, TCT No. 392429 in the names of Spouses delos Reyes and TCT No. 392430
in the name of Rosa Delos Reyes.
Respondents sought the cancellation of these new TCTs on the ground that the signatures of Donata
Lardizabal and Francisco Razalan in the 1972 Deed of Absolute Sale were forgeries, because they died on
June 30, 1926 and June 5, 1971, respectively.7
In response, petitioners filed a Motion for Bill of Particulars8 claiming ambiguity in respondents claim that
their vendors are the only heirs of Donata Lardizabal. Finding no merit in the motion, the trial court denied
the same and ordered petitioners to file their answer to the complaint. 9

In their answer,10 petitioners pleaded affirmative defenses, which also constitute grounds for dismissal of
the complaint. These grounds were: (1) failure to state a cause of action inasmuch as the basis of
respondents alleged title is void, since the Extrajudicial Succession of Estate and Sale was not published
and it contained formal defects, the vendors are not the legal heirs of Donata Lardizabal, and respondents
are not the real parties-in-interest to question the title of petitioners, because no transaction ever occurred
between them; (2) non-joinder of the other heirs of Donata Lardizabal as indispensable parties; and (3)
respondents claim is barred by laches.
In their Reply, respondents denied the foregoing affirmative defenses, and insisted that the Extrajudicial
Succession of Estate and Sale was valid. They maintained their standing as owners of the subject parcel of
land and the nullity of the 1972 Absolute Deed of Sale, upon which respondents anchor their purported
title.11 They appended the sworn statement of Amadeo Razalan declaring, among other things that:
(2) Na hindi ko minana at ibinenta ang nasabing lupa kay Socorro Limos at Rosa delos Reyes at
hindi totoo na ako lang ang tagapagmana ni Donata Lardizabal;
xxxx
(4) Ang aming lola na si Donata Lardizabal ay may tatlong (3) anak na patay na sina Tomas
Razalan, Clemente Razalan at Tomasa Razalan;
(5) Ang mga buhay na anak ni Tomas Razalan ay sina; 1. Soledad Razalan; 2. Ceferina Razalan; 3.
Dominador Razalan; at 4. Amadeo Razalan. Ang mga buhay na anak ni Clemente Razalan ay sina 1.
Rogelio Lagasca (isang abnormal). Ang mga buhay na anak ni Tomasa Razalan ay sina 1. Sotera
Razalan at 2 pang kapatid;
x x x x12
Thereafter, petitioners served upon respondents a Request for Admission of the following matters:
1. That the husband of the deceased Donata Lardizabal is Francisco Razalan;
2. That the children of the deceased Sps. Donata Lardizabal and Francisco Razalan are Mercedes
Razalan, Tomasa Razalan and Tomas Razalan;
3. That this Tomasa Razalan died on April 27, 1997, if not when? [A]nd her heirs are (a) Melecio
Partido surviving husband, and her surviving children are (b) Eduardo Partido married to Elisa
Filiana, (c) Enrique Razalan Partido married to Lorlita Loriana, (d) Eduardo Razalan Partido, (e)
Sotera Razalan Partido married to James Dil-is and (f) Raymundo Razalan Partido married to
Nemesia Aczuara, and all residents of Camiling, Tarlac.
4. That Amadeo Razalan is claiming also to be a grandchild and also claiming to be sole forced heir
of Donata Lardizabal pursuant to the Succession by a Sole Heir with Sale dated January 24, 2000,
executed before Atty. Rodolfo V. Robinos.
5. That Amadeo Razalan is not among those who signed the Extra[j]udicial Succession of Estate and
Sale dated January 29, 2004 allegedly executed in favor of the plaintiffs, Sps. Francisco/Arwenia
Odones;
6. That as per Sinumpaang Salaysay of Amadeo Razalan which was submitted by the plaintiffs, the
children of Tomasa Razalan are Sotera Razalan and 2 brothers/sisters. These children of Tomasa
Razalan did not also sign the Extra[j]udicial Succession of Estate and Sale;

7. That there is/are no heirs of Clemente Razalan who appeared to have executed the Extra[j]udicial
Succession of Estate and Sale;
8. That Soledad Razalan Lagasca, Ceferina Razalan Cativo, Rogelio Lagasca Razalan and Dominador
Razalan did not file any letters (sic) of administration nor declaration of heirship before executing
the alleged Extra[j]udicial Succession of Estate and Sale in favor of plaintiffs. 13
Respondents failed to respond to the Request for Admission, prompting petitioners to file a Motion to Set
for Preliminary Hearing on the Special and Affirmative Defenses, 14 arguing that respondents failure to
respond or object to the Request for Admission amounted to an implied admission pursuant to Section 2 of
Rule 26 of the Rules of Court. As such, a hearing on the affirmative defenses had become imperative
because petitioners were no longer required to present evidence on the admitted facts.
Respondents filed a comment on the Motion, contending that the facts sought to be admitted by
petitioners were not material and relevant to the issue of the case as required by Rule 26 of the Rules of
Court. Respondents emphasized that the only attendant issue was whether the 1972 Deed of Absolute Sale
upon which petitioners base their TCTs is valid. 15
In its Resolution dated November 16, 2006, the RTC denied the Motion and held that item nos. 1 to 4 in the
Request for Admission were earlier pleaded as affirmative defenses in petitioners Answer, to which
respondents already replied on July 17, 2006. Hence, it would be redundant for respondents to make
another denial. The trial court further observed that item nos. 5, 6, and 7 in the Request for Admission
were already effectively denied by the Extrajudicial Succession of Estate and Sale appended to the
complaint and by the Sinumpaang Salaysay of Amadeo Razalan attached to respondents
Reply.16 Petitioners moved for reconsideration17 but the same was denied in an Order dated January 5,
2007.18
Petitioners elevated this incident to the CA by way of a special civil action for certiorari, alleging grave
abuse of discretion on the part of the RTC in issuing the impugned resolution and order.
On August 14, 2008, the CA dismissed the petition ruling that the affirmative defenses raised by
petitioners were not indubitable, and could be best proven in a full-blown hearing. 19
Their motion for reconsideration20 having been denied,21 petitioners are now before this Court seeking a
review of the CAs pronouncements.
In essence, petitioners contend that the affirmative defenses raised in their Motion are indubitable, as they
were impliedly admitted by respondents when they failed to respond to the Request for Admission. As
such, a preliminary hearing on the said affirmative defenses must be conducted pursuant to our ruling in
Gochan v. Gochan.22
We deny the petition.
Pertinent to the present controversy are the rules on modes of discovery set forth in Sections 1 and 2 of
Rule 26 of the Rules of Court, viz:
Section 1. Request for admission. At any time after issues have been joined, a party may file and serve
upon any other party a written request for the admission by the latter of the genuineness of any material
and relevant document described in and exhibited with the request or of the truth of any material and
relevant matter of fact set forth in the request. Copies of the documents shall be delivered with the
request unless copies have already been furnished.

SEC. 2 Implied admission. Each of the matters of which an admission is requested shall be deemed
admitted unless, within a period designated in the request, which shall be not less than fifteen (15) days
after service thereof, or within such further time as the court may allow on motion, the party to whom the
request is directed files and serves upon the party requesting the admission a sworn statement either
denying specifically the matters for which an admission is requested or setting forth in detail the reasons
why he cannot truthfully either admit or deny those matters.
xxxx
Under these rules, a party who fails to respond to a Request for Admission shall be deemed to have
impliedly admitted all the matters contained therein. It must be emphasized, however, that the application
of the rules on modes of discovery rests upon the sound discretion of the court.
As such, it is the duty of the courts to examine thoroughly the circumstances of each case and to
determine the applicability of the modes of discovery, bearing always in mind the aim to attain an
expeditious administration of justice.23
The determination of the sanction to be imposed upon a party who fails to comply with the modes of
discovery also rests on sound judicial discretion. 24 Corollarily, this discretion carries with it the
determination of whether or not to impose the sanctions attributable to such fault.
As correctly observed by the trial court, the matters set forth in petitioners Request for Admission were
the same affirmative defenses pleaded in their Answer which respondents already traversed in their Reply.
The said defenses were likewise sufficiently controverted in the complaint and its annexes. In effect,
petitioners sought to compel respondents to deny once again the very matters they had already denied, a
redundancy, which if abetted, will serve no purpose but to delay the proceedings and thus defeat the
purpose of the rule on admission as a mode of discovery which is "to expedite trial and relieve parties of
the costs of proving facts which will not be disputed on trial and the truth of which can be ascertained by
reasonable inquiry."25
A request for admission is not intended to merely reproduce or reiterate the allegations of the requesting
partys pleading but should set forth relevant evidentiary matters of fact described in the request, whose
purpose is to establish said partys cause of action or defense. Unless it serves that purpose, it is pointless,
useless, and a mere redundancy.26
Verily then, if the trial court finds that the matters in a Request for Admission were already admitted or
denied in previous pleadings by the requested party, the latter cannot be compelled to admit or deny them
anew. In turn, the requesting party cannot reasonably expect a response to the request and thereafter,
assume or even demand the application of the implied admission rule in Section 2, Rule 26.
In this case, the redundant and unnecessarily vexatious nature of petitioners Request for Admission
rendered it ineffectual, futile, and irrelevant so as to proscribe the operation of the implied admission rule
in Section 2, Rule 26 of the Rules of Court. There being no implied admission attributable to respondents
failure to respond, the argument that a preliminary hearing is imperative loses its point.
Moreover, jurisprudence27 has always been firm and constant in declaring that when the affirmative
defense raised is failure to state a cause of action, a preliminary hearing thereon is unnecessary,
erroneous, and improvident.
In any event, a perusal of respondents complaint shows that it was sufficiently clothed with a cause of
action and they were suited to file the same.

In an action for annulment of title, the complaint must contain the following allegations: (1) that the
contested land was privately owned by the plaintiff prior to the issuance of the assailed certificate of title
to the defendant; and (2) that the defendant perpetuated a fraud or committed a mistake in obtaining a
document of title over the parcel of land claimed by the plaintiff. 28
Such action goes into the issue of ownership of the land covered by a Torrens title, hence, the relief
generally prayed for by the plaintiff is to be declared as the lands true owner. 29 Thus, the real party-ininterest is the person claiming title or ownership adverse to that of the registered owner. 30
The herein complaint alleged: (1) that respondents are the owners and occupants of a parcel of land
located at Pao 1st Camiling, Tarlac, covered by OCT No. 11560 in the name of Donata Lardizabal by virtue
of an Extrajudicial Succession of Estate and Sale; and (2) that petitioners fraudulently caused the
cancellation of OCT No. 11560 and the issuance of new TCTs in their names by presenting a Deed of
Absolute Sale with the forged signatures of Donata Lardizabal and her husband, Francisco Razalan.
The absence of any transaction between petitioners and respondents over the land is of no moment, as
the thrust of the controversy is the respondents adverse claims of rightful title and ownership over the
same property, which arose precisely because of the conflicting sources of their respective claims.
As to the validity of the Extrajudicial Succession of Estate and Sale and the status of petitioners
predecessors-in-interest as the only heirs of Donata Lardizabal, these issues go into the merits of the
parties respective claims and defenses that can be best determined on the basis of preponderance of the
evidence they will adduce in a full-blown trial. A preliminary hearing, the objective of which is for the court
to determine whether or not the case should proceed to trial, will not sufficiently address such issues.
Anent the alleged non-joinder of indispensable parties, it is settled that the non-joinder of indispensable
parties is not a ground for the dismissal of an action. The remedy is to implead the non-party claimed to be
indispensable. 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. It is only when the plaintiff refuses to implead an
indispensable party despite the order of the court, that the latter may dismiss the complaint. 31 In this case,
no such order was issued by the trial court.1awphi1
Equally settled is the fact that laches is evidentiary in nature and it may not be established by mere
allegations in the pleadings and can not be resolved in a motion to dismiss. 32
Finally, we cannot subscribe to petitioners contention that the status of the heirs of Donata Lardizabal who
sold the property to the respondents must first be established in a special proceeding. The
pronouncements in Heirs of Yaptinchay v. Hon. Del Rosario33 and in Reyes v. Enriquez34 that the petitioners
invoke do not find application in the present controversy.
In both cases, this Court held that the declaration of heirship can be made only in a special proceeding and
not in a civil action. It must be noted that in Yaptinchay and Enriquez, plaintiffs action for annulment of
title was anchored on their alleged status as heirs of the original owner whereas in this case, the
respondents claim is rooted on a sale transaction. Respondents herein are enforcing their rights as buyers
in good faith and for value of the subject land and not as heirs of the original owner. Unlike in Yaptinchay
and Enriquez, the filiation of herein respondents to the original owner is not determinative of their right to
claim title to and ownership of the property.
WHEREFORE, foregoing considered, the instant Petition is DENIED. The Decision of the Court of Appeals
dated August 14, 2008 and its Resolution dated March 9, 2009 are hereby AFFIRMED.
SO ORDERED.

G.R. No. 167979

March 15, 2006

WILSON S. UY, as Judicial Administrator of the Intestate Estate of the Deceased JOSE K. C.
UY, Petitioner,
vs.
THE HON. COURT OF APPEALS, HON. ANASTACIO C. RUFON, As Presiding Judge of Branch 52, of
the Regional Trial Court, Sixth Judicial Region, sitting at Bacolod City, and JOHNNY K. H.
UY, Respondents.
DECISION
YNARES-SANTIAGO, J.:
Petitioner assails the August 20, 2004 Decision of the Court of Appeals in CA-G.R. SP No. 72678, 1 affirming
the January 22, 2002 Order of the Regional Trial Court, Branch 52 of Bacolod City in Special Proceedings
No. 97-241,2 as well as the April 29, 2005 Resolution denying the motion for reconsideration. 3
The facts of the case show that Jose K.C. Uy (Deceased) died intestate on August 20, 1996 and is survived
by his spouse, Sy Iok Ing Uy, and his five children, namely, Lilian S. Uy, Lilly S. Uy, Livian S. Uy-Garcia ,
Lilen S. Uy and Wilson S. Uy (Petitioner).
On February 18, 1997, Special Proceedings No. 97-241 was instituted and Lilia Hofilea was appointed as
special administrator of the estate of the deceased. Petitioner moved to reconsider the order appointing
Lilia Hofilea as special administrator with prayer that letters of administration be issued to him instead. 4
On June 9, 1998, Judge Ramon B. Posadas revoked Lilia Hofileas appointment as special administrator
and denied her petition to be appointed as regular administrator. Meanwhile, letters of administration were
granted to petitioner, who took his oath of office as administrator on June 23, 1998.
On February 17, 1999, Johnny K. H. Uy (Private Respondent) filed a motion to intervene, praying that he be
appointed as administrator of the estate in lieu of petitioner. He alleged that he is the brother and a
creditor of the deceased, and has knowledge of the properties that should be included in the estate.
The trial court initially denied private respondents motion to intervene, 5 but on March 16, 2000,6 it
reconsidered its earlier order and appointed private respondent as co-administrator of the estate.
Petitioners motion for reconsideration was denied.
Petitioner then moved that private respondent bring into the estate properties belonging to the deceased,
which motion was granted by the trial court. Not satisfied with the compliance of private respondent,
petitioner reiterated his motion for removal of the former as co-administrator, but the same was denied.
The trial court found that private respondent substantially complied with the order directing him to bring
into the estate properties owned by or registered in the name of the deceased not subject of any adverse
claim or controversy when he listed the alleged properties suspected to be concealed, embezzled or
conveyed away by the persons named therein. Thus, it found no cogent reason to remove private
respondent as co-administrator.7
Thereafter, petitioner appealed to the Court of Appeals by way of a petition for certiorari which however,
dismissed the petition.
The Court of Appeals held that the refusal of the trial court to remove private respondent as coadministrator of the estate is neither an error of jurisdiction nor a grave abuse of discretion; that the
appointment of private respondent was justified; that the order of preference under Section 6 of Rule 78 of

the Rules of Court does not rule out the appointment of co-administrators; that the institution of a case for
annulment of title and reconveyance against respondent does not justify private respondents removal as
co-administrator.
Petitioners motion for reconsideration was denied, hence, this petition on the following grounds:
WHETHER OR NOT THE COURT OF APPEALS AND THE RESPONDENT REGIONAL TRIAL COURT HAVE ACTED
WITHOUT JURISDICTION OR IN GRAVE ABUSE OF THEIR DISCRETION TANTAMOUNT TO LACK OF
JURISDICTION (sic), IN VIOLATION [OF] THE ESTABLISHED AND ACCEPTED RULE OF LAW AND IN COMPLETE
DISREGARD OF SUBSTANTIAL JUSTICE AND EQUITY IN APPOINTING A CO-ADMINISTRATOR OF AN ESTATE (IN
THE PROCESS OF SETTLEMENT) WHERE THERE IS AN INCUMBENT ADMINISTRATOR WHOSE APPOINTMENT
IS FIRM, FINAL, IMPLEMENTED AND INAPPEALABLE, AND WHICH (sic) APPOINTMENT HAS NOT BEEN
CANCELLED, RECALLED, REVOKED OR RESCINDED BY APPOINTING, AT THAT, A PERSON
(a)
ALIEN TO THE ESTATE OF THE DECEASED, WITH VARIOUS SERIOUS INTERESTS (ACTUAL JUDICIAL
CONTROVERSIES) IN CONFLICT WITH THOSE OF THE ESTATE, AND
(B)
WITH NO PROPER INTEREST IN THE ESTATE AND WHO IS PERSONALLY UNFIT, UNSUITABLE, UNWORTHY,
UNDESERVING OF THE TRUST INHERENT IN THE POSITION OF CO-ADMINISTRATOR OF THE ESTATE, AND
UNACCEPTABLE AND REPULSIVE TO THE FAMILY OF THE LEGAL HEIRS OF THE DECEASED; AND THEN
REFUSING TO REMOVE HIM AS CO-ADMINISTRATOR AFTER IT WAS SHOWN THAT HIS REPRESENTATIONS ON
WHICH HE WAS APPOINTED CO-ADMINISTRATOR WERE EMPTY AND FALSE; AND
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS DENIED PETITIONER HIS CONSTITUTIONAL
RIGHTS TO DUE PROCESS OF LAW AND HIS RIGHT TO PETITION THE GOVERNMENT FOR REDRESS OF
GRIEVANCES BY NOT ADDRESSING AND RESOLVING THE ISSUES BROUGHT TO IT BY THE PETITIONER,
MORE ESPECIFICALLY THE ISSUES OF
(1)
RES JUDICATA AND STABILITY OF THE JUDGMENT APPOINTING THE PETITIONER HEREIN AS JUDICIAL
ADMINISTRATOR OF THE ESTATE IN QUESTION, AND
(2)
DECIDING THE ISSUES INVOLVED IN A MANNER CONTRARY TO THE RULES SET DOWN BY THE
SUPREME COURT ON THE MATTER.8
The main issues for resolution are: (1) whether the trial court acted with grave abuse of discretion in
appointing private respondent as co-administrator to the estate of the deceased; and (2) whether the
Court of Appeals deprived petitioner of his constitutional right to due process and his right to petition the
government for redress of grievances by not addressing the issues raised before it.
The petition is without merit.
Petitioner asserts that his appointment as a regular administrator is already final, unassailable or res
judicata; that the inferior court has no authority to re-open the issue of the appointment of an
administrator without removing the incumbent administrator; that private respondent is not only alien to

the estate, but has a conflict of interest with it; that the trial courts appointment of private respondent as
co-administrator constitutes grave abuse of discretion tantamount to lack of jurisdiction.
There is no question that petitioner was appointed as regular administrator of the estate of the deceased
Jose K. C. Uy on June 9, 1998. However, private respondent in his motion to intervene sought to be
appointed as administrator as he is not only the brother of the decedent but also a creditor who knows the
extent of the latters properties. Thus, the trial court, while retaining petitioner as administrator, appointed
private respondent as co-administrator of the estate.
The main function of a probate court is to settle and liquidate the estates of deceased persons either
summarily or through the process of administration.9 In the case at bar, the trial court granted letters of
administration to petitioner and thereafter to private respondent as co-administrator. Under Section 6, Rule
78 of the Rules of Court, the preference to whom letters of administration may be granted are as follows:
SEC. 6. When and to whom letters of administration granted. If no executor is named in the will, or the
executor or executors are incompetent, refuse the trust, or fail to give bond, or a person dies intestate,
administration shall be granted:
(a) To the surviving husband or wife, as the case may be, or next of kin, or both, in the discretion of
the court, or to such person as such surviving husband or wife, or next of kin, requests to have
appointed, if competent and willing to serve;
(b) If such surviving husband or wife, as the case may be, or next of kin, or the person selected by
them, be incompetent or unwilling, or if the husband or widow, or next of kin, neglects for thirty
(30) days after the death of the person to apply for administration or to request that administration
be granted to some other person, it may be granted to one or more of the principal creditors, if
competent and willing to serve;
(c) If there is no such creditor competent and willing to serve, it may be granted to such other
person as the court may select.
The order of preference in the appointment of an administrator depends on the attendant facts and
circumstances.10 In Sioca v. Garcia,11 this Court set aside the order of preference, to wit:
It is well settled that a probate court cannot arbitrarily and without sufficient reason disregard the
preferential rights of the surviving spouse to the administration of the estate of the deceased spouse. But,
if the person enjoying such preferential rights is unsuitable, the court may appoint another
person. The determination of a persons suitability for the office of administrator rests, to a great extent,
in the sound judgment of the court exercising the power of appointment and such judgment will not be
interfered with on appeal unless it appears affirmatively that the court below was in error.
x x x Unsuitableness may consist in adverse interest of some kind or hostility to those
immediately interested in the estate. x x x.12 (Emphasis supplied, citations omitted)
In the instant case, the order of preference was not disregarded by the trial court. Instead of removing
petitioner, it appointed private respondent, a creditor, as co-administrator since the estate was sizeable
and petitioner was having a difficult time attending to it alone. In fact, petitioner did not submit any report
regarding the estate under his administration. In its March 16, 2000 Order, 13 the trial court found thus:
Going over all the arguments of the parties, after hearing has been set relative thereto, this Court has
observed that indeed the judicial administrator had not submitted to the Court any report about the Estate
under his administration except those involving the cases he filed and/or intervened in other branches.
This may be due to his being inexperienced, but this fact will not be reason enough to remove him from

the administration of the Estate as Judicial Administrator thereof. However, considering that the Intervenor
is claiming to be the patriarch of the Uy family and who claims to have enormous knowledge of the
businesses and properties of the decedent Jose K.C. Uy, it is the feeling of this Court that it will be very
beneficial to the Estate if he be appointed co-administrator (without removing the already appointed
Judicial Administrator) of the Estate of Jose K.C. Uy, if only to shed more light to the alleged enormous
properties/businesses and to bring them all to the decedents Estate pending before this Court. 14
A co-administrator performs all the functions and duties and exercises all the powers of a regular
administrator, only that he is not alone in the administration.15 The practice of appointing coadministrators in estate proceedings is not prohibited. In Gabriel v. Court of Appeals,16 this Court reaffirmed
that jurisprudence allows the appointment of co-administrators under certain circumstances, to wit:
Under both Philippine and American jurisprudence, the appointment of co-administrators has been upheld
for various reasons, viz: (1) to have the benefit of their judgment and perhaps at all times to have different
interests represented; (2) where justice and equity demand that opposing parties or factions be
represented in the management of the estate of the deceased; (3) where the estate is large or, from
any cause, an intricate and perplexing one to settle; (4) to have all interested persons satisfied and
the representatives to work in harmony for the best interests of the estate; and (5) when a person entitled
to the administration of an estate desires to have another competent person associated with him in the
office.17 (Emphasis supplied)
Thus, petitioners argument that the trial court cannot re-open the issue of the appointment of an
administrator without removing the incumbent administrator is erroneous. In probate proceedings,
considerable latitude is allowed a probate court in modifying or revoking its own orders as long as the
proceedings are pending in the same court and timely applications or motions for such modifications or
revocations are made by the interested parties.18 In the instant case, the estate of the deceased has not
yet been settled and the case is still within the jurisdiction of the court.
The foregoing discussion renders moot the second issue raised by petitioner. We see no cogent reason to
set aside the findings of the Court of Appeals, because its findings of fact is conclusive and binding on the
parties and not subject to review by this Court, unless the case falls under any of the exceptions to the
rule.19
WHEREFORE, the petition is DENIED. The August 20, 2004 Decision of the Court of Appeals in CA-G.R. SP
No. 72678 affirming the January 22, 2002 Order of the Regional Trial Court in Special Proceedings No. 97241, as well as the April 29, 2005 Resolution denying the motion for reconsideration are
AFFIRMED.1avvphil.net
SO ORDERED.

[G.R. No. 141538. March 23, 2004]

Hermana R. Cerezo, petitioner, vs. David Tuazon, respondent.
DECISION
CARPIO, J.:
The Case
This is a petition for review on certiorari[1] to annul the Resolution[2] dated 21 October 1999 of the
Court of Appeals in CA-G.R. SP No. 53572, as well as its Resolution dated 20 January 2000 denying the
motion for reconsideration. The Court of Appeals denied the petition for annulment of the
Decision[3] dated 30 May 1995 rendered by the Regional Trial Court of Angeles City, Branch 56 (trial court),
in Civil Case No. 7415. The trial court ordered petitioner Hermana R. Cerezo (Mrs. Cerezo) to pay
respondent David Tuazon (Tuazon) actual damages, loss of earnings, moral damages, and costs of suit.
Antecedent Facts
Around noontime of 26 June 1993, a Country Bus Lines passenger bus with plate number NYA 241
collided with a tricycle bearing plate number TC RV 126 along Captain M. Palo Street, Sta. Ines, Mabalacat,
Pampanga. On 1 October 1993, tricycle driver Tuazon filed a complaint for damages against Mrs. Cerezo,
as owner of the bus line, her husband Attorney Juan Cerezo (Atty. Cerezo), and bus driver Danilo A. Foronda
(Foronda). The complaint alleged that:
7. At the time of the incident, plaintiff [Tuazon] was in his proper lane when the second-named defendant
[Foronda], being then the driver and person in charge of the Country Bus with plate number NYA 241, did
then and there willfully, unlawfully, and feloniously operate the said motor vehicle in a negligent, careless,
and imprudent manner without due regard to traffic rules and regulations, there being a Slow Down sign
near the scene of the incident, and without taking the necessary precaution to prevent loss of lives or
injuries, his negligence, carelessness and imprudence resulted to severe damage to the tricycle and
serious physical injuries to plaintiff thus making him unable to walk and becoming disabled, with his thumb
and middle finger on the left hand being cut[.] [4]
On 1 October 1993, Tuazon filed a motion to litigate as a pauper. Subsequently, the trial court issued
summons against Atty. Cerezo and Mrs. Cerezo (the Cerezo spouses) at the Makati address stated in the
complaint. However, the summons was returned unserved on 10 November 1993 as the Cerezo spouses
no longer held office nor resided in Makati. On 18 April 1994, the trial court issued alias summons against
the Cerezo spouses at their address in Barangay Sta. Maria, Camiling, Tarlac. The alias summons and a
copy of the complaint were finally served on 20 April 1994 at the office of Atty. Cerezo, who was then
working as Tarlac Provincial Prosecutor. Atty. Cerezo reacted angrily on learning of the service of summons
upon his person. Atty. Cerezo allegedly told Sheriff William Canlas: Punyeta, ano ang gusto mong
mangyari? Gusto mong hindi ka makalabas ng buhay dito? Teritoryo ko ito. Wala ka sa teritoryo mo.[5]
The records show that the Cerezo spouses participated in the proceedings before the trial court. The
Cerezo spouses filed a comment with motion for bill of particulars dated 29 April 1994 and a reply to
opposition to comment with motion dated 13 June 1994.[6] On 1 August 1994, the trial court issued an
order directing the Cerezo spouses to file a comment to the opposition to the bill of particulars. Atty. Elpidio
B. Valera (Atty. Valera) of Valera and Valera Law Offices appeared on behalf of the Cerezo spouses. On 29
August 1994, Atty. Valera filed an urgent ex-parte motion praying for the resolution of Tuazons motion to
litigate as a pauper and for the issuance of new summons on the Cerezo spouses to satisfy proper service
in accordance with the Rules of Court.[7]

On 30 August 1994, the trial court issued an order resolving Tuazons motion to litigate as a pauper and
the Cerezo spouses urgent ex-parte motion. The order reads:
At the hearing on August 30, 1994, the plaintiff [Tuazon] testified that he is presently jobless; that at the
time of the filing of this case, his son who is working in Malaysia helps him and sends him once in a
while P300.00 a month, and that he does not have any real property. Attached to the Motion to Litigate as
Pauper are his Affidavit that he is unemployed; a Certification by the Barangay Captain of his poblacion
that his income is not enough for his familys subsistence; and a Certification by the Office of the Municipal
Assessor that he has no landholding in the Municipality of Mabalacat, Province ofPampanga.
The Court is satisfied from the unrebutted testimony of the plaintiff that he is entitled to prosecute his
complaint in this case as a pauper under existing rules.
On the other hand, the Court denies the prayer in the Appearance and Urgent Ex-Parte Motion requiring
new summons to be served to the defendants. The Court is of the opinion that any infirmity in the service
of the summons to the defendant before plaintiff was allowed to prosecute his complaint in this case as a
pauper has been cured by this Order.
If within 15 days from receipt of this Order, the defendants do not question on appeal this Order of this
Court, the Court shall proceed to resolve the Motion for Bill of Particulars. [8]
On 27 September 1994, the Cerezo spouses filed an urgent ex-parte motion for reconsideration. The
trial court denied the motion for reconsideration.
On 14 November 1994, the trial court issued an order directing the Cerezo spouses to file their answer
within fifteen days from receipt of the order. The Cerezo spouses did not file an answer. On 27 January
1995, Tuazon filed a motion to declare the Cerezo spouses in default.On 6 February 1995, the trial court
issued an order declaring the Cerezo spouses in default and authorizing Tuazon to present his evidence. [9]
On 30 May 1995, after considering Tuazons testimonial and documentary evidence, the trial court
ruled in Tuazons favor. The trial court made no pronouncement on Forondas liability because there was no
service of summons on him. The trial court did not hold Atty. Cerezo liable as Tuazon failed to show that
Mrs. Cerezos business benefited the family, pursuant to Article 121(3) of the Family Code. The trial court
held Mrs. Cerezo solely liable for the damages sustained by Tuazon arising from the negligence of Mrs.
Cerezos employee, pursuant to Article 2180 of the Civil Code. The dispositive portion of the trial courts
decision reads:
WHEREFORE, judgment is hereby rendered ordering the defendant Hermana Cerezo to pay the plaintiff:
a) For Actual Damages
1) Expenses for operation and medical
Treatment - P69,485.35
2) Cost of repair of the tricycle - 39,921.00
b) For loss of earnings - 43,300.00
c) For moral damages - 20,000.00
d) And to pay the cost of the suit.

The docket fees and other expenses in the filing of this suit shall be lien on whatever judgment may be
rendered in favor of the plaintiff.
SO ORDERED.[10]
Mrs. Cerezo received a copy of the decision on 25 June 1995. On 10 July 1995, Mrs. Cerezo filed before
the trial court a petition for relief from judgment on the grounds of fraud, mistake or excusable
negligence. Testifying before the trial court, both Mrs. Cerezo and Atty. Valera denied receipt of notices of
hearings and of orders of the court. Atty. Valera added that he received no notice before or during the 8
May 1995elections, when he was a senatorial candidate for the KBL Party, and very busy, using his office
and residence as Party National Headquarters. Atty. Valera claimed that he was able to read the decision of
the trial court only after Mrs. Cerezo sent him a copy. [11]
Tuazon did not testify but presented documentary evidence to prove the participation of the Cerezo
spouses in the case. Tuazon presented the following exhibits:
Exhibit 1 - Sheriffs return and summons;
Exhibit 1-A - Alias summons dated April 20, 1994;
Exhibit 2 - Comment with Motion;
Exhibit 3 - Minutes of the hearing held on August 1, 1994;
Exhibit 3-A - Signature of defendants counsel;
Exhibit 4 - Minutes of the hearing held on August 30, 1994;
Exhibit 4-A - Signature of the defendants counsel;
Exhibit 5 - Appearance and Urgent Ex-Parte Motion;
Exhibit 6 - Order dated November 14, 1994;
Exhibit 6-A - Postal certification dated January 13, 1995;
Exhibit 7 - Order dated February [illegible];
Exhibit 7-A - Courts return slip addressed to Atty. Elpidio
Valera;
Exhibit 7-B - Courts return slip addressed to Spouses Juan
and Hermana Cerezo;
Exhibit 8 - Decision dated May [30], 1995
Exhibit 8-A - Courts return slip addressed to defendant Hermana
Cerezo;

Exhibit 8-B - Courts return slip addressed to defendants counsel,

Atty. Elpidio Valera;
Exhibit 9 - Order dated September 21, 1995;
Exhibit 9-A - Second Page of Exhibit 9;
Exhibit 9-B - Third page of Exhibit 9;
Exhibit 9-C - Fourth page of Exhibit 9;
Exhibit 9-D - Courts return slip addressed to Atty. Elpidio Valera;
and
Exhibit 9-E - Courts return slip addressed to plaintiffs counsel,
Atty. Norman Dick de Guzman.[12]
On 4 March 1998, the trial court issued an order[13] denying the petition for relief from judgment. The
trial court stated that having received the decision on 25 June 1995, the Cerezo spouses should have filed
a notice of appeal instead of resorting to a petition for relief from judgment. The trial court refused to grant
relief from judgment because the Cerezo spouses could have availed of the remedy of appeal. Moreover,
the Cerezo spouses not only failed to prove fraud, accident, mistake or excusable negligence by conclusive
evidence, they also failed to prove that they had a good and substantial defense. The trial court noted that
the Cerezo spouses failed to appeal because they relied on an expected settlement of the case.
The Cerezo spouses subsequently filed before the Court of Appeals a petition for certiorari under
Section 1 of Rule 65. The petition was docketed as CA-G.R. SP No. 48132. [14] The petition questioned
whether the trial court acquired jurisdiction over the case considering there was no service of summons on
Foronda, whom the Cerezo spouses claimed was an indispensable party. In a resolution [15] dated 21 January
1999, the Court of Appeals denied the petition for certiorari and affirmed the trial courts order denying the
petition for relief from judgment.The Court of Appeals declared that the Cerezo spouses failure to file an
answer was due to their own negligence, considering that they continued to participate in the proceedings
without filing an answer. There was also nothing in the records to show that the Cerezo spouses actually
offered a reasonable settlement to Tuazon. The Court of Appeals also denied Cerezo spouses motion for
reconsideration for lack of merit.
The Cerezo spouses filed before this Court a petition for review on certiorari under Rule 45. Atty.
Cerezo himself signed the petition, docketed as G.R. No. 137593. On 13 April 1999, this Court rendered a
resolution denying the petition for review on certiorari for failure to attach an affidavit of service of copies
of the petition to the Court of Appeals and to the adverse parties. Even if the petition complied with this
requirement, the Court would still have denied the petition as the Cerezo spouses failed to show that the
Court of Appeals committed a reversible error. The Courts resolution was entered in the Book of Entries
and Judgments when it became final and executory on 28 June 1999.[16]
Undaunted, the Cerezo spouses filed before the Court of Appeals on 6 July 1999 a petition for
annulment of judgment under Rule 47 with prayer for restraining order. Atty. Valera and Atty. Dionisio S.
Daga (Atty. Daga) represented Mrs. Cerezo in the petition, docketed as CA-G.R. SP No. 53572. [17] The
petition prayed for the annulment of the 30 May 1995 decision of the trial court and for the issuance of a
writ of preliminary injunction enjoining execution of the trial courts decision pending resolution of the
petition.

The Court of Appeals denied the petition for annulment of judgment in a resolution dated 21 October
1999. The resolution reads in part:
In this case, records show that the petitioner previously filed with the lower court a Petition for Relief from
Judgment on the ground that they were wrongfully declared in default while waiting for an amicable
settlement of the complaint for damages. The court a quo correctly ruled that such petition is without
merit. The defendant spouses admit that during the initial hearing they appeared before the court and
even mentioned the need for an amicable settlement. Thus, the lower court acquired jurisdiction over the
defendant spouses.
Therefore, petitioner having availed of a petition for relief, the remedy of an annulment of judgment is no
longer available. The proper action for the petitioner is to appeal the order of the lower court denying the
petition for relief.
Wherefore, the instant petition could not be given due course and should accordingly be dismissed.
SO ORDERED.[18]

[19]

On 20 January 2000, the Court of Appeals denied the Cerezo spouses motion for reconsideration.
The Court of Appeals stated:

A distinction should be made between a courts jurisdiction over a person and its jurisdiction over the
subject matter of a case. The former is acquired by the proper service of summons or by the parties
voluntary appearance; while the latter is conferred by law.
Resolving the matter of jurisdiction over the subject matter, Section 19(1) of B[atas] P[ambansa] 129
provides that Regional Trial Courts shall exercise exclusive original jurisdiction in all civil actions in which
the subject of the litigation is incapable of pecuniary estimation. Thus it was proper for the lower court to
decide the instant case for damages.
Unlike jurisdiction over the subject matter of a case which is absolute and conferred by law; any defects
[sic] in the acquisition of jurisdiction over a person (i.e., improper filing of civil complaint or improper
service of summons) may be waived by the voluntary appearance of parties.
The lower court admits the fact that no summons was served on defendant Foronda. Thus, jurisdiction over
the person of defendant Foronda was not acquired, for which reason he was not held liable in this
case. However, it has been proven that jurisdiction over the other defendants was validly acquired by the
court a quo.
The defendant spouses admit to having appeared in the initial hearings and in the hearing for plaintiffs
motion to litigate as a pauper. They even mentioned conferences where attempts were made to reach an
amicable settlement with plaintiff. However, the possibility of amicable settlement is not a good and
substantial defense which will warrant the granting of said petition.
xxx
Assuming arguendo that private respondent failed to reserve his right to institute a separate action for
damages in the criminal action, the petitioner cannot now raise such issue and question the lower courts
jurisdiction because petitioner and her husband have waived such right by voluntarily appearing in the civil
case for damages. Therefore, the findings and the decision of the lower court may bind them.
Records show that the petitioner previously filed with the lower court a Petition for Relief from Judgment on
the ground that they were wrongfully declared in default while waiting for an amicable settlement of the

complaint for damages. The court a quo correctly ruled that such petition is without merit, jurisdiction
having been acquired by the voluntary appearance of defendant spouses.
Once again, it bears stressing that having availed of a petition for relief, the remedy of annulment of
judgment is no longer available.
Based on the foregoing, the motion for reconsideration could not be given due course and is hereby
DENIED.
SO ORDERED.[20]
The Issues
On 7 February 2000, Mrs. Cerezo, this time with Atty. Daga alone representing her, filed the present
petition for review on certioraribefore this Court. Mrs. Cerezo claims that:
1. In dismissing the Petition for Annulment of Judgment, the Court of Appeals assumes that the
issues raised in the petition for annulment is based on extrinsic fraud related to the denied
petition for relief notwithstanding that the grounds relied upon involves questions of lack of
jurisdiction.
2. In dismissing the Petition for Annulment, the Court of Appeals disregarded the allegation that
the lower court[s] findings of negligence against defendant-driver Danilo Foronda [whom] the
lower court did not summon is null and void for want of due process and consequently, such
findings of negligence which is [sic] null and void cannot become the basis of the lower court to
adjudge petitioner-employer liable for civil damages.
3. In dismissing the Petition for Annulment, the Court of Appeals ignored the allegation that
defendant-driver Danilo A. Foronda whose negligence is the main issue is an indispensable
party whose presence is compulsory but [whom] the lower court did not summon.
4. In dismissing the Petition for Annulment, the Court of Appeals ruled that
assuming arguendo that private respondent failed to reserve his right to institute a separate
action for damages in the criminal action, the petitioner cannot now raise such issue and
question the lower courts jurisdiction because petitioner [has] waived such right by voluntarily
appearing in the civil case for damages notwithstanding that lack of jurisdiction cannot be
waived.[21]
The Courts Ruling
The petition has no merit. As the issues are interrelated, we shall discuss them jointly.
Remedies Available
to a Party Declared in Default
An examination of the records of the entire proceedings shows that three lawyers filed and signed
pleadings on behalf of Mrs. Cerezo, namely, Atty. Daga, Atty. Valera, and Atty. Cerezo. Despite their
number, Mrs. Cerezos counsels failed to avail of the proper remedies. It is either by sheer ignorance or by
malicious manipulation of legal technicalities that they have managed to delay the disposition of the
present case, to the detriment of pauper litigant Tuazon.

Mrs. Cerezo claims she did not receive any copy of the order declaring the Cerezo spouses in
default. Mrs. Cerezo asserts that she only came to know of the default order on 25 June 1995, when she
received a copy of the decision. On 10 July 1995, Mrs. Cerezo filed before the trial court a petition for relief
from judgment under Rule 38, alleging fraud, mistake, or excusable negligence as grounds. On 4 March
1998, the trial court denied Mrs. Cerezos petition for relief from judgment. The trial court stated that Mrs.
Cerezo could have availed of appeal as a remedy and that she failed to prove that the judgment was
entered through fraud, accident, mistake, or excusable negligence. Mrs. Cerezo then filed before the Court
of Appeals a petition for certiorari under Section 1 of Rule 65 assailing the denial of the petition for relief
from judgment. On 21 January 1999, the Court of Appeals dismissed Mrs. Cerezos petition. On 24 February
1999, the appellate court denied Mrs. Cerezos motion for reconsideration. On 11 March 1999, Mrs. Cerezo
filed before this Court a petition for review on certiorari under Rule 45, questioning the denial of the
petition for relief from judgment. We denied the petition and our resolution became final and executory
on 28 June 1999.
On 6 July 1999, a mere eight days after our resolution became final and executory, Mrs. Cerezo filed
before the Court of Appeals a petition for annulment of the judgment of the trial court under Rule
47. Meanwhile, on 25 August 1999, the trial court issued over the objection of Mrs. Cerezo an order of
execution of the judgment in Civil Case No. 7415. On 21 October 1999, the Court of Appeals dismissed the
petition for annulment of judgment. On 20 January 2000, the Court of Appeals denied Mrs. Cerezos motion
for reconsideration. On 7 February 2000, Mrs. Cerezo filed the present petition for review
on certiorari under Rule 45 challenging the dismissal of her petition for annulment of judgment.
Lina v. Court of Appeals[22] enumerates the remedies available to a party declared in default:
a) The defendant in default may, at any time after discovery thereof and before judgment, file
a motion under oath to set aside the order of default on the ground that his failure to
answer was due to fraud, accident, mistake or excusable negligence, and that he has a
meritorious defense (Sec. 3, Rule 18 [now Sec. 3(b), Rule 9]);
b) If the judgment has already been rendered when the defendant discovered the default, but
before the same has become final and executory, he may file a motion for new trial under
Section 1 (a) of Rule 37;
c) If the defendant discovered the default after the judgment has become final and executory, he
may file a petition for relief under Section 2 [now Section 1] of Rule 38; and
d) He may also appeal from the judgment rendered against him as contrary to the evidence or to
the law, even if no petition to set aside the order of default has been presented by him (Sec. 2,
Rule 41). (Emphasis added)
Moreover, a petition for certiorari to declare the nullity of a judgment by default is also available if the
trial court improperly declared a party in default, or even if the trial court properly declared a party in
default, if grave abuse of discretion attended such declaration. [23]
Mrs. Cerezo admitted that she received a copy of the trial courts decision on 25 June 1995. Based on
this admission, Mrs. Cerezo had at least three remedies at her disposal: an appeal, a motion for new trial,
or a petition for certiorari.
Mrs. Cerezo could have appealed under Rule 41[24] from the default judgment within 15 days from
notice of the judgment. She could have availed of the power of the Court of Appeals to try cases and
conduct hearings, receive evidence, and perform all acts necessary to resolve factual issues raised in
cases falling within its appellate jurisdiction.[25]

Mrs. Cerezo also had the option to file under Rule 37 [26] a motion for new trial within the period for
taking an appeal. If the trial court grants a new trial, the original judgment is vacated, and the action will
stand for trial de novo. The recorded evidence taken in the former trial, as far as the same is material and
competent to establish the issues, shall be used at the new trial without retaking the same. [27]
Mrs. Cerezo also had the alternative of filing under Rule 65 [28] a petition for certiorari assailing the
order of default within 60 days from notice of the judgment. An order of default is interlocutory, and an
aggrieved party may file an appropriate special civil action under Rule 65. [29] In a petition for certiorari, the
appellate court may declare void both the order of default and the judgment of default.
Clearly, Mrs. Cerezo had every opportunity to avail of these remedies within the reglementary periods
provided under the Rules of Court.However, Mrs. Cerezo opted to file a petition for relief from judgment,
which is available only in exceptional cases. A petition for relief from judgment should be filed within
the reglementary period of 60 days from knowledge of judgment and six months from entry of judgment,
pursuant to
Rule 38 of the Rules of Civil Procedure. [30] Tuason v. Court of Appeals[31] explained the nature of a
petition for relief from judgment:
When a party has another remedy available to him, which may either be a motion for new trial or appeal
from an adverse decision of the trial court, and he was not prevented by fraud, accident, mistake or
excusable negligence from filing such motion or taking such appeal, he cannot avail himself of this
petition. Indeed, relief will not be granted to a party who seeks avoidance from the effects of the judgment
when the loss of the remedy at law was due to his own negligence; otherwise the petition for relief can be
used to revive the right to appeal which has been lost thru inexcusable negligence.
Evidently, there was no fraud, accident, mistake, or excusable negligence that prevented Mrs. Cerezo
from filing an appeal, a motion for new trial or a petition for certiorari. It was error for her to avail of a
petition for relief from judgment.
After our resolution denying Mrs. Cerezos petition for relief became final and executory, Mrs. Cerezo, in
her last ditch attempt to evade liability, filed before the Court of Appeals a petition for annulment of the
judgment of the trial court. Annulment is available only on the grounds of extrinsic fraud and lack of
jurisdiction. If based on extrinsic fraud, a party must file the petition within four years from its discovery,
and if based on lack of jurisdiction, before laches or estoppel bars the petition. Extrinsic fraud is not a valid
ground if such fraud was used as a ground, or could have been used as a ground, in a motion for new trial
or petition for relief from judgment.[32]
Mrs. Cerezo insists that lack of jurisdiction, not extrinsic fraud, was her ground for filing the petition for
annulment of judgment. However, a party may avail of the remedy of annulment of judgment under Rule
47 only if the ordinary remedies of new trial, appeal, petition for relief from judgment, or other appropriate
remedies are no longer available through no fault of the party. [33] Mrs. Cerezo could have availed of a new
trial or appeal but through her own fault she erroneously availed of the remedy of a petition for relief,
which was denied with finality.Thus, Mrs. Cerezo may no longer avail of the remedy of annulment.
In any event, the trial court clearly acquired jurisdiction over Mrs. Cerezos person. Mrs. Cerezo actively
participated in the proceedings before the trial court, submitting herself to the jurisdiction of the trial
court. The defense of lack of jurisdiction fails in light of her active participation in the trial court
proceedings. Estoppel or laches may also bar lack of jurisdiction as a ground for nullity especially if raised
for the first time on appeal by a party who participated in the proceedings before the trial court, as what
happened in this case.[34]

For these reasons, the present petition should be dismissed for utter lack of merit. The extraordinary
action to annul a final judgment is restricted to the grounds specified in the rules. The reason for the
restriction is to prevent this extraordinary action from being used by a losing party to make a complete
farce of a duly promulgated decision that has long become final and executory. There would be no end to
litigation if parties who have unsuccessfully availed of any of the appropriate remedies or lost them
through their fault could still bring an action for annulment of judgment. [35] Nevertheless, we shall discuss
the issues raised in the present petition to clear any doubt about the correctness of the decision of the trial
court.
Mrs. Cerezos Liability and the
Trial Courts Acquisition of Jurisdiction
Mrs. Cerezo contends that the basis of the present petition for annulment is lack of jurisdiction. Mrs.
Cerezo asserts that the trial court could not validly render judgment since it failed to acquire jurisdiction
over Foronda. Mrs. Cerezo points out that there was no service of summons on Foronda. Moreover, Tuazon
failed to reserve his right to institute a separate civil action for damages in the criminal action. Such
contention betrays a faulty foundation. Mrs. Cerezos contention proceeds from the point of view of criminal
law and not of civil law, while the basis of the present action of Tuazon is quasi-delict under the Civil Code,
not delict under the Revised Penal Code.
The same negligent act may produce civil liability arising from a delict under Article 103 of the Revised
Penal Code, or may give rise to an action for a quasi-delict under Article 2180 of the Civil Code. An
aggrieved party may choose between the two remedies. An action based on a quasi-delict may proceed
independently from the criminal action. [36] There is, however, a distinction between civil liability arising
from a delict and civil liability arising from a quasi-delict. The choice of remedy, whether to sue for a delict
or a quasi-delict, affects the procedural and jurisdictional issues of the action. [37]
Tuazon chose to file an action for damages based on a quasi-delict. In his complaint, Tuazon alleged
that Mrs. Cerezo, without exercising due care and diligence in the supervision and management of her
employees and buses, hired Foronda as her driver. Tuazon became disabled because of Forondas
recklessness, gross negligence and imprudence, aggravated by Mrs. Cerezos lack of due care and diligence
in the selection and supervision of her employees, particularly Foronda. [38]
The trial court thus found Mrs. Cerezo liable under Article 2180 of the Civil Code. Article 2180 states in
part:
Employers shall be liable for the damages caused by their employees and household helpers acting within
the scope of their assigned tasks, even though the former are not engaged in any business or industry.
Contrary to Mrs. Cerezos assertion, Foronda is not an indispensable party to the case. An
indispensable party is one whose interest is affected by the courts action in the litigation, and without
whom no final resolution of the case is possible. [39] However, Mrs. Cerezos liability as an employer in an
action for a quasi-delict is not only solidary, it is also primary and direct. Foronda is not an indispensable
party to the final resolution of Tuazons action for damages against Mrs. Cerezo.
The responsibility of two or more persons who are liable for a quasi-delict is solidary. [40] Where there is
a solidary obligation on the part of debtors, as in this case, each debtor is liable for the entire
obligation. Hence, each debtor is liable to pay for the entire obligation in full. There is no merger or
renunciation of rights, but only mutual representation. [41] Where the obligation of the parties is solidary,
either of the parties is indispensable, and the other is not even a necessary party because complete relief
is available from either.[42] Therefore, jurisdiction over Foronda is not even necessary as Tuazon may collect
damages from Mrs. Cerezo alone.

Moreover, an employers liability based on a quasi-delict is primary and direct, while the employers
liability based on a delict is merely subsidiary. [43] The words primary and direct, as contrasted with
subsidiary, refer to the remedy provided by law for enforcing the obligation rather than to the character
and limits of the obligation.[44] Although liability under Article 2180 originates from the negligent act of the
employee, the aggrieved party may sue the employer directly. When an employee causes damage, the law
presumes that the employer has himself committed an act of negligence in not preventing or avoiding the
damage. This is the fault that the law condemns. While the employer is civilly liable in a subsidiary
capacity for the employees criminal negligence, the employer is also civilly liable directly and separately
for his own civil negligence in failing to exercise due diligence in selecting and supervising his
employee. The idea that the employers liability is solely subsidiary is wrong. [45]
The action can be brought directly against the person responsible (for another), without including the
author of the act. The action against the principal is accessory in the sense that it implies the existence of
a prejudicial act committed by the employee, but it is not subsidiary in the sense that it can not be
instituted till after the judgment against the author of the act or at least, that it is subsidiary to the
principal action; the action for responsibility (of the employer) is in itself a principal action. [46]
Thus, there is no need in this case for the trial court to acquire jurisdiction over Foronda. The trial
courts acquisition of jurisdiction over Mrs. Cerezo is sufficient to dispose of the present case on the merits.
In contrast, an action based on a delict seeks to enforce the subsidiary liability of the employer for the
criminal negligence of the employee as provided in Article 103 of the Revised Penal Code. To hold the
employer liable in a subsidiary capacity under a delict, the aggrieved party must initiate a criminal action
where the employees delict and corresponding primary liability are established. [47] If the present action
proceeds from a delict, then the trial courts jurisdiction over Foronda is necessary. However, the present
action is clearly for the quasi-delict of Mrs. Cerezo and not for the delict of Foronda.
The Cerezo spouses contention that summons be served anew on them is untenable in light of their
participation in the trial court proceedings. To uphold the Cerezo spouses contention would make a fetish
of a technicality.[48] Moreover, any irregularity in the service of summons that might have vitiated the trial
courts jurisdiction over the persons of the Cerezo spouses was deemed waived when the Cerezo spouses
filed a petition for relief from judgment.[49]
We hold that the trial court had jurisdiction and was competent to decide the case in favor of Tuazon
and against Mrs. Cerezo even in the absence of Foronda. Contrary to Mrs. Cerezos contention, Foronda is
not an indispensable party to the present case. It is not even necessary for Tuazon to reserve the filing of a
separate civil action because he opted to file a civil action for damages against Mrs. Cerezo who is
primarily and directly liable for her own civil negligence. The words of Justice Jorge Bocobo in Barredo v.
Garcia still hold true today as much as it did in 1942:
x x x [T]o hold that there is only one way to make defendants liability effective, and that is, to sue the
driver and exhaust his (the latters) property first, would be tantamount to compelling the plaintiff to follow
a devious and cumbersome method of obtaining relief. True, there is such a remedy under our laws, but
there is also a more expeditious way, which is based on the primary and direct responsibility of the
defendant under article [2180] of the Civil Code. Our view of the law is more likely to facilitate remedy for
civil wrongs, because the procedure indicated by the defendant is wasteful and productive of delay, it
being a matter of common knowledge that professional drivers of taxis and other similar public
conveyances do not have sufficient means with which to pay damages. Why, then, should the plaintiff be
required in all cases to go through this roundabout, unnecessary, and probably useless procedure?In
construing the laws, courts have endeavored to shorten and facilitate the pathways of right and justice. [50]

[51]

Interest at the rate of 6% per annum is due on the amount of damages adjudged by the trial court.
The 6% per annum interest shall commence from 30 May 1995, the date of the decision of the trial

court. Upon finality of this decision, interest at 12% per annum, in lieu of 6%per annum, is due on the
amount of damages adjudged by the trial court until full payment.
WHEREFORE, we DENY the instant petition for review. The Resolution dated 21 October 1999 of the
Court of Appeals in CA-G.R. SP No. 53572, as well as its Resolution dated 20 January 2000 denying the
motion for reconsideration, is AFFIRMED with the MODIFICATIONthat the amount due shall earn legal
interest at 6% per annum computed from 30 May 1995, the date of the trial courts decision. Upon finality
of this decision, the amount due shall earn interest at 12% per annum, in lieu of 6% per annum, until full
payment.
SO ORDERED.

G.R. No. 96354 June 8, 1993

LAPERAL DEVELOPMENT CORPORATION and SUNBEAMS CONVENIENCE FOOD
CORPORATION,petitioners,
vs.
HON. COURT OF APPEALS and THE HEIRS OF FILOTEO T. BANZON, respondents.
Vicente R. Acsay for petitioners.

CRUZ, J.:
In Civil Case No. Q-34907 in the Court of First Instance of Rizal, Quezon City, Atty. Filoteo T. Banzon sought
recovery of attorney's fees from Oliverio Laperal, Laperal Development Corporation, and Imperial
Development Corporation for professional services rendered by him in the following cases:
1. Land Registration Case No. 20, Court of First Instance of Bataan, Branch 1.
2. Land Registration Case, Court of First Instance of Bataan, Branch 2.
3. G.R. No. L-47074, Laperal Development Corp., et al. vs. Hon. Abraham P. Vera, Ascario
Tuazon,et al.
4. Petition for Land Registration, Court of First Instance of Bataan, Branch 1.
5. Land Registration Case No. N-398, Court of First Instance of Baguio.
6. Civil Case No. 3922, Court of First Instance of Bataan, Branch 2, Oliverio Laperal vs. Mario
Francisco.
7. Civil Case No. 4062, Court of First Instance of Bataan, Republic vs. Sunbeams
Convenience Foods, Inc., et al.
8. Civil Case No. 4437, Court of First Instance of Bataan, Laperal Development
Corporation et al. vs. Spouses Ascario Tyazon and Purificacion Ampil, et al.
9. Administrative action filed by the Solicitor General against Laperal Development
Corporation for annulment of title to 400 hectares of land.
10. Civil Case No. Q-22933, Court of First Instance of Quezon City, Imperial Development
Corp. vs. P & B Taxicab Inc..
On April 8, 1983, the case was decided on the basis of a Compromise Agreement reading in part as follows:
Atty. Filoteo Banzon by this agreement, does hereby voluntarily and freely waive, forfeit, or
consider as fully paid any and all other claims of money or otherwise that he may have
against the defendants, in all cases in the Philippines that he may have handled for the
defendants in the past, including whatever money claims he may have in the above-entitled
case outside of this agreement, inclusive of representation fees, representation expenses,
appearance fees, or retainers fees, or other forms of attorneys fees and, hereby re-affirm
that he will undertake upon his professional oath and standing, to protect the interest of the
defendants in all unfinished appealed cases that the herein plaintiff had appeared in the
past in representation of the defendants, without any further renumeration or attorneys
fees, representation fees, appearance fees and expenses in connection therewith.

On May 19, 1987, Banzon filed a complaint against Oliverio Laperal. Laperal Development Corporation.
Imperial Development Corporation, Sunbeams Convenience Foods, Inc. and Vicente Acsay for: 1) the
annulment of the aforequoted portion of the Compromise Agreement; 2) the collection of attorney's fees
for his services in the cases of: a) Imperial Development Corporation vs. Aover, b) Republic vs. Sunbeams
Convenience Foods, Inc., et al., and c) Laperal Development vs. Ascario Tuazon and Ascario Tuazon v.
Judge Maglalang, et al.; 3) the recovery of the amount of P10,000.00 that was adjudged payable to him as
attorney's fees by Ascario Tuazon in Civil Case No. 3918; and 4) the payment to him of nominal damages
and attorney's fees.
Docketed as Civil Case 50823 in Branch 92 of the Regional Trial Court of Quezon City, this case was
dismissed on the ground that the trial court had no jurisdiction to annul the Compromise Agreement as
approved by an equal and coordinate court. It was held that the issue was cognizable by the Court of
Appeals. An additional ground was that the Compromise Agreement already covered the plaintiff's
professional services in the aforementioned cases. 1
On appeal, the decision was affirmed on the issue of jurisdiction. The Court of Appeals held, however, that
attorney's fees were due the private respondent in the cases of Laperal Development Corporation v.
Ascario Tuazon and Ascario Tuazon v. Judge Maglalang and Republic v. Sunbeams Convenience Foods.
Inc.. 2
The petitioners are now before us to challenge the decision insofar as it orders them to pay Banzon
attorney's fees for his legal services in the aforementioned cases.
An examination of the list of cases for which Banzon was suing for attorney's fees in Civil Case No. Q34907 shows that the case of Laperal Development Corporation v. Ascario Tuazon was included therein
although it was erroneously referred to as Civil Case No. 4437. Even if it was not mentioned in the
complaint, it was nevertheless covered by the Compromise Agreement, where Atty. Banzon waived all
other claims against the
defendants * "in all cases in the Philippines that he may have handled for the defendants in the past,
including whatever money claims he may have in the above-entitled case outside of this agreement." He
also undertook therein to protect the interest of the defendants in all unfinished appealed cases where he
appeared in the past in representation of latter, without any further remuneration or attorney's fees,
representation fees, appearance fees and expenses in connection therewith.
The undertaking clearly covered the case of Laperal Development Corporation v. Ascario Tuazon, (AC-G.R.
CV No. 70186), which was still pending in the Court of Appeals at the time of the Compromise Agreement,
and the subsequent case of Ascario Tuazon v. Judge Maglalang (CA-G.R. SP No. 07370). The respondent
court erred in supposing that the said agreement covered only past services, disregarding the clear
stipulation for the continuation of the private respondent's services in all pending appealed cases in which
he had earlier appeared.
Concerning the case of Republic vs. Sunbeams Convenience Foods, Inc. (G.R. No. 50464), the Court of
Appeals said:
At the time of the execution of the compromise agreement and rendition of the judgment
based thereon on April 8, 1983, the aforementioned case bearing G.R. No. 50464 was still
pending in the Supreme Court. It was not, however, the subject of the compromise
agreement (Exhibits C and 2; Annex 2, answer, pp. 47-55, 65-66, rec.). It could not have
been so because Sunbeams Convenience Foods, Inc. was not a party defendant in the
second amended complaint, although reference was made to it in the appellant's seventh
cause of action for which he has rendered professional services but for which attorney's fees
were being claimed from the herein appellee Oliverio Laperal (Exhibits A and 1). But nothing
is mentioned in the second amended complaint and in the compromise agreement (Exhibits
A and 1; C and 2) which would indicate that Sunbeams Convenience Foods, Inc. itself was a
party plaintiff therein privy to the case. Appellee Oliverio Laperal and Sunbeams
Convenience Foods, Inc. do not appear to be one and the same.
It appearing that it was the herein appellant who filed the brief for Sunbeams Convenience
Foods, Inc. in the Supreme Court on March 14, 1980 (Exhibit D), he should be compensated
for his services.

Banzon's claim for attorney's fees in the said case was also among those enumerated in his complaint in
Civil Case No. Q-34907 against Oliverio Laperal, Laperal Development Corporation, and Imperial
Development Corporation. Notably, Sunbeams Convenience Foods, Inc. (Sunbeams, for brevity), referred to
in the complaint as "Mr. Laperal's Corporation," was not joined by name as a party-defendant. Apparently,
the private respondent believed that Oliverio Laperal, being the president of the said company, was
directly obligated to him for the attorney's fees due him for his handling of the case for Sunbeams.
It is settled that a corporation is clothed with a personality separate and distinct from that of the persons
composing it. 3 It may not generally be held liable for the personal indebtedness of its stockholders or
those of the entities connected with it. 4 Conversely, a stockholder cannot be made to answer for any of its
financial obligations even if he should be its president. 5
There is no evidence that Sunbeams and Laperal are one and the same person. While it is true that Laperal
is a stockholder, director and officer of Sunbeams, that status alone does not make him answerable for the
liabilities of the said corporation. Such liabilities include Banzon's attorney's fees for representing it in the
case of Republic v. Sunbeams Convenience Foods, Inc.
Sunbeams should have been joined as a party-defendant in order that the judgment of the lower court
could legally affect it. But even if it was not impleaded, the court could still validly proceed with the case
because Sunbeams was not an indespensable party but only a proper party. A proper party is one which
ought to be a party if complete relief is to be accorded as between those already parties. 6 A party is
indespensable if no final determination can be had of an action unless it is joined either as plaintiff or
defendant. 7
The Compromise Agreement upon which the decision of the court was based was between plaintiff Atty.
Banzon and the defendants represented by Oliverio Laperal. To repeat, Sunbeams was not a party to this
agreement and so could not be affected by it.
It is noted, however, that in his complaint in Civil Case No. 50823 against Sunbeams et al., Banzon stated:
1. On the 1st cause of action, to declare the portions of the compromise agreement (Annex
A) alleged in par. 4 of the 1st cause of action where plaintiff waives his attorney's fees and
other fees in all other cases he handled in the past for the defendants Oliverio Laperal and
his corporations not included in the complaint for attorney's fee . . . (emphasis supplied)
This declaration amounted to an admission that he had also waived his attorney's fees in the cases he had
handled for Laperal's corporations which were not impleaded in Civil Case Q-34907, including Sunbeams.
Moreover, in the hearing Civil Case 50823, Banzon testified as follows.
Atty. Banzon: I am not claiming my attorney's fees from 1974 to 1981. What I was claiming
was the attorney's fees for the services I have rendered after the compromise agreement in
1983 to 1987 by virtue of the new agreement . . .. (TSN, Sept. 15, p. 7 Records, Vol. II, p.
129).
xxx xxx xxx
Court: So you are not claiming anymore your attorney's fees in those ten cases?
Atty. Banzon: I am claiming only for the services I have rendered from 1983 to 1987 by
virtue of a new agreement.
Court: These services of yours exclude the ten?
Atty. Banzon: Exclude the ten, Your Honor. (Ibid, p. 16)
xxx xxx xxx

Atty. Banzon: I admit, Your Honor that those 10 services are those services I rendered in the
past wherein I waived my attorney's fees; my services covered from 1974 to 1981 but not
my services after the compromise agreement. (ibid, p. 22).
The Sunbeams case was one of the ten cases listed in the complaint in Civil Case No. 34907. It was
pending before this Court when Civil Case No.
Q-34907 and Civil Case No. 50823 were instituted. To prove his claim for attorney's fees for his services in
the Sunbeams case, Banzon submitted to the Regional Trial Court of Quezon City, Branch 92, "Petitioner's
Brief" (Exh. "D") and "Petitioner's Reply to Respondents' Brief" (Exh. "D-1") dated March 14, 1980 and
August 12, 1980, respectively, which had earlier been filled with this Court in connection with the said
case. Significantly, the preparation and filing of those pleadings were done sometime in 1980, which
means that they were among those ten cases referred to by Atty. Banzon for which he had waived his
attorney's fees. There is no other proof of his services in the said case after 1983 to 1987.
The private respondent's claim for attorney's fees in the Sunbeam case was waived by him not by virtue of
the Compromise Agreement to which Sunbeams, not being a defendant in Civil Case No. Q-34907, could
not have been a party. What militates against his claim is his own judicial admission that he had waived his
attorney's fees for the cases he had handled from 1974 to 1981 for Oliverio Laperal and his corporations,
including those not impleaded in his complaint in Civil Case No. Q-34907.
ACCORDINGLY, the petition is GRANTED. The decision of the respondent court dated November 21, 1990 is
MODIFIED. Petitioners Laperal Development Corporation and Sunbeams Convenience Foods, Inc. are
declared no longer liable to the private respondents for attorney's fees in AC-G.R. CV No. 70186, CA-G.R.
SP No. 07370 and G.R. No. 50464. Costs against the private respondent.
SO ORDERED.

G.R. No. L-23136 August 26, 1974

ISMAEL MATHAY, JOSEFINA MATHAY, DIOGRACIAS T. REYES and S. ADOR DIONISIO, plaintiffsappellants,
vs.
THE CONSOLIDATED BANK AND TRUST COMPANY, JOSE MARINO OLONDRIZ, WILFRIDO C.
TECSON, SIMON R. PATERNO, FERMIN Z. CARAM, JR., ANTONIO P. MADRIGAL, JOSE P.
MADRIGAL, CLAUDIO TEEHANKEE, and ALFONSO JUAN OLONDRIZ, defendants-appellees.
CIPRIANO AZADA, MARIA CRISTINA OLONDRIZ PERTIERRA jointly with her husband ARTURO
PERTIERRA, and MARIA DEL PUY OLONDRIZ DE STEVENS, movants-intervenors-appellants.
Deogracias T. Reyes & Associates for appellants.
Taada, Teehankee & Carreon for appellees.
Paterno Pedrena for appellee Fermin Z. Caram, Jr.

ZALDIVAR, J.:p
In this appeal, appellants-plaintiffs and movants-intervenors seek the reversal of the order dated March 21,
1964 of the Court of First Instance of Manila dismissing the complaint together with all other pending
incidents in Civil Case No. 55810.
The complaint in this case, filed on December 24, 1963 as a class suit, under Section 12, Rule 3, of the
Rules of Court, contained six causes of action. Under the first cause of action, plaintiffs-appellants alleged
that they were, on or before March 28, 1962, stockholders in the Consolidated Mines, Inc. (hereinafter
referred to as CMI), a corporation duly organized and existing under Philippine laws; that the stockholders
of the CMI, including the plaintiffs-appellants, passed, at a regular stockholders' meeting, a Resolution
providing: (a) that the Consolidated Bank & Trust Co. (hereinafter referred to as Bank) be organized with an
authorized capital of P20,000,000.00; (b) that the organization be undertaken by a Board of Organizers
composed of the President and Members of the Board of Directors of the CMI; (c) that all stockholders of
the CMI, who were legally qualified to become stockholders, would be entitled to subscribe to the capital
stock of the proposed Bank "at par value to the same extent and in the same amount as said stockholders'
respective share holdings in the CMI," as shown in its stock books on a date to be fixed by the Board of
Directors [which date was subsequently fixed as January 15, 1963], provided that the right to subscribe
should be exercised within thirty days from the date so fixed, and "that if such right to subscription be not
so exercised then the stockholders concerned shall be deemed to have thereby waived and released ipso
facto their right to such subscription in favor of the Interim Board of Organizers of the Defendant Bank or
their assignees;" and (d) that the Board of Directors of the CMI be authorized to declare a "special
dividend" in an amount it would fix, which the subscribing stockholders might authorize to be paid directly
to the treasurer of the proposed Bank in payment of the subscriptions; that the President and members of
the Board of Directors of the CMI, who are the individuals-defendants-appellees in the instant case,
constituted themselves as the Interim Board of Organizers; that said Board sent out, on or about
November 20, 1962, to the CMI stockholders, including the plaintiffs-appellants, circular letters with "PreIncorporation Agreement to Subscribe" forms that provided that the payment of the subscription should be
made in cash from time to time or by the application of the special dividend declared by the CMI, and that
the subscription must be made within the period from December 4, 1962 to January 15, 1963, "otherwise
such subscription right shall be deemed to have been thereby ipso facto waived and released in favor of
the Board of Organizers of the Defendant Bank and their assignees"; that the plaintiffs-appellants
accomplished and filed their respective "Pre-Incorporation Agreement to Subscribe" and paid in full their
subscriptions; that plaintiffs-appellants and the other CMI subscribing stockholders in whose behalf the
action was brought also subscribed to a very substantial amount of shares; that on June 25, 1963, the
Board of Organizers caused the execution of the Articles or Incorporation of the proposed Bank indicating
an original subscription of 50,000 shares worth P5,000,000 subscribed and paid only by six of the
individuals-defendants-appellees, namely, Antonio P. Madrigal, Jose P. Madrigal Simon R. Paterno, Fermin Z.
Caram, Jr., Claudio Teehankee, and Wilfredo C. Tecson, thereby excluding the plaintiffs-appellants and the

other CMI subscribing stockholders who had already subscribed; that the execution of said Articles of
Incorporation was "in violation of law and in breach of trust and contractual agreement as a means to gain
control of Defendant Bank by Defendant Individuals and persons or entities chosen by them and for their
personal profit or gain in disregard of the rights of Plaintiffs and other CMI Subscribing Stockholders;" that
the paid-in capital stock was raised, as required by the Monetary Board, to P8,000,000.00, and individualsdefendants-appellees caused to be issued from the unissued shares 30,000 shares amounting to
P3,000,000.00, all of which were again subscribed and paid for entirely by individuals-defendantsappellees or entities chosen by them "to the exclusion of Plaintiffs and other CMI subscribing stockholders"
"in violation of law and breach of trust and of the contractual agreement embodied in the contractual
agreement of March 28, 1962"; that the Articles were filed with the Securities and Exchange Commission
which issued the Certificate of Incorporation on June 25, 1963; that as of the date of the Complaint, the
plaintiffs-appellants and other CMI subscribing stockholders had been denied, through the unlawful acts
and manipulation of the defendant Bank and Individuals-defendants-appellees, the right to subscribe at
par value, in proportion to their equities established under their respective "Pre-Incorporation Agreements
to Subscribe" to the capital stock, i.e., (a) to the original issue of 50,000 shares and/or (b) to the additional
issue of 30,000 shares, and/or (c) in that portion of said original or additional issue which was
unsubscribed; that the individuals-defendants-appellees and the persons chosen by them had unlawfully
acquired stockholdings in the defendant-appellee Bank in excess of what they were lawfully entitled and
held such shares "in trust" for the plaintiffs-appellants and the other CMI stockholders; that it would have
been vain and futile to resort to intra corporate remedies under the facts and circumstances alleged
above. As relief on the first cause of action, plaintiffs-appellants prayed that the subscriptions and share
holdings acquired by the individuals-defendants- appellees and the persons chosen by them, to the extent
that plaintiffs-appellants and the other CMI stockholders had been deprived of their right to subscribe, be
annulled and transferred to plaintiffs-appellants and other CMI subscribing stockholders.
Besides reproducing all the above allegations in the other causes of action, plaintiffs-appellants further
alleged under the second cause of action that on or about August 28, 1963, defendants-appellees Antonio
P. Madrigal, Jose P. Madrigal: Fermin Z. Caram, Jr., and Wilfredo C. Tecson "falsely certified to the calling of a
special stockholders' meeting allegedly pursuant to due notice and call of Defendant Bank" although
plaintiffs-appellants and other CMI stockholders were not notified thereof, and amended the Articles of
Incorporation increasing the number of Directors from 6 to 7, and had the illegally created Position of
Director filled up by defendant-appellee Alfonso Juan Olondriz, who was not competent or qualified to hold
such position. In the third cause of action, plaintiffs-appellants claimed actual damages in an amount
equivalent to the difference between the par value of the shares they were entitled, but failed, to acquire
and the higher market value of the same shares. In the fourth cause of action, Plaintiffs-appellants claimed
moral damages; in the fifth, exemplary damages; and in the sixth, attorney's fees.
In his manifestation to the court on January 4, 1964, Francisco Sevilla, who was one of the original
plaintiffs, withdrew. On January 15, 1964 Cipriano Azada, Maria Cristina Olondriz Pertierra, Maria del Puy
Olondriz de Stevens (who later withdrew as intervenors-appellants) and Carmen Sievert de Amoyo, filed a
motion to intervene, and to join the plaintiffs-appellants on record, to which motion defendants-appellees,
except Fermin Z. Caram, Jr., filed, on January 17, 1964 their opposition.
On February 7, 1964 defendants-appellees, except Fermin Z. Caram, Jr., filed a motion to dismiss on the
grounds that (a) plaintiffs-appellants had no legal standing or capacity to institute the alleged class suit;
(b) that the complaint did not state a sufficient and valid cause of action; and (c) that plaintiffs-appellants'
complaint against the increase of the number of directors did not likewise state a cause of action. Plaintiffsappellants filed their opposition thereto on February 21, 1964.
On March 4, 1964 appellants, plaintiffs and intervenors, filed a verified petition for a writ of preliminary
injunction to enjoin defendants-appellees from considering or ratifying by resolution, at the meeting of the
stockholders of defendant-appellee Bank to be held the following day, the unlawful apportionment of the
shares of the defendant-appellee Bank and the illegal amendment to its Articles of Incorporation increasing
the number of Directors, The Court, after hearing, granted the writ, but subsequently set it aside upon the
appellees' filing a counter bond.
Some subscribers to the capital stock of the Bank like Concepcion Zuluaga, et al., and Carlos Moran Sison,
et al., filed separate manifestations that they were opposing and disauthorizing the suit of plaintiffsappellants.

On March 7, 1964 defendants-appellees, except Fermin Z. Caram, Jr., filed a supplemental ground for their
motion to dismiss, to wit, that the stockholders, except Fermin Z. Caram, Jr., who abstained, had
unanimously, at their regular annual meeting held on March 5, 1964, ratified and confirmed all the
actuations of the organizers-directors in the incorporation, organization and establishment of the Bank.
In its order, dated March 21, 1964, the trial court granted the motion to dismiss, holding, among other
things, that the class suit could not be maintained because of the absence of a showing in the complaint
that the plaintiffs-appellants were sufficiently numerous and representative, and that the complaint failed
to state a cause of action. From said order, appellants, plaintiffs and intervenors, interposed this appeal to
this Court on questions of law and fact, contending that the lower court erred as follows:
1. In holding that plaintiffs-appellants could not maintain the present class suit because of
the absence of a showing in the complaint that they were sufficiently numerous and
representative;
II. In holding that the instant action could not be maintained as a class suit because
plaintiffs-appellants did not have a common legal interest in the subject matter of the suit;
III. In dismissing the present class suit on the ground that it did not meet the requirements of
Rule 3, section 12 of the Rules of Court;
IV. In holding that the complaint was fatally defective in that it failed to state with
particularity that plaintiffs-appellants had resorted to, and exhausted, intra-corporate
remedies;
V. In resolving defendants-appellees' motion on the basis of facts not alleged in the
complaint;
VI. In holding that plaintiffs-appellants' complaint stated no valid cause of action against
defendants-appellees;
VII. In not holding that a trust relationship existed between the Interim Board of Organizers
of defendant-appellee Bank and the CMI subscribing stockholders and in not holding that the
waiver was in favor of the Board of Trustees for the CMI subscribing stockholders;
VIII. In holding that the failure of plaintiffs-appellants to allege that they had paid or had
offered to pay for the shares allegedly pertaining to them constituted another ground for
dismissal;
XI. In holding that the allegations under the second cause of action stated no valid cause of
action due to a fatal omission to allege that plaintiffs-appellants were stockholders of record
at the time of the holding of the special stockholders' meeting;
X. In holding that plaintiffs-appellants' complaint stated no cause of action against
defendant-appellee Bank; and
XI. In considering the resolution of ratification and confirmation and in holding that the
resolution rendered the issues in this case moot.
The assigned error revolve around two questions namely: (1) whether the instant action could be
maintained as a class suit, and (2) whether the complaint stated a cause of action. These issues alone will
be discussed.
1. Appellants contended in the first three assigned errors that the trial court erred in holding that the
present suit could not be maintained as a class suit, and in support thereof argued that the propriety of a
class suit should be determined by the common interest in the subject matter of the controversy; that in
the instant case there existed such common interest which consisted not only in the recovery of the shares
of which the appellants were unlawfully deprived, but also in divesting the individuals-defendants-

appellees and the person or entities chosen by them of control of the appellee Bank. 1 ; that the complaint
showed that besides the four plaintiff-appellants of record, and the four movant-intervenors-appellants
there were in the appellee Bank many other stockholders who, tough similarly situated as the appellants,
did not formally include themselves as parties on record in view of the representative character of the suit;
that the test, in order to determine the legal standing of a party to institute a class suit, was not one, of
number, but whether or not the interest of said party was representative of the persons in whose behalf
the class suit was instituted; that granting arguendo, that the plaintiffs-appellants were not sufficiently
numerous and representative, the court should not have dismissed the action, for insufficiency of number
in a class suit was not a ground for a motion to dismiss, and the court should have treated the suit as an
action under Rule 3, section 6, of the Rules of Court which permits a joinder of parties.
Defendants-appellees, on the contrary, stressed that the instant suit was instituted as a class suit and the
plaintiffs-appellants did not sue in their individual capacities for the protection of their individual interests;
that the plaintiffs appellants of record could not be considered numerous and representative, as said
plaintiffs-appellants were only four out of 1,500 stockholders, and owned only 8 shares out of the 80,000
shares of stock of the appellee Bank; that even if to the four plaintiffs-appellants were added the four
movants-intervenors-appellants the situation would be the same as two of the intervenors, to wit, Ma.
Cristina Olondriz Pertierra and Ma. del Puy Olondriz de Stevens, could not sue as they did not have their
husbands' consent; that it was necessary that in a class suit the complaint itself should allege facts
showing that the plaintiffs were sufficiently numerous and representative, and this did not obtain in the
instant case, as the complaint did not. even allege how many other CMI stockholders were "similarly
situated"; that the withdrawal of one plaintiff, Francisco Sevilla, the subsequent disclaimers of any interest
in the suit made in two separate pleadings by other CMI stockholders and the disauthorization of their
being represented by plaintiffs-appellants by the 986 (out of 1,663) stockholders who attended the annual
meeting of bank stockholders on March 5, 1964, completely negated plaintiffs-appellants' pretension that
they were sufficiently numerous and representative or that there were many other stockholders similarly
situated whom the plaintiffs-appellants allegedly represented; that plaintiffs-appellants did not have that
common or general interest required by the Rules of Court in the subject matter of the suit. 2
In their Reply Brief, appellants insisted that non-compliance with Section 12, Rule 3, not being one
enumerated in Rules 16 and 17, was not a ground for dismissal; that the requirements for a class had been
complied with; that the required common interest existed even if the interests were several for there was a
common question of law or fact and a common relief was sought; that the common or general interest
could be in the object of the action, in the result of the proceedings, or in the question involved in the
action, as long as there was a common right based on the same essential facts; that plaintiffs-appellants
adequately represented the aggrieved group of bank stockholders, inasmuch as appellants' interests were
not antagonistic to those of the latter, and appellants were in the same position as the group in whose
behalf the complaint was filed.
The governing statutory provision for the maintenance of a class suit is Section 12 of Rule 3 of the Rules of
Court, which reads as follows:
Sec. 12. Class suit When the subject matter of the controversy is one of common or
general interest to many persons, and the parties are so numerous that it is impracticable to
bring them all before the court, one or more may sue or defend for the benefit of -ill. But in
such case the court shall make sure that the parties actually before it are sufficiently
numerous and representative so that all interests concerned are fully protected. Any party in
interest shall have a right to intervene in protection of his individual interest.
The necessary elements for the maintenance of a class suit are accordingly: (1) that the subject matter of
the controversy be one of common or general interest to many persons, and (2) that such persons be so
numerous as to make it impracticable to bring them all to the court. An action does not become a class
suit merely because it is designated as such in the pleadings. Whether the suit is or is not a class quit
depends upon the attending facts, and the complaint, or other pleading initiating the class action should
allege the existence of the necessary facts, to wit, the existence of a subject matter of common interest,
and the existence of a class and the number of persons in the alleged class, 3 in order that the court might
be enabled to determine whether the members of the class are so numerous as to make it impracticable to
bring them all before the court, to contrast the number appearing on the record with the number in the
class and to determine whether claimants on record adequately represent the class and the subject matter
of general or common interest. 4

The complaint in the instant case explicitly declared that the plaintiffs- appellants instituted the "present
class suit under Section 12, Rule 3, of the Rules of Court in. behalf of CMI subscribing stockholders" 5 but
did not state the number of said CMI subscribing stockholders so that the trial court could not infer, much
less make sure as explicitly required by the sufficiently numerous and representative in order that all
statutory provision, that the parties actually before it were interests concerned might be fully protected,
and that it was impracticable to bring such a large number of parties before the court.
The statute also requires, as a prerequisite to a class suit, that the subject-matter of the controversy be of
common or general interest to numerous persons. Although it has been remarked that the "innocent
'common or general interest' requirement is not very helpful in determining whether or not the suit is
proper", 6 the decided cases in our jurisdiction have more incisively certified the matter when there is such
common or general interest in the subject matter of the controversy. By the phrase "subject matter of the
action" is meant "the physical facts, the things real or personal, the money, lands, chattels, and the like, in
relation to which the suit is prosecuted, and not the delict or wrong committed by the defendant." 7
This Court has ruled that a class suit did not lie in an action for recovery of real property where separate
portions of the same parcel were occupied and claimed individually by different parties to the exclusion of
each other, such that the different parties had determinable, though undivided interests, in the property in
question. 8 It his likewise held that a class suit would not lie against 319 defendants individually occupying
different portions of a big parcel of land, where each defendant had an interest only in the particular
portion he was occupying, which portion was completely different from the other portions individually
occupied by other defendants, for the applicable section 118 of the Code of Civil Procedure relates to a
common and general interest in single specific things and not to distinct ones. 9 In an action for the
recovery of amounts that represented surcharges allegedly collected by the city from some 30,000
customers of four movie houses, it was held that a class suit did not lie, as no one plaintiff had any right to,
or any share in the amounts individually claimed by the others, as each of them was entitled, if at all, only
to the return of what he had personally paid. 10
The interest, subject matter of the class suits in the above cited cases, is analogous to the interest claimed
by appellants in the instant case. The interest that appellants, plaintiffs and intervenors, and the CMI
stockholders had in the subject matter of this suit the portion of stocks offering of the Bank left
unsubscribed by CMI stockholders who failed to exercise their right to subscribe on or before January 15,
1963 was several, not common or general in the sense required by the statute. Each one of the
appellants and the CMI stockholders had determinable interest; each one had a right, if any, only to his
respective portion of the stocks. No one of them had any right to, or any interest in, the stock to which
another was entitled. Anent this point, the trial court correctly remarked:
It appears to be the theory of the plaintiffs borne out by the prayer, that each subscribing
CMI stockholder is entitled to further subscribe to a certain Proportion depending upon his
stockholding in the CMI, of the P8 million capital stock of the defendant bank open to
subscription (out of the 20 million authorized capital stock) as well as the unsubscribed
portion of the P8 million stock offering which were left unsubscribed by those CMI
stockholders who for one reason or another had failed to exercise their subscription rights on
or before January 15, 1963. Under the plaintiffs' theory therefore, each subscribing CMI
stockholder was entitled to subscribe to a definite number of shares both in the original
offering of P8 million and in that part thereof not subscribed on or before the deadline
mentioned, so that one subscribing CMI stockholder may be entitled to subscribe to one
share, another to 3 shares and a third to 11 shares, and so on, depending upon the amount
and extent of CMI stockholding. But except for the fact that a question of law the proper
interpretation of the waiver provisions of the CMI stockholders' resolution of March 28, 1962
is common to all, each CMI subscribing stock holder has a legal interest in, and a claim to,
only his respective proportion of shares in the defendant bank, and none with regard to any
of the shares to which another stockholder is entitled. Thus plaintiff Ismael Mathay has no
legal interest in, or claim to, any share claimed by any or all of his co-plaintiffs from the
defendant individuals. Hence, no CMI subscribing stockholder or, for that matter, not any
number of CMI stockholders can maintain a class suit in behalf of others,... 11
Even if it be assumed, for the sake of argument, that the appellants and the CMI stockholders suffered
wrongs that had been committed by similar means and even pursuant to a single plan of the Interim Board
of Organizers of the Bank, the wrong suffered by each of them would constitute a wrong separate from

those suffered by the other stockholders, and those wrongs alone would not create that common or
general interest in the subject matter of the controversy as would entitle any one of them to bring a class
suit on behalf of the others. Anent this point it has been said that:
Separate wrongs to separate persons, although committed by similar means and even
pursuant to a single plan, do not alone create a 'common' or 'general' interest in those who
are wronged so as to entitle them to maintain a representative action. 12
Appellants, however, insisted, citing American authorities, 13 that a class suit might be brought even if the
interests of plaintiffs-appellants might be several as long as there was a common question of law or fact
affecting them and a common relief was sought. We have no conflict with the authorities cited; those were
rulings under the Federal Rules of Civil Procedure, pursuant to Rule 23 of which, there were three types of
class suits, namely: the true, the hybrid, and the spurious, and these three had only one feature in
common, that is, in each the persons constituting the class must be so numerous as to make it
impracticable to bring them all before the court. The authorities cited by plaintiffs-appellants refer to the
spurious class action (Rule 23 (a) (3) which involves a right sought to be enforced, which is several, and
there is a common question of law or fact affecting the several rights and a common relief is sought. 14 The
spurious class action is merely a permissive joinder device; between the members of the class there is
no jural relationship, and the right or liability of each is distinct, the class being formed solely by the
presence of a common question of law or fact. 15 This permissive joinder is provided in Section 6 of Rule 3,
of our Rules of Court. Such joinder is not and cannot be regarded as a class suit, which this action
purported and was intended to be as per averment of the complaint.
It may be granted that the claims of all the appellants involved the same question of law. But this alone, as
said above, did not constitute the common interest over the subject matter indispensable in a class suit.
The right to purchase or subscribe to the shares of the proposed Bank, claimed by appellants herein, is
analogous to the right of preemption that stockholders have when their corporation increases its capital.
The right to preemption, it has been said, is personal to each stockholder, 16 and while a stockholder may
maintain a suit to compel the issuance of his proportionate share of stock, it has been ruled, nevertheless,
that he may not maintain a representative action on behalf of other stockholders who are similarly
situated. 17 By analogy, the right of each of the appellants to subscribe to the waived stocks was personal,
and no one of them could maintain on behalf of others similarly situated a representative suit.
Straining to make it appear that appellants and the CMI subscribing stockholders had a common or general
interest in the subject matter of the suit, appellants stressed in their brief that one of the reliefs sought in
the instant action was "to divest defendant individuality and the persons or entities chosen by them of
control of the defendant bank." 18 This relief allegedly sought by appellants did not, however, appear either
in the text or in the prayer of the complaint.
Appellants, furthermore, insisted that insufficiency of number in a class suit was not a ground for dismissal
of one action. This Court has, however, said that where it appeared that no sufficient representative parties
had been joined, the dismissal by the trial court of the action, despite the contention by plaintiffs that it
was a class suit, was correct. 19 Moreover, insofar as the instant case is concerned, even if it be granted for
the sake of argument, that the suit could not be dismissed on that ground, it could have been dismissed,
nevertheless, on the ground of lack of cause of action which will be presently discussed. .
2. Appellants supported their assigned error that the court erred in holding that the complaint stated no
valid cause of action, by claiming that paragraph 15 together with the other allegations of the complaint to
the effect that defendants-appellees had unlawfully acquired stockholdings in the capital stock of
defendant-appellee Bank in excess of what they were lawfully entitled to, in violation of law and in breach
of trust and the contractual agreement, constituted a valid and sufficient cause of action; 20 and that only
the allegations in the complaint should have been considered by the trial court in determining whether the
complaint stated a cause of action or not.
Defendants-appellees, on the contrary, maintained that the allegations of the complaint should not be the
only ones to be considered in determining whether there is a cause of action; that even if the ultimate
facts alleged in the first cause of action of the complaint be the only ones considered the complaint would
still fail to state a valid cause of action on the following grounds: first, there was no allegation regarding
appellants' qualification to subscribe to the capital stock of the appellee Bank, for under the CMI
stockholders' resolution of March 28, 1962, only those qualified under the law were entitled to subscribe,

and under the regulations of the Monetary Board, only natural-born Filipino citizens could be stockholders
of a banking corporation organized under the laws of the Philippines, and nowhere did the complaint
alleged that plaintiffs-appellants were natural born Filipino citizens. 21Second, appellants' averment in
paragraph 8 that they "subscribed," and their averment in paragraph 15 that they were "denied the right
to subscribe ... to the capital stock of the defendant Bank", were inconsistent, and hence neutralized each
other, thereby leaving in shambles the first cause of action. Third, there was no allegation that appellants
had not yet received or had not been issued the corresponding certificates of stock covering the shares
they had subscribed and paid for. Fourth, the allegations failed to show the existence of the supposed
trust; and fifth, the complaint failed to allege that plaintiffs-appellants had paid or offered to pay for the
shares allegedly pertaining to them. 22
Let us premise the legal principles governing the motion to dismiss on the ground of lack of cause of
action.
Section 1, Rule 16 of the Rules of Court providing in part that: .
Within the time for pleading a motion to dismiss may be made on any of the following
grounds: ....
(g) That the complaint states no cause of action. ..1.
explicitly requires that the sufficiency of the complaint must be tested exclusively on the basis of the
complaint itself and no other should be considered when the ground for motion to dismiss is that the
complaint states no cause of action. Pursuant thereto this Court has ruled that:
As a rule the sufficiency of the complaint, when Challenged in a motion to dismiss, must be determined
exclusively on the basis of the facts alleged therein. 23
It has been likewise held that a motion to dismiss based on lack of cause of action hypothetically admits
the truth of the allegations of fact made in the complaint. 24 It is to be noted that only the facts well
pleaded in the complaint, and likewise, any inferences fairly deducible therefrom, are deemed admitted by
a motion to dismiss. Neither allegations of conclusions 25 nor allegations of facts the falsity of which the
court may take judicial notice are deemed admitted. 26 The question, therefore, submitted to the Court in a
motion to dismiss based on lack of cause of action is not whether the facts alleged in the complaint are
true, for these are hypothetically admitted, but whether the facts alleged are sufficient to constitute a
cause of action such that the court may render a valid judgment upon the facts alleged therein.
A cause of action is an act or omission of one party in violation of the legal right of the other. Its essential
elements are, namely: (1) the existence of a legal right in the plaintiff, (2) a correlative legal duty in the
defendant, and (3) an act or omission of the defendant in violation of plaintiff's right with consequential
injury or damage to the plaintiff for which he may maintain an action for the recovery of damages or other
appropriate relief. 27 On the other hand, Section 3 of Rule 6 of the Rules of Court provides that the
complaint must state the ultimate facts constituting the plaintiff's cause of action. Hence, where the
complaint states ultimate facts that constitute the three essential elements of a cause of action, the
complaint states a cause of action; 28 otherwise, the complaint must succumb to a motion to dismiss on
that ground.
The legal principles having been premised, let us now analyze and discuss appellant's various causes of
action.
Appellants' first cause of action, pursuant to what has been premised above, should have consisted of: (1)
the right of appellants as well as of the other CMI stockholders to subscribe, in proportion to their equities
established under their respective "Pre-Incorporation Agreements to Subscribe", to that portion of the
capital stock which was unsubscribed because of failure of the CMI stockholders to exercise their right to
subscribe thereto; (2) the legal duty of the appellant to have said portion of the capital stock to be
subscribed by appellants and other CMI stockholders; and (3) the violation or breach of said right of
appellants and other CMI stockholders by the appellees.

Did the complaint state the important and substantial facts directly forming the basis of the primary right
claimed by plaintiffs? Before proceeding to elucidate this question, it should be noted that a bare allegation
that one is entitled to something is an allegation of a conclusion. Such allegations adds nothing to the
pleading, it being necessary to plead specifically the facts upon which such conclusion is founded. 29 The
complaint alleged that appellants were stockholders of the CMI; that as such stockholders, they were
entitled; by virtue of the resolution of March 28, 1962, to subscribe to the capital stock of the proposed
Consolidated Bank and Trust Co., at par value to the same extent and in the same amount as said
stockholders' respective share holdings in the CMI as shown in the latter's stock book as of January 15,
1963, the right to subscribe to be exercised until January 15, 1963, provided said stockholders of the CMI
were qualified under the law to become stockholders of the proposed Bank; 30 that appellants
accomplished and filed their respective "Pre-Incorporation Agreements to Subscribe" and fully paid the
subscription. 31
These alleged specific facts did not even show that appellants were entitled to subscribe to the capital
stock of the proposed Bank, for said right depended on a condition precedent, which was, that they were
qualified under the law to become stockholders of the Bank, and there was no direct averment in the
complaint of the facts that qualified them to become stockholders of the Bank. The allegation of the fact
that they subscribed to the stock did not, by necessary implication, show that they were possessed of the
necessary qualifications to become stockholders of the proposed Bank.
Assuming arguendo that appellants were qualified to become stockholders of the Bank, they could
subscribe, pursuant to the explicit terms of the resolution of March 28, 1962, "to the same extent and in
the same amount as said stockholders' respective stockholdings in the CMI" as of January 15, 1963. 32 This
was the measure of the right they could claim to subscribe to waived stocks. Appellants did not even aver
that the stocks waived to the subscription of which they claimed the right to subscribe, were comprised in
"the extent and amount" of their respective share holdings in the CMI. It is not surprising that they did not
make such an averment for they did not even allege the amount of shares of stock to which they claimed
they were entitled to subscribe. The failure of the complaint to plead specifically the above facts rendered
it impossible for the court to conclude by natural reasoning that the appellants and other CMI stockholders
had a right to subscribe to the waived shares of stock, and made any allegation to that effect a conclusion
of the pleader, not an ultimate fact, in accordance with the test suggested by the California Supreme
Court, to wit:
If from the facts in evidence, the result can be reached by that process of natural reasoning
adopted in the investigation of truth, it becomes an ultimate fact, to be found as such. If, on
the other hand, resort must be had to the artificial processes of the law, in order to reach a
final determination, the result is a conclusion of law. 33
Let us now pass to the second and third elements that would have constituted the first cause of action. Did
the complaint allege as ultimate facts the legal duty of defendants-appellees to have a portion of the
capital stock subscribed to by appellants? Did the complaint allege as ultimate facts that defendants
appellees had violated appellants' right?
Even if it be assumed arguendo that defendants-appellees had the duty to have the waived stocks
subscribed to by the CMI stockholders, this duty was not owed to all the CMI stockholders, but only to such
CMI stockholders as were qualified to become stockholders of the proposed Bank. Inasmuch as it has been
shown that the complaint did not contain ultimate facts to show that plaintiffs-appellants were qualified to
become stockholders of the Bank, it follows that the complaint did not show that defendants-appellees
were under duty to have plaintiffs-appellants subscribe to the stocks of the proposed Bank. It inevitably
follows also that the complaint did not contain ultimate facts to show that the right of the plaintiffsappellants to subscribe to the shares of the proposed Bank had been violated by defendants-appellees.
How could a non-existent right be violated?
Let us continue the discussion further. The complaint alleged that by virtue of the resolution of March 28,
1962, the President and Members of the Board of Directors of the CMI would be constituted as a Board of
Organizers to undertake and carry out the organization of the Bank; 34 that the Board of Organizers was
constituted and proceeded with the establishment of the Bank, 35 that the persons composing the Board of
Organizers were the individuals-defendants-appellees; 36 that the Board of Organizers sent our circular
letters with "Pre-Incorporation Agreement to Subscribe" forms37 which specified, among others, "such
subscription right shall be deemed ipso facto waived and released in favor of the Board of Organizers of

the defendant Bank and their assignees"; 38 that in the Articles of Incorporation prepared by the Board of
Organizers, the individuals-defendants-appellees alone appeared to have subscribe to the 50,
shares; 39 and that individuals-defendants-appellees again subscribe to all the additional 30,000
shares. 40 From these facts, appellants concluded that they were denied their right to subscribe in
proportion to their equities; 41 that the individuals-defendants-appellees unlawfully acquired stockholdings
far in excess of what they were lawfully entitled in violation of law and in breach of trust and of contractual
agreement; 42 and that, because of matters already alleged, the individuals-defendants-appellees "hold
their shares in the defendant bank in trust for plaintiffs." 43
The allegation in the complaint that the individuals-defendants-appellees held their shares "in trust" for
plaintiffs-appellants without averment of the facts from which the court could conclude the existence of
the alleged trust, was not deemed admitted by the motion to dismiss for that was a conclusion of law.
Express averments "that a party was the beneficial owner of certain property; ... that property or money
was received or held in trust, or for the use of another; that particular funds were trust funds; that a
particular transaction created an irrevocable trust; that a person held Property as constructive trustee; that
on the transfer of certain property a trust resulted" have been considered as mere conclusions of
law. 44 The facts alleged in the complaint did not, by logical reasoning, necessarily lead to the conclusion
that defendants-appellees were trustees in favor of appellants of the shares of stock waived by the CMI
stockholders who failed to exercise their right to subscribe. In this connection, it has been likewise said
that:
"The general rule is that an allegation of duty in terms unaccompanied by a statement of the facts showing
the existence of the duty, is a mere conclusion of law, unless there is a relation set forth from which the
law raises the duty." 45
In like manner, the allegation that individuals-defendants-appellees held said shares in trust was no more
than an interpretation by appellants of the effect of the waiver clause of the Resolution and as such it was
again a mere conclusion of law. It has been said that:
The following are also conclusions of law: ... an allegation characterizing an instrument or
purporting to interpret it and state its effects, ... 46
Allegations in petition in the nature of conclusions about the meaning of contract, inconsistent with stated
terms of the contract, cannot be considered. 47
The allegation that the defendants-appellee acquired stockholdings far in excess of what they were
lawfully entitled, in violation of law and in breach of trust and of contractual agreement, is also mere
conclusion of law.
Of course, the allegation that there was a violation of trust duty was plainly a conclusion of law, for "a
mere allegation that it was the duty of a party to do this or that, or that he was guilty of a breach of duty,
is a statement of a conclusion not of fact." 48
An averment ... that an act was 'unlawful' or 'wrongful' is a mere legal conclusion or opinion
of the pleader. 49
Moreover, plaintiffs-appellants did not state in the complaint the amount of subscription the individual
defendant-appellee were entitled to; hence there was no basis for the court to determine what amount
subscribed to by them was excessive.
From what has been said, it is clear that the ultimate facts stated under the first cause of action are not
sufficient to constitute a cause of action.
The further allegations in the second cause of action that the calling of a special meeting was "falsely
certified", that the seventh position of Director was "illegally created" and that defendant Alfonso Juan
Olondriz was "not competent or qualified" to be a director are mere conclusions of law, the same not being
necessarily inferable from the ultimate facts stated in the first and second causes of action. It has been
held in this connection that:

An averment that ... an act was 'unlawful' or 'wrongful' is a mere legal conclusion or opinion
of the pleader. The same is true of allegations that an instrument was 'illegally' certified or ...
that an act was arbitrarily done ..." 50
A pleader states a mere conclusion when he makes any of the following allegations: that a
party was incapacitated to enter into a contract or convey
property ... 51
The third, fourth, fifth and sixth causes of action depended on the first cause of action, which, as has been
shown, did not state ultimate facts sufficient to constitute a cause of action. It stands to reason, therefore,
that said causes of action would also be fatally defective.
It having been shown that the complaint failed to state ultimate facts to constitute a cause of action, it
becomes unnecessary to discuss the other assignments of errors.
WHEREFORE, the instant appeal is dismissed, and the order dated March 21, 1964 of the Court of First
Instance of Manila dismissing the complaint in Civil Case No. 55810 is affirmed, with costs in this instance
against appellants. It is so ordered.

G.R. No. 162788. July 28, 2005

Spouses JULITA DE LA CRUZ and FELIPE DE LA CRUZ, Petitioners,
vs.
PEDRO JOAQUIN, Respondents.
DECISION
PANGANIBAN, J.:
The Rules require the legal representatives of a dead litigant to be substituted as parties to a litigation.
This requirement is necessitated by due process. Thus, when the rights of the legal representatives of a
decedent are actually recognized and protected, noncompliance or belated formal compliance with the
Rules cannot affect the validity of the promulgated decision. After all, due process had thereby been
satisfied.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the August 26, 2003
Decision2and the March 9, 2004 Resolution3 of the Court of Appeals (CA) in CA-GR CV No. 34702. The
challenged Decision disposed as follows:
"WHEREFORE, the foregoing considered, the appeal is DISMISSED and the assailed decision accordingly
AFFIRMED in toto. No costs."4
On the other hand, the trial courts affirmed Decision disposed as follows:
"WHEREFORE, judgment is hereby rendered:
"a) declaring the Deed of Absolute Sale (Exh. D) and Kasunduan (Exhibit B), to be a sale with right of
repurchase;
"b) ordering the plaintiff to pay the defendants the sum of P9,000.00 by way of repurchasing the land in
question;
"c) ordering the defendants to execute a deed of reconveyance of said land in favor of the plaintiff after
the latter has paid them the amount of P9,000.00 to repurchase the land in question;
"d) ordering the defendants to yield possession of the subject land to the plaintiff after the latter has paid
them the amount of P9,000.00 to repurchase the property from them; and
"e) ordering the defendants to pay the plaintiff the amount of P10,000.00 as actual and compensatory
damages; the amount of P5,000[.00] as exemplary damages; the amount of P5,000.00 as expenses of
litigation and the amount of P5,000.00 by way of attorneys fees."5
The Facts
The case originated from a Complaint for the recovery of possession and ownership, the cancellation of
title, and damages, filed by Pedro Joaquin against petitioners in the Regional Trial Court of Baloc, Sto.
Domingo, Nueva Ecija.6 Respondent alleged that he had obtained a loan from them in the amount
of P9,000 on June 29, 1974, payable after five (5) years; that is, on June 29, 1979. To secure the payment
of the obligation, he supposedly executed a Deed of Sale in favor of petitioners. The Deed was for a parcel

of land in Pinagpanaan, Talavera, Nueva Ecija, covered by TCT No. T-111802. The parties also executed
another document entitled "Kasunduan." 7
Respondent claimed that the Kasunduan showed the Deed of Sale to be actually an equitable
mortgage.8Spouses De la Cruz contended that this document was merely an accommodation to allow the
repurchase of the property until June 29, 1979, a right that he failed to exercise. 9
On April 23, 1990, the RTC issued a Decision in his favor. The trial court declared that the parties had
entered into a sale with a right of repurchase.10 It further held that respondent had made a valid tender of
payment on two separate occasions to exercise his right of repurchase. 11 Accordingly, petitioners were
required to reconvey the property upon his payment. 12
Ruling of the Court of Appeals
Sustaining the trial court, the CA noted that petitioners had given respondent the right to repurchase the
property within five (5) years from the date of the sale or until June 29, 1979. Accordingly, the parties
executed theKasunduan to express the terms and conditions of their actual agreement. 13 The appellate
court also found no reason to overturn the finding that respondent had validly exercised his right to
repurchase the land.14
In the March 9, 2004 Resolution, the CA denied reconsideration and ordered a substitution by legal
representatives, in view of respondents death on December 24, 1988. 15
Hence, this Petition.16
The Issues
Petitioners assign the following errors for our consideration:
"I. Public Respondent Twelfth Division of the Honorable Court of Appeals seriously erred in dismissing the
appeal and affirming in toto the Decision of the trial court in Civil Case No. SD-838;
"II. Public Respondent Twelfth Division of the Honorable Court of Appeals likewise erred in denying
[petitioners] Motion for Reconsideration given the facts and the law therein presented." 17
Succinctly, the issues are whether the trial court lost jurisdiction over the case upon the death of Pedro
Joaquin, and whether respondent was guilty of forum shopping. 18
The Courts Ruling
The Petition has no merit.
First Issue:
Jurisdiction
Petitioners assert that the RTCs Decision was invalid for lack of jurisdiction. 19 They claim that respondent
died during the pendency of the case. There being no substitution by the heirs, the trial court allegedly
lacked jurisdiction over the litigation.20
Rule on Substitution

When a party to a pending action dies and the claim is not extinguished, 21 the Rules of Court require a
substitution of the deceased. The procedure is specifically governed by Section 16 of Rule 3, which reads
thus:
"Section 16. Death of a party; duty of counsel. Whenever a party to a pending action dies, and the claim
is not thereby extinguished, it shall be the duty of his counsel to inform the court within thirty (30) days
after such death of the fact thereof, and to give the name and address of his legal representative or
representatives. Failure of counsel to comply with this duty shall be a ground for disciplinary action.
"The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the
appointment of an executor or administrator and the court may appoint a guardian ad litem for the minor
heirs.
"The court shall forthwith order said legal representative or representatives to appear and be substituted
within a period of thirty (30) days from notice.
"If no legal representative is named by the counsel for the deceased party, or if the one so named shall fail
to appear within the specified period, the court may order the opposing party, within a specified time, to
procure the appointment of an executor or administrator for the estate of the deceased, and the latter
shall immediately appear for and on behalf of the deceased. The court charges in procuring such
appointment, if defrayed by the opposing party, may be recovered as costs."
The rule on the substitution of parties was crafted to protect every partys right to due process. 22 The
estate of the deceased party will continue to be properly represented in the suit through the duly
appointed legal representative.23 Moreover, no adjudication can be made against the successor of the
deceased if the fundamental right to a day in court is denied. 24
The Court has nullified not only trial proceedings conducted without the appearance of the legal
representatives of the deceased, but also the resulting judgments. 25 In those instances, the courts acquired
no jurisdiction over the persons of the legal representatives or the heirs upon whom no judgment was
binding.26
This general rule notwithstanding, a formal substitution by heirs is not necessary when they themselves
voluntarily appear, participate in the case, and present evidence in defense of the deceased. 27 These
actions negate any claim that the right to due process was violated.
The Court is not unaware of Chittick v. Court of Appeals,28 in which the failure of the heirs to substitute for
the original plaintiff upon her death led to the nullification of the trial courts Decision. The latter had
sought to recover support in arrears and her share in the conjugal partnership. The children who allegedly
substituted for her refused to continue the case against their father and vehemently objected to their
inclusion as parties.29Moreover, because he died during the pendency of the case, they were bound to
substitute for the defendant also. The substitution effectively merged the persons of the plaintiff and the
defendant and thus extinguished the obligation being sued upon. 30
Clearly, the present case is not similar, much less identical, to the factual milieu of Chittick.
Strictly speaking, the rule on the substitution by heirs is not a matter of jurisdiction, but a requirement of
due process. Thus, when due process is not violated, as when the right of the representative or heir is
recognized and protected, noncompliance or belated formal compliance with the Rules cannot affect the
validity of a promulgated decision.31 Mere failure to substitute for a deceased plaintiff is not a sufficient
ground to nullify a trial courts decision. The alleging party must prove that there was an undeniable
violation of due process.

Substitution in
the Instant Case
The records of the present case contain a "Motion for Substitution of Party Plaintiff" dated February 15,
2002, filed before the CA. The prayer states as follows:
"WHEREFORE, it is respectfully prayed that the Heirs of the deceased plaintiff-appellee as represented by
his daughter Lourdes dela Cruz be substituted as party-plaintiff for the said Pedro Joaquin.
"It is further prayed that henceforth the undersigned counsel32 for the heirs of Pedro Joaquin be furnished
with copies of notices, orders, resolutions and other pleadings at its address below."
Evidently, the heirs of Pedro Joaquin voluntary appeared and participated in the case. We stress that the
appellate court had ordered33 his legal representatives to appear and substitute for him. The substitution
even on appeal had been ordered correctly. In all proceedings, the legal representatives must appear to
protect the interests of the deceased.34 After the rendition of judgment, further proceedings may be held,
such as a motion for reconsideration or a new trial, an appeal, or an execution. 35
Considering the foregoing circumstances, the Motion for Substitution may be deemed to have been
granted; and the heirs, to have substituted for the deceased, Pedro Joaquin. There being no violation of
due process, the issue of substitution cannot be upheld as a ground to nullify the trial courts Decision.
Second Issue:
Forum Shopping
Petitioners also claim that respondents were guilty of forum shopping, a fact that should have compelled
the trial court to dismiss the Complaint.36 They claim that prior to the commencement of the present suit
on July 7, 1981, respondent had filed a civil case against petitioners on June 25, 1979. Docketed as Civil
Case No. SD-742 for the recovery of possession and for damages, it was allegedly dismissed by the Court
of First Instance of Nueva Ecija for lack of interest to prosecute.
Forum Shopping Defined
Forum shopping is the institution of two or more actions or proceedings involving the same parties for the
same cause of action, either simultaneously or successively, on the supposition that one or the other court
would make a favorable disposition.37 Forum shopping may be resorted to by a party against whom an
adverse judgment or order has been issued in one forum, in an attempt to seek a favorable opinion in
another, other than by an appeal or a special civil action for certiorari.38
Forum shopping trifles with the courts, abuses their processes, degrades the administration of justice, and
congests court dockets.39 Willful and deliberate violation of the rule against it is a ground for the summary
dismissal of the case; it may also constitute direct contempt of court. 40
The test for determining the existence of forum shopping is whether the elements of litis pendentia are
present, or whether a final judgment in one case amounts to res judicata in another.41 We note, however,
petitioners claim that the subject matter of the present case has already been litigated and decided.
Therefore, the applicable doctrine is res judicata.42
Applicability of Res Judicata

Under res judicata, a final judgment or decree on the merits by a court of competent jurisdiction is
conclusive of the rights of the parties or their privies, in all later suits and on all points and matters
determined in the previous suit.43 The term literally means a "matter adjudged, judicially acted upon, or
settled by judgment."44 The principle bars a subsequent suit involving the same parties, subject matter,
and cause of action. Public policy requires that controversies must be settled with finality at a given point
in time.
The elements of res judicata are as follows: (1) the former judgment or order must be final; (2) it must
have been rendered on the merits of the controversy; (3) the court that rendered it must have had
jurisdiction over the subject matter and the parties; and (4) there must have been -- between the first and
the second actions -- an identity of parties, subject matter and cause of action. 45
Failure to Support Allegation
The onus of proving allegations rests upon the party raising them.46 As to the matter of forum shopping
and res judicata, petitioners have failed to provide this Court with relevant and clear specifications that
would show the presence of an identity of parties, subject matter, and cause of action between the present
and the earlier suits. They have also failed to show whether the other case was decided on the merits.
Instead, they have made only bare assertions involving its existence without reference to its facts. In other
words, they have alleged conclusions of law without stating any factual or legal basis. Mere mention of
other civil cases without showing the identity of rights asserted and reliefs sought is not enough basis to
claim that respondent is guilty of forum shopping, or thatres judicata exists.47
WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution are AFFIRMED. Costs
against petitioners.
SO ORDERED.

G.R. No. 148606

June 30, 2008

CHARLES LIMBAUAN, petitioner,

vs.
FAUSTINO ACOSTA, respondent.
DECISION
LEONARDO-DE CASTRO, J.:
In this petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, petitioner seeks
to set aside and annul the Decision1 dated June 26, 2001 rendered by the Court of Appeals (CA), Thirteenth
Division, in CA-G.R. SP No. 49144.
The CA decision affirmed an earlier decision2 of the Regional Trial Court (RTC) of Caloocan City, Branch 125,
dated March 12, 1998 which also affirmed the decision 3 dated December 29, 1997 of the Metropolitan Trial
Court (MTC), Caloocan City, Branch 52, ordering herein petitioner to surrender possession of the property
in question and pay the unpaid monthly rentals thereon.
The pertinent facts, as found by the CA, are quoted hereunder:
Sometime in 1938, the Government acquired the Tala Estate consisting of 808 hectares, located in
Kalookan, primarily for a leprosarium. However, the State utilized only one-fifth of the property for
the purpose. More, under Republic Act 4085, it was no longer mandatory for the segregation of
hansenites. Consequently, the State needed a lesser portion of the property for the leprosarium. In
the meantime, the State found it necessary to establish new residential areas within a 20-kilometer
radius from the center of the Metropolitan Manila and/or utilizing inexpensive land in order to serve
low-income families whose housing needs can only be met by the Government. On April 26, 1971,
President Ferdinand E. Marcos issued Proclamation No. 843 allocating the property to the
Department of Health, the National Housing Corporation, the PHHC and Department of Social
Welfare and Development xxx.
It was also decreed that, more precise identities of the parcels of land allocated to the government
will be made only after a final survey shall have been completed. A joint PHHC-Bureau of Lands
team was tasked to undertake the necessary segregation survey and inquiries on
private rights within the Estate. In the Interim, it was decreed that no transfer of title shall be
made until the enactment of a law allowing the use of the site for purposes other than that of a
leprosarium.
In the meantime, Faustino Acosta took possession of a vacant portion of the Tala Estate and
constructed his house thereon, bearing address No. 786, Barrio San Roque, Barangay 187, Tala,
Caloocan City. In August, 1982, Faustino Acosta, who was then a Barangay Councilman, executed a
deed styled "Registration of Property", attested by the Barangay Captain, over another vacant
portion of the Estate, west of the Barangay Hall, with an area of 150 square meters, bearing the
following boundaries:
NORTH: WAITING SHEDSOUTH: JUAN DAMIAN WEST: NITA CRUZ, RESTAURANT..EAST:
BRGY. HALL187 (at page 7, Records)
Faustino Acosta then took possession of the property, constructed a fence around the perimeter of
the property and planted vegetables thereon. However, in 1984, Paulino Calanday took possession
of the said property without the consent of Faustino, constructed an edifice thereon and used the
same as a beerhouse. When Faustino remonstrated, Paulino filed two (2) criminal complaints

against Faustino with the Metropolitan Trial Court, entitled and docketed "People versus Faustino
Acosta, Criminal Case Nos. 143550-51", for "Malicious Michief" and "Unjust Vexation".
However, on September 27, 1985, the Court issued an Order dismissing the cases for failure of
Paulino to comply with PD 1508.
Paulino, in the meantime, conveyed the beerhouse to Juanita Roces. The latter and Faustino entered
into an oral contract of lease over the parcel of land for a monthly rental of P60.00. About a year
thereafter, Juanita suddenly stopped paying to Faustino her rentals for the property. It turned out
that Juanita conveyed the beerhouse to her nephew, Charles Limbauan, who forthwith assumed the
lease from his aunt and who, thenceforth, paid the monthly rentals for the property in the amount
of P60.00 to Faustino. However, in November, 1987, Charles stopped paying rentals to Faustino
claiming that, since the property was government property, Faustino had no right to lease the same
and collect the rentals therefore. However, Faustino did not file any complaint nor unlawful detainer
against Charles.
Sometime in February, 1995, Congress approved Republic Act 7999 under which the State
converted a portion of the Estate, with a total area of 120 hectares, for use as a housing site for
residents and employees of the Department of Health, with the National Housing Authority as the
leading implementing agency:
(a) Seventy (70) hectares of the one hundred thirty (130) hectares reserved for the
leprosarium and settlement site of the hansenites and their families under Proclamation No.
843 are hereby declared alienable and disposable for use as a housing site for the bona fide
residents, hansenites and their immediate families and for qualified employees of the
Department of Health: Provided, That if the said beneficiary is an employee of the
Deparment of Health, the said employee must have been assigned in the Tala Leprosarium
and must have been a resident thereat for at least five (5) years:Provided, further, That the
residential lot awarded to the beneficiaries under this Act shall not be transferred, conveyed
or assigned to any other person for a period of twenty-five (25) years, except to legal heirs
by way of succession; and
(b) The fifty (50) hectares reserved for the plants, installations and pilot housing project of
the National Housing Corporation, as provided in the same proclamation, are hereby
declared as alienable and disposable: Provided, That twenty-nine (29) hectares of the said
fifty (50) hectares shall be converted into a housing site exclusively for the bona fide and
qualified residents of the area. (idem, supra)
After the passage by Congress of Republic Act 7999, Faustino filed a complaint against Charles with
the Lupon for ejectment for failure of Charles to pay his rentals from October, 1987. On April 15,
1995, the Lupon issued a "Certification to File Action" (at page 9, Records). Republic Act 7999
became law on April 22, 1995, without the signature of the President.
On January 2, 1996, Faustino, through Law Interns in the office of Legal Aid of the University of the
Philippines, sent a letter to Charles demanding that the latter vacate the property within five (5)
days from notice for his failure to pay the monthly rentals in the amount of P60.00 a month since
October, 1987. Charles Limbauan ignored the letter and refused to vacate the property.
Faustino, forthwith, filed, on February 7, 1996, a complaint for "Unlawful Detainer" against
Charles with the Metropolitan Trial Court, entitled and docketed "Faustino Acosta versus Charles
Limbauan, Civil Case No. 22521", praying that, after due proceedings, judgment be rendered in
his favor as follows:
PRAYER

WHEREFORE, it is respectfully prayed of this Honorable Court that judgment be rendered in

favor of plaintiff and against the defendant as follows:
1. To order the immediate restoration of the premises to plaintiff in accordance with Rule 70,
Sec. 3 of the Rules of Court;
2. Ordering the defendants to pay to plaintiff the sum of P60.00 a month plus interest from
November 1987 until they vacate the premises;
2.(sic) Ordering defendant to pay plaintiff the sum of P10,000.00 by way of moral damages;
3. Such other remedies as may be just and equitable under the premises. (at page 4,
Records)
Upon suggestion of the Court, Faustino Acosta, through the Law Interns, sent another letter of
demand to Charles Limbauan, dated March 7, 1996, demanding that the latter vacate the property
this time within fifteen (15) days from notice, otherwise, Faustino will institute the appropriate
action for his eviction from the property. Charles Limbauan received the letter, on March 13, 1996,
but refused to vacate the property. Faustino forthwith filed a "Motion to Approve Attached
Amended Complaint" with the Court which was granted by the Court.
In his Answer to the Complaint, Charles alleged, inter alia that Faustino had no cause of action
against him because the property on which the beerhouse was constructed is owned by the
government since the government is the owner of the property, Faustino had no right of possession
over the property and collect rentals therefore. Besides, it was unfair for Faustino, who was already
in possession of the lot at No. 786 B. San Roque, Barangay 187 to still claim possession over the
subject property. The Defendant interposed the defense that the Court had no jurisdiction over the
action of the Plaintiff as it was one of accion publicianaand not one for unlawful detainer.
On December 29, 1997, the Court promulgated a Decision in favor of the Plaintiff and against the
Defendant, the decretal portion of which reads as follows:
DISPOSITION BY THE COURT:
Premises considered, decision is rendered for the plaintiff, Faustino Acosta, and against the
defendant, Charles Limbauan, directing the latter and all those claiming under him to vacate
the premises specifically described as the parcel of commercial land located at the west
portion of the barangay hall, barangay 187, Zone 16, B. Sto. Nino, Tala, Caloocan City, to
surrender peaceful possession of the same to the former, and to pay him the following
amounts:
a. P60.00 monthly from November, 1987, as reasonable compensation for the use and
occupancy of the parcel of land subject matter of this case with legal interests from today up
to the actual surrender of the same.
b. P130.00 by way of reimbursement for costs of suit as shown by the receipts on record.
Given in Chambers. (at page 79, Records)
The Court found and declared that the Plaintiff adduced evidence that the Defendant was the
lessee of the Plaintiff over the property and, hence, the latter was estopped from assailing Plaintiffs
title over the property.

The Defendant interposed an appeal from said Decision to the Regional Trial Court which, on August
28, 1998, rendered a Decision affirming the Decision of the Court a quo.
The Petitioner forthwith filed a "Petition for Review" with this Court (Court of Appeals), under Rule
42 of the 1997 Rules of Civil Procedure, and posed, for our resolution, the following issues: (a)
whether or not the remedy of the Respondent in the Metropolitan Trial Court for unlawful detainer
was proper; (b) the subject property was government property and, hence, cannot be the lawful
subject of a lease contract between the Petitioner and Respondent and, hence, the latter had no
right to have the Petitioner evicted from the property and to collect rentals from him. It was
inappropriate for the trial court, and the Regional Trial Court, to apply and rely on Section 2(b), Rule
131 of the Rules of Evidence.
On June 26, 2001, the CA dismissed the aforementioned Petition for Review and affirmed the decision of
the RTC.
Hence, this petition for review which seeks the reversal of the said CA decision on the basis of the issues
quoted hereunder:
a) DID THE HONORABLE COURT OF APPEALS IN RENDERING THE ASSAILED DECISION COMMIT
GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS OF JURISDICTION?
b) WHETHER OR NOT THE CASE IS RENDERED MOOT AND ACADEMIC ON ACCOUNT OF THE DEATH
OF THE RESPONDENT.4
In relation to the aforequoted issues, the petitioner adduces the following arguments:
(1) The right application of laws under Rule 70 and Rule 10 in relation with the law on jurisdiction
over the case was ignored.
(2) The amendment under Section 2, Rule 10, Rules of Court is a futile remedy when the Court has
no jurisdiction over the case.
(3) The alleged existence of lessor-lessee relationship between the parties had not been sufficiently
established.
(4) The fact of death of respondent rendered the case moot and academic. 5
The first and second arguments advanced by petitioner are interrelated. Thus, they shall be discussed
jointly. Petitioner argues that there must be a prior demand to vacate the leased premises and pay the rent
and a 15-day period from the time of demand must have lapsed before a complaint for unlawful detainer
may be commenced pursuant to Section 2, Rule 70. According to petitioner, respondents demand letter
gave the petitioner a five-day period only instead of fifteen (15) days within which to comply with the
demand to vacate. A jurisdictional requisite, not having been complied with, the MTC did not acquire
jurisdiction over the case.
Section 2, Rule 70 of the Revised Rules of Court provides as follows:
Sec. 2. Lessor to proceed against lessee only after demand. Unless otherwise stipulated, such
action by the lessor shall be commenced only after demand to pay or comply with the conditions of
the lease and to vacate is made upon the lessee, or by serving written notice of such demand upon
the person found on the premises, or by posting such notice on the premises if no person be found
thereon, and the lessee fails to comply therewith after fifteen (15) days in the case of land or five
(5) days in the case of buildings.

As contemplated in the aforecited rule, the demand to pay rent and vacate is necessary if the action for
unlawful detainer is anchored on the non-payment of rentals, as in the instant case. The same rule
explicitly provides that the unlawful detainer suit must be commenced only if the lessee fails to comply
after the lapse or expiration of fifteen (15) days in case of lands and five (5) days in case of buildings, from
the time the demand is made upon the lessee. The demand required and contemplated in Section 2 of
Rule 70 is a jurisdictional requirement for the purpose of bringing an unlawful detainer suit for failure to
pay rent. It partakes of an extrajudicial remedy that must be pursued before resorting to judicial action
such that full compliance with the demand would render unnecessary a court action. 6
Hence, it is settled that for the purpose of bringing an ejectment suit, two requisites must concur, namely:
(1) there must be failure to pay rent or to comply with the conditions of the lease and (2) there must be
demand both to pay or to comply and vacate within the periods specified in Section 2, particularly, 15 days
in the case of land and 5 days in the case of buildings. The first requisite refers to the existence of the
cause of action for unlawful detainer while the second refers to the jurisdictional requirement of demand in
order that said cause of action may be pursued.7
As the subject matter of the instant case is a parcel of land, the expiration of the aforesaid fifteen-day
period is a prerequisite to the filing of an action for unlawful detainer. As to whether respondent observed
this fifteen-day period, an affirmative answer can be gleaned from the evidence on record. Respondents
first demand letter dated January 2, 1996 gave petitioner five (5) days from receipt within which to pay the
unpaid rentals and vacate the premises. Petitioner received the demand letter on January 10, 1996 while
respondent brought the action for unlawful detainer on February 7, 1996, which was clearly more than 15
days from the time petitioner received the demand letter on January 10, 1996 and well within the one-year
period set forth by Section 1, Rule 70.8 Thus, the fact that respondents demand letter granted petitioner
five (5) days to pay and to vacate the subject property is of no moment because what is important and
required under Section 2 of Rule 70 is for the lessor to allow a period of fifteen (15) days to lapse before
commencing an action for unlawful detainer. Evidently, respondent actually complied with this
requirement. For this reason, we find no error in the MTC assuming jurisdiction over respondents
complaint and in not dismissing the same.
Moreover, upon the advice of the MTC, respondent sent another demand letter dated March 7, 1996 to
petitioner, this time giving the latter fifteen (15) days within which to vacate the subject property and
when petitioner still refused, respondent was compelled to file a Motion to Approve Attached Amended
Complaint. The said motion was rightly granted by the MTC in accordance with Section 2, Rule 10 of the
Revised Rules of Court, to wit:
Sec. 2. Amendments as a matter of right. A party may amend his pleading once as a matter of
course at any time before a responsive pleading is served or, in the case of a reply, at any
time within ten (10) days after it is served.
Under this provision, a party has the absolute right to amend his pleading whether a new cause of action
or change in theory is introduced, at any time before the filing of any responsive pleading. 9 Undoubtedly,
when respondent filed his Amended Complaint on May 16, 1996, 10 no responsive pleading had yet been
filed by petitioner, thus, the MTC validly admitted the said amended complaint.
It is well-settled that amendment of pleadings is favored and should be liberally allowed in the furtherance
of justice in order to determine every case as far as possible on its merits without regard to technicalities.
This principle is generally recognized in order that the real controversies between the parties are
presented, their rights determined and the case decided on the merits without unnecessary delay to
prevent circuity of action and needless expense.11
Petitioner also contends that the MTCs purpose for admitting the amended complaint was to eliminate the
jurisdictional defect of the original complaint. Petitioner cites the cases of Rosario v.

Carandang12 and Gaspar v. Dorado13 which declared that the amendment of the complaint could not be
allowed when its purpose is to confer jurisdiction upon the court, since the court must first acquire
jurisdiction over the case in order to act validly therein. Petitioners contention is devoid of merit. As earlier
discussed, respondents original complaint was free from any jurisdictional flaw and the MTC had
jurisdiction over the case to begin with. Thus, the cited cases are not applicable in the instant case. Hence,
the MTC was correct in allowing the amendment.
Furthermore, it is a well-settled rule that what determines the nature of an action as well as which court
has jurisdiction over it are the allegations of the complaint and the character of the relief sought. 14 A
complaint for unlawful detainer is deemed sufficient if it alleges that the withholding of the possession or
the refusal to vacate is unlawful, without necessarily employing the terminology of the law. 15 Here,
respondent alleged that he acquired possessory rights over the subject property by virtue of a government
grant. He leased the property to petitioner for a monthly rental of P60.00. When petitioner failed to pay the
rentals, respondent eventually sent two demand letters asking petitioner to pay and vacate the premises.
Petitioner refused, thereby depriving respondent of possession of the subject property. Clearly, the
complaint alleges the basic elements of an unlawful detainer case, which are sufficient for the purpose of
vesting jurisdiction over it in the MTC.
Likewise, petitioners allegation in his petition that he received respondents second demand letter on May
8, 1996 was belied by the records of this case, the truth being that, the said demand letter dated March 7,
1996 was received by petitioner on March 13, 1996.16 The letter granted petitioner fifteen (15) days within
which to pay and vacate the subject property. Respondents Amended Complaint was filed on May 16,
1996 which was obviously two (2) months from the time petitioner had notice of the demand, and again
more than 15 days as required by Section 2, Rule 70.
In sum, respondent clearly satisfied the jurisdictional requirement of prior demand to vacate within the
period set by the rules. The MTC validly acquired jurisdiction over both the original complaint and the
amended complaint.
Petitioner next argues that no lessor-lessee relationship existed between him and respondent. This
argument clearly deals with a question of fact. In petitions for review on certiorari under Rule 45 of the
Rules of Court, only questions of law may be put in issue. Questions of fact cannot be entertained. 17 The
issue of whether or not a lessor-lessee relationship existed between the herein parties is a question of fact
which we cannot pass upon as it would entail a re-evaluation of the evidence and a review of the factual
findings thereon of the courts a quo. As a rule, factual findings of the trial court, especially those affirmed
by the CA, are conclusive on this Court when supported by the evidence on record. 18 We find no cogent
reason to disturb the findings of the MTC and the RTC, which the Court of Appeals had affirmed.
Lastly, petitioner capitalizes on the failure of respondents counsel to inform the court of the death of his
client, Faustino Acosta, who passed away on October 22, 2000 19 while the case was pending appeal with
the CA. He avers that such failure rendered the case moot and academic as no proper substitution of a
party was effected in compliance with Rule 3, Section 16 of the Rules of Court.
Section 16, Rule 3 of the Revised Rules of Court provides that:
Sec. 16. Death of party; duty of counsel. Whenever a party to a pending action dies, and the claim
is not thereby extinguished, it shall be the duty of his counsel to inform the court within thirty (30)
days after such death of the fact thereof, and to give the name and address of his legal
representative or representatives. Failure of counsel to comply with this duty shall be a ground for
disciplinary action.

The heirs of the deceased may be allowed to be substituted for the deceased, without first requiring
the appointment of an executor or administrator and the court may appoint a guardian ad litem for
the minor heirs.
The court shall forthwith order said legal representative or representatives to appear and be
substituted within a period of thirty (30) days from notice. xxx.
It is well settled that the failure of counsel to comply with his duty under Section 16 to inform the court of
the death of his client and no substitution of such party is effected, will not invalidate the proceedings and
the judgment thereon if the action survives the death of such party. Moreover, the decision rendered shall
bind his successor-in-interest.20 The instant action for unlawful detainer, like any action for recovery of real
property, is a real action and as such survives the death of Faustino Acosta. His heirs have taken his place
and now represent his interests in the instant petition.21 Hence, the present case cannot be rendered moot
despite the death of respondent.
WHEREFORE, the petition for review is hereby DENIED. The assailed decision of the Court of Appeals
in CA-G.R. SP No. 49144 is hereby AFFIRMED.
SO ORDERED.

G.R. No. 106847. March 5, 1993.

PATRICIO P. DIAZ, petitioner, vs. JUDGE SANTOS B. ADIONG, RTC, Br. 8, Marawi City, SULTAN MACORRO L.
MACUMBAL, SULTAN LINOG M. INDOL, MACABANGKIT LANTO and MOHAMADALI ABEDIN, respondents.
Rex J.M.A. Fernandez for petitioner.
Mangurun B. Batuampar for respondents.
SYLLABUS
1. REMEDIAL LAW; ACTIONS; VENUE OF LIBEL CASE WHERE OFFENDED PARTY IS AN PUBLIC OFFICIAL.
From the provision of Article 360, third paragraph of the Revised Penal Code as amended by R.A. 4363, it is
clear that an offended party who is at the same time a public official can only institute an action arising
from libel in two (2) venues: the place where he holds office, and the place where the alleged libelous
articles were printed and first published.
2. ID.; ID.; IMPROPER VENUE; MUST BE RAISED IN A NOTION TO DISMISS PRIOR TO A RESPONSIVE
PLEADING. Unless and until the defendant objects to the venue in a motion to dismiss prior to a
responsive pleading, the venue cannot truly be said to have been improperly laid since, for all practical
intents and purposes, the venue though technically wrong may yet be considered acceptable to the parties
for whose convenience the rules on venue had been devised.
3. ID.; ID.; ID.; WAIVED IN CASE AT BAR BY FILING ANSWER. Petitioner Diaz then, as defendant in the
court below, should have timely challenged the venue laid in Marawi City in a motion to dismiss, pursuant
to Sec. 4, Rule 4, of the Rules of Court. Unfortunately, petitioner had already submitted himself to the
jurisdiction of the trial court when he filed his Answer to the Complaint with Counterclaim. His motion to
dismiss was therefore belatedly filed and could no longer deprive the trial court of jurisdiction to hear and
decide the instant civil action for damages. Well-settled is the rule that improper venue may be waived and
such waiver may occur by laches. Sec. 1 of Rule 16 provides that objections to improper venue must be
made in a motion to dismiss before any responsive pleading is filed. Responsive pleadings are those which
seek affirmative relief and set up defenses. Consequently, having already submitted his person to the
jurisdiction of the trial court, petitioner may no longer object to the venue which, although mandatory in
the instant case, is nevertheless waivable. As such, improper venue must be seasonably raised, otherwise,
it may be deemed waived.
4. ID.; ID.; ID.; RELATES TO TRIAL AND NOT TO JURISDICTION. Indeed, the laying of venue is procedural
rather than substantive, relating as it does to jurisdiction of the court over the person rather than the
subject matter. Venue relates to trial and not to jurisdiction.
DECISION
BELLOSILLO, J p:
VENUE in the instant civil action for damages arising from libel was improperly laid; nonetheless, the trial
court refused to dismiss the complaint. Hence, this Petition for Certiorari, with prayer for the issuance of a
temporary restraining order, assailing that order of denial 1 as well as the order denying reconsideration. 2
The facts: On 16 July 1991, the Mindanao Kris, a newspaper of general circulation in Cotabato City,
published in its front page the news article captioned "6-Point Complaint Filed vs. Macumbal," and in its
Publisher's Notes the editorial, "Toll of Corruption," which exposed alleged anomalies by key officials in the
Regional Office of the Department of Environment and Natural Resources. 3
On 22 July 1991, the public officers alluded to, namely, private respondents Sultan Macorro L. Macumbal,
Sultan Linog M. Indol, Atty. Macabangkit M. Lanto and Atty. Mohamadali Abedin, instituted separate
criminal and civil complaints arising from the libel before the City Prosecutor's Office and the Regional Trial
Court in Marawi City. The publisher-editor of the Mindanao Kris, petitioner Patricio P. Diaz, and Mamala B.

Pagandaman, who executed a sworn statement attesting to the alleged corruption, were named
respondents in both complaints. 4
On 2 September 1991, the City Prosecutor's Office dismissed the criminal case thus 5
"WHEREFORE . . . this investigation in the light of Agbayani vs. Sayo case finds that it has no jurisdiction to
handle this case and that the same be filed or instituted in Cotabato City where complainant is officially
holding office at the time respondents caused the publication of the complained news item in the
Mindanao Kris in Cotabato City, for which reason it is recommended that this charge be dropped for lack of
jurisdiction."
In the interim, the civil complaint for damages, docketed as Civil Case No. 385-91 and raffled to Branch 10
of the Regional Trial Court in Marawi City, was set for Pre-Trial Conference. The defendants therein had
already filed their respective Answers with Counterclaim.
On 18 November 1991, petitioner Diaz moved for the dismissal of the action for damages on the ground
that the trial court did not have jurisdiction over the subject matter. He vehemently argued that the
complaint should have been filed in Cotabato City and not in Marawi City. 6
Pending action on the motion, the presiding judge of Branch 10 inhibited himself from the case which was
thereafter reraffled to the sala of respondent judge.
On 15 June 1991, respondent judge denied petitioner's Motion to Dismiss for lack of merit. Diaz thereafter
moved for reconsideration of the order of denial. The motion was also denied in the Order of 27 August
1991, prompting petitioner to seek relief therefrom.
Petitioner Diaz contends that the civil action for damages could not be rightfully filed in Marawi City as
none of the private respondents, who are all public officers, held office in Marawi City; neither were the
alleged libelous news items published in that city. Consequently, it is petitioner's view that the Regional
Trial Court in Marawi City has no jurisdiction to entertain the civil action for damages.
The petitioner is correct. Not one of the respondents then held office in Marawi City: respondent Macumbal
was the Regional Director for Region XII of the DENR and held office in Cotabato City; respondent Indol was
the Provincial Environment and Natural Resources Officer of Lanao del Norte and held office in that
province; respondent Lanto was a consultant of the Secretary of the DENR and, as averred in the
complaint, was temporarily residing in Quezon City; and, respondent Abedin was the Chief of the Legal
Division of the DENR Regional Office in Cotabato City. 7 Indeed, private respondents do not deny that their
main place of work was not in Marawi City, although they had sub-offices therein.
Apparently, the claim of private respondents that they maintained sub-offices in Marawi City is a mere
afterthought, considering that it was made following the dismissal of their criminal complaint by the City
Prosecutor of Marawi City. Significantly, in their complaint in civil Case No. 385-91 respondents simply
alleged that they were residents of Marawi City, except for respondent Lanto who was then temporarily
residing in Quezon City, and that they were public officers, nothing more. This averment is not enough to
vest jurisdiction upon the Regional Trial Court of Marawi City and may be properly assailed in a motion to
dismiss.
The Comment of private respondents that Lanto was at the time of the commission of the offense actually
holding office in Marawi City as consultant of LASURECO can neither be given credence because this is
inconsistent with their allegation in their complaint that respondent Lanto, as consultant of the Secretary
of the DENR, was temporarily residing in Quezon City.
Moreover, it is admitted that the libelous articles were published and printed in Cotabato City. Thus,
respondents were limited in their choice of venue for their action for damages only to Cotabato City where
Macumbal, Lanto and Abedin had their office and Lanao del Norte where Indol worked. Marawi City is not
among those where venue can be laid.
The third paragraph of Art. 360 of the Revised Penal Code, as amended by R.A. No. 4363, specifically
requires that

"The criminal and civil action for damages in cases of written defamations as provided for in this chapter,
shall be filed simultaneously or separately with the Court of First Instance (now Regional Trial Court) of the
province or city where the libelous article is printed and first published or where any of the offended
parties actually resides at the time of the commission of the offense: Provided, however, that where one of
the offended parties is a public officer . . . (who) does not hold office in the City of Manila, the action shall
be filed in the Court of First Instance (Regional Trial Court) of the province or city where he held office at
the time of the commission of the offense or where the libelous article is printed and first published and in
case one of the the offended parties is a private individual, the action shall be filed in the Court of First
Instance of the province or city where he actually resides at the time of the commission of the offense or
where the libelous matter is printed and first published . . . . " (emphasis supplied)
From the foregoing provision, it is clear that an offended party who is at the same time a public official can
only institute an action arising from libel in two (2) venues: the place where he holds office, and the place
where the alleged libelous articles were printed and first published.
Private respondents thus appear to have misread the provisions of Art. 360 of the Revised Penal Code, as
amended, when they filed their criminal and civil complaints in Marawi City. They deemed as sufficient to
vest jurisdiction upon the Regional Trial Court of Marawi City the allegation that "plaintiffs are all of legal
age, all married, Government officials by occupation and residents of Marawi City." 8 But they are wrong.
Consequently, it is indubitable that venue was improperly laid. However, unless and until the defendant
objects to the venue in a motion to dismiss prior to a responsive pleading, the venue cannot truly be said
to have been improperly laid since, for all practical intents and purposes, the venue though technically
wrong may yet be considered acceptable to the parties for whose convenience the rules on venue had
been devised. 9
Petitioner Diaz then, as defendant in the court below, should have timely challenged the venue laid in
Marawi City in a motion to dismiss, pursuant to Sec. 4, Rule 4, of the Rules of Court. Unfortunately,
petitioner had already submitted himself to the jurisdiction of the trial court when he filed his Answer to
the Complaint with Counterclaim. 10
His motion to dismiss was therefore belatedly filed and could no longer deprive the trial court of
jurisdiction to hear and decide the instant civil action for damages. Well-settled is the rule that improper
venue may be waived and such waiver may occur by laches. 11
Petitioner was obviously aware of this rule when he anchored his motion to dismiss on lack of cause of
action over the subject matter, relying on this Court's ruling in Time, Inc. v. Reyes. 12 Therein, We declared
that the Court of First Instance of Rizal was without jurisdiction to take cognizance of Civil Case No. 10403
because the complainants held office in Manila, not in Rizal, while the alleged libelous articles were
published abroad.
It may be noted that in Time, Inc. v. Reyes, the defendant therein moved to dismiss the case without first
submitting to the jurisdiction of the lower court, which is not the case before Us. More, venue in an action
arising from libel is only mandatory if it is not waived by defendant. Thus
"The rule is that where a statute creates a right and provides a remedy for its enforcement, the remedy is
exclusive; and where it confers jurisdiction upon a particular court, that jurisdiction is likewise exclusive,
unless otherwise provided. Hence, the venue provisions of Republic Act No. 4363 should be deemed
mandatory for the party bringing the action, unless the question of venue should be waived by the
defendant . . . . " 13
Withal, objections to venue in civil actions arising from libel may be waived; it does not, after all, involve a
question of jurisdiction. Indeed, the laying of venue is procedural rather than substantive, relating as it
does to jurisdiction of the court over the person rather than the subject matter. 14 Venue relates to trial
and not to jurisdiction.
Finally, Sec. 1 of Rule 16 provides that objections to improper venue must be made in a motion to dismiss
before any responsive pleading is filed. Responsive pleadings are those which seek affirmative relief and
set up defenses. Consequently, having already submitted his person to the jurisdiction of the trial court,

petitioner may no longer object to the venue which, although mandatory in the instant case, is
nevertheless waivable. As such, improper venue must be seasonably raised, otherwise, it may be deemed
waived.
WHEREFORE, for lack of merit, the Petition for Certiorari is DISMISSED and the Temporary Restraining Order
heretofore issued is LIFTED.
This case is remanded to the court of origin for further proceedings.
SO ORDERED.